Delta Entertainment Group, Inc. - FORM 10-Q/A

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EX-31 - SECTION 302 CERTIFICATION - Delta Entertainment Group, Inc.	ex_31.htm
EX-32 - SECTION 906 CERTIFICATION - Delta Entertainment Group, Inc.	ex_32.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A
Amendment No. 1


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

	For the quarterly period ended June 30, 2011

	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.)

2950 West Cypress Creek Road Suite 201 Ft. Lauderdale, FL 33309

(Address of principal executive offices)

(954) 449-2690

(Issuer's telephone number)

1200 Stirling Road Suite 11A Dania Beach, Florida 33433

(Former name, former address and former fiscal year, if changed since last report)

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 X No

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 August 22, 2011 the issuer had outstanding 30,417,815 shares of Common Stock, par value $.001 per share.

EXPLANATORY NOTE

A typographical error was corrected on page 1, in the APPLICABLE ONLY TO CORPORATE ISSUERS. At August 22, 2011 the issuer had outstanding 30,417,815 shares of Common Stock, par value $.001 per share.

Additionally, a typographical error was corrected on page 3, in the CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS. The amount stated for the line item “Net Loss” under the column “From August 21, 2008 (Date of Inception) to June 30, 2011”, was inadvertently stated as “—”. The corrected number of “(200,875)” is now stated.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,			December 31,
	2011			2010

Assets
Current Assets:
Cash	$	23,518		$	7,993
Accounts receivable		—			4,385
Prepaid expenses		1,105			4,000
Inventory		3,097			—
Advance royalty payments		27,500			—
		55,220			16,378

Computer equipment, net		926			1,125
Customer list		66,521			—
Total Assets	$	122,667		$	17,503

Liabilities and Stockholders' Equity (Deficit)

Current Liabilities:
Accounts payable	$	2,227		$	167
Accounts payable-related party		3,167			—
Accrued wages- related party		2,662			614
Accrued liabilities		8,912			—
Accrued liabilities -related parties		3,669			150
Loan payable		15,000			—
Convertible note payable		28,500			—
Convertible notes payable-related party		105,600			—
Total Current Liabilities		169,737			931

Total Liabilities		169,737			931

Stockholders' Equity (Deficit)
100,000,000 shares authorized; 30,197,815 shares and 29,837,815 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively		30,198			29,838
Additional Paid in Capital		121,666			117,076
Accumulated Deficit		(198,934	)		(130,342	)
Total Stockholders' Equity (Deficit)		(47,070	)		16,572
Total Liabilities and Stockholders' Equity (Deficit)	$	122,667		$	17,503

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

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


													From
													August 21, 2008
													(Date of
	For the Three Months Ended						For the Six Months Ended						Inception) to
	June 30,			June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010			2011

Revenue	$	9,840		$	464		$	11,390		$	936		$	22,424

Cost of sales		2,514			2,817			3,593			5,898			27,535

Gross profit		7,326			(2,353	)		7,797			(4,962	)		(5,111	)

General administrative expenses		46,420			38,149			75,837			78,752			282,502

Operating loss		(39,094	)		(40,502	)		(68,040	)		(83,714	)		(287,613	)

Other income (expense)
Interest expense		(519	)		—			(552	)		—			(552	)
Gain on deconsolidation of subsidiary		—			—			—			—			87,290
Other income (expense)		(519	)		—			(552	)		—			86,738

Net Loss		(39,613	)		(40,502	)		(68,592	)		(83,714	)		(200,875	)
Net loss attributable to non controlling interest		—			1,418			—			1,418			1,941
Delta Net Loss	$	(39,613	)	$	(39,084	)	$	(68,592	)	$	(82,296	)	$	(198,934	)

Basic and Diluted Loss per Common Share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Basic and Diluted Weighted Average Common Shares Outstanding		30,174,815			23,552,925			30,111,315			20,115,246

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

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


							From
							August 21, 2008
							(Inception) to
	June 30,			June 30,			June 30,
	2011			2010			2011

Operating Activities:
Net loss	$	(68,592	)	$	(83,714	)	$	(198,934	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Shares issued for services		—			500			545
Shares issued for services-related parties and accrued liabilities- related party		1,950			21,660			24,345
Shares of former subsidiary issued for cash, services, and repayment of accrued liabilities-related party		—			—			19,291
Depreciation		199			—			265
Gain on deconsolidation of subsidiary		—			—			(87,290	)
Amortization of prepaid expenses		—			2,052			7,523
Changes in Assets and Liabilities:
Accounts receivable		4,385			697			—
Prepaid expenses		2,895			(100	)		(1,005	)
Advance royalties		(27,500	)		—			(27,500	)
Account payable		2,060			60			2,227
Accounts payable-related party		3,167			819			3,167
Accrued wages-related party		2,048			8,975			62,972
Accrued liabilities		8,912			—			8,912
Accrued liabilities-related party		3,519			—			3,669
Net Cash Provided (Used) by Operating Activities		(66,957	)		(49,051	)		(181,813	)

Investing Activities
Purchase of computer equipment		—			—			(1,191	)
Purchase of customer list		(44,018	)		—			(44,018	)
Cash of former subsidiary relinquished in deconsolidation		—			—			(107	)
Net Cash Used by Investing Activities		(44,018	)		—			(45,316	)

Financing Activities:
Proceeds from note payable		126,500			50,000			176,500
Proceeds from advances from related parties		—			41,250			74,147
Net Cash Provided by Financing Activities		126,500			91,250			250,647

Net Increase in Cash		15,525			42,199			23,518

Cash at Beginning of Period		7,993			2,373			—
Cash at End of Period	$	23,518		$	44,572		$	23,518

Supplemental Disclosures:
Cash paid for income taxes	$	—		$	—		$	—
Cash paid for interest	$	—		$	—		$	—

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

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation and Interim Consolidated Financial Statements

Delta Entertainment Group Inc. (“Delta”, “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 Famous Records, Corp. (“Famous”), Creative Music Group, Inc. (“Creative”), PearlBrite Concepts, Inc.(“PearlBrite”) and Captivating Cosmetics Corp(“Captivating”).

Famous was incorporated in Florida on August 21, 2008 and was a subsidiary of the Company through September 2010 at which time Famous was deconsolidated due to the issuance of Famous shares which diluted the Company’s ownership and control of the subsidiary.

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.

PearlBrite was formed in the state of Florida on May 31^st 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 1^st 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.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of Delta and its wholly owned subsidiaries Creative, PearlBrite and Captivating. All intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements

The accompanying unaudited condensed 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, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2010 Annual Report filed with the SEC on Form 10-K on March 31, 2011.

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Asset Purchase Agreement

On June 3, 2011 Pearl Brite Concepts, Inc., our wholly owned subsidiary, entered into a Bill of Sale with Pearl White Professional Teeth Whitening LLC. (the “Seller”) which provided in part for Pearl Brite Concepts to acquire substantially all of the assets of the Seller used in connection with the sale of its teeth whitening system which are marketed under the names “PearlBrite” and “Pearl White Professional Teeth Whitening”.

The purchase price for the assets was $70,000 (the “Purchase Price”) of which $50,000 has been paid. The remaining portion of the Purchase Price will be paid pursuant to the terms and conditions of two promissory notes. Pearl Brite Concepts will pay the Seller $10,000 within five calendar days following delivery by the Seller of Seller’s audited financial statements in accordance with Generally Accepted Accounting Principles and as required by the rules and regulations as promulgated by the Securities and Exchange Commission in connection with the acquisition of a business entity. The balance of the purchase price ($10,000) is due pursuant to the terms and conditions of a second promissory note which provides for four monthly payments of $2,500 commencing July 3, 2011 and continuing on the third day of each month thereafter.

The promissory notes are secured by all of the current and after-acquired assets, tangible or intangible, of Pearl Brite Concepts related to the operations and sales of either the Pearl Brite or Pearl White Professional Teeth Whitening systems.

The purchase was allocated to inventory valued at $3,479, which represented the original cost basis, with the balance of the purchase price being allocated to the intangible asset Customer List pending a final valuation determination.

Following is an unaudited proforma income statement as if the asset purchase had been consummated as of January 1, 2010:


	For the Three Months Ended						For the Six Months Ended
		June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010

Revenue	$	32,977		$	88,893		$	50,284		$	152,887

Cost of sales		11,378			51,157			25,617			88,861

Gross profit		21,599			37,736			24,667			64,026

General administrative expenses		54,768			61,277			94,696			124,132

Operating loss		(33,169	)		(23,541	)		(70,029	)		(60,106	)

Other income (expense)
Interest expense		(804	)		—			(1,301	)		—
Other income (expense)		(804	)		—			(1,301	)		—

Net Loss		(33,973	)		(23,541	)		(71,330	)		(60,106	)
Net loss attributable to non controlling interest		—			1,418			—			1,418
Delta Net Loss	$	(33,973	)	$	(22,123	)	$	(71,330	)	$	(58,688	)

Basic and Diluted Loss per Common Share	$	—		$	—		$	—		$	—

Basic and Diluted Weighted Average Common Shares Outstanding		30,174,815			23,552,925			30,111,315			20,115,246

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - Supplemental Schedule of Cash Flow Information

Supplemental cash flow information is as follows:


					From
					August 21, 2008
					(Inception) to
	June 30,		June 30,		June 30,
	2011		2010		2011

Noncash investing and financing activities
Common stock issued for convertible debt repayment	$	3,000	$	—	$	3,000
Common stock issued for repayment of notes payable	$	—	$	—	$	50,000
Purchase of customer list through note payable	$	25,600	$	—	$	25,600
Common stock issued in exchange for expenses paid by parent	$	—	$	—	$	1,000
Common stock issued as repayment for related
party advances, accrued wages, and directors fees	$	—	$	—	$	59,076
Forgiveness of debt related party	$	—	$	—	$	13,898

Note 4 – Convertible Notes Payable

On various dates during the six months ended June 30, 2011, the Company received proceeds of $28,500 from 8% convertible notes payable. The notes plus accrued interest are convertible into common stock at the rate of $.10 per share. Based on our share price on the date the notes were entered into, there was no beneficial conversion feature associated with the notes.

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 5 – Related Party Transactions

During the six months ended June 30, 2011 the Company received proceeds from a note payable from related parties in the amount of $3,000. During the period, the Company repaid the note through the issuance of 300,000 shares of its common stock.

On various dates during the six months ended June 30, 2011, the Company received proceeds of $70,500 from 8% convertible notes payable. The notes plus accrued interest are convertible into common stock at the rate of $.10 per share. Based on our share price on the date the notes were entered into, there was no beneficial conversion feature associated with the notes

The Company, through our subsidiary Pearlbrite received proceeds from a 8% convertible notes payable of $5,600. The note is convertible into shares of Pearlbrite at the rate of $.0001. There was no beneficial conversion feature associated with this notes as the conversion price is deemed to represent the value of the subsidiary shares on the date we entered into the note.

During February and March 2011, the Company received proceeds through its Creative subsidiary from convertible notes payable-related party in the amount of $5,000. The notes accrue interest at the rate of 8% per annum. The notes are convertible into shares of our subsidiary common stock at the rate of $.01. In April 2011, the Company received proceeds of $4,500 which is convertible at $.001. There was no beneficial conversion feature associated with the notes as the conversion price was deemed to be representative of the share price of the subsidiary on the dates of the notes.

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2011 there is account payable, wages, and accrued expenses due to related party for $3,167, $2,662, and $3,669, respectively.

During the six months ended June 30, 2011, 60,000 shares have been issued to its Officer, Directors and Advisors for management and consulting services.

Note 6 – Commitments and Contingencies

The Company entered into employment and director agreements with Leonard Tucker to serve as the Company’s President, Chief Executive and Financial Officer, and Director effective April 19, 2011 contemporaneously with the resignation of Marshall Freeman from those positions. Mr. Freeman remains the President of the Company’s wholly owned subsidiary Creative. The employment agreement with Mr. Tucker allows for compensation in the amount of $3,000 per month for his service as President of the Company. Additionally, he is to receive 5,000 shares per month for his service as a Director. If he is to serve as Chairman of any committee, he is to receive an additional 2,500 shares per month for that service and for service on any committee he is to receive 1,250 shares.

In June 2011, the Company, through its subsidiary Pearlbrite, entered into a Merchandise License Agreement with Celebrity Brand Licensing, LLC whereby the Company can use the celebrity likeness of Teresa Giudice on its products. The three year agreement has minimum royalty payments due as follows: $12,500 plus 125,000 shares of the company’s common stock for year one, $50,000 minimum payment due for year two, and $75,000 minimum for year three. Royalty payments are due on net sales in excess of $250,000 annually, at the rate of 8%. The payments for year two are due quarterly beginning January 1, 2013 in the amount of $12,500 per quarter and year three in the amount of $18,750. Earned royalties are applied against the annual guarantees.

In June 2011, the Company, through Pearlbrite, entered into a three month marketing agreement with CLC. Per the terms of the marketing agreement, the Company is to issue common stock valued at $2,000 per month and make payments of $3,000 in cash.

On June 1, 2011 the Company entered into advisory agreements with two individuals to provide services to its subsidiary Pearbrite. The agreements have a one year term and per the terms of the agreement the individuals are to receive compensation in the form of common stock of the Company valued at $500 per month.

On June 15, 2011, the Company entered into a Non-Exclusive License agreement through its subsidiary Captivating, whereby the Company can use the celebrity likeness of Teresa Giudice on its cosmetic products. The three year agreement requires royalty payments at the rate of 8% of net sales, with guaranteed minimum royalties due in year one of $15,000, year two of 75% of actual year 1 royalties and year 3 at the rate of actual year two royalties. The agreement is renewable for an additional three year term if sales minimums are achieved.

Note 7 – Going Concern

At June 30, 2011 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.

DELTA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 – Subsequent Events

Management has evaluated subsequent events, and the impact on the reported results and disclosures.

During July 2011 the Company issued 125,000 shares of restricted common stock pursuant to a License agreement. The Company also issued a total of 50,000 shares to its Officer, Directors and Advisors.

The Company has received proceeds from convertible notes payable of $7,500. The note bears interest at the rate of 8% per year and is convertible into shares of our common stock at the rate of $.10 per share. Additionally, the Company has received advances from a related party of approximately $8,000.

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") is a Florida corporation incorporated in the state of Florida on October 2, 2009. Through September 2010, Delta's business operations were conducted through its 93% owned subsidiary, Famous Records Corp. ("Famous Records"). In September, the ownership interest in Famous Records was reduced to 27.1% and the subsidiary was deconsolidated.

Delta Entertainment is a development stage company that will engage in concert promotions. Its initial focus will be the South Florida market. The Company's wholly owned subsidiary, Creative Music Group (“Creative”) is a Miami based entertainment company. Creative’s business strategy is to acquire, develop and represent upcoming recording artists in the entertainment field.

Our wholly owned subsidiaries Pearlbrite Concepts, Inc.(“PearlBrite”) and Captivating Concepts Corp. (“Captivating”) are entities engaged in the business of branding and marketing health and beauty products.

Products and Services

Creative is a service-based company focused on artist management services for recording artists. The company will offer bi-directional services. First, by selling artist management services to recording artists in exchange for commissions, and percentages of income. The second is by selling entertainment to consumers. This includes mediums such as CD’s, downloads, merchandise, live shows and other services of company clients. The company will rely on third parties such as record labels and agencies to sell talent services of its clients. The goal of Creative is to bring consumers and users of entertainment services, high quality and unique talent. Our management services will be customized to meet the needs of the individual artist. We intend to provide guidance, support, opportunities and career counseling for our artists

Our ability to fully implement this program will be dependent upon our ability to secure additional financing, of which there can be no assurance.

PearlBrite markets and sells a cosmetic teeth whitening system designed to be administered in 20 minutes by a certified technician. The process uses a light emitting laser which is focused on a mouthpiece which is preloaded with the whitening gel. The technician never touches the customer’s mouth. Customers will also be offered after care products. Teeth whitening after care products are one of the fastest growing products in beauty and convenience stores. The current after care products include: toothpaste, mouth rinse, whitening cream and whitening gum.

Captivating 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.

Target Market

Creative operates in the Miami Florida area, targeting the various event planners, promoters and entertainment venues in the area. The greater Miami metropolitan area is home to a large number of entertainment events each year with 2.1 million people in the immediate area.Pearlbrite sells its products primarily to salons throughout the United States and Canada. We also offer our products for sale through the website www.pearlbriteconcepts.com.

Captivating plans to sell its products primarily to mass market retailers and online through its website.

The Competition

Competition in the music industry is very diverse and uneven, creating substantial market opportunities for Creative. We will compete against both local, regional and national companies with far greater capital resources and name recognition. In order to effectively compete in these markets, Creative must be able to offer unique and personalized services, identifying strategic partners at colleges and universities and develop business relationships with local event organizers, record labels, agents and other entertainment companies. With limited capital, the Company will rely upon the personal contacts of our management.

Teeth whitening is a $12 billion annual business. It covers a broad spectrum of services ranging from laser treatments and gels administered in dental offices by licensed dental professionals to whitening strips sold by companies such as Proctor and Gamble and Colgate-Palmolive under the Crest and Colgate brand names. Teeth whitening is one of the most requested cosmetic procedure in the United States and in many parts of the world.

The market is dominated by several multi-national companies. However, there are many specialized and niche markets in the teeth whitening business which affords opportunities to smaller companies with limited resources and access to capital markets. We believe that PearlBrite has identified a niche market and will be able to compete based on product quality, pricing, convenience and marketing support

Cosmetics industry generated about $250 billion in sales in 2008, with the US industry share about 25% of the total; and largely dominated by a relative few leading brands from major corporations. L’Oreal, the world's largest beauty products company, owns more than 20 brands including Maybelline. Estee Lauder owns 25 brands, while others are owned by Revlon, Proctor & Gamble, Coty and Shiseido.

We plan to offer a line of duo-packed matching nail polish and lipstick with a standard “Buy One-Get One Free” value proposition for our tier-one distribution. Price points will also offer tremendous values for the domestically manufactured high-quality products. Another key feature is a Four-Season Rotation of products through seasonally-themed product colors and packaging in smaller 12-duo pre-packs that allow retailers to clear out their inventories, in order to stock new season products.

We believe the biggest market differentiator for our PearlBrite and Captivating subsidiaries is our celebrity endorsement licensing agreements with Teresa Giudice, known to millions of cable TV viewers for her high-visibility role on the hit reality show, The Real Housewives of New Jersey.

Results of Operations

Three and Six Months Ended June 30, 2011 and 2010

We generated revenues for the three months ended June 30, 2011 and 2010 of $9,840 and $464, respectively. The increase in the current period is primarily due to the revenues generated from our subsidiaries with revenues in the current three months of $2,105 for Creative and $7,734 for PearlBrite. These entities did not exist as of June 30, 2010.

We recognized revenues for the six months ended June 30, 2011 and 2010 of $11,390 and $936, respectively. The six month revenues were $7,734 from Pearlbrite and $3,655 from Creative.

Our cost of sales for the three months ended June 30, 2011 and 2010 were $2,514 versus $3,593 for the three months ended June 30, 2010.

During the three months ended June 30, 2011 we incurred general and administrative expenses of $46,420 as compared to $38,149 for the three months ended June 30, 2010. The increase in general and administrative expenses for the current year is due to an increase in Officers’ and Directors compensation.

The general and administrative expenses for the six months ended June 30, 2011 and 2010 were $75,837 and $78,752, respectively.

Liquidity

As of June 30, 2011 we had cash of $23,518 as compared to cash at December 31, 2010 of $7,993. We had total current assets at June 30, 2011 of $55,220 as compared to $16,378 at December 31, 2010. The increase in cash and other current assets is primarily attributable to notes payable received during the six months ended June 30, 2011. Our operations to date have primarily been funded through convertible notes payable and advances from a related party. Our total current liabilities at June 30, 2011 were $169, 737 as compared to $931 at December 31, 2010. The increase in the current liabilities is due to the lack of revenues sufficient to fund our operations.

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.

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.

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

In August 2008, we issued 16,555,315 shares of common stock to Beta Music Group, Inc. These shares were distributed by Beta to the shareholders of record on December 14, 2009 pursuant to the Sale and Stock Purchase Agreement of a controlling interest of Beta on December 15, 2009.

During 2009, we issued 45,000 shares of our common stock to related parties for services rendered. The shares were issued at par value of $.001

On March 31, 2010, we issued 45,000 shares of common stock to officers and directors as consideration for their services. Additionally on that date we issued 1,530,000 shares as repayment of accrued wages and 3,312,500 as repayment of advances from related parties. These shares were issued at $.01 per share.

On May 5, 2010 we issued 570,000 shares of common stock for accrued compensation, 15,000 to our officer and directors and 2,125,000 shares as repayment of related party advances. These shares were issued at $.01 per share. We also issued 50,000 shares for services. The aforementioned shares were all issued at $.01.

On May 31, 2010 we issued 470,000 to the Tucker Family Trust as repayment for advances made to the Company. We also issued 15,000 shares to our Officer and Directors. These shares were issued at $.01.

On June 30, 2010 we issued 5,000,000 shares of our common stock to an investor for the conversion of a note payable in the amount of $50,000. We also issued 15,000 shares to our Officer and Directors. These shares were issued at $.01.

On September 30, 2010 we issued 45,000 shares of common stock at $.01 per share for accrued compensation and directors’ fees.

On December 31, 2010 we issued 45,000 shares of common stock at $.01 per share for accrued compensation and directors’ fees.

In January 2011, we issued 45,000 shares of common stock at $.01 per share for directors compensation and 300,000 shares for repayment of a $3,000 advance from a shareholder.

In May 2011, we issued 45,000 shares of common stock at $.01 per share for officers and directors compensation.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Removed and Reserved

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.

* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

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 2, 2011

By /s/ Leonard Tucker

Leonard Tucker

President and Chief Executive and Financial Officer

Attached files

Delta Entertainment Group, Inc. Reports

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