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EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER - OSL HOLDINGS, INC.f10q1111ex31i_osl.htm
EX-32.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER - OSL HOLDINGS, INC.f10q1111ex32i_osl.htm
EX-32.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER - OSL HOLDINGS, INC.f10q1111ex32ii_osl.htm
EXCEL - IDEA: XBRL DOCUMENT - OSL HOLDINGS, INC.Financial_Report.xls
EX-31.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER - OSL HOLDINGS, INC.f10q1111ex31ii_osl.htm


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

FORM 10-Q

(Mark One)

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

For the quarter ended: November 30, 2011

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

For the transition period from ___________ to ___________

Commission File Number: 333-108690

OSL HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Nevada
 
98-0441032
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
     
1710 First Avenue
New York, NY
 
10028
(Address of principal executive offices)
 
(Zip Code)
(212) 419-4900
(Registrant’s telephone number, including area code)

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

Indicate by checkmark 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 o

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

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

Large Accelerated Filer o
Accelerated Filer o
Non-Accelerated Filer o
(Do not check if a smaller reporting company)
Smaller Reporting Company x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of January 13, 2012: 60,068,255 shares of common stock.
 
 
 

 
 
OSL HOLDINGS INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY RED ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES)

FORM 10-Q

THREE MONTHS ENDED NOVEMBER 30, 2011 AND 2010
___________________

TABLE OF CONTENTS
___________________
   
Page
     
PART I - FINANCIAL INFORMATION
     
Item 1.
Financial Statements
 
 
Condensed Consolidated Balance Sheets
4
 
Condensed Consolidated Statements of Operations
5
 
Condensed Consolidated Statements of Stockholders' Deficit
6
 
Condensed Consolidated Statements of Cash Flows
7
 
Notes to Condensed Consolidated Financial Statements
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
15
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
18
Item 4.
Controls and Procedures
18
 
PART II -- OTHER INFORMATION
     
Item 1.
Legal Proceedings
19
Item 1A.
Risk Factors
19
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
19
Item 3.
Defaults Upon Senior Securities
19
Item 4.
(Removed & Reserved)
19
Item 5
Other Information
19
Item 6.
Exhibits
19
 
Signatures
20

 
2

 

CAUTIONARY STATEMENT RELATED TO FORWARD LOOKING STATEMENTS
 
 
This Quarterly Report on Form 10-Q includes certain forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to revenue, revenue composition, earnings, projected plans, performance, contract procurement, demand trends, future expense levels, trends in average headcount and gross margins, and the level of expected capital expenditures. Such forward-looking statements are based on the beliefs of, estimates made by, and information currently available to OSL Holdings Inc. management and are subject to certain risks, uncertainties and assumptions. Any statements contained herein (including without limitation statements to the effect that the Company or management "estimates," "expects," "anticipates," "plans," "believes," "projects," "continues," "may," "will," "could," or "would" or statements concerning "potential" or "opportunity" or variations thereof or comparable terminology or the negative thereof) that are not statements of historical fact should be construed as forward-looking statements. The actual results of OSL Holdings Inc. may vary materially from those expected or anticipated in these forward-looking statements. The realization of such forward-looking statements may be impacted by certain important unanticipated factors including those discussed in "Risk Factors" under Item 1A, and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Because of these and other factors that may affect OSL Holdings Inc.’s operating results, past performance should not be considered as an indicator of future performance, and investors should not use historical results to anticipate results or trends in future periods. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers should carefully review the risk factors described in this and other documents that OSL Holdings Inc. files from time to time with the Securities and Exchange Commission ("SEC"), including subsequent Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

 
3

 
 
PART I – FINANCIAL INFORMATION
 
Item 1.  Financial Statements


OSL HOLDINGS INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY RED ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES)
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
             
   
As of
November 30,
   
As of
August 31,
 
   
2011
   
2011
 
   
(Unaudited)
   
(Unaudited)
 
Assets
 
Current assets:
           
  Cash
  $ 933     $ 1,147  
  Prepaid and other assets
    -       12,500  
    Total current assets
    933       13,647  
                 
  Website development costs
    185,800       185,800  
     Total assets
  $ 186,733     $ 199,447  
                 
Liabilities and Stockholders’ Deficit
 
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 644,195     $ 301,393  
Advances from related parties
    37,508       28,508  
Senior secured convertible note, including accrued interest of $42,500 and Nil as of November 30, 2011 and 2010, respectively
    134,200       -  
Secured promissory note
    240,000       -  
Total current liabilities
    1,055,903       329,901  
                 
Stockholders’ deficit:
               
Preferred Stock, $.001 par value; 5,000,000 shares authorized; 650,001 and Nil shares issued and outstanding at November 30, 2011 and August 31, 2011, respectively
    650       -  
Common Stock, $.001 par value; 120,000,000 shares authorized; 59,368,255 and 50,000,000 shares issued and outstanding at November 30, 2011 and August 31, 2011, respectively
    59,368       50,000  
Additional paid-in capital
    19,350       20,000  
Deficit accumulated during the development stage
    (948,538 )     (200,454 )
Total stockholders’ deficit
    (869,170 )     (130,454 )
Total liabilities and stockholders’ deficit
  $ 186,733     $ 199,447  
   
 
See accompanying notes to the condensed consolidated financial statements.
 
 
4

 

OSL HOLDINGS INC. AND SUBSIDIARIES
(FORMERLY RED ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)


             
   
Three Months Ended November 30, 2011
   
September 16, 2010 (Inception) to November 30, 2010
   
September 16, 2010
(Inception) to
November 30, 2011
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                   
Revenues
  $ -     $ -     $ -  
Operating expenses:
                       
General and administrative expenses
    96,636       48,000       297,090  
Total operating expenses
    96,636       48,000       297,090  
Operating loss
    (96,636 )     (48,000 )     (297,090 )
Other:
                       
Interest expense
    (2,500 )     -       (2,500 )
Gain on forgiveness of debt
    100,000       -       100,000  
     Other income, net
    100,000       -       100,000  
Net income (loss) before income tax expense
    864       (48,000 )     (199,590 )
Income tax expense
    -       -       -  
Net income (loss)
  $ 864     $ (48,000 )   $ (199,590 )
Net loss per common share
                       
Net loss per common share – basic and diluted
  $ 0.00     $ (0.00 )        
                         
Weighted average common shares outstanding – basic and diluted
    52,149,099       50,000,000          
                         

See accompanying notes to the condensed consolidated financial statements.
 
 
5

 
 
OSL HOLDINGS INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY RED ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
THREE MONTHS ENDED NOVEMBER 30, 2011
(UNAUDITED)
 
    Preferred Stock     Common Stock    
Additional
Paid in 
         
Stockholders’ 
 
   
Shares
   
Amount
   
Shares
   
Amount
    Capital    
Deficit
    Deficit  
Balance, August 31, 2011
    -     $ -       50,000,000     $ 50,000     $ 20,000     $ (200,454 )   $ (130,454 )
                                                         
Reverse  acquisition
    650,001       650       1,068,255       1,068       (650)       (748,948 )     (747,880 )
                                                         
Shares issued as payment of  Senior Secured Convertible Note
    -       -       8,300,000       8,300       -       -       8,300  
                                                         
Net income
                                            864       864  
                                                         
Balance, November 30, 2011
    650,001     $ 650       59,368,255     $ 59,368     $ 19,350     $ (948,538 )   $ (869,170 )

See accompanying notes to the condensed consolidated financial statements.
 
 
6

 
 
OSL HOLDINGS INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY RED ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

   
Three Months Ended 
November 30, 2011
   
September 16, 2010 (Inception) to
November 30, 2010
   
September 16, 2010 (Inception) to
November 30, 2011
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
Cash flows from operating activities:
                 
Net income (loss):
  $ 864     $ (48,000 )   $ (199,590 )
Adjustments to reconcile net income (loss) to cash provided by operating activities:
                       
Stock issued for services to founders
    -       48,000       48,000  
Gain on forgiveness of debt
    (100,000 )     -       (100,000 )
Accrued interest
    2,500       -       2,500  
(Increase) decrease in:
                       
Prepaid and other assets
    12,500       -       -  
Accounts payable and accrued liabilities
    84,883       -       200,476  
Net cash provided by (used in) operating activities
    747       -       (48,614 )
                         
Cash flows from investing activities:
                       
Cash acquired on reverse merger
    39       -       39  
Net cash provided by investing activities
    39       -       39  
                         
Cash flows from financing activities:
                       
Advances from related parties
    9,000       100       37,508  
Payment on cancellation of shares pursuant to Crisnic Share Cancellation
Agreement
    (10,000 )     -       (10,000 )
Issuance of common stock
    -       -       22,000  
Net cash provided by (used in) financing activities
    (1,000 )     100       49,508  
                         
Change in cash:
                       
Net (decrease) increase
    (214 )     100       933  
Balance at beginning of period
    1,147       -       -  
Balance at end of period
  $ 933     $ 100     $ 933  
Supplemental disclosures of cash flow information:
                       
                         
Cash paid for:
                       
Income taxes
  $ -     $ -     $    
Interest
  $ -     $ -     $    
                         
Non cash financing activities
                       
Common shares issued for repayment of Senior Secured Promissory Note
    8,300       -       8,300  
Accounts payable assumed on reverse acquisition
    257,919       -       257,919  
Acquisition of website for accounts payable
    -       185,800       185,800  
Senior secured convertible note assumed on reverse acquisition
    240,000       -       240,000  
Deficit assumed on reverse acquisition
    748,948       -       748,948  
 
See accompanying notes to the condensed consolidated financial statements.
 
 
7

 
 
 
OSL HOLDINGS INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY RED ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED NOVEMBER 30, 2011 AND FROM INCEPTION (SEPTEMBER 16, 2010) TO NOVEMBER 30, 2010 AND 2011
 
Note 1- Organization, Nature of Business and Basis of Presentation
 
Organization and Nature of Business

OSL Holdings Inc. (the “Company”) was originally incorporated in Nevada on November 22, 2004 as Maneki Mining Inc. (“Maneki”), a development stage company in the business of mineral exploration.  In August 2006, Red Rock Pictures, Inc. consummated a share exchange agreement, whereby 100% of its shares were acquired by Maneki in exchange for 1,800,000 shares of Maneki.  On October 31, 2006, Maneki filed a certificate of amendment, changing the legal name of the corporation to Red Rock Pictures Holdings, Inc.

Red Rock Pictures, Inc. was incorporated on August 18, 2006 under the laws of the State of Nevada and was engaged in the business of developing, financing, producing and licensing feature-length motion pictures and direct response infomercials.

On June 6, 2008, the Company entered into a stock for stock exchange agreement with Studio Store Direct, Inc. (“SSD”) and all of the current SSD Shareholders.  Pursuant to the stock for stock exchange agreement, the Company acquired 100% of the assets of SSD by issuing 11,000,000 restricted common shares in exchange for all the issued and outstanding shares of SSD.  Further, SSD became a wholly owned subsidiary of the Company.  With the addition of SSD, the Company also operated as a traditional infomercial production and distribution company.

On February 14, 2011, the Board of Directors authorized by written consent to effect a 1-for-100 reverse split of the Company’s issued and outstanding common shares. Except where the context indicates otherwise, all share figures in the consolidated financial statements give effect to the reverse stock split.

On October 10, 2011, the Company completed a Share Exchange Agreement (the “Share Exchange”) with Office Supply Line, Inc. (“OSL”), a company incorporated in the State of Nevada on September 16, 2010, whereby OSL exchanged all of the issued and outstanding shares of OSL in exchange for 50,000,000 shares of the Company’s common stock.

As part of the Share Exchange, the Company entered into a Share Cancellation Agreement and Release (the "Share Cancellation Agreement") with Crisnic and OSL. Pursuant to the Share Cancellation Agreement, Crisnic cancelled 14,130,000 shares in exchange for $10,000 cash and a Secured Promissory Note in the principal amount of $240,000 (the "Promissory Note"). As security for this Promissory Note, the Company issued Crisnic 650,001 shares of Series A Preferred Stock (the "Preferred Shares") which were placed into escrow, and will be released based on the terms in an Escrow Agreement. The Preferred Shares have 100:1 voting rights. Upon payment of the principal amount due under the Promissory Note the Preferred Shares will be cancelled. In the event that the Demand Date, as defined in the Promissory Note, has passed and Crisnic has not been paid in full, as provided in the Promissory Note, the Preferred Shares will be released to Crisnic.
 
Immediately prior to the Share Exchange, the Company entered into an Asset Assignment Agreement (the "Asset Assignment Agreement") by and among Reno Rolle ("Rolle"), Todd Wiseman ("Wiseman"), former principals of the Company, and Red Rock Direct (an entity managed by Rolle and Wiseman), pursuant to which the Company assigned certain of its assets to Red Rock Direct in consideration of the cancelation of shares of the Company of Rolle (143,809 shares) and Wiseman (5 million shares due under an employment agreement), pursuant to Share Cancellation Agreements and Releases entered into among each of Rolle (and Lynn Rolle, the wife of Rolle) and Wiseman, the Company and OSL; and the assumption of certain indebtedness of the Company by Red Rock Direct (the "Spin-Off"). The Company assets to be assigned to Red Rock Direct include (i) the Company's current direct response television commercial (hosted by Suzanne Somers) (the "Infomercial"), (ii) the book currently entitled The Anti-Aging Miracle by Dr. James William Forsythe, M.D., and any and all proceeds derived therefrom, including any health supplements sold as described in the Infomercial, (iii) the feature length film entitled "Endless Bummer", (iv) the book currently entitled Sleep and Grow Young by Dr. James William Forsythe, M.D, and (v) a management agreement with Mike Flynt (collectively, the "Assigned Assets").
 
On October 17, 2011, the Company changed the name to OSL Holdings Inc, by filing a Certificate of Amendment to Articles of Incorporation with the State of Nevada to more accurately reflect the new business operations. The Company became a holding company, which, through OSL, markets and distributes "Products for the Office."
 
 
8

 
 
Basis of Presentation
 
The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Securities and Exchange Commission, or SEC, Form 10-Q and Article 8 of SEC Regulation S-X. They do not include all of the information and footnotes required by generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature.  The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto of Office Supply Line, Inc. for the year ended July 31, 2011 included in our Current Report on Form 8-K filed on October 19, 2011.  Operating results for the three months ended November 30, 2011 are not necessarily indicative of the results that may be expected for future quarters or the year ending August 31, 2012.

Note 2 – Going Concern

The Company's consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced losses from operations since inception, does not have significant sources of revenue and has working capital deficiencies that raise substantial doubt as to its ability to continue as a going concern. The Company's existence is dependent upon management's ability to develop profitable operations and resolve its liquidity problems.
 
The Company is in the process of acquiring interests in existing businesses with ongoing revenues and will be launching direct sales of office products in the near future.  The Company will require additional capital, either through debt or private placements, in order to execute its business plan.  The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Note 3 – Summary of Significant Accounting Policies

The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America.  Presented below are those policies considered particularly significant:
 
Development Stage Company

The Company’s consolidated financial statements are presented as those of a development stage enterprise.  Activities during the developmental stage primarily include equity based financing and further implementation of the Company’s business plan.  The Company has not generated any revenues since inception.

Principles of Consolidation
 
The accompanying consolidated financial statements of the Company include the accounts of OSL Holdings, Inc. and its wholly owned subsidiaries, OSL, Red Rock Pictures Inc. and Studio Store Direct Inc. Inter-company balances 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 requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Examples include estimates of the useful life of equipment and intangibles, the impairment of long-lived assets, intangibles and goodwill, the value of stock compensation and the estimates of revenue and costs related to film production.  These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.
 
 
9

 
 
Cash and Cash Equivalents
 
Cash equivalents consist of all highly liquid investments with original maturities of ninety days or less.

Internal Website Development Costs

Under Accounting Standards Codification (“ASC”) 350-50 – Intangibles – Goodwill and Other – Website Development Costs, costs and expenses incurred during the planning and operating stages of the Company's web site development are expensed as incurred. Costs incurred in the web site application and infrastructure development stages are capitalized by the Company and amortized to expense over the web site's estimated useful life or period of benefit. As of November 30, 2011 and August 31, 2011, the Company capitalized costs totaling $185,800 related to its website development. No amortization has been recorded as the website currently remains in development and has not been placed into service.

Fair Value of Financial Instruments
 
The Company measures its financial assets and liabilities in accordance with the requirements of ASC 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
  
The carrying value of the Company's cash, accounts payable and accrued liabilities, advances from stockholder, senior secured convertible debt, secured note payable and advances from related parties approximates fair value because of the short-term maturity of these instruments.
 
Income Taxes
 
The Company accounts for income taxes pursuant to ASC 740, Income Taxes.  Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.
 
Earnings or Loss per Share
 
The Company accounts for earnings per share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share.  Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year.  Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.  There were no dilutive financial instruments as of November 30, 2011 or August 31, 2011.
 
 
10

 
 
Stock-Based Compensation
 
The Company accounts for Stock-Based Compensation in accordance with ASC 718, Compensation – Stock Compensation. ASC 718 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity ’ s equity instruments or that may be settled by the issuance of those equity instruments.  ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements.  That cost is measured based on the fair value of the equity or liability instruments issued.
 
Recent Accounting Pronouncements

In May 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”.  ASU No. 2011-04 does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting.  The ASU is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the ASU as required.  The ASU will affect the Company’s fair value disclosures, but will not affect the Company’s results of operations, financial condition or liquidity.
 
In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income”.  The ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity, and instead requires consecutive presentation of the statement of net income and other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements.  ASU No. 2011-05 is effective for interim and annual periods beginning after December 15, 2011.  The Company will adopt the ASU as required.  It will have no effect on the Company’s results of operations, financial condition or liquidity.
 
In September 2011, the FASB issued ASU 2011-08, “Testing Goodwill for Impairment”, an update to existing guidance on the assessment of goodwill impairment.  This update simplifies the assessment of goodwill for impairment by allowing companies to consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before performing the two-step impairment review process.  It also amends the examples of events or circumstances that would be considered in a goodwill impairment evaluation.  The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted.  The Company is currently evaluating the effect that the adoption of ASU 2011-08 may have on its goodwill impairment testing.
 
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

Note 4 – Acquisition of Office Supply Line, Inc.

On October 10, 2011, the Company completed a Share Exchange Agreement (the “Share Exchange”) with Office Supply Line, Inc. (“OSL”), a company incorporated in the State of Nevada on September 16, 2010, whereby OSL exchanged all of the issued and outstanding shares of OSL in exchange for 50,000,000 shares of the Company’s common stock.

For financial statement reporting purposes, the Share Exchange was treated as a reverse acquisition, with OSL deemed the accounting acquirer and the Company deemed the accounting acquiree under the purchase method of accounting. The reverse acquisition is deemed a recapitalization and the consolidated financial statements represent the continuation of the financial statements of OSL (the accounting acquirer/legal subsidiary) except for its capital structure, and the consolidated financial statements reflect the assets and liabilities of OSL recognized and measured at their carrying value before the combination and the assets and liabilities of the Company (the accounting acquiree/legal parent). The equity structure reflects the equity structure of the Company, the legal parent, and the equity structure of OSL, the accounting acquirer, as restated using the exchange ratios established in the share exchange agreement to reflect the numbers of shares of the legal parent.

Note 5 – Website Development Costs
 
As of November 30, 2011 and August 31, 2011, the Company has capitalized website development costs of $185,800.  The website currently remains in development and has not been placed into service, therefore no amortization has been recorded for the three months ended November 30, 2011 or since September 16, 2010 (inception) to November 30, 2011 and 2010, respectively.

Note 6 – Advances from Related Parties
 
The Company has received funding from certain related parties to help fund the operating needs of the Company.  The balance outstanding as of November 30, 2011 and August 31, 2011 was $37,508 and $28,508, respectively.  The loans are non-interest bearing, unsecured and due on demand.
 
 
11

 
 
Note 7 – Secured Promissory Note

As part of the Share Exchange, the Company entered into a Share Cancellation Agreement and Release (the "Share Cancellation Agreement") with Crisnic and OSL. Pursuant to the Share Cancellation Agreement, Crisnic cancelled 14,130,000 shares in exchange for $10,000 cash and a Secured Promissory Note in the principal amount of $240,000 (the "Promissory Note"). Under the terms of the Promissory Note, OSL would pay Crisnic $50,000 on November 8, 2011, then $25,000 every subsequent week until December 27, 2011, and then one final payment of $15,000 on January 3, 2012. As security for this Promissory Note, the Company issued Crisnic 650,001 shares of Series A Preferred Stock (the "Preferred Shares") which were placed into escrow, and will be released based on the terms in an Escrow Agreement. The Preferred Shares have 100:1 voting rights. Upon payment of the principal amount due under the Promissory Note the Preferred Shares will be cancelled. In the event that the Demand Date, as defined in the Promissory Note, has passed and Crisnic has not been paid in full, as provided in the Promissory Note, the Preferred Shares will be released to Crisnic. The Promissory Note is non-interest bearing.

Due to delays in raising financing, the Company was unable to meet the original repayment terms of the Promissory Note. The Company paid $10,000 in January 2012 and is currently renegotiating the repayment terms with Crisnic. The Company will continue to make payments of $10,000 per week until the repayment terms can be renegotiated. The Company has not received any written demand for repayment and the preferred shares have not been released from escrow.
 
Note 8 – Senior Secured Convertible Note

In December 2011, the Company entered into three employment agreements and issued 500,000 shares of common stock at a price of $0.05 per share to the employees in accordance with the agreements.

On December 28, 2008, the Company issued a twelve month $100,000 Senior Secured Convertible Note (the “Senior Secured Convertible Note”) to Emerald Asset Advisors, LLC (“Emerald”). The original terms of the Senior Secured Convertible Note was a one year term loan bearing interest at 10% per annum where interest accrues and is payable in cash upon maturity provided that the elected conversion to common shares does not occur.  At any time or times on or after December 28, 2008, Emerald was entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.06 per common share.  During the year ended August 31, 2010, Emerald advanced the Company an additional $100,000 in the form of a short term loan with no terms attached (the “Additional Debt”).  

Pursuant to an agreement dated September 19, 2011, by and between Emerald and the Exchange LLC (“Exchange LLC”), Emerald assigned the Senior Secured Convertible Note and the Additional Debt to the Exchange LLC.   On October 12, 2011, the Company and the Exchange LLC entered into Amendment No. 1 (the “Amendment”) to the Senior Secured Convertible Note and Additional Debt.  Pursuant to the Amendment, the Additional Debt was forgiven by the Exchange LLC and the maturity date of the Senior Secured Convertible Note was extended to October 5, 2012.  In consideration of the forgiveness by the Exchange LLC of the Additional Debt and extending the maturity date of the Senior Secured Convertible Note to October 5, 2012, the Company agreed to amend the conversion price of the Senior Secured Convertible Note to $0.001. Any conversion of debt owed to the Exchange LLC under the Senior Secured Convertible Note must be approved by the Board of Directors of the Company and in the event that the Board of Directors does not approve such conversion request, the corresponding principal amount shall be due. There is no material relationship between the Company or its affiliates and the Exchange LLC, other than with respect to the Amendment.

During the three months ended November 30, 2011, the Company issued a total of 8,300,000 shares of common stock at the conversion price of $0.001 or $8,300 as partial repayment the Senior Secured Convertible Note.  As of November 30, 2011, the total remaining balance outstanding as of November 30, 2011 to Exchange LLC is $134,200, including accrued interest of $42,500.

Note 9 – Capital Stock
 
As part of the acquisition discussed in Note 4, the Company recapitalized its share capital, adding 1,068,255 common stock and 650,001 preferred stock.  This reflects the share capital of OSL Holdings Inc. and cancellation of shares immediately prior to the recapitalization.
 
 
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During the three months ended November 30, 2011, the Company issued a total of 8,300,000 shares of common stock at the conversion price of $0.001 or $8,300 representing partial repayment of the Senior Secured Convertible Note, as discussed in Note 7 above.
 
Note 10 – Income Taxes

As at November 30, 2011 and August 31, 2011, there were no differences between financial reporting and tax bases of assets and liabilities.  The Company will have tax losses available to be applied against future years' income as result of the losses incurred.  However, due to the losses incurred in the period and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carry forward will not be realized through the reduction of future income tax payments.  Accordingly a 100% valuation allowance has been recorded for deferred income tax assets.
 
 
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Note 11 – Subsequent Events
 
On December 15, 2011, the Company acquired a 50% equity interest in Corporate Diversity Solutions, Inc., a New Jersey Corporation (“CDS”) and issued 200,000 shares of common stock in December 2011 to the shareholders of CDS to purchase this interest.  The Company also entered into an employment agreement with an employee of CDS and issued 500,000 shares in accordance with this agreement.
 
 
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Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

OSL Holdings Inc. is a holding company that will develop or acquire business units with the purpose of collecting and transmitting real-time consumer and business sales data that facilitates the ability to sell data, manage electronic marketplaces, operate real-time loyalty rewards and transact with buyers in multiple channels.  We plan to sell data to manufactures for designated markets, such as urban retail, convenient and/or liquor stores.  We plan to facilitate developing electronic marketplaces with real time buy-side and sell side capabilities for multiple private & public markets.  We plan to operate a real-time loyalty rewards platform that can facilitate the earning and redemption of our currency at the point of the transaction (online, mobile, at retail) as well as on future transactions.  The Company plans on leveraging these business units to connect buyers, sellers as well as channels that will clearly differentiate itself from the competitive landscape so that each venture can scale revenues and their respective offerings to their specific market(s) or across markets.  The Company will bring onboard additional management talent with broad experience in technology, distribution, interactive and affinity marketing as well as the diversity markets.

Our wholly owned subsidiary, Office Supply Line, Inc. (“OSL”) is an integrated marketer and distributor of “Products for the Office.”  OSL differentiates itself from its competition by leveraging innovative marketing programs and technology.  It operates in the competitive office supply market as a virtual distributor, leveraging the existing logistical capabilities of its suppliers who provide for inventory logistics, distribution and delivery. OSL focuses on the development and or acquisition of cutting edge technology, sales, marketing and customer service.

On December 15, 2011, we acquired 48% of Corporate Diversity Solutions, Inc., a New Jersey Corporation (“CDS”), through OSL.  CDS is a Women's Business Enterprise National Council (WBENC) certified Tier One distributor of office products and related services to Fortune 1000 companies in North America.  With strong focus on technology and e-commerce based solutions combined with over 100 years of combined office products distribution experience within its growing staff, CDS has become one of the fastest growing distributors in North America by utilizing a solid foundation to provide practical solutions to the industry.  CDS is committed to being a leading diversity procurement & distribution organization which is today focused on office supply, sustainability, janitorial, research development, and MRO (maintenance, repair and overhaul) supplier of goods and data maintenance services.

An initial focus has been on building a business unit focused on finalizing the development of our rewards technology platform by the end of the first quarter of calendar 2012 that will initially leverage current and developing business relationships within the diversity and affinity marketplaces that have substantial membership bases.  The intent of the rewards program is to design, develop, operate and market a loyalty program that is based on “reward currency” and is available for its members to earn and redeem in online ecommerce sites, brick and mortar retail stores, mobile and through other service providers. The offering is a combination of the loyalty program and the technology platform and marketplace.  The benefits of the offering include enabling millions of members of the “loyalty program” to earn and redeem ”reward currency” regardless of the payment method used when making a purchase (i.e. Visa, Amex, MasterCard, or cash) and to redeem the points both in retail stores, or when shopping online regardless of the payment method used to gain discounts on purchases. The program will allow retail merchants and online ecommerce site operators with a package of products and services for better business efficiency and for boosting sales and profitability.

We are also in substantive discussions with several potential acquisitions and strategic partnerships that will expand our reach into Fortune 1000 corporations in retail, telecommunications, publishing, and finance as well as reach into local, state and federal government.  The purpose of these discussions is to further secure major corporate contracts, access to additional membership bases, and expand our technology as well as retain the talent needed to execute our plan.

Collectivity these business units will create a transactional network that brings together brands, distributors, wholesalers, retailers (both online commerce and brick and mortar [land based] stores) and consumer’s audiences to accelerate commerce and value.  The goal is to take advantage of these cross platform (online, mobile, at retail), cross channel (b2c, b2b, govt.) and cross vertical (diversity, non-profit, green etc.) commerce companies to enhance the overall offering of each.  For example the acquisition, of CDS will allow real-time electronic commerce within the diversity market, as CDS is a Tier 1 Certified Woman-owned company, as well as allow CDS to differentiate itself by offering the reward platform as added value to its clients.  Our expectation is that these initiatives will produce substantial contracts in the first quarter of calendar 2012 with growth in revenue by the third quarter of calendar 2012.
 
 
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Recent Developments

Share Exchange with OSL
 
On October 10, 2011, we completed a Share Exchange with OSL whereby OSL exchanged all of the issued and outstanding equity interests of OSL in exchange for 50,000,000 shares of our common stock, par value $0.001 per share.  As a result of the Share Exchange, OSL became our wholly owned subsidiary.

As part of the Share Exchange, the Company entered into a Share Cancellation Agreement and Release (the " Share Cancellation Agreement") with Crisnic and OSL. Pursuant to the Share Cancellation Agreement, Crisnic agreed to cancel 14,130,000 shares in exchange for $10,000 and a Secured Promissory Note in the principal amount of $240,000 (the "Promissory Note"). Under the terms of the Promissory Note, OSL would pay Crisnic $50,000 on November 8, 2011, then $25,000 every subsequent week until December 27, 2011, and then one final payment of $15,000 on January 3, 2012. As of November 30, 2011, no payments had been made to Crisnic. Some payments have been made towards the obligation subsequent to November 30th.  As a security for this Promissory Note, the Company issued Crisnic 650,001 shares of Series A Preferred Stock (the "Preferred Shares") which were placed into escrow, and will be released based on the terms in an Escrow Agreement (the "Escrow Agreement") by and among the Company, OSL, Crisnic and Sichenzia Ross Friedman Ference Anslow LLP, as escrow agent. The Preferred Shares have 100:1 voting rights. Upon payment of the principal amount due under the Promissory Note the Preferred Shares will be cancelled. In the event that the Demand Date, as defined in the Promissory Note, has passed and Crisnic has not been paid in full, as provided in the Promissory Note, the Preferred Shares will be released to Crisnic. The Promissory note is non-interest bearing.

Due to delays in raising financing, the Company was unable to meet the original repayment terms of the Promissory Note. The Company paid $10,000 in January 2012 and is currently renegotiating the repayment terms with Crisnic. The Company will continue to make payments of $10,000 per week until the repayment terms can be renegotiated. The Company has not received any written demand for repayment and the preferred shares have not been released from escrow.

In conjunction with the Share Exchange, the Company entered into an Asset Assignment Agreement (the "Asset Assignment Agreement") by and among Reno Rolle ("Rolle"), Todd Wiseman ("Wiseman"), former principals of the Company, and Red Rock Direct (an entity managed by Rolle and Wiseman), pursuant to which the Company assigned certain of its assets to Red Rock Direct in consideration of the cancelation of shares of the Company of Rolle (143,809 shares) and Wiseman (5 million shares due under an employment agreement), pursuant to Share Cancellation Agreements and Releases entered into among each of Rolle (and Lynn Rolle, the wife of Rolle) and Wiseman, the Company and OSL; and the assumption of certain indebtedness of the Company by Red Rock Direct (the "Spin-Off"). The Company assets to be assigned to Red Rock Direct include (i) the Company's current direct response television commercial (hosted by Suzanne Somers) (the "Infomercial"), (ii) the book currently entitled The Anti-Aging Miracle by Dr. James William Forsythe, M.D., and any and all proceeds derived therefrom, including any health supplements sold as described in the Infomercial, (iii) the feature length film entitled "Endless Bummer", (iv) the book currently entitled Sleep and Grow Young by Dr. James William Forsythe, M.D, and (v) a management agreement with Mike Flynt (collectively, the "Assigned Assets").

Pursuant to an agreement dated September 19, 2011, by and between Emerald and the Exchange LLC (“Exchange LLC”), Emerald assigned the Senior Secured Convertible Note and the Additional Debt to the Exchange LLC.   On October 12, 2011, the Company and the Exchange LLC entered into Amendment No. 1 (the “Amendment”) to the Senior Secured Convertible Note and Additional Debt.  Pursuant to the Amendment, the Additional Debt was forgiven by the Exchange LLC and the maturity date of the Senior Secured Convertible Note was extended to October 5, 2012.  In consideration of the forgiveness by the Exchange LLC of the Additional Debt and extending the maturity date of the Senior Secured Convertible Note to October 5, 2012, the Company agreed to amend the conversion price of the Senior Secured Convertible Note to $0.001. Any conversion of debt owed to the Exchange LLC under the Senior Secured Convertible Note must be approved by the Board of Directors of the Company and in the event that the Board of Directors does not approve such conversion request, the corresponding principal amount shall be due by the maturity date. There is no material relationship between the Company or its affiliates and the Exchange LLC, other than with respect to the Amendment.
 
Results of Operations

Comparison of the Three Months Ended November 30, 2011 and from September 16, 2010 (inception) to November 30, 2010 and 2011

Revenue
 
The Company had no revenues for the three months ended November 30, 2011 and from September 16, 2010 (inception) to November 30, 2010 and 2011, respectively.  
 
 
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General and Administrative
 
General and administrative expenses were $96,636, $48,000 and $297,090 for the three months ended November 30, 2011 and from September 16, 2010 (inception) to November 30, 2010 and 2011, respectively.   The increase in expenses was related to the Company executing its business plan including the recent Share Exchange agreement.  Expenses during the three months ended November 31, 2011 consisted primarily of professional service expenses and accrued compensation expense. Expenses from inception to November 30, 2011 consisted of employee compensation, professional fees and development of our website.

Gain on Forgiveness of Debt
 
Pursuant to the Amendment, the Additional Debt of $100,000 was forgiven by the Exchange LLC and the maturity date of the Senior Secured Convertible Note was extended to October 5, 2012.  In consideration of the forgiveness by the Exchange LLC of the Additional Debt and extending the maturity date of the Senior Secured Convertible Note to October 5, 2012, the Company agreed to amend the conversion price of the Senior Secured Convertible Note to $0.001. Any conversion of debt owed to the Exchange LLC under the Senior Secured Convertible Note must be approved by the Board of Directors of the Company and in the event that the Board of Directors does not approve such conversion request, the corresponding principal amount shall be due. There is no material relationship between the Company or its affiliates and the Exchange LLC, other than with respect to the Amendment. 

Liquidity and Capital Resources
 
As of November 30, 2011 we had $933 in cash and a working capital deficiency of $1,054,970.  A substantial amount of cash will be required in order to continue operations over the next twelve months.  Based upon our current cash and working capital deficiency, we will not be able to meet our current operating expenses and will require additional capital.  We expect to obtain additional capital in order to execute our business plan.  We intend to raise up to $500,000 through private placements in the next several months.  Our business plan involves adding qualified executives and rolling out various business units. Our initial capital needs exceed our current capital, but should be satisfied by a small private funding.  We believe that substantial contracts will be signed before larger public financing is required.

Cash provided by operating activities was $747, $0 and ($48,614) for the three months ended November 30, 2011 and from September 16, 2010 (inception) to November 30, 2010 and 2011, respectively.  Cash was primarily used to fund our net losses from operations.

Cash used in financing activities was $1,000 for the three months ended November 30, 2011.   We received cash, net of repayment, of $9,000 as operating loans from related parties.  Additionally, the Company used $10,000 as consideration our note holder for the renegotiation of debt.

We believe our current working capital position, together with our expected future cash flows from operations will be insufficient to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations for at least the next twelve months.  

We anticipate that we will require $325,000 per month to cover all of our operating expenses, including those of CDS. We also anticipate website expenses not included in the monthly costs of approximately $500,000.  In addition we anticipate using approximately $4,000,000 for acquisitions. We also have various debt and other payables of approximately $400,000, including an outstanding promissory note of $240,000 to Crisnic.

To meet these expenses we anticipate revenues of $200,000 from our current operations, including those of CDS, which we expect to increase over time. We expect revenues from any future acquisitions to match a good portion of the expense of the acquisition. In addition we expect to raise approximately $500,000 in private placements during the first quarter of calendar 2012.

We have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or technologies or any other material capital expenditures.  However, we will continue to evaluate acquisitions of and/or investments in products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or investments in the future.  Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments.  

Capital Expenditures

Other Capital Expenditures

The Company expects to spend approximately $750,000 due to the development of our internet marketing capability in connection with the expansion of its business.

 
17

 
 
Subsequent Events

On December 15, 2011, the Company entered into a Share Cancellation and Reissue Agreement and Release (the “Agreement”) by and among the Company, OSL, Corporate Diversity Solutions, Inc., a New Jersey Corporation (“CDS”), David Wernon, Chris Georgiou, Mary Georgiou, Pat Lorusso, Joe Rappapaort, Elizabeth Miller, Jennifer Scorzelli (the “Departing Shareholders”), Stacey Scarpa (the “Remaining Shareholder”), and Ken Scarpa, to acquire a 50% equity interest of CDS, 48% to be owned by OSL and 2% to be owned by designees of OSL.  Pursuant to the terms of the Agreement, all the Departing Shareholders canceled their shares of CDS. In consideration for the cancelation of shares, CDS will indemnify and relieve the Departing Shareholders from any liabilities incurred by CDS.  Further, the Company issued 100,000 shares of its common stock, each to Mr. Wernon and Mr. Lorusso at the time the Agreement was executed, and will issue an additional 100,000 shares of its common stock each to Mr. Wernon and Mr. Lorusso, when Mr. Wernon and Mr. Lorusso obtain a release of liability from Lester Halbrick to CDS, the Remaining Shareholder and Mr. Scarpa.  Additionally, OSL will request that United Stationers Inc. a supplier of CDS, release all Departing Shareholders from any liability and OSL and CDS shall indemnify all Departing Shareholders until such release is obtained.  OSL designated Linda Feder, the wife of Eli Feder, the Company’s President and CEO, and Andrea Kotch, the wife of Eric Kotch, the Company’s CFO and a director of the Company to acquire 2% of CDS as its designees.
 
Off Balance Sheet Arrangements

None.
 
Going Concern
 
The Company’s independent certified public accountants have stated in their audit report for the year ended August 31, 2011, that the Company has no current source of revenue and, without realization of additional capital, it would be unlikely for the Company to continue as a going concern.  If the Company is not successful in raising the necessary capital, then the Company believes that its independent certified public accountants would issue an opinion with a similar going concern modification regarding the Company’s financial condition.

Critical Accounting Policies
 
The Company’s consolidated financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our consolidated financial statements.
 
Our significant accounting policies are summarized in Note 3 of our annual consolidated financial statements filed on Form 10-K and dated December 12, 2011. While all these significant accounting policies impact its financial condition and results of operations, the Company views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company’s consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.
 
Item 3.       Quantitative and Qualitative Disclosures About Market Risk

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4.       Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, (as defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the period ended September 30, 2011. Based on this evaluation, our Principal Executive Officer  and Principal Financial Officer concluded that our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

We are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified weaknesses. The Company intends on hiring the necessary staff to address the weaknesses once additional capital is obtained which will allow full operations to commence.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
 
We have taken numerous steps to address the underlying causes of the internal control deficiencies, primarily through the development and implementation of policies, improved processes and documented procedures, the retention of third-party experts and contractors, and the hiring of additional accounting personnel with technical accounting and inventory accounting experience.
 
Changes in internal control over financial reporting
 
There were no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
 
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PART II - OTHER INFORMATION

Item 1.       Legal Proceedings

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A.    Risk Factors

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

None.

Item 3.       Defaults Upon Senior Securities

None

Item 4.       (Removed and Reserved)
 

Item 5.       Other Information

None

Item 6.       Exhibits
 
Exhibit Number
 
Exhibit Title
     
31.1
 
Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
31.2
 
Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
32.1
 
Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
32.2
 
Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
101.INS *
 
XBRL Instance Document
     
101.SCH *
 
XBRL Taxonomy Schema
     
101.CAL *
 
XBRL Taxonomy Calculation Linkbase
     
101.DEF *
 
XBRL Taxonomy Definition Linkbase
     
101.LAB *
 
XBRL Taxonomy Label Linkbase
     
101.PRE *
 
XBRL Taxonomy Presentation Linkbase
 
In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

* Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 
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SIGNATURES

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

Dated: January 17, 2012
 
OSL HOLDINGS INC.
     
 
 By:
/s/ Eli Feder                                            
   
Eli Feder
President and Chief Executive Officer
(Duly Authorized Officer and Principal Executive Officer)
     
 
By:
/s/ Eric Kotch
   
Eric Kotch
   
Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer)



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