Edgar Filing: Beta Music Group, Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended: December 31, 2009
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 333-113296

BETA MUSIC GROUP, INC.
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(Exact name of registrant as specified in its charter)

FLORIDA 26-0582871
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

160 EAST 65TH STREET NEW YORK, NY 10065
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(Address of principal executive offices) (Zip Code)

(212)249-4900
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(Registrant's telephone number, including area code)

7359 BALLANTRAE COUR BOCA RATON, FL 33495
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(Former name or former address, if changed since last report)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
----------------------------- -----------------------------------------
common stock, $0.01 par value None

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

COMMON STOCK
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(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in 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 Section 15(d) of the Act.
[ ] 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.
[ ] 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 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.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. [X]

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

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

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

The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant computed by reference to the price at which the
common equity was last sold, or the average bid and asked price for such common
equity, as of the last business day of the registrant's most recently completed
second fiscal quarter as reported by the Pink Sheets OTC on August 2, 2010 was
approximately $44,000.

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

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

APPLICABLE ONLY TO CORPPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date: 16,555,315 shares of common
stock, $.01 par value as of August 2, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K(e.g. Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to the security holders; (2) Any proxy or
information statement ; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933.

None.

THIS FORM 10-K CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
APPLICABLE SECURITIES LAWS RELATING TO BETA MUSIC GROUP, INC. ("BETA", "BETA
MUSIC" "WE", "OUR", OR THE "COMPANY") WHICH REPRESENT OUR CURRENT EXPECTATIONS
OR BELIEFS INCLUDING, BUT NOT LIMITED TO, STATEMENTS CONCERNING OUR OPERATIONS,
PERFORMANCE, AND FINANCIAL CONDITION. THESE STATEMENTS BY THEIR NATURE INVOLVE
SUBSTANTIAL RISKS AND UNCERTAINTIES, CREDIT LOSSES, DEPENDENCE ON MANAGEMENT AND
KEY PERSONNEL, VARIABILITY OF QUARTERLY RESULTS, AND OUR ABILITY TO CONTINUE
GROWTH. STATEMENTS IN THIS ANNUAL REPORT ABOUT THE COMPANY'S FUTURE
EXPECTATIONS, BELIEFS, GOALS, PLANS OR PROSPECTS CONSTITUTE FORWARD-LOOKING
STATEMENTS. YOU SHOULD ALSO SEE OUR RISK FACTORS BEGINNING ON PAGE 9. FOR THIS
PURPOSE, ANY STATEMENTS CONTAINED IN THIS FORM 10-K THAT ARE NOT STATEMENTS OF
HISTORICAL FACT ARE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, WORDS SUCH AS "MAY", ANTICIPATE", "INTEND", "COULD",
"ESTIMATE", OR "CONTINUE" OR THE NEGATIVE OR OTHER COMPARABLE TERMINOLOGY ARE
INTENDED TO IDENTIFY FORWARD- LOOKING STATEMENTS. OTHER MATTERS SUCH AS OUR
GROWTH STRATEGY AND COMPETITION ARE BEYOND OUR CONTROL. SHOULD ONE OR MORE OF
THESE RISKS OR UNCERTAINTIES MATERIALIZE OR SHOULD THE UNDERLYING ASSUMPTIONS
PROVE INCORRECT, ACTUAL OUTCOMES AND RESULTS COULD DIFFER MATERIALLY FROM THOSE
INDICATED IN THE FORWARD-LOOKING STATEMENTS.

ANY FORWARD-LOOKING STATEMENT SPEAKS ONLY AS OF THE DATE ON WHICH SUCH
STATEMENT IS MADE, AND WE UNDERTAKE NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING
STATEMENT OR STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE ON
WHICH SUCH STATEMENT IS MADE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED
EVENTS. NEW FACTORS EMERGE FROM TIME TO TIME AND IT IS NOT POSSIBLE FOR US TO
PREDICT ALL OF SUCH FACTORS, NOR CAN WE ASSESS THE IMPACT OF EACH SUCH FACTOR ON
THE BUSINESS OR THE EXTENT TO WHICH ANY FACTOR, OR COMBINATION OF FACTORS, MAY
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY
FORWARD-LOOKING STATEMENTS.

WE ARE UNDER NO DUTY TO UPDATE SUCH FORWARD-LOOKING STATEMENTS.

iii

TABLE OF CONTENTS

PART I
Page
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ITEM 1. Business ........................................................ 1

ITEM 1A. Risk Factors .................................................... 9

ITEM 1B. Unresolved Staff Comments ....................................... 13

ITEM 2. Properties ...................................................... 13

ITEM 3. Legal Proceedings ............................................... 13

ITEM 4. Submission of Matters to a Vote of Security Holders ............. 13

PART II

ITEM 5. Market for Common Equity Related Stockholder Matters and Issuer
Purchases of Equity Securities .................................. 13

ITEM 6. Selected Financial Data ......................................... 14

ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation ............................................ 14

ITEM 7A. Quantitative and qualitative disclosure ......................... 16

ITEM 8. Financial Statement and Supplemental Data ....................... 16

ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure ............................................ 16

ITEM 9A. Controls and procedures ......................................... 16

ITEM 9B. Other information ............................................... 18

PART III

ITEM 10. Directors, Executive Officers and Corporate Governance .......... 18

ITEM 11. Executive Compensation .......................................... 19

ITEM 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters ................................. 20

ITEM 13. Certain Relationships and Related Transactions, and Director
Independence .................................................... 21

ITEM 14. Principal Accounting Fees and Services .......................... 21

PART IV

ITEM 15. Exhibits, Financial Statement Schedule .......................... 22

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

BACKGROUND:

Beta Music Group Inc. ("BETA", the "Company" or the "Registrant") is a
Florida corporation incorporated in the state of Florida on July 5, 2006 under
the name Pop Starz Productions, Inc. On November 15, 2007 we changed our name to
The Next Pop Star Inc. Our original business endeavor was to produce live
entertainment competitions (in installments or episodes) to be taped and/or
filmed for distribution by television and/or internet means. We were not
successful and refocused our operations. In conjunction with this change in our
business focus, on October 23, 2008 we changed our name to Beta Music Group,
Inc.

The Company, through its subsidiary, Famous Records, Corp., new
business focus was to establish contact with new artists who write their own
songs ("singer-songwriters") and produce their own work. The Company's objective
was to sign these artists to exclusive services agreements or license the
artists' products for exploitation in domestic and foreign markets. Once these
artists were signed, their appeal could be enhanced by concert promotions. With
limited capital we were not successful.

In December 2009 there was a change in the Company's control and new
management was appointed. In connection with this change in control, Beta
spun-off the operations of Delta Entertainment Group, Inc, the holding company
for Famous Records, pursuant to a stock dividend to the shareholders of record
of Beta on December 15, 2009. These shareholders received one share of common
stock of Delta for every one share of Beta. The spin-off was effective April 12,
2010. Since the completion of the spin-off, the Company has had no operations.
Its current objective is to identify potential business acquisitions.

GENERAL:

Since we no longer have operations, our focus will be to effect a
merger, exchange of capital stock, asset acquisition or other similar business
combination (a "Business Combination") with an operating or development stage
business (the "Target Business") which desires to utilize our status as a
reporting corporation under the Securities Exchange Act of 1934 ("Exchange
Act"). We intend to seek potential business opportunities and effectuate a
Business Combination with a Target Business with significant growth potential
which, in the opinion of our management, could provide a profit to both the
Company and our shareholders. We intend to seek opportunities demonstrating the
potential of long term growth as opposed to short term earnings. Our efforts in
identifying a prospective Target Business are expected to emphasize businesses
primarily located in the United States; however, we reserves the right to
acquire a Target Business located elsewhere. While we may, under certain
circumstances, seek to effect Business Combinations with more than one Target
Business, as a result of our limited resources, we will, in all likelihood, have
the ability to effect only a single Business Combination. We may effect a
Business Combination with a Target Business which may be financially unstable or
in its early stages of development or growth. We will not restrict our search to
any specific business, industry or geographical location, and we may participate
in a business venture of virtually any kind or nature. Our management may become
involved in management of the Target Business and/or may hire qualified but as
yet unidentified individuals to manage such Target Business. Presently, we have
no plans, proposals, agreements, understandings or arrangements to acquire or
merge with any specific business or company, and we have not identified any
specific business or company for investigation and evaluation.

- 1 -

"SHELL" CORPORATION

We were previously a developmental stage company with limited
operations. Currently, we have virtually no business operations and expect to
conduct none in the future, other than our efforts to effectuate a Business
Combination. As a result we can be characterized as a "shell" corporation. As a
shell corporation, we face special risks inherent in the investigation,
acquisition, or involvement in a new business opportunity. We face all of the
unforeseen costs, expenses, problems, and difficulties related to such
companies. We are dependent upon the efforts of our sole officer and director to
effectuate a Business Combination. Assuming he is successful in identifying a
Business Combination, it is unlikely our shareholders will have an opportunity
to evaluate the specific merits or risks of any one or more Business
combinations and will have no control over the decision making relating to such.

Due to our limited capital resources, the consummation of a Business
Combination will likely involve the acquisition of, or merger or consolidation
with, a company that does not need substantial additional capital but which
desires to establish a public trading market for our shares, while avoiding what
it might deem to be the adverse consequences of undertaking a public offering
itself, such as the time delays and significant expenses incurred to comply with
the various federal and state securities laws that regulate initial public
offerings. A Target Business might desire, among other reasons, to create a
public market for their shares in order to enhance liquidity for current
shareholders, facilitate raising capital through the public sale of securities
of which a prior existence of a public market for our securities exists, and/or
acquire additional assets through the issuance of securities rather than for
cash.

We cannot estimate the time that it will take to effectuate a Business
Combination. It could be time consuming; possibly in excess of many months.
Additionally, no assurance can be made that we will be able to effectuate a
Business Combination on favorable terms. We might identify and effectuate a
Business Combination with a Target Business which proves to be unsuccessful for
any number of reasons, many of which are due to the fact that the Target
Business is not identified at this time. If this occurs, the Company and our
shareholders might not realize any type of profit.

UNSPECIFIED INDUSTRY AND TARGET BUSINESS.

We will seek to acquire a Target Business without limiting ourselves to
a particular industry. Most likely, the Target Business will be primarily
located in the United States, although we reserve the right to acquire a Target
Business located outside the United States. In seeking a Target Business, we
will consider, without limitation, businesses which (i) offer or provide
services or develop, manufacture or distribute goods in the United States or
abroad, including, without limitation, in the following areas: Internet
services, real estate, health care and health products, educational services,
environmental services, consumer-related products and services (including
amusement, entertainment and/or recreational services), personal care services,
voice and data information processing and transmission and related technology
development or (ii) is engaged in wholesale or retail distribution. To date, we
have not selected any particular industry or any Target Business in which to
concentrate our Business Combination efforts. Accordingly, we are only able to
make general disclosures concerning the risks and hazards of effectuating a
Business Combination with a Target Business since there is presently no current
basis for us to evaluate the possible merits or risks of the Target Business or
the particular industry in which we may ultimately operate.

- 2 -

To the extent that we effect a Business Combination with a financially
unstable company or an entity in its early stage of development or growth
(including entities without established records of sales or earnings), we will
become subject to numerous risks inherent in the business and operations of
financially unstable and early stage or potential emerging growth companies. In
addition, to the extent that we effect a Business Combination with a Target
Business in an industry characterized by a high level of risk, we will become
subject to the currently unascertainable risks of that industry. An extremely
high level of risk frequently characterizes certain industries which experience
rapid growth. Although management will endeavor to evaluate the risks inherent
in a particular industry or Target Business, there can be no assurances that we
will properly ascertain or assess all significant risk factors.

PROBABLE LACK OF BUSINESS DIVERSIFICATION.

As a result of our limited resources, in all likelihood, we will have
the ability to effect only a single Business Combination. Accordingly, our
prospects for success will be entirely dependent upon the future performance of
a single business.

Unlike certain entities that have the resources to consummate several
Business Combinations or entities operating in multiple industries or multiple
segments of a single industry, it is highly unlikely that we will have the
resources to diversify our operations or benefit from spreading risks or
offsetting losses. Our probable lack of diversification could subject us to
numerous economic, competitive and regulatory developments, any or all of which
may have a material adverse impact upon the particular industry in which we may
operate subsequent to consummation of a Business Combination. The prospects for
our success may become dependent upon the development or market acceptance of a
single or limited number of products, processes or services. Accordingly,
notwithstanding the possibility of management assistance to the Target Business
by us, there can be no assurance that the Target Business will prove to be
commercially viable.

LIMITED ABILITY TO EVALUATE TARGET BUSINESS' MANAGEMENT.

While our ability to successfully effect a Business Combination will be
dependent upon certain key personnel, the future role of such personnel in the
Target Business cannot presently be stated with any certainty. There can be no
assurance that current management will remain associated in any operational
capacity with the Company following a Business Combination. Moreover, there can
be no assurances that current management will have any experience or knowledge
relating to the operations of the particular Target Business. Furthermore,
although we intend to closely scrutinize the management of a prospective Target
Business in connection with evaluating the desirability of effecting a Business
Combination, there can be no assurances that our assessment of such management
will prove to be correct, especially since none of our management are
professional business analysts. See "Directors, Executive Officers, Promoters
and Control Persons".

Accordingly, we will be dependant, in some significant respects, on the
ability of the management of the Target Business who are unidentifiable as of
the date hereof. In addition, there can be no assurances that such future
management will have the necessary skills, qualifications or abilities to manage
a public company. We may also seek to recruit additional managers to supplement
the incumbent management of the Target Business. There can be no assurances that
we will have the ability to recruit such additional managers, or that such
additional managers will have the requisite skill, knowledge or experience
necessary or desirable to enhance the incumbent management.

- 3 -

OPPORTUNITY FOR SHAREHOLDER EVALUATION OR APPROVAL OF BUSINESS COMBINATIONS.

Our shareholders will, in all likelihood, not receive nor otherwise
have the opportunity to evaluate any financial or other information which will
be made available to us in connection with selecting a potential Business
Combination until after we have entered into an agreement to effectuate a
Business Combination. Such agreement to effectuate a Business Combination,
however, may be subject to shareholder approval pursuant to applicable law. As a
result, our shareholders will be almost entirely dependent on the judgment and
experience of management in connection with the selection and ultimate
consummation of a Business Combination. In addition, under Florida law, the form
of Business Combination could impact upon the availability of dissenters' rights
(i.e., the right to receive fair payment with respect to the Company's Common
Stock) to shareholders disapproving the proposed Business Combination.

SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A BUSINESS COMBINATION.

We anticipate that the selection of a Target Business will be complex
and risky because of competition for such business opportunities among all
segments of the financial community. The nature of our search for the
acquisition of a Target Business requires maximum flexibility inasmuch as we
will be required to consider various factors and circumstances which may
preclude meaningful direct comparison among the various business enterprises,
products or services investigated. Investors should recognize that the possible
lack of diversification among our acquisitions may not us to offset potential
losses from one venture against profits from another. We have virtually
unrestricted flexibility in identifying and selecting a prospective Target
Business. In addition, in evaluating a prospective Target Business, management
will consider, among other factors, the following factors which are not listed
in any particular order:

- financial condition and results of operation of the Target Business;

- growth potential and projected financial performance of the Target
Business and the industry in which it operates;

- experience and skill of management and availability of additional
personnel of the Target Business;

- capital requirements of the Target Business;

- the availability of a transaction exemption from registration pursuant to
the Securities Act for the Business Combination;

- the location of the Target Business;

- competitive position of the Target Business;

- stage of development of the product, process or service of the Target
Business;

- degree of current or potential market acceptance of the product, process
or service of the Target Business;

- possible proprietary features and possible other protection of the
product, process or service of the Target Business;

- regulatory environment of the industry in which the Target Business
operates;

- costs associated with effecting the Business Combination; and

- 4 -

- equity interest in and possible management participation in the Target
Business.

The foregoing criteria are not intended to be exhaustive; any
evaluation relating to the merits of a particular Business Combination will be
based, to the extent relevant, on the above factors as well as other
considerations deemed relevant by us in connection with effecting a Business
Combination consistent with our business objective. In many instances, it is
anticipated that the historical operations of a Target Business may not
necessarily be indicative of the potential for the future because of the
possible need to shift marketing approaches substantially, expand significantly,
change product emphasis, change or substantially augment management, or make
other changes.

We will be dependent upon the owners of a Target Business to identify
any such problems which may exist and to implement, or be primarily responsible
for the implementation of, required changes. Because we may engage in a Business
Combination with a newly organized firm or with a firm which is entering a new
phase of growth, we will incur further risks, because in many instances,
management of the Target Business will not have proven its abilities or
effectiveness, the eventual market for the products or services of the Target
Business will likely not be established, and the Target Business may not be
profitable subsequent to a Business Combination.

Our limited funds and the lack of full-time management will likely make
it impracticable to conduct a complete and exhaustive investigation and analysis
of a Target Business before we commit our capital or other resources thereto.
Management decisions, therefore, will likely be made without detailed
feasibility studies, independent analysis, market surveys and the like which, if
we had more funds available to it, would be desirable. We will be particularly
dependent in making decisions upon information provided by the promoter, owner,
sponsor, or others associated with the business opportunity seeking our
participation.

In connection with our evaluation of a prospective Target Business,
management anticipates that it will conduct a due diligence review which will
encompass, among other things, meetings with incumbent management and inspection
of facilities, as well as review of financial or other information which will be
made available to us. The time and costs required to select and evaluate a
Target Business (including conducting a due diligence review) and to structure
and consummate the Business Combination (including negotiating relevant
agreements and preparing requisite documents for filing pursuant to applicable
securities laws cannot presently be ascertained with any degree of certainty.
Management only devotes a small portion of their time to the operations of the
Company, and accordingly, consummation of a Business Combination may require a
greater period of time than if management devoted its full time to the Company's
affairs.

However management will devote such time as they deem reasonably
necessary, to carry out the business and affairs of the Company, including the
evaluation of potential Target Businesses and the negotiation of a Business
Combination and, as a result, the amount of time devoted to our business and
affairs may vary significantly depending upon, among other things, whether we
have identified a Target Business or are engaged in active negotiations of a
Business Combination. Any costs incurred in connection with the identification
and evaluation of a prospective Target Business with which a Business
Combination is not ultimately consummated will result in a loss to the Company
and reduce the amount of capital available to otherwise complete a Business
Combination or for the resulting entity to utilize. In the event we deplete our
cash reserves, we might be forced to cease operations and a Business Combination
might not occur.

- 5 -

We anticipate that we will locate and make contact with Target
Businesses primarily through the reputation and efforts of management, who will
meet personally with existing management and key personnel, visit and inspect
material facilities, assets, products and services belonging to such prospects,
and undertake such further reasonable investigation as they deem appropriate.
Management has a network of business contacts and believes that prospective
Target Businesses will be referred to the Company through these network of
contacts.

We also expect that many prospective Target Businesses will be brought
to our attention from various other non-affiliated sources, including securities
broker-dealers, investment bankers, venture capitalists, bankers, and other
members of the financial community. We have neither the present intention, nor
does the present potential exist for us, to consummate a Business Combination
with a Target Business in which our management, promoters, or their affiliates
or associates directly or indirectly have a pecuniary interest, although no
existing corporate policies would prevent this from occurring. Although there
are no current plans to do so, we may engage the services of professional firms
that specialize in finding business acquisitions and pay a finder's fee or other
compensation. Since we have no current plans to utilize any outside consultants
or advisors to assist in a Business Combination, no policies have been adopted
regarding use of such consultants or advisors, the criteria to be used in
selecting such consultants or advisors, the services to be provided, the term of
service, or regarding the total amount of fees that may be paid. However,
because of our limited resources, it is likely that any such fee we agree to pay
would be paid in stock and not in cash. In no event will we pay a finder's fee
or commission to any officer or director or to any entity with which they are
affiliated for such service.

As a general rule, Federal and state tax laws and regulations have a
significant impact upon the structuring of business combinations. We will
evaluate the possible tax consequences of any prospective Business Combination
and will endeavor to structure a Business Combination so as to achieve the most
favorable tax treatment for us, the Target Business and their respective
stockholders. There can be no assurance that the Internal Revenue Service or
relevant state tax authorities will ultimately assent to our tax treatment of a
particular consummated Business Combination.

To the extent the Internal Revenue Service or any relevant state tax
authorities ultimately prevail in recharacterizing the tax treatment of a
Business Combination, there may be adverse tax consequences to us, the Target
Business and their respective stockholders. Tax considerations as well as other
relevant factors will be evaluated in determining the precise structure of a
particular Business Combination, which could be effected through various forms
of a merger, consolidation or stock or asset acquisition.

We will, in all likelihood, issue a substantial number of additional
shares in connection with the consummation of a Business Combination. To the
extent that such additional shares are issued, dilution to the interests of our
stockholders will occur. Additionally, if a substantial number of shares of
Common Stock are issued in connection with the consummation of a Business
Combination, a change in our control is likely to occur which will likely
affect, among other things, our ability to utilize net operating loss carry
forwards, if any.

- 6 -

Any such change in control may also result in the resignation or
removal of our present officer and director. If there is a change in management,
no assurance can be given as to the experience or qualification of such persons,
either in the operation of our activities or in the operation of the business,
assets or property being acquired. Management considers it likely that in order
to consummate a Business Combination, a change in control will occur; therefore,
management anticipates offering a controlling interest to a Target Business in
order to effectuate a Business Combination.

Management may actively negotiate for or otherwise consent to the
disposition of any portion of their Common Stock as a condition to or in
connection with a Business Combination. Therefore, it is possible that the terms
of any Business Combination will provide for the sale of some shares of Common
Stock held by management. It is likely that none of our other shareholders will
be afforded the right to sell their shares of Common Stock in connection with a
Business Combination pursuant to the same terms that Management will be
provided.

There are currently no limitations relating to our ability to borrow
funds to increase the amount of capital available to us to effect a Business
Combination or otherwise finance the operations of the Target Business. However,
our limited resources and lack of operating history could make it difficult for
us to borrow additional funds from other sources. The amount and nature of any
borrowings by us will depend on numerous considerations, including our capital
requirements, potential lenders' evaluation of our ability to meet debt service
on borrowings and the then prevailing conditions in the financial markets, as
well as general economic conditions. We do not have any arrangements with any
bank or financial institution to secure additional financing and there can be no
assurance that such arrangements if required or otherwise sought, would be
available on terms commercially acceptable or otherwise in our best interests.
Our inability to borrow funds required to effect or facilitate a Business
Combination, or to provide funds for an additional infusion of capital into a
Target Business, may have a material adverse effect on our financial condition
and future prospects, including the ability to effect a Business Combination. To
the extent that debt financing ultimately proves to be available, any borrowings
may subject us to various risks traditionally associated with indebtedness,
including the risks of interest rate fluctuations and insufficiency of cash flow
to pay principal and interest. Furthermore, a Target Business may have already
incurred debt financing and, therefore, all the risks inherent thereto.

If our securities are issued as part of an acquisition, such securities
are required to be issued either in reliance upon exemptions from registration
under applicable federal or state securities laws or registered for public
distribution. We intend to primarily target only those companies where an
exemption from registration would be available; however, since the structure of
the Business Combination has yet to be determined, no assurances can be made
that we will be able to rely on such exemptions. Registration of securities
typically requires significant costs and time delays are typically encountered.
In addition, the issuance of additional securities and their potential sale in
any trading market which might develop in our Common Stock, of which there is
presently no trading market and no assurances can be given that one will
develop, could depress the price of our Common Stock in any market which may
develop in our Common Stock. Further, such issuance of additional securities
would result in a decrease in the percentage ownership of present shareholders.

- 7 -

Due to our small size and limited amount of capital, our ability to
raise additional capital if and when needed could be constrained. Until such
time as any enterprise, product or service which we acquire generates revenues
sufficient to cover operating costs, it is conceivable that we could find
ourselves in a situation where it needs additional funds in order to continue
our operations. This need could arise at a time when we are unable to borrow
funds and when market acceptance for the sale of additional shares of our Common
Stock does not exist.

CONFLICTS OF INTEREST.

Management is not required to commit their full time to our affairs
and, accordingly, such persons may have conflicts of interest in allocating
management time among various business activities. Our affiliates, officers and
directors may engage in other business activities similar and dissimilar to
those we are engaged in. To the extent that management engages in such other
activities, they will have possible conflicts of interest in diverting
opportunities to other companies, entities or persons with which they are or may
be associated or have an interest, rather than diverting such opportunities to
us. As no policy has been established for the resolution of such a conflict, we
could be adversely affected should management choose to place their other
business interests before ours. No assurance can be given that such potential
conflicts of interest will not cause us to lose potential opportunities.
Management may become aware of investment and business opportunities which may
be appropriate for presentation to us as well as the other entities with which
they are affiliated. Management may have conflicts of interest in determining
which entity a particular business opportunity should be presented. Accordingly,
as a result of multiple business affiliations, management may have similar legal
obligations relating to presenting certain business opportunities to multiple
entities. In addition, conflicts of interest may arise in connection with
evaluations of a particular business opportunity by the board of directors with
respect to the foregoing criteria. There can be no assurances that any of the
foregoing conflicts will be resolved in our favor. We may consider Business
Combinations with entities owned or controlled by persons other than those
persons described above. There can be no assurances that any of the foregoing
conflicts will be resolved in our favor.

INVESTMENT COMPANY ACT AND OTHER REGULATION

We may participate in a Business Combination by purchasing, trading or
selling the securities of such Target Business. We do not, however, intend to
engage primarily in such activities. Specifically, we intend to conduct our
activities so as to avoid being classified as an "investment company" under the
Investment Company Act of 1940 (the "Investment Act"), and therefore to avoid
application of the costly and restrictive registration and other provisions of
the Investment Act, and the regulations promulgated thereunder.

ITEM 1A. RISK FACTORS.

The risks and uncertainties described below are not the only ones
facing the Company. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also impair our business operations. If
any of the following risks actually occur, our business could be materially
adversely affected. In such case, the Company may not be able to proceed with
its planned operations and your investment may be lost entirely.

- 8 -

RISK FACTORS

RISKS RELATED TO OUR BUSINESS

WE HAVE EXTREMELY LIMITED ASSETS AND NO SOURCE OF REVENUE.

We have virtually no assets and have had limited revenues since
inception. We will not receive revenues until we select an industry in which to
commence business or complete an acquisition, reorganization or merger. We can
provide no assurance that any selected or acquired business will produce any
material revenues for us or our stockholders, or that any such business will
operate on a profitable basis.

We will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until the consummation of a merger or other
business combination with a private company. This may result in our incurring a
net operating loss that will increase unless we consummate a business
combination with a profitable business. We cannot assure you that we can
identify a suitable business opportunity and consummate a business combination,
or that any such business will be profitable at the time of its acquisition by
the Company or ever.

WE FACE A NUMBER OF RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS, INCLUDING THE
POSSIBILITY THAT WE MAY INCUR SUBSTANTIAL DEBT WHICH COULD ADVERSELY AFFECT OUR
FINANCIAL CONDITION.

We intend to use reasonable efforts to complete a merger or other
business combination with an operating business. Such combination will be
accompanied by risks commonly encountered in acquisitions, including, but not
limited to, difficulties in integrating the operations, technologies, products
and personnel of the acquired companies and insufficient revenues to offset
increased expenses associated with acquisitions. Failure to manage and
successfully integrate acquisitions we make could harm our business, our
strategy and our operating results in a material way. Additionally, completing a
business combination is likely to increase our expenses and it is possible that
we may incur substantial debt in order to complete a business combination, which
can adversely affect our financial condition. Incurring a substantial amount of
debt may require us to use a significant portion of our cash flow to pay
principal and interest on the debt, which will reduce the amount available to
fund working capital, capital expenditures, and other general purposes. Our
indebtedness may negatively impact our ability to operate our business and limit
our ability to borrow additional funds by increasing our borrowing costs, and
impact the terms, conditions, and restrictions contained in possible future debt
agreements, including the addition of more restrictive covenants; impact our
flexibility in planning for and reacting to changes in our business as covenants
and restrictions contained in possible future debt arrangements may require that
we meet certain financial tests and place restrictions on the incurrence of
additional indebtedness and place us at a disadvantage compared to similar
companies in our industry that have less debt.

FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF MANAGEMENT TO LOCATE AND
ATTRACT A SUITABLE ACQUISITION.

The nature of our operations is highly speculative, and there is a
consequent risk of loss of an investment in the Company. The success of our plan
of operation will depend to a great extent on the operations, financial
condition and management of a yet to be identified business opportunity. While
management intends to seek business combination(s) with entities having
established operating histories, we cannot provide any assurance that we will be
successful in locating candidates meeting that criterion. In the event we
complete a business combination, the success of our operations may be dependent
upon management of the successor firm or venture partner firm and numerous other
factors beyond our control.

- 9 -

MANAGEMENT INTENDS TO DEVOTE ONLY A LIMITED AMOUNT OF TIME TO SEEKING A TARGET
COMPANY WHICH MAY ADVERSELY IMPACT OUR ABILITY TO IDENTIFY A SUITABLE
ACQUISITION CANDIDATE.

While seeking a business combination, management anticipates devoting
limited time to our affairs. Our officers have not entered into written
employment agreements with the Company and are not expected to do so in the
foreseeable future. This limited commitment may adversely impact our ability to
identify and consummate a successful business combination.

THERE CAN BE NO ASSURANCE THAT WE WILL SUCCESSFULLY CONSUMMATE A BUSINESS
COMBINATION.

We can give no assurances that we will successfully identify and
evaluate suitable business opportunities or that we will conclude a business
combination. Management has not identified any particular industry or specific
business within an industry for evaluation. We cannot guarantee that we will be
able to negotiate a business combination on favorable terms. At the date of this
filing, we have no arrangement, agreement or understanding with respect to
engaging in a merger with, joint venture with or acquisition of, a private or
public entity. No assurances can be given that we will successfully identify and
evaluate suitable business opportunities or that we will conclude a business
combination.

THE TERMS FOR ANY FUTURE BUSINESS COMBINATION THAT INVOLVE RELATED PARTIES OR
AFFILIATES MAY NOT BE ON TERMS THAT ARE COMPARABLE TO WHAT COULD BE OBTAINED
FROM UNAFFILIATED THIRD PARTIES.

Our management and affiliates will play an integral role in
establishing the terms for any future business combination. We do not have
policies and procedures in place to govern transactions with related parties or
affiliates, accordingly, these transactions may be negotiated between related
parties without "arms length" bargaining and, as a result, the terms of these
transactions may be different than transactions negotiated between unrelated
persons.

WE MAY FACE ADVERSE TAX CONSEQUENCES.

REPORTING REQUIREMENTS UNDER THE EXCHANGE ACT AND COMPLIANCE WITH THE
SARBANES-OXLEY ACT OF 2002, INCLUDING ESTABLISHING AND MAINTAINING ACCEPTABLE
INTERNAL CONTROLS OVER FINANCIAL REPORTING, ARE COSTLY.

The Company currently has no business that produces revenues; however,
the rules and regulations pursuant to the Exchange Act require a public company
to provide periodic reports which will require the Company to engage legal,
accounting and auditing services. The engagement of such services can be costly
and the Company is likely to incur losses which may adversely affect the
Company's ability to continue as a going concern. Additionally, the
Sarbanes-Oxley Act of 2002 will require the Company to establish and maintain
adequate internal controls and procedures over financial reporting. The costs of
complying with the Sarbanes-Oxley Act of 2002 and the limited time that
management will devote to the Company may make it difficult for the Company to

- 10 -

establish and maintain adequate internal controls over financial reporting. In
the event the Company fails to maintain an effective system of internal controls
or discover material weaknesses in our internal controls, we may not be able to
produce reliable financial reports or report fraud, which may harm our financial
condition and result in loss of investor confidence and a decline in our share
price.

THE TIME AND COST OF PREPARING A PRIVATE COMPANY TO BECOME A PUBLIC REPORTING
COMPANY MAY PRECLUDE US FROM ENTERING INTO A MERGER OR ACQUISITION WITH THE MOST
ATTRACTIVE PRIVATE COMPANIES.

Target companies that fail to comply with SEC reporting requirements
may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act
require reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some target
entities to prepare these statements may significantly delay or essentially
preclude consummation of an acquisition. Otherwise suitable acquisition
prospects that do not have or are unable to obtain the required audited
statements may be inappropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.

ANY POTENTIAL ACQUISITION OR MERGER WITH A FOREIGN COMPANY MAY SUBJECT US TO
ADDITIONAL RISKS.

If we enter into a business combination with a foreign company, we will
be subject to risks inherent in business operations outside of the United
States. These risks include, for example, currency fluctuations, regulatory
problems, punitive tariffs, unstable local tax policies, trade embargos, risks
related to shipment of raw materials and finished goods across national borders
and cultural and language differences. Foreign economies may differ favorably or
unfavorably from the United States economy in growth of gross national product,
rate of inflation, market development, rate of savings, and capital investment,
resource self-sufficiency and balance of payments positions, and in other
respects.

WE WILL NEED TO RAISE ADDITIONAL CAPITAL.

We will require additional financing. Any debt or equity financing may
be dilutive to shareholders, and debt financing, if available, would increase
expenses and may involve restrictive covenants. We may be required to raise
additional capital, at times and in amounts, which are uncertain, especially
under the current capital market conditions. Under these circumstances, if we
are unable to acquire additional capital or are required to raise it on terms
that are less satisfactory than desired, it may have a material adverse effect
on our financial condition.

RISKS RELATED TO OUR STOCKHOLDERS AND SHARES OF COMMON STOCK

WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK.

We have never paid cash dividends on our common stock and do not
presently intend to pay any dividends in the foreseeable future. We anticipate
that any funds available for payment of cash dividends will be re-invested into
the Company to further our business strategy.

WE CANNOT ASSURE YOU THAT FOLLOWING A BUSINESS COMBINATION WITH AN OPERATING
BUSINESS, OUR COMMON STOCK WILL BE LISTED ON NASDAQ OR ANY OTHER SECURITIES
EXCHANGE.

- 11 -

Following a business combination, we may seek the listing of our common
stock on NASDAQ or the NYSE AMEX. However, we cannot assure you that following
such a transaction, we will be able to meet the initial listing standards of
either of those or any other stock exchange. After completing a business
combination, until our common stock is listed on the NASDAQ or another stock
exchange, we expect that our common stock would be eligible to trade on the OTC
Bulletin Board, another over-the-counter quotation system, or on the "pink
sheets," where our stockholders may find it more difficult to dispose of shares
or obtain accurate quotations as to the market value of our common stock. In
addition, we would be subject to an SEC rule that, if we failed to meet the
criteria set forth in such rule, imposes various practice requirements on
broker-dealers who sell securities governed by the rule to persons other than
established customers and accredited investors. Consequently, such rule may
deter broker-dealers from recommending or selling our common stock, which may
further affect its liquidity. This would also make it more difficult for us to
raise additional capital following a business combination.

IT IS LIKELY THAT OUR COMMON STOCK WILL BE CONSIDERED "PENNY STOCK," WHICH MAY
MAKE IT MORE DIFFICULT FOR INVESTORS TO SELL THEIR SHARES DUE TO SUITABILITY
REQUIREMENTS.

Our common stock may be deemed to be "penny stock" as that term is
defined under the Exchange Act. Penny stocks generally are equity securities
with a price of less than $5.00. Penny stock rules impose additional sales
practice requirements on broker-dealers who sell to persons other than
established customers and "accredited investors." The term "accredited investor"
refers generally to institutions with assets in excess of $5,000,000 or
individuals with a net worth in excess of $1,000,000 or an annual income
exceeding $200,000 or $300,000 jointly with their spouse.

The penny stock rules require a broker/dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
disclosure document in a form prepared by the SEC, which provides information
about penny stocks and the nature and level of risks in the penny stock market.
Moreover, broker/dealers are required to determine whether an investment in a
penny stock is a suitable investment for a prospective investor. A broker/dealer
must receive a written agreement to the transaction from the investor setting
forth the identity and quantity of the penny stock to be purchased. These
requirements may reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more difficult for investors
in our common stock to sell shares to third parties or to otherwise dispose of
them. This could cause our stock price to decline.

WE EXPECT TO ISSUE MORE SHARES IN A MERGER OR ACQUISITION, WHICH WILL RESULT IN
SUBSTANTIAL DILUTION.

Our Articles of Incorporation authorize the Company to issue
100,000,000 shares of common stock. Any merger or acquisition effected by the
Company may result in the issuance of additional securities without stockholder
approval and may result in substantial dilution in the percentage of our common
stock held by our then existing stockholders. Moreover, our common stock issued
in any such merger or acquisition transaction may be valued on an arbitrary or
non-arm's-length basis by our management, resulting in an additional reduction
in the percentage of common stock held by our then existing stockholders. Our
board of directors has the power to issue any or all of such authorized but
unissued shares without stockholder approval. To the extent that additional
shares of common stock or preferred stock are issued in connection with a
business combination or otherwise, dilution to the interests of our stockholders
will occur and the rights of the holders of common stock might be materially
adversely affected.

- 12 -

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

Our executive offices are currently located at 160 East 65th Street New
York, NY 10065 which is also the principal place of business of our chief
executive officer. The office is provided rent free and should be sufficient to
meet our current needs.

ITEM 3. LEGAL PROCEEDINGS.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS.

None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.

A. MARKET INFORMATION

Our common stock currently trades on the Pink Sheets
Over-the-Counter-under the symbol ("BEMG"). There is a very limited market for
our common stock. Our common stock began trading on the Over-the-Counter
Bulletin Board on September 2009. There has been a very limited market for our
common stock.

2009 HIGH* LOW*

First Quarter ............................... $N/A $N/A
Second Quarter .............................. $N/A $N/A
Third Quarter ............................... $0.11 $0.10
Fourth Quarter .............................. $0.11 $0.10

2010 HIGH* LOW*

First Quarter ............................... $0.20 $0.10
Second Quarter .............................. $0.51 $0.25
Third Quarter (through August 2, 2010) ...... $0.20 $0.19

B. HOLDERS

As of December 31, 2009 there were 85 shareholders of record of our
Common Stock.

Our transfer agent is Pacific Stock Transfer Company. Their mailing
address is 4045 South Spencer Street Suite 403, Las Vegas, NV 89119.

C. DIVIDENDS

Holders of our common stock are entitled to receive such dividends as
our board of directors may declare from time to time from any surplus that we
may have. We have not paid any cash dividends on our common stock since the date
of our incorporation and we do not anticipate paying any common stock dividends
in the foreseeable future. We anticipate that any earnings will be retained for
development and expansion of our businesses and we do not anticipate paying any

- 13 -

cash dividends in the foreseeable future. Future dividend policy will depend
upon our earnings, financial condition, contractual restrictions and other
factors considered relevant by our Board of Directors and will be subject to
limitations imposed under Florida law.

D. EQUITY COMPENSATION PLANS

None.

E. SALE OF UNREGISTERED SECURITIES

At various dates since its incorporation, we have issued unregistered
shares of our Common Stock. Sales of unregistered shares of Common Stock were
made to in reliance on Section 4(2) of the Securities Act. In each case, the
subscriber was required to represent that the shares were purchased for
investment purposes, and the certificates were legended to prevent transfer
except in compliance with applicable laws. In addition, each subscriber was
provided with access to the Registrant's officers, directors, books and records
to obtain any information.

We have issued a total of 3,720,000 shares of our common stock to
Michelle Tucker for officer and director compensation valued at $43,750. We have
also issued to both Marshall Freeman and Francisco Del 75,000 shares of our
common stock which was valued at $1,950.

We also issued a total of 5,735,105 to the Tucker Family Spendthrift
Trust, an affiliated entity of Michelle Tucker, our former chief executive
officer, as consideration for repayment of outstanding loan obligations and for
accrued rent.

EFFECT OF "SHELL" COMPANY STATUS":

Because we are a shell company as defined under the Rules of the
Securities and Exchange Commission, we are disqualified from using a short form
of registration statement (S-8) for the issuance of employee stock options.
Furthermore, holders of restricted securities issued while we were or are a
shell company may not re-sell the restricted securities pursuant to SEC Rule 144
for a period of one year after we cease to be a shell and have filed the
necessary report with the SEC to that effect.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

FORWARD LOOKING STATEMENTS

The statements contained in this report that are not historical facts
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. Forward-looking statements are made based upon
management's current expectations and beliefs concerning future developments and
their potential effects upon the Company. There can be no assurance that future
developments affecting the Company will be those anticipated by management.
Actual results may differ materially from those included in the forward-looking
statements.

Readers are also directed to other risks and uncertainties discussed in
other documents filed by the Company with the Securities and Exchange
Commission. The Company undertakes no obligation to update or revise any
forward-looking information, whether as a result of new information, future
developments or otherwise.

- 14 -

The following discussion and analysis should be read in conjunction
with our audited financial statements for the fiscal year ended December 31,
2009.

We were previously a subsidiary of Pop Starz Records Inc. Our common
stock was spun off by Pop Starz Records Inc. on January 9, 2010. On April 12,
2010 we spun off the shares of common stock of our subsidiary Delta
Entertainment, Group. to our shareholders of record on December 15, 2009.

We are currently a shell Company and have limited continuing
operations. Our business objective is to effect a merger, exchange of capital
stock, asset acquisition or other similar business combination with an operating
or development stage business which desires to utilize our status as a reporting
corporation under the Exchange Act. The Company through its subsidiary, Famous
Records, was previously in the business of producing master recordings to
commercially release and promote finished "Master" recordings for distribution.

RESULTS OF OPERATIONS FOR FISCAL YEAR ENDED DECEMBER 31, 2009 AS COMPARED TO
DECEMBER 31, 2008

REVENUES:

We are a shell company with no operations. We had no revenues in either
2009 or 2008. Our revenues since Inception (July 5, 2006) totaled $2,760.

OPERATING UPDATE:

General and administrative expenses for the years ended 2009 and 2008
totaled $93,852 and $62,090 respectively. Total general and administrative
expenses since Inception totaled $178,073. Our Net loss from continuing
operations for the year ended December 31, 2009 and 2008 totaled $93,852 and
$62,090 and $177,564 since inception. We also recorded a net loss from
discontinued operations of $84,560 and $13,524. Our Net Losses for the years
ended December 31, 2009, 2008 and from Inception totaled $178,367, $(75,614) and
$275,603.

Our Net Loss per share in 2009 totaled $0.01 and $0.02 in 2008.

LIQUIDITY AND CAPITAL RESOURCES:

ASSETS AND LIABILITIES

At December 31, 2009, we had cash totaling $1,936, prepaid expenses of
$1,600 and assets attributable to our discontinued operations totaling $11,070
Our total assets were $14,606. At December 31, 2008, we had $8 ..00 in cash,
$7,366 in prepaid expenses and $11,626 assets attributable to discontinued
operations. Our total assets were $19,000.

Our liabilities at December 31, 2009 totaled $99,698 of which $94,211
represents current liabilities attributable to discontinued operations. Our
liabilities at December 31, 2008 totaled $48,234 consisting of $16,456 in
accounts payable, $5,295 due related parties, $14,400 in accrued liabilities and
$12,083 attributable to discontinued operations.

We have a working capital deficit at December 31, 2009 and 2008 of
$85,137 and $29,234 respectively.

We have no revenues to satisfy our ongoing liabilities. Unless we
secure equity or debt financing, of which there can be no assurance, or identify
an acquisition candidate, we will not be able to continue any operations.

- 15 -

PLAN OF OPERATION FOR FISCAL YEAR 2010

We will attempt to identify an acquisition candidate. We have had
discussions with several companies in different industries. However, we have not
come to terms with any company and there can be no assurance that we will enter
an agreement at any time in the near future.

OFF-BALANCE SHEET ARRANGEMENTS

None.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our financial statements have been examined to the extent indicated in
their reports by Malonebailey LLP and have been prepared in accordance with
generally accepted accounting principles and pursuant to Regulation S-K as
promulgated by the Securities and Exchange Commission and are included herein,
on Page F-1 hereof in response to Part F/S of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

On August 27, 2009, the Public Company Accounting Oversight Board
("PCAOB") revoked the registration of Moore & Associates, Chartered, causing the
board of directors of Beta Music Group, Inc. (the "Registrant") to concurrently
dismiss Moore & Associates, Chartered (the "Dismissal") and appoint a new
independent registered public accounting firm.

The reports of Moore & Associates, Chartered on the audited financial
statements of the Registrant for the fiscal years ended December 31, 2008 and
2007 did not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles,
except a going concern qualification in its audit report dated February 20, 2009
on the Registrant's financial statements for the fiscal year ended December 31,
2008. A going concern qualification was also included in its audit report dated
June 4, 2008 on the Registrant's financial statements for the fiscal year ended
December 31, 2007.

ITEM 9A. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") are designed to ensure that information required to be disclosed
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
rules and forms of the Securities and Exchange Commission. Our disclosure
controls and procedures are also designed to ensure that information required to
be disclosed in the reports that we file or submit under the Exchange Act is
accumulated and communicated to our management, including our principal
executive and principal financial officer, to allow timely decisions regarding
required disclosure. Our chief executive officer and chief financial officer
have reviewed the effectiveness of our disclosure controls and procedures as of
December 31, 2009 and, based on their evaluation, and, have concluded that the
disclosure controls and procedures were effective.

- 16 -

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the
year ended December 31, 2009 that materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as that term is defined in Rule
13a-15(f) under the Exchange Act. Under the supervision and with the
participation of our management, including our principal executive and principal
financial officer, we assessed, as of December 31, 2009, the effectiveness of
our internal control over financial reporting. This assessment was based on
criteria established in the framework in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on our assessment using those criteria, management concluded that our
internal control over financial reporting as of December 31, 2009, was
effective.

Internal control over financial reporting is defined as a process
designed by, or under the supervision of, our principal executive and principal
financial officers and effected by our 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:

o pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our
assets;

o provide reasonable assurance that transactions are recorded as
necessary to permit the preparation of financial statements in
accordance with U.S. generally accepted accounting principles and that
our receipts and expenditures are being made only in accordance with
authorization of our management and directors; and

o provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.

A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
internal control system are met. Because of the inherent limitations of any
internal control system, no evaluation of controls can provide absolute
assurance that all control issues, if any, within a company have been detected.

This Annual Report on Form 10-K does not include an attestation report
of the Company's independent registered public accounting firm regarding
internal control over financial reporting. Management's report was not subject
to attestation by the Company's independent registered public accounting firm
pursuant to rules of the Securities and Exchange Commission that permit the
Company to provide only management's report in this Annual Report on Form 10-K.

- 17 -

CORPORATE GOVERNANCE.

We have one director. We do not have an audit committee, compensation
committee or nominating committee. We do not have sufficient funds to secure
officer and directors insurance and we do not believe that we will be able to
retain an independent Board of Directors in the immediate future. We do not
believe that we will be able to attract independent board members until such
time as we acquire an operating business.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The following information sets forth the names of our officers and
directors, their present positions, and some brief information about their
background.

NAME: AGE: POSITION:
Edwin Mendlinger 74 CEO/President/Secretary/CFO/Director

OFFICERS AND DIRECTORS:

EDWIN MENDLINGER: Mr. Mendlinger currently serves as our sole officer
and director. He has been involved in investment banking for over 40 years. He
has been instrumental in structuring a variety of investment banking
transactions, including initial public offerings, reverse mergers,
consolidations and restructuring both as a principal and agent. He was the
founder of Mendlinger, Snyder Inc., formerly a FINRA member firm. He currently
works as an independent consultant in New York. He attended New York University
receiving his Bachelor of Science degree in accounting with a minor in finance.

COMMITTEES OF THE BOARD OF DIRECTORS

None.

COMPENSATION OF DIRECTORS

Our current director does not receive any compensation, either in cash
or common stock, for serving on our Board of Directors. Board members are
reimbursed for their reasonable expenses incurred in attending board or
committee meetings. Our prior Board members received 5,000 shares of our common
stock per month in consideration for serving on our Board of Directors.

TERMS OF OFFICE

Our directors are appointed for one-year terms to hold office until the
next annual general meeting of the holders of our Common Stock or until removed
from office in accordance with our by-laws. Our officers are appointed by our
board of directors and hold office until removed by our board of directors.

- 18 -

PENALTIES OR SANCTIONS

To the best of our knowledge, none of our directors, officers or
stockholders holding a sufficient number of securities to affect materially the
control of the Company, has been subject to any penalties or sanctions imposed
by a court relating to securities legislation or by a securities regulatory
authority or has entered into a settlement agreement with a securities
regulatory authority or been subject to any other penalties or sanctions imposed
by a court or regulatory body that would likely be considered important to a
reasonable investor making an investment decision.

PERSONAL BANKRUPTCIES

To the best of our knowledge, none of our directors, officers or
stockholders holding a sufficient number of securities to affect materially the
control of the Company, nor any personal holding company of any such person has,
within the last ten years become bankrupt, made a proposal under any legislation
relating to bankruptcy or insolvency, or been subject to or instituted any
proceedings, arrangement or compromise with creditors, or had a receiver,
receiver manager or trustee appointed to hold the assets of that person.

FAMILY RELATIONSHIPS

None.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Compliance with Section 16(a) of the Securities Exchange Act of 1934

For companies registered pursuant to section 12(g) of the Exchange Act,
Section 16(a) of the Exchange Act requires our executive officers and directors,
and persons who beneficially own more than ten percent of our equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file. To our knowledge, based solely on a review of the
copies of reports furnished to us and written representations that no other
reports were required, Section 16(a) filing requirements applicable to our
officers, directors and greater than ten percent beneficial owners were complied
with on a timely basis for the period which this report relates.

ITEM 11. EXECUTIVE COMPENSATION.

Our current CEO has not been paid any compensation since assuming
office in December 2009 and there is no employment agreement in place. The
Company has not set any parameters to pay any salaries. We believe that any
compensation to be paid should be based on the belief that any compensation
programs should: be aligned with stockholders' interests and business
objectives; reward performance; and be externally competitive and internally
equitable. We may compensate our officers with cash compensation and equity
awards.

Prior to Mr. Mendlinger's appointment as our chief executive officer,
Michelle Tucker served as our sole officer and a board member. Ms. Tucker was
paid a monthly salary of $3,000. Ms. Tucker was also received 5,000 shares of
the Company's common stock per month for serving as our chief financial officer
and 5,000 shares of common stock per month for serving on our Board of
Directors. Marshall Freeman and Francisco Del were former Board members. Mr.
Freeman and Mr. Del received 5,000 shares of common stock per month for serving
on our board of directors.

- 19 -

Ms. Tucker has not received any cash compensation. She has been issued
a total of 3,720,000 shares of our common stock for services rendered as an
officer and director. Mr. Freeman and Mr. Del have each been issued a total of
75,000 shares of our common stock as director compensation.

The following table discloses compensation paid during the fiscal years
ended December 31, 2009 and 2008 to the Company's Chief Executive Officer and
the most highly compensated executive officer whose total compensation exceeded
$100,000 for the fiscal year ended December 31, 2009 (collectively, the "Named
Executive Officers"). No restricted stock awards, long-term incentive plan
payouts or other types of compensation, other than the compensation identified
in the table below, were paid to the Named Executive Officers during these
fiscal years.

STOCK OPTION
AWARDS AWARDS
NAME AND SALARY BONUS ($) ($) TOTAL
PRINCIPAL POSITION YEAR ($) ($) (1) (2) ($)
------------------- ---- ------ ----- ---------- ------ ------
Edwin Mendlinger 2009 0 0 0 0 0
2008 0 0 0 0 0

Michelle Tucker (1) 2009 0 0 $43,750(2) 0 43,750
2008 0 0 0 0 0
---------
(1) Former CEO

(2) The amounts in these columns reflect the dollar amount recognized for
financial statement reporting purposes for the fiscal years indicated in
accordance with SFAS No. 123(R). These amounts reflect the Company's
accounting expense for these awards, and do not correspond to the actual
value that will be recognized by the named executives.

STOCK OPTIONS GRANTED/EXERCISED IN LAST YEAR

The Company has never issued any stock options.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information as of December 31,
2009 with respect to the beneficial ownership of the Company's Common Stock by:
(i) all persons known by the Company to be beneficial owners of more than 5% of
the Company's Common Stock, (ii) each current officer and director and Named
Executive Officer, and (iii) by all executive officers and directors as a group.

NAME NO. OF SHARES OF COMMON STOCK (1) PERCENT OF CLASS
---- --------------------------------- ----------------
Edwin Mendlinger .......... -0- -0-
Mark Teitelbaum ........... 13,711,676 82.8%
Michelle Tucker(1) ........ 1,528,795 9.2%
--------------------------------------------------------------------------------
(All officers and directors -0- -0-
as a group member)

(1) Includes 741,602 shares owned by Michelle Tucker and 787,193 shares of
common stock owned by the Tucker Family Spendthrift Trust, an entity in which
Ms. Tucker serves as a co-trustee.

- 20 -

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.

Except as described below, none of the following persons has any direct
or indirect material interest in any transaction to which we are a party during
the past two years, or in any proposed transaction to which the Company is
proposed to be a party:

(A) any director or officer;

(B) any proposed nominee for election as a director;

(C) any person who beneficially owns, directly or indirectly, shares
carrying more than 5% of the voting rights attached to our common
stock; or

(D) any relative or spouse of any of the foregoing persons, or any
relative of such spouse, who has the same house as such person or who
is a director or officer of any parent or subsidiary.

During the years ended December 31, 2009 our officers and directors
were issued a total of 3,870,000 shares of common stock for services rendered.

We also issued to the Tucker Family Revocable Trust, an affiliate of
Michelle Tucker, a total of 5,735,105 shares of our common stock in exchange for
repayment of loans and for rent.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

AUDIT FEES. The aggregate fees billed for professional services
rendered was $10,000 and $3,500 for the audit of our annual financial statements
for the fiscal years ended December 31, 2009 and 2008, respectively, and $4,500
and $4,500 for the reviews of the financial statements included in our Forms
10-Q for the fiscal years ended 2009 and 2008 respectively.

AUDIT-RELATED FEES. The aggregate fees billed in each of the last two
fiscal years for assurance and related services by the principal accountant that
are reasonably related to the performance of the audit or review of our
financial statements and not reported under the caption "Audit Fee." There were
no such fees billed for the fiscal year ended December 31, 2009 and 2008.

TAX FEES. No fees were billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax compliance,
tax advice and tax planning services.

ALL OTHER FEES. Other than the services described above, there were no
other services provided by our principal accountants for the fiscal years ended
December 31, 2009 and 2008.

We do not have an audit committee. Therefore, our entire Board of
Directors (the "Board") serves in the capacity of the audit committee. In
discharging its oversight responsibility as to the audit process, our Board
obtained from the independent auditors a formal written statement describing all
relationships between the auditors and us that might bear on the auditors'
independence as required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees."

- 21 -

Our Board discussed with the auditors any relationships that may impact
their objectivity and independence, including fees for non-audit services, and
satisfied itself as to the auditors' independence. The Board also discussed with
management and the independent auditors the quality and adequacy of its internal
controls. The Board reviewed with the independent auditors their management
letter on internal controls.

Our Board discussed and reviewed with the independent auditors all
matters required to be discussed by auditing standards generally accepted in the
United States of America, including those described in Statement on Auditing
Standards No. 61, as amended, "Communication with Audit Committees". Our entire
Board, acting in the capacity of the audit committee reviewed the audited
consolidated financial statements of the Company as of and for the year ended
December 31, 2009 and 2008 with the independent auditors. Management has the
responsibility for the preparation of the Company's financial statements and the
independent auditors have the responsibility for the examination of those
statements. Based on the above-mentioned review and discussions with the
independent auditors our Board of Directors approved the Company's audited
consolidated financial statements and recommended that they be included in its
Annual Report on Form 10-K for the year ended December 31, 2009, for filing with
the Securities and Exchange Commission.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) The following report and financial statements are filed together with this
Annual Report.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2009 AND 2008

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2009 AND
2008 AND CUMULATIVE SINCE INCEPTION (July 5, 2006).

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND
DECEMBER 31, 2008 AND CUMULATIVE SINCE INCEPTION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

NOTES TO FINANCIAL STATEMENTS

(b) Index to Exhibits

31.1 Certificate of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

31.2 Certificate of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

32.1 Certificate of the Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

32.2 Certificate of the Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

- 22 -

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

BETA MUSIC GROUP, INC.

Date: August 4, 2010

By: /s/ Edwin Mendlinger
--------------------
Edwin Mendlinger
CEO and Director

In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

By: /s/ Edwin Mendlinger Date: August 4, 2010
--------------------
Edwin Mendlinger
CEO and Director

- 23 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of
Beta Music Group, Inc.
(A Development Stage Company)
New York, NY

We have audited the consolidated balance sheets of Beta Music Group, Inc. ("the
Company") as of December 31, 2008 and 2009, and the consolidated statements of
operations, shareholders' equity and cash flows for the years then ended and for
the period from July 5, 2006 (inception) to December 31, 2009. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. 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 financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of at the Company as of
December 31, 2008 and 2009, and the results of their operations and cash flows
for the years then ended and for the period from inception through December 31,
2009, in conformity with accounting principles generally accepted in the United
States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 8 to the
consolidated financial statements, the Company has incurred losses since
inception, has not attained profitable operations and is dependent upon
obtaining adequate financing to fulfill its exploration activities. These
factors raise substantial doubts about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also discussed
in Note 8. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

MALONEBAILEY, LLP
www.malonebailey.com
Houston, Texas

August 4, 2010

F-1

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Balance Sheets

December 31, December 31,
2009 2008
------------ ------------
ASSETS
Current Assets:
Cash ......................................... $ 1,936 $ 8
Prepaid expenses ............................. 1,600 7,366
Current assets of discontinued operations .... 11,070 11,626
------------ ------------

Total Assets .............................. $ 14,606 $ 19,000
============ ============

LIABILITIES AND STOCKHOLDER'S DEFICIT

Current Liabilities:
Accounts payable ............................. $ - $ 16,456
Accounts payable-related parties ............. - 5,295
Accrued liabilities .......................... 487 14,400
Notes payable ................................ 5,000 -
Current liabilities of discontinued operations 94,211 12,083
------------ ------------
Total Current Liabilities ................. 99,698 48,234
------------ ------------

Total Liabilities ............................... 99,698 48,234
------------ ------------

Stockholder's Equity
Common stock, $.01 par value 100,000,000
authorized and 16,555,315 and 6,800,210
issued and outstanding, respectively ........ 165,553 68,002
Additional paid in capital ................... 24,958 -
Deficit Accumulated in the Development Stage (275,648) (97,236)
------------ ------------
Total Beta Music Group, Inc. Equity ....... (85,137) (29,234)
Non Controlling Interest ..................... 45 -
------------ ------------
Total Liabilities and Stockholders' Deficit $ 14,606 $ 19,000
============ ============

The accompanying notes are an integral part of these
consolidated financials statements.

F-2

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Statements of Operations

From
July 5, 2006
(Date of Inception)
December 31, December 31, to December 31,
2009 2008 2009
------------ ------------ -------------------

Revenue ................................. $ - $ - $ 2,760

Cost of sales ........................... - - 2,251
------------ ------------ -------------------

Gross profit ............................ - - 509

General administrative expenses ......... 93,852 62,090 178,073
------------ ------------ -------------------

Net loss from continuing operations ..... (93,852) (62,090) (177,564)
------------ ------------ -------------------

Loss from discontinued operations ....... (84,560) (13,524) (98,084)
------------ ------------ -------------------

Provision for income taxes .............. - - -
------------ ------------ -------------------

Net Loss ................................ $ (178,412) $ (75,614) $ (275,648)
------------ ------------ -------------------
Less: Net loss attributable to
noncontrolling Interest ................ (45) - (45)
NET LOSS ATTRIBUTABLE TO BETA MUSIC
GROUP, INC.............................. (178,367) (75,614) (275,603)
============ ============ ===================

Basic and Diluted Loss per Common Share
Loss from continuing operations ...... $ (0.01) $ (0.02)
============ ============
Loss from discontinued operations .... $ (0.01) $ -
============ ============
Net loss ............................. $ (0.01) $ (0.02)
============ ============

Basic and Diluted Weighted Average
Common Shares Outstanding ............. 12,616,763 3,265,157
============ ============

The accompanying notes are an integral part of these
consolidated financials statements.

F-3

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Statement of Changes in Shareholders' Equity

Deficit
Accumulated
in the Total
Common Paid in Development Stockholders'
Stock Amount Capital Stage Deficit
---------- -------- ------- ----------- -------------

Balance, July 5, 2006, date of inception ........................ - $ - $ - $ - $ -
Proceeds from Founders shares issued on July 14, 2006 at
$.01 per share ................................................ 10,000 100 - - 100
Net Loss ........................................................ - - - (100) (100)
---------- -------- ------- ----------- -------------
Balance December 31, 2006 ....................................... 10,000 100 - (100) -
Net Loss ........................................................ - - - (21,522) (21,522)
---------- -------- ------- ----------- -------------
Balance, December 31, 2007 ...................................... 10,000 100 - (21,622) (21,522)
Shares issued for conversion of accounts payable-related parties
at $.01 per share on March 31, 2008 ........................... 2,160,087 21,601 - - 21,601
Shares issued for conversion of accounts payable-related party
at $.01 per share on April 24, 2008 ........................... 244,000 2,440 - - 2,440
Shares issued for conversion of accounts payable-related party
on May 27, 2008 ............................................... 940,091 9,401 - - 9,401
Shares issued for officer compensation on May 31, 2008 .......... 60,000 600 - - 600
Shares issued for conversion of accounts payable-related party
on August 21, 2008 ............................................ 85,000 850 - - 850
Shares issued for officer compensation on August 21, 2008 ....... 298,000 2,980 - - 2,980
Shares issued for conversion of accounts payable-related party
and accrued wages-related parties on September 4, 2008 ........ 1,106,590 11,066 - - 11,066
Shares issued for officer compensation on May 31, 2008 .......... 20,000 200 - - 200
Shares issued for conversion of accounts payable-related party
on October 22, 2008 ........................................... 175,500 1,755 - - 1,755
Shares issued for conversion of rent for October 2008 ........... 150,000 1,500 - - 1,500
Shares issued for officer compensation on October 22, 2008 ...... 320,000 3,200 - - 3,200
Shares issued for prepaid expenses on October 22, 2008 .......... 1,230,942 12,309 - - 12,309
Net Loss ........................................................ - - - (75,614) (75,614)
---------- -------- ------- ----------- -------------
Balance, December 31, 2008 ...................................... 6,800,210 68,002 - (97,236) (29,234)
Shares issued for conversion of accounts payable-related party
at 12/31/2008 on Janaury 7, 2009 at $.01 per share ............ 529,500 5,295 - - 5,295
Shares issued for borrowing from related party in January ....... 30,000 300 - - 300
Shares issued for accrued officer compensation on Jaunary 7, 2009 640,000 6,400 - - 6,400
Shares issued for officer compensation of January 2009 on
Jaunary 7, 2009 ............................................... 320,000 3,200 - - 3,200
Shares issued for conversion of accrued rent of November and
December 2008 on January 7, 2009 .............................. 300,000 3,000 - - 3,000
Shares issued for rent of January 2009 .......................... 150,000 1,500 - - 1,500
Shares issued at $.01 per share for prepaid expense on
January 7, 2009 ............................................... 50,000 500 - - 500
Shares issued at $.01 per share for accrued liability at
December 31, 2008 on January 7, 2009 .......................... 500,000 5,000 - - 5,000
Shares issued for conversion of accounts payable-related party
on February 4, 2009 ........................................... 400,000 4,000 - - 4,000
Shares issued for officer compensation on February 4, 2009 ...... 320,000 3,200 - - 3,200
Shares issued for rent of February 2009 on February 4, 2009 ..... 150,000 1,500 - - 1,500
Shares issued for consulting expenses on August 3, 2009 at $.01 . 100,000 1,000 - - 1,000
Shares issued for conversion of accounts payable-related party
on August 3, 2009 ............................................. 3,190,605 31,906 - - 31,906
Shares issued for rent of March - July 2009 on August 3, 2009 ... 750,000 7,500 - - 7,500
Shares issued for officer compensation of March - July 2009 on
August 3, 2009 ................................................ 1,600,000 16,000 - - 16,000
Shares issued for conversion of accounts payable-related party
on September 1, 2009 .......................................... 85,000 850 - - 850
Shares issued for officer compensation of August-September 2009
on August 3, 2009 ............................................. 640,000 6,400 - - 6,400
Contributed capital from related party debt forgiveness ......... - - 24,958 - 24,958
Net Loss ........................................................ - - - (178,412) (178,412)
---------- -------- ------- ----------- -------------
Balance, December 31, 2009 ...................................... 16,555,315 $165,553 $24,958 $ (275,648) $ (85,137)
========== ======== ======= =========== =============

The accompanying notes are an integral part of these
consolidated financials statements.

F-4

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Statements of Cash Flows

From
July 5, 2006
(Date of Inception)
December 31, December 31, to December 31,
2009 2008 2009
------------ ------------ -------------------

OPERATING ACTIVITIES:
Net loss ............................................ $ (178,412) $ (75,614) $ (275,648)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Rent expense paid through issuance of common stock 41,800 9,750 51,550
Shares of subsidiary issued to minority interest . 45 - 45
Amortization of prepaid expenses ................. 11,129 - 11,129
Changes in Assets and Liabilities:
Accounts receivable ........................... (834) - (834)
Prepaid expenses .............................. (1,600) (3,750) (1,600)
Accounts payable .............................. (16,456) 16,456 -
Accounts payable-related parties .............. 2,750 - 2,750
Accrued liabilities ........................... 487 8,000 487
------------ ------------ -------------------
Net Cash Provided (Used) by Operating Activities . (91,978) (26,743) (163,008)
------------ ------------ -------------------

FINANCING ACTIVITIES:
Proceeds from related party advances .......... 92,879 26,672 163,917
Repayment of related party advances ........... (1,600) - (1,600)
Proceeds from notes payable ................... 5,000 - 5,000
------------ ------------ -------------------
Net Cash Provided by Financing Activities ........ 96,279 26,672 167,317
------------ ------------ -------------------

Net Increase in Cash .......................... 4,301 (71) 4,309
------------ ------------ -------------------

Cash at Beginning of Period ......................... 8 - -
------------ ------------ -------------------
Cash at End of Period ............................... $ 4,309 $ (71) $ 4,309
============ ============ ===================

Supplemental Disclosures:
Cash paid for income taxes ....................... $ - $ - $ -
============ ============ ===================
Cash paid for interest ........................... $ - $ - $ -
============ ============ ===================

The accompanying notes are an integral part of these
consolidated financials statements.

F-5

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

NOTE 1: DESCRIPTION OF COMPANY AND BASIS OF PRESENTATION

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

The consolidated financial statements include the accounts of the Company's
subsidiaries Delta Entertainment Group, Inc. ("Delta") and Famous Records, Corp.
("Famous").

The Company, through its subsidiary Famous, is in the business of producing
master recordings to commercially release and promote finished "Master"
recordings for distribution on an exclusive basis during a specific term to
record stores, other non-traditional outlets and digitally through downloads &
ringtones. Pursuant to a Stock Sale and Agreement, this line of business is
presented as discontinued operations. (See below.)

Delta Entertainment Group, Inc. was incorporated in the state of Florida on
October 2, 2009. Its principal business purpose is to act as a holding
corporation for Famous.

On December 14, 2009, pursuant to a Stock Purchase and Sale Agreement between a
third party and certain shareholders of Beta, the Board of Directors of Beta
resolved to spin off Delta Music Group, Inc. and its subsidiary Famous Records
Corp. This Board action was taken in relation to the change in control of Beta.
Shareholders of Beta on the record date, December 13, 2009 will receive one
share of Delta for each share of Beta held. The spin-off was effective on the
date the Registration statement for Delta Entertainment Group, Inc. was declared
effective by the Securities and Exchange Commission, which was April 13, 2010.

Due to the Stock Purchase and Sale Agreement, these financial statements present
the assets, liabilities and operations of Delta and Famous as discontinued
operations.

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

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

F-6

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

NOTE 2: SUMMARY OF ACCOUNTING POLICIES

CONSOLIDATION PRINCIPLES

The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States for all periods
presented and include the accounts of the Company and its subsidiaries. All
intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions, which 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 revenues and
expenses during the reporting period.

RECLASSIFICATIONS

The prior year financial statements have been reclassified to conform with
current year presentation. These reclassifications do not impact previously
reported amounts.

CASH AND CASH EQUIVALENTS:

Cash and cash equivalents are considered to be all highly liquid investments
purchased with an initial maturity of three (3) months or less.

CONCENTRATION OF CREDIT RISK:

Financial instruments that potentially subject the company to credit risk
consist principally of cash and cash equivalents and receivables. The Company
places its cash and cash equivalents with financial institutions. Deposits are
insured to FDIC limits. At December 31, 2009 and 2008 there was no uninsured
cash.

Other financial instruments include notes payable and amounts due to related
parties for wages and advances. Due to the short-term maturity of these
obligations and the stated interest rates on notes payable, the carrying value
of these instruments represent their fair value.

REVENUE RECOGNITION:

Through April 13, 2010, the effective date of the Spin-off, revenue was
generated through the sale and licensing of recorded music. Revenues are
recognized when all of the following have been met:

o Persuasive evidence of an arrangement exists;

o Delivery or service has been performed;

o The customer's fee is deemed to be fixed or determinable and free of
contingencies or significant uncertainties

o Collectability is probable.

F-7

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

The Company, through its subsidiary Famous, has entered into an agreement with a
distributor whereby we have granted them the right to distribute our recorded
music. Based on the terms set forth in the agreement, we have determined that
the conditions for revenue recognition are met when we have obtained
notification by the distributor of the amount due to us. There are minimum
payment thresholds in the agreement, and no payment is made to us until we have
met these thresholds, however, the Company has determined that collectability is
probable once the distributor has provided us with a statement detailing the
amounts due to us.

ADVERTISING:

Advertising costs are charged to operations when incurred. Advertising costs for
the years ended December 31, 2009 and 2008 was $550, and nil, respectively. The
advertising costs are included as part of discontinued operations in the
statement of operations.

INCOME TAXES:

Deferred income tax assets and liabilities are computed for differences between
the financial statement and tax bases of assets and liabilities that will result
in future taxable or deductible amounts and are based on enacted tax laws and
rates applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to reduce
deferred income tax assets to the amount expected to be realized.

INCOME (LOSS) PER SHARE:

Basic net loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares outstanding.
Diluted net loss per common share is computed similar to basic net loss per
common share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.
At December 31, 2009 and 2008 diluted net loss per share is equivalent to basic
net loss per share as the inclusion of any shares committed to be issued would
be anti-dilutive.

RECENT ACCOUNTING PRONOUNCEMENTS

In January 2010, the FASB issued Accounting Standards Update 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership
of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the
scope of current US GAAP. It clarifies the decrease in ownership provisions of
Subtopic 810-10 and removes the potential conflict between guidance in that
Subtopic and asset de-recognition and gain or loss recognition guidance that may
exist in other US GAAP. An entity will be required to follow the amended
guidance beginning in the period that it first adopts FAS 160 (now included in
Subtopic 810-10). For those entities that have already adopted FAS 160, the
amendments are effective at the beginning of the first interim or annual
reporting period ending on or after December 15, 2009. The amendments should be
applied retrospectively to the first period that an entity adopted FAS 160. The
Company does not expect the provisions of ASU 2010-02 to have a material effect
on the financial position, results of operations or cash flows of the Company.

F-8

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This update
addressed the accounting for multiple-deliverable arrangements to enable vendors
to account for products or services (deliverables) separately rather than a
combined unit and will be separated in more circumstances that under existing US
GAAP. This amendment has eliminated that residual method of allocation.
Effective prospectively for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-13 to have a
material effect on the financial position, results of operations or cash flows
of the Company.

NOTE 3: STOCK PURCHASE AND SALE AGREEMENT AND DISCONTINUED OPERATIONS

In December 2009, certain shareholders entered into a Stock Purchase and Sale
Agreement to sell 13,711,676 shares of common stock held to an individual.
Pursuant to that agreement, the Board of Directors of the Company resolved to
spin off the subsidiaries to the shareholders of record as of December 15, 2009.
The effective date of the spin-off was to be the later of December 31, 2009 or
the date that the Securities and Exchange Commission declared the registration
statement of Delta Entertainment Group, Inc. effective, which was April 13,
2010. Accordingly, the financial statements present the assets, liabilities and
operations of the subsidiaries as discontinued operations.

NOTE 4: RELATED PARTY TRANSACTIONS

At December 31, 2009 and 2008 Due to Related Parties consists of the following:

DECEMBER 31, DECEMBER 31,
2009 2008
------------ ------------
Due to Tucker Family Spendthrift Trust .. $ 30,333 $ 5,363
Due to Alpha Music Mfg. Corp ............ 2,750 -
------------ ------------
$ 33,083 $ 5,363
============ ============

In December 2009, in relation to the Stock Purchase and Sale Agreement, accrued
wages related party in the amount of $15,000 were forgiven and recorded as
Additional Paid in Capital. Additionally, the Tucker Family Spendthrift Trust
forgave $9,958 of amounts due to them, which was also recorded as Additional
Paid in Capital.

During October 2009, through Delta, the Company entered into an employment
agreement with Michelle Tucker to act as President of the Company. Per the terms
of her employment agreement, she is to receive compensation of $3,000 per month.
At December 31, 2009, included in discontinued operations is $9,000 of
compensation expense pursuant to the agreement.

During October 2009, the Delta entered into agreements with three individuals to
serve as Corporate Directors. Per the terms of the agreements the Director's are
to receive 5,000 shares of common stock of Delta for each month that they serve.
If the Director serves as a Chairman of any committee, he is to receive an
additional 2,500 shares per month, and if he is serves on any committee, he is
to receive an additional 1,250 shares per month. As of December 31, 2009, these
individuals were entitled to 45,000 shares for serving as board of directors of
Delta, these shares were accounted for but none of these shares were issued as
of the date of this report. Included in discontinued operations at December 31,
2009 is $45 pursuant to the Directors' agreements.

F-9

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

Effective October 1, 2008, the Company, through Famous, entered into an
employment agreement and a Director agreement with Jeffrey Collins to act as
President of Famous and as a member of the Board of Directors of Famous. Mr.
Collins is to receive compensation in the amount of $4,000 per month for his
services as President of Famous. Additionally, on October 22, 2008, the Board of
Directors of Beta Music Group, Inc. approved the issuance of 1,230,942 shares of
Beta common stock to Mr. Collins in relation to his employment agreement with
Famous. The Beta shares were valued at $.01 per share which represented their
fair value at the time of issuance. The shares of Beta were to vest over a
period of three years, and should his employment with Famous cease prior to the
end of the three year term, the shares are subject to forfeiture on a pro-rata
basis. In connection with the spin-off of Delta from Beta, Mr. Collins is to
receive shares of Delta on a one on one basis, therefore, should his employment
with Famous cease prior to the end of the three year term, the Delta shares are
subject to forfeiture on a pro-rata basis.

Per the terms of his Director Agreement, Mr. Collins is to receive 5,000 shares
of Famous common stock per month for being a member of the Board of Directors of
Famous. If he should serve as Chairman of any committee, he shall receive 2,500
Famous shares per month, and for service on any other committee he shall receive
an additional 1,250 Famous shares per month. At December 31, 2009, Mr. Collins
was due 75,000 shares of common stock of Famous, these shares have been
accounted for, however, they have not yet been issued as of the date of this
report.

In relation to the aforementioned agreements with Mr. Collins, for the years
ended December 31, 2009 and 2008 compensation expense in the amount of $51,816
and $12,699, respectively, is included as a part of the loss from discontinued
operations.

In October 2009, the Company, through its subsidiary Famous, has entered into a
month to month lease agreement with Famous' president. Monthly rent expense is
$500. Rent expense in the amount of $1,500 has been included as part of
discontinued operations pursuant to the lease agreement. Prior to May 2009,
Famous had been provided office space, telephone and secretarial services from a
related party at no charge.

In April 2008, the Company entered into a month to month lease agreement with
the Tucker Family Spendthrift Trust. Monthly rent expense was $1,500 and for the
years ended December 31, 2009 and 2008, rent expense in the amount of $10,500
and $12,750, respectively, has been recorded and is included in discontinued
operations. The lease was terminated in July 2009. Prior to April 2008, the
Company had been provided office space, telephone and secretarial services from
a related party at no charge.

In January and May 2008, the Company entered into agreements with individuals to
serve as Corporate Directors. Per the terms of the agreements, the Directors are
to receive 5,000 shares of common stock of the company for each month that they
serve as a Director. If the Director serves as a Chairman of any committee, he
is to receive an additional 2,500 shares per month, and if he serves on any
committee, he is to receive an additional 1,250 shares per month. The Officers'
resigned their positions in December 2009 pursuant to the Stock Purchase and
Sale Agreement.

F-10

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

In October 2008, the Company entered into an employment agreement with Michelle
Tucker, whereby she is to receive compensation in the amount of $3,000 per month
for serving as President to the Company. Michelle Tucker also receives 5,000
shares of common stock per month for serving as the Chief Financial Officer to
the Company. Pursuant to the Stock Purchase and Sale Agreement, Ms. Tucker
resigned her positions with the Company during December 2009.

Included in discontinued operations for the years ended December 31, 2009 and
2008 is $43,458 and $11,592, respectively related to the aforementioned Officer
and Directors' Agreements.

During the years ended December 31, 2009 and 2008, the Tucker Family Spendthrift
Trust made cash advances to the Company $75,361 and $22,852, respectively, for
general operating expenses.

During the year ended December 31, 2008, the Company issued 5,559,268 shares of
common stock to related parties as payment for services, rent expense and
advances from a related party.

During the year ended December 31, 2009, the Company issued 9,105,105 shares of
common stock to related parties as payment for services, rent expense and
advances from a related party.

Currently, Beta is provided office space, telephone and secretarial services
from a related party at no charge.

NOTE 5: INCOME TAXES

At December 31, 2009 and 2008 deferred tax assets consist of the following:

DECEMBER 31, DECEMBER 31,
2009 2008
------------ ------------
Federal loss carryforwards .............. $ 109,000 $ 39,000
Less: valuation allowance ............... (109,000) (39,000)
------------ ------------
$ - $ -
============ ============

The Company has established a valuation allowance equal to the full amount of
the deferred tax asset primarily due to uncertainty in the utilization of the
net operating loss carry forwards.

As of December 31, 2009, the effective tax rate is lower than the statutory rate
due to net operating losses.

The estimated net operating loss carry forwards of approximately $240,000 begin
to expire in 2028 for both federal and state purposes.

NOTE 6: STOCKHOLDERS' EQUITY

At December 31, 2009, the authorized capital of the Company consisted of
100,000,000 shares of common stock with a par value of $.001. At December 31,
2009, there are 16,555,315 shares outstanding.

At inception, the Company issued 10,000 shares of common stock to its founders.

F-11

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

On March 31, 2008, the Company issued 2,160,087 shares of common stock as
repayment of $21,601 of amounts due to related parties.

On April 24, 2008, the Company issued 244,000 shares of common stock as
repayment of $2,440 of advances made by the Tucker Family Spendthrift Trust to
the Company.

On May 27, 2008, the Company issued 940,091 shares of common stock to the Tucker
Family Spendthrift Trust as repayment of advances made to the Company in the
amount of $9,401. Also on that date, the Company issued 60,000 shares valued at
$600 to Officers and Directors for their services to the Company.

On August 21, 2008, the Company issued 298,000 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of advances made to the Company in
the amount of $2,980. Also on that date, the Company issued 85,000 shares of
common stock valued at $850 to Officers and Directors for their services to the
Company.

On September 4, 2008, the Company issued 1,106,590 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of $2,816 of advances made to the
Company and $8,250 of accrued rent. Also on that date, the Company issued 20,000
shares of common stock value at $200 to Officers and Directors of the Company
for their services.

On October 22, 2008, the Board of Directors approved the issuance of 1,230,942
shares of Company common stock valued at $12,309 to Mr. Collins, the President
of Famous, in relation to his employment agreement. The Company issued 325,500
for repayment of $1,755 in advances from the Tucker Family Spendthrift Trust,
$1,500 in accrued rent, as well as 320,000 shares valued at $3,200 to Directors
and Officers for their services to the Company.

On January 7, 2009, the Company issued 1,009,500 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of $5,595 of advances made to the
Company and $4,500 for accrued rent and rent expense. The Company issued 960,000
shares of common stock valued at $9,600 to Officers and Directors of the Company
for their services. The Company also issued 550,000 shares of common stock
valued at $5,500 for services.

On February 4, 2009, the Company issued 550,000 to the Tucker Family Spendthrift
Trust as repayment of $4,000 of advances made to the Company and $1,500 for rent
expense. Also on that date, the Company issued 320,000 shares valued at $3,200
to Officers and Directors of the Company for their services.

On August 3, 2009, the Company issued 3,940,605 shares of common stock to the
Tucker Family Spendthrift Trust as repayment $31,906 of advances made to the
Company and $7,500 of accrued rent The Company issued 1,600,000 shares of common
stock valued at $16,000 to Officers and Directors for their services and also
100,000 shares valued at $1,000 to vendors for accrued liabilities and
consulting expenses.

On September 1, 2009, the Company issued 85,000 shares to the Tucker Family
Spendthrift Trust as repayment of $850 of advances made to the Company. Also on
that date, the Company issued 640,000 shares valued at $6,400 to Officers and
Directors.

F-12

Beta Music Group, Inc. and Subsidiaries
(A Development Stage Entity)
Notes to Consolidated Financial Statements

NOTE 7: NONCONTROLLING INTEREST

The Company has a minority shareholder in its subsidiary Delta at December 31,
2009 due to shares issued to its Officer and Director. Following is a
reconciliation of shares outstanding in Delta at December 31, 2009:

Shares outstanding at December 31, 2008 .......... -

Shares issued to Beta at inception of Delta ...... 16,555,315

Shares issued to Non Controlling Party ........... 45,000
----------

Total Shares outstanding at December 31, 2009 .... 16,600,315
==========

Delta Percentage Ownership of Famous ............. 99.7%
==========
Non Controlling Interest Ownership of Famous ..... 0.3%
==========

NOTE 8: GOING CONCERN

At December 31, 2009, the Company has a working capital deficit. As such, the
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company does not have sufficient working
capital for its planned activities, which raises substantial doubt about its
ability to continue as a going concern.

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

NOTE 9: SUBSEQUENT EVENTS

Subsequent to December 31, 2009 the Company received proceeds from notes payable
of $15,000. The term of the loan was payable on demand of the creditor and the
loan bears interest at 6% annually.

The registration statement for Delta Entertainment Group, Inc. was declared
effective on April 13, 2010, and the Company distributed its shares of common
stock in Delta to the shareholders of record as of December 13, 2009.

F-13