XOTC:DENG Delta Entertainment Group Inc Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


   X          QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2012


                TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT 


For the transition period from _______________ to _______________


Commission File Number   333-165719


Delta Entertainment Group, Inc.

(Exact name of small business issuer as specified in its charter)


Florida

27-1059780

(State or other jurisdiction of

(I.R.S. Employer

incorporation of organization)

Identification No.)


7546 La Paz Blvd. # 101 Boca Raton, FL 33433

(Address of principal executive offices)


(954) 449-2690

(Issuer’s telephone number)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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     X        No         


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)   Yes            No     X   


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.


 

Large accelerated filer        

Accelerated Filer        

 

Non-accelerated filer        
(Do not check if a smaller reporting company)

Smaller Reporting Company    X   


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


APPLICABLE ONLY TO CORPORATE ISSUERS


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: At September 13, 2012 the issuer had outstanding 37,745,038 shares of Common Stock, par value $.001 per share.




PART I – FINANCIAL INFORMATION


Item 1.  Financial Statements.


DELTA ENTERTAINMENT GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS


 

 

June 30,

 

December 31,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Assets

Current Assets:

 

 

 

 

 

 

 

Cash

 

$

4,440

 

$

34

 

Accounts receivable

 

 

3,126

 

 

1,650

 

Prepaid expenses

 

 

1,154

 

 

894

 

Inventory

 

 

18,253

 

 

9,912

 

Advance royalty payments

 

 

 

 

20,000

 

 

 

 

26,973

 

 

32,490

 

 

 

 

 

 

 

 

 

Computer equipment, net

 

 

1,375

 

 

1,707

 

Total Assets

 

$

28,348

 

$

34,197

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

20,103

 

$

19,107

 

Accounts payable and accrued liabilities-related party

 

 

54,005

 

 

35,634

 

Accrued liabilities

 

 

16,295

 

 

13,643

 

Note payable

 

 

28,500

 

 

28,500

 

Convertible note payable

 

 

28,500

 

 

32,667

 

Convertible notes payable-related party

 

 

45,900

 

 

95,900

 

Total Current Liabilities

 

 

193,303

 

 

225,451

 

Total Liabilities

 

 

193,303

 

 

225,451

 

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000 shares authorized, 37,281,704 shares and 30,904,384 shares issued as of June 30, 2012 and December 31, 2011, respectively.

 

 

37,282

 

 

30,905

 

Additional Paid in Capital

 

 

748,319

 

 

252,792

 

Accumulated Deficit

 

 

(950,556

)

 

(474,951

)

Total Stockholders’ Equity (Deficit)

 

 

(164,955

)

 

(191,254

)

Total Liabilities and Stockholders’ Equity (Deficit)

 

$

28,348

 

$

34,197

 


The Accompanying Notes are an Integral Part of the Unaudited Consolidated Financial Statements.


- 2 -



DELTA ENTERTAINMENT GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


 

 

For the Three Months

 

For the Six Months

 

 

 

Ended June 30,

 

Ended June 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

18,343

 

$

9,840

 

$

49,723

 

$

11,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

14,824

 

 

2,514

 

 

31,384

 

 

3,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

3,519

 

 

7,326

 

 

18,339

 

 

7,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General administrative expenses

 

 

115,083

 

 

46,420

 

 

392,158

 

 

75,837

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(111,564

)

 

(39,094

)

 

(373,819

)

 

(68,040

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(74,486

)

 

(519

)

 

(101,786

)

 

(552

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

(186,050

)

 

(39,613

)

 

(475,605

)

 

(68,592

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted  Loss per Common Share

 

$

(0.01

)

$

(0.00

)

$

(0.01

)

$

(0.00

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Weighted Average Common Shares Outstanding

 

 

35,868,368

 

 

30,174,815

 

 

33,672,368

 

 

30,111,315

 


The Accompanying Notes are an Integral Part of the Unaudited Consolidated Financial Statements.


- 3 -



DELTA ENTERTAINMENT GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


 

 

For the Six Months

 

 

 

Ended June 30,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

 

Net loss

 

$

(475,605

)

$

(68,592

)

Adjustments to reconcile net loss to net cash provided (used) by operating activities:

 

 

 

 

 

 

 

Shares issued for services

 

 

146,495

 

 

 

Shares issued for services - related parties and accrued liabilities related party

 

 

58,085

 

 

1,950

 

Stock option expense

 

 

20,824

 

 

 

Debt discount

 

 

95,833

 

 

 

Depreciation

 

 

332

 

 

199

 

Changes in Assets and Liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,476

)

 

4,385

 

Prepaid expenses

 

 

(260

)

 

2,895

 

Inventory

 

 

659

 

 

 

Advance royalty

 

 

20,000

 

 

(27,500

)

Accounts payable

 

 

996

 

 

2,060

 

Accounts payable-related parties

 

 

18,371

 

 

5,215

 

Accrued liabilities

 

 

5,152

 

 

12,431

 

Net Cash Provided (Used) by Operating Activities

 

 

(110,594

)

 

(66,957

)

 

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

Purchase of customer list

 

 

 

 

(44,018

)

 

 

 

 

 

(44,018

)

Financing Activities:

 

 

 

 

 

 

 

Proceeds from convertible notes

 

 

50,000

 

 

126,500

 

Repayment of notes payable-related party

 

 

(10,000

)

 

 

Proceeds from sale of common stock

 

 

75,000

 

 

 

Net Cash Provided by Financing Activities

 

 

115,000

 

 

126,500

 

 

 

 

 

 

 

 

 

Net Increase in Cash

 

 

4,406

 

 

15,525

 

 

 

 

 

 

 

 

 

Cash at Beginning of Period

 

 

34

 

 

7,993

 

Cash at End of Period

 

$

4,440

 

$

23,518

 

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

 

$

 

Cash paid for interest

 

$

 

$

 

 

 

 

 

 

 

 

 

Non Cash Investing and Financing Activities

 

 

 

 

 

 

 

Beneficial conversion feature

 

$

50,000

 

$

 

Common stock issued for repayment of related party note payable

 

$

40,000

 

$

 

Common stock issued for repayment of note payable and accrued interest

 

$

102,500

 

$

3,000

 

Common stock issued for purchase of inventory

 

$

9,000

 

$

 


The Accompanying Notes are an Integral Part of the Unaudited Consolidated Financial Statements.


- 4 -



DELTA ENTERTAINMENT GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1 – Basis of Presentation and Interim Unaudited Consolidated Financial Statements


Delta Entertainment Group Inc. (“Delta”, “We”, or the “Company”) was incorporated in the state of Florida on October 2, 2009. The principal business purpose of Delta is to operate as a holding company of its subsidiaries Creative Music Group, Inc. (“Creative”), PearlBrite Concepts, Inc.(“PearlBrite”) and Captivating Cosmetics Corp(“Captivating”).


Creative was formed in the state of Florida in October 2010. The principal business purpose of Creative is the management, promotion and development of recording artists and offer live music services.


PearlBrite was formed in the state of Florida on May 31st 2011, The principal business purpose of PearlBrite is to supply and market professional teeth whitening products.


Captivating was formed in the state of Florida on June 1st 2011 The principal business purpose of Captivating is to produce and market color cosmetics, such as nail polish, lipstick and lip gloss) through mass market retailers.


Interim Financial Statements


The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information required to be included in a complete set of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP).  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2012.  The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2011 Annual Report filed with the SEC on Form 10-K on April 16, 2012.


Going Concern


At June 30, 2012 the Company has a working capital deficit. As such, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to continue as a going concern.


Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through short-term loans from related parties and additional equity investments, which will enable the Company to continue operations for the coming year.


Note 2 – Convertible Notes Payable


In January 2012, the Company received proceeds of $50,000 from an 8% convertible note payable. The note plus accrued interest is convertible into common stock at the rate of $.025 per share. Based on our share price on the date the note was entered into, we recognized a beneficial conversion feature in the amount of $50,000. The beneficial conversion feature is being amortized to interest expense over the term of the note using the effective interest method. The note plus accrued interest of $1,000 was converted into 2,040,000 shares of common stock in April 2012. At that time, we expensed the remaining unamortized discount and recorded a total of $50,000 to interest expense as of June 30, 2012.


In November 2011, the Company received proceeds of $50,000 from an 8% convertible note payable. The note plus accrued interest is convertible into common stock at the rate of $.05 per share. Based on our share price on the date the note was entered into, we recognized a beneficial conversion feature in the amount of $50,000. The beneficial conversion feature is being amortized to interest expense over the term of the note using the effective interest method. The note plus accrued interest of $1,500 was converted into 1,030,000 shares of common stock in April 2012. At that time, we expensed the remaining unamortized discount of $45,833 to interest expense and recorded $45,833 to interest expense at June 30, 2012.


- 5 -



DELTA ENTERTAINMENT GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


The Company, analyzed the convertible notes for derivative accounting consideration under FASB ASC 815-15 and FASB ASC 815-40. The Company, determined the embedded conversion option in the convertible met the criteria for classification in stockholders equity under FASB ASC 815-15 and FASB ASC 815-40. Therefore, derivative accounting was not applicable for these convertible notes payable.


Note 3 – Related Party


Convertible Notes Payable – related party


In February 2012, the Company repaid $10,000 on a $50,000 convertible related party note. During May 2012, the note holder converted $40,000 into common shares at $0.10 per share for a total of 400,000 common shares. As of June 30, 2012 and December 31, 2011, the convertible notes payable related party balance is $45,900 and $95,900, respectively.


Accounts payable – related party


At June 30, 2012 and December 31, 2011, accounts payable – related party consisted of the following:


 

·

Accounts payable related party of $15,146 and $20,195, respectively

 

·

Accrued wages related party of $38,625 and $15,439, respectively


Stock issued for services-related party


As of June 30, 2012 the Company has issued 340,002 shares of its common stock and recorded a total of $58,085 related to stock compensation for Officers and Directors.


Note 4 – Equity


During the six months ended June 30, 2012, the Company issued 892,317 shares of its common stock for consulting fees of $146,495.

The Company also issued 75,000 shares of common stock for the purchase of inventory valued at $9,000.


During the six months ended June 30, 2012 the Company issued 600,000 shares of common stock for proceeds of $30,000 in a private placement at a per share price of $0.05. In relation to the issuance, the Company also extended a warrant to the investor for the purchase of an additional 600,000 shares at $0.05. This warrant is exercisable immediately and expires on March 12, 2013.


During the six months ended June 30, 2012 the Company issued 600,000 shares of common stock for proceeds of $30,000 in private placements at a per share price of $0.05.


During the six months ended June 30, 2012 the Company issued 200,000 shares of common stock for proceeds of $10,000. In relation to the issuance the Company also extended a warrant to the investor for the purchase of an additional 200,000 shares at $0.10. This warrant is exercisable immediately and expires on June 6, 2013.


During the six months ended June 30, 2012 the Company also issued 200,000 shares of common stock to a related party for proceeds of $5,000 at a per share price of $0.025.


For the six months ended June, 2012, the Company issued 152,777 warrants for services provided at a fair value of $20,824. The fair value of the warrants were determined using a Black-Scholes option valuation model using the following key assumptions: exercise price of $0.25, stock price of between $.07 and $0.20, term of 3 years, expected volatility of 280%, and a discount rate of 0.35%. The fair value recorded to expense during the three months ended June 30, 2012 was $7,176.


Note 5 – Subsequent Events


Management has evaluated subsequent events, and the impact on the reported results and disclosures and determined that there are no events subsequent to the period end which would require disclosure in the financial statements except as follows:


The Company has issued 463,334 shares of common stock for officer, director and advisory compensation.


- 6 -



Item 2.  Management’s Discussion and Analysis of Financial Condition and Plan of Operation.


Overview


Delta Entertainment Group, Inc. (the “Company”, the “Registrant”, “Delta Entertainment” or “Delta”) was incorporated in the state of Florida in October 2009. Until April, 2011, the Company’s business strategy was to acquire, develop and represent up and coming artists in the entertainment field through its operating subsidiary Creative Music Group, Inc.. To date, we have not been successful in this endeavor. When Marshall Freeman stepped down as our president and director, Leonard Tucker was appointed as the Company’s sole officer and a director. Mr. Tucker investigated multiple business opportunities and chose to focus on the teeth whitening industry. In furtherance thereof, in June 2011, the Company, through its wholly owned subsidiary, PearlBrite Concepts, Inc. acquired a teeth whitening company which is marketed under the name “PearlBrite”.


We currently have three subsidiaries, PearlBrite Concepts, Inc, Captivating Cosmetics Corp. dba TG Cosmetics and Creative Music Group, Inc.


Creative Music Group, Inc. is a service-based company focused on artist management services for recording artists. It has limited operations.


PearlBrite Concepts, Inc. (“PearlBrite”) is a non dental cosmetic teeth whitening company specializing in providing turnkey professional solutions and products for salons, spas, tanning facilities, and other professional establishments as well as an at home kit and pen for consumers. TG Cosmetics (“TG Cosmetics”) is engaged in the business of producing, outsourcing, packaging, marketing, distributing, advertising, promoting, merchandising and selling cosmetic products to the mass markets, including, but not limited to, nail polish, lipstick, eyeliners, mascara, make-up and related accessories. To date, TG Cosmetics has not conducted meaningful operations


Results of Operations


Three and Six Months Ended June 30, 2012 and 2011


We generated revenues for the three months ended June 30, 2012 and 2011 of $18,343 and $9,840, respectively. We generated revenues for the six months ended June 30, 2012 and 2011 of $49,723 and $11,390 respectively. The increase in the current year periods are primarily due to the revenues generated from sales of our teeth whitening products which we acquired in June 2011.


Our cost of sales for the three months ended June 30, 2012 were $14,824 versus $2,514 for the three months ended June 30, 2011. The cost of sales for the six months ended June 30, 2012 and 2011 were $31,384 and $3,593, respectively. The increase in cost of sales was also due to the teeth whitening products acquired in June 2011.


During the three months ended June 30, 2012 we incurred general and administrative expenses of $115,083 as compared to $46,420 for the three months ended June 30, 2011. For the six months ended June 30, 2012 and 2011, we incurred general and administrative expenses of $392,158 and $75,837 respectively. The increase in general and administrative expenses for the current year is due to an increase in Officers’ and Directors compensation, other compensation, professional fees, and marketing expenses. We did not begin to incur similar expenses in the same period of the prior year until June 2011 and we expect to incur these expenses going forward.


Liquidity


As of June 30, 2012 we had cash of $4,440 as compared to cash at December 31, 2011 of $34. We had total current assets at June 30, 2012 of $26,973 as compared to $32,490 at December 31, 2011. Our operations to date have primarily been funded through convertible notes payable and advances from a related party as we have not yet generated revenues sufficient to fund our operating costs. Our total current liabilities at June 30, 2012 were $193,303 as compared to $225,451 at December 31, 2011. The decrease in the current liabilities is due to the payment of liabilities with the proceeds from the sale of common stock during the quarter.


We have a deficit in working capital of $166,330 as of June 30, 2012 as compared to a deficit in working capital at December 31, 2011 of $192,961.


Off-balance sheet arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


- 7 -



Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


Item 4.  Controls and Procedures.


Disclosure Controls and Procedures.   Our principal executive and financial officer, based on his evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, has concluded that (i) our disclosure controls and procedures are effective for ensuring that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.


Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


FORWARD-LOOKING INFORMATION


The statements contained in this Quarterly Report on Form 10-Q that are not historical fact are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties.  These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.  The Company wishes to caution the reader that these forward-looking statements that are not historical facts are only predictions.  No assurances can be given that the future results indicated, whether expressed or implied, will be achieved.  While sometimes presented with numerical specificity, these projections and other forward-looking statements are based upon a variety of assumptions relating to the business of the Company, which, although considered reasonable by the Company, may not be realized.  Because of the number and range of assumptions underlying the Company’s projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report.  These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information.  Therefore, the actual experience of the Company and the results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected.  Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized, and actual results may vary materially.  There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate.


PART II – OTHER INFORMATION


Item 1.  Legal Proceedings.


The Company may from time to time be involved in legal proceedings arising from the normal course of business.   As of the date of this report, the Company is not currently involved in any legal proceedings.


Item 1A.  Risk Factors.


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. However, they are more fully disclosed in the Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on April 16, 2012.


- 8 -



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


We have issued shares of our common stock and other securities for services rendered and capital formation. We have relied on the exemptive provisions of Section 4(2) of the Securities Act.


In the months of January through March 2011, we issued 45,000 shares of common stock at $.01 per share for officer and director compensation. We also issued 300,000 shares for repayment of a $3,000 advance from a shareholder.


In the months of April through September 2011, we issued 90,000 shares of common stock at $.10 per share for officer and director compensation.


In the months of June and July 2011, we issued 50,000 shares of common stock for advisory compensation and 125,000 shares for the purchase of a licensing agreement. The aforementioned shares were all issued at $.10 per share.


In August 2011, we issued 10,000 shares of common stock at $.10 per share and 12,157 shares of common stock at $.16 per share for advisory compensation. We also issued 200,000 shares of common stock for cash proceeds of $20,000.


In September 2011, we issued 5,714 shares of common stock at $.35 per share and 10,000 shares of common stock at $.10 per share for advisory compensation. We also issued 100,000 shares of common stock for cash proceeds of $10,000.


In October 2011, we issued 15,000 shares of common stock at $.05 per share for officer and director compensation. We also issued 19,532 shares of common stock at $.0512 per share for advisory compensation.


In November 2011, we issued 21,666 shares of common stock at $.15 per share for officer, director, and advisory compensation.


In December 2011, we issued 19,444 shares of common stock at $.23 per share and 43,056 share of common stock at $.27 per share for officer, director, and advisory compensation.


In January 2012 we issued 70,367 shares of common stock at $.27 per share for officer, director, and advisory compensation.


On January 18, 2012 we issued 500,000 shares of common stock at $.20 per share for a three year endorsement, promotional, and advisory agreement.


In February 2012 we issued 75,117 shares of common stock at $.29 per share for officer, director, and advisory compensation.


In March 2012 we issued 118,334 shares of common stock at $.20 per share for officer, director, and advisory compensation.


On March 16, 2012, we issued 600,000 shares of common stock in a private placement for proceeds of $30,000.


In April 2012, the holder of two $50,000 convertible notes payable issued in November 2011 and January 2012 elected to convert the principal and accrued interest into shares of common stock. In relation the conversion, the Company issued 3,070,000 shares of common stock.


In April 2012, the Company issued 130,000 shares of common stock at $0.12 per share for officer, director, and advisory compensation.


In May 2012, the Company issued 171,667 shares of common stock at $.07 per share for officer, director, and advisory compensation. Also in May 2012, the holder of $40,000 of convertible notes payable-related party elected to convert the principal balance into shares of common stock. In relation to the conversion the Company issued 400,000 shares of common stock. During the month of May the Company issued 100,000 shares of common stock for cash of $5,000 in a private placement and also 75,000 shares of common stock for the purchase of $9,000 worth of inventory.


In June 2012, the Company issued 166,833 shares of common stock at $.075 per share for officer, director, and advisory compensation. The Company issued 300,000 shares of common stock for $15,000 cash, and 200,000 shares for cash of $5,000 in private placements. In relation to the private placements, the Company issued options to two of the investors as follows: 600,000 shares of common stock at $.05 and 200,000 shares of common stock at $.10. The options were exercisable immediately and have a one year life.


- 9 -



We have also issued the following debt obligations:


In June 2011, the Company issued an 8% convertible promissory note in the amount of $28,500.


On various dates between January and September 2011, we received proceeds from 8% convertible notes payable in the aggregate amount of $73,500.


In May 2011, through our subsidiary PearlBrite, we received proceeds from an 8% convertible note payable of $5,600. The note plus accrued interest is convertible into shares of PearlBrite at the rate of $.0001.


In July 2011, through our subsidiary Captivating, we received proceeds from an 8% convertible note payable of $7,500. The note plus accrued interest is convertible into shares of Captivating at the rate of $.0001.


In September 2011, through our subsidiary PearlBrite, we received proceeds from an 8% convertible note payable of $2,800. The note plus accrued interest is convertible into shares of PearlBrite at the rate of $.0001.


During September 2011, through ours Creative subsidiary we received proceeds from an 8% convertible note payable in the amount of $9,500. The note accrues interest at the rate of 8% per annum. The note is convertible into shares of our subsidiary common stock at the rate of $.001.


With respect to the sale of all unregistered securities:


 

·

the sale was made to a sophisticated or accredited investor, as defined in Rule 502;

 

 

 

 

·

we gave the purchaser the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which we possessed or could acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished;

 

 

 

 

·

at a reasonable time prior to the sale of securities, we advised the purchaser of the limitations on resale in the manner contained in Rule 502(d)2; and

 

 

 

 

·

neither we nor any person acting on our behalf sold the securities by any form of general solicitation or general advertising;


Item 3.  Defaults Upon Senior Securities.


None.


Item 4.  Mine Safety Disclosures.


Not applicable.


Item 5.  Other information.


None.


Item 6.  Exhibits.


(a)         The following exhibits are filed herewith pursuant to Item 601 of Regulation S-K.


 

31

Section 302 Certification of Chief Executive and Financial Officer

 

32

Section 906 Certification

 

101 *

Interactive Date Files of Financial Statements and Notes.


* To be filed by amendment.


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SIGNATURES


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


Delta Entertainment Group, Inc.


Dated:  September 20, 2012

By  /s/ Leonard Tucker

President and Chief Executive and Financial Officer


- 11 -


XOTC:DENG Delta Entertainment Group Inc Quarterly Report 10-Q Filling

Delta Entertainment Group Inc XOTC:DENG Stock - Get Quarterly Report SEC Filing of Delta Entertainment Group Inc XOTC:DENG stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

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XOTC:DENG Delta Entertainment Group Inc Quarterly Report 10-Q Filing - 6/30/2012
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