Debut Broadcasting 10Q/A 2009 Q0 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 2)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended March 31, 2008

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

		For the transition period from to

Commission file number 0-50762

DEBUT BROADCASTING CORPORATION, INC.

(Exact name of registrant as specified in its charter)

Nevada		88-0417389
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1209 16^th Ave South, Nashville, TN		37212
(Address of principal executive offices)		(Zip Code)

(615) 866-3001

(Registrants telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, par value $0.003 per share

(Former name, former address, and formal fiscal year if changed since last report)

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

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

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller Reporting Company þ

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

As of March 31, 2008, there were 19,794,360 shares of common stock issued and outstanding.

EXPLANATORY NOTE

This Amendment No. 2 on Form 10-Q/A (the “Amendment”) amends the quarterly report of Debut Broadcasting Corporation, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2008 as filed with the Securities and Exchange Commission on May 15, 2008 and as amended on May 15, 2008 (the “Original Filing”). This Amendment (i) revises the Company’s file number on the cover page, (ii) revises the presentation of the condensed consolidated statements of operations and accumulated deficit to exclude the effect of anti-dilutive common stock equivalents, (iii) adds information with respect to the Company’s assumptions as a going concern, and (iv) clarifies that Debut Broadcasting Mississippi, Inc. (“Debut Mississippi”) and Holladay Broadcasting of Louisiana, LLC (“HBL”) entered into an asset purchase agreement, pursuant to which Debut Mississippi will acquire the assets of HBL upon satisfaction of certain conditions precedent. In addition, as required by Rule 12b-15 under the Exchange Act, new certifications by the Company’s principal executive officer and principal financial officer are filed as exhibits to this Amendment.

For the convenience of the reader, this Amendment sets forth the Original Filing in its entirety. This Amendment does not reflect events occurring after the date of the Original Filing or modify or update any disclosures that may have been affected by subsequent events. Except as described above, all other information included in the Original Filing remains unchanged.

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TABLE OF CONTENTS

		Page

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis or Plan of Operation	14
Item 3.	Qualitative and Quantitative Disclosures About Market Risk.	26

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Submission of Matters to a Vote of Security Holders	27
Item 5.	Other Information	27
Item 6.	Exhibits	28

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited financial statements included in this Form 10-Q are as follows:

Page 5		Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007;

Page 6		Consolidated Statements of Operations and Accumulated Deficit for the three months ended March 31 2008 and 2007;

Page 7		Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007;

These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2008 are not necessarily indicative of the results that can be expected for the full year. Balance sheet information as of December 31, 2007 was derived from the Company’s audited financial statements for the year ended December 31, 2007.

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DEBUT BROADCASTING CORPORATION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31 2008 (Unaudited)			December 31 2007¹
ASSETS
Current assets
Cash and cash equivalents	$	451,096		$	8,643
Accounts receivable, net		887,047			650,580
Other current assets		173,758			45,723
Total current assets		1,511,901			704,946

Property and equipment, net		566,319			541,159
Goodwill		79,280			79,280
FCC licenses		1,037,000			1,037,000

Other intangible assets, net		8,153			13,925

Total assets	$	3,202,653		$	2,376,310

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	216,587		$	339,734
Accrued expenses and taxes		573,089			339,411
Notes payable		-			-
Notes payable to shareholders		750,000			-
Lines of credit		274,297			239,297
Current portion of long-term debt		69,753			85,600
Total current liabilities		1,883,727			1,004,072

Long term liabilities
Long-term debt		595,105			601,374
Total long term liabilities		595,105			601,374

Total liabilities		2,478,833			1,605,446

Stockholders' equity
Common stock - $.003 par value, 100,000,000 shares authorized 19,794,360 and 19,794,360 issued and outstanding, respectively. (See Note 4)		30,383			30,383

Additional paid in capital		3,376,026			3,162,272
Accumulated deficit		(2,682,588	)		(2,421,791	)
Total stockholders' equity		723,820			770,864

Total liabilities and stockholders' equity	$	3,202,653		$	2,376,310

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

¹Derived from the Company’s audited financial statements from the year ended December 31, 2007.

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DEBUT BROADCASTING CORPORATION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

(Unaudited)

	Three months ended March 31,
	2008			2007

Net Revenue	$	451,345		$	263,467

Operating expenses
Advertising		39,480			17,653
Operating expense		604,979			239,817
Depreciation expense		33,472			4,709
Merger and acquisition related expenses		-			83,954

Total operating expenses		663,996			346,032

Operating (loss)		(212,300	)		(82,565	)

Other income and expense
Interest expense		36,221			26,915
Interest income		(814	)		-

Total other income and expenses		35,407			26,915

Net (loss)	$	(260,796	)	$	(109,480	)

Accumulated deficit at the beginning of the period		(2,420,944	)		(725,298	)

Accumulated deficit at the end of the period	$	(2,682,588	)	$	(834,778	)

Loss per common share
Basic and diluted	$	(0.0133	)	$	(0.0056	)
Weighted average number of shares outstanding, basic and diluted		19,794,360			19,794,360

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

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DEBUT BROADCASTING CORPORATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the three Months Ended March 31,
	2008			2007

Operating activities:
Net loss	$	(260,796	)	$	(109,480	)
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:
Depreciation and amortization		33,472			4,709
Changes in operating assets and liabilities, net of effects of acquisitions:

(Increase) decrease in accounts receivable		(237,136	)		(1,249	)
(Increase) decrease in other current assets		(129,095	)		-
Increase (decrease) in accounts payable		(123,147	)		41,071
Increase (decrease) in accrued expenses and taxes		233,647			8,025

Net cash provided by/(used in) operating activities		(222,258	)		52,557

Investing activities:
Purchases of property and equipment		(51,132	)		(1,322	)

Net cash used in investing activities		(51,132	)		(1,322	)

Financing activities:
Proceeds from issuance of stock warrants		231,754			-
Proceeds from bank credit facility		35,000			15,000
Proceeds from shareholder notes		750,000			-
Repayment of long term debt		(22,114	)		(12,865	)

Net cash provided by financing activities		976,637			2,135

Net increase in cash and cash equivalents		442,453			(56,109	)

Cash and cash equivalents at beginning of period		8,643			86,112

Cash and cash equivalents at end of period	$	451,096		$	30,003

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

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Note 1 - Organization

Debut Broadcasting Corporation, Inc. (the “Company”) is located in Nashville, Tennessee and conducts business from its principal executive office at 1209 16th Avenue South, Nashville, Tennessee 37212. The Company produces and distributes syndicated radio programs to radio stations across the United States and Canada. In addition, the Company owns and operates five radio stations in Mississippi.

The Company maintains radio syndication in Nashville and produces and distributes 15 radio programs, which are broadcast over approximately 1,400 radio station affiliates. These radio programs have an estimated 45 million U.S. listeners per week. In addition to its syndication services, the Company owns and operates a multi-media studio with audio, video and on-line content production capabilities. This facility is located on Music Row in Nashville, Tennessee. The Company also provides marketing, consulting and media buying (advertising) for its radio broadcast station customers in the United States.

On May 17, 2007, the Company consummated a reverse merger with California News Tech, a public company that was organized in Nevada. Media Sentiment, Inc. (“MSI”), a wholly-owned subsidiary of California News Tech, held all of the assets and operations of California News Tech at the date of the merger (see Note 10 – Business Combinations). Pursuant to a Post-Merger Operating Agreement, dated as of May 17, 2007, MSI and the Company agreed to operate as separate businesses after the reverse merger, with neither entity exercising control over the assets or operations of the other.

On June 27, 2007, MSI filed a registration statement with the SEC with respect to the issued and outstanding shares of common stock of MSI for the purpose of completing a spin-off of MSI by transferring all of the shares of common stock of MSI to shareholders of record of California News Tech as of April 20, 2007. We anticipate completing the spin-off of MSI during the third quarter of 2008.

Note 2 - Basis of Presentation and Interim Results

The condensed consolidated financial statements include the accounts of the Company, and its subsidiaries. The interim financial statements of the Company. have been prepared without audit.

These interim results do not include the assets, liabilities and operations of the non-controlled subsidiary MSI, which the Company expects to be spun off during the third quarter of 2008.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. We believe that the disclosures are adequate to make the financial information presented not misleading. These condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2007. All adjustments were of a normal recurring nature unless otherwise disclosed. In the opinion of management, all adjustments necessary for a fair statement of the results of operations for the interim period have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year.

Accounts Receivable

We use the allowance method for determining the collectability of our accounts receivable. The allowance method recognizes bad debt expense following a review of the individual accounts outstanding in light of the surrounding facts. Accounts receivable are reported at their outstanding unpaid principal balances reduced by an allowance for doubtful accounts based on historical bad debts, factors related to specific customers’ ability to pay and economic trends. We write off accounts receivable against the allowance when a balance is determined to be uncollectible. Accounts receivable on the consolidated balance sheet is stated net of our allowance for doubtful accounts. The following table shows activity in our allowance for doubtful accounts:

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December 31, 2005	$	0
Charged to expense	$	300
Deductions	$	(300	)
December 31, 2006	$	0
Charged to expense	$	89,975
Deductions	$	(69,676	)
December 31, 2007	$	20,299
Charged to expense	$	24,831
Deductions	$	(19,921	)
March 31, 2008	$	15,389

Revenue and Cost Recognition

The Company recognizes its advertising and programming revenues when the Company’s radio shows air on its contracted radio station affiliates. Generally, the Company is paid by a national advertising agency, which sells the commercial time provided by the affiliate.

As the Company earns its revenue from the national advertising agency, it also recognizes any amounts due to the individual shows, which are based on the audience level generated by the specific program. Expenses are accrued at the time the shows are run.

Consulting projects are generally negotiated at a fixed price per project; however, if the Company utilizes its advertising capacity as part of the consulting project, it will charge the consulting client in the same manner as the affiliated stations described more fully above. Consulting fee income is recognized as time is incurred under the terms of the contract.

Advertising

The Company expenses advertising costs as they are incurred. Total advertising costs of $39,480 and $17,653 are included in the financial statements for the three months ended March 31, 2008 and March 31, 2007, respectively.

Note 3 - Initial Adoption of FIN 48

We adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (“FIN 48”), on May 17, 2007. This interpretation increases the relevancy and comparability of financial reporting by clarifying the way companies account for uncertainty in income taxes. FIN 48 prescribes a consistent recognition threshold and measurement attribute, as well as clear criteria for subsequently recognizing, derecognizing and measuring such tax positions for financial statement purposes. The interpretation also requires expanded disclosure with respect to the uncertainty in income taxes. We do not believe that the timing of the adoption of FIN 46 has created any material differences in comparability between the three months ended March 31, 2007, and the three months ended March 31, 2008.

Note 4 - Loss Per Share

We present basic loss per share on the face of the consolidated statements of operations. As provided by SFAS No. 128, Earnings Per Share, basic loss per share is calculated as income available to common stockholders divided by the weighted average number of shares outstanding during the period.

On January 2, 2008, the Company awarded 342,055 shares through the Debut Broadcasting Employee Stock Option Plan.

On January 21, 2008, the Company issued to Remington Partners, Inc. a warrant to purchase 62,500 shares of Company common stock at an exercise price of $1.00 per share, with an expiration date three years after the date of issuance.

On February 26, 2008, the Company issued to Remington Partners, Inc. a warrant to purchase 125,000 shares of Company common stock at an exercise price of $1.00 per share, with an expiration date three years after the date of issuance.

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On March 16, 2008, the Company issued to Holladay Broadcasting of Louisiana, LLC a warrant to purchase 200,000 shares of Company common stock at an exercise price of $1.00 per share, with an expiration date ten years after the date of issuance.

During the first quarter of 2008, the Company accrued for warrants to be issued in the second quarter for the purchase of shares of common stock. An accrual was made for services provided by Politis Communications as partial payment for services rendered in the amount of $4,666. In addition, an accrual was made for services provided by Wolcott Squared as partial payment for services rendered in the amount if $21,488.

The Company revalues warrants annually on December 31 utilizing the Black-Scholes method.

All shares of common stock and prices have been restated in the accompanying consolidated financial statements and notes to give effect to the reverse merger of the Company with California News Tech. Therefore, the calculation of loss per share is equal to the number of shares of common stock outstanding assuming the reverse merger was completed on January 1, 2006.

Note 5 - Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment are computed using the straight-line method based upon estimated lives of assets ranging between three to thirty years. Property and equipment are summarized as follows:

	Estimated Useful Life		March 31, 2008			December 31, 2007
Land			$	49,500		$	49,500
Buildings and building improvements		5 – 10 years		98,023			71,810
Towers and studio equipment		5 - 30 years		324,394			314,666
Furniture, fixtures and equipment		3 – 7 years		165,705			150,515
Automotive		3 - 5 years		101,858			101,858

Accumulated depreciation				(173,162	)		(147,190	)
Property and equipment, net			$	566,319		$	541,159

Of the $566,319 in Net Property and Equipment as of March 31, 2008, $292,947 was added through the acquisition of five broadcast radio stations during the second quarter of 2007 including equipment purchases to support the acquired stations.

Note 6 - Lines of Credit

On May 3, 2002 and amended on April 26, 2004, the Company entered into an unsecured promissory note establishing a revolving line of credit with the Bank of America for $75,000. The note requires monthly interest payments and the interest rate is based on the bank’s prime rate, which was 7.5% at March 31, 2008. The note matures on May 3, 2008. The balance of the line of credit at both March 31, 2008 and 2007 was $75,000.

The Company signed a promissory note and established a revolving line of credit on February 27, 2004 for $200,000 with Regions Bank to refinance existing debt. The note matures on August 31, 2008, and requires monthly interest payments accruing at an initial rate of 7.58% and a current rate of 5.025% at March 31, 2008. The rate is subject to monthly changes based on an independent index plus 2.25%.

The note is secured by personal guarantee of certain officers of the Company and all inventory, chattel paper, accounts, equipment and general intangibles existing or purchased after the signing of the related agreement. The principal balance at March 31, 2008 and 2007 was $199,297 and $135,375, respectively.

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Note 7 - Notes Payable to Shareholders

Debut Broadcasting Shareholder Notes

Shareholder loans to the Company were made under various promissory notes dated May 15, 2003 through May 17, 2006. The interest rate for these loans was the prime rate. Principal and interest were payable upon shareholder demand. The total balance of these loans at March 31, 2008 and 2007 was $0 and $162,158, respectively.

On June 6, 2005, the Company entered into an unsecured loan agreement with Rush Capital, LLC for $50,000. Rush Capital is an entity owned and controlled by an officer and shareholder of the Company. The promissory note, plus interest accrued at prime, was payable upon demand. The total balance of these loans at March 31, 2008 and 2007 was $0 and $50,000.

On June 5, 2006 the Company entered into a loan agreement with Rush Capital, LLC for $3,000. The promissory note, plus interest accrued at prime, was payable upon demand. The total balance of this loan at March 31, 2008 and 2007 was $0 and $3,000.

Effective with the reverse merger of the Company on May 17, 2007, the outstanding balances of principal and interest on the Rush Capital and other shareholder notes were converted into 430,316 shares of common stock in the Company. Therefore, the balance of these loans at March 31, 2008 was $0.

On January 2, 2008, the Company awarded options to purchase 342,055 shares of its common stock to employees and valued contractors. These options were awarded at a strike price of $0.86 per share and vest ratably over five years. The options will be accounted for utilizing the Black-Scholes method of valuation.

On January 21, 2008 the Company entered into a loan agreement with Remington Partners, Inc. for $250,000. This loan agreement included warrant coverage for 62,500 shares of common stock at an exercise price of $1.00 per share with an expiration date three years after issuance, a $2,000 loan origination fee and interest of 18% per annum due monthly. The promissory note plus any accrued interest is payable on January 31, 2009.

On February 26, 2008 the Company entered into a loan agreement with Remington Partners, Inc. for $500,000. This loan agreement included warrant coverage for 125,000 shares of common stock at an exercise price of $1.00 per share with an expiration date three years after issuance, a $2,000 loan origination fee and interest of 18% per annum due monthly. The promissory note plus any accrued interest is payable on February 28, 2009.

Total interest expense associated with the shareholder loans for the three months ended March 31, 2008 and 2007 was $13,808 and $4,438 respectively. Accrued interest due to shareholders was $0 and $32,930 as of March 31, 2008 and 2007, respectively.

Note 8 - Loans Payable

Regions Bank Loan

On August 15, 2006, the Company signed a promissory note with Regions Bank for $300,000 with an initial interest rate of 7.58% and a current rate of 5.11125% as of March 31, 2008. The loan is secured by all inventory, chattel paper, accounts, equipment and general intangibles of the Company. The loan matures August 30, 2011 and is payable in monthly installments of $6,058, including variable interest at 2.25% points per annum over the London Interbank Offered Rate for the applicable index period.

Total interest expense on the Regions Bank loan for the three months ended March 31, 2008 and 2007 was $4,209 and $5,308 respectively. The balance of the loan at March 31, 2008 was $221,936 of which $42,945 was classified as current portion of long-term debt. The balance of the loan at March 31, 2007 was $275,730, of which $39,820 was classified as current portion of long-term debt.

Citadel Communications Loan

On August 28, 2002, the Company signed an unsecured promissory note with Citadel Communications for $430,415. The loan has no maturity date and accrues interest at a rate of 12%. The note was amended in April, 2003 requiring interest only payments indefinitely. Total interest expense on the Citadel Communications loan for the three months ended March 31, 2008 and 2007 was $10,428 and $10,428 respectively. The balance of the loan at both March 31, 2008 and 2007 was $347,491.

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Vehicle Loans

On August 28, 2007 the Company signed a direct purchase money loan and security agreement with DaimlerChrysler for the purchase of two vehicles for $50,068 with an effective interest rate of 7.3%. The corresponding promissory note is to be paid over a five-year period with a monthly payment of $1,011.

On September 25, 2007, the Company signed a retail installment sale contract with GMAC for the purchase of two vehicles for $47,498 with an effective interest rate of 5.0%. The corresponding promissory note is to be paid over a three-year period with a monthly payment of $1,424. The purchased vehicles are used in conjunction with the radio broadcast operations.

Total interest expense on the vehicle loans for the three months ended March 31, 2008 and 2007 was $1,528 and $0, respectively. The principal balance of the vehicle loans as of March 31, 2008 and 2007 was $87,212 and $0, respectively. At March 31, 2008, $18,032 was classified as the current portion.

Capital Lease

On December 5, 2007, the Company entered into a capital lease arrangement with National City Media Finance to acquire studio equipment for $15,009 with a fixed interest rate of 7.5%. The lease term is for three years with monthly payments of $464 with a $1 buyout option at the end of the lease term.

Total interest expense on studio equipment for the three months ended March 31, 2008 and 2007 was $361 and $0, respectively. The principal balance of the capital lease as of March 31, 2008 and 2007 was $13,503 and $0 respectively. At March 31, 2008, $3,530 was classified as the current portion of the lease.

Note 9 - Shareholders’ Equity

In connection with the reverse merger on May 17, 2007, all shares of common stock of Debut Broadcasting (as hereinafter defined) outstanding prior to the merger were exchanged for 10,000,000 shares of Company common stock (See Note 10. Business Combinations).

In addition, in connection with the reverse merger, the Company completed a private placement of 6,000,000 shares of Company common stock at $0.50 per share. The transaction was recorded net of financing costs of $23,502.

Finally, in connection with the reverse merger, the Company converted notes payable to shareholders in the amount of $215,158 into 430,316 shares of Company common stock at $0.50 per share.

The pre-merger shareholders of the Company maintained 364,044 shares of Company common stock.

On May 21, 2007, $100,000 of convertible debentures issued on May 15, 2007 were converted into 3,000,000 shares of Company common stock.

Note 10 - Business Combinations

California News Tech

On May 17, 2007, the Company entered into an Agreement and Plan of Merger with California News Tech. The merger was accounted for as a reverse merger using the purchase method of accounting. Accordingly, the acquisition has been treated as an acquisition of California News Tech by the Company. MSI held all of the assets and operations of California News Tech at the date of the merger.

As part of the reverse merger, each share of common stock of Debut Broadcasting, Inc., a Tennessee Corporation formerly known as The Marketing Group (“Debut Broadcasting”), issued and outstanding immediately prior to the closing of the merger was converted into the right to receive one share of common stock. As a result, the shareholders of Debut Broadcasting received 10,000,000 newly issued shares of common stock.

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Also as part of the reverse merger, the Company issued 6,430,316 shares of Company common stock to investors as a result of closing a private offering that was exempt from registration under Rule 506 of Regulation D of the Securities Act of 1933. The shares were issued for a combination of cash and debt reduction.

On June 27, 2007, MSI filed a registration statement with the Securities and Exchange Commission with the respect to the issued and outstanding shares of common stock of MSI for the purpose of completing a spin-off of MSI by transferring all of the shares of common stock of MSI to shareholders of record of California News Tech as of April 20, 2007. We anticipate completing the spin-off of MSI during the first quarter of 2008.

As part of the reverse merger, the Company also entered into a Post-Merger Operating Agreement in which the Company and MSI agreed to operate their respective businesses separately and the Company, specifically agreed that it would not interfere in any manner with the operations of MSI, have any rights to use, acquire or otherwise operate any of the assets or intellectual property of MSI or create any liabilities for which MSI would be obligated. In addition, MSI agreed that it would not interfere in any manner with the operations of the Company, have any rights to use, acquire or otherwise operate any of the assets or intellectual property of the Company or create any liabilities for which the Company would be obligated.

Moreover, as part of this Post-Merger Operating Agreement, the Company agreed that if for any reason California News Tech is unable to register the MSI shares, that the Company would sell its MSI shares to the Company’s former president and director, Marian Munz, for $1.00. As a consequence, MSI has and will continue to operate completely separate from the Company effective as of the date of the reverse merger.

In addition, at the time of the reverse merger, the Company was released from certain liabilities to its former president and director, Mr. Munz, and his spouse; however, these liabilities continued as the sole responsibility of MSI in the form of two separate convertible promissory notes. These notes remain outstanding but, if converted under their terms into shares of MSI common stock, would represent over an 80% interest and full voting control over MSI.

As a result, the Company considers MSI a non-controlled subsidiary and has not included any operating results, cash flow analysis or assets and liabilities of MSI in its consolidated financial statements.

The Company reported the details of the Agreement and Plan of Merger and the related transactions on a Form 8-K filed May 22, 2007.

Shamrock Broadcasting, Inc.

On June 7, 2007, the Company acquired two radio broadcast stations identified as WNLA FM 105.5 MHz and WNLA AM 1380 kHz in Indianola, Mississippi, from Shamrock Broadcasting, Inc., including all of the facilities, equipment, licenses and intellectual property necessary to operate these stations, in exchange for $300,000. In a separate agreement, the Company purchased the accounts receivable of Shamrock Broadcasting through issuance of a $10,134 promissory note payable in equal installments made in each of three months following completion of the transaction.

The purchase price was allocated as follows:

Description	Amount

Accounts receivable	$	10,134
Land		14,500
Buildings and structures		13,500
Equipment		30,000
FCC licenses		237,000
Non-compete agreement		5,000
Liabilities assumed		(10,134	)
Total	$	300,000

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River Broadcasting Company

On June 19, 2007, the Company acquired three radio broadcast stations identified as WIQQ FM 102.3 MHz in Leland, MS, WBAQ FM 97.9 MHz and WNIX AM 1330 kHz in Greenville, MS, from River Broadcasting Company, including all of the facilities, equipment, licenses and intellectual property necessary to operate these stations, in exchange for $1,037,134. In September 2007, the Company identified a $14,280 liability that was not recorded as of the closing date of the transaction. This was recorded as an adjustment to goodwill.

The purchase price was allocated as follows:

Description	Amount

Accounts receivable	$	37,134
Land		35,000
Buildings and structures		50,000
Equipment		25,000
FCC licenses		800,000
Non-compete agreement		25,000
Goodwill		79,280
Liabilities assumed		(14,280	)
Total	$	1,037,134

We reported our acquisition of these five radio stations on a Form 8-K filed June 22, 2007.

Holladay Broadcasting Company

On March 16, 2008, the Company entered into a Local Marketing Agreement (“LMA”) with two radio broadcast stations identified as WBBV FM 101.3 MHz in Vicksburg, MS, KLSM FM 105.5 MHz in Tallulah, LA with Holladay Broadcasting Company, including all of the facilities, equipment, licenses and intellectual property necessary to operate these stations. The Company maintains the station including all revenues and expenses. Holladay Broadcasting Company has retained ownership of all assets and liabilities of the station that were incurred prior to March 16, 2008.

On March 16, 2008, the Company signed an asset purchase agreement and filed with the FCC for ownership of WBBV FM 101.3 MHz in Vicksburg, MS including all of the facilities, equipment, licenses, intellectual property, assets, and liabilities of the station.

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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

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Company Overview

We are located in Nashville, Tennessee and conduct business from our principal executive office, located at 1209 16^th Avenue South, Nashville, Tennessee 37212. We produce and distribute syndicated radio programs to radio stations across the United States and Canada. In addition, we own and operate five radio stations in Mississippi.

We maintain radio syndication in Nashville and produce and distribute 15 radio programs, which are broadcast over approximately 1,400 radio station affiliates. These radio programs have an estimated 45 million U.S. listeners per week. In addition to syndication services, we own and operate a multi-media studio with audio, video and on-line content production capabilities. This facility is located on Music Row in Nashville, Tennessee. We also provide marketing, consulting and media buying (advertising) for our radio broadcast station customers in the United States.

The Company was originally incorporated in Nevada on January 22, 1999 as NewsSurfer.com Corporation (the “Predecessor Company”). In 2001, the Predecessor Company changed its name to California News Tech and shifted its business plan to focus on providing online access to news media analysis for a subscription fee. On October 31, 2006, the Predecessor Company transferred all of its assets, liabilities, and business operations to a new wholly-owned subsidiary, Media Sentiment, Inc. (“MSI”).

On May 17, 2007, the Company issued a control block of its common stock to the former shareholders of Debut Broadcasting, Inc. (“Debut Broadcasting”), a privately held Tennessee corporation. Through a series of related transactions (the “Reverse Merger”), the Company acquired Debut Broadcasting, which became the Company’s wholly-owned subsidiary, and subsequently the Company changed its name to Debut Broadcasting Corporation, Inc.

As part of the Reverse Merger, the Company and MSI entered into a Post-Merger Operating Agreement in which the two entities agreed to operate their respective businesses separately, and agreed to not interfere in any manner with their respective operations, have any rights to use, acquire or otherwise operate any of their respective assets or intellectual property, or create any liabilities for which the other party would be obligated.

As part of this Post-Merger Operating Agreement, the Company agreed that if for any reason the former president and director of the Predecessor Company, Marian Munz, is unable to register the MSI shares, that the Company would sell our shares to Munz, for $1.00. As a consequence, MSI has and will continue to operate completely separate from the Company from the date of the Reverse Merger.

In addition, at the time of the Reverse Merger, the Company was released from certain liabilities to its former president and director, Mr. Munz, and his spouse; however, these liabilities continued as the sole responsibility of MSI in the form of two separate convertible promissory notes. These notes remain outstanding but, if converted under their terms into shares of MSI common stock, would represent over an 80% interest and full voting control over MSI.

As a result, the Company considers MSI a non-controlled subsidiary for financial purposes, and has not included any operating results, cash flow analysis or assets and liabilities of MSI in its consolidated financial statements.

On June 27, 2007, MSI filed a registration statement with the SEC with respect to its issued and outstanding shares of common stock for the purpose of completing a spin-off of MSI by transferring all its shares of common stock to stockholders of record of California News Tech as of April 20, 2007. The Company anticipates the completion of the spin-off of MSI during third quarter of 2008.

Our Focus

Our strategic focus is on small, rural-sized markets in the Southeastern United States. We believe that these markets represent attractive operating environments and generally exhibit the following:

•

Below-market purchase prices;

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	•	Rising advertising revenues, as the larger national and regional retailers expand into these markets;
	•	Small independent operators, many of whom lack the capital to produce high-quality locally originated programming or to employ more sophisticated research, marketing, management and sales techniques; and
	•	Lower overall susceptibility to economic downturns.

Operating Strategy

Our operating strategy capitalizes on the synergies we create between radio syndication and radio station operations. We have the technology, talent, and facilities to outsource content for radio stations. By utilizing this content, we gain affiliates, increase Arbitron ratings for our affiliates and, therefore, generate increased revenues in advertising sales. We maximize this strength by utilizing a strategy of building radio content once, and re-selling it to new markets over and over.

The strength of our radio operations strategy lies in our ability to buy existing radio stations at prices below market value. We utilize our extensive radio and management background to successfully increase sales, reduce operating costs and increase overall performance.

Acquisition Strategy

Our acquisition strategy has the following principal components:

	•	assemble leading radio station clusters in small rural markets by taking advantage of their size and fragmented nature of ownership; and

	•	selectively acquire leading stations where we believe we can cost-effectively achieve a leading position in terms of signal coverage, revenue or audience share and acquire under-performing stations where there is significant potential to apply our management expertise to improve financial and operating performance.

On March 16, 2008 we signed an asset purchase agreement for WBBV, FM 101.1 MHz in Vicksburg, MS. Additionally, we placed KLSM, FM in Tallulah, LA under a local marketing agreement. We believe these stations conform to our focus and operating strategy. Geographically, we expect to be able to capitalize on the proximity to Vicksburg to achieve significant cost reductions. Key station roles in engineering, sales management, and business management will be distributed across the region with anticipated incremental savings for all owned and operated stations.

Existing Business Operations of Debut

All of our current material business operations are conducted through our wholly-owned subsidiaries, The Marketing Group, Inc., and Debut Broadcasting Mississippi, Inc.

Existing Radio Syndication Business

Our core business is the production and distribution of syndicated radio programming to radio stations in the U.S. and Canada. We have grown from a single radio program in 1999 to approximately 14 distinct programs and services currently offered to radio stations in the U.S. and Canada. Our customer base of nearly 1,400 radio stations generates an audience of nearly 45 million listeners each week in the US. Our current programming focuses on country, Christian, and urban formats. Our planned expansion includes adult contemporary and rock formats.

Revenue is generated from advertising and sponsorship sold in the syndicated radio programs, as well as revenue-sharing agreements with radio station affiliates. Key advertising relationships include Wal-Mart, Pfizer, GEICO Insurance, Johnson & Johnson, General Mills, and Proctor & Gamble.

During the past decade, rapid consolidation of the radio industry resulted from government de-regulation of ownership limits. Companies that owned the maximum of 24 radio stations prior to 1996 are now free to own far more licenses. At the beginning of 2007, larger companies owned an average of 254 stations each and the largest, Clear Channel Communications, owned over 1,100 stations (although it is in the process of divesting stations in some smaller markets).

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The process of consolidation has dramatically reduced staffing levels. Most radio stations now rely on automation systems and syndicated programming to fill airtime. Management believes that the average number of employees dedicated to each on-air radio signal in 1996 was eight; today, that number is below three. We have exploited this need, providing radio stations with daily features and hourly weekend programming.

We intend to continue our rapid expansion of the programming and services we offer to radio stations, including increased penetration of larger markets with long-form programming. Specifically, we will focus on creating a new-generation of long-form, 24-hour programming in the following formats:

Country;

Rock;

Urban; and

Adult Contemporary

Relying on our management’s experience with 24-hour programming, which has been historically delivered via satellite to radio station affiliates, we now utilize a more efficient delivery method facilitated by the Internet. The result is a more “hands-off” operation on the radio station end of the service, higher-quality, much greater flexibility, more localized programming for radio station affiliates, and more reliable delivery (eliminating vulnerabilities in the traditional satellite-delivery systems).

In addition, planned our expansion of program and service offerings includes:

24-hour weather and on-call severe weather coverage;

Format-specific news and sports reporters; and

Production music and station imaging.

By increasing the rate of the expansion of our programming and services even further, we acquire a higher number of radio station affiliates and earn increased ratings, which should translate into increased revenues.

Diversification

Our business plan includes the acquisition and management of radio stations (“Properties”) in small to mid-sized radio markets in the U.S.

During the first quarter of 2008, we launched a Day Part Personality program which diversifies our syndicated offerings. We expect to rapidly grow this fledgling program throughout the year. Additionally, we developed a production library which is available on a subscription basis for stations to subscribe to. This new library received its first subscription from three stations in the Houston, TX market. Finally, in the first quarter of 2008, we began a digital delivery conversion program. We will require all affiliates with 100 average quarter hours or less, to receive their syndicated programming from us through digital delivery, by July 1, 2008. This program should result in material reductions to postage, materials, and other shipping expenses. As of March 31, 2008 we had successfully converted 30% of our syndication affiliates to digital delivery.

Properties acquired by us will serve as flagships for the new 24-hour programming and other programs and services provided by us. We further anticipate that these acquisitions will also increase margins and cash flow for the Properties and existing syndication operations as we leverage unique synergies resulting from our existing lines of business. In furtherance of this strategy, during June 2007 we acquired and now own and operate five broadcast radio stations identified as WIQQ FM 102.3 MHz in Leland, Mississippi, WBAQ FM 97.9 MHz, WNIX AM 1330 kHz in Greenville, Mississippi, and WNLA FM 105.5 MHz and WNLA AM 1380 kHz in Indianola, Mississippi. We will continue to review the potential of additional acquisitions of radio stations in proximity to this area, although there is no assurance that we will be able to consummate such acquisitions.

We believe that ownership of Properties has the potential to increase our margins and cash flow. We are uniquely capable of more cost-efficient operation of radio stations than other owners because of our ability to generate the programming out of our existing syndication operation in Nashville, overlay national advertising revenues and then localize the content in each market. Further, this strategy blends elements of the new and old economies to diversify risk in three key ways:

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HD Radio and Webcasting. The FCC approved digital radio (“HD Radio”) in March 2007. Similar to digital television, HD Radio allows broadcasters to transmit two channels digitally through the equivalent of one analog channel.

We anticipate that the years 2008 through 2010 will show a rapid proliferation of HD Radio. Many radio stations in the top 50 markets have already converted to the new broadcast format, and major retailers, including Radio Shack, Best Buy and Wal-Mart, carry the receivers, which already compete favorably with hardware prices for satellite radio and should continue to drop.

HD Radio provides a wide range of new free listening options to consumers without the monthly subscription charged by satellite radio. All existing FM license-holders have the right to convert to HD Radio without further approval from the FCC.

Further, the growth potential offered by the new technologies of HD Radio and webcasting into the future provide additional diversification opportunities.

Diversification of Revenue Streams and the Future Potential of New Technologies. While revenues from syndication and radio station operations are both primarily derived from advertising, budgets and clients are quite separate. By diversifying revenues to include both national syndication revenues and local-market revenues, we are less vulnerable to any potential changes in future market conditions than companies that operate only radio stations.

Diversification of Assets. Ownership of Properties also adds hard assets to our balance sheet (such as licenses, real estate, towers, etc.) in addition to the extensive intellectual assets we have in our content and brands.

Strategy for Investing In Radio Stations

Our management and members of our Board of Directors have extensive experience in the radio industry, ranging from programming, sales and management to acquisitions and financing. That experience has been key to our success in syndication and is the genesis of our unique and proprietary radio station acquisition strategy.

Radio has typically provided a short turnaround cycle and near-term horizon for return on investment for investors who focus on strong operational fundamentals. As the largest radio companies in the U.S. consolidate into the top 100 markets, prices in medium and small markets have reached levels where management believes that stations are greatly undervalued and attractive for investment when certain other conditions exist.

The largest radio companies (Clear Channel, Cumulus, Citadel, CBS, etc.) are increasingly focused on larger markets because they have determined that they find the greatest cost-efficiency there. We perceive that there is a virtual absence of and need for a company with an effective strategy for medium and small markets - a successful and repeatable business model for radio stations that relies primarily on local, direct advertising revenues. We intend to create stockholder value by investing in medium and small-market radio stations that we perceive are not taking advantage of modern operational strategies designed to maximize revenue and minimize cost. It is our view that many such stations are underperforming financially because of poor sales strategies and inefficient costs of operation.

By investing only in Properties that are under-performing, we hope to capture the gap between low purchase prices (typically four times net revenue or seven times broadcast cash flow) and the public market for healthy stations (estimated at between nine to 15 times broadcast cash flow). A recent article in the trade publication Inside Radio reported on a Kagan study that showed the largest transactions in 2006 averaged as high as 17 times broadcast cash flow. The worst state for such transactions, Louisiana, averaged 8.2 times broadcast cash flow. Management believes the benchmark of nine to 15 times multiple is holding up against market trends. Management has strong confidence in its strategy to selectively acquire Properties because industry researchers like Kagan continue to report a robust flow of private capital into both large and small acquisitions within the radio industry.

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In broad terms, our investment criteria include:

·	Consolidation. The opportunity to consolidate multiple Properties in a single market is a key investment criteria because it offers immediate cost savings.

Dominance. The opportunity to own a substantial majority of the Properties competing for advertising in a single market (the maximum number allowed by FCC ownership limits or close to it) is a key investment criteria for competitive reasons. Markets where Clear Channel, Citadel, Cumulus, CBS or other major national competitors are present will be avoided.

Good Infrastructure. Radio stations that are broken, abused or neglected can be turned around quickly with good management. Others that we determine are in particularly poor physical condition will require too much time and resources to turn around and, therefore, will not meet our acquisition criteria.

· .	Demographics and the Local Economy. High-priority acquisition markets will have positive growth trends for population, retail sales and other lifestyle and economic factors because the extent of the turnaround can be more accurately projected on these bases.

Consummation of our pending acquisitions and any acquisitions in the future are subject to various conditions, such as compliance with FCC and regulatory requirements which are discussed elsewhere in this report.

We cannot be certain that any of these conditions will be satisfied. In addition, the FCC has asserted the authority to review levels of local radio market concentration as part of its acquisition approval process, even where proposed assignments would comply with the numerical limits on local radio station ownership in the FCC’s rules and the Communications Act.

Our acquisition strategy involves numerous other risks, including risks associated with:

·	Identifying acquisition candidates and negotiating definitive purchase agreements on satisfactory terms;

·	Integrating operations and systems and managing a large and geographically diverse group of stations; and

·	Diverting our management’s attention from other business concerns.

We cannot be certain that we will be able to successfully integrate our acquisitions or manage the resulting business effectively, or that any acquisition will achieve the benefits that we anticipate. In addition, we are not certain that we will be able to acquire future properties at valuations as favorable as those of previous acquisitions.

Sales and Programming Strategies

Management’s experience is that radio station turn-arounds are achieved most quickly with a combination of revenue growth and cost-cutting. We believe that we have the potential to accomplish both in some new, unique ways based on synergies with our existing lines of business.

Our sales plan for our acquired Properties is to expand revenue from a single source to three distinct revenue streams:

Local Advertising. This is typically the existing revenue stream for any acquisition. By utilizing tighter structure, ongoing training and new technology (i.e. presentation and sales tracking software), we hope to make account executives more effective. There can be no assurance that we will be successful in achieving similar increases with Properties we acquire.

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Event & Promotion Revenues. It has been our management’s experience that overall revenues have the potential to increase as much as 20 percent with the addition of event and promotion revenues. This also has the effect of generating new revenues from non-traditional advertisers, such as employers, professional services companies, and smaller advertisers who are typically priced out of standard radio advertising. There can be no assurance that we will be successful in generating new event and promotion revenues.

National Advertising. Because we have an existing national advertising sales plan, we anticipate that any acquired Properties will immediately be able to access this new revenue stream, increasing overall sales by 10-15 percent within 30 days. There can be no assurance that we will be successful in implementing our national advertising sales plan at Properties we acquire.

Our programming plan for the acquired Properties has been centered around our expansion into 24-hour syndicated music programming. Our existing syndication operation in Nashville now provides the music, imaging and most of the air talent. This has resulted in a more sophisticated radio station at a reduced expense. Localized staffing at the radio station level now concentrates on localization of the content (i.e. weather, news and information, promotions, remotes and community events).

Taking advantage of the latest technology, we anticipate that approximately 90 percent of each radio station acquired can be programmed from a central studio location in Nashville. As a result, the local staff in each market can concentrate on serving the local audience by localizing the content, marketing the radio stations and generating revenue through ad sales and promotional events. This represents a more efficient use of resources and is more cost-efficient than current practice.

The Overall Impact of Our Acquisitions

We anticipate that the impact on margins and cash flow will become even greater as more acquisitions are made. Fixed costs of programming on a per station basis continue to fall as the expense is distributed over a larger number of radio stations, and new revenue streams - particularly “non-traditional” forms of revenue - increase as the scale of our business increases. Also, as we acquire additional radio stations, the impact on the existing syndication operation also increases because of added revenue potential from the owned and operated radio stations.

Members of management and the Board of Directors have extensive networks of contacts within the radio industry that we believe will generate a consistent and reliable flow of potential deals for evaluation, as well as extensive experience in radio station operation, acquisition and financing.

In June 2007, we completed the initial two radio station acquisitions consisting of five radio stations in and around Greenville, Mississippi, which we are assembling into a station cluster (the “Greenville Cluster”).

The Market:	Greenville, Mississippi

Designated Marketing Area(“DMA”):	Greenville-Greenwood, Mississippi

Rank:	184

On June 7, 2007, we acquired two radio broadcast stations identified as WNLA FM 105.5 MHz and WNLA AM 1380 kHz in Indianola, Mississippi, from Shamrock Broadcasting, Inc., including all of the facilities, equipment, licenses and intellectual property necessary to operate these stations, in exchange for $300,000. In a separate agreement, we purchased the accounts receivable of Shamrock Broadcasting through issuance of a $10,134 promissory note payable in installments made in each of three months following completion of the transaction.

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The purchase price was allocated as follows:

Description	Amount

Accounts receivable	$	10,134
Land		14,500
Buildings and structures		13,500
Equipment		30,000
FCC licenses		237,000
Non-compete agreement		5,000
Liabilities assumed		(10,134	)
Total	$	300,000

On June 19, 2007, we acquired three radio broadcast stations identified as WIQQ FM 102.3 MHz in Leland, Mississippi, WBAQ FM 97.9 MHz and WNIX AM 1330 kHz in Greenville, Mississippi, from River Broadcasting Company, including all of the facilities, equipment, licenses and intellectual property necessary to operate these stations in exchange for $1,037,134. In September 2007, we identified a $14,280 liability that was not recorded as of the closing date of the transaction. This was recorded as an adjustment to goodwill.

The purchase price was allocated as follows:

Description	Amount

Accounts receivable	$	37,134
Land		35,000
Buildings and structures		50,000
Equipment		25,000
FCC licenses		800,000
Non-compete agreement		25,000
Goodwill		79,280
Liabilities assumed		(14,280	)
Total	$	1,037,134

Negotiations are ongoing with a third potential seller for two additional stations within the market, but there is no assurance that any additional acquisitions will be consummated in the Greenville, Mississippi area.

Greenville, Mississippi falls into the Greenville-Greenwood, Mississippi DMA, which is rated by Arbitron. Although there is no rating book specifically prepared for Greenville, Mississippi, we will have the option to make Greenville a rated market by entering into a subscription agreement with Arbitron. However, management does not currently believe that this would be beneficial.

On March 16, 2008, we entered into a local marketing agreement with Holladay Broadcasting for two radio stations in and around Vicksburg, Mississippi, which we are assembling into a super-regional station cluster (the “Mississippi Super-Regional Cluster”).

We selected these Properties for investment for a number of reasons. First, they are in close proximity to each other and they operate in the same market. Second, each of the stations, each of the three station groups and the stations collectively have underperformed fiscally in recent years in terms of revenue generation and operating income. The third factor in our investment decision was the community of Greenville, Mississippi, and the surrounding area. An estimated 130,000 listeners live within the range of the stations of the Greenville Cluster. A smaller market would not be able to support the advertising necessary to make this a profitable cluster, and a significantly larger market would likely already have station clusters owned by competing groups, as opposed to fragmented station ownership by individuals, making our entrance into the market significantly more difficult.

The final factor in our decision to invest in the Greenville cluster and Mississippi Super-Regional Cluster is the fact that we are able to assemble enough Properties to create a station cluster. By creating a station cluster, we expect to be able to consolidate the operations of the stations and eliminate redundancies, thereby cutting our per-station operational costs. A station cluster also allows us to program multiple, advertiser-friendly formats to reach a cross-section of key demographic and lifestyle groups within the community. By simultaneously selling all the stations as a single offering to advertisers, we anticipate that market share and overall revenues will increase.

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We intend to achieve cost reductions through the elimination of redundant management and administrative positions, consolidation of facilities and the use of technology to reduce programming and technical expenses.

We expect to take an aggressive stance on HD Radio as a content provider, and we plan to install HD transmitters as revenue streams develop and as long as current sales trends for HD receivers continue. When we are able to install HD transmitters, we will have at least three additional terrestrial signals for delivery of content to consumers.

While we have successfully acquired five stations, and entered into a local marketing agreement for two stations in our plan for creating the Mississippi Super-Regional cluster, and management anticipates having the ability to consummate additional acquisitions in the area, there can be no assurance that any additional acquisitions will be completed or that the resulting station cluster will be profitable.

Acquisitions and Dispositions

Pending Acquisitions

During the fourth quarter of 2007, we signed letters of intent to purchase seven additional radio stations in two markets. Two of these stations, WBBV FM, and KLSM FM were placed under a local marketing agreement on March 16, 2008.

On March 10, 2008, Debut Broadcasting Mississippi, Inc., a wholly-owned subsidiary of the Company (“Debut Mississippi”), signed an asset purchase agreement with one of these four stations - Holladay Broadcasting of Louisiana, LLC (“HBL”). The consummation of the transactions contemplated by such asset purchase agreement is contingent upon, among other things, approval of the Federal Communications Commission. On March 16, 2008, Debut Mississippi filed an application with the Federal Communications Commission with respect to the acquisition and ownership of this radio station. On March 16, 2008, Debut Mississippi and HBL entered into a Local Marketing Agreement pursuant to which Debut Mississippi maintains the radio station and HBL retains ownership of all assets and liabilities of the station. The Company’s Current Report on Form 8-K, filed on March 19, 2008, incorrectly indicated that the Company acquired the assets of HBL. Instead, this Form 8-K should have stated that Debut Mississippi and HBL have entered into an asset purchase agreement, pursuant to which Debut Mississippi will acquire the assets of HBL upon satisfaction of the conditions precedent.

These markets complement the geography of our existing radio stations and will create a super-regional cluster™ resulting in an anticipated reduction in operating costs of up to 17% incrementally. We anticipate signing asset purchase agreements, and filing for FCC license transfers for the 5 additional stations during the second and third quarter of 2008. These acquisitions will represent overall growth in radio operations of 140% year over year.

Financing

We will require additional capital to execute on our plan to grow through the acquisition of radio stations and radio station clusters. We do not presently have sufficient capital to make additional acquisitions. We intend to raise additional capital over the next twelve months through additional equity offerings.

We have made our initial radio station acquisitions without taking on any additional debt financing. However, debt financing may be advisable and attractive as we contemplate future additional acquisitions.

Although we are and will be unable to predict the precise terms of any financing until the time that such financing is actually obtained, it is likely that any such financing will fit within the following parameters:

• None of the indebtedness to which the Properties would be subject will be recourse to the shareholders, although some or all of the indebtedness may be recourse to us. However, each obligation will be secured by a first lien and/or second lien security interest in the financed Property. It is probable that all of our Properties will be subject to substantial security interests.

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• We expect any indebtedness will be first repaid with the operating revenues of the Properties. Operating revenues will first be applied to the payment of interest, principal amortization (if any), and principal on primary indebtedness. Next, operating revenues will be applied to interest on and principal of any subordinate financing.

• Each of these financing arrangements may be subject to acceleration in the event of default, including non-payment, insolvency, or the sale of a Property. Upon an acceleration, if we are unable to effect an immediate refinancing, we may lose one or more of our Properties by foreclosure.

While financing may initially be available only on a radio station by radio station basis, we may eventually seek to refinance all of our Properties in one non-recourse loan which will, in all likelihood, be secured by all of our Properties.

In connection with acquisitions, dispositions and financing, we will incur appropriate accounting and legal fees.

Governmental Regulation of Radio Broadcasting

The following is a brief summary of certain provisions of the Communications Act, the Telecom Act, and related FCC rules and policies (collectively, the "Communications Laws"). This description does not purport to be comprehensive, and reference should be made to the Communications Laws, public notices, and decisions issued by the FCC for further information concerning the nature and extent of federal regulation of radio broadcast stations. Failure to observe the provisions of the Communications Laws can result in the imposition of various sanctions, including monetary forfeitures and the grant of a "short-term" (less than the maximum term) license renewal. For particularly egregious violations, the FCC may deny a station's license renewal application, revoke a station's license, or deny applications in which an applicant seeks to acquire additional broadcast properties.

License Grant and Renewal. Radio broadcast licenses are granted and renewed for maximum terms of eight years. Licenses are renewed by filing an application with the FCC. Petitions to deny license renewal applications may be filed by interested parties, including members of the public.

Service Areas. The area served by AM stations is determined by a combination of frequency, transmitter power, antenna orientation, and soil conductivity. To determine the effective service area of an AM station, the station’s power, operating frequency, antenna patterns and its day/night operating modes are required. The area served by an FM station is determined by a combination of transmitter power and antenna height, with stations divided into classes according to these technical parameters.

Class C FM stations operate with the equivalent of 100 kilowatts of effective radiated power (“ERP”) at an antenna height of up to 1,968 feet above average terrain. They are the most powerful FM stations, providing service to a large area, typically covering one or more counties within a state. Class B FM stations operate with the equivalent of 50 kilowatts ERP at an antenna height of up to 492 feet above average terrain. Class B FM stations typically serve large metropolitan areas as well as their associated suburbs. Class A FM stations operate with the equivalent of 6 kilowatts ERP at an antenna height of up to 328 feet above average terrain, and generally serve smaller cities and towns or suburbs of larger cities.

The minimum and maximum facilities requirements for an FM station are determined by its class. FM class designations depend upon the geographic zone in which the transmitter of the FM station is located. In general, commercial FM stations are classified as follows, in order of increasing power and antenna height: Class A, B1, C3, B, C2, C1, C0, and C.

The following table sets forth the market, call letters, FCC license classification, antenna elevation above average terrain (for FM stations only), power and frequency of all of our owned and operated stations as of March 31, 2008.

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Market

Stations

City of License

Frequency

Expiration Date

of License

FCC

Class

Height

Above

Average

Terrain

(in feet)

Power

(in

Watts)

G Mississippi

WNLA FM

Indianola, MS

105.5

June 1, 2012

190

4400

WBAQ FM

Greenville, MS

97.9

June 1, 2012

502

48000

WIQQ FM

Leland, MS

102.3

June 1, 2012

446

1650

WNLA AM

Indianola, MS

1380

June 1, 2012

500

WNIX AM

Greenville, MS

1330

June 1, 2012

1000

WBBV FM

Vicksburg, MS

101.1

June 1, 2012

394

13000

KLSM FM

Tallulah, LA

104.9

June 1, 2012

299

3000

Compliance with Environmental Laws

We have not incurred and do not anticipate incurring any expenses associated with environmental laws.

Results of Operations

For the three months ended March 31, 2008 and 2007

On a consolidated basis, we generated $451,345 in net revenue for the quarter ended March 31, 2008, an increase of $187,878 or 41%, compared to $263,467 for the quarter ended March 31, 2007. Approximately $153,000 of this increase relates to the Mississippi radio station acquisitions, and approximately $35,000 in net revenues relates to the core syndication business.

Since the merger with California News Tech occurred during the three months ended June 30, 2007, we did not report corresponding revenue for MSI.

On a consolidated basis, advertising expense was $39,480 for the quarter ended March 31, 2008 an increase of 17,258 or 45%, compared to $17,653 for the quarter ended March 31, 2007. This increase is attributable to a public relations contract that was entered into between Debut Broadcasting and Politis Communications. $4,666 of this expense was non-cash expenditure through issuance of warrants to purchase common stock.

On a consolidated basis, operating expense was $663,996 for the quarter ended March 31, 2008, an increase of $317,964 or 47%, compared to $346,032 for the quarter ended March 31, 2007. Of the total increase in operating expenses, $235,071 relates to the Mississippi radio acquisitions which did not have operations recorded in the first quarter of 2007. Additional reasons for our increase in operating expenses relate to $138,394 in additional costs associated with the company’s public trading status.

On a consolidated basis, depreciation and amortization expense was $33,472 for the quarter ended March 31, 2008, an increase of $28,763 or 711%, compared to $4,709 for the quarter ended March 31, 2007. The primary reason for the increase relates to the assets acquired as part of the Shamrock and River acquisitions.

During the quarter ended March 31, 2007, the Company recorded $83,954 in non-recurring merger and acquisition related expenses.

As a result of the foregoing revenue and expenses, our overall net loss for the three month period ending March 31, 2008 and March 31, 2007 was $260,796 and $109,480, respectively.

Liquidity and Capital Resources

As of March 31, 2008, we had Current Assets in the amount of $1,511,901 and Current Liabilities in the amount of $1,883,727. This resulted in working capital deficit in the amount of $371,826.

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As of March 31, 2008, we had current Assets in the amount of $1,511,901, consisting of $452,545 in Cash and Cash Equivalents, $887,047 in Accounts Receivable, $172,308 in Other Current Assets. As of March 31, 2008, we had Current Liabilities in the amount of $1,883,727, consisting of $216,587 in Accounts Payable, $573,089 in Accrued Expenses and Taxes, $750,000 in notes payable to shareholders, $274,297 in Lines of Credit and $69753 in Current Portion of Long Term Debt. This combination of assets and liabilities resulted in a working capital deficit in the amount of $371,826.

The Company has limited working capital and has had significant historical operating losses from sales of products and services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. As of March 31, 2008, the Company had utilized the $750,000 loan from Remington Partners, Inc. to fund operations and facilitate the local marketing agreement of WBBV FM and KLSM FM with Holladay Broadcasting of Louisiana, LLC. The Company expects to generate additional capital, either from the sale of its common stock and/or obtaining debt financing, before the end of the third quarter of 2008. The Company cannot provide any assurance, however, that such additional capital will mitigate the effect of the Company’s going concern uncertainty.

Recent Events

On January 21, 2008, we entered into a loan agreement with Remington Partners, Inc. for $250,000. In conjunction with this loan, we issued Remington Partners, Inc. a warrant to purchase 62,500 shares of our common stock at an exercise of $1.00 per share with an expiration date three years after the date of issuance.

On March 6, 2008, we entered into a loan agreement with Remington Partners, Inc. for $500,000. In conjunction with this loan, we issued Remington Partners, Inc. a warrant to purchase 125,000 shares of our common stock at an exercise price of $1.00 per share with an expiration date three years after the date of issuance.

The essential terms of these agreements have been previously disclosed in our filings on Form 8-K on January 25, 2008 and March 11, 2008 respectively. The proceeds of these loans were used for working capital expenditures and to fund acquisition costs related to the asset purchase agreement with Holladay Broadcasting Corporation of Louisiana, LLC.

On March 16, 2008, we entered into a local marketing agreement for two radio broadcast stations identified as WBBV FM 101.1 MHz in Vicksburg, MS and KLSM FM 104.9 MHz in Tallulah, LA with Holladay Broadcasting of Louisiana, LLC. We have signed an asset purchase agreement and filed with the FCC for ownership of these stations. We reported our purchase of these two radio stations on Form 8-K filed March 19, 2008.

Off Balance Sheet Arrangements

As of March 31, 2008, there were no off balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We believe that the following accounting policies fit this definition.

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Revenue and Cost Recognition

Advertising

The Company expenses advertising costs as they are incurred. Total advertising costs of $39,490 and $17,653 are included in the financial statements for the quarter ended March 31, 2008 and March 31, 2007, respectively.

Reclassifications

To maintain consistency and comparability, certain amounts from prior years have been reclassified and combined, where appropriate, to conform to the current-year financial statement presentation.

New Accounting Pronouncements

The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (“FIN 48”), on May 17, 2007. This interpretation increases the relevancy and comparability of financial reporting by clarifying the way companies account for uncertainty in income taxes. FIN 48 prescribes a consistent recognition threshold and measurement attribute, as well as clear criteria for subsequently recognizing, derecognizing and measuring such tax positions for financial statement purposes. The interpretation also requires expanded disclosure with respect to the uncertainty in income taxes

Item 3. Qualitative and Quantitative Disclosures About Market Risk.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2008. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Mr. Steve Ludwig, and our former Chief Financial Officer, Ms. Shannon Farrington. Based upon that evaluation, our Chief Executive Officer and former Chief Financial Officer concluded that, as of March 31, 2008, our disclosure controls and procedures are effective. There have been no changes in our internal controls over financial reporting during the quarter ended March 31, 2008.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the 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, within the Company 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. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also 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. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On March 31, 2008 we were not party to any pending legal proceeding. On April 16, 2008 we became party to a legal proceeding with Delta Plaza, LLC a Mississippi Limited Liability company regarding an alleged breach of a lease contract. Delta Plaza, LLC is seeking compensation of $65,000. We are defending our interests vigorously, and do not anticipate incurring any liability for the compensation and reimbursement sought.

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

On January 2, 2008, the Company awarded 342,055 shares through the Debut Broadcasting Employee Stock Option Plan.

All shares were issued in transactions exempt from the registration requirement of the Securities Act of 1933, as amended.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended March 31, 2008.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of 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

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SIGNATURES

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

DEBUT BROADCASTING CORPORATION, INC.

August 19, 2008	By:	/s/ Sariah Hopkins
		Sariah Hopkins
		Chief Financial Officer

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Debut Broadcasting (DBTB) Inactive 10-Q/A2009 Q0 Quarterly report (amended)