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EXCEL - IDEA: XBRL DOCUMENT - Beta Music Group, Inc.Financial_Report.xls
EX-31 - SECTION 302 CERTIFICATION OF THE PEO - Beta Music Group, Inc.ex_31-1.htm
EX-32 - SECTION 906 CERTIFICATION OF PF&AO - Beta Music Group, Inc.ex_32-2.htm
EX-31 - SECTION 302 CERTIFICATION OF THE PFO - Beta Music Group, Inc.ex_31-2.htm
EX-32 - SECTION 906 CERTIFICATION OF PEO - Beta Music Group, Inc.ex_32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


(Mark One)

Form 10-Q


[]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2011


or


[  ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from __________________ to __________________


Commission file number: 333-113296


Beta Music Group, Inc.

(Name of registrant as specified in its charter)


_______________________

(Former Name of Registrant)


Florida

26-0582871

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)


160 East 65th Street, New York, NY

10065

(Address of principal executive offices)

(Zip Code)


(212) 249-4900

(Registrant's telephone number, including area code)


N/A

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]   No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [X]   No [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


 

Large accelerated Filer

[  ]

Accelerated Filer

[  ]

 

Non-accelerated Filer

[  ]

Small Reporting Company

[X]




Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.   
Yes [X]   No [  ]


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS


Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13, or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   
Yes [  ]   No [  ]


APPLICABLE ONLY TO CORPORATE ISSUERS:


Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock as of the latest practicable date: 16,555,315 shares of Common Stock as of August 3, 2011.


PART I. - FINANCIAL INFORMATION

Item 1.

Financial Statements

1

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

5

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

6

Item 4.

Controls and Procedures.

6

PART II. - OTHER INFORMATION

Item 1.

Legal Proceedings.

7

Item 1A.

Risk Factors.

7

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

7

Item 3.

Defaults Upon Senior Securities.

7

Item 4.

Submission of Matters to a Vote of Security Holders.

7

Item 5.

Other Information.

7

Item 6.

Exhibits.

7


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


Certain statements in this quarterly report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Generally, the words “believes”, “anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements which include, but are not limited to, statements concerning the Company’s expectations regarding its working capital requirements, financing requirements, business prospects, and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this quarterly report in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.




PART I. – FINANCIAL INFORMATION


Item 1.

Financial Statements.


BETA MUSIC GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED CONDENSED BALANCE SHEETS


 

 

June 30,

 

December 31,

 

 

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash

 

$

5,898

 

$

6,355

 

 

 

 

 

 

 

 

 

Total Assets

 

$

5,898

 

$

6,355

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

1,914

 

$

2,324

 

Accrued liabilities

 

 

2,357

 

 

1,033

 

Notes payable

 

 

50,000

 

 

35,500

 

Total Current Liabilities

 

 

54,271

 

 

38,857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

54,271

 

 

38,857

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

Common stock, $.01 par value 100,000,000 authorized and
16,555,315 issued and outstanding

 

 

165,553

 

 

165,553

 

Additional paid in capital

 

 

174,490

 

 

174,490

 

Deficit Accumulated in the Development Stage

 

 

(388,416

)

 

(372,545

)

Total Stockholders’ Deficit

 

 

(48,373

)

 

(32,502

)

Total Liabilities and Stockholders’ Deficit

 

$

5,898

 

$

6,355

 


The accompanying notes are an integral part of these unaudited condensed financial statements


1



BETA MUSIC GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


 

 

 

 

 

 

 

 

 

 

 

 

 

 

From

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 5, 2006

 

 

 

Three Months Ended

 

Six Months Ended

 

(Date of Inception)

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

to June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 

$

 

$

 

$

 

$

2,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

2,251

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General administrative expenses

 

 

5,749

 

 

11,366

 

 

15,871

 

 

13,103

 

 

224,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

 

(5,749

)

 

(11,366

)

 

(15,871

)

 

(13,103

)

 

(224,017

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

 

 

 

(15,400

)

 

 

 

(58,612

)

 

(149,500

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

(5,749

)

 

 (26,766

)

 

(15,871

)

 

 (71,715

)

 

(373,517

)

Net loss allocated to nonconrolling interest

 

 

 

 

7,196

 

 

 

 

7,196

 

 

 

Net Loss attributable to common stockholders

 

$

 (5,749

)

$

 (19,570

)

$

 (15,871

)

$

 (64,519

)

$

 (373,517

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

 (0.00

)

$

 (0.00

)

$

 (0.00

)

$

 (0.00

)

 

 

 

Basic and Diluted Weighted Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares Outstanding

 

 

16,555,315

 

 

16,555,315

 

 

16,555,315

 

 

16,555,315

 

 

 

 


The accompanying notes are an integral part of these unaudited condensed financial statements


2



BETA MUSIC GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS


 

 

 

 

 

 

 

 

From

 

 

 

 

 

 

 

 

 

July 5, 2006

 

 

 

 

 

 

 

 

 

(Date of Inception)

 

 

 

June 30,

 

June 30,

 

to June 30,

 

 

 

2011

 

2010

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

 (15,871

)

$

 (71,715

)

$

 (373,517

)

Adjustments to reconcile net loss to net cash provided (used) by operating activities:

 

 

 

 

 

 

 

 

 

 

Rent expense paid through issuance of common stock

 

 

 

 

 

 

21,750

 

Shares issued for services

 

 

 

 

 

 

1,000

 

Shares issued for services-related party

 

 

 

 

 

 

28,800

 

Shares of subsidiary issued for services-related party

 

 

 

 

 

 

15,434

 

Officers compensation forgiven as paid-in capital

 

 

 

 

 

 

24,958

 

Shares of subsidiary issued to minority interest

 

 

 

 

 

 

45

 

Loss allocated to non controlling interest

 

 

 

 

 

 

(7,196

)

Amortization of prepaid expenses

 

 

 

 

1,368

 

 

12,496

 

Changes in Assets and Liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

 

 

834

 

 

 

Prepaid expenses

 

 

 

 

1,500

 

 

 

Accounts payable

 

 

(410

)

 

18,320

 

 

12,893

 

Accounts payable-related parties

 

 

 

 

 

 

2,750

 

Accrued wages related party

 

 

 

 

24,210

 

 

47,930

 

Accrued liabilities

 

 

1,324

 

 

(140

)

 

2,357

 

Net Cash Used by Operating Activities

 

 

(14,957

)

 

(25,623

)

 

(210,300

)

 

 

 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

 

 

 

Cash relinquished in distribution of subsidiary

 

 

 

 

(394

)

 

(394

)

Net Cash Used by Investing Activities

 

 

 

 

(394

)

 

(394

)

 

 

 

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

 

 

 

Proceeds from related party advances

 

 

 

 

24,275

 

 

173,192

 

Repayment of related party advances

 

 

 

 

(5,000

)

 

(6,600

)

Proceeds from notes payable

 

 

14,500

 

 

15,000

 

 

50,000

 

Net Cash Provided by Financing Activities

 

 

14,500

 

 

34,275

 

 

216,592

 

 

 

 

 

 

 

 

 

 

 

 

Net Increase in Cash

 

 

(457

)

 

8,258

 

 

5,898

 

 

 

 

 

 

 

 

 

 

 

 

Cash at Beginning of Period

 

 

6,355

 

 

1,936

 

 

 

Cash at End of Period

 

$

5,898

 

$

10,194

 

$

5,898

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash Transactions

 

 

 

 

 

 

 

 

 

 

Stock issued for repayment of related party advances

 

$

 

$

33,171

 

$

114,575

 

Stock issued for prepaid compensation at subsidiary

 

$

 

$

 

$

12,309

 

Shares of subsidiary issued to non controlling interest

 

$

 

$

48,560

 

$

48,560

 

Stock issued as repayment of accrued liabilities

 

$

 

$

 

$

14,400

 

Dividend paid through issuance of shares of subsidiary

 

$

 

$

14,899

 

$

14,899

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

 

$

 

$

 

Cash paid for interest

 

$

 

$

 

$

 


The accompanying notes are an integral part of these unaudited condensed financial statements


3



BETA MUSIC GROUP, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONENSED INTERIM FINANCIAL STATEMENTS


NOTE 1: Description of Company and Basis of Presentation


Beta Music Group, Inc. (the “Company” or “Beta”) was incorporated in the state of Florida on July 5, 2006 under the name Pop Starz Productions, Inc. On November 14, 2007 the name of the Company was changed to The Next Pop Star, Inc.  On October 20, 2008, the name was changed again to Beta Music Group, Inc.


The Company is currently a shell company and has limited continuing operations.  The Company intends to locate and combine with an existing company that is profitable or which, in management’s view, has growth potential, irrespective of the industry in which it is engaged.  A combination may be structured as a merger, consolidation, exchange of the Company’s common stock for stock or assets or any other form.


Pending negotiation and consummation of a combination the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. The Company does not currently have cash on hand sufficient to fund its operations until the earlier of a combination or a period of one year, and will be required to seek additional funding to consummate a transaction. The Company intends to either seek additional equity or debt financing. No assurances can be given that such equity or debt financing will be available, nor can there be any assurance that a combination transaction will be consummated. Should the Company be required to incur any significant liabilities prior to a combination transaction, including those associated with the current minimal level of general and administrative expenses, it may not be able to satisfy those liabilities in the event it was unable to obtain additional equity or debt financing.


The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included.


NOTE 2: Going Concern


At June 30, 2011, the Company has a working capital deficit. As such, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to continue as a going concern.


Continuation of the company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through short-term loans from related parties and additional equity investments, which will enable the Company to continue operations for the coming year.


4



Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation.


THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.


Background


Beta Music Group Inc. (“BETA”, the “Company” or “we”) is a Florida corporation incorporated in the state of Florida on July 5, 2006.  Our original business endeavor was to produce live entertainment competitions (in installments or episodes) to be taped and/or filmed for distribution by television and/or internet means.  We were not successful and changed our business plan.  Through the Company’s subsidiary, Famous Records, Corp., our new business focus was to establish contact with new artists who write their own songs (“singer-songwriters”) and produce their own work.  The Company’s objective was to sign these artists to exclusive services agreements or license the artists’ products for exploitation in domestic and foreign markets. Once these artists were signed, their appeal could be enhanced by concert promotions.  With limited capital we were not successful.


In December 2009 there was a change in the Company’s control and new management was appointed.  In connection with this change in control, Beta spun-off the operations of Delta Entertainment Group, Inc, the holding company for Famous Records, pursuant to a stock dividend to the shareholders of record of Beta on December 15, 2009.  The spin-off was effective April 12, 2010.


Since the completion of the spin-off, the Company has had no operations. Our focus will be to effect a merger, exchange of capital stock, asset acquisition or other similar business combination with an operating or development stage business which desires to utilize our status as a reporting corporation under the Securities Exchange Act of 1934.  We have not limited our search to any specific industry.


Comparison of Operating Results for the Three Months and Six Months ended June 30, 2011 and 2010 and from July 5, 2006 (“Inception”) to June 30, 2011.


Revenues


We had no revenues for either the three or six month period ended June 30, 2011 or 2010.  Total revenues since inception were $2,760.


For the three months ended June 30, 2011 and 2010, general and administrative expenses totaled $5,749 and $11,366, resulting in a net loss from continuing operations of $(5,749) and $(11.366).


For the six months ended June 30, 2011 and 2010, general and administrative expenses totaled $15,871 and $13,103, resulting in a net loss from continuing operations of $(15,871) and $(13,103).


General and administrative expenses since Inception totaled $224,526 which has resulted in a net loss from continuing operations totaling $(224,017).  We have reduced our operating expenses to the extent possible until such time as we can identify an acquisition candidate.


For the three and six months ended June 30, 2011there was no loss attributable to discontinued operations as compared to a loss from discontinued operations totaling $(15,400) and $(58,612) for the periods ended June 30, 2010.  Net loss from discontinued operations since Inception totaled $(149,500).


Our net loss from continuing and discontinued operations for the three and six months ended June 30, 2011 totaled $(5,749) and $(15,871). For the three and six months ended June 30, 2010 our net loss from continuing and discontinued operations were $(26,766) and $(71,715), respectively. Net loss attributable to common shareholders for the three and six months ended June 30, 2010 was $(19,570) and $(64,519).  Net loss attributable to common shareholders since Inception totaled $(373,517).


Our net loss per share during for the three and six months ended June 30, 2011 and 2010 was $(0.00).


We will require additional capital to fully implement our business plan.  There can be no assurance that we will be able to secure additional capital or if available, on commercially acceptable terms.  Until such time as we can fully implement our business plan, it is unlikely that we will be able to reverse our continuing losses in which case an investor may lose their entire investment.  


5



Liquidity and Capital Resources


Assets and Liabilities


At June 30, 2011 we had cash of $5,898 as compared to $6,355 on December 31, 2010.  The decrease in our cash reserves is due to the use of funds for our administrative expenses.


Our current liabilities at June 30, 2011 totaled $54,271 consisting primarily of a note payable in the amount of $50,000.  At December 31, 2010 current liabilities totaled $38,857 which was primarily attributable to a note payable totaling $35,500.  We used the proceeds from these notes for working capital.


Accounts payable at June 30, 2011 were $1,914 as compared to $2,324 at December 31, 2010.


Total current liabilities at June 30, 2011 were $54,271 as compared to $38,857 at December 31, 2010.


We had a working capital deficit of $48,373 at June 30, 2011 and a working capital deficit of $32,502 at December 31, 2010.  We have no revenues to satisfy these liabilities.  Unless we secure additional debt or equity financing, of which there can be no assurance, or enter into some form of business combination, we may be forced to discontinue our limited operations.


Off-Balance Sheet Arrangements


We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


Item 3.

Quantitative and Qualitative Disclosure About Market Risk.


Not applicable.


Item 4.

Controls and Procedures.


(a)

Evaluation of Disclosure Controls and Procedures


Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and determined that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation considered the procedures designed to ensure that the information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.


(b)

Changes in Internal Control over Financial Reporting


During the period covered by this Quarterly Report on Form 10-Q, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(d) and 13d-15(d) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


(c)

Inherent Limitations of Disclosure Controls and Internal Controls over Financial Reporting


Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation or effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


6



PART II. – OTHER INFORMATION


Item 1.

Legal Proceedings.


None.


Item 1A.

Risk Factors.


There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the period ended December 31, 2010.


Item 2.

Unregistered Sales of Equity Securities.


During the quarter ended June 30, 2011 we did not issue any shares of common stock.


Item 3.

Defaults upon senior securities.


None


Item 4.

(Removed and Reserved).


Not Applicable.


Item 5.

Other information.


None.


Item 6.

Exhibits.


Exhibit No.

Description

 

 

31.1*

Section 302 Certification of the Principal Executive Officer

 

 

31.2*

Section 302 Certification of the Principal Financial Officer

 

 

32.1*

Section 906 Certification of Principal Executive Officer

 

 

32.2*

Section 906 Certification of Principal Financial and Accounting Officer

 

 

100**

XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.


*  Filed herewith.

**  In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”


7



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Beta Music Group, Inc.


Date:   August 9, 2011


By:  /s/ Edwin Mendlinger

Edwin Mendlinger

Chief Executive Officer



Date:   August 9, 2011


By:  /s/ Edwin Mendlinger

Edwin Mendlinger

Chief Financial Officer


8