Debut Broadcasting (DBTB) 10-Q 2010 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 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 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.)

1025 16th Ave South, Suite 102, Nashville, TN	37212
(Address of principal executive  offices)	(Zip Code)

(615) 301-0001

(Registrant’s telephone number, including area code)

(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, or a smaller reporting company. See definitions of “large accelerated filer,” “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 August 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	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 4T.	Controls and Procedures	7
PART II - OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 4.	Submission of Matters to a Vote of Security Holders	9
Item 6.	Exhibits	10

-2-

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 as of June 30, 2009 and December 31, 2008
F-2	Condensed Consolidated Statements of Operations and Accumulated Deficit for the three months and six months ended June 30, 2009 and 2008
F-3	Condensed Consolidated Statements of Cash Flows for the three months and six months ended June 30, 2009 and 2008

99

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 June 30, 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.

-3-

DEBUT BROADCASTING CORPORATION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30 2009 (Unaudited)			December 31 20081
ASSETS
Current assets
Cash and cash equivalents	$	16,385		$	59,143
Accounts receivable, net		947,098			1,096,316
Stock warrant receivable		85			85
Prepaid expenses		35,412			47,644
Unexercized stock warrants		447,836			454,658
Total current assets		1,446,816			1,657,846
Property and equipment, net		658,268			749,415
Deposits		20,519			3,928
Goodwill		459,280			459,280
FCC licenses		1,509,500			1,509,500
Non-Compete Agreement, net		5,833			23,333
Other intangible assets, net		1,995,150			1,996,041
Total assets	$	4,100,234		$	4,403,302
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	862,535		$	530,792
Accrued expenses and taxes		274,158			449,881
Notes payable to shareholders		750,000			750,000
Lines of credit		757,039			774,212
Current portion of long-term debt		62,734			108,443
Unrecognized stock warrant loss		485,523			485,523
Total current liabilities		2,329,454			3,098,851
Long term liabilities
Leases  payable		3,694			5,381
Long-term debt		1,306,993			1,336,194
Total long term liabilities		1,310,687			1,341,575
Total liabilities		3,487,091			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		(3,599,663	)		(3,234,346	)
Total stockholders' deficit		(402,441	)		(37,124	)
Total liabilities and stockholders' deficit	$	4,100,234		$	4,403,302

F-1

DEBUT BROADCASTING CORPORATION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Net Revenue	$	584,068		$	726,438		$	1,058,395		$	1,177,783
Operating Expenses
Advertising		2,931			113,260			9,671			152,740
Operating Expense		588,029			773,383			1,184,944			1,378,362
Depreciation Expense		46,835			32,396			87,274			65,868
Merger and Acquisition Related Expenses		-			895			-			895
Total Operating Expenses		637,795			919,934			1,281,889			1,597,865
Operating Loss		(53,727	)		(193,496	)		(223,494	)		(420,082	)
Other Income and Expense
Interest Income		(2,949	)		(1,585	)		(4,700	)		(2,399	)
Interest Expense		76,119			71,374			152,911			107,595
Income Tax		960			--			960
Total Other (Income) and Expense		74,130			69,789			149,171			105,196
Net Loss	$	(127,857	)	$	(263,285	)	$	(372,665	)	$	(525,278	)
Accumulated Deficit at the Beginning of the Period		(3,471,806	)		(2,807,308	)		(3,226,998	)		(2,545,315	)
Accumulated Deficit at the End of the Period		(3,599,663	)		(3,070,593	)		(3,599,663	)		(3,070,593	)
Loss per common share
Basic		(0.0181	)		(0.0155	)		(0.0181	)		(0.0155	)
Weighted average number of shares outstanding, basic		19,866,907			19,794,360			19,866,907			19,794,360

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

F-2

DEBUT BROADCASTING CORPORATION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Operating Activities:
Net Loss	$	(127,857	)	$	(263,285	)	$	(372,665	)	$	(525,278	)
Adjustments to reconcile net loss to net cash provided by/used in operating activities:
Depreciation and amortization		55,584			32,397			104,774			65,869
Changes in operating assets and liabilities, net effects of acquisitions
(Increase) decrease in accounts receivable		(59,497	)		(306,803	)		149,133			(543,939	)
(Increase) decrease in other current assets		11,929			(305,849	)		2,548			(434,944	)
Increase (decrease) in accounts payable		150,387			257,024			331,743			133,877
Increase (decrease) in accrued expenses and taxes		14,821			673,648			-175,724			907,295
Net cash provided by (used in) operating activities		45,367			87,133			39,810			128,159
Investing Activities:
Purchases of property and equipment		22,013			(161,341	)		11,201			(211,076	)
Net cash used in investing activities		22,013			(161,342	)		11,201			(211,076	)
Financing Activities:
Proceeds from issuance of stock warrants		-			(213,753	)		-			18,001
Proceeds from bank credit facility		(47,659	)		59,036			(48,061	)		94,036
Proceeds from stockholder notes		-			-			-			750,000
Repayment of long-term debt		(16,264	)		(754	)		(45,709	)		(22,868	)
Proceeds from issuance of common stock		-			-			-
Net cash provided by financing activities		(63,923	)		(155,471	)		(93,770	)		839,169
Net (decrease) increase in cash and cash equivalents		3,457			(229,680	)		(42,759	)		230,773
Cash and cash equivalents at beginning of period		12,927			451,096			59,143			8,643
Cash and cash equivalents at end of period		16,385			221,416			16,385			221,416

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

F-3

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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 102, 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.

F-4

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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  $2,931 and $113,260 are included in the financial statements for the three months ended June 30, 2009 and June 30, 2008, respectively. Total advertising costs of $9,671 and $152,740 are including in the financial statements for the six months ended June 30, 2009 and June 30, 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.

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.

F-5

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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 June 30, 2009

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	A		190		4400
	WBAQ FM	Greenville, MS		97.9	June 1, 2012	C2		502		48000
	WIQQ FM	Leland, MS		102.3	June 1, 2012	A		446		1650
	WNLA AM	Indianola, MS		1380	June 1, 2012	D		AM		500
	WNIX AM	Greenville, MS		1330	June 1, 2012	B		AM		1000
	WBBV FM	Vicksburg, MS		101.1	June 1, 2012	C3		394		13000
	KLSM FM	Tallulah, LA		104.9	June 1, 2012	A		299		3000
	WQBC AM	Vicksburg, MS		1420	June1, 2012	B		AM		1000

F-6

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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 48 has created any material differences in comparability between the six months  and six months ended June 30, 2008, and the three months and six months ended June 30, 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.

F-7

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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.

On April 1, 2009, 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  April 1, 2012. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq.

On June 30, 2009, 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  June 30, 2012. The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq.

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.

F-8

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2009

Note 4 - Loss Per Share (continued)

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.

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	June 30, 2009			December 31, 2008
Land		$	49,500		$	49,500
Buildings and building improvements	5 – 10 years		138,880			136,460
Towers and studio equipment	5 - 30 years		388,068			372,714
Furniture, fixtures and equipment	3 – 7 years		277,689			270,972
Automotive	3 - 5 years		160,318			194,938
Accumulated depreciation			(356,168	)		(276,169	)
Property and equipment, net		$	658,286		$	749,415

Of the $658,286  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.  In April of 2009, the Company disposed of a 2007 Chevrolet HHR and a 2007 Nissan XTerra through sales to third parties for $12,000 and $13,300 respectively.

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 June 30, 2009. The note matured on May 3, 2009.  The balance of the line of credit at both June 30, 2008 and 2008 was $75,000.  As of June 30, 2009 the note was being converted to three year term loan with an anticipated maturity of September 30, 2012.  The note is secured by personal guarantee of certain officers of the Company.

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 matured on June 30, 2009, and requires monthly interest payments accruing at an initial rate of 7.58% and a current rate of 4.41438% at June 30, 2009. The rate is subject to monthly changes based on an independent index plus 2.25%. As a result of the present economic downturn in the banking and radio industries, the note was transferred to the special assets division of Regions Bank. At June 30, 2009, the Company was actively seeking an amicable settlement with Regions Bank to satisfy the loan balance.

F-9

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 of the note at June 30, 2009 and 2008 was $199,297 and $199,297, respectively.

Note 7 - Notes Payable to Stockholders

Debut Broadcasting Stockholder Notes

On January 21, 2008 the Company issued to Remington Partners, Inc. warrants to purchase 62,500 shares of Company common stock in exchange for a loan in the amount of $250,000 with 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 issued to Remington Partners, Inc. warrants to purchase 125,000 shares of Company common stock in exchange for a loan in the amount of $500,000, with 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 stockholder loans for the three months ended June 30, 2009 and 2008 was $34,397 and $13,808 respectively.  Accrued interest due to stockholders was $0 and $0 as of June 30, 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  2.59438%  as of June 30, 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 June 20, 2009 and 2008 was $999.63 and $2,769, respectively.  Total interest expense for the six months ended June 30 2009 and 2008 was $2,153 and $6,978, respectively. The balance of the loan at June 30, 2009 was $141,120, of which $41,365 was classified as current portion of long-term debt.  The balance of the loan at June 30, 2008 was $206,532, of which $27,541 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 each of the three months ended June 30, 2009 and 2008 was $10,428.  The balance of the loan at both June 30, 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 June 30, 2009. The rate is subject to monthly changes based on an independent index plus 1.00%

F-10

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 June 30, 2009 and 2008 was $7,349 and $0.00 respectively.  Total interest expense on the SunTrust Bank loan for the six months ended June 30, 2009 and 2008 was $14,668 and  $0.00 respectively.  The balance of the loan at June 30, 2009  and  2008 was $496,142 and $0.00 respectively.

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.  In April of 2009, these two vehicles were disposed of through sales to third parties for $12,000 and $13,300 respectively.  The direct purchase money loan was paid in full and the security interest DaimlerChrysler held in the vehicles was released.

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 quarter ended June 30, 2009 and 2008 was $1,831 and $2286, respectively.  Total interest expense on the vehicle loans for the six months ended June 30, 2009 and 2008 was $4,707 and $3,971, respectively. The principal balance of the vehicle loans as of June 30, 2009 and 2008 was $78,264 and $146,019, respectively.  At June 30, 2009, $16,374 was classified as the current portion of the loans. 

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 quarters ended June 30, 2009 and 2008 was $107 and $174, respectively. Total interest expense on studio equipment for the six months ended June 30, 2009 and 2008 was $169 and $535, respectively.  The principal balance of the capital lease as of June 30, 2009 and 2008 was $3,281 and $12,748, respectively.  At June 30, 2009, $3,281 was classified as the current portion of the lease.

F-11

DEBUT BROADCASTING CORPORATION, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2009

Note 9 - Stockholders’ 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 stockholders in the amount of $215,158 into 430,316 shares of Company common stock at $0.50 per share.

The pre-merger stockholders 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.  We attribute $39,340 of the net loss incurred during the six months ended June 30, 2009 to the operation of WQBC AM.  In response to the evaluation of losses incurred through the operation of  WQBC AM, the company advised Grace Media Company of its decision to exercise a 90 day cancellation clause in the Local Marketing Agreement.  WQBC AM was taken off the air at 11:59pm on May 31, 2009.  Operations will revert to Grace Media Company on September 1, 2009.

F-12

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.  Analysts are projecting that overall revenue will continue to be lower year over year in 2009 with a return to 2008 levels in 2010.  We have been affected by this decline with a decrease in sales from advertisers in key groups of casino and automotive.  Management believes that the small markets will recover with more speed than the broader national markets, but that has not left the small markets immune to recession.  Non-broadcast radio revenue (“non-spot revenue”) remained steady during the second 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 six months ended June 30, 2009, combined net revenue from radio, multi-media, media purchasing and syndication decreased 10.1% compared to the same period in 2008.

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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.

Results of Operations

For the Three Months Ended June 30, 2009 and 2008

We generated $584,068  in net revenue for the quarter ended June 30, 2009, a decrease of $142,370 or 19.6%, compared to $726,438 for the quarter ended June 30, 2008.  Approximately $109,000 of this decrease relates to the syndication business. Revenue decreased approximately $83,400 in the Greenville, MS radio station market, however, the corresponding increase in revenue in the Vicksburg, MS radio station market reduced the overall decrease in radio revenue to $33,370 for the quarter ended June 30, 2009 compared to the quarter ended June 30, 2008.

Advertising expense was $2,931 for the quarter ended June 30, 2009, a decrease of 110,329 or 97.4%, compared to $113,260 for the quarter ended June 30, 2008.  This decrease is partially attributable to the expiration of a public relations contract that we entered into with Politis Communications.  Additionally contributing to the decrease were the expiration of contracts that we entered into with Agoracom for investor relations services, as well as discontinued public relations contracts with Dutton Associates and Rubicon Capital Partners.

Operating expense was $588,029 for the quarter ended June 30, 2009, a decrease of $185,354 or 23.9%, compared to $773,383 for the quarter ended June 30, 2008. Of the total decrease in operating expenses, approximately $106,000 related to company wide staffing and salary reductions implemented in the first quarter of 2009. Additional reasons for the decrease in operating expenses relate to a decrease in legal and regulatory spending of approximately $92,000, and a decrease and travel and entertainment expenditures of approximately $32,500.

Depreciation and amortization expense was $46,835 for the quarter ended June 30, 2009, an increase of $14,439, or 44.6%, compared to $32,396 for the quarter ended June 30, 2008. The primary reason for the increase relates to the assets acquired as part of the WBBV FM acquisition.

Interest expense was $76,119 for the quarter ended June 30, 2009, and increase of $4,745 or 6.7% compared to $71,374 for the quarter ended June 30, 2008.  The primary source of the interest expenditures were interest payments associated with the two term loans from Remington Partners, Inc, and the Regions Bank loans.

As a result of the foregoing revenue and expenses, our overall net loss for the three-month period ending June 30, 2009 and June 30, 2008 was $127,857 and $263,285, respectively.

For the Six Months Ended June 30, 2009 and 2008

We generated $1,058,395  in net revenue for the six months ended June 30, 2009, a decrease of $119,388, or 10.1%, compared to $1,177,783 for the six months ended June 30, 2008.  Approximately $140,000 of this decrease relates to the syndication business.  Revenue decreased approximately $125,800  in the Greenville, MS radio station market, however, the corresponding increase in revenue in the Vicksburg, MS radio station market resulted in an overall increase in radio revenue of approximately $22,000 for the six months ended June 30, 2009 compared to the six months ended June 30, 2008.

Advertising expense was $9,671 for the six months ended June 30, 2009 a decrease of $143,069 or 93.6% compared to $152,740 for the six months ended June 30, 2008.  This decrease is partially attributable to the expiration of a public relations contract that we entered into with Politis Communications.  Additionally contributing to the decrease were the expiration of contracts that we entered into with Agoracom for investor relations services, as well as discontinued public relations contracts with Dutton Associates and Rubicon Capital Partners.

4

Operating expense was $1,184,944 for the six months ended June 30, 2009, a decrease of $193,418 or 14%, compared to $1,378,362 for the six months ended June 30, 2008. Of the total decrease in operating expenses, approximately $83,000 related to company wide staffing and salary reductions implemented in the first quarter of 2009. Additional reasons for the decrease in operating expenses relate to a decrease in legal and regulatory spending of approximately $149,800, and a decrease and travel and entertainment expenditures of approximately $44,500.

Depreciation and amortization expense was $87,274 for the six months ended June 30, 2009, an increase of $21,406 or 32.5% compared to $65,868 for the six months ended June 30, 2008. The primary reason for the increase relates to the assets acquired as part of the WBBV FM acquisition.

Interest expense was $152,911  for the six months ended June 30, 2009, an increase of $45,316 or 42.2% compared to $107,595 for the six months ended June 30, 2008.  The primary source of the increase was interest payments associated with the two term loans from Remington Partners, Inc.  An additional increase in interest expense was attributable to the vehicles which have been financed for the radio station operations.

As a result of the foregoing revenue and expenses, our overall net loss for the six-month period ending June 30, 2009 and June 30, 2008 was $372,665 and $525,278, respectively.

Financial Condition

Accounts receivable, net of allowance for doubtful accounts was $947,098 at June 30, 2009, a decrease of $149,218 or 14% compared to $1,096,316 at December 31, 2008.  The drop in sales revenue from the syndication business is largely attributable to the decrease in the accounts receivable balance.

Unexercised Stock warrants was $447,836 at June 30, 2009, a decrease of $6,822 compared to $454,658 at December 31, 2008.  In accordance with FAS 133, we record an associated asset and liability for the issuance of warrants, which is adjusted quarterly using the Black-Scholes method of  derivative valuation.

In the second quarter of 2009, we disposed of a Dodge Magnum and a Nissan Xterra through sales to third parties for $12,000 and $13,300 respectively. As a result of these disposals and accumulated depreciation on our existing assets, our property and equipment, net of depreciation, fell to $658,268 compared to $749,416 at December 31, 2008.

Accounts payable at June 30, 2009 was $862,535, an increase of $331,743 or 47.5% compared to $530,792 at December 31, 2008.  This increase in accounts payable is attributable to a slower collections cycle and increases in bad debt among automotive advertisers nationally and locally,  limiting our ability to maintain a normal payables cycle.

Accrued expenses and taxes at June 30, 2009 were $274,158,  a decrease of $175,723 from December 31, 2008.  This decrease is attributable to payments of accrued audit and legal fees, as well as accrued contracts for radio programming that have been fully satisfied.

In January and February of 2008, we exercised two loans with Remington Partners, Inc. for a total of $750,000 in notes payable to stockholders. As a result, our notes payable to stockholders were $750,000 at June 30, 2009 and December 31, 2008.

Liquidity and Capital Resources

As of June 30, 2009, our current assets in the amount of $1,446,816, consisted of $16,385 in cash and cash equivalents, $947.098 in accounts receivable, $85 in stock warrants receivable, $35,412 in prepaid expenses and $447,836 in unexercised stock warrants. As of June 30, 2009, our current liabilities in the amount of $2,329,454, consisted of $862,535 in accounts payable, $274,158  in accrued expenses and taxes, $750,000 in notes payable to stockholders, $757,039 in lines of credit and $62,734 in current portion of long term debt, and $485,523 in unexercised stock warrant loss. This combination of assets and liabilities resulted in a working capital deficit in the amount of $882,638.

5

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 additional acquisitions. We are in ongoing negotiations with a lender for line of credit to be determined at the lenders discretion.  We anticipate releasing details of this financing agreement through a form 8K in the third quarter of 2009.

Recent Events

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.  We signed an asset purchase agreement and filed for FCC License transfer for WBBV during the first quarter of 2008.  We received approval from the FCC to proceed with the acquisition during the second quarter of 2008.  We finalized the acquisition of WBBV during the third quarter of 2008.  We anticipate placing additional stations under local marketing agreements and filing asset purchase agreements during the third and fourth quarters of 2009.

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 6 additional stations during the third and fourth quarter of 2009.  These acquisitions will represent overall growth in radio operations of 140% year over year.

Off Balance Sheet Arrangements

As of June 30, 2009, there were no off balance sheet arrangements.

Critical Accounting Policies

Revenue and Cost Recognition

We recognize advertising and programming revenues when our radio programs air with our contracted radio station affiliates.  Generally, we are paid by a national advertising agency, which sells the commercial time provided by the affiliate.

We earn revenue from the national advertising agency, we also recognize any amounts attributable to the individual radio programs, which are based on the audience level generated by the specific program.  Expenses are accrued at the time the radio programs are run.

Consulting projects are generally negotiated at a fixed price per project; however, if we utilize our advertising capacity as part of the consulting project, we 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

We expense advertising costs as they are incurred.

New Accounting Pronouncements

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.

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Item 4T.     Controls and Procedures.

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 June 30, 2008. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Mr. Steve Ludwig, and our Chief Financial Officer, Ms. Sariah Hopkins. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2008, our disclosure controls and procedures were effective.

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 Securities Exchange Act of 1934, as amended (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 Disclosure Controls and Procedures

Our management does not expect that our disclosure controls and procedures 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

None

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.

On April 1, 2009, 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  March 31, 2012.The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq,

On June 30, 2009, 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  June 29, 2012.The consideration we received for this warrant was legal services rendered by Stephen Ross, Esq,

We revalue 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.

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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 4.     Submission of Matters to a Vote of Security Holders

           On July 29, 2009 we held our annual meeting of stockholders.  Matters brought before stockholders for approval were the ratification of Maddox Unger Silberstein, PLLC as our registered auditor, the election of our board of directors, and the amendment of the Company’s Amended and Restated Certificate of Incorporation to provide for authorization of 50,000,000 shares of preferred stock, par value $0.003 per share.  Of 19,866,866 shares outstanding, 11,842,841 were present at the meeting.  Tabulation of votes was provides by CPA Associates, PLLC.

The results of the vote were:

·   Ratification of Maddox Unger Silberstein, PLLC, as registered auditor:

·   For – 11,442,821

·   Against – 0

·   Abstain – 400,000

·   Election of Ron Heineman as a director:

·   For – 11,442,071

·   Against – 0

·   Abstain – 400,750

·   Election of Steven Ludwig as a director:

·   For – 11,442,071

·   Against – 0

·   Abstain – 400,750

·   Election of Robert Marquitz as a director:

·   For – 11,442,071

·   Against – 0

·   Abstain – 400,750

·   Election of Alan Hirsch as a director:

·   For – 11,442,071

·   Against – 0

·   Abstain – 400,750

·   Election  of Harry Lyles as a director:

·   For – 11,442,071

·   Against – 0

·   Abstain – 400,750

·   Authorization of 50,000,000 shares of common stock, par value $.0003:

·   For – 11,260,404

·   Against – 80,100

·   Abstain – 502,317

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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

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

	DEBUT BROADCASTING CORPORATION, INC.
August 11, 2009		/s/ Sariah Hopkins
		Sariah Hopkins
		Chief Financial Officer

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