Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

		(Amendment Number One)
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the fiscal year ended December 31, 2008

¨		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission file number 0001254371

DEBUT BROADCASTING CORPORATION, INC.

(Exact name of registrant as specified in its charter)


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

1025 16th Ave South, Nashville, TN		37212
(Address of principal executive offices)		(Zip Code)
Registrants telephone number, including area code (615) 301-0001

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

None

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

Common Stock, par value $0.003 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

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 ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ 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 ¨ No þ

The aggregate market value of the registrant’s outstanding voting and non-voting common stock as of June 30, 2008, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $7.9 million, based on 19,866,866 shares outstanding and a last reported per share price of common stock on the Over the Counter Bulletin Board of $0.40 on that date. As of March 31, 2009, the registrant had outstanding 19,866,866 shares of common stock.

Documents Incorporated by Reference:

Portions of the registrant’s Proxy Statement for the 2009 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, have been incorporated by reference in Part III of this Annual Report on Form 10-K.

Table of Contents

PART I		3
Item 1.	Business	3
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Submission of Matters To a Vote of Security Holders

PART II		20
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 8.	Financial Statements and Supplementary Data	29
Item 9A(T).	Controls and Procedures	29
Item 9B.	Other Information	31

PART III		31
Item 10.	Directors, Executive Officers and Corporate Governance	31
Item 11.	Executive Compensation	32
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
Item 13.	Certain Relationships and Related Transactions, and Director Independence	34
Item 14.	Principal Accountant Fees and Services	34

PART IV		34
Item 15.	Exhibits and Financial Statement Schedules	34

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (the “Amendment”) amends the annual report of Debut Broadcasting Corporation, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 1, 2009 (the “Original Filing”). This Amendment (i) revises the discussion of liquidity and capital resources with management’s discussion and analysis of financial condition, (ii) revises the disclosure of controls and procedures (iii) adds certain information to paragraph 4 of Exhibits 31.1 and 31.2, and (iv) adds certain information to disclose executive compensation in Part III that was previously incorporated by reference from the Company’s definitive proxy statement for the 2009 Annual Meeting of Stockholders, As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company has set forth the complete text of Items 10 and 15, as amended.

In addition, as required by Rule 12b-15 under the Exchange Act, new certifications by the Company’s principal executive officer and principal financial officer are filed as exhibits to this Amendment. This Amendment does not reflect events occurring after the date of the Original Filing or modify or update any disclosures that may have been affected by subsequent events. Except as described above, all other information included in the Original Filing remains unchanged.

PART I

Item 1. Business.

Certain Definitions

In this Form 10-K the terms “Company”, “Debut”, “we”, “us”, and “our” refer to Debut Broadcasting Corporation, Inc. and its consolidated subsidiaries. Unless the context otherwise requires, these terms exclude California News Tech, our predecessor company, and Media Sentiment, Inc., a wholly-owned subsidiary of the Company into which the former assets and operations of California News Tech were transferred effective October 31, 2007.

We use the term local marketing agreement (“LMA”) in various places in this report. A typical LMA is an agreement under which a Federal Communications Commission (“FCC”) licensee of a radio station makes available, for a fee, air time on its station to another party. The other party provides programming to be broadcast during the airtime and collects revenues from advertising it sells for broadcast during that programming.

We use the trademarked term Super-Regional Cluster in various places in this report. A typical radio conglomerate uses the term “cluster” to designate stations under ownership in an urban to suburban area. We will acquire traditional clusters in neighboring markets, and chain them together under common management. We have defined this strategic collection of clusters as a Super-Regional Cluster.

Unless otherwise indicated:

•

we obtained total radio industry listener and revenue levels from public statistics published by the Radio Advertising Bureau (the “RAB”);

•

we derived historical market revenue statistics and market revenue share percentages from data published by SNL Kagan Financial, a sector focused business intelligence firm specializing in media and communications data;

•

we derived all audience share data and audience rankings, including ranking by population, except where otherwise stated to the contrary, from surveys of people ages 12 and over, listening Monday through Sunday, 6 a.m. to 12 midnight, and based on the Fall 2008 Arbitron Market Report; and

•

all dollar amounts are rounded to the nearest thousand.

Company Overview

We are located in Nashville, Tennessee and conduct business from our principal executive office, located at 1025 16th Avenue South, Suite 102, Nashville, Tennessee 37212. On February 1, 2009, we relocated to our current address. We formerly conducted business from offices located at 1209 16th Avenue South, Suite 200, Nashville, Tennessee 37212. We produce and distribute syndicated radio programs to radio stations across the United States and Canada. In addition, we own and operate eight radio stations in Mississippi.

We maintain radio syndication in Nashville and produce and distribute 14 radio programs, which are broadcast over approximately 1,400 radio station affiliates. These radio programs have an estimated 45 million U.S. listeners per week. In addition to syndication services, we own and operate a multi-media studio with audio, video and on-line content production capabilities. This facility is located on Music Row in Nashville, Tennessee. We also provide marketing, consulting and media buying (advertising) for our radio broadcast station customers in the United States.

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

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

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

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

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

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

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

Our Focus

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

•

Below-market purchase prices;

•

Rising advertising revenues, as the larger national and regional retailers expand into these markets;

•

Small independent operators, many of whom lack the capital to produce high-quality locally originated programming or to employ more sophisticated research, marketing, management and sales techniques; and

•

Lower overall susceptibility to economic downturns.

We believe that the attractive operating characteristics of small rural markets, together with the relaxation of radio station ownership limits under the Telecommunications Act of 1996 (the “Telecom Act”) and FCC rules, have created significant opportunities for growth from the formation of groups of radio stations within these markets. We have capitalized on these opportunities to acquire attractive properties at favorable purchase prices, taking advantage of the size and fragmented nature of ownership in these markets, and to the greater attention historically given to the larger markets by radio station acquirers. Our business model allows us to capitalize on the synergies created by acquiring geographic clusters while providing centralized programming and distributing administrative overhead across the cluster. According to FCC statistics, as of March 31, 2008, there were 9,201 FM and 4,776 AM stations in the United States.

To maximize the advertising revenues of our stations, we seek to enhance the quality of radio programs for listeners and the attractiveness of our radio stations to advertisers in a given market. We also recruit top talent for locally originated programming content that airs on each station, as well as improve content utilizing our facilities on Music Row in Nashville, Tennessee. Within each market, our stations are diversified in terms of format and target audience enabling us to attract larger and broader listener audiences and thereby a wider range of advertisers. This diversification, coupled with our competitive advertising pricing, also has provided us with the ability to compete successfully for advertising revenue against other radio, print and television media competitors.

We believe that we are in a position to generate revenue growth, increase audience and revenue shares within our markets and, by capitalizing on economies of scale and by competing against other media for incremental advertising revenue, increase our operating income, growth rates and margins. Our markets are still in the development stage with the potential for substantial growth as we implement our operating strategy. We believe we have several significant opportunities for growth within our current business model, including growth through maturation of recently reformatted or re-branded stations, and through investment in signal upgrades, which allow for a larger audience reach, for stations that were already strong performers.

Operating Strategy

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

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

Acquisition Strategy

Our acquisition strategy has the following principal components:

•

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

•

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

Existing Business Operations

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

Existing Radio Syndication Business

Our core business is the production and distribution of syndicated radio programming to radio stations in the U.S. and Canada. We have grown from a single radio program in 1999 to approximately 14 distinct programs and services currently offered to radio stations in the U.S. and Canada. Our customer base of nearly 1,400 radio stations generates an audience nearly 40 million listeners each week in the US. Our current programming focuses on country, Christian, and urban formats. Our planned expansion includes adult contemporary and rock formats.

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

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

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

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

Relying on our management’s experience with 24-hour programming, which has been historically delivered via satellite to radio station affiliates, we now utilize a more efficient delivery method facilitated by the Internet. The result is a more “hands-off” operation on the radio station end of the service, higher-quality, much greater flexibility, more localized programming for radio station affiliates, and more reliable delivery (eliminating vulnerabilities in the traditional satellite-delivery systems). During 2008, we converted distribution of more than 90% of our programming to digital delivery. We further expanded our program and service offerings to include:

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

Production music and station imaging.

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

Traffic and Billing Services

Weekday and weekend personalities; and

Format-specific news and sports reporters.

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

Diversification

During 2007 we expanded our business plan to include the acquisition and management of radio stations (“Properties”) in small to mid-sized radio markets in the United States. Properties acquired by us will serve as flagships for the new 24-hour programming and other programs and services provided by us. We further anticipate that these acquisitions will also increase margins and cash flow for the Properties and existing syndication operations as we leverage unique synergies resulting from our existing lines of business. In furtherance of this strategy, during March of 2008 we entered into a Local Marketing Agreement (“LMA”) with Holladay Broadcasting of Louisiana for the radio broadcast stations identified as WBBV FM 101.3 Mhz, and KLSM FM 104.9. During September of 2008 we purchased the assets of WBBV FM 101.3 Mhz from Holladay Broadcasting of Louisiana. Finally, during September of 2008 we entered into an LMA with Grace Media Partners for the radio broadcast station WQBC AM 1420. We now own and operate eight broadcast radio stations identified as WIQQ FM 102.3 MHz in Leland, Mississippi, WBAQ FM 97.9 MHz, WNIX AM 1330 kHz in Greenville, Mississippi, and WNLA FM 105.5 MHz, WNLA AM 1380 kHz in Indianola, Mississippi, KLSM 104.9 in Tallulah, Louisiana and WBBV FM 101.3 Mhz, and WQBC AM 1420. We will continue to review the potential of additional acquisitions of radio stations in proximity to this area, although there is no assurance that we will be able to consummate such acquisitions.

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

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

We anticipate that the years 2009 through 2011 will show a rapid proliferation of HD Radio. Many radio stations in the top 50 markets have already converted to the new broadcast format, and major retailers, including Radio Shack, Best Buy and Wal-Mart, carry the receivers, which already compete favorably with hardware prices for satellite radio and should continue to drop. Major market automotive companies such as Volvo will be offering their 2009 model vehicles with HD Radio factory installed.

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

We are seeking to promote the expansion of new technologies and adapt our platforms for increased integration with devices like digital music players and mobile phones. Independent reports from The New York Times and USA Today report that traditional radio has gained strength with the consumers in their late teens and early twenties with the advent of new devices that are FM compatible.

The growth potential offered by the new technologies of HD Radio, other digital music players, mobile phones and webcasting into the future provide additional diversification opportunities.

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

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

Strategy for Investing in Properties

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

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

The largest radio companies (Clear Channel, Cumulus, Citadel, CBS, etc.) are increasingly focused on larger markets because they have determined that they find the greatest cost-efficiency there. We perceive that there is a virtual absence of and need for a company with an effective strategy for medium and small markets - a successful and repeatable business model for radio stations that relies primarily on local, direct advertising revenues.

We intend to create stockholder value by investing in medium and small-market radio stations that we perceive are not taking advantage of modern operational strategies designed to maximize revenue and minimize cost. It is our view that many such stations are underperforming financially because of poor sales strategies and inefficient costs of operation.

By investing only in Properties that are under-performing, we hope to capture the gap between low purchase prices (typically four times net revenue or seven times broadcast cash flow) and the public market for healthy stations (estimated at between nine to 15 times broadcast cash flow). A recent article in the trade publication Inside Radio showed the largest transactions in 2008 averaged as high as 22 times broadcast cash flow. Management believes the benchmark of nine to 15 times multiple is holding up against market trends in small market radio. Management has strong confidence in its strategy to selectively acquire Properties because industry researchers like Kagan continue to report a robust flow of private capital into both large and small acquisitions within the radio industry.

In broad terms, our investment criteria include:

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

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

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

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

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

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

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

•

identifying acquisition candidates and negotiating definitive purchase agreements on satisfactory terms;

•

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

•

diverting our management’s attention from other business concerns.

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

Sales and Programming Strategies

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

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

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

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

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

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

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

The Overall Impact of Our Acquisitions

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

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

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

The Market:		Greenville, Mississippi

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

Rank:		184

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

The purchase price was allocated as follows:

Description	Amount

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

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

The purchase price was allocated as follows:

Description	Amount

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

On August 27, 2008, we acquired a radio broadcast station 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

On March 16, 2008, we 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.

On August 15, 2008, we 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.

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

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

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

We selected these Properties for investment for a number of reasons. First, they are in close proximity to each other. Second, each of the three station groups and the stations collectively have underperformed fiscally in recent years in terms of revenue generation and operating income. The third factor in our investment decisions were the communities in Mississippi, and the surrounding area. An estimated 130,000 listeners live within the range of the stations of the Greenville Cluster. An estimated 540,000 listeners live within range of the stations of the Vicksburg Cluster, bringing our estimated listener level to 670,000 for the Mississippi Super-Regional Cluster. A smaller market would not be able to support the advertising necessary to make this a profitable cluster, and a significantly larger market would likely already have station clusters owned by competing groups, as opposed to fragmented station ownership by individuals, making our entrance into the market significantly more difficult.

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

In 2008, we achieved cost reductions through centralization of redundant management and administrative positions. We intend to achieve cost further reductions through the elimination of redundant positions, consolidation of facilities and the use of technology to reduce programming and technical expenses.

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

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

Acquisitions and Dispositions

Pending Acquisitions

During 2008, we signed letters of intent to purchase additional radio broadcast stations. 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 two of these stations during the second quarter of 2009. We further anticipate entering into LMA agreements with up to four additional stations during the second quarter of 2009. These acquisitions will represent overall growth in radio operations of 80% in the first half of 2009.

Industry Overview

The primary source of revenues for radio stations is the sale of advertising time to local, regional and national spot advertisers and national network advertisers. National spot advertisers assist advertisers in placing their advertisements in a specific market. National network advertisers place advertisements on a national network show and such advertisements will air in each market where the network has an affiliate. During the past decade, local advertising revenue as a percentage of total radio advertising revenue in a given market has ranged from approximately 72% to 87% according to the RAB. The growth in total radio advertising revenue tends to be fairly stable. With the exception of 1961, 1991, 2001, and 2008 when total radio advertising revenue fell by approximately 0.5%, 2.8%, 7.5%, and 2.1% respectively, advertising revenue has risen each year since 1960, according to the RAB.

Radio is considered an efficient, cost-effective means of reaching specifically identified demographic groups. Stations are typically classified by their on-air format, such as rock, adult contemporary, urban, gospel and news/talk. A station’s format and style of presentation enables it to target specific segments of listeners sharing certain demographic features. By capturing a specific share of a market’s radio listening audience, with particular concentration in a targeted demographic, a station is able to market its broadcasting time to advertisers seeking to reach a specific audience. Advertisers and stations use data published by audience measuring services, such as Arbitron, to estimate how many people within particular geographical markets and demographics listen to specific stations.

Although the number of advertisements broadcast during a given time period may vary, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year.

A station’s local sales staff generates the majority of its local and regional advertising sales through direct solicitations of local advertising agencies and businesses. To generate national advertising sales, a station usually will engage a firm that specializes in soliciting radio-advertising sales on a national level. National sales advertising is derived principally from advertising agencies located outside the station’s market and receive sales agents receive commissions based on the revenue from the advertising they obtain.

Our stations compete for advertising revenue with other terrestrial-based radio stations in the market (including low power FM radio stations that are required to operate on a noncommercial basis) as well as other media, including newspapers, broadcast television, cable television, magazines, direct mail, coupons and outdoor advertising. In addition, the radio broadcasting industry is subject to competition from services that use new media technologies that are being developed or have already been introduced, such as the Internet and satellite-based digital radio services. Such services reach nationwide and regional audiences with multi-channel, multi-format, digital radio services that have a sound quality equivalent to that of compact discs. Competition among terrestrial-based radio stations has also been heightened by the introduction of terrestrial digital audio broadcasting (i.e., digital audio broadcasting delivered through earth-based equipment rather than satellites). The FCC currently allows terrestrial radio stations like ours to commence the use of digital technology through a “hybrid” antenna that carries both the pre-existing analog signal and the new digital signal. We have the opportunity to upgrade our existing antennas to utilize this new technology. The FCC is conducting a proceeding that could result in a radio station’s use of two antennas: one for the analog signal and one for the digital signal.

Advertising Revenue

Our revenue is generated from the sale of national advertising for broadcast within our syndicated programming and on our affiliate networks. We also generate revenue through local, regional, and national advertising on our radio stations. During 2008, approximately 69% of our net revenue was generated from the sale of national advertising. Additional broadcasting revenue is generated from the sale of local, regional and national advertising for broadcast on our stations. The major categories of our advertisers include:

• automotive dealers;

• amusement and recreation;

• healthcare services;

• banking and mortgage;

• arts and entertainment; and

• furniture and home furnishings.

Each super-regional cluster’s™ sales staff solicits advertising either directly from the local advertiser or indirectly through an advertising agency. We employ a tiered commission structure based on collections with a 120-day eligibility time frame. Consistent with our operating strategy of reducing overhead by utilizing the cluster, each member of our sales force works for all of our stations within their cluster. This allows for greater opportunity for cross-selling to garner more market share across all consumer groups. We believe that we can outperform the traditional growth rates of our markets by (1) expanding our base of advertisers, (2) training newly hired sales people and (3) providing a higher level of service to our existing customer base. This requires a strong team ethic with assistance from station managers, office managers and corporate support staff. We support our strategy of building local direct accounts by employing personnel for each of our markets to produce custom commercials that respond to the needs of our advertisers. In addition, in-house production provides advertisers greater flexibility in changing their commercial messages with minimal lead-time.

Our national sales are made by Dial Global, a firm specializing in radio advertising sales on the national level, in exchange for a commission that is based on our net revenue from the advertising obtained. Regional sales, which we define as sales in regions surrounding our markets to buyers that advertise in our markets, are generally made by our local sales staff and market managers. Whereas we seek to grow our local sales through larger and more customer-focused sales staffs, we seek to grow our national and regional sales by offering to key national and regional advertisers groups of stations within specific markets and regions that make our stations more attractive. Many of these large advertisers have previously been reluctant to advertise in these markets because of the logistics involved in buying advertising from individual stations. Certain of our stations had no national representation before we acquired them.

The number of advertisements that can be broadcast without jeopardizing listening levels and the resulting ratings are limited in part by the format of a particular station. We estimate the optimal number of advertisements available for sale depending on the programming format of a particular station. Each of our stations has a general target level of on-air inventory that it makes available for advertising. This target level of inventory for sale may be different at different times of the day but tends to remain stable over time. Our stations strive to maximize revenue by managing their on-air inventory of advertising time and adjusting prices up or down based on supply and demand. We seek to broaden our base of advertisers in each of our markets by providing a wide array of audience demographic segments across our cluster of stations, thereby providing each of our potential advertisers with an effective means of reaching a targeted demographic group. Our selling and pricing activity is based on demand for our radio stations’ on-air inventory and, in general, we respond to this demand by varying prices rather than by varying our target inventory level for a particular station. Most changes in revenue are explained by some combination of demand-driven pricing changes and changes in inventory utilization rather than by changes in the available inventory. Advertising rates charged by radio stations, which are generally highest during morning and afternoon commuting hours, are based primarily on:

•

a station’s share of audiences generally, and in the demographic groups targeted by advertisers (as measured by ratings surveys); and

•

the supply of and demand for radio advertising time generally and for time targeted at particular demographic groups.

A station’s listenership is reflected in ratings surveys that estimate the number of listeners tuned to the station and the time they spend listening. Each station’s ratings are used by its advertisers and advertising representatives to consider advertising with the station and are used by us to chart audience growth, set advertising rates and adjust programming. The radio broadcast industry’s principal ratings service is Arbitron, which publishes periodic ratings surveys for significant domestic radio markets. These surveys are our primary source of ratings data. We utilize data from Arbitron to analyze ratings within our markets and in the markets of potential acquisitions.

The success of each of our radio stations, within our station cluster, is primarily dependent upon its share of the overall advertising revenue within the market. Although we believe that each of our stations can compete effectively in its market, we cannot guarantee that our stations can maintain or increase their current audience ratings or market share. In addition to competition from other radio stations and other media, shifts in population, demographics, audience tastes and other factors beyond our control could cause us to lose our audience ratings or market share. Our advertising revenue may suffer if any of our stations cannot maintain its audience ratings or market share.

During 2008, Dial Global, one of our customers, accounted for 69% of our consolidated net revenue. The loss of this customer could have a material adverse effect on our operations and financial condition.

Competition

The radio broadcasting industry is very competitive. The success of each of our stations depends largely upon its audience ratings and its share of the overall advertising revenue within its market. Our audience ratings and advertising revenue are subject to change, and any adverse change in a particular market affecting advertising expenditures or any adverse change in the relative market share of the stations located in a particular market could have a material adverse effect on the revenue of our radio stations located in that market. There can be no assurance that any one or all of our stations will be able to maintain or increase current audience ratings or advertising revenue market share.

Our stations compete for listeners and advertising revenues directly with other radio stations within their respective markets, as well as with other advertising media such as newspapers, magazines, cable and broadcast television, outdoor advertising, satellite radio, the Internet and direct mail. In addition, many of our stations compete with groups of two or more radio stations operated by a single operator in the same market.

Radio stations compete for listeners primarily on the basis of program content that appeals to a particular demographic group. By building a strong brand identity with a targeted listener base consisting of specific demographic groups in each of our markets, we are able to attract advertisers seeking to reach those listeners. Companies that operate radio stations must be alert to the possibility of another station changing its format to compete directly for listeners and advertisers. Another station’s decision to convert to a format similar to that of one of our radio stations in the same geographic area or to launch an aggressive promotional campaign may result in lower ratings and advertising revenue, increased promotion and other expenses and, consequently, lower our operating income.

Factors that are material to a radio station’s competitive position include station brand identity and loyalty, management experience, the station’s local audience rank in its market, transmitter power and location, assigned frequency, audience characteristics, local program acceptance and the number and characteristics of other radio stations and other advertising media in the market area. We attempt to improve our competitive position in each market by extensively researching and improving our stations’ programming, by implementing advertising campaigns aimed at the demographic groups for which our stations program and by managing our sales efforts to attract a larger share of advertising dollars for each station individually. However, we compete with some organizations that have substantially greater financial or other resources than we do.

Audience ratings and market shares fluctuate, and any adverse change in a particular market could have a material adverse effect on the revenue of stations located in that market. While we already compete with other stations with comparable programming formats in many of our markets, any one of our stations could suffer a reduction in ratings or revenue and could require increased promotion and other expenses, and, consequently, could have a lower operating income, if:

•

another radio station in the market was to convert its programming format to a format similar to our station or launch aggressive promotional campaigns;

•

a new station were to adopt a competitive format; or

•

an existing competitor was to strengthen its operations.

In 1996, changes in federal law and FCC rules dramatically increased the number of radio stations a single party can own and operate in a local market. Our management continues to believe that companies that elect to take advantage of those changes by forming groups of commonly owned stations or joint arrangements such as LMAs in a particular market may have lower operating costs and may be able to offer advertisers in those markets more attractive rates and services. Although we currently operate multiple stations in one market, and intend to pursue the creation of additional multiple station groups in this particular market, our competitors include other parties who own and operate as many or more stations than we do in other markets. We may also compete with those other parties or broadcast groups for the purchase of additional stations in those markets or new markets. Some of those other parties and groups are owned or operated by companies that have substantially greater financial or other resources than we do. In addition, increased consolidation in our target markets may result in greater competition for acquisition properties and a corresponding increase in purchase prices we pay for these properties.

A radio station’s competitive position can be enhanced by a variety of factors, including changes in the station’s format and an upgrade of the station’s authorized power. However, the competitive position of existing radio stations is protected to some extent by certain regulatory barriers to new entrants. The operation of a radio broadcast station requires an FCC license, and the number of radio stations that an entity can operate in a given market is limited. Under FCC rules that became effective in 2004, the number of radio stations that a party can own in a particular market is dictated largely by whether the station is in a defined “Arbitron Metro” (a designation designed by a private party for use in advertising matters) and, if so, the number of stations included in that Arbitron Metro. In those markets that are not in an Arbitron Metro, the number of stations a party can own in the particular market is dictated by the number of AM and FM signals that together comprise that FCC-defined radio market. For a discussion of FCC regulation (including recent changes), see “— Federal Regulation of Radio Broadcasting.”

The FCC has authorized two companies, XM Radio and Sirius Satellite Radio, which merged in 2008, to provide a digital audio programming service by satellite to nationwide audiences with a multi-channel, multi-format and with sound quality equivalent to that of compact discs. The FCC has also authorized FM terrestrial stations like ours to use a hybrid antenna to deliver both the current analog radio signal and a new digital signal. The FCC is also exploring the possibility of allowing AM stations to deliver both analog and digital signals.

In some cases, our ability to compete will be dependent on our acquisition of new technologies and our provision of new services, and we cannot assure you that we will have the resources to acquire those new technologies or provide those new services, in other cases, the introduction of new technologies and services could increase competition and have an adverse effect on our revenue. Recent new media technologies and services include the following:

•

audio programming by cable television systems, direct broadcast satellite systems, Internet content providers (both landline and wireless), Internet-based audio radio services, satellite delivered digital audio radio service and other digital audio broadcast formats;

•

HD Radiotm digital radio, which could provide multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; and

•

low power FM radio, which could result in additional FM radio broadcast stations in markets where we have stations.

We also cannot assure you that we will continue to have the resources to acquire other new technologies or to introduce new services that could compete with other new technologies. We cannot predict how existing or new sources of competition will affect the revenues generated by our stations. The radio broadcasting industry historically has grown despite the introduction of new technologies for the delivery of entertainment and information, such as television broadcasting, cable television, audio tapes and compact discs. A growing population and greater availability of radios, particularly car and portable radios, have contributed to this growth. There can be no assurance, however, that the development or introduction in the future of any new media technology will not have an adverse effect on the radio broadcasting industry in general or our stations in particular.

We cannot predict what other matters might be considered in the future by the FCC or Congress with respect to radio broadcasting, nor can we assess in advance what impact, if any, the implementation of any of these proposals or changes might have on our business.

Employees

At December 31, 2008, we employed approximately 29 people, of which, 21were employed full-time. None of our employees are covered by collective bargaining agreements, and we consider our relations with our employees to be satisfactory.

Our strategic plan includes employment of a regional market manager for each radio market in which we own and will own or operate stations. A regional market manager is responsible for all employees of the market and for managing all aspects of the radio operations. We currently employ one regional market manager for our market. The loss of our regional market manager could result in a short-term loss of performance in our market, but we do not believe that any such loss would have a material adverse effect on our financial condition or results of operations, taken as a whole.

Our business is managed by a small number of key management and operating personnel, and our loss of one or more of these individuals could have a material adverse effect on our business. We believe that our future success will depend in large part on our ability to attract and retain highly skilled and qualified personnel and to expand, train and manage our employee base.

Federal Regulation of Radio Broadcasting

General. The ownership, operation and sale of radio broadcast stations, including those licensed to us, are subject to the jurisdiction of the FCC, which acts under authority derived from the Communications Act of 1934, as amended (the “Communications Act”). The Telecommunications Act of 1996 (the “Telecom Act”) amended the Communications Act and directed the FCC to change certain of its broadcast rules. Among its other regulatory responsibilities, the FCC issues permits and licenses to construct and operate radio stations; assigns broadcast frequencies; determines whether to approve changes in ownership or control of station licenses; regulates transmission equipment, operating power, and other technical parameters of stations; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; regulates the content of some forms of radio broadcast programming; and has the authority under the Communications Act to impose penalties for violations of its rules.

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 generally 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. We are not currently aware of any facts that would prevent the renewal of our licenses to operate our radio stations, although there can be no assurance that each of our licenses will be renewed for a full term without adverse conditions.

Although the vast majority of FCC radio station licenses are routinely renewed, we cannot assure you that the FCC will grant our existing or future renewal applications or that the renewals will not include conditions out of the ordinary course. The non-renewal or renewal with conditions, of one or more of our licenses could have a material adverse effect on us.

The acquisition of a radio station requires the prior approval of the FCC. To obtain that approval, we would have to file a transfer of control or assignment application with the FCC. The Communications Act and FCC rules allow members of the public and other interested parties to file petitions to deny or other objections to the FCC grant of any transfer or assignment application. The FCC could rely on those objections or its own initiative to deny a transfer or assignment application or to require changes in the transaction as a condition to having the application granted. The FCC could also change its existing rules and policies to reduce the number of stations that we would be permitted to acquire in some markets. For these and other reasons, there can be no assurance that the FCC will approve potential future acquisitions that we deem material to our business.

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 stations as of February 28, 2008.

Expiration Date of License

Regulatory Approvals. The Communications Laws prohibit the assignment or transfer of control of a broadcast license without the prior approval of the FCC. In determining whether to grant an application for assignment or transfer of control of a broadcast license, the Communications Act requires the FCC to find that the assignment or transfer would serve the public interest. The FCC considers a number of factors in making this determination, including (1) compliance with various rules limiting common ownership of media properties, (2) the financial and “character” qualifications of the assignee or transferee (including those parties holding an “attributable” interest in the assignee or transferee), (3) compliance with the Communications Act’s foreign ownership restrictions, and (4) compliance with other Communications Laws, including those related to programming and filing requirements.

We must also comply with the extensive FCC regulations and policies in the ownership and operation of our radio stations. FCC regulations limit the number of radio stations that a licensee can own in a market, which could restrict our ability to acquire radio stations that would be material to our financial performance in a particular market or overall.

The FCC also requires radio stations to comply with certain technical requirements to limit interference between two or more radio stations. Despite those limitations, a dispute could arise regarding whether another station is improperly interfering with the operation of one of our stations or another radio licensee could complain to the FCC that one our stations is improperly interfering with that licensee’s station. There can be no assurance as to how the FCC might resolve that dispute. These FCC regulations and others may change over time, and we cannot assure you that those changes would not have a material adverse effect on us.

FCC regulations prohibit the broadcast of “obscene” material at any time, and “indecent” material between the hours of 6:00 a.m. and 10:00 p.m. The FCC has recently increased its enforcement efforts with respect to these regulations. Further, Congress has introduced legislation that would substantially increase the penalties for broadcasting indecent programming and potentially subject broadcasters to license revocation, renewal or qualification proceedings in the event that they broadcast indecent material. We may in the future become subject to inquiries or proceedings related to our stations’ broadcast of allegedly indecent or obscene material. To the extent that such an inquiry or proceeding results in the imposition of fines, a settlement with the FCC, revocation of any of our station licenses or denials of license renewal applications, our results of operation and business could be materially adversely affected.

3.1		Amended and Restated Articles of Incorporation.
3.2		Amended and Restated Bylaws (incorporated herein by reference to exhibit 3.3 of our Registration Statement on Form SB-2, Registration No. 333-107300, filed on July 24, 2003).
10.1		Promissory Note, dated as of January 25, 2008, between Debut Broadcasting Corporation, Inc. and Remington Partners, Inc., (incorporated herein by reference to exhibit 10.1 of our Current Report on Form 8-K, filed on January 25, 2008).
10.2		Warrant, dated January 21, 2008, between Debut Broadcasting Corporation, Inc. and Remington Partners, Inc. (incorporated herein by reference to exhibit 10.2 to our Current Report on form 8-K, filed on January 25, 2008).
10.3		Impact Network Affiliate agreement, dated November 7, 2007, between Debut Broadcasting Corporation, Inc. and GAP Broadcasting (incorporated herein by reference to exhibit 10.1 to our Current Report on Form 8-K, filed on November 19, 2007).
10.4		Letter Agreement, dated August 15, 2007, between The Marketing Group, Inc. and Regions Bank (incorporated herein by reference to exhibit 10.1 to our Current Report on Form 8-K, filed on August 29, 2007).
10.5		Letter Agreement, dated August 22, 2008 between Debut Broadcasting Mississippi, Inc and SunTrust Bank (incorporated herein by reference to exhibit 10.1 to our Current Report on Form 8-K, filed on August 25, 2008).
10.6		Asset Purchase Agreement, dated March 16, 2008 between Debut Broadcasting and Holladay Broadcasting of Louisiana (incorporated herein by reference to exhibit to our Current Report on Form 8-K filed on August 16, 2008).
21		Subsidiaries of Debut Broadcasting Corporation, Inc.
31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14 or 15a-14, as pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14 or 15a-14, as pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1		Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	2008			2007
Cash Flows from Operating Activities:
Net loss for the period	$	(812,554	)	$	(1,696,493	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation and amortization expense		154,571			77,991
Stock issued as compensation		2,940			0
Stock issued for services		1,542			0
Unexercised stock warrant expense		30,865			0
Changes in Assets and Liabilities
(Increase) in accounts receivable		(388,214	)		(201,245	)
(Increase) in other current assets		(2,341	)		(45,723	)
(Increase) in deposits		(3,592	)		0
Increase in accounts payable		191,058			172,686
Increase in accrued payroll, expenses and taxes		110,439			275,007
Net Cash Used in Operating Activities		(715,286	)		(1,417,777	)

Cash Flows from Investing Activities:
Acquisition of property and equipment		(302,236	)		(260,475	)
Acquisition of Shamrock Broadcasting		0			(300,000	)
Acquisition of River Broadcasting		0			(1,037,134	)
Cash payment for Holladay Broadcasting – WBBV Vicksburg station acquisition		(180,022	)		0
Net Cash Used in Investing Activities		(480,258	)		(1,597,609	)

Cash Flows from Financing Activities:
Net Proceeds from private placement of common stock		0			2,976,497
Exercise of stock warrant		85			0
Proceeds from stockholder notes		750,000			0
Proceeds from short – term debt		35,000			30,000
Proceeds from long – term debt		565,106			0
Repayment of short – term debt		0			(11,212	)
Repayment of long – term liabilities		(102,147	)		(57,368	)
Net Cash Provided by Financing Activities		1,248,044			2,937,917

Net Increase (Decrease) in Cash and Cash Equivalents		50,500			(77,469	)
Cash and Cash Equivalents – Beginning		8,643			86,112

Cash and Cash Equivalents – Ending	$	59,143		$	8,643

Supplemental Cash Flow Information:
Cash paid for interest	$	217,675		$	77,000
Cash paid for income taxes	$	800		$	0

Supplemental Cash Flow Information for Non-Cash Transactions
Holladay Broadcasting – WBBV Vicksburg station acquisition	$	(980,022	)	$	0
Seller financing of station acquisition	$	800,000		$	0

(a) Designation. The board of directors is hereby vested with the authority from time to time to provide by resolution for the issuance of shares of Preferred Stock in one or more series not exceeding the aggregate number of shares of Preferred Stock authorized by these Articles, and to prescribe with respect to each such series the voting powers, if any, designations, preferences, and relative, participating, optional, or other special rights, and the qualifications, limitations, or restrictions relating thereto, including, without limiting the generality of the foregoing: the voting rights relating to the shares of Preferred Stock of any series (which voting rights, if any, may be full or limited, may vary over time, and may be applicable generally or only upon any stated fact or event); the rate of dividends (which may be cumulative or noncumulative), the condition or time for payment of dividends and the preference or relation of such dividends to dividends payable on any other class or series of capital stock; the rights of holders of Preferred Stock of any series in the event of liquidation, dissolution, or winding up of the affairs of the Corporation; the rights, if any, of holders of Preferred Stock of any series to convert or exchange such shares of Preferred Stock of such series for shares of any other class or series of capital stock or for any other securities, property, or assets of the Corporation or any subsidiary (including the determination of the price or prices or the rate or rates applicable to such rights to convert or exchange and the adjustment thereof, the time or times during which the right to convert or exchange shall be applicable, and the time or times during which a particular price or rate shall be applicable); whether the shares of any series of Preferred Stock shall be subject to redemption by the Corporation and if subject to redemption, the times, prices, rates, adjustments and other terms and conditions of such redemption. The powers, designations, preferences, limitations, restrictions and relative rights may be made dependent upon any fact or event which may be ascertained outside the Articles or the resolution if the manner in which the fact or event may operate on such series is stated in the Articles or resolution. As used in this section “fact or event” includes, without limitation, the existence of a fact or occurrence of an event, including, without limitation, a determination or action by a person, government, governmental agency or political subdivision of a government. The board of directors is further authorized to increase or decrease (but not below the number of such shares of such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series. Unless the board of directors provides to the contrary in the resolution which fixes the characteristics of a series of Preferred Stock, neither the consent by series, or otherwise, of the holders of any outstanding Preferred Stock nor the consent of the holders of any outstanding Common Stock shall be required for the issuance of any new series of Preferred Stock regardless of whether the rights and preferences of the new series of Preferred Stock are senior or superior, in any way, to the outstanding series of Preferred Stock or the Common Stock.

Section 4. Payment of Expenses. In addition to any other rights of indemnification permitted by the laws of the State of Nevada or as may be provided for by the Corporation in its bylaws or by agreement, the expenses of officers and directors incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, involving alleged acts or omissions of such officer or director in his or her capacity as an officer or director of the Corporation or member, manager, or managing member of a predecessor limited liability company or affiliate of such limited liability company or while serving in any capacity at the request of the Corporation as a director, officer, employee, agent, member, manager, managing member, partner, or fiduciary of, or in any other capacity for, another corporation or any partnership, joint venture, trust, or other enterprise, shall be paid by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements made by the Corporation, as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation. To the extent that an officer or director is successful on the merits in defense of any such action, suit or proceeding, or in the defense of any claim, issue or matter therein, the Corporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred by him or her in connection with the defense. Notwithstanding anything to the contrary contained herein or in the bylaws, no director or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, that such director or officer incurred in his or her capacity as a stockholder, including, but not limited to, in connection with such person being deemed an Unsuitable Person (as defined in Article VII hereof).

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.

EXHIBIT 31.1

CERTIFICATIONS

I, Ronald Heineman, certify that;

(1)	I have reviewed this quarterly report on Form 10-Q of Debut Broadcasting Corporation Inc.;

(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 22, 2010

/s/ Ronald Heineman
By: Ronald Heineman
Title: Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, Sariah Hopkins, certify that;

(1)	I have reviewed this quarterly report on Form 10-Q of Debut Broadcasting Corporation Inc.;

(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 22, 2010

/s/ Sariah Hopkins

By: Sariah Hopkins

Title: Chief Financial Officer

EXHIBIT 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

In connection with the accompanying quarterly Report on Form 10-Q of Debut Broadcasting Corporation Inc. for the quarter ended September 30, 2009, I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1)

the quarterly Report on Form 10-Q of Debut Broadcasting Corporation Inc. for the quarter ended September 30, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

the information contained in the quarterly Report on Form 10-Q for the quarter ended September 30, 2009, fairly presents in all material respects, the financial condition and results of operations of Debut Broadcasting Corporation Inc.

	By:	/s/ Ronald Heineman
	Name:	Ronald Heineman
	Title:	Principal Executive Officer
	Date:	February 22, 2010

	By:	/s/ Sariah Hopkins
	Name:	Sariah Hopkins
	Title:	Principal Financial Officer
	Date:	February 22, 2010

Year	High		Low

2007
Second Quarter	$	2.45	$	0.28
Third Quarter	$	1.90	$	0.56
Fourth Quarter	$	1.10	$	0.40
2008
First Quarter	$	1.25	$	0.51
Second Quarter	$	1.05	$	0.27
Third Quarter	$	0.30	$	0.14
Fourth Quarter	$	0.27	$	0.06

	Year Ended December 31,						Percent Change
	2008			2007			2008 vs. 2007

Net Revenues	$	2,648		$	2,970			(11	%)
Operating expenses excluding depreciation, amortization and merger related expenses		2,185			3,600			(41	%)
Depreciation and amortization		147			78			88	%
Merger related expenses		11			397			(97	%)
Corporate general and administrative expenses		890			514			73	%
Impairment charge		—			—			**
Operating income (loss)		(585	)		(1,619	)		(64	%)
Net interest expense		(217	)		(77	)		182	%
Total non-operating expense, net		(219	)		(77	)		184	%
Net income (loss)		(805	)		(1,696	)		(53	%)
Net income (loss) attributable to common stockholders	$	(805	)	$	(1,696	)		**

	2008	2007
	(Dollars in Thousands)
Aquisitions and purchase of intangible assets	980.02	$	1,337.13
Capital expenditures	244.78		260.47
Repayments of bank borrowings	68.13		68.58
Interest payments	241.98		99.14

	2008			2007
	Dollars in Thousands
Net cash provided by operating activities	$	(785.2	)		(1,417.7	)

	2008		2007
		Dollars in Thousands
Net cash used in investing activities	$	1,224.8	$	1597.6

Name	Age	Position(s)
Steven Ludwig	39	Chief Executive Officer
Robert Marquitz	61	President and Chairman of the Board
Sariah Hopkins	31	Chief Financial Officer

Name	Age	Position(s)
Steven Shelton	51	Greenville Mississippi Super-Regional Cluster General Manager

Name and Principal Position	Year(1)	Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation			Total
Steven Ludwig	2008	$	93,779	$	––	$	––	$	––	$	––	$	––	$	9,880	(2)	$	103,659
Chief Executive Officer
Steven Ludwig	2007	$	104,750	$	––	$	––	$	––	$	––	$	––	$	4,170	(2)	$	108.920
Chief Executive Officer
Sariah Hopkins	2008	$	102,763	$	––	$	––	$	––	$	––	$	––	$	—		$	102,763
Chief Financial Officer

Name (a)	Number of Securities Underlying Unexercised options (#) (b)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (c)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price ($) (e)		Option Expiration Date ($) (f)	Number of Shares or Units of Stock that have not Vested (#) (g)		Market Value of Shares of Units of Stock that Have not Vested ($) (h)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) (i)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights that have not Vested ($) (j)
Sariah Hopkins		18,000			$	1.02	1/2/2018		18,000	$	900.00
Frank Woods		18,000			$	1.02	01/2/2018		18,000	$	900.00

3.1		Articles of Incorporation of Debut Broadcasting Corporation., as amended.
3.2		Bylaws.
10.1		Promissory Note, dated as of January 25, 2008 between Debut Broadcasting and Remington Partners, the lenders thereto (incorporated herein by reference to exhibit 10.1 of our Current Report on Form 8-K, filed on January 25, 2008).
10.2		Warrant, dated January 21, 2008, between Debut Broadcasting Corporation, Inc and Remington Partners, Inc (incorporated herein by reference to exhibit 10.2 to our Current Report on form 8-K, filed on January 25, 2008).
10.3		Impact Network Affiliate agreement, dated November 7, 2007, between Debut Broadcasting Corporation, Inc. and GAP Broadcasting (incorporated by reference to exhibit 10.3 to our Current Report on Form 8-K, filed on November 19, 2007).
10.4		Letter Agreement, dated August 15, 2007, between The Marketing Group, Inc and Regions Bank (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on August 29, 2007).
10.5		Debut Broadcasting Corporation, Inc., 2007 Employee Stock Incentive Plan.
21.0		Subsidiaries of Debut Broadcasting Corporation, Inc.
31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14 or 15a-14, as pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14 or 15a-14, as pursuant to Section 302 of the Sarbanes Oxley Act of 2002
32.1		Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	By	/s/ SARIAH HOPKINS
		Sariah Hopkins
		Executive Vice President,
		and Chief Financial Officer

Signature	Title	Date


/s/ RONALD E. HEINEMAN	Chief Executive Officer and Director, (Principal Executive Officer)	February 22, 2010
Ronaled E. Heineman

/s/ SARIAH HOPKINS	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 22, 2010
Sariah Hopkins

/s/ Robert Marquitz	President, Chairman, Executive Vice President, and Director	February 22, 2010
Robert Marquitz

/s/ HARRY LYLES	Director	February 22, 2010
HARRY LYLES

/s/ Alan HIRSCH	Director	February 22, 2010
Alan Hirsch

Report of Independent Registered Public Accounting Firm			1

Consolidated Balance Sheets as of December 31, 2008 and 2007			2

Consolidated Statements of Operations for the Years Ended December 31, 2008 and 2007			3

Consolidated Statement of Stockholders’ Equity (Deficit) as of December 31, 2008			4

Consolidated Statements of Cash Flows for the Years Ended December 31, 2008 and 2007			5

Notes to Consolidated Financial Statements			6 – 16

	2008			2007
ASSETS
Current Assets
Cash and cash equivalents	$	59,143		$	8,643
Accounts receivable, net		1,096,316			650,580
Stock warrant receivable		85			0
Prepaid expenses		47,644			45,388
Unexercised stock warrants		454,658			0
Total Current Assets		1,657,846			704,611

Property and Equipment, Net		749,415			541,159

Other Assets
Deposits		3,928			336
Goodwill		459,280			79,280
FCC licenses		1,509,500			1,037,000
Non-compete agreement, net		23,333			13,924
Total Other Assets		1,996,041			1,130,540

TOTAL ASSETS	$	4,403,302		$	2,376,310

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable	$	530,792		$	339,734
Accrued payroll, expenses and taxes		449,881			339,442
Notes payable to stockholders		750,000			0
Lines of credit		774,212			239,297
Current portion of long – term debt		108,443			85,600
Unrecognized stock warrant loss		485,523			0
Total Current Liabilities		3,098,851			1,004,073

Long – Term Liabilities
Leases payable		5,381			9,976
Long – term debt		1,336,194			591,398
Total Long – Term Liabilities		1,341,575			601,374

TOTAL LIABILITIES		4,440,426			1,605,447

STOCKHOLDERS’ EQUITY (DEFICIT)
Capital stock		30,601			30,383
Paid in capital		3,166,621			3,162,272
Accumulated deficit		(3,234,346	)		(2,421,792	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		(37,124	)		770,863

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	4,403,302		$	2,376,310

	2008			2007

GROSS REVENUES	$	6,313,496		$	2,970,965

OPERATING EXPENSES		6,906,425			4,590,171

OPERATING LOSS		(592,929	)		(1,619,206	)

OTHER INCOME (EXPENSE)		(219,625	)		(77,287	)

NET LOSS	$	(812,554	)	$	(1,696,493	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		19,799,725			19,794,360

NET LOSS PER SHARE	$	(0.041	)	$	(0.09	)

	Common Stock						Additional			Accumulated
	Shares			Amount			Paid in Capital			Deficit			Total

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

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

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

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

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

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

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

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

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

Exercise of stock warrants		8,500			26			59			-			85

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

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

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

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

	Estimated Useful Life	2008			2007
Land		$	49,500		$	49,500
Buildings and building improvements	5-10 years		137,460			71,810
Towers and studio equipment	5-30 years		372,714			314,666
Furniture, fixtures and equipment	3-7 years		270,972			150,515
Automotive	3-5 years		194,938			101,858
Total Property and equipment			1,025,584			688,349
Less: Accumulated depreciation			(276,169	)		(147,190	)
Property and equipment, net		$	749,415		$	541,159

	2008		2007
Accrued compensation	$	45,895	$	42,909
Accrued 401K contributions		14,863		9,805
Accrued other expenses		82,571		14,788
Accrued producer sharing payouts		306,552		271,940
Total	$	449,881	$	339,442

	Lease Commitments
2009	$	148,847
2010		106,236
2011		71,304
2012		23,256
2013		6,141
Total	$	355,784

	Lease Commitments
2009	$	75,592
2010		51,858
2011		29,592
2012		9,851
2013		0
Total	$	166,893

Name	Address
Steven Ludwig	1209 16th Avenue, Nashville, TN 37212
Robert Marquitz	1209 16th Avenue, Nashville, TN 37212
Stephen Rush	1209 16th Avenue, Nashville, TN 37212
Frank Woods	1209 16th Avenue, Nashville, TN 37212

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

		For the quarterly period ended September 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

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

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4T.	Controls and Procedures	20

PART II - OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 4.	Submission of Matters to a Vote of Security Holders	23
Item 6.	Exhibits	24

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

	September 30 2009 (Unaudited)			December 31 2008 (Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	35,040		$	59,143
Accounts receivable, net		1,065,298			1,096,316
Stock warrant receivable		—			85
Prepaid expenses		21,624			47,644
Unexercized stock warrants		454,657			454,658
Total current assets		1,576,621			1,657,846

Property and equipment, net		632,525			749,415
Deposits		15,651			3,928
Goodwill		459,280			459,280
FCC licenses		1,509,500			1,509,500
Non-Compete Agreement, net		—			23,333
Other intangible assets, net		1,989,431			1,996,041

Total assets	$	4,198,577		$	4,403,302

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	761,971		$	530,792
Accrued expenses and taxes		336,548			449,881
Notes payable to shareholders		750,000			750,000
Lines of credit		731,860			774,212
Current portion of long-term debt		56,659			108,443
Unrecognized stock warrant loss		485,523			485,523
Total current liabilities		3,122,561			3,098,851

Long term liabilities
Leases payable		2,4445			5,381
Long-term debt		1,309,501			1,336,194
Total long term liabilities		1,311,946			1,341,575

Total liabilities		4,434,507			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		(3,433,153	)		(3,234,346	)
Total stockholders' deficit		(235,931	)		(37,124	)
Total liabilities and stockholders' deficit	$	4,198,577		$	4,403,302

	Three Months Ended September 30,						Nine Months Ended September 30,
	2009			2008			2009			2008

Net Revenue	$	592,931		$	741,074		$	1,584,197		$	1,918,857

Operating Expenses
Advertising		3,052			21,751			12,722			174,491
Operating Expense		601,581			711,739			1,763,193			2,088,904
Depreciation 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			-			11,300

Total Operating Expenses		310,928			772,784			1,592,818			2,369,452

Operating Income (Loss)		214,873			(31,711	)		(8,621	)		(450,596	)

Other Income and Expense
Interest Income		(5,126	)		(7,143	)		(9,836	)		(9,542	)
Interest Expense		53,499			46,200			206,410			153,795
Income Tax		—			—			960
Total Other (Income) and Expense		48,363			39,057			197,533			144,253

Net 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 share
Basic		(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

	Nine Months Ended September 30,
	2009			2008

Operating 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			94,759
Changes in operating assets and liabilities, net effects of 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			159,186
Increase (decrease) in accrued expenses and taxes		(165,117	)		396,596

Net 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		-			30,865
Proceeds from bank credit facility		350,000			1,241,304
Proceeds from stockholder notes		-			750,000
Repayment of long-term debt		(421,981	)		(59,563	)
Proceeds from issuance of common stock		-			-

Net cash provided by financing activities		(71,981	)		1,962,606

Net (decrease) increase in cash and cash equivalents		(24,103	)		61,918

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

Cash and cash equivalents at end of period		35,040			70,561

	Estimated Useful Life	September 30, 2009			December 31, 2008
Land		$	49,500		$	49,500
Buildings and building improvements	5 – 10 years		138,780			136,460
Towers and studio equipment	5 - 30 years		395.835			372,714
Furniture, fixtures and equipment	3 – 7 years		282,304			270,972
Automotive	3 - 5 years		169,032			194,938

Accumulated depreciation			(403,006	)		(276,169	)
Property and equipment, net		$	632,525		$	749,415

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