Debut Broadcasting 10Q 2010 Q0 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2009

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 0001254371

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.)

1025 16th Ave South, Nashville, TN	37212
(Address of principal executive offices)	(Zip Code)

(615) 301-0001

(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 May 13, 2009, there were 19,866,866 shares of common stock issued and outstanding.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis or Plan of Operation	13
Item 3.	Qualitative and Quantitative Disclosures About Market Risk.	15

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
Item 5.	Other Information	17
Item 6.	Exhibits	17

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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:

F-1	Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2009 and December 31, 2008;

F-2	Consolidated Statements of Operations and Stockholder’s Deficit (unaudited) for the three months ended March 31 2009 and 2008;

F-3	Consolidated Statement of Stockholder’s Deficit (unaudited) for the three months ended March 31, 2009;

F-4	Consolidated Statements of Cash (unaudited) for the three months ended March 31, 2009 and 2008;

These 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, 2009 are not necessarily indicative of the results that can be expected for the full year. Balance sheet information as of December 31, 2008 was derived from the Company’s audited financial statements for the year ended December 31, 2008.

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DEBUT BROADCASTING CORPORATION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31 2009 (Unaudited)			December 31 20081
ASSETS
Current assets
Cash and cash equivalents	$	12,927		$	59,143
Accounts receivable, net		887,686			1,096,316
Stock warrant receivable		85			85
Prepaid expenses		35,412			47,644
Unexercized stock warrants		454,658			454,658
Total current assets		1,390,768			1,657,846

Property and equipment, net		727,134			749,415
Deposits		25,542			3,928
Goodwill		459,280			459,280
FCC licenses		1,509,500			1,509,500
Non-Compete Agreement, net		14,583			23,333
Other intangible assets, net		2,008,905			1,996,041

Total assets	$	4,126,807		$	4,403,302

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	712,148		$	530,792
Accrued expenses and taxes		259,336			449,881
Notes payable to shareholders		750,000			750,000
Lines of credit		774,212			774,212
Current portion of long-term debt		78,998			108,443
Unrecognized stock warrant loss		585,523			485,523
Total current liabilities		2,348,069			3,098,851

Long term liabilities
Leases payable		4,980			5,381
Long-term debt		1,336,194			1,336,194
Total long term liabilities		1,341,174			1,341,575

Total liabilities		4,401,391			4,440,426

Stockholders' deficit
Common stock - $.003 par value, 100,000,000 shares authorized		30,383			30,601
Additional paid in capital		3,166,839			3,166,621
Accumulated deficit		(3,471,806	)		(3,234,346	)
Total stockholders' deficit		(274,584	)		(37,124	)
Total liabilities and stockholders' deficit	$	4,126,807		$	4,403,302

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

1 Derived from the Company’s audited financial statements from the year ended December 31, 2008.

F-1

DEBUT BROADCASTING CORPORATION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

(Unaudited)

	Three months ended March 31,
	2009			2008

Net Revenue	$	474,327		$	451,345

Operating expenses
Advertising		6,739			39,480
Operating expense		588,302			604,979
Depreciation expense		49,190			33,472
Merger and acquisition related expenses		-			-

Total operating expenses		644,229			663,996

Operating (loss)		(169,903	)		(212,300	)

Other income and expense
Interest expense		76,791			36,221
Interest income		(1,615	)		(814	)

Total other income and expenses		75,177			35,407

Net (loss)	$	(244,807	)	$	(260,796	)

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

F-2

DEBUT BROADCASTING CORPORATION, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

AS OF MARCH 31, 2008

(UNAUDITED)

							Additional
	Common Stock						Paid in			Accumulated
	Shares			Amount			Capital			Deficit				Total

Beginning Balance, January 1, 2007		5,000		$	1,000		$	0		$	(725,299	)		$	(724,299	)

Recapitalization		10,000,000			1,000			-			-				1,000
		(5,000	)		(1,000	)		-			-				(1,000	)

Private Placement		6,000,000			18,000			2,958,498			-				2,976,498

Shareholder Note Conversion		430,316			1,291			213,866			-				215,157

Debenture Conversion		3,000,000			9,000			91,000			-				100,000

Existing CNT		364,044			1,092			(1,092	)		-				0

MSI Debentures								(100,000	)						(100,000	)

Net Loss for the Year Ended December 31, 2007		-			-			-			(1,696,493	)			(1,696,493	)

Ending Balance, December 31, 2007		19,794,360			30,383			3,162,272			(2,421,792	)			770,863

Exercise of stock warrants		8,500			26			59			-		��		85

Stock issued for services		22,026			66			1,476			-				1,542

Stock issued as compensation		42,000			126			2,814			-				2,940

Net Loss for the Year Ended December 31, 2008		-			-			-			(812,554	)			(812,554	)

Ending Balance, December 31, 2008		19,866,886		$	30,601		$	3,166,621		$	(3,234,346	)		$	(37,124	)

Net Loss for the 3 Months EndedMarch 31, 2008											(244,807	)			(244,807	)

Ending Balance, March 31, 2008		19,866,886		$	30,601		$	3,166,621		$	(3,479,153	)		$	(281,931	)

F-3

DEBUT BROADCASTING CORPORATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the three Months Ended March 31,
	2009			2008
Operating activities:
Net loss	$	(244,807	)	$	(260,796	)

Adjustments to reconcile net loss to net cash provided
by/(used in) operating activities:
Depreciation and amortization		49,190			33,472
Changes in operating assets and liabilities, net of effects of acquisitions:

(Increase) decrease in accounts receivable		208,630			(237,136	)
(Increase) decrease in other current assets		(9,381	)		(129,095	)
Increase (decrease) in accounts payable		181,356			(123,147	)

Increase (decrease) in accrued expenses and taxes		(190,545	)		233,647

Net cash provided by/(used in) operating activities		(5,557	)		(222,258	)

Investing activities:
Purchases of property and equipment		(10,812	)		(51,132	)

Net cash used in investing activities		(10.812	)		(51,132	)

Financing activities:
Proceeds from issuance of stock warrants		-			231,754
Proceeds from bank credit facility		(402	)		35,000
Proceeds from shareholder notes		-			750,000
Repayment of long term debt		(29,445	)		(22,114	)

Net cash provided by/(used in) financing activities		(29,847	)		976,637

Net increase/(decrease) in cash and cash equivalents		(46,216	)		442,453

Cash and cash equivalents at beginning of period		59,143			8,643

Cash and cash equivalents at end of period	$	12,927		$	451,096

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

F-4

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Note 1 - Organization

Debut Broadcasting Corporation, Inc. (the “Company”) is located in Nashville, Tennessee and conducts business from its principal executive office at 1025 16th Avenue South, Suite 200, Nashville, Tennessee 37212. The Company relocated to the current office location on January 31, 2009. The Company produces and distributes syndicated radio programs to radio stations across the United States and Canada. In addition, the Company owns and operates eight radio stations in Mississippi.

The Company maintains radio syndication in Nashville and produces and distributes 14 radio programs, which are broadcast over approximately 1,400 radio station affiliates. These radio programs have an estimated 40 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.

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.

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, 2008. All adjustments were of a normal recurring nature unless otherwise disclosed. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading 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.

Revenue and Cost Recognition

The Company recognizes its advertising and programming revenues for syndicated programming 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.

- 4 - -

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Note 2 - Basis of Presentation and Interim Results (continued)

The Company recognizes its advertising and programming revenues for its owned and operated radio broadcast stations when the advertising airs. Generally, the Company is paid by the local advertiser for advertising coordinated and contracted through a local employee sales representative or sales manager.

Advertising

The Company expenses advertising costs as they are incurred. Total advertising costs of $6,739 and $39,480 are included in the financial statements for the three months ended March 31, 2009 and March 31, 2008, respectively.

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.

• 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.

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DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Note 2 - Basis of Presentation and Interim Results (continued)

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, 2009.

Market

Stations

City of License

Frequency

Expiration Date of

License

FCC

Class

Height

Above

Average

Terrain

(in feet)

Power

(in

Watts)

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

WQBC AM

Vicksburg, MS

1420

June1, 2012

1000

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DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Note 2 - Basis of Presentation and Interim Results (continued)

Compliance with Environmental Laws

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

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, 2008, and the three months ended March 31, 2009.

Note 4 - Loss Per Share

We present basic loss per share on the face of the condensed consolidated balance sheets. 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 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 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.

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 10 years after the date of issuance.

On June 18, 2008 the Company issued to Wolcott Squared a warrant to purchase 18,408 shares of our common stock at an exercise price of $0.3925 per share, with an expiration date of December 17, 2017. The consideration received for this warrant was services rendered in December of 2007 valued at $7,225.

On June 18, 2008, the Company issued to Wolcott Squared a warrant to purchase 22,279 shares of our common stock at an exercise price of $0.51 per share with an expiration date of January 31, 2018. The consideration received for this warrant was services rendered in January of 2008 valued at $11,362.

On June 18, 2008, the Company issued to Wolcott Squared a warrant to purchase 5,686 shares of our common stock at an exercise price of $0.51 per share with an expiration date of February 29, 2018. The consideration received for this warrant was services rendered in February of 2008 valued at $2,899.

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DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Note 4 - Loss Per Share (continued)

On June 30, 2008, the Company issued to Politis Communications a warrant to purchase 10,254 shares of our common stock at an exercise price of $0.01 per share, with an expiration date of June 29, 2018. The consideration received for this warrant was services rendered by Politis Communications.

On September 22, 2008, the Company issued to Stephen Ross, a third party, a warrant to purchase 18,000 shares of Company common stock at an exercise price of $0.50 per share, with an expiration date of January 31, 2011. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq,

On September 22, 2008, the Company issued to Stephen Ross, a third party, a warrant to purchase 27,000 shares of Company common stock at an exercise price of $0.50 per share, with an expiration date of September 30, 2011. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq,

On September 30, 2008, the Company issued to Politis Communications a warrant to purchase 5,495 shares of Company common stock at an exercise price of $0.01 per share, with an expiration date of September 29, 2018. The consideration received for this warrant was public relations services rendered by Politis Communications.

On December 31, 2008, the Company issued to Stephen Ross, a third party, a warrant to purchase 27,000 shares of Company common stock at an exercise price of $0.50 per share, with an expiration date of December 31, 2011. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq.

On December 31, 2008, the Company issued to Politis Communications a warrant to purchase 5,495 shares of Company common stock at an exercise price of $0.01 per share, with an expiration date December 31, 2018. The consideration received for this warrant was public relations services rendered by Politis Communications.

The Company revalues all warrants quarterly utilizing the Black-Scholes method.

All of these warrants were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), as set forth in Section 4(2) under the Securities Act and Rule 506 of Regulation D promulgated thereunder relating to sales by an issuer not involving any public offering, to the extent an exemption from such registration was required.

On December 5, 2008, Politis Communications exercised a warrant to purchase 8,500 shares of Company common stock at $0.01 per share. The shares were authorized by Politis Communications as compensatory gifts to a number of employees of Politis Communications. No underwriters were involved in this warrant exercise. The underlying shares are restricted and carry piggy-back registration rights.

On December 5, 2008, The Company issued a stock certificate to Mohammed Rahman for 22,026 shares of our common stock at $0.07 per share. We issued the shares of common stock to Mohammed Rahman in exchange for services rendered. No underwriters were involved in this sale of securities. Outside of the existing vendor client relationship the investor has no prior relationship to the company. The underlying shares are restricted and carry piggy-back registration rights.

On December 3, 2008, The Company issued a stock certificate to Sariah Hopkins for 42,000 shares of our common stock at $0.07 per share. We issued the shares of common stock to Sariah Hopkins as a compensatory bonus for services rendered in the role of Chief Financial Officer. The underlying shares are restricted and carry piggy-back registration rights.

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DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Note 4 - Loss Per Share (continued)

The Company issued the above-described shares of our common stock in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, as set forth in Section 4(2) under the Securities Act and Rule 506 of Regulation D promulgated thereunder relating to sales by an issuer not involving any public offering, to the extent an exemption from such registration was required. The purchasers represented to us that they were accredited investors as defined in Rule 501(a) of the Securities Act and that the securities issued pursuant thereto were being acquired for investment purposes. The sales of these securities were made without general solicitation or advertising.

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, 2009			December 31, 2007
Land		$	49,500		$	49,500
Buildings and building improvements	5 – 10 years		138,395			136,460
Towers and studio equipment	5 - 30 years		377,945			372,714
Furniture, fixtures and equipment	3 – 7 years		275,691			270,972
Automotive	3 - 5 years		194,938			194,938

Accumulated depreciation			(309,336	)		(276,169	)
Property and equipment, net		$	727,134		$	749,415

Of the $727,134 in Net Property and Equipment as of March 31, 2009, $35,000 was added through the acquisition of the radio broadcast station WBBV FM during the third quarter of 2008 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 4.75% at March 31, 2009. The note matures on May 3, 2010. The balance of the line of credit at both March 31, 2009 and 2008 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, 2009, and requires monthly interest payments accruing at an initial rate of 7.58% and a current rate of 4.35938% at March 31, 2009. The rate is subject to monthly changes based on an independent index plus 2.25%.

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DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Note 7 - Notes Payable to Shareholders

Debut Broadcasting Shareholder Notes

On January 21, 2008 the Company entered into a loan agreement with Remington Capital Partners for $250,000. This loan agreement included warrant coverage for 62,500 shares of common stock, a $2,000 loan origination fee and interest of 18% per annum due monthly. The promissory note plus any accrued interest is payable on July 31, 2009.

On February 26, 2008 the Company entered into a loan agreement with Remington Capital Partners for $500,000. This loan agreement included warrant coverage for 125,000 shares of common stock, a $2,000 loan origination fee and interest of 18% per annum due monthly. The promissory note plus any accrued interest is payable on July 31, 2009.

Total interest expense associated with the shareholder loans for the three months ended March 31, 2009 and 2008 was $34,397 and $13,808 respectively. Accrued interest due to shareholders was $0 and $0 as of March 31, 2009 and 2008, 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 2.58313% as of March 31, 2009. 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, 2009 and 2008 was $1,154 and $4,209 respectively. The balance of the loan at March 31, 2009 was $152,550 of which $41,365 was classified as current portion of long-term debt. 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.

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, 2009 and 2008 was $10,428 and $10,428 respectively. The balance of the loan at both March 31, 2009 and 2008 was $347,491.

SunTrust Bank Loan

The Company signed a promissory note and established a revolving line of credit on August 22, 2008 for $500,000 with SunTrust Bank to facilitate the acquisition of WBBV. The note matures on August 22, 2009 and requires monthly interest payment accruing at an initial rate of 6.0% and a current rate of 4.25% at March 31, 2009. The rate is subject to monthly changes based on an independent index plus 1.00%

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 by the wholly-owned subsidiary entity, Debut Broadcasting Mississippi, after the signing of the related agreement. Total interest expense on the SunTrust Bank loan for the three months ended March 31, 2009 and 2008 was $7,319 and $0.00 respectively. The balance of the loan at March 31, 2009 and 2008 was $499,914 and $0.00 respectively.

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DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

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.

On May 1, 2008, the Company signed a retail installment sale contract with Daimler Chrysler Financial Services for the purchase of a vehicle for $23,137 with an effective interest rate of 7.49%. The corresponding promissory note is to be paid over a five-year period with a monthly payment of $463. The purchased vehicle is used in conjunction with the radio broadcast operations.

On May 15, 2008, the Company signed a retail installment sale contract with Daimler Chrysler Financial Services for the purchase of a vehicle for $19,303 with an effective interest rate of 11.25%. The corresponding promissory note is to be paid over a five-year period with a monthly payment of $367. The purchased vehicle is used in conjunction with the radio broadcast operations.

On May 30, 2008, the Company signed a retail installment sale contract with GMAC for the purchase of a vehicle for $25,256 with an effective interest rate of 9.5%. The corresponding promissory note is to be paid over a five-year period with a monthly payment of $530. The purchased vehicle is used in conjunction with the radio broadcast operations..

Total interest expense on the vehicle loans for the three months ended March 31, 2009 and 2008 was $2,875 and $1,528 respectively. The principal balance of the vehicle loans as of March 31, 2009 and 2008 was $123,730 and $87,212 respectively. At March 31, 2009, $32,639 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, 2009 and 2008 was $62 and $361, respectively. The principal balance of the capital lease as of March 31, 2009 and 2008 was $9,509 and $13,503 respectively. At March 31, 2009, $4,994 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.

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DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

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

WBBV FM

On August 27, 2008, the Company acquired a radio broadcast stations from Holladay Broadcasting of Louisiana, LLC identified as WBBV FM 101.3 MHz in Vicksburg, Mississippi, including all of the facilities, equipment, licenses and intellectual property necessary to operate this station, in exchange for $180,022.

The purchase price was allocated as follows:

Description	Amount

Accounts receivable	$	57,522
Land		0.00
Buildings and structures		25,000
Equipment		10,000
FCC licenses		472,500
Non-compete agreement		35,000
Goodwill		380,000
Liabilities assumed		(800,000	)
Total	$	180,022

Holladay Broadcasting Company

On March 16, 2008, the Company entered into a Local Marketing Agreement for a radio broadcast station identified as KLSM FM 105.5 MHz in Tallulah, Louisiana 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 as of March 16, 2008.

Grace Media Company

On August 15, 2008, the Company entered into a Local Marketing Agreement for a radio broadcast station identified as WQBC AM 1420 Khz in Vicksburg, Mississippi with Grace Media 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. Grace Media Company has retained ownership of all assets and liabilities of the station as of August 22, 2008.

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

Forward-Looking Statements

Certain statements contained in this report may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements may be identified by reference to a future-period(s) or by the use of forward-looking terminology, such as “anticipate,” “believe,” “estimate,” “expect,” “foresee,” “may,” “might,” “will,” “intend,” “could,” “would,” or “plan” or future or conditional verb tenses, and variations or negatives of such terms.

These forward-looking statements include, without limitation, the basis of presentation of our financial statements, charges to consulting clients, the impact of recent accounting pronouncements, the impact of radio station acquisitions, radio advertising growth, pending acquisitions, the future use of Black-Scholes method of valuation, market trends, our need for additional capital, our ability to raise capital through debt and equity financing, the terms of any financing the we may obtain, the incurrence of accounting and legal fees in connection with acquisitions and the effectiveness of our disclosure controls and procedures.

We caution you not to place undue reliance on the forward-looking statements contained in this report, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors. These factors include, but are not limited to, our ability to provide and market competitive service and products, our ability to diversify revenue, our ability to attract, train and retain qualified personnel, our ability to operate and integrate new technology, changes in consumer preference, changes in our operating or expansion strategy, changes in economic conditions, fluctuation in prevailing interest rates, our ability to identify and effectively integrate potential acquisitions, FCC and government approval of potential acquisition, our inability to renew one or more of our broadcast licenses, our ability to manage growth and effectively serve an expanding customer and market base, geographic concentrations of our assets and susceptibility to economic downturns in that area, availability of and costs associated with maintaining and/or obtaining adequate and timely sources of capital and liquidity, our ability to compete with other companies that produce and distribute syndicated radio programs and/or own radio stations, shifts in populations and other demographics, changes in governmental regulations, laws and regulations as the affect companies that produce and distribute syndicated radio programs and/or own radio stations, industry conditions, the popularity of radio as a broadcasting and advertising medium, cancellation, disruption or postponements of advertising schedules in response to national or world events, possible adverse ruling, judgments, settlements, and other outcomes of pending or threatened litigation, other factors generally understood to affect the financial condition or results of companies that produce and distribute syndicated radio programs and/or own radio stations and other factors detailed from time to time in our press releases and filings with the Securities and Exchange Commission. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this report.

Overview

A Radio Advertising Bureau report issued in January of 2009 indicated that local advertisers, the largest advertisers which are served in small markets, decreased their overall advertising by 10% in 2008. Despite this report, we realized growth in half of our markets while the industry as a whole declined. Management believes that local market advertisers are advertising more in order to compete during the economic slowdown. Non-broadcast radio revenue (“non-spot revenue”) remained steady during the first quarter of 2009. Our small market focus allows us to capitalize on the growth in local markets and non-spot revenue as we participate as active members in the communities in which we operate. For the three months ended march 31, 2009, combined net revenue from radio, multi-media, media purchasing and syndication increased 4.8% compared to the same period in 2008.

Our management team remains focused on our strategy of pursuing growth through acquisition. However, acquisitions are closely evaluated to ensure that they will generate stockholder value and our management is committed to completing only those acquisitions that it believes will increase our share price.

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Results of Operations

For the three months ended March 31, 2009 and 2008

On a consolidated basis, we generated $474,327 in net revenue for the quarter ended March 31, 2009, an increase of $22,982 or 4.8%, compared to $451,345 for the quarter ended March 31, 2008. Approximately $22,982 of this increase relates to growth in the Vicksburg, Mississippi radio station market, specifically in our owned and operated radio broadcast station WBBV FM, and our LMA station KLSM FM.

On a consolidated basis, advertising expense was $6,739 for the quarter ended March 31, 2009 a decrease of 32,741 or 93%, compared to $39,480 for the quarter ended March 31, 2008. This decrease is attributable to termination and expiration of public relations and investor relations contracts that were entered into between Debut Broadcasting and Politis Communications, Agoracom, Inc, and Rubicon Capital Partners.

On a consolidated basis, operating expense was $588,302 for the quarter ended March 31, 2009, an increase of $16,677 or 3.7%, compared to $604,979 for the quarter ended March 31, 2008. The decrease in operating expenses, relates to cost cutting including staffing reductions which were instituted in the first quarter of 2009.

On a consolidated basis, depreciation and amortization expense was $49,190 for the quarter ended March 31, 2009, an increase of $15,718 or 32%, compared to $33,472 for the quarter ended March 31, 2008. The primary reason for the increase relates to the assets acquired as part of the WBBV acquisition.

As a result of the foregoing revenue and expenses, our overall net loss for the three month period ending March 31, 2009 and March 31, 2008 was $244,807 and $260,796, respectively.

Liquidity and Capital Resources

As of March 31, 2009, we had current Assets in the amount of $1,390,768, consisting of $12,927 in Cash and Cash Equivalents, $887,686 in Accounts Receivable, $490,155 in Other Current Assets. As of March 31, 2009, we had Current Liabilities in the amount of $2,348,069, consisting of $259,366 in Accounts Payable, $259,336 in Accrued Expenses and Taxes, $750,000 in notes payable to shareholders, $774,212 in Lines of Credit and $78,998 in Current Portion of Long Term Debt. This combination of assets and liabilities resulted in a working capital deficit in the amount of $957,301. The working capital deficit is largely attributable to seasonality in the radio advertising industry.

We will require additional capital to execute our plan to grow through the acquisition of radio stations and radio station clusters. We do not presently have sufficient capital to make acquisitions or to guarantee our continued long-term operations. We intend to raise additional capital over the next twelve months through refinancing and restructuring our debt.

Recent Events

None

Off Balance Sheet Arrangements

As of March 31, 2009, there were no off balance sheet arrangements.

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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.

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.

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, 2009 and March 31, 2008, 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 4. Qualitative and Quantitative Disclosures About Market Risk.

None

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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 sought compensation of $65,000. We appeared in the Circuit Court of Washington County on March 24th, 2009 to defend our interests and were found to have no fault or liability in this case.

On December 31, 2008 we were involved in a legal proceeding pertaining to a former employee in our Greenville Mississippi market. We defended ourselves vigorously, however the Circuit Court of Washington County found the case in favor of the employee. We placed funds in escrow in 2008 to cover our liability in this case. These funds have been dispersed to the plaintiff.

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

On May 17, 2007, we completed a private placement of 6,430,316 shares of our common stock at $0.50 per share. 430,316 shares were sold to existing shareholders in exchange for conversion of their notes to the Predecessor Company. The remaining 6,000,000 shares were sold to a number of investors with no prior relationship to the company. No underwriters were involved in this sale of securities. We issued the shares of common stock to the investors in exchange for a combination of cash and debt reduction. The transaction was recorded net of financing costs of $23,503. We used the net proceeds from the private offering for the acquisition of Shamrock Broadcasting and River Broadcasting Group.

On June 18, 2008, we issued to Wolcott Squared a warrant to purchase 18,408 shares of our common stock at an exercise price of $0.3925 per share, with an expiration date of December 17, 2017. The consideration received for this warrant was services rendered in December of 2007 valued at $7,225.

On June 18, 2008, we issued to Wolcott Squared a warrant to purchase 22,279 shares of our common stock at an exercise price of $0.51 per share with an expiration date of January 31, 2018. The consideration received for this warrant was services rendered in January of 2008 valued at $11,362.

On June 18, 2008, we issued to Wolcott Squared a warrant to purchase 5,686 shares of our common stock at an exercise price of $0.51 per share with an expiration date of February 29, 2018. The consideration received for this warrant was services rendered in February of 2008 valued at $2,899.

On June 30, 2008, we issued to Politis Communications a warrant to purchase 10,254 shares of our common stock at an exercise price of $0.01 per share, with an expiration date of June 29, 2018. The consideration received for this warrant was services rendered by Politis Communications.

On September 22, 2008, we issued to Stephen Ross, a third party, a warrant to purchase 18,000 shares of Company common stock at an exercise price of $0.50 per share, with an expiration date of January 31, 2011. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq,

On September 22, 2008, we issued to Stephen Ross, a third party, a warrant to purchase 27,000 shares of Company common stock at an exercise price of $0.50 per share, with an expiration date of September 30, 2011. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq,

On September 30, 2008, we issued to Politis Communications a warrant to purchase 5,495 shares of Company common stock at an exercise price of $0.01 per share, with an expiration date of September 29, 2018. The consideration received for this warrant was public relations services rendered by Politis Communications.

On December 31, 2008, we issued to Stephen Ross, a third party, a warrant to purchase 27,000 shares of Company common stock at an exercise price of $0.50 per share, with an expiration date of December 31, 2011. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq,

On December 31, 2008, we issued to Politis Communications a warrant to purchase 5,495 shares of Company common stock at an exercise price of $0.01 per share, with an expiration date December 31, 2018. The consideration received for this warrant was public relations services rendered by Politis Communications.

We revalue warrants quarterly utilizing the Black-Scholes method.

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On December 5, 2008, Politis Communications exercised a warrant to purchase 8,500 shares of our common stock at $0.01 per share. The shares were authorized by Politis Communications as compensatory gifts to a number of employees of Politis Communications. No underwriters were involved in this warrant exercise. The underlying shares are restricted and carry piggy-back registration rights.

On December 5, 2008, we issued a stock certificate to Mohammed Rahman for 22,026 shares of our common stock at $0.07 per share. We issued the shares of common stock to Mohammed Rahman in exchange for services rendered. No underwriters were involved in this sale of securities. Outside of the existing vendor client relationship the investor has no prior relationship to the company. The underlying shares are restricted and carry piggy-back registration rights.

On December 3, 2008, we issued a stock certificate to Sariah Hopkins for 42,000 shares of our common stock at $0.07 per share. We issued the shares of common stock to Sariah Hopkins as a compensatory bonus for services rendered in the role of Chief Financial Officer. The underlying shares are restricted and carry piggy-back registration rights.

We issued the above-described shares of our common stock in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, as set forth in Section 4(2) under the Securities Act and Rule 506 of Regulation D promulgated thereunder relating to sales by an issuer not involving any public offering, to the extent an exemption from such registration was required. The purchasers represented to us that they were accredited investors as defined in Rule 501(a) of the Securities Act and that the securities issued pursuant thereto were being acquired for investment purposes. The sales of these securities were made without general solicitation or advertising.

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, 2009.

Item 5. Other Information

None.

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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Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	H.S. freshman Avg

Debut Broadcasting (DBTB) Inactive 10-Q2010 Q0 Quarterly report

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