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
      1934For
      the quarterly period ended September 30, 2009o
                
                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
fileroAccelerated
fileroNon-accelerated fileroSmaller Reporting Companyþ




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







TABLE
OF CONTENTS





PagePART
      I - FINANCIAL INFORMATIONItem
      1.
                            Financial
      Statements
                            
                            3Item
      2.
                            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                            
                            16Item
      4T.
                            Controls
      and Procedures
                            
                            20PART
      II - OTHER INFORMATIONItem
      2.
                            Unregistered
      Sales of Equity Securities and Use of Proceeds
                            
                            21Item
      4.
                            Submission
      of Matters to a Vote of Security Holders
                            
                            22Item
      6.
                            Exhibits
                            
                            23




- 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 September 30, 2009 (unaudited) and
      December 31, 2008 (audited)F-2
              Condensed
      Consolidated Statements of Operations and Accumulated Deficit for the
      three months and nine months ended September 30, 2009 and 2008
      (unaudited)F-3
              Condensed
      Consolidated Statements of Cash Flows for the nine months ended September
      30, 2009 and 2008 (unaudited)




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 September 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





September 30
                  2009
                  (Unaudited)
                
                
                December 31
                  2008
                  (Unaudited)ASSETSCurrent
      assetsCash
      and cash equivalents
                
                $
                35,040
                
                
                $
                59,143Accounts
      receivable, net
                
                
                1,065,298
                
                
                
                1,096,316Stock
      warrant receivable
                
                
                —
                
                
                
                85Prepaid
      expenses
                
                
                21,624
                
                
                
                47,644Unexercized
      stock warrants
                
                
                454,657
                
                
                
                454,658Total
      current assets
                
                
                1,576,621
                
                
                
                1,657,846Property
      and equipment, net
                
                
                632,525
                
                
                
                749,415Deposits
                
                
                15,651
                
                
                
                3,928Goodwill
                
                
                459,280
                
                
                
                459,280FCC
      licenses
                
                
                1,509,500
                
                
                
                1,509,500Non-Compete
      Agreement, net
                
                
                —
                
                
                
                23,333Other
      intangible assets, net
                
                
                1,989,431
                
                
                
                1,996,041Total
      assets
                
                $
                4,198,577
                
                
                $
                4,403,302LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilitiesAccounts
      payable
                
                $
                761,971
                
                
                $
                530,792Accrued
      expenses and taxes
                
                
                336,548
                
                
                
                449,881Notes
      payable to shareholders
                
                
                750,000
                
                
                
                750,000Lines
      of credit
                
                
                731,860
                
                
                
                774,212Current
      portion of long-term debt
                
                
                56,659
                
                
                
                108,443Unrecognized
      stock warrant loss
                
                
                485,523
                
                
                
                485,523Total
      current liabilities
                
                
                3,122,561
                
                
                
                3,098,851Long
      term liabilitiesLeases  payable
                
                
                2,4445
                
                
                
                5,381Long-term
      debt
                
                
                1,309,501
                
                
                
                1,336,194Total
      long term liabilities
                
                
                1,311,946
                
                
                
                1,341,575Total
      liabilities
                
                
                4,434,507
                
                
                
                4,440,426Stockholders'
      deficitCommon
      stock - $.003 par value, 100,000,000 shares authorized
                
                
                30,383
                
                
                
                30,601Additional
      paid in capital
                
                
                3,166,839
                
                
                
                3,166,621Accumulated
      deficit
                
                
                (3,433,153
                )
                
                
                (3,234,346
                )Total
      stockholders' deficit
                
                
                (235,931
                )
                
                
                (37,124
                )Total
      liabilities and stockholders' deficit
                
                $
                4,198,577
                
                
                $
                4,403,302




- 4
-





DEBUT
BROADCASTING CORPORATION, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT


(Unaudited)





Three
      Months Ended September
                  30,
                
                
                Nine
      Months Ended September
                  30,2009
                
                
                2008
                
                
                2009
                
                
                2008Net
      Revenue
                
                $
                592,931
                
                
                $
                741,074
                
                
                $
                1,584,197
                
                
                $
                1,918,857Operating
      ExpensesAdvertising
                
                
                3,052
                
                
                
                21,751
                
                
                
                12,722
                
                
                
                174,491Operating
      Expense
                
                
                601,581
                
                
                
                711,739
                
                
                
                1,763,193
                
                
                
                2,088,904Depreciation
      Expense
                
                
                46,835
                
                
                
                28,889
                
                
                
                134,109
                
                
                
                94,757(Gain)
      on Settlement of Debt
                
                
                (340,539
                )
                
                
                -
                
                
                
                (340,539
                )
                
                
                -Merger
      and Acquisition Related Expenses
                
                
                -
                
                
                
                10,405
                
                
                
                -
                
                
                
                11,300Total
      Operating Expenses
                
                
                310,928
                
                
                
                772,784
                
                
                
                1,592,818
                
                
                
                2,369,452Operating
      Income (Loss)
                
                
                214,873
                
                
                
                (31,711
                )
                
                
                (8,621
                )
                
                
                (450,596
                )Other
      Income and ExpenseInterest
      Income
                
                
                (5,126
                )
                
                
                (7,143
                )
                
                
                (9,836
                )
                
                
                (9,542
                )Interest
      Expense
                
                
                53,499
                
                
                
                46,200
                
                
                
                206,410
                
                
                
                153,795Income
      Tax
                
                
                —
                
                
                
                —
                
                
                
                960Total
      Other (Income) and Expense
                
                
                48,363
                
                
                
                39,057
                
                
                
                197,533
                
                
                
                144,253Net
      Income (Loss)
                
                $
                166,510
                
                
                $
                (70,767
                )
                
                $
                (206,154
                )
                
                $
                (594,848
                )Accumulated
      Deficit at the Beginning of the Period
                
                $
                (3,599,663
                )
                
                $
                (2,945,025
                )
                
                $
                (3,226,998
                )
                
                $
                (2,545,315
                )Accumulated
      Deficit at the End of the Period
                
                $
                (3,433,153
                )
                
                $
                (3,015,792
                )
                
                $
                (3,433,153
                )
                
                $
                (3,015,792
                )Loss
      per common shareBasic
                
                
                (0.008
                )
                
                
                (0.008
                )
                
                
                (0.01
                )
                
                
                (0.03
                )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.


- 5
-





DEBUT
BROADCASTING CORPORATION, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)





Nine
      Months Ended September 30,2009
                
                
                2008Operating
      Activities:Net
      Loss
                
                
                (206,154
                )
                
                
                (594,858
                )Adjustments
      to reconcile net loss to net cash  provided by/used in operating
      activities:Depreciation
      and amortization
                
                
                157,443
                
                
                
                94,759Changes
      in operating assets and liabilities, net effectsof
      acquisitions(Increase)
      decrease in accounts receivable
                
                
                39,400
                
                
                
                (687,929
                )(Increase)
      decrease in other current assets
                
                
                1,000
                
                
                
                (8,325
                )Increase
      (decrease) in accounts payable
                
                
                231,180
                
                
                
                159,186Increase
      (decrease) in accrued expenses and taxes
                
                
                (165,117
                )
                
                
                396,596Net
      cash provided by (used in) operating activities
                
                
                57,752
                
                
                
                (640,573
                )Investing
      Activities:Purchases
      of property and equipment
                
                
                (9,872
                )
                
                
                (280,094
                )Acquisition
      of WBBV FM
                
                
                -
                
                
                
                (980,022
                )Net
      cash used in investing activities
                
                
                (9,872
                )
                
                
                (1,260,116
                )Financing
      Activities:Proceeds
      from issuance of stock warrants
                
                
                -
                
                
                
                30,865Proceeds
      from bank credit facility
                
                
                350,000
                
                
                
                1,241,304Proceeds
      from stockholder notes
                
                
                -
                
                
                
                750,000Repayment
      of long-term debt
                
                
                (421,981
                )
                
                
                (59,563
                )Proceeds
      from issuance of common stock
                
                
                -
                
                
                
                -Net
      cash provided by financing activities
                
                
                (71,981
                )
                
                
                1,962,606Net
      (decrease) increase in cash and cash equivalents
                
                
                (24,103
                )
                
                
                61,918Cash
      and cash equivalents at beginning of period
                
                
                59,143
                
                
                
                8,643Cash
      and cash equivalents at end of period
                
                
                35,040
                
                
                
                70,561





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


- 6
-


DEBUT
BROADCASTING CORPORATION, INC.


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


September
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.


- 7
-





DEBUT
BROADCASTING CORPORATION, INC.


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


September
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  $3,052 and $21,751 are included in the financial statements for
the three months ended September 30, 2009 and September 30, 2008, respectively.
Total advertising costs of $12,722 and $174,491 are including in the financial
statements for the nine months ended  September  30, 2009
and September 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.


- 8
-





DEBUT
BROADCASTING CORPORATION, INC.


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


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




- 9
-


DEBUT
BROADCASTING CORPORATION, INC.


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


September
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.





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.


- 10
-





DEBUT
BROADCASTING CORPORATION, INC.


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


September
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.


- 11
-





DEBUT
BROADCASTING CORPORATION, INC.


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


September
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
                  
                  September
                    30, 2009
                  
                  
                  December
                    31, 2008Land
                  
                  
                  
                  $
                  49,500
                  
                  
                  $
                  49,500Buildings
      and building improvements
                  
                  5 –
      10 years
                  
                  
                  138,780
                  
                  
                  
                  136,460Towers
      and studio equipment
                  
                  5 -
      30 years
                  
                  
                  395.835
                  
                  
                  
                  372,714Furniture,
      fixtures and equipment
                  
                  3 –
      7 years
                  
                  
                  282,304
                  
                  
                  
                  270,972Automotive
                  
                  3 -
      5 years
                  
                  
                  169,032
                  
                  
                  
                  194,938Accumulated
      depreciation
                  
                  
                  
                  
                  (403,006
                  )
                  
                  
                  (276,169
                  )Property
      and equipment, net
                  
                  
                  
                  $
                  632,525
                  
                  
                  $
                  749,415





Of the
$632,525  in Net Property and Equipment as of September 30, 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.   On September 21, 2009, the note was converted to a
new five year term loan, eliminating the balance of the line of credit. The
balance of the line of credit at September 30, 2009 and 2008 was $0.00 and
$75,000 respectively.





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 September 30, 2009, and requires monthly interest payments
accruing at an initial rate of 7.58% and a current rate of 4.41438% at September
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.   The company has reached an amicable settlement
agreement on the note with Regions Bank, and anticipates paying the settlement
agreement in full on or before November 16, 2009.


- 12
-





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 September 30, 2009 and 2008 was $164,823 and $199,297,
respectively.





The
Company signed a promissory note and established a revolving line of credit on
September 21, 2009 for $1,500,000 with River Falls Financial Services, LLC to
refinance existing debt and fund future acquisitions.  The note
matures on July 31, 2010, and requires monthly interest payments accruing at a
rate of 12% per annum.  The balance of the note on September 30,
2009  and 2008 was $350,000 and $0.00 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 was
payable on July 31, 2009.  The company is actively negotiating an
amicable settlement with Remington Partners, Inc.





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 was
payable on July 31, 2009.  The company is actively negotiating an
amicable settlement with Remington Partners, Inc.





Total
interest expense associated with the stockholder loans for the three months
ended September 30, 2009 and 2008 was $34,397 and $33,334
respectively.  Accrued interest due to stockholders was $0 and $0 as
of September 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 September 30, 2009. The loan is secured
by all inventory, chattel paper, accounts, equipment and general intangibles of
the Company.  The loan matures on 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.  The company has reached an amicable settlement agreement on
the note with Regions Bank, and anticipates paying the settlement agreement in
full on or before November 16, 2009.





Total
interest expense on the Regions Bank loan for the three months ended September
30, 2009 and 2008 was $861.91 and $2,363, respectively.  Total
interest expense for the nine months ended September 30, 2009 and 2008 was
$3,014 and $8,487, respectively. The balance of the loan at September 30,
2009 was $146,749, of which $35,565 was classified as current portion of
long-term debt.  The balance of the loan at September 30, 2008 was
$190,790, of which $11,733 was classified as current portion of long-term
debt.





Bank
of America Loan





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.   On September 21, 2009, the note was converted to a
new five year term loan, which will mature on September 30, 2014. The note
requires monthly principle and interest payments and the interest rate is based
on the bank’s prime rate, which was 7.5% at September 30, 2009. The note is
secured by personal guarantee of certain officers of the
Company.





Total
interest expense on the Bank of America loan for the three months ended
September 30, 2009 and 2008 was $ and $0.00 respectively.  Total
interest expense for the nine months ended September 30 2009 and 2008 was
$184.22 and $0.00 respectively.  The balance of the loan at September
30, 2009 was $75,000 of which $0.00 was classified as current portion of
long-term debt.


- 13
-





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.  The company
negotiated a settlement of $24,322 to be paid to Citadel Communications in one
lump sum, which was accepted  on September 21, 2009 by Citadel
Communications.  Total interest expense on the Citadel Communications
loan for each of the three months ended September 30, 2009 and 2008 was
$10,428.  The balance of the loan at September 30, 2009 and 2008 was
$0.00 and $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 matured 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 September 30, 2009. The rate is subject to monthly changes based on an
independent index plus 1.00%.  The company is in the process of
converting the line of credit into a ten year term loan.





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 September
30, 2009 and 2008 was $5,508 and $825 respectively.  Total interest
expense on the SunTrust Bank loan for the nine months ended September 30, 2009
and 2008 was $20,175 and  $825 respectively.  The balance of
the loan at September 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.


- 14
-





DEBUT
BROADCASTING CORPORATION, INC.


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


September
30, 2009





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 endedSeptember 30, 2009and 2008was $1,571 and $2286,
respectively.  Total interest expense on the vehicle loans for the
nine months ended September 30, 2009and 2008 was $6,278and $3,107, respectively. The principal balance
of the vehicle loans as ofSeptember 30, 2009and 2008 was $70,068and $132,232, respectively.  AtSeptember 30,
2009, $8,179was 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 September 30, 2009
and 2008 was $188 and $175, respectively. Total interest expense on studio
equipment for the nine months ended September 30, 2009 and 2008 was $357 and
$710, respectively.  The principal balance of the capital lease as of
September 30, 2009 and 2008 was $2,445 and $6,237, respectively.  At
September 30, 2009, $2,445 was classified as the current portion of the
lease.





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:


- 15
-





Description
                
                AmountAccounts
      receivable
                
                $
                57,522Land
                
                
                0.00Buildings
      and structures
                
                
                25,000Equipment
                
                
                10,000FCC
      licenses
                
                
                472,500Non-compete
      agreement
                
                
                35,000Goodwill
                
                
                380,000Liabilities
      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 nine months ended
September 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.





Note 11 – Subsequent
Events





The
Company has analyzed its operations subsequent to September 30, 2009 through
November 13, 2009 and has determined that it does not have any material
subsequent events to disclose in these financial statements.





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.


- 16
-





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 nine months ended September 30, 2009, combined net revenue
from radio, multi-media, media purchasing and syndication decreased 10.1%
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.




Results
of Operations





For
the Three Months Ended September 30, 2009 and 2008





We
generated $525,802  in net revenue for the quarter ended September 30,
2009, a decrease of $215,272 or 29.04%, compared to $741,074 for the quarter
ended September 30, 2008.  Approximately $354,000 of this decrease
relates to the syndication business. Revenue increased in the Mississippi radio
station markets, offsetting the overall loss for the quarter ended September 30,
2009 compared to the quarter ended September 30, 2008.




Advertising
expense was $3,052 for the quarter ended September 30, 2009, a decrease of
18,699 or 85.9%, compared to $21,751 for the quarter ended September 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.
 - 17
-




Operating
expense was $601,581 for the quarter ended September 30, 2009, a decrease of
$170.148 or 22.04%, compared to $771,729 for the quarter ended September 30,
2008. Of the total decrease in operating expenses, approximately $340,539
related to a gain on settlement of debt with Citadel Broadcasting. Approximately
$170,000 relates to company wide staffing and salary reductions implemented in
the first quarter of 2009, and a decrease in legal and regulatory
spending.
  On August
22, 2002, the company signed an unsecured promissory note with Citadel
Broadcasting to alleviate pass through bad debt due to the temporary collapse of
the national advertising market in late 2001. Over the life of the agreement,
the company made principle and interest payments to Citadel Broadcasting
totaling $350,467. During the three months ended September 30, 2009 the company
settled the agreement, resulting in a one time gain on settlement of
$340,539.
  Depreciation
and amortization expense was $52,668 for the quarter ended September 30, 2009,
an increase of $23,779, or 82%, compared to $28,889 for the quarter ended
September 30, 2008. The primary reason for the increase relates to the assets
acquired as part of the WBBV FM acquisition.


Interest
expense was $53,499 for the quarter ended September 30, 2009, an increase of
$7,299 or 13.6% compared to $46,200 for the quarter ended September 30,
2008.  The primary source of the interest expenditures were interest
payments associated with the two term loans from Remington Partners, Inc, the
Regions Bank loans, and the SunTrust Bank loan.





As a
result of the foregoing revenue and expenses, our overall net income or (loss)
for the three-month period ending September 30, 2009 and September 30, 2008 was
$166,510 and ($70,767), respectively.




For
the Nine Months Ended September 30, 2009 and 2008





We
generated $1,056,916  in net revenue for the nine months ended
September 30, 2009, a decrease of $861,939, or 44.9%, compared to $1,918,857 for
the nine months ended September 30, 2008.  Approximately $1,009,889 of
this decrease relates to the syndication business.  Revenue increased
in the Mississippi radio station markets, offsetting the overall loss for the
nine months ended September 30, 2009 compared to the nine months ended September
30, 2008




Advertising
expense was $12,722 for the nine months ended September 30, 2009 a decrease of
$161,769 or 92.7% compared to $174,491 for the nine months ended September 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 $1,763,193 for the nine months ended September 30, 2009, a decrease
of $325,711 or 15.59%, compared to $2,088,904 for the nine months ended
September 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.
  On August
22, 2002, the company signed an unsecured promissory note with Citadel
Broadcasting to alleviate pass through bad debt due to the temporary collapse of
the national advertising market in late 2001. Over the life of the agreement,
the company made principle and interest payments to Citadel Broadcasting
totaling $350,467. During the nine months ended September 30, 2009 the company
settled the agreement, resulting in a one time gain on settlement of
$340,539.
  Depreciation
and amortization expense was $157,442 for the nine months ended September 30,
2009, an increase of $21,406 or 32.5% compared to $65,868 for the nine months
ended September 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 nine months ended September 30, 2009, an
increase of $58,154 or 38% compared to $94,757 for the nine months ended
September 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 nine
month period ending September 30, 2009 and September 30, 2008 was $206,154 and
$594,848, respectively.





Financial
Condition





Accounts receivable, net of allowance
for doubtful accounts was $1,056,916 at September 30, 2009, a decrease of
$36,400 or 3.3% 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.


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Unexercised Stock warrants was $447,836
at September 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 $632,525 compared to $749,416 at December 31,
2008.





Accounts payable at September 30, 2009
was $761,971, an increase of $231,179 or 30.3% compared to $530,792 at December
31, 2008.  We decreased our accounts payable balance in the third
quarter as compared to the quarter ended June 30, 2009, utilizing funds from the
Riverfalls loan.  However, the 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 September
30, 2009 were $336,548, a decrease of $113,333 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 September 30, 2009 and December 31, 2008.





Liquidity and
Capital Resources





As of
September 30, 2009, our current assets in the amount of $1,576,619, consisted of
$35,040 in cash and cash equivalents, $1,056,916 in accounts receivable, $85 in
stock warrants receivable, $21,624 in prepaid expenses and $454,657 in
unexercised stock warrants. As of September 30, 2009, our current liabilities in
the amount of $3,122,561, consisted of $761,971 in accounts payable,
$336,548  in accrued expenses and taxes, $750,000 in notes payable to
stockholders, $731,860 in lines of credit and $56,659 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
$1,540,941.





In the
third quarter of 2009 we signed an agreement with Riverfalls Capital Partners
that we anticipate will meet our funding needs to acquire additional radio
stations while subsequently correcting our arrearages on accounts
payable.





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
fourth quarter of 2009 and first quarter of 2010.





These
markets complement the geography of our existing radio stations and will create
a super-regional clusterTM 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 fourth quarter of 2009 and first quarter of
2010.  These acquisitions will represent overall growth in radio
operations of 140% year over year.


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Off
Balance Sheet Arrangements





As of
September 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.





Item
4T.     Controls and Procedures.





This
quarterly report does not include a report of management's assessment regarding
internal control over financial reporting or an attestation report of the
company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.


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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
September 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:


o
            For
      – 11,442,821


o
            Against
      – 0


o
            Abstain
      – 400,000


·
            Election
      of Ron Heineman as a director:


o
            For
      – 11,442,071


o
            Against
      – 0


o
            Abstain
      – 400,750


·
            Election
      of Steven Ludwig as a director:


o
            For
      – 11,442,071


o
            Against
      – 0


o
            Abstain
      – 400,750


·
            Election
      of Robert Marquitz as a director:


o
            For
      – 11,442,071


o
            Against
      – 0


o
            Abstain
      – 400,750


·
            Election
      of Alan Hirsch as a director:


o
            For
      – 11,442,071


o
            Against
      – 0


o
            Abstain
      – 400,750


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-


·
            Election  of
      Harry Lyles as a director:


o
            For
      – 11,442,071


o
            Against
      – 0


o
            Abstain
      – 400,750


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


o
            For
      – 11,260,404


o
            Against
      – 80,100


o
            Abstain
      – 502,317





Item
6.      Exhibits





Exhibit
                  Number
                Description
      of Exhibit31.1
                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
  200231.2
                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
  200232.1
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002




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SIGNATURES





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





DEBUT
      BROADCASTING CORPORATION, INC.November
      11, 2009
                    /s/
      Sariah HopkinsSariah
      HopkinsChief
      Financial Officer




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