UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB
  (Mark One)

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

For the quarterly period ended March 31, 2007

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

For the transition period from ________________ to _______________

000-1338929
(Commission file number)

PREMIERE PUBLISHING GROUP, INC.
(Exact name of small business issuer as specified in its charter)

Nevada
11-3746201
(State or other jurisdiction
of incorporation or organization)
(IRS Employer
Identification No.)
                                                             
                                                                          
                                                                             

386 Park Avenue South, 16 th Floor, New York, New York  10016
(Address of principal executive offices)

(212) 481-1005
(Issuer’s telephone number)

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes  [  ]   No   [X]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of March 31, 2007 – 25,649,846 shares of common stock


Transitional Small Business Disclosure Format (check one):  Yes [   ]   No [X]




PREMIERE PUBLISHING GROUP, INC.
Index

 
 
   
Page
Number
 
PART I.
FINANCIAL INFORMATION
2
     
Item 1.
Financial Statements
2
     
 
Consolidated Balance Sheet as of March 31, 2007 (unaudited)
2
     
 
Consolidated Statements of Operations for the
 
 
three months ended March 31, 2007 and 2006 (unaudited)
3
     
 
Consolidated Statement of Stockholders’ Deficit for the
 
 
three months ended March 31, 2007 (unaudited)
4
     
 
Consolidated Statements of Cash Flows for the
 
 
three months ended March 31, 2007 and 2006 (unaudited)
5
     
 
Notes to Consolidated Financial Statements (unaudited)
6
     
Item 2.
Management’s Discussion and Analysis or Plan of Operations
14
     
Item 3.
Controls and Procedures
17
     
PART II.
OTHER INFORMATION
17
     
Item 1.
Legal Proceedings
17
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
17
     
Item 3.
Defaults Upon Senior Securities
17
     
Item 4.
Submission of Matters to a Vote of Security Holders
17
     
Item 5.
Other Information
17
     
Item 6.
Exhibits
17
     
SIGNATURES
 
18

                                                                                                           

                                                                                                    

                                                                                                                                

                                                                                                                  

      
                                         
    


Premiere  Publishing Group, Inc. and Subsidiaries    
Consolidated Balance Sheet     
As of March 31, 2007     

       
   
March 31,
 
   
2007
 
   
(unaudited)
 
ASSETS
     
       
CURRENT ASSETS
     
Cash and cash equivalents
  $
735
 
Accounts receivable, net of allowance for doubtful accounts of $0
   
480,270
 
Barter receivables
   
730,757
 
Debt issue costs
   
63,111
 
Prepaid expenses and other current assets
   
22,090
 
         
TOTAL CURRENT ASSETS
   
1,296,963
 
         
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $34,039
   
81,655
 
LICENSES, net of accumulated amortization of $48,335
   
145,005
 
         
TOTAL ASSETS
  $
1,523,623
 
         
         
LIABILITIES AND STOCKHOLDERS' DEFICIT
       
         
CURRENT LIABILITIES
       
8% Bridge loan
  $
250,000
 
Note payable
   
601,049
 
Accounts payable
   
730,844
 
Accrued expenses
   
89,208
 
Accrued interest
   
49,476
 
Accrued warrant liability
   
708,012
 
Accrued derivative liability
   
217,783
 
         
TOTAL CURRENT LIABILITIES
   
2,646,372
 
         
CONVERTIBLE DEBENTURES, net of discount of $192,139
   
287,861
 
         
TOTAL LIABILITIES
   
2,934,233
 
         
COMMITMENTS AND CONTINGENCIES
   
-
 
         
STOCKHOLDERS' DEFICIT
       
Common stock; $0.001 par value; 75,000,000 shares
       
authorized; 25,649,846 shares issued and outstanding
   
25,650
 
Additional paid-in capital
   
4,705,389
 
Accumulated deficit
    (6,141,649 )
         
TOTAL STOCKHOLDERS' DEFICIT
    (1,410,610 )
         
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $
1,523,623
 
         
 

 
      
         The accompanying notes are an integral part of these consolidated financial statements.      
 
2
      
                                   
    

 

Premiere  Publishing Group, Inc. and Subsidiaries
Consolidated Statement of Operations
For The Three Months Ended March 31, 2007 and 2006
Statement of Operations
 
             
   
Three Months Ended March 31,
 
   
2007
   
2006
 
   
(unaudited)
   
(unaudited)
 
REVENUES
           
Advertising, circulation, events and other
  $
771,557
    $
826,984
 
                 
OPERATING EXPENSES:
               
Production, distribution and editorial
   
331,407
     
380,344
 
Selling, general and adminstrative
   
596,775
     
368,857
 
Consulting services
   
162,669
     
2,300
 
                 
TOTAL OPERATING EXPENSES
   
1,090,851
     
751,501
 
                 
INCOME (LOSS) FROM OPERATIONS
    (319,294 )    
75,483
 
                 
OTHER INCOME (EXPENSE)
               
Interest expense and financing costs
    (38,525 )     (167,157 )
Change in value of warrant and derivative liabilities
    (170,947 )    
-
 
Other income
   
-
     
788
 
                 
TOTAL OTHER INCOME (EXPENSE)
    (209,472 )     (166,369 )
                 
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
    (528,766 )     (90,886 )
                 
PROVISION FOR INCOME TAXES
   
-
     
-
 
                 
NET LOSS
  $ (528,766 )   $ (90,886 )
                 
LOSS PER SHARE:
               
BASIC
  $ (0.02 )   $ (0.01 )
                 
                 
WEIGHTED AVERAGE SHARES OUTSTANDING:
               
BASIC
   
25,373,590
     
16,064,934
 
                 

 

      
         The accompanying notes are an integral part of these consolidated financial statements.    
 
3  
      
                                   
    

 
 
Premiere  Publishing Group, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Deficit
For the Three Months Ended March 31, 2007
(unaudited)

                               
               
Additional
         
Total
 
   
Common stock
   
paid-in
   
Accumulated
   
Stockholders'
 
   
Shares
   
Amount
   
capital
   
Deficit
   
Deficit
 
                               
Balance, December 31, 2006
   
25,051,981
    $
25,052
    $
4,543,318
    $ (5,612,883 )   $ (1,044,513 )
                                         
                                         
Common stock issued to consultants for services rendered
   
597,865
     
598
     
162,071
             
162,669
 
Net loss
                            (528,766 )     (528,766 )
                                         
                                         
Balance, March 31, 2007
   
25,649,846
    $
25,650
    $
4,705,389
    $ (6,141,649 )   $ (1,410,610 )
                                         


      
         The accompanying notes are an integral part of these consolidated financial statements.   
 
4   
      
                                   
    


Premiere  Publishing Group, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For The Three Months Ended March 31, 2007 and 2006

             
   
Three Months Ended March 31,
 
   
2007
   
2006
 
   
(unaudited)
   
(unaudited)
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (528,766 )   $ (90,886 )
Adjustment to reconcile net loss to net cash
               
used in operating activities:
               
Depreciation and amortization expense
   
11,729
     
11,462
 
Common stock issued for services
   
162,669
     
-
 
Amortization of debt issuecosts and debt discounts
   
23,445
     
106,957
 
Change in value of warrant and derivative liabilities
   
170,947
     
-
 
Barter revenue
    (278,943 )    
-
 
Barter expenses
   
129,440
     
-
 
Changes in assets and liabilities:
               
Accounts receivable
    (159,226 )     (487,338 )
Prepaid expenses and other assets
   
10,436
      (1,172 )
Accounts payable
   
290,560
     
122,129
 
Accrued expenses
   
26,219
     
-
 
Accrued interest
   
13,272
     
60,200
 
Deferred revenue
   
-
      (14,357 )
                 
Net cash used in operating activities
    (128,218 )     (293,005 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchase of property and equipment
   
-
      (16,958 )
                 
Net cash used in investing activities
   
-
      (16,958 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from issuance of convertible debentures
   
20,000
     
-
 
Payment of debt issue costs
    (2,600 )    
-
 
Proceeds from line of credit, net
    (100,000 )    
100,000
 
                 
Net cash provided by (used in) financing activities
    (82,600 )    
100,000
 
                 
NET DECREASE IN CASH AND
               
CASH EQUIVALENTS
    (210,818 )     (209,963 )
                 
CASH AND CASH EQUIVALENTS, Beginning of period
   
211,553
     
502,602
 
                 
CASH AND CASH EQUIVALENTS, End of period
  $
735
    $
292,639
 
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
               
                 
Interest paid
  $
-
    $
-
 
Income taxes paid
  $
-
    $
-
 
                 

      
         The accompanying notes are an integral part of these consolidated financial statements.   
 
5   
      
                                   
    

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES       
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
       (UNAUDITED)       
         
 
Note 1 — Basis of Presentation

The unaudited consolidated financial statements have been prepared by Premiere Publishing Group, Inc. (the “Company”), in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these consolidated financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2006 included in the Company’s Form 10KSB for the year ended December 31, 2006. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. The results of the three months ended March 31, 2007 are not necessarily indicative of the results to be expected for the full year ending December 31, 2007.

Note 2 — Organization and Summary of Significant Accounting Policies

Organization

Sobe Life, LLC (“Sobe”), an Illinois limited liability company was formed in April 2004. Sobe enter into a publishing agreement with Trump World Publications LLC to publish Trump World magazine on a national basis. Trump World magazine was initially published, beginning in September 2004.  Premiere Publishing Group, Inc. (“PPG”) is a Nevada corporation organized on March 25, 2005. In April 2005, Sobe entered into an agreement with PPG whereby PPG acquired all of the outstanding membership interests of Sobe in exchange for 5,350,000 shares of PPG’s common stock. As a result of the transaction, Sobe’s sole member owned 100% of the combined company and the sole owner and executive officer of Sobe became a director and executive officer of the PPG. Accordingly, the transaction has been accounted for as a reverse acquisition of PPG by Sobe resulting in a recapitalization of Sobe rather than as a business combination. Sobe is deemed to be the purchaser and surviving company for accounting purposes. Accordingly, its assets and liabilities are included in the balance sheet at their historical book values and the results of operations of Sobe have been presented for the comparative prior period. The historical cost of the net assets of PPG was $0. The combined companies of PPG and Sobe are thereafter referred to as the “Company.”

Prior to April 1, 2006, the Company was considered a development staged company.  The deficit accumulated during its development stage amounted to $3,898,690.

The Company’s principal business activities are the publishing of the national magazine “Trump World” and “Poker Life.”  The Company also offers custom publishing services to companies.  The Company has also received barter credits and maintains several accounts with major barter companies and individual vendors who place advertising in the Company’s publications in exchange for goods and services.

Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a

6

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES       
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
         (UNAUDITED)       
          

going concern. The Company has incurred a net loss for the three months ended March 31, 2007 in the amount of $528,766 and as of March 31, 2007 had a working capital deficit of $1,349,409 and an accumulated deficit of $6,141,649.  These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company’s ability to continue in business is dependent upon obtaining sufficient financing or attaining profitable operations.  The Company believes that it can  raise additional funds through the exercise of its outstanding warrants and through short-term borrowing or the additional sale of its debt or equity securities.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Principles of consolidation

The consolidated financial statements include the accounts of Premiere Publishing Group, Inc. and its wholly owned subsidiaries. Significant inter-company transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements. The Company bases its estimates on historical experience, management expectations for future performance, and other assumptions as appropriate. Key areas affected by estimates include the assessment of the recoverability of long-lived assets, which is based on such factors as estimated future cash flows. The Company re-evaluates its estimates on an ongoing basis. Actual results may vary from those estimates.

Cash and cash equivalents

All cash and short-term investments with original maturities of three months or less are considered cash and cash equivalents, since they are readily convertible to cash. These short-term investments are stated at cost, which approximates fair value.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivables. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $100,000 insurance limit. The Company extends credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required. Accounts are “written-off” when deemed uncollectible.


7

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES       
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
         (UNAUDITED)       
          
 
Property and equipment
 
Property and equipment are stated at cost. Costs of replacements and major improvements are capitalized, and maintenance and repairs are charged to operations as incurred. Depreciation expense is provided primarily by the straight-line method over the estimated useful lives of the assets, five years for computer equipment, and ten years for office furnishings. Depreciation for the three months ended March 31, 2007 and 2006 was $4,824 and $4,557, respectively.

Revenues

Revenues are recognized only when realized / realizable and earned, in accordance with GAAP. Advertising revenues are recognized when the underlying advertisements are published, defined as the issuer’s on-sale date. Barter advertising revenues and the offsetting expense are recognized at the fair value of the advertising as determined by similar cash transactions. Barter revenue and expenses for the three months ended March 31, 2007 were $278,943 and $129,440, respectively.  Revenues from magazine subscriptions are deferred and recognized proportionately as products are delivered to subscribers.

Stock Based Compensation

The Company accounts for its stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123.” The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. The Company did not grant any new employee options and no options were cancelled or exercised during the three months ended March 31, 2007. As of March 31, 2007, there were no options outstanding.

Income taxes

Income taxes are accounted for in accordance with SFAS 109, Accounting for Income Taxes, using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings (loss) per share

In accordance with SFAS No. 128, “Earnings Per Share,” the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At March 31, 2007, the only potential dilutive securities were 1,989,990 warrants to purchase shares of common stock and bridge loans that are convertible into 1,064,333 shares of common stock.  For the three months ended March 31, 2007 and 2006, the Company incurred net losses; therefore the effect of any dilutive securities would be anti-dilutive.

 

8

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES       
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
         (UNAUDITED)       
      
        
      
    
 
Derivative instruments
 
In February 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial Instruments, an Amendment of FASB Standards No. 133 and 140” (hereinafter “SFAS No. 155”). This statement established the accounting for certain derivatives embedded in other instruments. It simplifies accounting for certain hybrid financial instruments by permitting fair value remeasurement for any hybrid instrument that contains an embedded derivative that otherwise would require bifurcation under SFAS No. 133 as well as eliminating a restriction on the passive derivative instruments that a qualifying special-purpose entity (“SPE”) may hold under SFAS No. 140. This statement allows a public entity to irrevocably elect to initially and subsequently measure a hybrid instrument that would be required to be separated into a host contract and derivative in its entirety at fair value (with changes in fair value recognized in earnings) so long as that instrument is not designated as a hedging instrument pursuant to the statement. SFAS No. 140 previously prohibited a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This statement is effective for fiscal years beginning after September 15, 2006, with early adoption permitted as of the beginning of an entity's fiscal year. Management believes the adoption of this statement will have no impact on the Company's financial condition or results of operations.
 
If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. The Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes. The Company has not engaged in any transactions that would be considered derivative instruments, except for the beneficial conversion feature associated with the convertible debentures issued in 2006 and 2007.

Special purpose entities

The Company does not have any off-balance sheet financing activities.

Impairment or Disposal of Long-Lived Assets

In August 2001, FASB issued Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to their estimated fair value based on the best information available.

Recently issued accounting pronouncements

In September 2006, the FASB issued SFAS No. 157, “ Fair Value Measurements .” This statement clarifies the definition of fair value, establishes a framework for measuring fair value and expands the disclosures on fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management has not determined the effect, if any, the adoption of this statement will have on the C ompany’s financial statements.
 
In September 2006, the FASB issued SFAS No. 158, " Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans−An amendment of FASB Statements No. 87, 88, 106, and 132(R )." One

9

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES        
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
         (UNAUDITED)       
      
            

objective of this standard is to make it easier for investors, employees, retirees and other parties to understand and assess an employer's financial position and its ability to fulfill the obligations under its benefit plans. SFAS No. 158 requires employers to fully recognize in their financial statements the obligations associated with single−employer defined benefit pension plans, retiree healthcare plans, and other postretirement plans. SFAS No. 158 requires an employer to fully recognize in its statement of financial position the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This Statement also requires an employer to measure the funded status of a plan as of the date of its year−end statement of financial position, with limited exceptions. SFAS No. 158 requires an entity to recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS No. 87. This Statement requires an entity to disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. The company is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures for fiscal years ending after December 15, 2006. Management believes that this statement will not have a significant impact on the company’s financial statements.

 
In February of 2007 the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115.”  The statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.  The statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007.  The company is analyzing the potential accounting treatment.
 

FASB Interpretation No. 48, “ Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No.109 .” Interpretation 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. The amount of tax benefits to be recognized for a tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax benefits relating to tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met or certain other events have occurred. Previously recognized tax benefits relating to tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Interpretation 48 also provides guidance on the accounting for and disclosure of tax reserves for unrecognized tax benefits, interest and penalties and accounting in interim periods. Interpretation 48 is effective for fiscal years beginning after December 15, 2006. The change in net assets as a result of applying this pronouncement will be a change in accounting principle with the cumulative effect of the change required to be treated as an adjustment to the opening balance of retained earnings on January 1, 2007, except in certain cases involving uncertainties relating to income taxes in purchase business combinations. In such instances, the

10

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES       
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
         (UNAUDITED)       
      
        

impact of the adoption of Interpretation 48 will result in an adjustment to goodwill. The adoption of this standard had no material impact on the Company’s consolidated financial statements.
 
Note 3 — Bridge Notes

In a private placement transaction in April and May, 2005, the Company issued a series of 8% convertible promissory notes in a total amount of $560,000 with a maturity date of 180 days. The principal amount of each note is convertible, at the option of the Payee at anytime prior to the maturity date into common stock of the Company at the rate of 100,000 shares of common stock for each $25,000 of principal. The Company may at its election pay the interest due on the convertible promissory note in the form of shares of its common stock for $0.50 of interest due.  These debentures were due on October 31, 2005. During the quarter ended September 30, 2006, certain note holders converted $285,000 in principal plus accrued interest into 1,201,782 shares of common stock.  The principal balance due under these 8% Bridge Notes at March 31, 2007 is $250,000.  

Note 4 — Note Payable

During the three months ended March 31, 2007, the Company converted an account payable to a vendor into a note payable.  The note payable accrues interest at the rate of 10% per annum and is payable in 12 monthly installments beginning on March 10, 2007.  The Company has not made any payments under this note payable.

Note 5 — Convertible Debentures
 
In October and November 2006, the Company issued a total of $460,000 of convertible debentures. The convertible debenture are convertible into shares of the Company common stock determined by dividing the dollar amount being converted by 75% of the lowest closing bid price (as reported by Bloomberg) of the Company’s common stock for the fifteen (15) trading days immediately preceding the date of conversion. The convertible debentures accrue interest at 6% annum, are due three years after issuance and do not contain registration rights. The debentures are redeemable by the Company, in whole or in part, at the Company’s option, at 115% of the then outstanding principal amount of the debentures. If the redemption occurs more than six months from the date of the individual closings the redemption shall be set at 125%. If the redemption occurs more than one year from the date of the individual closings the amount will be set at 131%. The Company shall give ten days written notice of intent to redeem the debentures in whole or in part, during which period no conversions shall be permitted.
 
In connection with the convertible debentures, the Company paid $69,800 in fees and commissions. These debt issue costs of are being amortized over the term of the debentures.

In addition, in February 2007, the Company issued a convertible debenture in the amount of $20,000 with exactly the same terms as described above.  The Company paid $2,600 in fees and commissions in connection with this convertible debenture that are being amortized over the term of the debentures.

During the three months the Company amortized $5,819 of the debt issue costs as a charge to financing costs.

Per EITF 00-19, paragraph 4, these convertible debentures do not meet the definition of a “conventional convertible debt instrument” since the debt is not convertible into a fixed number of shares.  The debt can be converted into common stock at a conversions price that is a percentage of the market price; therefore

11

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES       
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
         (UNAUDITED)       
      

the number of shares that could be required to be delivered upon “net-share settlement” is essentially indeterminate.  Therefore, the convertible debenture is considered “non-conventional,” which means that the conversion feature must be bifurcated from the debt and shown as a separate derivative liability.  This beneficial conversion liability has been calculated to be $210,871 and $9,166 at the inception of the debentures issued in 2006 and 2007, respectively and has been recorded as a debt discount.  This debt discount is being amortized over the terms of the convertible debentures.  During the three months the Company amortized $17,626 of the debt discount as a charge to financing costs. In addition, since the convertible debenture is convertible into an indeterminate number of shares of common stock, it is assumed that the Company could never have enough authorized and unissued shares to settle the conversion of the outstanding warrants into common stock that are hold by non-employees.  Therefore, the fair value of the warrants outstanding when the debentures were issued was determined and removed from equity and shown as a liability. The fair value of the beneficial conversion feature and the warrant liability will be adjusted to fair value each balance sheet date with the change being shown as a component of net loss. During the three months ended March 31, 2007, the Company recognized other expense of $170,947 related to the decease in fair value of the beneficial conversion feature and the warrant liability.

Note 6 — Line of Credit

The Company had a line of credit with a financial institution that provides for maximum borrowings of $100,000 and accrues interest at prime. During the three months ended March 31, 2007, the Company repaid the outstanding balance on this line of credit.

Note 7 – Stockholders’ Deficit

Common Stock
 
During the three months ended March 31, 2007, the Company issued a total of 597,865 shares of common stock to consultants for services rendered for a total value of $162,669. The shares were valued at the price of the Company’s stock on the date of issuance. Prior to the Company’s common stock being publicly traded, the value of the Company’s common stock was determined by the management of the Company based on the value of the most recent transaction in its common stock.

Warrants

Below is a summary of the warrant activity:

 
Warrants Outstanding
 
Weighted Average Exercise Price
 
Aggregate Intrinsic Value
 
Outstanding, December 31, 2006
    1,989,990
$0.58
       $                0
Granted
-
-
 
Forfeited
-
-
 
Exercised
-
-
 
Outstanding, March 31, 2007
1,989,990
$0.58
        $                0


12

      
         PREMIERE PUBLISHING GROUP, INC. AND SUBSIDIARIES       
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006       
         (UNAUDITED)       
          

As of March 31, 2007, all of the warrants had vested.  The weighted average life of the outstanding warrants at March 31, 2007 is 3.55 years.

  Note 8 – Litigation

R.R. Donnelly & Sons Company (“Donnelly”), Sobe Life LLC and Poker Life Magazine LLC, wholly owned subsidiaries of the Company, entered into a Stipulation of Settlement on June 6, 2007 settling a lawsuit that Donnelly commenced against Sobe Life LLC and Poker Life Management LLC on April 12, 2007 in New York State Supreme Court, New York County, seeking to enforce a note in the principal amount of $601,048.58 issued in connection with printing and related work that Donnelly performed on behalf of Sobe Life LLC. The Stipulation of Settlement provides that Sobe Life LLC will pay Donnelly the full amount of the note plus interest at the rate of 9% and Donnelly’s legal fees in 15 consecutive monthly installments of $43,577.05 beginning in July 2007 with one payment of $10,000 being made on June 12, 2007. Poker Life LLC is also primarily obligated on these payments and these payments are guaranteed by the Company and secured by all the assets of the Company, Sobe Life LLC and Poker Life LLC.
 
The Company will have to raise additional capital in order for the payments described above to be made to Donnelly, of which no assurance can be given. If the payments described above are not made, then Donnelly may be able to obtain a judgment for the full amount owing or a similar amount. This judgment would have a material adverse effect on the Company’s financial condition and its ability to continue as a going concern.
 

13


Item 2.  Management’s Discussion and Analysis or Plan of Operations

FORWARD-LOOKING STATEMENTS
 
Most of the matters discussed within this report  include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In some cases you can identify forward-looking statements by terminology such as "may," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties, many of which are set forth in our filings with the Securities and Exchange Commission. Actual results and events may vary significantly from those discussed in the forward-looking statements.
 
These forward-looking statements are made as of the date of this quarterly report, and we assume no obligation to explain the reason why actual results may differ. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this quarterly report might not occur.

General

The following discussion and analysis should be read in conjunction with the our consolidated financial statements and related footnotes for the year ended December 31, 2006 included in our Form 10KSB for the year ended December 31, 2006 filed with the Securities and Exchange Commission.  The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.

Overview

Sobe Life, LLC (“Sobe”), an Illinois limited liability company was formed in April 2004. Sobe enter into a publishing agreement with Trump World Publications LLC to publish Trump World magazine on a national basis. Trump World magazine was initially published, beginning in September 2004.  Premiere Publishing Group, Inc. (“PPG”) is a Nevada corporation organized on March 25, 2005. In April 2005, Sobe entered into an agreement with PPG whereby PPG acquired all of the outstanding membership interests of Sobe in exchange for 5,350,000 shares of PPG’s common stock. As a result of the transaction, Sobe’s sole member owned 100% of the combined company and the sole owner and executive officer of Sobe became a director and executive officer of the PPG. Accordingly, the transaction has been accounted for as a reverse acquisition of PPG by Sobe resulting in a recapitalization of Sobe rather than as a business combination. Sobe is deemed to be the purchaser and surviving company for accounting purposes. Accordingly, its assets and liabilities are included in the balance sheet at their historical book values and the results of operations of Sobe have been presented for the comparative prior period.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  On an ongoing basis, we evaluate our estimates, including assessment of the recoverability of long-lived assets, which is based on such factors as estimated future cash flows.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.
 
 

14



Revenues.   Revenues are recognized only when realized / realizable and earned, in accordance with accounting principles generally accepted in the United States. Advertising revenues are recognized when the underlying advertisements are published, defined as the issuer’s on-sale date. Barter advertising revenues and the offsetting expense are recognized at the fair value of the advertising as determined by similar cash transactions. Revenues from magazine subscriptions are deferred and recognized proportionately as products are delivered to subscribers.

Stock Based Compensation.   We account for our stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123.” We recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Long-Lived Assets.   We account for long-lived assets in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to their estimated fair value based on the best information available.

Our Plan of Operation

Premiere Publishing Group, Inc., together with our wholly owned subsidiaries Sobe Life, LLC Publisher of Trump Magazine, and Poker Life Magazine, LLC Publisher of Poker Life Magazine generated gross revenues for the three months ended March 31, 2007 of $771,557 which resulted in a loss from operations of $319,294.
 
Our plan of operations for 2007 is to publish an additional four issues of Trump Magazine and four issues of Poker Life magazine. We expect that for at least the next 12 months, the revenues associated with each future issue of Trump Magazine and Poker Life Magazine will increase but that the expenses associated with each issue will remain the same because we anticipate that the number of pages of advertisements will increase with each issue, while the number of editorial pages will decrease, thereby resulting in increased revenues with constant printing and other publishing expenses.   In March 2006, we created a custom publishing division to offer companies the service to create, manage, print, mail and publish a theme magazine to promote and cross market their brands to their customers. In June 2006, we custom published PartyLife, World Player and GameDay USA. In 2007, we are contracted to publish nationally in August 2007 GameDay USA Magazine. GameDay USA is a sports theme publication and is direct mailed and distributed in Las Vegas and Atlantic City. The company has also received barter credits and maintains several accounts with major barter companies who place advertising in our publications in exchange for goods and services.

As of March 31, 2007 we had cash on hand of $735, accounts receivable of $480,270 and barter credits of $730,757. We have financed our operations since inception from revenues generated from the magazines we publish, revenues from custom publishing services for PartyLife and World Player magazines, a bridge loan financing in April and May 2005, a private placements of our Investment Units in July and August 2005 and a convertible debenture in October 2006.  

15


The bridge financing in April and May 2005 consisted of 8% convertible promissory notes that we issued in the aggregate amount of $560,000. The notes matured in November 2005 but are convertible at anytime at the option of the payee into our common stock at the rate of $.25 per share. One payee holding a $25,000 note requested repayment when the notes matured and we paid him back in full. During 2006, certain bridge note holders converted a total of $285,000 of principal and accrued interest into 1,201,782 shares of our common stock.

In the private placement in July and August, 2005, we offered 100 units consisting of an 8% senior convertible promissory note in the face amount of $25,000 due July 31, 2006, and 6,666 shares of common stock. Each senior convertible promissory note is convertible at any time into 60,000 shares of common stock or $0.42 per share. We issued 659,934 shares of common stock to the holders of the debentures. During 2006, all of the note holders converted $2,475,500 in principal plus accrued interest into 6,345,265 shares of common stock.
 
In October and November 2006 and February 2007, we issued a total of $480,000 of convertible debentures. The convertible debenture are convertible into shares of our common stock determined by dividing the dollar amount being converted by 75% of the lowest closing bid price (as reported by Bloomberg) of our common stock for the fifteen (15) trading days immediately preceding the date of conversion. The convertible debentures accrue interest at 6% annum, are due three years after issuance and do not contain registration rights. The debentures are redeemable by us, in whole or in part, at our option, at 115% of the then outstanding principal amount of the debentures. If the redemption occurs more than six months from the date of the individual closings the redemption shall be set at 125%. If the redemption occurs more than one year from the date of the individual closings the amount will be set at 131%. We must give ten days written notice of intent to redeem the debentures in whole or in part, during which period no conversions shall be permitted.
 
We expect that the cash we have on hand and cash expected to be generated from operations will not be sufficient for us to continue to operate for the next 12 months based on our anticipated advertising, circulation and custom publishing revenues, as well as our anticipated expenses over that period. In order for us to continue in existence, we will need to raise additional debt or equity capital.

The continuing development of our publishing business will be dependent upon our success in attracting advertisers and maintaining custom publishing projects. Future advertising may be affected by events and trends such as general economic conditions, alternative means of advertising and the circulation of our magazine.

Sobe Life, LLC has recognized revenue upon the publication and distribution of each issue of Trump Magazine for which advertising has been purchased and billed. At this point, collection is reasonably assured and Sobe Life, LLC , Poker Life Magazine, LLC and Premiere Publishing Group, Inc . Prepayments and/or deposits on advertising to be published in future issues are deferred until the publication and distribution date of the respective issue but many accounts pre-pay for advertising . In the normal course of business, Sobe Life, LLC , Poker Life Magazine, LLC and Premiere Publishing Group, Inc. extends unsecured credit to virtually all of its customers. Sobe Life, LLC believes it will be able to collect all advertising revenue, so it has not provided an allowance for doubtful accounts. In the event of complete non-performance, the maximum exposure to Sobe Life, LLC is the recorded amount of trade accounts receivable shown on its balance sheet at the date of non-performance.
 
For the period from May 1, 2004 through March 31, 2007, we have incurred a net loss of $6,141,649.
 

16

 
Item 3. Controls and Procedures

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer.  Based on this evaluation, this officer has  concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
 
Part II.   OTHER INFORMATION

Item 1. Legal Proceedings
 
R.R. Donnelly & Sons Company (“Donnelly”), Sobe Life LLC and Poker Life Magazine LLC, wholly owned subsidiaries of the Company, entered into a Stipulation of Settlement on June 6, 2007 settling a lawsuit that Donnelly commenced against Sobe Life LLC and Poker Life Management LLC on April 12, 2007 in New York State Supreme Court, New York County, seeking to enforce a note in the principal amount of $601,048.58 issued in connection with printing and related work that Donnelly performed on behalf of Sobe Life LLC. The Stipulation of Settlement provides that Sobe Life LLC will pay Donnelly the full amount of the note plus interest at the rate of 9% and Donnelly’s legal fees in 15 consecutive monthly installments of $43,577.05 beginning in July 2007 with one payment of $10,000 being made on June 12, 2007. Poker Life LLC is also primarily obligated on these payments and these payments are guaranteed by the Company and secured by all the assets of the Company, Sobe Life LLC and Poker Life LLC.
 
The Company will have to raise additional capital in order for the payments described above to be made to Donnelly, of which no assurance can be given. If the payments described above are not made, then Donnelly may be able to obtain a judgment for the full amount owing or a similar amount. This judgment would have a material adverse effect on the Company’s financial condition and its ability to continue as a going concern.
 
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None

17


Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of Security Holders

None
 

Item 5.  Other Information

Not applicable

Item 6.  Exhibits
Regulation
S-B Number
Exhibit
31.1
Certification of the Chief Executive Officer, as the principal executive officer and the principal financial officer, under 18 U.S.C. section 1350, as adopted in accordance with section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of the Chief Executive Officer, as the principal executive officer and the principal financial officer, under 18 U.S.C. Section 1350, as adopted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002.


SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




  PREMIERE PUBLISHING GROUP, INC.
 
 
 
June 6, 2007
 
 
By: /s/ Michael Jacobson
Michael Jacobson
Chairman and Chief Executive Officer
(Principal Executive Officer and Principal
Financial Officer)

 
 
18

 
Exhibit 31.1
 
 
CERTIFICATIONS
 
 
I, Michael Jacobson, Chief Executive Officer of Premiere Publishing Group, Inc., certify that:
 
 
1.
I have reviewed this Quarterly Report on Form 10-QSB of Premiere Publishing Group, 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 small business issuer as of, and for, the periods presented in this report;
 
 
4.
I am 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 small business issuer and have:
 
 
a)  
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 small business issuer, 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;
 
 
b) 
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 small business issuer’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 changes in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and
 
 
5.
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’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 small business issuer’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 small business issuer’s internal control over financial reporting.

 
 
PREMIERE PUBLISHING GROUP, INC.
June 6, 2007
By: /s/ Michael Jacobson
Michael Jacobson
Chairman and Chief Executive Officer
(Principal Executive Officer and PrincipalFinancial Officer)
 

 

 
Exhibit 32.1
 
 
CERTIFICATION 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 Quarterly Report of March 31,2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Jacobson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
 
(1)
The report 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 

 
Dated: June 6, 2007
By: /s/ Michael Jacobson
 
Michael Jacobson
 
Chairman and Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)