f10k2012_oslholdingsinc.htm

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of August 31, 2012 and 2011		F-3

Consolidated Statements of Operations for the Year Ended August 31, 2012 and from inception to August 31, 2012 and 2011		F-4

Consolidated Statements of Changes in Stockholders’ Deficit from inception to August 31, 2012		F-5

Consolidated Statements of Cash Flows for the Year Ended August 31, 2012 and from inception to August 31, 2012 and 2011		F-6

Notes to the Consolidated Financial Statements		F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

OSL Holdings, Inc. and Subsidiaries.

We have audited the consolidated balance sheets of OSL Holdings, Inc. and Subsidiaries as of August 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the year ended August 31, 2012 and for the periods from September 16, 2010 (inception) to August 31, 2012 and 2011, respectively. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated 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 consolidated financial position of OSL Holdings, Inc. and Subsidiaries as of August 31, 2012 and 2011, and the results of their operations and their cash flows for the year ended August 31, 2012 and for the periods from September 16, 2010 (inception) to August 31, 2012 and 2011, respectively,, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses and negative cash flows from operating activities, which have resulted in a negative working capital and a stockholders' deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Weinberg & Company, P.A.

Los Angeles, California

December 13, 2012

F-2

OSL HOLDINGS INC. AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS

	As of August 31,			As of August 31,
	2012			2011

Assets
Current assets:
Cash	$	202		$	1,147
Prepaid and other assets		2,000			12,500
Total current assets		2,202			13,647

Website development costs		-			185,800
Total assets	$	2,202		$	199,447

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued liabilities	$	659,001		$	301,393
Accrued officers compensation		270,000			-
Advances from related parties		14,727			4,508
Senior secured convertible note, including accrued interest of $51,300		135,300			-
Secured promissory note		170,000			-
Convertible notes, including accrued interest of $18,800		318,142			-
Promissory notes, including accrued interest of $2,000		26,000			24,000
Derivative liability		250,970			-
Total current liabilities		1,844,140			329,901

Stockholders’ deficit:
Preferred Stock, $.001 par value; 5,000,000 shares authorized; no shares issued and outstanding		-			-
Common Stock, $.001 par value; 120,000,000 shares authorized; 86,694,333 and 50,000,000 shares issued and outstanding at August 31, 2012 and August 31, 2011, respectively		86,694			50,000
Additional paid-in capital		771,990			20,000
Common shares issuable (1,624,998 shares)		102,083			-
Deficit accumulated during the development stage		(2,802,705	)		(200,454	)
Total stockholders’ deficit		(1,841,938	)		(130,454	)
Total liabilities and stockholders’ deficit	$	2,202		$	199,447

See accompanying notes to the consolidated financial statements.

F-3

OSL HOLDINGS INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended August 31, 2012			September 16, 2010 (Inception) to August 31, 2011			September 16, 2010 (Inception) to August 31, 2012

Revenues	$	-		$	-		$	-
Operating expenses:
General and administrative expenses		1,424,793			200,454			1,625,247
Impairment of website development		185,800			-			185,800
Operating loss		(1,610,593	)		(200,454	)		(1,811,047	)
Other:
Reverse merger costs		(647,880	)		-			(647,880	)
Costs of rescinded acquisition		(27,297	)		-			(27,297	)
Interest expense		(178,511	)		-			(178,511	)
Cost of offering		(145,510	)		-			(145,510	)
Change in value of derivative liability		7,540			-			7,540
Other expense, net		(991,658	)		-			(991,658	)
Net loss	$	(2,602,251	)	$	(200,454	)	$	(2,802,705	)
Net loss per common share
Net loss per common share – basic and diluted	$	(0.04	)	$	(0.00	)
Weighted average common shares outstanding – basic and diluted		66,796,315			50,000,000

See accompanying notes to the consolidated financial statements.

F-4

OSL HOLDINGS INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE PERIOD FROM SEPTEMBER 16, 2010 (INCEPTION) TO AUGUST 31, 2012

	Preferred Stock					Common Stock				Additional Paid in			Common Shares					Stockholders’
	Shares		Amount			Shares		Amount		Capital			Issuable		Deficit			Deficit
Balance, September 16, 2010 (Inception)		-	$	-			-	$	-	$	-		$	-	$	-		$		-

Common shares issued for cash received							2,000,000		2,000		20,000								22,000

Stock based compensation expense							48,000,000		48,000										48,000

Net loss																(200,454	)		(200,454)
Balance, August 31, 2011		-	$	-			50,000,000	$	50,000	$	20,000		$	-	$	(200,454	)	$	(130,454	)

Shares issued upon Reverse acquisition		-		-			1,068,255		1,068		(1,068	)				-			-

Fair value of stock issued upon rescinded acquisition		-		-			400,000		400		19,600					-			20,000

Shares issued to employees for services provided							8,041,662		8,042		308,208								316,250

Fair value of stock issued for outside services received		-			-		5,800,000		5,800		234,200						-		240,000

Common stock issued for cash							29,412		29		4,971								5,000

Common stock to be issued														100,000					100,000

Common stock to be issued for employee compensation														2,083					2,083

Shares issued upon conversion of Convertible Notes		-		-			21,355,004		21,355		102,746			-		-			124,101

Fair value of beneficial conversion feature of Convertible Notes		-		-			-		-		83,333			-					83,333

Net loss		-		-			-		-		-			-		(2,602,251	)		(2,602,251	)

Balance, August 31, 2012		-	$	-			86,694,333	$	86,694	$	771,990		$	102,083	$	(2,802,705	)	$	(1,841,938	)

See accompanying notes to the consolidated financial statements.

F-5

OSL HOLDINGS INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Twelve Months Ended August 31, 2012			September 16, 2010 (Inception) to August 31, 2011			September 16, 2010 (Inception) to August 31, 2012
Cash flows from operating activities:
Net loss:	$	(2,602,251	)	$	(200,454	)	$	(2,802,705	)
Adjustments to reconcile net loss to cash used in operating activities:
Cost of reverse merger		647,880			-			647,880
Impairment of website development costs		185,800						185,800
Fair value of stock issued upon rescinded acquisition		20,000			-			20,000
Fair value of stock issued for services		240,000			-			240,000
Stock issued to employees for compensation and services		98,333			48,000			146,333
Cost of offering		145,510			-			145,510
Change in fair value of derivative liability		(7,540)			-			(7,540)
Amortization of note discount		69,810			-			69,810
Accrued interest		29,600			-			29,600
Non cash interest expense on note conversions		69,101			-			69,101
(Increase) decrease in:
Prepaid and other assets		10,500			-			10,500
Accrued compensation		490,000			-			490,000
Accounts payable and accrued liabilities		92,228			127,093			219,320
Net cash used in operating activities		(511,029)			(25,361)			(536,390	)

Cash flows from financing activities:
Advances from related parties		10,219			4,508			14,727
Payment of senior secured convertible note		(70,000	)		-			(70,000	)
Payment of promissory note		(3,000	)		-			(3,000	)
Cash received on issuance of convertible promissory notes		400,500			-			400,500
Cash received on issuance of a promissory note		67,365			-			67,365
Cash received on shares to be issued		100,000			-			100,000
Cash received on issuance of common stock		5,000			22,000			27,000
Net cash provided by financing activities		510,084			26,508			536,592

Change in cash:
Net (decrease) increase		(945)			1,147			202
Balance at beginning of period		1,147			-			-
Balance at end of period	$	202		$	1,147		$	202
Supplemental disclosures of cash flow information:

Cash paid for:
Income taxes	$	-		$	-		$
Interest	$	-		$	-		$

Non cash financing activities
Fair value of common shares issued upon conversion of senior secured promissory note	$	16,000		$	-		$	16,000
Fair value of common shares issued upon conversion of convertible notes	$	39,000		$			$	39,000
Accounts payable assumed on reverse acquisition	$	265,380		$	-		$	265,380
Acquisition of website for accounts payable	$	-		$	185,800		$	185,800
Promissory notes assumed on reverse acquisition	$	142,500		$	-		$	142,500
Issuance of note payable on reverse merger	$	240,000		$	-		$	240,000
Fair value of common shares issued upon conversion of accrued compensation	$	220,000		$	-		$	220,000
Fair value of beneficial conversion feature of convertible notes	$	358,333		$			$	358,333

See accompanying notes to the consolidated financial statements.

F-6

OSL HOLDINGS INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED AUGUST 31, 2012 AND FROM INCEPTION (SEPTEMBER 16, 2010)

TO AUGUST 31, 2011

Note 1- Organization, Nature of Business and Basis of Presentation

Organization and Nature of Business

OSL Holdings, Inc. (the “Company”) was incorporated under the name Red Rock Pictures, Inc. 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”). Pursuant to the stock for stock exchange agreement, the Company acquired 100% of the assets of SSD by issuing 11,000 restricted common shares in exchange for all the issued and outstanding shares of SSD. With the addition of SSD, the Company also operated as a traditional infomercial production and distribution company.

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 Fund S.A., a Costa Rican corporation (“Crisnic”), and OSL, pursuant to which Crisnic cancelled 14,130,000 shares of the Company in exchange for $10,000 cash and a Secured Promissory Note of OSL in the principal amount of $240,000 (the "Promissory Note"). As security for the repayment of the Promissory Note, the Company agreed to issue into escrow 650,001 shares of Series A Preferred Stock (the "Preferred Shares"), to have been released based on the escrow and default terms of the Promissory Note. The Company recently discovered that the Preferred Shares were never issued. Due to delays in raising financing, OSL was unable to meet the original repayment terms of the Promissory Note. OSL has made intermittent payments and the current balance of $170,000 as of December 1, 2012 is currently due and payable. The Company and OSL recently received a written notice of default in accordance with the terms of the Promissory Note and the Company is obligated to issue the 650,001 Preferred Shares to Crisnic. The Preferred Shares have 100:1 voting rights.

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 that had not yet been issued) 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.

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 legal acquirer. These financial statements reflect the historical activity of OSL, and the historical stockholders’ equity of OSL has been retroactively restated for the equivalent number of shares received in the Share Exchange after giving effect to the differences in par value offset to additional paid-in capital. In connection with the Share Exchange, OSL is deemed to have issued an additional 1,068 shares of common stock to its stockholders existing prior to the Share Exchange. Reverse merger costs of approximately $649,000 include net liabilities of $408,000 assumed upon the reverse merger and the $250,000 cost of the Share Cancellation Agreement.

On October 17, 2011, the Company changed its name to OSL Holdings Inc., and became a holding company for its operating subsidiaries.

F-7

On November 16, 2012, the Board of Directors of the Company unanimously adopted a resolution approving an amendment to the Company’s Articles of Incorporation to effect a reverse split of the Company’s outstanding shares of Common Stock. As a result of the reverse stock split, every one thousand shares of the common stock of the Company will be combined into one share of common stock. The Company expects to receive approval from FINRA to effect the reverse split and has filed an amendment to its Articles of Incorporation to effect the reverse stock split as of January 2, 2013. Adoption of the reverse stock split, without taking into account the issuance of any additional shares of our common stock, will reduce the shares of common stock outstanding to approximately 117,121 shares of Common Stock (without taking into account adjustments for fractional shares). All share and per share amounts will be retroactively adjusted for the reverse split in the Company’s financial statements when the reverse split become effective.

On December 4, 2012, the Company amended its Articles of Incorporation to increase the number of authorized shares available for issuance from 120,000,000 to 450,000,000.

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 and stockholders’ deficiencies that raise substantial doubt as to its ability to continue as a going concern. The Company has less than $1,000 cash on hand which will is not sufficient to fund ongoing operations. The Company expects a burn rate of at least $125,000 per month and will need to raise at least $500,000 by the end of the second quarter of 2013 to remain in business, of which we can give no assurance of success. In addition, the Company is currently in default on its Senior Secured Convertible note and Secured Promissory Notes. The Company's existence is dependent upon management's ability to develop profitable operations and resolve its liquidity problems. 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.

The Company has 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, it will continue to evaluate acquisitions of and/or investments in products, technologies, capital equipment or improvements or companies that complement its current or planned business and may make such acquisitions and/or investments in the future. The Company will require additional capital, either through debt or private placements, in order to execute its business plan to finance any such acquisitions and/or investments. Such additional financing may not become available on acceptable terms and there can be no assurance that any additional financing that the Company does obtain will be sufficient to meet its needs in the long term. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

Note 3 – Summary of Significant Accounting Policies

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, OSL Diversity Marketplace, Inc., OSL Rewards Corporation, Red Rock Pictures Inc. and Studio Store Direct Inc. Inter-company balances and transactions have been eliminated in consolidation.

F-8

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.

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. In May 2012, the Company determined that the website under development was not going to be utilized and recorded a charge of $185,800 categorized as “Loss on Impairment of Website Development Costs” in the Consolidated Statement of Operations for the year ended August 31, 2012. Prior to this charge, no amortization was recorded and the website was in development and was not yet 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.

F-9

The following table presents certain investments and liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of August 31, 2012.

		Level 1				Level 2				Level 3				Total
Fair value of Derivative Liability		$	–			$	–			$	250,970			$	250,970

Vendor Concentration

As of August 31, 2012 and August 31, 2011, one vendor represented 32% and 70% of the accounts payable and accrued liabilities balance, respectively.

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 August 31, 2012 or August 31, 2011.

Weighted average number of shares outstanding has been retroactively restated for the equivalent number of shares received by the accounting acquirer as a result of the reverse merger as if these shares had been outstanding as of the beginning of the earliest period presented. The 1,068,225 shares issued to the legal acquirer are included in the weighted average share calculation from October 10, 2011, the date of the exchange agreement.

Stock-Based Compensation

The Company periodically issues stock options and warrants to officers, directors and consultants for services rendered. Options vest and expire according to terms established at the grant date. The Company accounts for share-based payments to officers and directors by measuring the cost of services received in exchange for equity awards based on the grant date fair value of the awards, with the cost recognized as compensation expense in the Company’s financial statements over the vesting period of the awards. The Company accounts for share-based payments to consultants by determining the value of the stock compensation based upon the measurement date at either (a) the date at which a performance commitment is reached or (b) at the date at which the necessary performance to earn the equity instruments is complete.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black Scholes Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

F-10

Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standard Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU No. 2011-11 will be applied retrospectively and is effective for annual and interim reporting periods beginning on or after January 1, 2013. The Company does not expect adoption of this standard to have a material impact on its consolidated financial statement disclosures.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02) , allowing entities the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If the qualitative assessment indicates it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no testing is required. ASU 2012-02 is effective for the Company in the period beginning January 1, 2013. The Company does not expect the adoption of this update to have a material effect on the consolidated financial statements.

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 – Rescinded Acquisition

On December 15, 2011, the Company acquired a 48% equity interest in Corporate Diversity Solutions, Inc., a New Jersey Corporation (“CDS”) and issued 200,000 shares of common stock valued at $10,000 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 valued at $25,000 in accordance with this agreement. The shares issued were valued at $.05 per share, the trading price of the common stock on the date of the agreement. As part of the agreement, family members of the majority shareholders of the Company also acquired a 2% equity interest in CDS. For financial reporting purposes, the Company initially believed its 48% ownership and the ownership of the 2% interest of related individuals gave the Company effective control of CDS.

Pursuant to the terms of the Agreement, all the departing shareholders of CDS (the “Departing Shareholders”) cancelled their shares of CDS. In consideration for the cancelation of shares, CDS indemnified and relieved the Departing Shareholders from any liabilities incurred by CDS. Additionally, OSL requested that United Stationers Inc. (“United Stationers”), a supplier of CDS, release all Departing Shareholders from any liability and OSL and CDS indemnify all Departing Shareholders until such release is obtained. United Stationers also requested that each of Eric Kotch, the Company’s CFO, Eli Feder, the Company’s President and CEO, and OSL, guarantee the debt owed by CDS to United Stationers (the “Guarantee”).

On April 5, 2012, the Company announced that it was unable to complete a two year audit (the “Audit”) of CDS as required by the rules of the SEC and was therefore actively seeking to divest its ownership in CDS. The unrelated CDS shareholders returned $20,000 in cash advanced to CDS and 500 shares of OSLH previously issued to CDS employee Ken Scarpa had been returned. On June 5, 2012, United Stationers cancelled the personal guarantee of OSL, Eric Kotch and Eli Feder. For financial reporting purposes at August 31, 2012, the Company has determined that it never had effective control of the CDS, and the costs of the acquisition totaling $27,297, comprising the issuance of 400,000 shares of its common shares at $0.05 per share (aggregate value of $20,000) and cash advances of $7,297 made to CDS, have been reflected as a cost of abandoned acquisition on the accompanying statement of operations for the twelve months ended August 31, 2012.

F-11

Note 5 – 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 August 31, 2012 and August 31, 2011 was $14,727 and $4,508, respectively. The loans are non-interest bearing, unsecured and due on demand.

Note 6 – Senior Secured Convertible Note

The Company assumed a $100,000 senior secured convertible note due to The Exchange LLC (the “Exchange LLC”), an unrelated company, upon the consummation of the reverse merger. 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 maturity date of the Senior Secured Convertible Note was extended to October 5, 2012 the conversion price of the Senior Secured Convertible Note was set at $1.00. 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. The Company entered into amendment number 2 to the note on December 12, 2012, pursuant to which the maturity date was extended to October 5, 2013, and further provided that the conversion of the note shall not be affected by any reverse split of the Company’s common stock. There is no material relationship between the Company or its affiliates and the Exchange LLC.

During the twelve months ended August 31, 2012, the Company issued a total of 16,000,000 shares of common stock at the conversion price of $0.001, or $16,000, as partial repayment the Senior Secured Convertible Note.

As of August 31, 2012, the total remaining balance outstanding to Exchange LLC is $135,300, including accrued interest of $51,300.

Note 7 – Secured Promissory Note

As part of the Share Exchange, the Company entered into 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 the Promissory Note in the principal amount of $240,000. Under the terms of the Promissory Note, OSL was required to pay Crisnic $50,000 on November 8, 2011, then $25,000 every subsequent week until December 27, 2011, and one final payment of $15,000 on January 3, 2012. The Promissory note is non-interest bearing. As security for the Promissory Note, the Company was obligated to issue into escrow 650,001 Preferred Shares, to be released either to the Company upon full satisfaction of the Crisnic Note or released to Crisnic upon an uncured event of default. The Preferred Shares have 100:1 voting rights. The Company recently discovered that the Preferred Shares were never issued into escrow.

Due to delays in raising financing, OSL was unable to meet the original repayment terms of the Promissory Note. OSL has made intermittent payments and the current balance of $170,000 as of December 1, 2012 is currently due and payable. The Company and OSL recently received a written notice of default in accordance with the terms of the Promissory Note and the Company is obligated to issue the 650,001 Preferred Shares to Crisnic.

F-12

Note 8 – Convertible Notes

Convertible notes payable consist of the following as of August 31, 2012:


Convertible notes payable, interest at 8% per annum (A)	$	116,600
Convertible notes payable, interest at 10% per annum (B)		260,600
Convertible notes payable, interest at 8% per annum, due June 30, 2013 (C)		67,465
Convertible notes payable		444,665
Less: note discount		(126,523)
Convertible notes payable, net of discount	$	318,142

__________

(A) Asher Enterprises

During the period November 15, 2011 to July 17, 2012, the Company issued four unsecured Convertible Notes (the “Convertible Notes”) to Asher Enterprises (“Asher”) in the aggregate amount of $150,500. The Convertible Notes are due after one year and bear interest at 8% per annum where interest accrues and is payable in cash upon maturity provided that the elected conversion to common shares does not occur. Any amount of principal or interest on these Convertible Notes which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date until the past due amount is paid. At any time or times after 180 days from the date of the Notes and until the maturity dates, Asher is entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock. The conversion price will be based on a 49% discount to the average of the three lowest closing bid prices for the Company's common stock during the ten trading days immediately preceding a conversion date.

Each of the Convertible Notes include an anti-dilution provision that allows for the automatic reset of the conversion or exercise price upon any future sale of common stock instruments at or below the current exercise price. The Company considered the current FASB guidance of “Determining Whether an Instrument Indexed to an Entity’s Own Stock” which indicates that any adjustment to the fixed amount (either conversion price or number of shares) of the instrument regardless of the probability or whether or not within the issuers’ control, means the instrument is not indexed to the issuers own stock. Accordingly, the Company determined that the conversion price of the Convertible Notes is not a fixed amount because they are subject to fluctuation based on the occurrence of future offerings or events. As a result, the Company determined that the conversion features are not considered indexed to the Company’s own stock and characterized the fair value of the conversion features as derivative liabilities upon issuance.

The Company determined the initial fair value of the embedded beneficial conversion feature of the Debentures to be $258,510. This amount was determined by management using a weighted-average Black-Scholes Merton option pricing model. In accordance with current accounting guidelines, the excess of $145,510 of derivative liability created over the face amount of the Debentures was considered to be a cost of offering. As such, the Company recorded an $113,000 valuation discount upon issuance. The Company determined the fair value of the derivative liabilities to be $250,970 as of August 31, 2012, and the Company recorded a gain for the change in fair value of derivative liabilities of $7,540 in the accompanying statement of operations for the year ended August 31, 2012. During the year ended August 31, 2012, the Company amortized $34,338 of the discount and as of August 31, 2012, the total discount of $78,662 is offset against the balance of the notes for financial statement presentation.

F-13

During the twelve months ended August 31, 2012, the Company issued a total of 5,355,004 shares of common stock at an average conversion price of $0.007 or $39,000 as partial repayment to the Convertible Notes. Upon conversion, the Company recognized a beneficial conversion cost of $69,101 related to the difference between the conversion price and the market price of the stock at the date of conversion. As of August 31, 2012, the total remaining balance outstanding to Asher is $116,600, including accrued interest of $5,100.

(B) Panache Capital, LLC

During the period March 5, 2012 to April 26, 2012, the Company issued four convertible promissory notes (the "Panache Notes") to Panache Capital, LLC (the "Payee") for an aggregate amount of $250,000, with 10% annum interest. The Panache Notes are each due after the one year anniversary thereof. All past-due principal of the Panache Notes bear interest at 15%. There is a 25% prepayment fee. The Payee has the right to convert the Panache Notes, in its entirety or in part, into common stock of the Company. The conversion price is based on a 25% discount to the average of the three lowest closing bid prices for the Company's common stock during the ten trading days immediately preceding a conversion date. The Company determined the initial fair value of the beneficial conversion feature was approximately $83,333 and was recorded by the Company as a loan discount, which is being amortized as interest expense over the life of the notes. As of August 31, 2012, the unamortized balance of the Panache Notes discount was $47,861.

As of August 31, 2012, the total remaining balance outstanding to Panache is $260,600, including accrued interest of $10,600.

On September 21, 2012, the Company entered into an amendment agreement (the “Amendment”) with Panache, which amends the Panache Notes. Pursuant to the Amendment, the Company shall have the option, for 90 days after September 21, 2012 (the “Outside Date”), to redeem the Panache Notes for 100% of their outstanding principal and interest. Additionally, Panache shall not, until the Outside Date and absent an event of default, convert any of the Panache Notes into Company common stock. Each of the Panache Notes were further amended to permit Panache to convert the Panache Notes valued at a price not to fall below a 49% discount to the average of the three lowest closing bid prices for the Company common stock during the ten trading days immediately preceding a conversion date.

On February 20, 2012, the Company issued a $67,365 unsecured promissory note (the “Profectus Note”) to Profectus, LLC (“Profectus”). The Profectus Note is due on demand bearing interest at 8% per annum where interest accrues. On August 13, 2012, Profectus transferred and assigned the Profectus Note to Continental Equities, LLC (“Continental”). Pursuant to the terms of such transfer and assignment, the Company canceled the Profectus Note and issued a new convertible promissory note to Continental in the principal amount of $67,000 (the “New Note”) with a maturity date of June 30, 2013. The interest rate of the New Note is 8% per annum through the maturity date. The New Note is convertible into shares of the Company’s common stock commencing on a date that is 30 days after the issue date of the New Note, at a price equal to the average of the lowest two intraday trading prices for the common stock during the five trading days period ending one trading day prior to the date the conversion notice is sent by Continental to the Company. The New Note is subject to customary anti-dilution and default provisions. In the event the Company shall default in the payment of the New Note, the interest rate shall be increased to 18% per annum.

As of August 31, 2012, the total remaining balance outstanding to Continental is $67,465, including accrued interest of $465.

F-14

Note 9 – Promissory Notes

On August 8, 2011, the Company issued a $24,000 unsecured Promissory Note to a private investor. The note is due on demand bearing interest at 8% per annum where interest accrues and is payable in cash upon demand.

As of August 31, 2012, the total remaining balance outstanding under the note is $26,000, including accrued interest of $2,000.

Note 10 – Derivative Liability

In June 2008, the FASB issued authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock. Under the authoritative guidance, effective January 1, 2009, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The conversion feature of certain of the Company’s Convertible Notes (described in Note 8), does not have fixed settlement provisions because their conversion will be lowered if the Company issues securities at lower prices in the future. The Company was required to include the reset provisions in order to protect the holders of the Convertible Notes from the potential dilution associated with future financings. In accordance with the FASB authoritative guidance, the conversion feature of the Convertible Notes was separated from the host contract and recognized as a derivative instrument. The conversion feature of the Convertible Notes have been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

At the date of issuance and as of August 31, 2012, the derivative liabilities were valued using a probability weighted average Black-Scholes pricing model with the following assumptions:

	August 31, 2012		At Date of Issuance
Conversion feature :
Risk-free interest rate		0.25%		0.25%
Expected volatility		215%		215%
Expected life (in years)		1 year		1 year
Expected dividend yield		0%		0%
Fair Value :
Conversion feature	$	250,970	$	258,510

The risk-free interest rate was based on rates established by the Federal Reserve Bank. The expected volatility was based on the Company’s historical volatility for its common stock. The expected life of the conversion feature of the Debentures was based on the term of the Debentures. The expected dividend yield was based on the fact that the Company has not paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future

The Company determined the fair value of the derivative liabilities to be $250,970 as of August 31, 2012, and the Company recorded a gain for the change in fair value of derivative liabilities of $7,540 in the accompanying statement of operations for the year ended August 31, 2012.

F-15

Note 11 – Capital Stock

Preferred Stock

The Company’s articles of incorporation provide that it is authorized to issue up to 5,000,000 shares of preferred stock with a par value of $.001 per share. The Company’s Board of Directors has the authority, without further action by the shareholders, to issue from time to time the preferred stock in one or more series for such consideration and with such relative rights, privileges, preferences and restrictions that the Board may determine. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and purchase funds and other matters. The issuance of preferred stock could adversely affect the voting power or other rights of the holders of common stock.

As security for the Promissory Note due to an uncured event of default, the Company is obligated to issue 650,001 shares of Series A Preferred Stock. Each share of the Series A Convertible Preferred Stock would, among other things as provided in the Certificate of Designations relating to the Series A Preferred Stock: (i) carry voting rights 100 times of the Company’s common stock, (ii) carry no dividends, (iii) carry liquidation preference two times the sum available for distribution to common stock holders, (iv) automatically convert after at such time as the Company has filed a certificate of amendment with the State of Nevada to increase the authorized shares of common stock of the Company to a minimum of 500,000,000 into 100 shares of common stock, and (v) not be subject to reverse stock splits and other changes to the common stock capital of the Company.

Common Stock

Common Stock Issued for Cash

On December 30, 2011, the Company entered into a private agreement to sell 29,412 shares of the Company’s common stock at $0.17 per share, or $5,000.

From September 16, 2010 (inception) to August 31, 2011, the Company issued a total of 220,000 shares of common stock at a valuation based upon the par value of $.001 per common share, for $22,000 received from related parties.

Common Stock Issued for Employee Compensation and Services

During the twelve months ended August 31, 2012, the Company issued a total of 8,041,662 shares of common stock at the market price on date of issuance which averaged $0.04 per common share, or $316,250. Of the 8,041,662 shares issued, 708,330 common shares valued at $96,250 were issued as stipulated in an employment agreement dated January 17, 2012 with the Company’s President, Robert Rothenberg. Per the employment agreement, the Company issued 500,000 shares on at signing of the agreement and is required to issue 42,000 shares per month. As of August 31, 2012, a total of 124,998 shares of common stock have not been issued and are included in common shares issuable discussed below.

From September 16, 2010 (inception) to August 31, 2011, the Company issued a total of 48,220,000 shares of common stock at a valuation based upon the primarily the fair value of pre-incorporation services rendered which averaged $0.001 per common share, or $48,000.

Common Stock Issued for Outside Services

During the twelve months ended August 31, 2012, the Company issued a total of 5,800,000 shares of common stock valued at the closing market price on date of issuance for payment of investor relations services. The total shares issued were value at the market price on the date of issuance which averaged $0.04 per common share, or $240,000.

Common Stock Issued for Partial Repayment of Senior Secured Convertible Notes

During the twelve months ended August 31, 2012, the Company issued a total of 16,000,000 shares of common stock at the conversion price of $0.001 or $16,000 representing partial repayment of the Senior Secured Convertible Note, as discussed in Note 6 above.

During the twelve months ended August 31, 2012, the Company issued a total of 5,355,004 shares of common stock at an average conversion price of $.007 or $39,000 in the aggregate, as partial repayment of outstanding indebtendess, as discussed in Note 8 above. The Company additionally recorded interest expense of $69,101, representing the difference between the market price and the conversion price on the date of conversion.

F-16

Common Stock Issued Relating to Rescinded Acquisition

During the twelve months ended August 31, 2012, the Company issued a total of 400,000 shares of common stock to several CDS employees related to services performed prior to the Company’s decision to rescind the acquisition. Based on the closing market price on date of issuance, the total value of services received was valued at $20,000.

Common Shares Issuable

On January 6, 2012, the Company entered into a private agreement to sell 500,000 shares of the Company’s common stock at $0.10 per share, or $50,000. The Company has not issued the shares as of August 31, 2012. The amount is classified as common shares issuable in the Balance Sheet at August 31, 2012.

On May 31, 2012, the Company entered into a private agreement to sell 1,000,000 shares of the Company’s common stock at $0.05 per share, or $50,000. The Company has not issued the shares as of August 31, 2012. The amount is classified as common shares issuable in the Balance Sheet at August 31, 2012.

As of August 31, 2012, one of our employees is owed 124,998 shares of common stock as stipulated in an employment agreement. The common stock is valued at the average market price of $0.02 per share, or $2,083. The amount is classified as common shares issuable in the Balance Sheet at August 31, 2012.

Note 12 – Income Taxes

As at August 31, 2012 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.

Note 13 – Subsequent Events

On September 20, 2012, the Company issued an aggregate of 4,018,240 shares of its common stock at the conversion price of $0.001, or $4,018 as partial repayment of outstanding indebtedness due Asher (See Note 8).

On September 21, 2012, the Company issued a convertible promissory note to the Payee for the principal amount of $30,000, with a maturity date of September 21, 2013. The interest rate of the note is 10% per annum through the maturity date. The note is convertible into shares of the Company’s common stock at any time and from time to time, valued at an agreed discount to market not to fall below a 49% discount to the average of the three lowest closing bid prices for the Company’s common stock during the ten days immediately preceding a conversion date. In the event the Company fails to deliver to the Payee the common stock issuable upon conversion, the Company shall be required to pay to the Payee $2,000 per day for each day beyond the due date until the Company so delivers the common stock (the “Conversion Penalty”). In the event the Company shall default in the payment of the note, the interest rate shall be increased to 15% per annum. Furthermore, upon the occurrence and during the continuation of any event of default with respect to failure to pay principal or interest when due at the maturity date, the note shall become immediately due and payable and the Company shall pay to the Payee, in full satisfaction of its obligations under the note, an amount equal to the Default Sum. “Default Sum” is defined as (a) the then outstanding principal amount of the note to the date of payment, plus (b) the accrued and unpaid interest on the unpaid principal amount of the Note to the date of payment plus (c) default interest, if any, on the amounts referred to in clauses (a) and (b) plus (d) any amounts owed to the Payee pursuant to the Conversion Penalty.

On September 21, 2012, the Company entered into an amendment agreement (the “Amendment”) with the Payee, which amends the Panache Notes. Pursuant to the Amendment, the Company shall have the option, for 90 days after September 21, 2012 (the “Outside Date”), to redeem the Panache Notes for 100% of their outstanding principal and interest. Additionally, the Payee shall not, until the Outside Date and absent an event of default, convert any of the Panache Notes into Company common stock. Each of the Panache Notes were further amended to permit the Payee to convert the Panache Notes valued at a price not to fall below a 49% discount to the average of the three lowest closing bid prices for the Company common stock during the ten trading days immediately preceding a conversion date.

F-17

On October 8, 2012, the Company issued a total of 4,476,560 shares of common stock at the conversion price of $0.001 or $4,923 as partial repayment of outstanding indebtedness (See Note 8).

On October 17, 2012, the Company issued a total of 3,529,412 shares of common stock upon the conversion of an existing convertible promissory note amounting to $6,000 issued by the Company dated February 10, 2012.

On October 31, 2012, the Company issued a total of 4,107,143 shares of common stock upon the conversion of an existing convertible promissory note amounting to $2,300 issued by the Company dated January 20, 2012.

Crisnic notified OSL and the Company, by letter dated October 28, 2012 (the "Letter") but deemed delivered in accordance with the terms of the Promissory Note on November 1, 2012, that OSL remains in default under the Promissory Note (see Note 7), and that Crisnic has declared all sums due and owing under the Promissory Note immediately due and payable. The Company and OSL disagreed that any amount under the Promissory Note was immediately due and payable as neither of them had received appropriate notification from Crisnic to commence the Cure Period until receipt of the Letter. Accordingly, OSL and the Company believe that the date to cure the non-payment under the Promissory Note is December 1, 2012. At such time, the Promissory Note remained unpaid in full and, accordingly, all outstanding amounts are due and payable by OSL and the Company is obligated to issue 650,001 Preferred Shares to Crisnic. As of the filing of this Annual Report, the 650,001 Preferred Shares have not been issued.

On November 8, 2012, the Company entered into a Securities Purchase Agreement dated as of October 19, 2012, with Asher, pursuant to which Asher purchased, and the Company issued, a convertible promissory note issued by the Company as of the same date in the principal amount of $22,500 (the “November 2012 Note”) with a maturity date of July 23, 2013. The interest rate of the Note is 8% per annum through the maturity date. The November 2012 Note is convertible into shares of the Company’s common stock (up to an amount that would result in Asher holding no more than 4.99% of the outstanding shares of common stock of the Company, subject to waiver by Asher) at any time beginning on the date that is 180 days following the date of the November 2012 Note and ending on the maturity date, valued at an agreed discount to market not to fall below a 59% discount to the average of the three lowest closing bid prices for the Company’s common stock during the ten days immediately preceding a conversion date, subject to certain exceptions described in the November 2012 Note. In the event the Company fails to deliver to Asher the common stock issuable upon conversion, the Company shall be required to pay to Asher $1,000 per day for each day beyond the due date until the Company so delivers the common stock (the “Conversion Penalty”). Furthermore, upon the occurrence and during the continuation of a “Conversion Default” (as defined in the November 2012 Note), the November 2012 Note shall become immediately due and payable and the Company shall pay to the holder, in full satisfaction of its obligations under the November 2012 Note, an amount equal to the Default Sum (as defined below), multiplied by 2. In the event the Company shall default in the payment of the November 2012 Note, the interest rate shall be increased to 22% per annum. Furthermore, upon the occurrence and during the continuation of any event of default with respect to failure to pay principal or interest when due at the maturity date, the November 2012 Note shall become immediately due and payable and the Company shall pay to Asher, in full satisfaction of its obligations under the November 2012 Note, an amount equal to the Default Sum. “Default Sum” is defined as (a) the then outstanding principal amount of the November 2012 Note to the date of payment, plus (b) the accrued and unpaid interest on the unpaid principal amount of the November 2012 Note to the date of payment plus (c) default interest, if any, on the amounts referred to in clauses (a) and (b) plus (d) any amounts owed to Asher pursuant to the Conversion Penalty.

F-18

NEVADA	98-0441032
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

60 Dutch Hill Road, Suite 15 Orangeburg, NY	10962
(Address of principal executive offices)	(Zip Code)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class registered:	Name of each exchange on which registered:
None	None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001 (Title of class)

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o (do not check if smaller reporting company)	Smaller reporting company x

PART I

Item 1.	Business	3
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosures	10

PART II

Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	11
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk	18
Item 8.	Financial Statements and Supplementary Data	18
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	18
Item 9A.	Controls and Procedures	19
Item 9B.	Other Information	20

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	21
Item 11.	Executive Compensation	23
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
Item 13.	Certain Relationships and Related Transactions, and Director Independence	25
Item 14.	Principal Accounting Fees and Services	26

PART IV

Item 15.	Exhibits, Financial Statement Schedules	27

Signatures		29

·	“Commission” refers to the Securities and Exchange Commission;
·	“Crisnic” refers to Crisnic Fund, S.A., a Costa Rican corporation;
·	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;
·	“OSL” refers to Office Supply Line, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company;
·	“Red Rock” refers to the Company while named Red Rock Pictures Holdings, Inc.; and
·	“Securities Act” refers to the Securities Act of 1933, as amended.

●	Service the shopper in a better way by understanding their shopping habits and product needs;
●	Support retailers by providing fact based information for their decision making process;
●	Create product and store loyalty with the consumer by having their favorite products on the shelves; and
●	Develop effective retail execution at these stores.

	High		Low
Fiscal Year 2012
First quarter ended November 30, 2011	$	.50	$	.07
Second quarter ended February 28, 2012	$	.50	$	.05
Third quarter ended May 31, 2012	$	.11	$	.04
Fourth quarter ended August 31, 2012	$	.05	$	.01

Fiscal Year 2011
First quarter ended November 30, 2010	$	.40	$	.12
Second quarter ended February 28, 2011*	$	38.00	$	.10
Third quarter ended May 31, 2011	$	.35	$	.10
Fourth quarter ended August 31, 2011	$	.15	$	.10

Name	Age	Position
Eli Feder	56	Chief Executive Officer and Chairman of the Board
Eric Kotch	53	Chief Financial Officer, Treasurer, Secretary and Director
Robert Rothenberg	42	President

Name and Principal Position	Year	Salary($)		Bonus($)		All Other Compensation ($)		Total($)
Eli Feder (1)	2012	$	145,500	$	25,000	$	0	$	170,500
Chief Executive Officer and Chairman	2011	$	0	$	0	$	0	$	0

Eric Kotch (2)	2012	$	145,500	$	25,000	$	0	$	170,500
Chief Financial Officer, Treasurer, Secretary and Director	2011	$	0	$	0	$	0	$	0

Robert Rothenberg (3) President	2012	$	200,000	$	0	$	96,250	$	296,250

Name of Beneficial Owner and Address	Amount and Nature of Beneficial Ownership of Common Stock		Percent of Common Stock (1)			Amount and Nature of Beneficial Ownership of Preferred Stock		Percent of Preferred Stock (2)
Crisnic Fund, S.A. Conhotel Office Center Office 5 Sabana San Jose, Costa Rica		-		-		650,001	(2)	100	%
ARMK LLC (3)		21,575,000		18.42	%
Eric Kotch (3) 60 Dutch Hill Rd, Suite 15 Orangeburg, NY 10963		3,723,833		3.18	%	-		-
Eli Feder 60 Dutch Hill Rd, Suite 15 Orangeburg, NY 10963		21,430,833		28.30	%	-		-
Robert Rothenberg		2,524,990		2.16	%
All directors and executive officers as a group (3 people)		49,254,656		42.05	%	-		-

(1)	Based on 117,121,248 shares of common stock issued and outstanding as of December 1, 2012. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.
(2)	We agreed, as security for a loan, to issue an aggregate of 650,001 shares of our preferred stock, pending repayment in full of such loan by December 1, 2012. The Company recently received a written notice of default in accordance with the terms of the loan and is obligated to issue the 650,001 shares of Preferred Stock to Crisnic. Each share of preferred stock effectively would entitle the holder to 100 votes on all matters submitted to shareholders. The preferred stock would also convert into our common stock on a 100:1 basis upon certain circumstances. As of the filing of this Annual Report, the 650,001 Preferred Shares have not been issued.
(3)	Mr. Kotch personally owns 3,723,833 shares and through his wife, Andrea Kotch, is the beneficial owner of the 21,575,000 shares owned by ARMK, LLC.

●	the director is, or at any time during the past three years was, an employee of the company;
●	the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

●	a family member of the director is, or at any time during the past three years was, an executive officer of the company;
●	the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);

Exhibit No.	Title of Document	Location

3.1	Articles of Incorporation	Incorporated by reference to Form SB-2 filed on June 17, 2005

3.2	Bylaws	Incorporated by reference to Form SB-2 filed on June 17, 2005

3.3	Certificates of Amendment to Articles of Incorporation and Certificate of Designation	Filed herewith

10.1	Convertible Note dated January 20, 2012 with Asher Enterprises	Filed herewith

10.2	Convertible Note dated June 15, 2012 with Asher Enterprises	Filed herewith

10.3	Convertible Note dated July 17, 2012 with Asher Enterprises	Filed herewith

10.4	Convertible Note dated November 8, 2012 with Asher Enterprises	Incorporated by reference to Form 8-K filed on November 14, 2012

10.5	Convertible Note dated March 5, 2012 with Panache Capital	Incorporated by reference to Form 8-K filed on March 15, 2012

10.6	Convertible Note dated April 10, 2012 with Panache Capital	Filed herewith

10.7	Convertible Note dated April 18, 2012 with Panache Capital	Incorporated by reference to Form 8-K filed on April 20, 2012

10.8	Convertible Note dated April 26, 2012 with Panache Capital	Incorporated by reference to Form 8-K filed on May 1, 2012

10.9	Amendment to Convertible Notes dated September 21, 2012 with Panache Capital	Filed herewith

10.10	Convertible Note dated August 13, 2012 with Continental Equities	Incorporated by reference to Form 8-K filed on September 25, 2012

10.11	Note dated October 10, 2011 with Crisnic Fund	Filed herewith

10.12	Stock Purchase Agreement with Asher Enterprises dated November 8, 2012	Incorporated by reference to Form 8-K filed on November 14, 2012

10.13	Office Lease Agreement	Filed herewith

10.14*	Employment Agreement dated January 17, 2012 with Robert Rothenberg	Filed herewith

10.15	Senior Secured Convertible Note dated December 28, 2008 with The Exchange LLC (as assignee of Emerald Asset Advisors, LLC)	Filed herewith

10.16	Amendment No. 1 to Senior Secured Convertible Note dated as of October 12, 2011 with The Exchange LLC	Filed herewith

10.17	Amendment No. 2 to Senior Secured Convertible Note dated as of December 4, 2012 with The Exchange LLC	Filed herewith

14	Code of Ethics	Incorporated by reference to Form 10-K/A filed on December 17, 2008

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.	Filed herewith

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.	Filed herewith

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.	Filed herewith

32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith

101	Materials from the OSL Holdings, Inc.’s Annual Report on Form 10-K for the fiscal year ended August 31, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statement of Stockholders’ Deficit, (iv) Consolidated Statement of Cash Flows and (v) related Notes to the Financial Statements.	Filed herewith

	OSL HOLDINGS INC.

	By:	/s/ Eli Feder
		Eli Feder Chairman 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)

/s/ Eli Feder		Chairman of the Board and Chief Executive Officer
Eli Feder

/s/ Eric Kotch		Director, Chief Financial Officer, Treasurer and Secretary
Eric Kotch