NEUROONE MEDICAL TECHNOLOGIES Corp - Quarter Report: 2013 September (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 [x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended September 30, 2013

-OR-

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from _________ to________

Commission File Number      333-169732

Original Source Entertainment, Inc.

(Exact name of Registrant in its charter)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [x] No [ ]

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):

1

Large accelerated filer   [  ]		Non-accelerated filer             [  ]
Accelerated filer            [  ]		Smaller reporting company   [x]

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

The number of outstanding shares of the registrant's common stock, November 14, 2013:  Common Stock – 6,573,000

2

ORIGINAL SOURCE ENTERTAINMENT, INC.

FORM 10-Q

INDEX

PART 1 – FINANCIAL INFORMATION

		Page
Item 1.  Financial Statements (Unaudited)		4
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3. Quantitative and Qualitative Disclosure About Market Risk		12
Item 4.  Controls and Procedures		13

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings		14
Item 1A. Risk Factors		14
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds		14
Item 3.  Defaults Upon Senior Securities		14
Item 4.  Mine Safety Disclosures		14
Item 5.  Other Information		14
Item 6.  Exhibits		14
SIGNATURES		15

3

Original Source Entertainment, Inc.

(A Development Stage Company)

Consolidated Balance Sheets

	Dec. 31,	Sept. 30, 2013
	2012	(Unaudited)
ASSETS
Current assets
Cash	$            1,118	$                  608
Total current assets	1,118	608
Total Assets	$            1,118	$                  608
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Related party payables	$              952	$                  952
Accrued interest payable	403	1,454
Notes payable - current	17,000	26,500
Total current liabilities	18,355	28,906
Notes payable	-	-
Total Liabilities	18,355	28,906
Stockholders' Equity
Preferred stock, $.001 par value;
5,000,000 shares authorized;
none issued and outstanding
Common stock, $.001 par value;	-	-
45,000,000 shares authorized;
6,573,000 shares issued and outstanding	5,073	5,073
Additional paid in capital	28,077	44,577
Deficit accumulated during the dev. stage	(50,387)	(77,948)
Total Stockholders' Equity	(17,237)	(28,298)
Total Liabilities and Stockholders' Equity	$            1,118	$                  608

The accompanying notes are an integral part of the consolidated financial statements.

4

Original Source Entertainment, Inc.

(A Development Stage Company)

Consolidated Statements of Operations

The accompanying notes are an integral part of the consolidated financial statements.

5

Original Source Entertainment, Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

(Continued on next page)

6

Original Source Entertainment, Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of the consolidated financial statements.

7

ORIGINAL SOURCE ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Original Source Entertainment, Inc. (the “Company”), was incorporated in the State of Nevada on August 20, 2009. The Company plans to license songs to the television and music industry for use in television shows or movies.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Original Source Entertainment, Inc. and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any),

8

are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

Income tax

The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Revenue recognition

Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectability is reasonably assured.

Property and equipment

Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life.

Financial Instruments

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheet, approximates fair value.

Stock based compensation

The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements

Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operation, as well as in certain other parts of this quarterly report on Form

10-Q (as well as information included in oral statements or other written statements made or to be made by Original Source) that look forward in time, are forward-looking statements made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, expectations, predictions, and assumptions and other statements which are other than statements of historical facts. Although Original Source believes such forward-looking statements are reasonable, it can give no assurance that any forward-looking statements will prove to be correct. Such forward-looking statements are subject to, and are qualified by, known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by those statements. These risks, uncertainties and other factors include, but are not limited to Original Source’s ability to estimate the impact of competition and of industry consolidation and risks, uncertainties and other factors set forth in Original Source’s filings with the Securities and Exchange Commission, including without limitation to this Annual Report on Form 10-Q.

Original Source undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q.

Critical Accounting Policies

The following discussion as well as disclosures included elsewhere in this Form 10-Q are based upon our unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  These financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies.  Original Source continually evaluates the accounting policies and estimates used to prepare the financial statements.  Original Source bases its estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management.

10

Trends and Uncertainties

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 our limited operations. There are no known causes for any material changes from period to period in one or more line items of Original Source’s financial statements.

Liquidity and Capital Resources

At September 30, 2013, Original Source had a cash balance of $608, which represents a $510 decrease from the $1,118 balance at December 31, 2012.  The decrease was primarily the result of decreased revenues for the nine months ended September 30, 2013.

For the nine months ended September 30, 2013 and 2012, we did not pursue any investing activities.

For the nine months ended September 30, 2012, we did not pursue any financing activities.

For the nine months ended September 30, 2013, we received $9,500 from notes payable – borrowings and $12,500 from paid in capital.  As a result, we had net cash provided by financing activities of $22,000 for the nine months ended September 30, 2013.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, Original Source has incurred losses of $27,561 and $12,535 for the nine months ended September 30, 2013 and 2012, respectively, and a working capital deficiency which raises substantial doubt about the Company’s ability to continue as a going concern.

Management believes the Company will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever.  Management plans to seek additional debt and/or equity financing for the Company, but cannot assure that such financing will be available on acceptable terms.

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that management will be successful in implementing its business plan or that the successful implementation of such business plan will actually improve Original Source’s operating results.

Results of Operations

For the three months ended September 30, 2013, we earned revenues of $252.  We paid general and administrative expenses of $4,982, and interest expenses of $401.  As a result, we had a net loss of $5,131 for the three months ended September 30, 2013.

11

For the three months ended September 30, 2012, we earned revenues of $23.  We had general and administrative expenses of $4,754 and interest expenses of $49.  As a result, we had a net loss of $4,780 for the three months ended September 30, 2012.

The $351 increase in net loss for the three months ended September 30, 2013 compared to the three months ended September 30, 2012 is primarily the result of increased general and administrative expenses and increased interest expenses.  Our $229 increase in revenue for the three months ended September 30, 2013 does not adequately counteract the losses from our increased general and administrative expenses and our increased interest expense.

For the nine months ended September 30, 2013, we earned revenues of $1,109.  We paid general and administrative expenses of $23,619, interest expenses of $1,051, and interest expense – beneficial conversion features of $4,000.  As a result, we had a net income of $27,561 for the nine months ended September 30, 2013.

Comparatively, for the nine months ended September 30, 2012, we earned revenues of $561.  We paid general and administrative expenses of $12,927 and interest expenses of $169.  As a result, we had a net loss of $12,535 for the nine months ended September 30, 2012.

The $10,692 difference in general and administrative expenses was due to the increased cost of our application and approval for DTC eligibility during the nine months ended September 30, 2013.

Recently Issued Accounting Standards

Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements.

Off Balance Sheet Arrangements

None.  

Disclosure of Contractual Obligations

None.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk  

Not applicable for smaller reporting companies.   

12

12

Item 4.  Controls and Procedures  

During the three months ended September 30, 2013, there were no changes in our internal controls over financial reporting (as defined in Rule 13a- 15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2013.  Based on this evaluation, our chief executive officer and principal financial officers have concluded such controls and procedures to be effective as of September 30, 2013 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

13

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

None  

Item 1A.  Risk Factors

Not applicable for smaller reporting companies  

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None  

Item 3.   Defaults Upon Senior Securities.

None  

Item 4.   Mine Safety Disclosures

Not applicable

Item 5.   Other Information

None

Item 6.   Exhibits

    Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

    Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

    Exhibit 101.INS**  XBRL Instance Document

    Exhibit 101.SCH**  XBRL Taxonomy Extension Schema Document

    Exhibit 101.CAL**  XBRL Taxonomy Extension Calculation Linkbase Document

    Exhibit 101.DEF**  XBRL Taxonomy Extension Definition Linkbase Document

    Exhibit 101.LAB**  XBRL Taxonomy Extension Label Linkbase Document

    Exhibit 101.PRE**  XBRL Taxonomy Extension Presentation Linkbase Document

*  Filed herewith

**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.

14

SIGNATURES

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

Dated: November 14, 2013

ORIGINAL SOURCE ENTERTAINMENT, INC.  

By: /s/Lecia L. Walker

Lecia L. Walker

Chief Executive Officer

Principal Financial Officer

15