10Q form10q 123111.htm REPORT FOR THE QUARTER ENDED ~~September~~December 3031, 2011

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarter ended ~~September~~December 3031, 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 No. 0-11968

COSMO COMMUNICATIONS CORPORATION

(Name of Small Business Issuer in its Charter)

FLORIDA	59-2268025
(State or Other Jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No)

Unit 2 - 55 Travail Road, Markham, Ontario, Canada

(Address of Principal Executive Offices)

(905) 209-0488

(Issuer's Telephone Number)

~~Check whether the Issuer~~ (1)Former ~~filed~~Name ~~all reports required to be filed by Section 13~~ or ~~15(d)~~Former ~~of the Exchange Act during the past 12 months (or for such shorter period that the Company was required to file such reports)~~Address, ~~and~~if ~~(2)~~changed ~~has~~since last ~~been subject to such filing requirements for the past 90 days.~~Report)

Check whether the Issuer (1) ~~Yes x~~ ~~No o~~ filed all reports required to be filed by Section 13 or 15(2d) ~~Yes x~~ ~~No o~~of the Exchange

Act during the past 12 months (or for such shorter period that the Company was required to file such

reports), and (2) has been subject to such filing requirements for the past 90 days.

(1) Yes x No ¨ (2) Yes x No ¨

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Not applicable

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 “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):~~

~~Large~~accelerated ~~Accelerated~~filer ~~Filer o~~or ~~Accelerated~~a ~~Filer~~smaller oreporting ~~Non-Accelerated~~company ~~Filer~~filer. See odefinition ~~Smaller~~of ~~Reporting~~“accelerated ~~Company~~filer” xand “large

~~Indicate~~accelerated byfiler” ~~check mark whether the registrant is a shell company (as defined~~ in Rule 12b-2 of the Exchange Act~~) Yes o~~ ~~No x~~(Check one):

Large Accelerated Filer ¨ Accelerated Filer ¨ Non-Accelerated Filer ¨ Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes ¨ No x

(APPLICABLE ONLY TO CORPORATE ISSUERS)

State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date:

~~November 14~~February 13, ~~2011~~2012

Common – 40,467,636 shares

DOCUMENTS INCORPORATED BY REFERENCE

A description of any "Documents Incorporated by Reference" is contained in Item 6 of this Report.

Transitional Small Business Issuer Format Yes o ¨ No x

TABLE OF CONTENTS

		Page	~~Page~~
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	■ Consolidated Balance Sheets			1
	§ Consolidated Balance Sheets	1
	■ Consolidated Statements of Operations			2-3
	§ Consolidated Statements of Operations and Comprehensive Income (Loss)	2-3
	■ Consolidated Statements of Cash Flows			4
	§ Consolidated Statements of Cash Flows	4
	■ Notes to Consolidated Financial Statements			5- 8
	§ Notes to Consolidated Financial Statements	5-8
Item 2.	Management’s Discussion & Analysis of Financial Condition and Results of Operations	9-15		~~9 - 15~~
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15		15
Item 4.	Controls and Procedures	15		15
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	16		16
Item 2.	Unregistered Sales of Equity securities and Use of Proceeds	16		16
Item 3.	Defaults Upon Senior Securities	16		16
Item 4.	~~Submission~~(Removed ofand ~~Matters to a Vote of Security Holders~~Reserved)	16		16
Item 5	Other Information	16		16
Item 6.	Exhibits	17		17

COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	As Of September 30,			As Of March 31,
	2011			2011
	(Unaudited)			(Audited)
ASSETS
Current Assets:
Cash	$	348,672		$	375,365
Accounts receivable (net of allowance of $175,206 and $175,206 respectively)		3,378,129			1,971,806
Inventories (net of allowance of $631,342 and $752,822 respectively)		8,790,292			4,712,192
Prepaid expenses and deposits		21,983			9,702
Total Current Assets		12,539,076			7,069,065
Other Assets:
Deferred taxes		8,317			8,317
Total Equipment and Other Assets		8,317			8,317
Total Assets	$	12,547,393		$	7,077,382
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	555,766		$	496,179
Accrued liabilities		248,464			391,463
Accounts payable to parent company		14,384,727			7,809,241
Interest payable to parent company		604,627			604,627
Taxes payable		18,208			-
Total Current Liabilities		15,811,792			9,301,510
Stockholders’ Deficit:
Preferred stock, $0.01 par value, cumulative and convertible, 30,000 shares authorized, none issued and outstanding		-			-
Preferred stock, $0.01 par value, 9,970,000 shares authorized, none issued and outstanding		-			-
Capital stock, $0.05 par value, 50,000,000 shares authorized, 40,467,636 shares issued and outstanding		2,023,382			2,023,382
Additional paid-in capital		27,704,592			27,704,592
Accumulated other comprehensive income		321,969			355,598
Accumulated deficit		(33,314,342	)		(32,307,700	)
Total Stockholders' Deficit		(3,264,399	)		(2,224,128	)
Total Liabilities and Stockholders' Deficit	$	12,547,393		$	7,077,382

AS OF

	December 31,			March 31,
	2011			2011
	(Unaudited)			(Audited)
ASSETS
Current Assets:
Cash	$	642,300		$	375,365
Accounts receivable (net of allowance of $270,503 and $175,206, respectively)		2,943,966			1,971,806
Inventories (net of allowance of $682,249 and $752,822, respectively)		4,159,762			4,712,192
Prepaid expenses and deposits		14,723			9,702
Total Current Assets		7,760,751			7,069,065

Equipment and Other Assets:
Deferred taxes		8,317			8,317
Total Equipment and Other Assets		8,317			8,317

Total Assets	$	7,769,068		$	7,077,382
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	618,784		$	496,179
Accrued liabilities		168,433			391,463
Accounts payable to parent company		9,827,907			7,809,241
Interest payable to parent company		604,627			604,627
Taxes payable		18,208			-
Total Current Liabilities		11,237,959			9,301,510

Stockholders’ Deficit:
Preferred stock, $0.01 par value, cumulative and convertible, 30,000 shares authorized		-			-
Preferred stock, $0.01 par value, 9,970,000 shares authorized		-			-
Capital stock, $0.05 par value, 50,000,000 shares authorized, 40,467,636 shares issued and outstanding		2,023,382			2,023,382
Additional paid-in capital		27,704,592			27,704,592
Accumulated other comprehensive income		276,871			355,598
Accumulated deficit		(33,473,736	)		(32,307,700	)

Total Stockholders' Deficit		(3,468,891	)		(2,224,128	)

Total Liabilities and Stockholders' Deficit	$	7,769,068		$	7,077,382

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

COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~DECEMBER 3031

(Unaudited)

	2011			2010
Sales	$	49,~~473~~259,~~229~~290		$	36,~~738~~877,~~822~~240
Cost of products sold		37,~~624~~937,~~726~~092			35,~~247~~539,~~342~~942
Gross profit		~~848~~1,~~503~~322,198			~~491~~1,~~480~~337,298
Commission income		2,~~605~~773			23,~~165~~095
		851,108			493,645
		1,324,971			1,340,393
Expenses:
Selling and delivery		~~511~~1,~~100~~006,109			~~291~~689,~~650~~808
Salaries and wages		~~223~~240,~~176~~029			~~244~~354,~~321~~090
General and administrative		~~187~~296,~~851~~770			~~155~~189,~~956~~808
Loss (gain) on foreign exchange		518,180			(13,542	)
Gain on foreign exchange		(63,485	)		(105,325	)
Financial		24,~~150~~943			2,~~355~~856
Depreciation		-			3,~~718~~719
		1,442,457			684,458
		1,484,366			1,134,956
Net loss before income taxes		(591,349	)		(190,813	)
Net income (loss) before income taxes		(159,395	)		205,437
Current income taxes		5			812
Net income (loss)	$	(159,395	)	$	205,437
Net loss	$	(591,354	)	$	(191,625	)
Foreign currency translation adjustment		(45,098	)		67,005
Foreign currency translation adjustment		(26,459	)		11,066
Comprehensive income (loss)		(204,493	)		272,442
Comprehensive loss		(617,813	)		(180,559	)
Net income (loss) per common share:
Net loss per common share:
Basic and diluted	$	(0.01	)	$	0.01
Basic and diluted	$	(0.01	)	$	(0.00	)
Weighted average shares outstanding:
Basic and diluted		40,467,636			40,467,636

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

COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE ~~SIX~~NINE MONTHS ENDED ~~SEPTEMBER~~DECEMBER 3031

(Unaudited)

	2011			2010
Sales	$	615,~~176~~435,~~305~~595		$	714,~~231~~109,~~797~~037
Cost of products sold		513,~~175~~112,~~025~~117			611,~~373~~913,~~359~~301
Gross profit		12,~~001~~323,~~280~~478			~~858~~2,~~438~~195,736
Commission income		811,~~587~~360			2629,~~690~~785
		1,009,867			885,128
		2,334,838			2,225,521
Expenses:
Selling and delivery		~~648~~1,~~560~~654,669			~~554~~1,~~125~~243,933
Salaries and wages		~~470~~710,~~862~~891			~~511~~865,~~374~~464
General and administrative		~~364~~660,~~138~~908			~~342~~532,~~562~~372
Loss on foreign exchange		~~525~~462,~~895~~410			~~104,501~~(824	))
Financial		611,~~249~~191			710,~~514~~370
Depreciation		-			711,~~437~~156
		2,015,704			1,527,513
		3,500,069			2,662,471
Net loss before income taxes		(1,~~005~~165,~~837~~231	)		(~~642~~436,~~385~~950	))
Income taxes		805			812	)
Net loss	$	(1,~~006~~166,~~642~~036	)	$	(~~643~~437,~~197~~762	))
Foreign currency translation adjustment		(3378,~~629~~727	)		~~(54~~12,~~135~~870	)
Comprehensive loss		(1,~~040~~244,~~271~~763	)		(~~697~~424,~~332~~892	))
Net loss per weighted number of shares outstanding:
Basic and diluted	$	(0.0203	)	$	(0.0201	))
Weighted average shares outstanding:
Basic and diluted		40,467,636			40,467,636

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

COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ~~SIX~~NINE MONTHS ENDED ~~SEPTEMBER~~DECEMBER 3031

(Unaudited)

	2011			2010
Cash Flows from Operating Activities:
Net loss	$	(1,~~006~~166,~~642~~036	)	$	(~~643~~437,~~197~~762	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation		-			711,~~437~~156
		(1,006,642	)		(635,760	)
		(1,166,036	)		(426,606	)
Changes in operating assets and liabilities:
Accounts receivable		(1972,~~406,323~~160	)		(~~575~~19,~~343~~855	)
Inventories		(4552,~~078,100~~430	)		(1,~~027~~874,~~520~~116	)
Prepaid expenses and deposits		(125,~~281~~021	)		(135,~~113~~991	)
Accounts payable and accrued liabilities		(83100,~~412~~425	)		~~313~~(73,~~489~~747	)
Taxes payable		18,208			(69108,~~240~~115	)
Accounts payable to parent company		62,~~575~~018,~~486~~666			1(972,~~761,638~~066	)
Net cash provided by (used in) operating activities		6,936			(245,849	)
Net cash provided by operating activities		345,662			267,736
Effect of exchange rate changes on cash		(3378,~~629~~727	)		~~(54~~12,~~135~~870	)
Net decrease in cash		(26,693	)		(299,984	)
Net increase in cash		266,935			280,606
Cash - beginning of period		375,365			635,516
Cash - end of period	$	~~348~~642,~~672~~300		$	~~335~~916,~~532~~122

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

COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NATURE OF OPERATIONS

Cosmo Communications Corporation and subsidiaries (the "Company" or "Cosmo") market and distribute consumer electronic products. The Company has operations in Hong Kong, the United States of America and Canada.

BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the Securities Exchange Commission (“SEC”) instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three ~~months~~ and ~~six~~nine months periods ended ~~September~~December 3031, 2011 are not necessarily indicative of the results that may be expected for the year ending March 31, 2012. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended March 31, 2011.

PRINCIPLES OF CONSOLIDATION

The Company includes, in consolidation, its wholly owned subsidiaries, Cosmo Communications Canada Inc. (“Cosmo Canada”), Cosmo Communications (H.K.) Limited (“Cosmo H.K.”) and Cosmo Communication USA Corporation (“Cosmo USA”). All significant intercompany transactions and balances have been eliminated upon consolidation.

Concentration of Credit Risk

The Company has cash in bank accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

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. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. As of September 30, 2011, the Company provided reserves for doubtful accounts receivable in the amount of $175,206 (March 31, 2011 - $175,206); provided inventory reserves for estimated obsolescence for $631,342 (March 31, 2011 - $752,822); and provided reserves for defective inventory returns of $116,836 (March 31, 2011 - $252,977).

As of December 31, 2011, the Company provided reserves for doubtful accounts receivable in the amount of $270,503 (March 31, 2011 - $175,206); provided inventory reserves for estimated obsolescence for $682,249 (March 31, 2011 - $752,822); and provided reserves for defective inventory returns of $124,541 (March 31, 2011 - $252,977).

Fair Value of Financial Instruments

The Company's financial instruments include cash, accounts receivable, accounts payable, and advances from the parent company.

The estimated fair value of financial instruments has been determined by the Company using available market information and valuation methodologies. Considerable judgment is required in estimating fair value. Accordingly, the estimates may not be indicative of the amounts the Company could realize in a current market exchange. At ~~September~~December 3031, 2011 and March 31, 2011, the carrying amounts of cash, accounts receivable, accounts payable, and advances from the parent company approximate their fair values due to the short-term maturities of these instruments.

Earnings or Loss Per Share

There were no anti-dilutive financial instruments for three months ended ~~September~~December 3031, 2011 and 2010.

AMOUNTS PAYABLE TO PARENT COMPANY

As of ~~September~~December 3031, 2011, the Company owed $1410,~~989~~432,~~354~~ 534 (March 31, 2011 - $8,413,869) to The Starlight Group of Companies, the principal corporate shareholder of the Company ("Starlight"). Of this amount $149,~~384~~827,~~727~~907 (March 31, 2011- $7,809,242) was owed in the form of trade payable and the remainder was interest on prior advances. These amounts are unsecured, payable on demand and Starlight has agreed not to charge further interest on the accrued interest payable. Interest accrued as of ~~September~~December 3031, 2011 was $604,627 (March 31, 2011 - $604,627).

COMMITMENTS

The Company leases premises under an operating lease with a five year term in Canada and shares the facilities for its Hong Kong operation. In September 2008 the Company extended the current operating lease in Canada for five years commencing on October 1, 2008. Minimum lease commitments under the leases at ~~September~~December 3031, 2011 were:

2012 (Six months)		167,344
2012 (Three months)		84,705
2013		~~337~~341,~~373~~540
2014		~~170~~172,~~029~~129
	$	~~674~~598,~~746~~374

RELATED PARTY TRANSACTIONS

Apart from those as disclosed in Amounts Payable to Parent Company, the Company's transactions with related parties were, in the opinion of the directors, carried out on normal commercial terms and in the ordinary course of the Company's business.

During the ~~six~~nine months ended ~~September~~December 3031, 2011, the Company purchased $68,~~055~~315,~~300~~680 (~~six~~nine months ended ~~September~~December 3031, 2010 - $611,~~321~~659,~~495~~587) of goods from Starlight. The Company also purchased a net value of $~~904~~1,~~307~~744,160 of goods from Singing Machine Company, a subsidiary company of ~~our~~Starlight ~~Parent~~for ~~Company~~the nine months ended December 31, 2011. (~~six~~nine months ended ~~September~~December 3031, 2010 - $~~940~~1,~~773~~890,127).

ECONOMIC DEPENDENCE

The Company ishas ~~economically~~been ~~dependent~~traditionally dependent on ~~its~~one ~~parent~~single ~~company~~large ~~for the supply of inventory products to its customers. A~~ mass-market merchandiser and chain store located in Canada isand the ~~Company's~~US ~~largest customer,~~ which accounted for ~~approximately 29~~56% of sales ~~for~~in 2010. During the ~~six~~year ~~months~~ ended ~~September~~31 ~~30,~~March 2011, ~~and~~the ~~29%~~Company ~~for~~has ~~the~~built ~~three~~up ~~months~~sales ~~ended~~with ~~September~~a ~~30,~~second account located in Canada. The two customers accounted for 38% of sales in fiscal 2011. Economic dependence exists with ~~this~~these ~~identified~~two ~~customer~~customers. Loss of ~~the~~both ~~customer~~customers may have significant adverse results to the financial position of the Company.

As of ~~September~~December 3031, 2011, the accounts receivable from ~~this~~these ~~customer~~two customers amounted to approximately $193,~~211,577,~~964 (March 31, ~~2011~~2010 –- $1,252,960) and claims payable for inventory returns amounted to approximately $~~350~~256,~~861~~854 (March 31, 2010 - $12,076).

OPERATING SEGMENT INFORMATION

The Company operated in one business segment and all of its sales are consumer electronic products. The Company's customers are principally in Canada and in the USA. Borrowings are principally in the United States.

Canada

Hong Kong

United States

Total

September 30, 2011

December 31, 2011

Assets

116,~~169~~301,~~445~~595

~~275~~236,~~276~~917

1,~~102~~230,~~672~~556

127,~~547~~769,~~393~~068

Six Months Ended September 30, 2011

Nine Months Ended December 31, 2011

Sales, net

513,~~126~~051,~~280~~329

~~761~~1,~~874~~580,884

~~288~~803,~~151~~382

615,~~176~~435,~~305~~595

Gross margin

~~983~~2,~~448~~238,226

~~106~~169,~~035~~942

(8884,~~203~~690

)

12,~~001~~323,~~280~~478

Net loss

(928,015

)

38,138

(116,765

)

(1,006,640

)

Net income (loss)

(1,084,264

)

50,289

(132,061

)

(1,166,036

)

March 31, 2011

Assets

67,~~044~~165,~~244~~931

~~136~~44,~~493~~475

~~896~~849,~~645~~091

78,~~077~~059,~~382~~497

Six Months Ended September 30, 2010

Nine Months Ended December 31, 2010

Sales, net

612,~~097~~365,~~925~~582

~~677~~954,~~090~~726

~~456~~788,~~781~~730

714,~~231~~109,~~796~~037

Gross margin

~~761~~2,~~535~~046,491

6398,~~048~~417

3350,~~854~~828

~~858~~2,~~437~~195,736

Net loss

(~~550~~315,~~686~~980

)

(5057,~~789~~304

)

(4164,~~722~~478

)

(~~643~~437,~~197~~762

)

SUPPLEMENTAL CASH FLOW INFORMATION

During the ~~six~~nine months ended ~~September~~December 3031, 2011 the Company paid interest of $611,~~249~~191 (~~six~~nine months ended ~~September~~December 3031, 2010 - $710,~~514~~370) and paid $805 in income ~~tax~~taxes (~~six~~nine months ended ~~September~~December 3031, 2010 –- $~~812~~125,729).

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information contained in our consolidated financial statements and the notes thereto appearing elsewhere in this quarterly report, and in conjunction with the Management's Discussion and Analysis set forth in (1) our annual report on Form 10-K for the year ended March 31, 2011.

As used in this quarterly report, to term “we”, “us”, our”, “Cosmo”, the “Company” or “our company refer to Cosmo Communications Corporation, a Florida corporation.

Preliminary Note Regarding Forward-Looking Statements

This quarterly report and the documents incorporated herein by reference contain forward-looking statements within the meaning of the federal securities laws, which generally include the plans and objectives of management for future operations, including plans and objectives relating to our future economic performance and our current beliefs regarding revenues we might earn if we are successful in implementing our business strategies. The forward-looking statements and associated risks may include, relate to or be qualified by other important factors. You can identify forward-looking statements generally by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “intends,” “plans,” “should,” “could,” “seeks,” “pro forma,” “anticipates,” “estimates,” “continues,” or other variations of those terms, including their use in the negative, or by discussions of strategies, opportunities, plans or intentions. You may find these forward-looking statements in this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as throughout this quarterly report. A number of factors could cause results to differ materially from those anticipated by forward-looking statements.

These forward-looking statements necessarily depend upon assumptions and estimates that may prove to be incorrect. Although we believe that the assumptions and estimates reflected in the forward-looking statements are reasonable, we cannot guarantee that we will achieve our plans, intentions or expectations. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ in significant ways from any future results expressed or implied by the forward-looking statements.

Any of the factors described in this quarterly report, including in this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, could cause our financial results, including our net income (loss) or growth in net income (loss) to differ materially from prior results, which in turn could, among other things, cause the price of our common stock to fluctuate substantially. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.

In addition, readers are also advised to refer to the information contained in our filings with the Commission, especially on Forms 10-K, 10-Q and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.

Overview

Cosmo Communications Corporation (the “Company”, “Cosmo”, “we”, “us” or “our”) was incorporated in the state of Florida in 1983.

The Company is engaged in the development, production, distribution, marketing and sale of consumer electronic audio and video equipment, accessories and clocks. Our products are sold primarily in Canada and to selective customers in USA, United Kingdom, and South America through mass merchandisers, department stores, electronic stores, chains, and specialty stores.

Our products are currently sold in stores such as Wal-Mart, Super-Stores, Home Hardware, Bargain Shop, and Best Buy/Future Shop.

Results of Operations for the Quarter Ended ~~September~~December 3031, 2011 (“2011”) and For the Quarter Ended ~~September~~December 3031, 2010 (“2010”)

The following table sets forth, for the periods indicated, certain items related to our consolidated statements of operations as a percentage of net revenues for the three and nine months ended December ~~September 30~~31, 2011 and 2010.

	Three months ended			Three months ended			Six months ended			Six months ended			Three months ended			Three months ended
	Three monthsended			Three monthsended			Nine monthsended			Nine monthsended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010			June 30, 2010			June 30, 2009
	December 31,2011			December 31,2010			December 31,2011			December 31,2010
Sales		100	%		100	%		100	%		100	%		~~100~~	%		~~100~~	%
Cost of products sold		8185.7	%		8680.96	%		~~83.8~~85	%		8884.15	%		~~89.5~~	%		~~88.6~~	%
Gross profit		1914.3	%		1319.14	%		1615.20	%		1115.95	%		~~10.5~~	%		~~11.4~~	%
Commission income		~~0.1~~-	%		~~0.1~~-	%		0.1	%		0.42	%		~~0.7~~	%		~~0.7~~	%
Expenses:
Salaries and wages		52.6	%		6.5.1	%		74.6	%		76.1	%		~~7.6~~	%		~~7.6~~	%
General and administrative		43.2	%		4.2.7	%		54.93	%		43.7	%		~~5.3~~	%		5	%
Selling and delivery		1110.49	%		~~7.8~~10	%		10.57	%		78.78	%		~~7.5~~	%		12	%
Financial		0.1	%		~~0.1~~-	%		~~0.1~~-	%		~~0.1~~-	%		~~0.1~~	%		~~0.1~~	%
(Gain) loss on foreign exchange		11(0.67	)%		(01.5	)%		~~8.5~~3	%		~~1.5~~-	%		~~3.4~~	%		~~(3.9~~	)%
Depreciation		-			0.1	%		-			0.1	%		~~0.1~~	%		~~0.1~~	%
Net loss before income tax		~~(13~~1.27	%)		(52.09	%)		~~(16~~7.36.0	%)		(83.90	%)		~~(12.9~~	%)		~~(8.8~~	%)
Income tax (recovery) expense		-			-			-			-			-			~~(0.3~~	)%
Net loss		~~(13~~1.27	%)		(52.09	%)		~~(16~~7.36	%)		(83.90	%)		~~(12.9~~	%)		~~(8.5~~	%)

The following is a discussion and analysis of our results of operations for the above periods:

Three months ended ~~September~~December 3031, 2011 ~~and~~compared with three months ended ~~September~~December 3031, 2010.

Net Sales:

Sales for the three months ended ~~September~~December 3031, 2011 increased by approximately $~~734,407~~2.4 million or 2035% compared to the corresponding period in 2010. The ~~increase~~19” ~~reflected~~and ~~the~~22” ~~normal~~TV contributed ~~sales~~$1.8M ~~level~~to inthe ~~this quarter~~increase. In ~~2010,~~Other ~~there~~increases ~~was~~include akaraoke ~~severe~~products ~~labor~~($537,000), ~~shortages~~camera inproducts ~~Southern China~~($352,000) ~~goods~~and ~~that~~clearance of ~~would~~discontinued ~~normally~~items be($349,000). ~~shipped~~These inincreases ~~September~~ were ~~delayed~~partially ~~until~~offset ~~October~~by a decrease of sales in ~~that~~the ~~year. We~~Disney ~~did~~products ~~not~~($728,000) due ~~experience~~to ~~major~~few ~~labor~~new ~~shortages~~characters increated ~~the~~by ~~current~~Disney ~~year~~in 2011.

Cost of Sales and Gross Margin:

Gross margin was 1914.3% for the three months ended ~~September~~December 3031, ~~2011~~2010 as compared to 1319.4% for the same period in 2010. ~~The~~ ~~Canadian~~TV ~~dollar~~products ~~appreciated~~have bya ~~about~~lower 3%average ~~this~~gross ~~period~~profit ~~compared with the 2010 period~~margin. ~~Cost~~ We ofexperienced ~~sales~~20% ~~which~~to ~~was~~74% ~~paid in US dollars became relatively cheaper with majority~~ of ~~our~~losses ~~sales revenue~~ in ~~Canadian~~clearing ~~dollars. A~~out ~~higher profit margin in refurbished products also helped to improve~~ the ~~overall~~discontinued ~~gross profit margin~~items.

Commission Income:

Commission income ~~was~~decreased ~~similar~~by $322 for the three months ended December 31, 2011 compared to the corresponding period in 2010. We are handling less defective returns from TV manufacturers on a commission basis. Rather, we have negotiated to buy the ~~two~~defective ~~periods~~returns from the manufacturers, refurbish the goods in ~~comparison~~house and sell the refurbished goods to our customers. The revenue from the sale of refurbished goods for the current three months was $292,975 and is included with sales in the current quarter.

Selling, General and Administrative Expenses:

~~Our~~Selling ~~salaries~~ expenses ~~decreased~~increased by $21316,~~145~~301 mainly ~~for~~because ~~the~~of ~~three~~advertising ~~months~~allowances ~~ended~~provided ~~September~~to ~~30,~~major ~~2011~~customers. ~~compared~~The ~~with~~allowance ~~the~~provided ~~same~~ranged ~~period~~from in2% ~~2010. General~~- ~~and~~7% ~~administrative~~on ~~expense~~sales. ~~increased by $31~~Our salaries,~~895,~~ ~~mainly~~general inand ~~rent~~administrative ~~increment. Our selling~~ expenses ~~increased~~decreased by $~~219~~7,~~450~~099 ~~due~~for to the ~~accrual~~three ofmonths ~~minimum~~ended ~~royalties~~December ~~and increase in providing advertising and promotional allowances to our customers. Through our parent company~~31, we2011 ~~received~~compared ~~the~~with ~~license to distribute Polaroid brand products. Our share of~~ the same ~~minimum~~period ~~royalty~~in ~~is $115,000 per quarter~~2010.

Financial:

There was no major change in our financial costs in the two periods in comparison.

Net Earnings:

~~The~~Net ~~net~~ loss for the three months ended ~~September 30~~December 31, 2011 was $~~591~~159,~~354~~395 compared with a net ~~loss~~income of $~~190~~205,~~625~~437 in the corresponding period in 2010. The ~~increase~~adverse inresult ~~net loss~~ was due to deterioration ~~loss~~ in ~~foreign~~the ~~exchange~~gross ofprofit ~~$518,180~~margin ~~compared~~and ~~with~~increase ~~an exchange gain of $13,542~~ in ~~2010~~selling expenses.

Foreign exchange:

For the three months ended ~~September~~December 3031, 2011, we ~~recorded~~realized a ~~loss~~foreign exchange gain of $~~518~~63,~~180~~485 ~~in foreign exchange~~ as compared with a gain of $13105,~~542~~325 in 2010. ~~The~~ ~~exchange~~Our ~~rates~~Canadian ofsubsidiary has liabilities due to our parent company which are dominated in US dollars. With the ~~Canadian~~decrease ~~dollar~~in ~~against~~the value of the US dollar ~~have~~as ~~been~~compared ~~volatile~~to in the Canadian ~~two~~dollar, ~~periods~~we realized a foreign exchange gain of $63,485 in ~~comparison~~the current quarter.

~~Six~~Nine months ended ~~September~~December 3031, 2011 compared with ~~six~~nine months ended ~~September~~December 3031, 2010.

Net Sales:

Sales for the ~~six~~nine months ended ~~September~~December 3031, 2011 ~~decreased~~increased by $1~~,055,492~~.3M compared with the same period in 2010. ~~Our~~ ~~audio~~The ~~products~~increase ~~experienced~~was afrom ~~decrease~~sales of ~~$1.3M~~TV and camera offset by ana ~~increase~~ decrease in ~~new~~Disney ~~camera~~and audio products. ~~under~~The ~~the~~decrease ~~Polaroid~~in ~~brand~~Disney ~~name~~sales ofwas ~~$141,000~~due to few new characters created by Disney in 2011.

Cost of Sales and Gross Margin:

Gross margin was ~~16.2~~15% for the ~~six~~nine months ended December ~~September 30~~31, 2011 compared with 1115.95% in 2010. The ~~Canadian~~gross ~~dollar~~profit ~~appreciated~~margins bywere ~~about~~comparable 6%in ~~this period compared with~~ the ~~2010~~two ~~period. Cost~~periods ~~of sales which was paid~~ in ~~US dollars became relatively cheaper with majority of our sales in Canadian dollars~~comparison. ~~A better profit margin in refurbished products also helped to improve the overall gross profit margin.~~

Commission Income:

Commission income decreased by $18,~~103~~425 for the current ~~six~~nine months compared with 2010. The decrease was from reverse logistic income related to the handling of defective returns for third party manufacturers. We negotiated to buy the defective returns from the third party manufacturers, refurbished the goods in house and sold the refurbished goods to the second tier outlets. Revenue from the sales was $~~574~~1,~~769~~070,765 and ~~has~~is ~~been~~included with ~~booked as~~ sales ~~income in the current six months~~.

Selling, General and Administrative Expenses:

Selling and delivery expenses increased by $94410,~~435~~736 for the ~~six~~nine months ended ~~September~~December 3031, 2011. The increase was due to ~~the~~an ~~need~~increase in advertising and other promotional allowances provided to ~~accrue~~major ~~minimum~~customers ~~royalty~~in ~~expenses~~this period compared with 2010.

Salaries, general and administrative expenses decreased by $1826,~~936~~037 during this period. The decrease was mainly due to ~~reduction~~cut inback ~~payroll~~ of ~~admin and warehouse~~ staff offset by ~~increase~~increases in ~~rent~~office ~~increments~~expenses.

Financial:

There was no major change in our financial costs in the two periods in comparison.

Net Earnings:

Net loss for the ~~six~~nine months ended ~~September 30~~December 31, 2011 was $1,~~006~~166,~~642~~036 compared with a net loss of $~~643~~437,~~197~~762 in 2010. The ~~increase~~adverse result in net loss was due mainly to ~~the~~a ~~impact~~loss of foreign exchange~~. Foreign~~ ~~exchange~~and ~~loss~~increases ~~was $525,895~~ in ~~this~~selling ~~current period compared with $104,501 in 2010~~expenses.

Foreign exchange:

We ~~incurred~~recorded an exchange loss of $~~525~~462,~~895~~410 compared with a ~~loss~~gain of $~~104,501~~824 in 2010 . The exchange rates of the Canadian dollar against the US dollar have been volatile in the two periods in comparison.

Liquidity and Capital Resources

During the ~~six~~nine months ended ~~September~~December 3031, 2011, net cash provided by operating activities was $6345,~~936~~662. The main source of our working capital during this period came from increasing our trade payable ~~from~~to our parent company. The ratio of current assets to current liabilities was 0.7669 to 1, as compared to 0.76 to 1 on March 31, 2011.

~~Seasonal~~There have been no cash flows from investing and ~~Quarterly~~financing ~~Results~~activities for the nine months ended December 31, 2011 and we have no planned investing or financing activities.

~~Historically,~~We expect our ~~operations~~factories ~~have~~will ~~been~~continue ~~seasonal,~~to ~~with~~provide credits ~~the~~to ~~highest~~us ~~net sales occurring in the second~~ and ~~third~~that ~~quarters~~Starlight ~~(reflecting~~will ~~increased~~not ~~orders~~demand ~~for~~immediate ~~electronic~~repayment ~~audio and video equipment during the Christmas selling months) and to a lesser extent the first and fourth quarters~~ of ~~the fiscal year. The~~ current ~~trend~~liabilities ~~is we will receive less direct import orders~~ and ~~more domestic sales orders from our customers. In effect, the timing of placing orders~~ will beprovide ~~delayed. Our~~financing ~~results of operations often fluctuate from quarter~~ to ~~quarter~~us asif we arequire ~~result~~additional ofshort ~~the~~term ~~amount~~working ~~and timing of orders placed and shipped to customers, as well as other factors~~capital. ~~The fulfillment of orders can therefore significantly affect results of operations on a quarter-to-quarter basis.~~

~~Inflation~~Seasonal and Quarterly Results

~~Inflation~~Historically, ~~has~~our ~~not~~operations ~~had~~have been seasonal, with the highest net sales occurring in the second and third quarters (reflecting increased orders for electronic audio and video equipment during the Christmas selling months) and to a ~~significant~~lesser ~~impact~~extent onthe first and fourth quarters of the ~~Company's~~fiscal ~~operations~~year. The ~~Company~~current trend ~~has~~is ~~historically~~we ~~passed~~will ~~any~~receive ~~price~~less ~~increases~~direct onimport toorders ~~its~~and more domestic sales orders from our customers. ~~since~~In ~~prices~~effect, ~~charged~~the bytiming of placing orders will be delayed. Our results of operations often fluctuate from quarter to quarter as a result of the ~~Company~~amount ~~are~~and timing ~~generally~~of ~~not~~orders ~~fixed~~placed byand ~~long~~shipped to customers, as well as other factors. The fulfillment of orders can therefore significantly affect results of operations on a quarter-~~term~~to-quarter ~~contracts~~basis.

~~Critical Accounting Policies and Estimates~~Inflation

~~The~~Inflation ~~methods,~~has ~~estimates~~not ~~and~~had ~~judgments Cosmo uses in applying its accounting policies have~~ a significant impact on the ~~results~~Company's ~~reported in its consolidated financial statements~~operations. ~~Cosmo~~The ~~evaluates~~Company ~~its~~has ~~estimates~~historically ~~and~~passed ~~judgments~~any onprice anincreases on~~-going~~ ~~basis. Cosmo~~to ~~bases~~ its ~~estimates~~customers onsince ~~historical~~prices ~~experience~~charged ~~and assumptions that Cosmo believes to be reasonable under~~ by the ~~circumstances.~~Company ~~Cosmo’s experience and assumptions form the basis for its judgments about the carrying value of assets and liabilities that~~ are generally not ~~readily~~fixed ~~apparent~~by ~~from~~long-term ~~other sources~~contracts. ~~Actual results may vary from what Cosmo anticipates and different assumptions or estimates about the future could change its reported results.~~

~~Cosmo~~Critical ~~believes~~Accounting Policies ~~the following accounting policies are the most critical to Cosmo, in that they are important to the portrayal of Cosmo’s consolidated financial statements~~ and ~~they require Cosmo’s most difficult, subjective or complex judgments in the preparation of its consolidated financial statements:~~ Estimates

13The methods, estimates and judgments Cosmo uses in applying its accounting policies have a significant impact on the results reported in its consolidated financial statements. Cosmo evaluates its estimates and judgments on an on-going basis. Cosmo bases its estimates on historical experience and assumptions that Cosmo believes to be reasonable under the circumstances. Cosmo’s experience and assumptions form the basis for its judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may vary from what Cosmo anticipates and different assumptions or estimates about the future could change its reported results.

~~Use~~Cosmo believes the following accounting policies are the most critical to Cosmo, in that they are important to the portrayal of ~~Estimates~~Cosmo’s consolidated financial statements and they require Cosmo’s most difficult, subjective or complex judgments in the preparation of its consolidated financial statements:

~~Revenue~~Use ~~Recognition~~of Estimates

~~Sales,~~The ~~net~~preparation of financial ~~estimated~~statements ~~sales~~in ~~returns,~~conformity ~~are~~with ~~recognized~~accounting ~~upon~~principles ~~passage~~generally ofaccepted ~~title~~in to the ~~customer. This~~United ~~occurs~~States ~~upon~~requires ~~shipment~~management orto ~~upon~~make estimates ~~receipt~~and byassumptions that affect the ~~customer~~reported ~~depending~~amounts onof assets and liabilities and the ~~country~~disclosure of ~~the~~contingent ~~sale~~assets and liabilities at the ~~agreement~~date ~~with~~of the ~~customer. Revenue~~financial isstatements ~~recognized~~and ifthe ~~persuasive~~reported ~~evidence~~amounts of anrevenues ~~agreement~~and ~~exists,~~expenses during the ~~sales~~reporting ~~price~~period. Actual isresults ~~fixed~~could ordiffer ~~determinable~~from those estimates. These estimates are reviewed periodically, and, ~~collectability~~as isadjustments ~~reasonably~~become ~~assured~~necessary, they are reported in earnings in the period in which they become known.

Commission income is derived from reverse logistic services that consist of handling other distributor companies returned goods. In providing these services, the Company acts as an agent or broker without assuming the risks and rewards of ownership of the goods and therefore reports the commissions on a net basis. Revenue ~~is recognized based on the completion of the contracted services.~~Recognition

~~Inventories~~Sales, net of estimated sales returns, are recognized upon passage of title to the customer. This occurs upon shipment or upon receipt by the customer depending on the country of the sale and the agreement with the customer. Revenue is recognized if persuasive evidence of an agreement exists, the sales price is fixed or determinable, and collectability is reasonably assured.

~~Inventories~~Commission ~~are~~income is ~~valued~~derived atfrom ~~the~~reverse ~~lower~~logistic ofservices ~~cost~~that orconsist ~~net~~of ~~realizable~~handling ~~value. Cost~~other isdistributor ~~determined~~companies onreturned ~~average cost~~goods. ~~Inventory~~ isIn ~~comprised~~providing ofthese services, ~~finished products that~~ the Company ~~intends~~acts toas ~~sell~~an toagent ~~its~~or ~~customers. The~~broker ~~Company~~without ~~periodically~~assuming ~~makes judgments and estimates regarding~~ the ~~future~~risks ~~utility~~ and ~~carrying~~rewards ~~value~~ of ~~its~~ownership ~~inventory. The carrying value~~ of ~~inventory~~the isgoods ~~periodically reviewed~~ and ~~impairments,~~therefore reports ~~if any, are recognized when~~ the ~~expected~~commissions ~~future~~on ~~benefit~~a ~~from~~net ~~the inventory is less than its carrying value~~basis. ~~The~~ ~~Company~~Revenue ~~has inventory reserves for estimated obsolescence or unmarketable inventory which~~ is ~~equal~~recognized tobased ~~the~~on ~~difference between~~ the ~~cost~~completion of ~~inventory and~~ the ~~estimated~~contracted ~~market value based upon assumptions about future demand and market conditions~~services.

~~Foreign Translation Adjustment~~Inventories

~~The~~Inventories ~~accounts~~are ofvalued at the ~~foreign~~lower ~~subsidiaries were translated into U.S. dollars in accordance with the provisions~~ of ~~Accounting~~cost ~~Standards~~or ~~Codification~~net ~~“ASC”~~realizable ~~830 Foreign Currency Translation~~value. ~~Management~~ ~~has~~Cost is determined ~~that~~on ~~the~~average ~~Hong~~cost. ~~Kong~~Inventory ~~dollar~~ is ~~the~~comprised ~~functional currency~~ of ~~the~~finished ~~Hong~~products ~~Kong subsidiaries and~~ that the ~~Canadian~~Company ~~dollar~~intends isto ~~the~~sell ~~functional~~to ~~currency~~its ofcustomers. ~~the~~The ~~Canadian~~Company ~~subsidiary. Certain~~periodically ~~current~~makes ~~assets~~judgments and ~~liabilities~~estimates ofregarding ~~these~~the ~~foreign~~future ~~entities~~utility and ~~are~~carrying ~~denominated~~value inof ~~U.S.~~its ~~dollars~~inventory. In ~~accordance~~The ~~with~~carrying ~~the~~value ~~provisions~~ of ~~ASC~~inventory ~~830,~~is ~~transaction~~periodically ~~gains~~reviewed and ~~losses~~impairments, onif ~~these~~any, ~~assets and liabilities~~ are ~~included~~recognized when in the ~~determination~~expected offuture ~~income~~benefit ~~for~~from the ~~relevant~~inventory ~~periods. Adjustments~~is ~~resulting~~less ~~from~~than ~~the~~its ~~translation~~carrying ofvalue. ~~the~~The ~~financial~~Company ~~statements~~has ~~from~~inventory ~~their~~reserves ~~functional~~for ~~currencies~~estimated obsolescence toor ~~United~~unmarketable ~~States~~inventory ~~dollars~~which ~~are~~is ~~accumulated~~equal asto athe ~~separate~~difference ~~component~~between ofthe ~~accumulated~~cost ~~other~~of ~~comprehensive~~inventory ~~income~~ and ~~have~~the ~~not~~estimated ~~been~~market value ~~included~~based inupon ~~the~~assumptions ~~determination~~about offuture ~~income~~demand ~~for~~and ~~the~~market ~~relevant periods~~conditions.

~~Income~~Foreign ~~Taxes~~Translation Adjustment

The accounts ~~Company~~of ~~accounts~~the ~~for~~foreign ~~income~~subsidiaries ~~taxes~~were ~~pursuant~~translated tointo ~~ASC~~U.S. ~~740,~~dollars in accordance with the provisions of Accounting ~~for~~Standards Codification ~~Income~~“ASC” ~~Taxes~~830 Foreign Currency Translation. ~~Deferred~~ ~~tax~~Management ~~assets~~has ~~and~~determined ~~liabilities~~that ~~are~~the ~~recorded~~Hong ~~for~~Kong ~~differences~~dollar ~~between~~is the ~~financial~~functional currency ~~statement~~of the Hong Kong subsidiaries and ~~tax~~the ~~basis~~Canadian dollar is the functional currency of the Canadian subsidiary. Certain current assets and liabilities ~~that~~of ~~will~~these ~~result~~foreign entities are denominated in ~~taxable~~U.S. ordollars. ~~deductible~~In ~~amounts~~accordance inwith the ~~future~~provisions ~~based~~of onASC ~~enacted~~830, transaction ~~tax~~gains ~~laws~~ and ~~rates. Valuation~~losses ~~allowances~~on ~~are~~these ~~established~~assets ~~when~~and ~~necessary~~liabilities toare ~~reduce~~included ~~deferred~~in ~~tax~~the ~~assets~~determination toof ~~the~~income ~~amount~~for ~~expected~~the torelevant ~~be realized~~periods. ~~Income~~ Adjustments ~~tax~~resulting ~~expense~~from isthe ~~recorded~~translation ~~for~~of the ~~amount~~financial ofstatements ~~income~~from ~~tax~~their ~~payable~~functional orcurrencies ~~refundable~~to ~~for~~United ~~the~~States ~~period~~dollars are ~~increased~~accumulated oras ~~decreased~~a byseparate ~~the~~component ~~change~~of inaccumulated ~~deferred~~other ~~tax~~comprehensive ~~assets~~income and ~~liabilities~~have ~~during~~not been included in the ~~period~~determination of income for the relevant periods.

14Income Taxes

~~Fair~~The ~~Value~~Company accounts for income taxes pursuant to ASC 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of ~~Financial~~the ~~Instruments~~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.

~~The Company's financial instruments include cash and cash equivalents, receivables, payables, and advances from the parent company.~~14

~~The~~Fair ~~estimated~~Value ~~fair value~~ of ~~financial~~Financial instruments has been determined by the Company using available market information and valuation methodologies. Considerable judgment is required in estimating fair value. Accordingly, the estimates may not be indicative of the amounts the Company could realize in a current market exchange.Instruments

~~ITEM~~The 3.Company's ~~QUANTITATIVE~~financial instruments ~~AND~~include ~~QUALITATIVE~~cash ~~DISCLOSURES~~and ~~ABOUT~~cash ~~MARKET~~equivalents, ~~RISK~~receivables, payables, and advances from the parent company.

~~There~~The ~~has~~estimated ~~been~~fair novalue ~~material~~of ~~changes~~financial ininstruments has been determined by the Company’s using available market ~~risk~~information ~~during~~and ~~the~~valuation ~~first~~methodologies. ~~fiscal~~Considerable ~~quarter~~judgment ~~ended~~is ~~September~~required ~~30,~~in ~~2011~~estimating fair value. ~~For~~ ~~additional information~~Accordingly, ~~refer~~the toestimates ~~the~~may ~~Company’s~~not ~~Annual~~be ~~Report~~indicative onof ~~Form 10-K~~the ~~for~~amounts the ~~fiscal~~Company ~~year~~could ~~ended~~realize ~~March~~in ~~31,~~a ~~2011~~current market exchange.

ITEM 43. ~~CONTROLS~~QUANTITATIVE AND ~~PROCEDURES~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

WeThere ~~maintain~~has ~~disclosure~~been ~~controls~~no ~~and~~material ~~procedures~~changes ~~that are designed to be effective~~ in ~~providing reasonable assurance that information required to be disclosed in our reports under~~ the ~~Securities~~Company’s market ~~Exchange~~risk ~~Act~~during ~~of 1934 is recorded, processed, summarized and reported within~~ the ~~time~~first ~~periods~~fiscal ~~specified~~quarter inended ~~the~~December ~~rules and forms of the SEC~~31, ~~and~~2011. ~~that~~For ~~such~~additional information, isrefer ~~accumulated~~to ~~and~~the ~~communicated~~Company’s toAnnual Report ~~our~~on ~~management~~Form 10-K tofor ~~allow~~the ~~timely~~fiscal ~~decisions~~year ~~regarding~~ended ~~required~~March ~~disclosure~~31, 2011.

InITEM designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives4. ~~Also,~~CONTROLS ~~the~~AND design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.PROCEDURES

AsWe ofmaintain the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures that asare ~~defined~~designed into ~~Rules~~be ~~13a-15(e)~~effective ~~and~~in ~~15d-15(e)~~providing ofreasonable ~~the~~assurance ~~Exchange Act. Based upon~~ that ~~evaluation, management concluded that our disclosure controls and procedures are effective to cause the~~ information required to be disclosed ~~by us~~ in our reports ~~that we file or submit~~ under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods ~~prescribed~~specified byin the rules and forms of the SEC, and that such information is accumulated and communicated to ~~management, including~~ our ~~chief~~management ~~executive officer and principal financial officer, as appropriate,~~ to allow timely decisions regarding required disclosure.

~~There~~In ~~was~~designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no ~~change~~matter inhow ~~our~~well ~~internal~~designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls ~~over~~must ~~financial~~be ~~reporting~~considered ~~identified~~relative into ~~connection~~their ~~with~~costs. Because of the ~~requisite~~inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that ~~occurred~~all ~~during~~control ~~our~~issues ~~last~~and ~~fiscal~~instances of ~~quarter~~fraud, if any, have been detected. These inherent limitations include the realities that ~~has~~judgments ~~materially~~in ~~affected,~~decision-making can be faulty and that breakdowns can occur because of simple error or ismistake. ~~reasonably~~The ~~likely~~design toof ~~materially~~any ~~affect~~system of controls is based, ~~our~~in ~~internal~~part, upon ~~control~~certain ~~over~~assumptions ~~financial~~about ~~reporting~~the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon that evaluation, management concluded that our disclosure controls and procedures are effective to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

~~PART~~There IIwas -no ~~OTHER~~change ~~INFORMATION~~in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~ITEM 1. - LEGAL PROCEEDINGS~~15

WePART ~~are~~II ~~from~~- ~~time~~OTHER to time involved in routine litigation incidental to our business, most of which is adequately covered by insurance and none of which is expected to have a material adverse affect on our business, financial condition or results of operation.INFORMATION

ITEM 21. - ~~UNREGISTERED~~LEGAL ~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~PROCEEDINGS

~~Not~~We ~~applicable~~are from time to time involved in routine litigation incidental to our business, most of which is adequately covered by insurance and none of which is expected to have a material adverse affect on our business, financial condition or results of operation.

ITEM 32. - ~~DEFAULTS~~UNREGISTERED ~~UPON~~SALES ~~SENIOR~~OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 43. - ~~SUBMISSION~~DEFAULTS OFUPON ~~MATTERS~~SENIOR ~~TO A VOTE OF SECURITY HOLDERS~~SECURITIES

Not applicable.

ITEM 54. - ~~OTHER~~SUBMISSION ~~INFORMATION~~OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

16ITEM 5. - OTHER INFORMATION

~~ITEM~~Not 6applicable. ~~- EXHIBITS~~

~~The following exhibits are being filed as part of this quarterly report:~~16

Exhibit No.		Description
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

ITEM 6. - EXHIBITS

~~SIGNATURES~~The following exhibits are being filed as part of this quarterly report:

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit No.		Description

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	COSMO COMMUNICATIONS CORPORATION
	By:	/s/ Peter Horak
		Name: Peter Horak
		Title: Chief Executive Officer
	Date: November 14, 2011

SIGNATURES

	By:	/s/ Carol Atkinson
		Name: Carol Atkinson
		Title: Chief Financial Officer
	Date: November 14, 2011

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COSMO COMMUNICATIONS CORPORATION

	By:	/s/ Peter Horak
		Name: Peter Horak
		Title: Chief Executive Officer

	Date: February 13, 2012

	By:	/s/ Carol Atkinson
		Name: Carol Atkinson
		Title: Chief Financial Officer

	Date: February 13, 2012

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