Attached files
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| EX-32 - Original Source Music, Inc. | ex32.htm |
| EX-31 - Original Source Music, Inc. | ex31.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No.1 to Form 10-K)
| [X] | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended December 31, 2019 |
OR
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission file number: 000-55516
Original Source Music, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 20-8594615 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
| 8547 E. Arapahoe Road #J453 | ||
| Greenwood Village, CO, 80112 | (852) 9039 9345 | |
| (Address of Principal Executive Offices) | (Registrant’s telephone number) |
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. [ ] Yes [X] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.406 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 (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. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | [ ] | Accelerated filer | [ ] |
| Non-accelerated filer | [ ] | Smaller reporting company | [X] |
| Emerging growth company | [X] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. The market value of the registrant’s voting common stock held by non-affiliates of the registrant was approximately $0.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant’s only class of common stock, as of March 27, 2020 was 5,073,000 shares.
No documents are incorporated into the text by reference.
Throughout this Report on Form 10-K, the terms the “Company,” “we,” “us” and “our” refer to Original Source Music, Inc., and its wholly-owned subsidiary 10 Fields Factory HK Limited and “our board of directors” refers to the board of directors of Original Source Music Inc.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K contains forward-looking statements regarding, among other things, our future operating results and financial position, our business strategy, and other objectives for our future operations. The words “anticipate,” “believe,” “intend,” “expect,” “may,” “estimate,” “predict,” “project,” “potential” and similar expression are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.
You should read this Report on Form 10-K and the documents that we have filed as exhibits to this Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Report on Form 10-K are made as of the date of this Report on Form 10-K, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
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EXPLANATORY NOTE
The Company's Annual Report on Form 10-K filed on April 9, 2020 is amended here to add the following language: Original Source Music, Inc. relied on the Securities and Exchange Commission’s Order under the Securities Exchange Act of 1934 Granting Exemptions From Specified Provisions of the Exchange Act and Certain Rules Thereunder dated March 4, 2020 Order (Release No. 34-88318), as modified on March 25, 2020 (Release No. 34-88465)(the “Order”) to delay the filing of its Annual Report on Form 10-K for the year ended December 31, 2019 (the “Report”) due to the circumstances related to COVID-19. In particular, COVID-19 caused severe disruptions in transportation and limited access to the Company’s facility, resulting in limited support from its staff and professional advisors. This delayed the Company’s ability to complete its audit and prepare the Report.
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Table of Contents
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| ITEM 1. | BUSINESS |
Organizational History
Original Source Music, Inc. (“OSM”) was incorporated under the laws of the State of Nevada on August 20, 2009. OSM was formed to license songs to the television and movie industry. OSM was a wholly owned subsidiary of Original Source Entertainment, Inc., a publicly traded Nevada corporation. On February 5, 2014, the board of directors of Original Source Entertainment authorized the spin-off of OSM to shareholders of record as of February 25, 2014.
The spin-off was accomplished in connection with a change of control of Original Source Entertainment. Under the terms of the spin-off, the registrant’s common shares, par value $0.001 per share, were distributed on a pro-rata basis to each holder of Original Source Entertainment’s common shares on the record date without any consideration or action on the part of such holders, and the holders of Original Source Entertainment’s common shares as of the record date became owners of 100 percent of our common shares. The spin-off was consummated upon the satisfactory resolution of all comments from the Securities and Exchange Commission to the registration statement on Form 10 and upon its effectiveness. There was no material change in the registrant’s operations as a result of the spin-off.
On March 19, 2018, the OSM’s board of directors and officer sold their interest in OSM to Big Emperor, Ltd. a British Virgin Islands company (“Big Emperor”). The total number of shares purchased was 3,500,000 shares of common stock (the “Shares”) of OSM for $93,800 (the “Transaction”). Of the Shares, 3,000,000 were acquired from Lecia L. Walker (“Ms. Walker”), OSM’s Chief Executive Officer (“CEO”) and a director, and 500,000 were acquired from Esther Lynn Atwood (“Ms. Atwood”), a director. The Shares represent approximately 69% of OSM’s issued and outstanding common stock.
Along with the Transaction, the OSM’s board of directors appointed Tsang Chi Hin, age 59, as its CEO, and as director to hold office until the next annual meeting of shareholders and until his successor is duly elected and qualified or until his resignation or removal. Following the appointment of Mr. Tsang as an officer and director of OSM, Ms. Walker resigned her position as our CEO and director and Ms. Atwood resigned her position as director. Both resignations are effective as of March 19, 2018.
With the proceeds from the acquisition of the Shares, Ms. Walker and Ms. Atwood agreed to pay $64,410 to holders of promissory notes issued by OSM in full satisfaction of principal and interest in all outstanding promissory notes issued by OSM. On March 19, 2018, all the Promissory Notes K through Promissory Note W, inclusive, were paid in full. Ms. Walker and Ms. Atwood have waived all amounts due by OSM at March 19, 2018.
On September 30, 2019, Mr. Tsang, the sole shareholder of Big Emperor sold his one share of Big Emperor for $270,000.00 to 10 Fields Factory Co., Ltd, a Japanese Company (“10 Fields Factory”). Big Emperor owning 3,500,000 shares of common stock of OSM, represents approximately 69% of OSM’s issued and outstanding common stock. 10 Fields Factory becomes the new shareholder of OSM.
Along with the Transaction, OSM’s sole director appointed ICHIKAWA Hiroshi (“Mr. Ichikawa”), age 46, as its Chief Executive Officer, Chief Financial Officer, and as director, also appointed GUNJISHIMA Sayo (“Ms. Gunjishima”), age 30, and TONOBE Masatatsu (Mr. Tonobe), age 27, as director and to hold office until the next annual meeting of shareholders and until his successor is duly elected and qualified or until his resignation or removal. Following the appointment of Mr. Ichikawa as an officer and director and Ms. Gunjishima and Mr. Tonobe, as a director of OSM, Tsang Chi Hin resigned his position as our Chief Executive Officer and Director with effective as of September 30, 2019.
OSM has decided to not pursue its original business plan and is currently in the process of evaluating new business opportunities. The CEO of OSM is exploring such options. Such opportunities may take many forms, including the acquisition of an existing business or the acquisition of assets to establish subsidiary businesses. All risks inherent in new and inexperienced enterprises are inherent in OSM’s business.
We currently have no employee other than our officers, who are also our directors.
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10 Fields Factory HK Limited – Solar Energy Consultant Company
10 Fields Factory HK Limited (“10FFHK”) is a 100% owned subsidiary of OSM formed under the Hong Kong Companies Ordinance and incorporated on September 30, 2019. 10FFHK is engaged in the solar energy consultant industry, and during the year 2019, 10FFHK was inactive. The Board of Directors will start its business in the forthcoming year.
Other than the abovementioned subsidiary, we have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings. We have not made any significant purchase or sale of assets, nor has the registrant been involved in any mergers, acquisitions or consolidations. Neither the registrant, nor its officers, directors, promoters or affiliates, has had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger.
Business
The Company has decided not pursue its original business plan and is currently in the process of evaluating new business opportunities after change of shareholders and directors. Our CEO is exploring such options. In addition, the Company is currently not conducting any business.
The Company is currently not conducting any business. It does not possess products or services, distribution methods, competitive business positions, or major customers. The Company does not possess any unexpired patents or trademarks and all of its licensing and royalty agreements from the inventions it sought to market in the past have since expired, and are not currently valid.
The selection of a business opportunity in which to participate is complex and risky. Additionally, as the Company has only limited resources, it may be difficult to find good opportunities. There can be no assurance that the Company will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to the Company and its stockholders. The Company will select any potential business opportunity based on management’s business judgment.
The activities of the Company are subject to several significant risks which arise primarily as a result of the fact that the Company has no specific business and may acquire or participate in a business opportunity based on the decision of management which potentially could act without the consent, vote, or approval of the Company’s stockholders. The risks faced by the Company are further increased as a result of its lack of resources and its inability to provide a prospective business opportunity with significant capital.
| ITEM 1A. | RISK FACTORS |
Not applicable to smaller reporting companies.
| ITEM 2. | PROPERTIES |
The registrant’s current address is 8547 E Arapahoe Road #J453, Greenwood Village, CO, 80112. Should the registrant be required to obtain suitable facilities in the future, it believes it can obtain the required facilities at competitive rates.
| ITEM 3. | LEGAL PROCEEDINGS |
The registrant is aware of no pending or threatened litigation.
There are no material proceedings to which any director, officer or affiliate of the Company, or any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
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| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Item 5(a)
| a) | Market Information. Our common stock is not listed on any national or international stock exchange nor is its quoted by OTC Markets. | |
| There is no public trading market for our common stock and there is no guarantee any trading market will develop. | ||
| b) | Holders. At March 27, 2020, there were approximately 36 shareholders of the registrant. | |
| c) | Dividends. Holders of our common stock are entitled to receive such dividends as may be declared by its board of directors. The registrant does not anticipate that it will declare any dividends. All profit will be used for continuing operations. | |
| d) | Securities authorized for issuance under equity compensation plans. No securities are authorized for issuance by the registrant under equity compensation plans. | |
| e) | Performance graph. Not applicable. | |
| f) | Sale of unregistered securities. None. |
| Item 5(b) | Use of Proceeds. Not applicable. |
| Item 5(c) | Purchases of Equity Securities by the issuer and affiliated purchasers. None. |
| ITEM 6. | SELECTED FINANCIAL DATA |
Not applicable to a smaller reporting company.
| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Trends and Uncertainties
The Company is not actively engaged in conducting any business. Rather, the Company is in the process of investigating potential business ventures which, in the opinion of management, will provide a source of eventual profit to the Company.
There are no other known trends, events or uncertainties that have, or are reasonably likely to have, a material impact on our short term or long term liquidity. Sources of liquidity will come from sales of our products and services. There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from the Company’s continuing operations. There are no other known causes for any material changes from period to period in one or more line items of our consolidated financial statements.
Capital and Sources of Liquidity
For the year ended December 31, 2019, we had a net loss of $10,983. We made an adjustment of $1,206 for accounts payable and accrued expenses and $12,189 for due to a related party. As a result, we had net cash used in operating activities of $Nil for the year ended December 31, 2019.
For the year ended December 31, 2018, we had a net loss of $24,346. We made an adjustment of $500 for prepayment and $8,959 for accounts payable and accrued expenses. As a result, we had net cash used in operating activities of $14,887 for the year ended December 31, 2018.
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For the years ended December 31, 2019 and 2018, we did not pursue any investing activities.
For the year ended December 31, 2019, we did not pursue any financing activities.
For the year ended December 31, 2018, we received $14,320 from related party. As a result, we had net cash provided by financing activities of $14,320 for the year ended December 31, 2018.
Results of Operations
For the year ended December 31, 2019, we recorded revenues of Nil. We incurred general and administrative expenses of $81 and professional fees of $10,902. We recorded other income of Nil. As a result, we recorded a net loss of $10,983 for the year ended December 31, 2019.
For the year ended December 31, 2018, we recorded revenues of $10. We incurred general and administrative expenses of $1,436 and professional fees of $24,037. We recorded other income of $1,117 consisting of the written-off of loans to the Company because of cancellation of loan to the Company. As a result, we recorded a net loss of $24,346 for the year ended December 31, 2018.
The $13,363 difference in net loss between the years ended December 31, 2019 and 2018 is due to a decrease in revenue, general administrative expenses and other income during the year ended December 31, 2019.
Off-Balance Sheet Arrangements
The registrant had no material off-balance sheet arrangement as of December 31, 2019.
Contractual Obligations
The registrant has no material contractual obligation.
New Accounting Pronouncements
The registrant has adopted all recently issued accounting pronouncements.
| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The registrant does not have any significant market risk exposure.
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| CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
ORIGINAL SOURCE MUSIC, INC.
Index to
Consolidated Financial Statements
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Original Source Music, Inc.
Greenwood Village, Colorado
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Original Source Music, Inc. and its subsidiary as of December 31, 2019 and 2018 and the related consolidated statements of operations, consolidated statement of changes in shareholders’ deficit and consolidated statement of cash flows for the years then ended December 31, 2019 and 2018, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Substantial doubt about the Company’s ability to continue as a going concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have served as the Company’s auditor since fiscal year 2017.
/s/ Lo and Kwong C.P.A. & Co.
(as successor to Lo and Kwong C.P.A. Company Limited)
8/F., Catic Plaza
8 Causeway Road
Causeway Bay
Hong Kong
April 08, 2020
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Consolidated Balance Sheets
December 31, 2019 and 2018
| December 31, 2019 | December 31, 2018 | |||||||
| $ | $ | |||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | 12,353 | 13,559 | ||||||
| Due to a related party | 26,509 | 14,320 | ||||||
| Total Liabilities | 38,862 | 27,879 | ||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued and outstanding | - | - | ||||||
Common stock, $0.001 par value; 45,000,000 shares authorized 5,073,000 shares issued and outstanding | 5,073 | 5,073 | ||||||
| Additional paid-in capital | 37,070 | 37,070 | ||||||
| Other reserve | 64,410 | 64,410 | ||||||
| Accumulated deficit | (145,415 | ) | (134,432 | ) | ||||
| Total Stockholders’ Deficit | (38,862 | ) | (27,879 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | - | - | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
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Consolidated Statements of Operations
For the years ended December 31, 2019 and 2018
| Year ended December 31, 2019 | Year ended December 31, 2018 | |||||||
| $ | $ | |||||||
| Revenue | - | 10 | ||||||
| Other income | - | 1,117 | ||||||
| Operating expenses: | ||||||||
| General and administrative expense | 81 | 1,436 | ||||||
| Professional fees | 10,902 | 24,037 | ||||||
| Total operating expenses | 10,983 | 25,473 | ||||||
| Loss from operations before income taxes | (10,983 | ) | (24,346 | ) | ||||
| Income tax provision | - | - | ||||||
| Net loss | (10,983 | ) | (24,346 | ) | ||||
| Net loss per common share - basic and diluted | (0.00 | )* | (0.00 | )* | ||||
| Shares | Shares | |||||||
| Weighted average number of common shares outstanding- basic and diluted | 5,073,000 | 5,073,000 | ||||||
*denotes net loss per common share of less than $0.01 per share.
The accompanying notes are an integral part of these audited consolidated financial statements.
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Consolidated Statement of Changes in Shareholders’ Deficit
For the years ended December 31, 2019 and 2018
| Shares | Amount ($0.001 Par) | Paid-in capital | Other reserve | Accumulated deficit | Stockholders’ deficit | |||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||
| Balances at December 31, 2017 | 5,073,000 | 5,073 | 37,070 | - | (110,086 | ) | (67,943 | ) | ||||||||||||||||
| Waiver of amount due to related party | - | - | - | 64,410 | - | 64,410 | ||||||||||||||||||
| Net loss for the year | - | - | - | - | (24,346 | ) | (24,346 | ) | ||||||||||||||||
| Balances at December 31, 2018 | 5,073,000 | 5,073 | 37,070 | 64,410 | (134,432 | ) | (27,879 | ) | ||||||||||||||||
| Net loss for the year | - | - | - | - | (10,983 | ) | (10,983 | ) | ||||||||||||||||
| Balances at December 31, 2019 | 5,073,000 | 5,073 | 37,070 | 64,410 | (145,415 | ) | (38,862 | ) | ||||||||||||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
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Consolidated Statements of Cash Flows
For the years ended December 31, 2019 and 2018
| Year ended December 31, 2019 | Year ended December 31, 2018 | |||||||
| $ | $ | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | (10,983 | ) | (24,346 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepayment | - | 500 | ||||||
| Accounts payable and accrued expenses | (1,206 | ) | 8,959 | |||||
| Due to a related party | 12,189 | - | ||||||
| Net cash used in operating activities | - | (14,887 | ) | |||||
| Net cash from financing activity | ||||||||
| Advance from related party | - | 14,320 | ||||||
| Net decrease in cash | - | (567 | ) | |||||
| Cash at beginning of period | - | 567 | ||||||
| Cash at end of period | - | - | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for: | ||||||||
| Interest | - | - | ||||||
| Income taxes | - | - | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
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Notes To The Audited Consolidated Financial Statements
For the years ended December 31, 2019 and 2018
| NOTE 1: | ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The consolidated financial statements include the accounts of Original Source Music, Inc. (“OSM”) and its wholly-owned subsidiary 10 Fields Factory HK Limited (“10FFHK”) (collectively referred to as the “Company,” “we,” “us,” or “our”). All significant intercompany transactions and balances have been eliminated in these consolidated financial statements.
OSM was incorporated in the State of Nevada on August 20, 2009. OSM was a licensor of songs to the television and music industry for use in television shows or movies and currently it has not commenced operations that have resulted in significant revenue. OSM has had limited activity and revenue to date.
10FFHK was formed under the Hong Kong Companies Ordinance and incorporated on September 30, 2019. 10FFHK is engaged in the solar energy consultant industry, and during the year 2019, 10FFHK was inactive. The Board of Directors will start its business in the forthcoming year.
Basis of Preparation of Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s year-end is December 31.
Use of Estimates and Assumptions
The consolidated financial statements are presented in conformity with generally accepted accounting principles requires that management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Due to uncertainties inherent in the estimation process, it is possible that these estimates could be materially revised within the next year.
Cash and cash equivalents
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.
Fair Value of Financial Instruments
FASB ASC 820-10 “Fair Value Measurements” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This ASC also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
The three levels of the fair value hierarchy are described below:
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
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Level 2
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable data by correlation or other means.
Level 3
Inputs that are unobservable for the assets and liabilities.
The carrying value of cash, accounts payable and accrued expenses and notes payable-related party approximates their fair value due to their short-term maturity.
Income tax
The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income or loss in the period that includes the enactment date. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on the Company’s income tax provision and net income or loss in the period the determination is made.
Revenue recognition
The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Basic and Diluted Earnings (Loss) Per Share
The Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted earnings per share on the face of the consolidated statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. During year ended December 31, 2019 or 2018, no potentially dilutive convertible notes payable issued and outstanding.
The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan of licensing songs to the television and music industry for use in television shows or movies on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company
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| NOTE 2: | GOING CONCERN |
The consolidated financial statements for the years ended December 31, 2019 and 2018 have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has suffered a loss from operations and has negative cash flows from operations, and in all likelihood will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The principal stockholder has undertaken to finance the Company in cash for a “reasonable” period of time for the Company to continue as a going concern, assuming that in such a period of time the Company would be able to restructure its business and restart on a revenue-generating operation to support its continuation. However, it is uncertain as for how long or to what extent such a period of time would be “reasonable”, and there can be no assurance that the financing from the principal stockholder will not be discontinued.
These uncertainties may result in adverse effects on continuation of the Company as a going concern. The accompanying consolidated financial statements do not include or reflect any adjustments that might result from the outcome of these uncertainties.
| NOTE 3: | INCOME TAXES |
As of December 31, 2019, the Company had net operating loss carry forwards of $145,415 that may be available to reduce future years’ taxable income through 2038. Future tax benefits which may arise as a result of these losses have not been recognized in these consolidated financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
| Year ended December 31, 2019 | Year ended December 31, 2018 | |||||||
| $ | $ | |||||||
| Federal income tax benefit attributable to: | ||||||||
| Current operations | (2,306 | ) | (5,113 | ) | ||||
| Less: change in valuation allowance | 2,306 | 5,113 | ||||||
| Net provision for Federal income taxes | - | - | ||||||
The Tax Cuts and Jobs Act was signed into law on December 22, 2017 and significantly changes tax law in the United States by, among other items, reducing the federal corporate income tax rate from a maximum of 34% to 21% (effective January 1, 2018). The cumulative tax effect at the expected rate of significant items comprising our net deferred tax amount is as follows:
| December 31, 2019 | December 31, 2018 | |||||||
| $ | $ | |||||||
| Deferred tax asset attributable to: | ||||||||
| Net operating loss carryover | 30,536 | 28,230 | ||||||
| Less: valuation allowance | (30,536 | ) | (28,230 | ) | ||||
| Net deferred tax asset | - | - | ||||||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $145,415 as of December 31, 2019 for Federal income tax reporting purposes are subject to annual limitations should a change in ownership occur.
| NOTE 4: | SUBSEQUENT EVENTS |
On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely, and although operations have not been materially affected by the coronavirus outbreak to date, the ultimate severity of the outbreak is uncertain. Operations of the Company are ongoing as the delivery of electricity to customers is considered an essential business. Further the uncertain nature of its spread globally may impact our business operations resulting from quarantines of employees, customers, and third-party service providers. At this time, the Company is unable to estimate the impact of this event on its operations.
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| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
On April 18, 2019, the Company was informed by its independent registered accountants, Lo and Kwong C.P.A. Company Limited (“Lo and Kwong”), that Lo and Kwong C.P.A & Co. (“LK & Co.”) has succeeded from Lo and Kwong, the license to audit U.S. public company regulated by Public Company Accounting Oversight Board (United States), effective from April 3, 2019. The Company did not dismiss Lo and Kwong, and Lo and Kwong did not resign as a result of any dispute with the Company. The principal and staffs of LK & Co. are the same principal and staffs who were engaged on the audit of the Company while at Lo and Kwong. The engagement of LK & Co. was approved by the Company’s sole director on May 13, 2019.
| ITEM 9A. | CONTROLS AND PROCEDURES |
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to insure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, or the persons performing similar functions, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Based on that evaluation, our CEO and CFO, or the persons performing similar functions, concluded that our disclosure controls and procedures were effective as of December 31, 2019.
Management’s Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company. Our internal control over financial reporting is the process designed by and under the supervision of our CEO and CFO, or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our consolidated financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management has determined that our internal control over financial reporting was not effective as of December 31, 2019.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to consolidated financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
Management has evaluated the effectiveness of our internal control over financial reporting using the criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Commission that permit us to provide only management’s report in this annual report.
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Evaluation of Changes in Internal Control over Financial Reporting:
Under the supervision and with the participation of our CEO and CFO, or those persons performing similar functions, our management has evaluated changes in our internal controls over financial reporting that occurred during the year ended December 31, 2019. Based on that evaluation, our CEO and CFO, or those persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| ITEM 9B. | OTHER INFORMATION |
None.
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Our directors and executive officers and their ages as of March 23, 2020 are as follows:
| Name | Age | Position | ||
| ICHIKAWA Hiroshi | 46 | Chief Executive Officer, Chief Financial Officer, Director | ||
| GUNJISHIMA Sayo | 30 | Chief Operating Officer, Director | ||
| TONOBE Masatatsu | 27 | Chief Marketing Officer, Director |
ICHIKAWA Hiroshi
On September 30, 2019, the Company’s board of directors appointed ICHIKAWA Hiroshi, age 46, as its Chief Executive Officer, Chief Financial Officer, and as director to hold office until the next annual meeting of shareholders and until his successor is duly elected and qualified or until his resignation or removal.
Mr. Ichikawa is the founder of 10 Fields Factory Co., Ltd, a Japan limited company that providing comprehensive services from acquiring land, designing and engineering to construction and O&M and has served in that role since 2007. Previously, Mr. Ichikawa joined sales department of Ajinomoto Co., Inc., a leading food and seasoning company, and went all over the country for work.
Mr. Ichikawa graduated from the School of Economics, Hiroshima University. He is experience in developing business models and has launched various businesses and promoting overseas business development, including Philippines and Indonesia.
The Board of Directors appointed Mr. Ichikawa in recognition of the importance of his abilities to assist the Company in expanding its business and the contributions he can make to its strategic direction.
The Company has not entered into any compensation arrangements with Mr. Ichikawa.
GUNJISHIMA Sayo
On September 30, 2019, the Company’s board of directors appointed GUNJISHIMA Sayo, age 30, as its Chief Operating Officer, and as director to hold office until the next annual meeting of shareholders and until his successor is duly elected and qualified or until his resignation or removal.
Ms. Gunjishima has joined of 10 Fields Factory Co., Ltd, a Japan limited company to launch of overseas business, she established the route from suppliers, clients to investors for the company which had few international trades those times. She has been responsible for overseas business for years, engaging in the launch of offices in the Philippines and Indonesia, and the startup of new in Japan.
Ms. Gunjishima studied business management and graduated from College of Policy Science, Ritsumeikan University in New Zealand.
The Board of Directors appointed Ms. Gunjishima in recognition of the importance of her abilities to assist the Company in expanding its business and the contributions she can make to its strategic direction.
The Company has not entered into any compensation arrangements with Ms. Gunjishima.
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TONOBE Masatatsu
On September 30, 2019, the Company’s board of directors appointed TONOBE Masatatsu, age 27, as its Chief Marketing Officer, and as director to hold office until the next annual meeting of shareholders and until his successor is duly elected and qualified or until his resignation or removal.
Mr. Tonobe has joined of 10 Fields Factory Co., Ltd, a Japan limited company. He participated in the launch of Media Division, which merged with Web Division and Creative Division and mainly engaged in marketing business in and out of the company, proposing and planning of new marketing strategies and subscribe option accommodating the diversifying marketing tools.
Mr. Tonobe was graduated from Faculty of Commerce, University of Marketing and Distribution Sciences in Japan.
The Board of Directors appointed Mr. Tonobe in recognition of the importance of his abilities to assist the Company in expanding its business and the contributions he can make to its strategic direction.
The Company has not entered into any compensation arrangements with Mr. Tonobe.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, as amended, an officer, director, or greater-than-10% shareholder of the registrant must file a Form 4 reporting the acquisition or disposition of registrant’s equity securities with the Securities and Exchange Commission no later than the end of the second business day after the day the transaction occurred unless certain exceptions apply. Transactions not reported on Form 4 must be reported on Form 5 within 45 days after the end of the registrant’s fiscal year. Such persons must also file initial reports of ownership on Form 3 upon becoming an officer, director, or greater-than-10% shareholder. To our knowledge, based solely on a review of the copies of these reports furnished to it, the officers, directors, and greater than 10% beneficial owners have complied with all applicable Section 16(a) filing requirements during 2019.
Code of Ethics Policy
The registrant has prepared but has not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
Corporate Governance
There have been no changes in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert. Based on the fact that our current business affairs are simple, any such committees are excessive and beyond the scope of our business and needs.
| ITEM 11. | EXECUTIVE COMPENSATION |
Compensation of Executive Officers
During the last four fiscal years, there has been no compensation awarded to, earned by or paid to any executive officer nor did the registrant have any compensatory plans in effect for stock options.
Director Compensation
Directors do not receive any compensation for serving as directors. All directors are reimbursed for ordinary and necessary expenses incurred in attending any meeting of the board of directors or any board committee or otherwise incurred in their capacities as directors.
Compensation Committee Interlocks and Insider Participation
During the last three fiscal years, we have not had a compensation committee (or other board committee performing equivalent functions) as part of our board of directors, nor have we had any officer participate in deliberations concerning executive officer compensation.
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| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS |
The following table sets forth, as of March 23, 2020 the number and percentage of outstanding shares of the registrant’s common stock owned by (i) each person known to us to beneficially own more than 5% of its outstanding common stock, (ii) each director, (iii) each named executive officer, and (iv) all officers and directors as a group.
| Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Outstanding Shares | ||||||
| ICHIKAWA Hiroshi 8547 E. Arapahoe Road #J453 Greenwood Village, CO 80112 | 3,500,000 | 68.99 | % | |||||
| Directors and Executive Officers as a Group | 3,500,000 | 68.99 | % | |||||
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
Transactions with management and others
During the year ended December 31, 2019, there were no material transactions, or series of similar transactions, since the beginning of the Company’s last fiscal year, or any currently proposed transactions, or series of similar transactions, to which the Company was or is to be party, in which the amount involved exceeds $60,000, and in which any director or executive officer, or any security holder who is known by the Company to own of record or beneficially more than 5% of any class of the Company’s common stock, or any member of the immediate family of any of the foregoing persons, has an interest.
Indebtedness of Management
During the year ended December 31, 2019, there were no material transactions, or series of similar transactions, since the beginning of the Company’s last fiscal year, or any currently proposed transactions, or series of similar transactions, to which the Company was or is to be a party, in which the amount involved exceeds $60,000 and in which any director or executive officer, or any security holder who is known to the Company to own of record or beneficially more than 5% of any class of the Company’s common stock, or any member of the immediate family of any of the foregoing persons, has an interest.
| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Audit Fees
We have incurred fees and expenses from Lo and Kwong C.P.A. & Co of $2,685 for the 2019 fiscal years and $5,600 for the 2018 fiscal year. Fees included work completed for our annual audit and for the review of our consolidated financial statements included in our Form 10.
Tax Fees
We have not incurred fees and expenses for the 2019 and 2018 fiscal years for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
The Board of Directors, acting as the Audit Committee considered whether, and determined that, the auditor’s provision of non-audit services was compatible with maintaining the auditor’s independence. All of the services described above for fiscal years 2019 and 2018 were approved by the Board of Directors pursuant to its policies and procedures. We intend to continue using independent accounting firm for the audit and audit-related services.
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| ITEM 15. | EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES |
| (a)(1) | List of Consolidated Financial statements included in Part II hereof |
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets:
December 31, 2019 and 2018
Consolidated Statements of Operations:
For the years ended December 31, 2019 and 2018
Consolidated Statements of Changes in Shareholders’ Equity:
For the years ended December 31, 2019 and 2018
Consolidated Statements of Cash Flows:
For the years ended December 31, 2019 and 2018
Notes to Consolidated Financial Statements:
For the years ended December 31, 2019 and 2018
| (a)(2) | List of Consolidated Financial Statement schedules included in Part IV hereof: None |
| (a)(3) | Exhibits |
The following exhibits are included herewith:
| Exhibit No. | Description | ||
| 31 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
| 32 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
| 101.INS* | XBRL Instance Document | ||
| 101.SCH* | XBRL Taxonomy Extension Schema Document | ||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | ||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | ||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | ||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
Following are a list of exhibits which we previously filed in other reports which we filed with the SEC, including the Exhibit No., description of the exhibit and the identity of the Report where the exhibit was filed.
| No. | Description | Filed With | Date Filed | ||||
| 3.1 | Articles of Incorporation | Form 10 | March 8, 2016 | ||||
| 3.2 | Bylaws of Original Source Music, Inc. | Form 10 | March 8, 2016 | ||||
| 3.3 | Specimen of Stock Certificate | Form 10 | March 8, 2016 | ||||
| 10.1 | License Agreement | Form 10 | March 8, 2016 | ||||
| 10.2 | Assignment of license agreement | Form 10 | March 8, 2016 | ||||
| 10.3 | Option agreement | Form 10 | March 8, 2016 |
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned duly authorized person.
Dated: May 15, 2020
| /s/ ICHIKAWA Hiroshi | ||
| By: | ICHIKAWA Hiroshi, Chief Executive Officer, Chief Financial Officer & Chairman |
In accordance with the requirements of the Securities Exchange Act of 1934, as amendment, this report has been signed by the following persons in the capacities and on the dates stated.
Original Source Music, Inc.
(Registrant)
| By: | /s/ ICHIKAWA Hiroshi | |
| Dated: | May 15, 2020 | |
| ICHIKAWA Hiroshi | ||
| Chief Executive Officer, Chief Financial Officer & Chairman |
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