ITEM 1. BUSINESS
General Business Development
Bassline Productions, Inc. is a development stage company incorporated in the State of Nevada on May 11, 2010. We were formed to assist in the travel arrangements of educational and other institutional organizations interested in performing at festivals and competitions in the areas of musical and drama performance.
We have been unable to obtain the necessary funding to support the implementation of our business plan at this time. We explored all financing and strategic alternatives available to us. It may be necessary for us to either seek alternative opportunities available to us unrelated to our business plan in an effort to maximize shareholder value. To this end, the Company has in the past had, and may in the future have, discussions with potential merger candidates wishing to become publicly traded. There is no assurance that the Company will be successful in any of such efforts. If the Company is unable to secure additional financing or find another alternative, the Company will not have sufficient capital to implement its business plan until such time as capital or another alternative is available to it.
Since our inception on May 11, 2010 through December 31, 2012, we have generated minimal revenues and have incurred a net loss of $70,794. Since May of 2010, our only business activities have included the formation of our corporate entity, the development of our business model, and the completion of our S-1 offering for $50,000.
Recent Change of Officers and Directors
On December 7, 2012, Randi Lorenzo submitted her letter of resignation from her position as President, CEO and Director of the Registrant, effective immediately. The resignation was accepted by the Registrant on December 7, 2012.
On December 7, 2012, Pamela Elliott submitted her letter of resignation from her position as Secretary and Treasurer of the Registrant, effective immediately. The resignation was accepted by the Registrant on December 7, 2012.
On December 7, 2012, in connection with resignation of Randi Lorenzo, the Board of Directors unanimously appointed Ms. Pamela Elliott to serve as President, CEO, and Director of the Registrant, effective immediately.
On December 7, 2012, in connection with Pamela Elliott’s resignation and subsequent appointment, the Board of Directors unanimously appointed Ms. Lisa Rubin to serve as the Secretary and Treasurer of the Registrant, effective immediately.
OUR BUSINESS
Bassline was striving to build a multi-faceted entertainment based business. Our initial focus was based upon developing an online travel assistance service, as well as an onsite tour and performance management.
We have been unable to obtain the necessary funding to support the implementation of our business plan at this time. We explored all financing and strategic alternatives available to us. It may be necessary for us to either seek alternative opportunities available to us unrelated to our business plan in an effort to maximize shareholder value. To this end, the Company has in the past had, and may in the future have, discussions with potential merger candidates wishing to become publicly traded. There is no assurance that the Company will be successful in any of such efforts. If the Company is unable to secure additional financing or find another alternative, the Company will not have sufficient capital to implement its business plan until such time as capital or another alternative is available to it.
Employees
We are a development stage company and as of December 31, 2012 have only two part-time employees, Pamela Elliot, who is our President and sole Director, and Lisa Rubin, our Secretary and Treasurer. As of December 31, 2012 they devoted approximately 5-10 hours a week to Bassline Productions.
Available Information
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. All of our reports are able to be reviewed through the SEC’s Electronic Data Gathering Analysis and Retrieval System (EDGAR) which is publicly available through the SEC’s website (http://www.sec.gov).
We intend to furnish to our stockholders annual reports containing financial statements audited by our independent certified public accountants and quarterly reports containing reviewed unaudited interim financial statements for the first three-quarters of each fiscal year. You may contact the Securities and Exchange Commission at (800) SEC-0330 or you may read and copy any reports, statements or other information that we file with the Securities and Exchange Commission at the Securities and Exchange Commission’s public reference room at the following location:
Public Reference Room
100 F. Street N.W.
Washington, D.C. 2054900405
Telephone: (800) SEC-0330
ITEM 1A.
ITEM 1A. RISK FACTORS
We are a development stage company organized in May 2010 and have recently commenced operations, which makes an evaluation of us extremely difficult. At this stage of our business operations, even with our good faith efforts, we may never become profitable or generate any significant amount of revenues, thus potential investors have a high probability of losing their investment.
We were incorporated in May of 2010 as a Nevada corporation. As a result of our start-up operations we have; (i) generated no revenues, (ii) accumulated deficits of $70,794 for the period ended December 31, 2012, and (iii) we have incurred losses of $70,794 for the period of Inception (May 11, 2010) to December 31, 2012, and have been focused on organizational and start-up activities and business plan development since we incorporated.
Our auditor’s have substantial doubt about our ability to continue as a going concern. Additionally, our auditor’s report reflects the fact that the ability of the Company to continue as a going concern is dependent upon our ability to raise additional capital from the sale of common stock and, ultimately the achievement of significant operating revenues.
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our auditor’s report reflects that the ability of Bassline to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues.
We are significantly dependent on our officers and director, who have limited experience. The loss or unavailability to Bassline, of either Ms. Rubin’s or Ms. Elliot’s services would have an adverse effect on our business, operations and prospects in that we may not be able to obtain new management under the same financial arrangements, which could result in a loss of your investment.
Our business plan is significantly dependent upon the abilities and continued participation of Ms.Elliot, our President and sole Director as well as, Ms. Rubin who is both our Secretary and Treasurer. They expect to devote limited time, approximately 5 to 10 hours a week on a going forward basis. It would be difficult to replace either Ms. Rubin or Ms. Elliot, at such an early stage of development of Bassline. The loss by or unavailability to Bassline, of either Ms. Rubin’s or Ms. Elliot’s services would have an adverse effect on our business, operations and prospects, in that our inability to replace Ms. Rubin or Ms. Elliot could result in the loss of one’s investment. There can be no assurance that we would be able to locate or employ personnel to replace either Ms. Rubin or Ms. Elliot, should their services be discontinued. In the event that we are unable to locate or employ personnel to replace Ms. Rubin, or Ms. Elliot then, in that event we would be required to cease pursuing our business opportunity, which would result in a loss of your investment.
Ms. Elliot and Ms. Rubin are involved with other businesses and there can be no assurance that they will continue to provide services to us.
As compared to many other public companies, we do not have the depth of managerial or technical personnel. Ms. Elliot and Ms. Rubin are currently involved in other businesses.
Ms. Elliot and Ms. Rubin’s limited time devotion to Bassline, could have the effect on our operations of preventing us from being a successful business operation, which ultimately could cause a loss of your investment.
Ms. Elliot and Ms. Rubin are currently, and may continue in the future, to be involved with additional businesses and there can be no assurance that she will continue to provide services to us. Ms. Elliot and Ms. Rubin currently devote only a portion of their time to our activities. There can be no assurance that we would be able to locate or employ personnel to replace Ms. Elliot or Ms. Rubin, should their services be discontinued.
Because of competitive pressures from competitors with more resources, Bassline, may fail to implement its business model profitably.
The business of travel assistance and entertainment production may be a very risky venture. Even though we believe a strong business plan is in place, our plan may fail due to a continued decreased travel and engagement opportunities,
Because of the current economic and financial condition, Bassline, may be unsuccessful in obtaining and retaining a strong client base.
The current economic condition and recession may make it difficult to obtain clients who have the funds available to spend on services such as ours. Our potential clients may spend less money, if any at all, on traveling and performance management services.
The anticipated costs of being a public company will affect our limited available funds.
The costs associated with being a public company as opposed to a private company include, but are not limited to, increased legal fees, accounting and auditor fees. Each year we will have to comply with the reporting requirements of the SEC. In the future, we may need to raise additional funds through private placements, registered offerings, debt financing or other sources to maintain operations.
Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.
Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:
· Deliver to the customer, and obtain a written receipt for, a disclosure document;
· Disclose certain price information about the stock;
· Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
· Send monthly statements to customers with market and price information about the penny stock; and
· In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.
Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.
FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
If we fail to remain current on our reporting requirements with the SEC, we could be removed from the OTC Bulletin Board (OTCBB), now known as the OTCQB, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
Companies trading on the OTCQB, such as us, generally must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTCQB. More specifically, FINRA has enacted Rule 6530, which determines eligibility of issuers quoted on the OTCQB by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year period or our securities are removed from the OTCQB for failure to timely file twice in a two-year period, then we will be ineligible for quotation on the OTCQB. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. As of the date of this memorandum, we have no late filings reported by FINRA.
Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Bassline Productions, Inc.; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Bassline Productions, Inc., are being made only in accordance with authorizations of managementa nd directors of Bassline Productions, Inc., and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Bassline Productions’ assets that could have a material effect on the financial statements.
We have two individuals performing the functions of all officers, and one individual acting as our sole director. This individual caused the development of our internal control procedures and is responsible for monitoring and ensuring compliance with those procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
ITEM 2. PROPERTIES
We currently maintain an office at 17011 Beach Blvd. Suite 900, Huntington Beach CA 92647. As of December 31, 2012, we have no monthly rent, nor do we accrue any expense for monthly rent. Ms. Elliot, our secretary and treasurer, provided us her home in which we conduct business on our behalf. Ms. Elliot did not receive any remuneration for the use of this facility or time spent on behalf of us. We do not believe that we will need to obtain additional office space at any time in the foreseeable future, approximately 12 months, until our business plan is more fully implemented.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.
PART II
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES
Market Information
Our common stock is quoted on the OTC Markets QB (OTCQB) under the symbol “BSSP.”
Historically, there has not been an active trading market for our common stock. We have been eligible to participate in the OTCQB since September 27, 2011.
Without an active public trading market, a stockholder may not be able to liquidate their shares. If a market does develop, the price for our securities may be highly volatile and may bear no relationship to our actual financial
condition or results of operations. Factors we discuss in this report, including the many risks associated with an investment in our securities, may have a significant impact on the market price of our common stock.
The ability of individual stockholder to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer's securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state.
Holders of Common Stock
As of March 28, 2013, we had approximately 41 stockholders of record of the 25,005,000 shares outstanding.
Dividends
The payment of dividends is subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements, our financial condition, and other relevant factors. We have not paid or declared any dividends upon our common stock since our inception and, by reason of our present financial status and our contemplated financial requirements, do not anticipate paying any dividends upon our common stock in the foreseeable future.
We have never declared or paid any cash dividends. We currently do not intend to pay cash dividends in the foreseeable future on the shares of common stock. We intend to reinvest any earnings in the development and expansion of our business. Any cash dividends in the future to common stockholders will be payable when, as and if declared by our Board of Directors, based upon the Board’s assessment of:
· our financial condition;
· earnings;
· need for funds;
· capital requirements;
· prior claims of preferred stock to the extent issued and outstanding; and
· other factors, including any applicable laws.
Therefore, there can be no assurance that any dividends on the common stock will ever be paid.
Securities Authorized for Issuance under Equity Compensation Plans
We currently do not maintain any equity compensation plans.
Recent Sales of Unregistered Securities
We have no recent sales of unregistered securities.
Use of Proceeds
On October 6, 2010, we filed a Registration Statement with the Securities and Exchange Commission wherein we registered 500,000 shares of our common stock (pre 10:1 forward split). Our Registration Statement became effective on July 25, 2011. On August 17, 2011, we completed our offering for 500,000 shares of our common stock, resulting in gross proceeds of $50,000. The common stock sold in our initial public offering to 40 investors was issued on August 23, 2011.
The amount of expenses incurred in connection with the issuance and distribution of the securities as of the date of this report was $44,042, of which $25,000 was legal fees, $10,750 was accounting and audit fees, $7,692 was EDGAR filing fees.
Issuer Purchases of Equity Securities
The Company did not repurchase any of its equity securities during the fourth quarter ended December 31, 2012.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the risks described in “Risk Factors” and elsewhere in this annual report. Our discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes and with the understanding that our actual future results may be materially different from what we currently expect.
OVERVIEW AND OUTLOOK
Background
Bassline is a development stage company incorporated in the State of Nevada on May 11, 2010. Our stated business objective is to provide tour booking and production services to institutional music programs and semi-professional musicians. Since our inception on May 11, 2010 through December 31, 2012, we generated no revenues from that line of business.
Going Concern
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. As of December 31, 2012, the Company had an accumulated deficit of $70,794. The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues.
RESULTS OF OPERATIONS
Revenue
Since our inception on May 11, 2010 through December 31, 2012, we generated minimal revenues . We anticipate that the current economic recession have a material adverse affect on our continuing operations.
Costs and Expenses
Operating expenses during year ended December 31, 2012 were $54,428, consisting of $281 in amoritzation, $580 in general and administrative and $53,067 in professional fees. In comparison, operating expenses in the year ended December 31, 2011 were $88,474, consisting of $281 in amortization, $1,831 in general
and administrative and $86,362 in professional fees. Thedecrease in total expenses from 2011 to 2012 is primarily attributable to an decrease in legal fees and EDGAR fees.
Liquidity and Capital Resources
As of December 31, 2012, we had $154 in cash and did not have any other cash equivalents. The following table provides detailed information about our net cash flow for the years ended December 31, 2012 and 2011. To date, we have financed our operations through the issuance of stock and borrowings.
In summary, our cash flows were as follows:
Operating activities
Net cash used in operating activities was $40,388 for the year ended December 31, 2012, as compared to $88,189 used in operating activities for the same period in 2011. The decrease in net cash used in operating activities was primarily due to a decrease in professional fees.
Investing activities
Net cash used in investing activities was $0 for the year ended December 31, 2011, as compared to $0 used in investing activities for the same period in 2012.
Financing activities
Net cash provided by financing activities for the year ended December 31, 2012 was $36,891, as compared to $85,061 for the same period of 2011. The decrease of net cash provided by financing activities was attributable to a decrease in proceeds from the sale of our common stock and the line of credit.
Since inception, we have financed our cash flow requirements through issuance of common stock and related party line of credit. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending receipt of listings or some form of advertising revenues. Additionally, we anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital. In the future we need to generate sufficient revenues from product sales in order to eliminate or reduce the need to sell additional stock or obtain additional loans. There can be no assurance we will be successful in raising the necessary funds to execute our business plan.
Additionally, we are considering focusing more of our operations on artist management and production rental services.
We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth.
To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop and upgrade our website, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.
Off-balance Sheet Arrangements
The Company has no off-balance sheet arrangements and does not anticipate entering into any such arrangements in the foreseeable future.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This item is not applicable as we are currently considered a smaller reporting company.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedules appearing on page through of this Form 10-K.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no disagreements with our independent auditors on accounting or financial disclosures.
ITEM 9A
ITEM 9A (T). CONTROLS AND PROCEDURES
Our Principal Executive Officer and Principal Financial Officer, Pamela Elliot, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Report. Based on that evaluation, Ms. Elliot has concluded that, as of December 31, 2012, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control, as is defined in the Securities Exchange Act of 1934. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.
Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable
assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and the receipts and expenditures of company assets are made and in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Management has undertaken an assessment of the effectiveness of our internal control over financial reporting based on the framework and criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2012.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The names of our director and executive officers as of December 31, 2012 and their ages, positions, and biographies are set forth below. Our executive officers are appointed by, and serve at the discretion of, our board of directors.
Duties, Responsibilities and Experience
Pamela Elliot. Age, 63, President & Director of Bassline from August 18, 2011 to present. Ms. Elliot has been an independently licensed California Real Estate agent since 1974. From March 2001 through July of 2009, Ms. Elliot was the President and Director of E & M Group, Inc. (formerly Madison Management, Inc.). With nearly thirty years of management experience in a variety of businesses, including real estate, retailing, manufacturing, consulting, and publishing, Ms. Elliott brings significant experience to the positions of President and Director.
Lisa Rubin, Age 46 , Secretary , and Treasurer; joined Bassline Productions, Inc., in December of 2012, and serves as the Company’s Secretary and Treasurer. Ms. Rubin attended Mesa College in San Diego, studying marketing and business management. From 1989 through present, Ms. Rubin has been employed with Jack In The Box, currently holding the position of Manager of Development Systems, Analysis and Capital Reporting. Her position at Jack In The Box requires her to manage the development and tracking of Restaurant Development’s capital budget to ensure it is properly utilized to meet the Company’s goal. Ms. Rubin’s financial and management experience has led us to the conclusion that she would be capable to serve in the positions of Secretary and Treasurer.
Family Relationships
There are no family relationships among any of our officers or directors.
Indemnification of Directors and Officers
Our Articles of Incorporation and Bylaws both provide for the indemnification of our officers and directors to the fullest extent permitted by Nevada law.
Limitation of Liability of Directors
Pursuant to the Nevada General Corporation Law, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives an improper personal benefit. This exclusion of liability does not limit any right which a Director may have to be indemnified and does not affect any Director’s liability under federal or applicable state securities laws. We have agreed to indemnify our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he acted in good faith and in a manner he believed to be in our best interests.
Election of Directors and Officers
Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the Board of Directors following the next annual meeting of stockholders and until their successors have been elected and qualified.
Involvement in Certain Legal Proceedings
No Executive Officer or Director of the Corporation has been the subject of any Order, Judgment, or Decree of any Court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him/her from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.
No Executive Officer or Director of the Corporation has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any pending legal proceedings.
Audit Committee and Financial Expert
We do not have an Audit Committee. Our director performs some of the same functions of an Audit Committee, such as: recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditor’s independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. The Company does not currently have a written audit committee charter or similar document.
We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our start-up operations, we believe the services of a financial expert are not warranted.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our executive officers and directors, and persons who beneficially own more than ten percent of an issuer's common stock, which has been registered under Section 12 of the Exchange Act, to file initial reports of ownership and reports of changes in ownership with the SEC. Based upon a review of the copies of such forms furnished to us and written representations from our executive officers and Directors, we believe that as of the date of this filing they were all current in their filings.
Corporate Governance
Nominating Committee
We do not have a Nominating Committee or Nominating Committee Charter. Our Board of Directors performs some of the functions associated with a Nominating Committee. We have elected not to have a Nominating Committee in that we are an initial-stages operating company with limited operations and resources.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation
During the year ended December 31, 2012, neither Ms. Rubin nor Ms. Elliot received any compensation for their roles associated as the company’s officers or in the case of Ms. Elliot as sole director.
Future Compensation
Both Ms. Rubin and Ms. Elliot have agreed to provide services to us without further compensation until such time as we have sufficient earnings from our revenue.
Director Compensation
As a result of having limited resources we do not currently have an established compensation package for board members.
Board Committees
We do not currently have any committees of the Board of Directors, as our Board consisted of one member during the year ended December 31, 2012. Additionally, due to the nature of our intended business, the Board of Directors does not foresee a need for any committees in the foreseeable future.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information, to the best of our knowledge, about the beneficial ownership of our common stock on March 28, 2012 relating to the beneficial ownership of our common stock by those persons known to beneficially own more than 5% of our capital stock and by our directors and executive officers. The percentage of beneficial ownership for the following table is based on 25,000,000 shares of common stock outstanding.
Security Ownership of Management
“Beneficial ownership” means the sole or shared power to vote or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days from the date of this filing.
Changes in Control
There are no arrangements, known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPNDENCE
The Company utilizes office space provided at no cost from Ms. Elliot, our President and sole director. Such costs are immaterial to the financial statements and, accordingly, have not been reflected.
Director Independence
We currently do not have any independent directors, as the term “independent” is defined in Section 803A of the NYSE Amex LLC Company Guide. Since the OTC Markets does not have rules regarding director independence, the Board makes its determination as to director independence based on the definition of “independence” as defined under the rules of the New York Stock Exchange (“NYSE”) and American Stock Exchange (“Amex”).
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
(1) AUDIT FEES
The aggregate fees billed for professional services rendered by De Joya Griffith, LLC., for the audit of our annual financial statements and review of the financial statements included in our Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal years 2012 and 2011 was $11,000 and $10,250, respectively.
(2) AUDIT-RELATED FEES
None.
(3) TAX FEES
None.
(4) ALL OTHER FEES
None.
(5) AUDIT COMMITTEE POLICIES AND PROCEDURES
We do not have an audit committee.
(6) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
Not applicable.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
1. The financial statements listed in the "Index to Financial Statements" at page 30 are filed as part of this report.
2. Financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
3. Exhibits included or incorporated herein: See index to Exhibits.
(b) Exhibits
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly authorized.
BASSLINE PRODUCTIONS, INC.
By:
Tamio Stehrenberger, President
Date: March 29, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
President, Principal Executive Officer, Principal Financial Officer and Director March 29, 2013
Tamio Stehrenberger
Secretary and Treasurer March 29, 2013
Tamio Stehrenberger
BASSLINE PRODUCTIONS, INC.
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Bassline Productions Inc
We have audited the accompanying balance sheets of Bassline Productions Inc (A Development Stage Company) (the "Company") as of December 31, 2012 and 2011 and the related statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2012 and for the periods from inception (May 11, 2010) to December 31, 2011 and from inception (May 11, 2010) to December 31, 2012. Bassline Productions Inc management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over the financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bassline productions Inc (A Development Stage Company) as of December 31, 2012 and 2011 and the result of its operations and its cash flows for the year ended December 31, 2012 and for the periods from inception (May 11, 2010) to December 31, 2011 and from inception (May 11, 2010) to December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming 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, which raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding 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.
/s/ De Joya Griffith, LLC
Henderson, Nevada
March 12, 2013
See Accompanying Notes to Financial Statements
See Accompanying Notes to Financial Statements
See Accompanying Notes to Financial Statements
See Accompanying Notes to Financial Statements
BASSLINE PRODUCTIONS, INC.
(a Development Stage Company)
Notes to Financial Statements
(audited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on May 11, 2010 (Date of Inception) under the laws of the State of Nevada, as Bassline Productions, Inc.
The Company has not commenced significant operations and, in accordance with ASC Topic 915, the Company is considered a development stage company.
Nature of operations
The Company provides educators and semi professional entertainers the service of travel and production management to entertainment venues and festivals throughout the United States of America.
Year End
The Company’s year end is December 31.
Cash and cash equivalents
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.
Website
The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company has commenced amortization upon completion of the Company’s fully operational website. Amortization expense for the years ended December 31, 2012 and 2011 was $281 and $281, respectively.
Revenue Recognition
We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.
The Company will record revenue when it is realizable and earned and the travel services have been rendered to the customers.
Concentrations of Revenue
In 2012, one customer accounted for 100% of revenue.
Advertising Costs
Advertising costs are anticipated to be expensed as incurred; however there were no advertising costs included in general and administrative expenses for the years ended December 31, 2012 and 2011.
BASSLINE PRODUCTIONS, INC.
(a Development Stage Company)
Notes to Financial Statements
(audited)
Earnings per share
The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
Income taxes
The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of December 31, 2012 and 2011, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.
The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.
The Company classifies tax-related penalties and net interest as income tax expense. As of December 31, 2012 and 2011, no income tax expense has been incurred.
Stock-based compensation
The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.
BASSLINE PRODUCTIONS, INC.
(a Development Stage Company)
Notes to Financial Statements
(audited)
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012 and 2011. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses, bank overdraft and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.
Recent pronouncements
The Company has evaluated the recent accounting pronouncements through February 2013 and believes that none of them will have a material effect on the company’s financial statements.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company incurred accumulated net losses from Inception (May 11, 2010) through the period ended December 31, 2012 of ($173,574). In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing.
BASSLINE PRODUCTIONS, INC.
(a Development Stage Company)
Notes to Financial Statements
(audited)
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
NOTE 3 - LINE OF CREDIT
On November 15, 2010, the Company executed a revolving credit line with a related party for up to $100,000. The related party was an entity that is owned and controlled by a family member of one of the officers of the Company. The unsecured line of credit bears interest at 6% per annum with principal and interest due on November 15, 2013. As of December 31, 2012, the line of credit was terminated.
On August 20, 2012, the related party agreed to assign the revolving credit line to a third party. The terms of the loan remain the same. The line of credit was reclassified from a related party transaction to a third party transaction.
On December 31, 2012, the entire balance of principal $93,076 and accrued interest of $9,704 was forgiven by the lender, who is a shareholder of the Company, and was recorded to additional paid in capital..
Interest expense for the years ended December 31, 2012 and 2011 was $5,485 and $3,252, respectively.
On June 15, 2012, the Company executed a revolving credit line with a third party for up to $50,000. The unsecured line of credit bears interest at 6% per annum with principal and interest due on June 16, 2015. As of December 31, 2012, an amount of $6,190 has been used for general corporate purposes with a remaining balance of $43,810 available. As of December 31, 2012, the balance of accrued interest was $138.
Interest expense for the years ended December 31, 2012 and 2011 was $138 and $0, respectively.
On July 30, 2012, the Company executed a revolving credit line with a third party for up to $50,000. The unsecured line of credit bears interest at 6% per annum with principal and interest due on August 1, 2015. As of December 31, 2012, an amount of $13,750 has been used for general corporate purposes with a remaining balance of $36,250 available. As of December 31, 2012, the balance of accrued interest was $284.
As of December 31, 2012, the Company has a total of $100,000 in revolving lines of credit with two entities of which a total of $19,940 is owed and there is a remaining balance of $80,060 available.
Interest expense for the years ended December 31, 2012 and 2011 was $5,908 and $3,252, respectively.
BASSLINE PRODUCTIONS, INC.
(a Development Stage Company)
Notes to Financial Statements
(audited)
NOTE 4 - INCOME TAXES
At December 31, 2012 and 2011, the Company had a federal operating loss carryforward of $173,074 and $125,238, which begins to expire in 2030.
Components of net deferred tax assets, including a valuation allowance, are as follows at December 31, 2012 and 2011:
NOTE 4 - INCOME TAXES (CONTINUED)
The valuation allowance for deferred tax assets as of December 31, 2012 and 2011 was $60,576 and $43,833, respectively, which will begin to expire 2030. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2012 and 2011 and maintained a full valuation allowance.
Reconciliation between the statutory rate and the effective tax rate is as follows at December 31, 2012 and 2011:
NOTE 5 - STOCKHOLDERS’ EQUITY
The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 10,000,000 shares of its $0.001 par value preferred stock. The Company did not authorize terms and rights of preferred shares as of December 31, 2012.
On August 23, 2011, the Company’s board of directors approved a 10-to-1 forward stock split with a record date of August 23, 2011. This event has been retroactively applied to these financial statements.
On November 22, 2011, a former officer and director of the Company agreed to return and cancel 20,000,000 shares of common stock. For accounting purposes, this transaction was accounted for as a reverse stock split. All shares and per share amounts have been retroactively adjusted.
Common Stock
On May 12, 2010, the Company issued its officers and directors of the Company a total of 20,000,000 shares of its $0.001 par value common stock at a price of $0.0001 per share for subscriptions receivable of $20,000. The Company received $4,000 in cash during August 2010.
On August 17, 2011, the Company issued 5,000,000 shares of common stock at a price of $0.01 per share for total cash received of $50,000 less direct offering costs totaling $4,939. Of the total direct offering costs, $4,000 was for non-accountable expenses for an officer and director of the Company and a former officer and director of the Company.
BASSLINE PRODUCTIONS, INC.
(a Development Stage Company)
Notes to Financial Statements
(audited)
On December 7, 2012, the Company issued 5,000 shares of common stock at a price of $0.10 per share for executive compensation valued at $500. The fair value of the shares were valued according to the fair value of the executive compensation rendered.
On December 31, 2012, a shareholder of the Company agreed to forgive a total of $102,780 in notes payable and accrued interest which was recorded to additional paid in capital.
During the year ended December 31, 2012, there have been no other issuances of common stock.
NOTE 6 - WARRANTS AND OPTIONS
As of December 31, 2012, there were no warrants or options outstanding to acquire any additional shares of common stock.