VALCOM, INC - FORM 10-K/A - February 22, 2010

Attached files

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EX-1 - EXHIBIT 31-1 - VALCOM, INC	vcex_31-1jss.txt
EX-2 - EXHIBIT 32-1 - VALCOM, INC	vcex_32-1jss.txt

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A
(Mark One)

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

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009

{square} Transition Report Pursuant to Section 13 or 15(d) of the

SECURITIES EXCHANGE ACT OF 1934

VALCOM, INC.
--------------------------------------------------------
(Name of small business issuer specified in its charter)

Delaware 58-1700840
------------------------------------ -----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)

2113A Gulf Boulevard, Indian Rocks Beach, Florida 33785
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(Address of Principal executive offices) (Zip code)

(727) 953 - 9778
-------------------------
Issuer's telephone number

Securities registered pursuant to 12(b) of the Act: None Securities to be
registered pursuant to Section 12(g) of the Act:

COMMON STOCK $0.001 PAR VALUE
-----------------------------
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T
({section}232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

Yes [ ] No [X]

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

Large accelerated filer [ ]
Accelerated filer [ ]
Non-accelerated filer [ ]
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]

Revenues for year ended September 30, 2009: $ 766,355

Number of shares of the registrant's common stock outstanding as of February
12, 2010 was 39,684,158

TABLE OF CONTENTS

PAGE

PART I
ITEM 1. BUSINESS 2
ITEM 1A.RISK FACTORS 8
ITEM 2. PROPERTIES 11
ITEM 3. LEGAL PROCEEDINGS 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13

PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY; RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 14
ITEM 6. SELECTED FINANCIAL DATA 16
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 17
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 21
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA F-1
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 22
ITEM 9A.CONTROLS AND PROCEDURES 22

PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 23
ITEM 11.EXECUTIVE COMPENSATION 27
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS 28
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE 29
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES 29

PART IV
ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES 29

SIGNATURES 30

PART I

ITEM 1. DESCRIPTION OF BUSINESS

VALCOM, INC.'S CORPORATE STRUCTURE

As of September 30, 2009, ValCom, Inc. had the following operating
subsidiaries:

1. My Family TV, LLC 100%

2. Sun Investments, LLC 51%

3. Valencia Entertainment International 100%

Unless the context requires otherwise, the term "Company" includes ValCom,
Inc., a publicly held Delaware corporation and, its subsidiaries, predecessors
and affiliates whose operations or assets have been taken over by ValCom, Inc.
The Company also has a number of non-operating subsidiaries.

The Company is a diversified entertainment company and during 2009, reorganized
its operations into the following five divisions:

1. BROADCASTING

On December 15, 2008, we acquired 100% of Faith TV LLC, a Christian TV network
operating through 65 television broadcast affiliates and through IPTV & LPTV
networks. Upon closing, we re-branded the network and launched it as
"MyFamily TV," a new family focused TV network with plans to add significantly
more broadcast affiliates. My Family TV is a strong family oriented network
with a core established audience and broadcasts to over 50m households on
full-time and part-time through its extensive affiliate network. My Family
TV is a new network created for American families, broadcasting over
80 movies per month and in July 2009 launched Kid Mango, a daily 3 hour kids
block in a venture with Porchlight Entertainment which is carried on Sky Angel,
iLife and on the ION digital channel and featuring major kids programs
including Emmy Award winning titles such as Jakkers, Jay Jay the Jet Plane and
Denis the Menace.

With the acquisition of My Family TV, we now have a library of over 1,000
films, over 200 episodic TV series and more than 500 individual TV one-off
specials and documentary programs.

The purchase price included 100,000 shares of convertible preferred stock
valued at $9,000 based on an "as if" converted basis; 1,500,000 shares of
common stock valued at $59,400 based on the Company's quoted stock price; cash
payments totaling $661,092. The total adjusted purchase price was $729,492.

Through our joint venture with New Global Communications, Inc., we own a 45%
equity interest in ValCom Broadcasting, LLC, a New York limited liability
company, which operates KVPS (Channel 8), an independent television broadcaster
in the Palm Springs, California market. Valcom has not realized significant
revenues from this joint venture to date.

2. FILM AND TV PROGRAM PRODUCTION DIVISION

ValCom's business includes television production for network and syndication
programming, motion pictures, and real estate holdings. Revenue is primarily
generated through the lease of the sound stages and production. ValCom's past
and present clients include Paramount Pictures, Don Belisarious Productions,
Warner Brothers, Universal Studios, MGM, HBO, NBC, 20th Century Fox, Disney,
CBS, Sony, Showtime, the USA Network, the Game Show Network, Endemol, BET Home
Shopping Network and Sullivan Studios.

ValCom has a long history of TV and film production and continuously develops
projects for productions and considers proposals for co-production. ValCom has
developed and produced a number of live action series pilots and full length
feature film projects such as PCH (Pacific Coast Highway), One Deadly Road and
the 40 episode TV series AJ's Time Travelers. Valcom has been commissioned to
produce pilots such as Truster for Fox, It also produces development pilots
itself for pitching to networks such as the New York based sitcom Fuhgedabowit
and Lets Do It Again featuring Frankie Avalon and Ultimate Driver. With its
integrated studio operation, studio equipment and post production facility,
ValCom has the opportunity to co-produce by way of the provision of services
with the opportunity to defer costs and also to provide executive producer
services to assist with development, planning, financing and distribution.

October 1, 2003, we formed New Zoo Revue LLC pursuant to a joint venture
agreement with O Atlas Enterprises Inc.,a California corporation. New Zoo Revue
LLC was formed for the development and production of "New Zoo Revue" a feature
film and television series and marketing of existing episodes. The company did
not proceed with the production of the new feature film or series but in 2004,
it did complete a distribution agreement for the DVD with BCI Eclipse for 183
episodes of the New Zoo Revue library. Valcom has not realized significant
revenues from animation to date.

ValCom's Studio Division is composed of its studio at 14375 Myerlake Circle,
Clearwater, Florida which houses a state-of- the art production studio,
broadcast facilities, recording studios, production design construction,
animation and post-production. Corporate offices are located at 2113A Indian
Rocks Beach, Florida.

In 2009, Valcom produced the documentary feature film `Michel Legrand is
Music'. The documentary pays tribute to Michel Legrand's five-decade, multiple
award-winning career composing many of the most memorable film and television
scores and songs of all time. ValCom Inc. will premiere the documentary in a
limited week-long theatrical run in New York City on September 18th at the
Coliseum Theater. In addition, the documentary will premiere in Los Angeles on
September 16th at the Laemmle Grand Cineplex 4. "Michel Legrand Is Music"
honors the work of the three-time Academy Award-winning French music composer,
arranger, conductor and pianist Michel Legrand. Legrand composed more than 200
film and television scores and numerous jazz, popular and classical musical
albums. He won Academy Awards for Best Music, Original Song for "The Windmills
of Your Mind" from "The Thomas Crown Affair" (1969), Best Music, Original
Dramatic Score for "Summer of '42" (1971) and Best Music, Original Song for
Barbra Streisand Movie "Yentl" (1983). Academy Award-winning actor Jon Voight
narrates the documentary.

3. LIVE THEATRE AND EVENT DIVISION

Valcom has a live theatre division responsible for bringing live shows and
events to fruition. In 2006 Valcom produced a theater production called
'Headlights and Tailpipes' which was unveiled at the Las Vegas Stardust hotel
and ran until July 2006. Other events produced included the 2006 Superbowl pre-
game Wrap Bowl Event featuring Young Jeezy, Academy Award winner Ludacris,
Juvenile and Juelz Santana.

Valcom is producing a live theatre event based on Michel Legrand and his music
scheduled for March 2010 at the MGM Grand, Las Vegas and featuring a line-up of
major international recording stars.

4. DISTRIBUTION

Valcom , through Valencia Entertainment International operates a compete
distribution and syndication service to producers and thus acquire content for
its networks at little or no cost with its ability to guarantee TV broadcast
and provide a launch for further home entertainment distribution on DVD and on-
demand channels through it other relationships. ValCom also has the opportunity
to co-produce film and TV programs by way of the provision of services with the
opportunity to defer costs and also to provide executive producer services to
assist with development, planning, financing and then be able to acquire
distribution rights for these productions.

ValCom owns a substantial library of television content with over 1000 films
and it also acquires third party film and TV programming which it distributes
through Valencia Entertainment International. Valcom's extensive library also
contains 5000 music titles, with some of the original records of the Platters,
Elvis and Ike and Tina Turner.

On November 6, 2007, Valencia Entertainment signed an agreement with Porchlight
Distribution Inc. from Santa Monica Blvd., Los Angeles, for the worldwide
distribution of all 40 episodes of A.J.'s Time Travelers.

In December 2008, Valcom signed a production and distribution agreement with
XFC, the mixed martial arts promoter for the editing and world-wide
distribution of 13 one hour shows featuring live events promoted by XFC. XFC
events are currently attracting the largest audiences of any mixed martial arts
events promoted in the US

To coincide with the Michel LeGrand live events in Las Vegas in 2010, Valcom is
planning a number of distribution opportunities including the distribution and
syndication of programming based on the live event, music recordings, album and
other related events.

5. REAL ESTATE AND OTHER BROADCAST EVENT AUCTIONS

In 2009, Valcom pioneered the process of live event auctions covering a wide
range of events for TV broadcast and live webcast. Combining the expertise in
TV production, live event promotion and now as the owner of a broadcast TV
network, the opportunity offers a synergistic approach to such events. In 2008
and 2009, Valcom produced a wide range live TV and webcast events including
1. The Hilton `Make a Wish Foundation' broadcast live from Barron Hilton's
mansion in Beverly Hills in December 2008
2. The Universal Studios `Battlestar Galactica' prop and memorabilia auction
by live web-cast in 2009 over a number of days from the Pasadena
Convention Centre
3. The Grammy Awards `Music Cares' auction as part of the 2009 Grammy Awards

In June 2009, Valcom together with Florida Opportunities, Inc set up Sun
Investments LLC, a 51% subsidiary of Valcom, Inc to develop the business
opportunity of live event and regular real estate auctions on broadcast TV. Sun
Investments will acquire suitable properties and together with Valcom
production studios, My Family TV will produce live auction events. Valcom
acquires additional TV carriage through the purchase of airtime on major
networks and markets the events nationwide.

The first such event took place in June 2009 with live broadcast from the
Valcom studios media centre in Clearwater, Florida and broadcast live over 4
hours on My Family TV and carried on other networks with an auction of over 40
foreclosure properties acquired by Sun Investments. A series of further live
events are planned for October and November 2009.

EXPANSION PLANS

The Company continuously reviews industry developments and regulations for
potential expansion opportunities. As a public company, the Company benefits
from operating in highly regulated markets, which levels the competitive
playing field.

On July 14, 2007, we voluntarily filed for protection under Chapter 11 of the
U.S. Bankruptcy Code and became a Debtor in Possession. During 2008, we
completed a plan of reorganization and emerged from bankruptcy.

The background to the bankruptcy was that Valcom had initiated suit against
Chicago Title and The Laurus Master Fund in October 2005 because it claimed
that Laurus and Chicago Title had retained the $500,000 overage arising out of
the proceeding in 2003/4. Subsequently, the trial court entered summary
judgment in favor of Chicago Title and Laurus. Valcom appealed, contending that
there were triable issues as to whether: (1) Valcom suffered damages; (2)
Chicago Title and Laurus violated Civil Code sections 2924K, 2924d, and 2924h;
and (3) Chicago Title breached its duties as the foreclosure trustee.
Additionally, at the time that the trial court granted Summary Judgment against
Valcom, the trial court awarded costs and attorney fees of $562,127.30, and
Valcom argued in its appeal that Chicago Title was not entitled to attorney
fees, and the attorney fees awarded to Laurus were excessive.

Prior to the filing of the Chapter 11 bankruptcy, Valcom attempted to obtain a
stay against enforcement of the attorney fees and costs judgment awarded to
Chicago Title and Laurus pending appeal. Valcom was unable to prove to the
trial court's satisfaction that the value of Valcom's assets was sufficient to
protect Chicago Title and Laurus' judgment. The Court denied Valcom's attempt
to use its property in lieu of a cash bond, and threatened with enforcement of
the judgment, Valcom had no choice but to file for the protection of the
bankruptcy court.

Valcom, through appeals counsel, filed an appeal, and oral argument on the
appeal occurred December 17, 2007. On February 13, 2008, subsequent to the
Debtor's status conference in bankruptcy court, the Court of Appeals for the
Second Appellate District, Division Two, case number B193714, ruled in favor of
Valcom, Inc. Valcom has reasserted its claim against Laurus and Chicago Title
for money damages based upon a foreclosure conducted by them. The case is set
for trial on April 6, 2009. No action or claim has been asserted against
ValCom by these defendants.

On March 24, 2009, Valcom and Laurus Master Fund, Ltd, and Chicago Title
Company entered into a Settlement Agreement whereby Valcom resolved its
previously asserted claims against Laurus and Chicago Title. Pursuant to the
terms of the Agreement, Laurus agrees to pay the Company five hundred and fifty
thousand dollars ($550,000) which was received by the Company's attorney on
March 30, 2009. Within ten calendar days after the Company receives payment
from Laurus, the Company filed a Request for Dismissal of its claims, with
prejudice, of its actions against Laurus and Chicago Title and Chicago Title.
This settlement is reflected as `Other Income' with full accrual made for legal
costs relating to the settlement.

During this time, Valcom completed a major re-organization of its operations
and prepared a new business plan that will allow the Company to grow through
acquisitions and internal growth. It is imperative that the Company continues
to grow its operational revenues. The Company has invested in new corporate
offices, new studio facilities and has assembled its management team and
operational infrastructure.

Valcom entered into an agreement dated June 19, 2009 with Florida
Opportunities, Inc. ("FOI"), an investor in real estate properties, to sell REO
properties in an on-line auction format promoted by television advertising. The
company has an agreement with FOI to share in the profits of the sale of
properties on shared basis after expenses are deducted through a joint venture,
Sun Investment Services, LLC ("Sun"). Sun is jointly owned (51%:49%) by Valcom
and FOI and the Parties are currently negotiating an operating agreement for
future auctions. Valcom is also in active discussion with other entities to
market and promote properties utilizing its auction promotion format.

THE COMPANY'S COMPETITIVE POSITION

The Company's operations are in competition with all aspects of the
entertainment industry, locally, nationally and worldwide.

ValCom experiences competition from four market segments:

1) Traditional television broadcasting

2) Interactive television, game shows and reality television drama

3) Movies for television and theatrical releases

4) Studio facility services and other entertainment/media companies

TELEVISION BROADCASTING

While the company has significant experience in TV broadcasting and is
broadcasting a 24/7 network through an affiliate network, technology
advancements in the television broadcast area with a move to high definition
broadcast and expansion through IPTV & LPTV networks will be a feature of
virtually TV networks. The competitive environment for advertising has been
especially difficult over recent times but the management expects that
consolidation in the industry, alignment with other networks to increase
carriage and household coverage and continued innovative programming,
particularly where network broadcast is a key element to a number of revenue
streams will be the focus of the management for the continued growth of the
network.

INTERACTIVE TECHNOLOGY

The Company has experience in the interactive communications and entertainment
fields, which brings together elements of the TV and telecom industry. During
the year, Valcom facilities produced major live interactive TV shows and
reality TV based games shows including such shows as BET's `Take the Cake'
which was broadcast live 5 night a week from the studios Burbank facility. It
has created and broadcast interactive national and international television
programs using state-of-the-art computer technology, satellite communications,
and advanced telecommunications systems. The Company's management believes that
it's experience in developing and delivering interactive television programs,
will enhances its ability to launch new entertainment and information programs
based on comparable resources.

DEPENDENCE ON STUDIO FACILITIES

The Company's experience of studio facilities management over the years and has
been very successful. ValCom is focusing on its core business and capitalizes
on its reputation in the film and TV business to increase its revenue base. The
Company does not rely on a small group of customers. It may rent facilities,
production equipment and personnel to any motion picture studio or production
company. The Company's television broadcast operations will offer further
opportunities to revenue share in a broader way with TV productions through its
ability to broadcast and syndicate programming and further distribution though
its distribution subsidiary.

PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY
AGREEMENTS OR LABOR CONTRACTS, INCLUDING DURATION

The Company has no patent rights. It has the following service marks:

MYFAMILY TV

International Class 41, Granted registration number 77631826 on December 12,
2008 to Valcom Inc., 10 years.

SATELLITE BINGO:

International Class 41 (production and distribution of television game shows)
granted Registration Number 1,473,709 on January 19, 1988 to Satellite Bingo,
Inc. 20 years.

"HANGIN WITH THE BOYZ":

International Class 25 (Clothing) and 41 (Production and distribution of
television game shows) application filed on March 1, 2000, Serial NO.
75/932,583,

"WHO CAN YOU TRUST?"

Mark granted March 9, 1999 for 20 years International Class 41 (production and
distribution of television game shows) serial NO.75/485225,

"FUHGEDABOWDIT":

International Class 41 (production and distribution of television game shows)
Serial NO. 75/784,763 application filed on August 26, 1999.

"ULTIMATE DRIVER":

The Company applied for registration of copyright of "Ultimate Driver" in
October, 2002.

"FINAL ROUND" FIGHT FILM: registered under the Writer's Guild of America (WGA).
The Company applied for registration of copyright of "The Final Round-The
Gabriel Ruelas Story" on December 2, 2000.

The Company obtained an assignment to a copyright for "The Works," copyright
registrations for Globalot Bingo and derivatives: Number PAU 855-931 (June 10,
1986); Number Pau 847-876 (March 11, 1986); Number PAU 788-031 (September 19,
1985); Number PAU 927-410 (November 4, 1986); Number PA 370-721 (February 9,
1988); Number PA 516-494 (January 17, 1991); Number PA 533-697 (January 17,
1991); from Satellite Bingo, Inc. to SBI Communications, Inc., dated September
14, 1993.

The Company applied for registration of copyright of "The Final Round- The
Gabriel Ruelas Story" on December 2, 2000. The Company obtained an assignment
of copyright of "The Life", Txu 744-678 June 12, 1996. The Company obtained a
copyright by assignment of "PCH" Pau 2-040-426 September 12, 1995.

HEADLIGHTS AND TAILPIPES

Live Theater Show Debut and Stardust Casino: Broadcast, merchandise and
food/beverages.

SIN CITY RECORDS

Record Studio, Record Label, publishing, music, television, films and
merchandise

MOTOWN PARTNERS, LLC

Live Theatre, Production Revenue and Concerts

EMPLOYEES

As of September 30, 2009, the Company had 12 full-time employees, including two
officers and three professional staff. No employee of the Company is
represented by a labor union or is subject to a collective bargaining
agreement. We have never experienced a work stoppage and believe our employee
relations are very good.

ITEM 1A. RISK FACTORS

RISKS ASSOCIATED WITH OUR OPERATIONS

WE WILL REQUIRE ADDITIONAL FUNDS TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND
OUR INABILITY TO OBTAIN ADDITIONAL FINANCING COULD CAUSE US TO CEASE OUR
BUSINESS OPERATIONS.

We will need to raise additional funds through public or private debt or
sale of equity to achieve our current business strategy. Such financing may not
be available when needed. Even if such financing is available, it may be on
terms that are materially adverse to your interests with respect to dilution of
book value, dividend preferences, liquidation preferences, or other terms. Our
capital requirements to implement our business strategy will be significant.
However, at this time, we cannot determine the amount of additional funding
necessary to implement such plan. We anticipate requiring additional funds in
order to fully implement our business plan to significantly expand our
operations. We may not be able to obtain financing if and when it is needed on
terms we deem acceptable. Our inability to obtain financing would have a
material negative effect on our ability to implement our acquisition strategy,
and as a result, could require us to diminish or suspend our acquisition
strategy.

If we are unable to obtain financing on reasonable terms, we could be
forced to delay, scale back or eliminate certain product and service
development programs. In addition, such inability to obtain financing on
reasonable terms could have a material negative effect on our business,
operating results, or financial condition to such extent that we are forced to
restructure, file for bankruptcy, sell assets or cease operations, any of which
could put your investment dollars at significant risk.

IT IS LIKELY THAT ADDITIONAL SHARES OF OUR STOCK WILL BE ISSUED IN THE NORMAL
COURSE OF OUR BUSINESS DEVELOPMENT, WHICH WILL RESULT IN A DILUTIVE EFFECT ON
OUR EXISTING SHAREHOLDERS.

We will issue additional stock as required to raise additional working
capital in order to secure intellectual properties, undertake company
acquisitions, recruit and retain an effective management team, compensate our
officers and directors, engage industry consultants and for other business
development activities.

IF WE FAIL TO ADEQUATELY MANAGE OUR GROWTH, WE MAY NOT BE SUCCESSFUL IN GROWING
OUR BUSINESS AND BECOMING PROFITABLE.

We expect our business and number of employees to grow over the next year.
We expect that our growth will place significant stress on our operation,
management, employee base and ability to meet capital requirements sufficient
to support our growth over the next 12 months. Any failure to address the needs
of our growing business successfully could have a negative impact on our chance
of success.

IF WE ACQUIRE OR INVEST IN OTHER BUSINESSES, WE WILL FACE CERTAIN RISKS
INHERENT IN SUCH TRANSACTIONS.

We may acquire, make investments in, or enter into strategic alliances or
joint ventures with, companies engaged in businesses that are similar or
complementary to ours. If we make such acquisitions or investments or enter
into strategic alliances, we will face certain risks inherent in such
transactions. For example, we could face difficulties in managing and
integrating newly acquired operations. Additionally, such transactions would
divert management resources and may result in the loss of artists or
songwriters from our rosters. We cannot assure you that if we make any future
acquisitions, investments, strategic alliances or joint ventures that they will
be completed in a timely manner, that they will be structured or financed in a
way that will enhance our creditworthiness or that they will meet our strategic
objectives or otherwise be successful. Failure to effectively manage any of
these transactions could result in material increases in costs or reductions in
expected revenues, or both.

"PENNY STOCK" RULES MAY MAKE BUYING OR SELLING OUR COMMON STOCK DIFFICULT.

Trading in our securities is subject to the "penny stock" rules. The SEC
has adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. These rules require that any broker-dealer who recommends
our securities to persons other than prior customers and accredited investors,
must, prior to the sale, make a special written suitability determination for
the purchaser and receive the purchaser's written agreement to execute the
transaction. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated with
trading in the penny stock market. In addition, broker-dealers must disclose
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities they offer. The additional burdens
imposed upon broker- dealers by such requirements may discourage broker-dealers
from effecting transactions in our securities, which could severely limit the
market price and liquidity of our securities. Broker- dealers who sell penny
stocks to certain types of investors are required to comply with the
Commission's regulations concerning the transfer of penny stocks. These
regulations require broker-dealers to:

* Make a suitability determination prior to selling a penny stock to the
purchaser;
* Receive the purchaser's written consent to the transaction; and
* Provide certain written disclosures to the purchaser.

RISKS ASSOCIATED WITH THE ENTERTAINMENT, MEDIA AND COMMUNICATIONS INDUSTRIES

COMPETITION FROM PROVIDERS OF SIMILAR PRODUCTS AND SERVICES COULD MATERIALLY
ADVERSELY AFFECT OUR REVENUES AND FINANCIAL CONDITION.

The industry in which we compete is a rapidly evolving, highly competitive
and fragmented market, which is based on consumer preferences and requires
substantial human and capital resources. We expect competition to intensify in
the future. There can be no assurance that we will be able to compete
effectively. We believe that the main competitive factors in
the entertainment, media and communications industries include effective
marketing and sales, brand recognition, product quality, product placement and
availability, niche marketing and segmentation and value propositions. They
also include benefits of one's company, product and services, features and
functionality, and cost. Many of our competitors are established, profitable
and have strong attributes in many, most or all of these areas. They may be
able to leverage their existing relationships to offer alternative products or
services at more attractive pricing or with better customer support. Other
companies may also enter our markets with better products or services, greater
financial and human resources and/or greater brand recognition. Competitors may
continue to improve or expand current products and introduce new products. We
may be perceived as relatively too small or untested to be awarded business
relative to the competition. To be competitive, we will have to invest
significant resources in business development, advertising and marketing. We
may also have to rely on strategic partnerships for critical branding and
relationship leverage, which partnerships may or may not be available or
sufficient. We cannot assure that it will have sufficient resources to make
these investments or that we will be able to make the advances necessary to be
competitive. Increased competition may result in price reductions, reduced
gross margin and loss of market share. Failure to compete successfully against
current or future competitors could have a material adverse effect on the
Company's business, operating results and financial condition.

THE SPECULATIVE NATURE OF THE ENTERTAINMENT, MEDIA AND COMMUNICATIONS INDUSTRY
MAY RESULT IN OUR INABILITY TO PRODUCE PRODUCTS OR SERVICES THAT RECEIVE
SUFFICIENT MARKET ACCEPTANCE FOR US TO BE SUCCESSFUL.

Certain segments of the entertainment, media and communications industry
are highly speculative and historically have involved a substantial degree of
risk. For example, the success of a particular film, program or recreational
attraction depends upon unpredictable and changing factors, including the
success of promotional efforts, the availability of alternative forms of
entertainment and leisure time activities, general economic conditions, public
acceptance and other tangible and intangible factors, many of which are beyond
our control. If we complete a business combination with a target business in
such a segment, we may be unable to produce products or services that receive
sufficient market acceptance for us to be successful.

CHANGES IN TECHNOLOGY MAY REDUCE THE DEMAND FOR THE PRODUCTS OR SERVICES WE MAY
OFFER FOLLOWING A BUSINESS COMBINATION.

The entertainment, media and communications industries are substantially
affected by rapid and significant changes in technology. These changes may
reduce the demand for certain existing services and technologies used in these
industries or render them obsolete. We cannot assure you that the technologies
used by or relied upon or produced by a target business with which we effect a
business combination will not be subject to such occurrence. While we may
attempt to adapt and apply the services provided by the target business to
newer technologies, we cannot assure you that we will have sufficient resources
to fund these changes or that these changes will ultimately prove successful.

IF OUR PRODUCTS OR SERVICES THAT WE MARKET AND SELL ARE NOT ACCEPTED BY THE
PUBLIC, OUR PROFITS MAY DECLINE.

Certain segments of the entertainment, media and communications industries
are dependent on developing and marketing new products and services that
respond to technological and competitive developments and changing customer
needs and tastes. We cannot assure you that the products and services of a
target business with which we effect a business combination will gain market
acceptance. Any significant delay or failure in developing new or enhanced
technology, including new product and service offerings, could result in a loss
of actual or potential market share and a decrease in revenues.

THE TV BROADCASTING INDUSTRY IS EXTREMELY COMPETITIVE AND REQUIRES CONTINUES
INVESTMENT IN NEW TECHNOLOGY, MARKETING, CARRIAGE AND IN NEW PROGRAMMING

The TV broadcast industry continues to be under severe pressure with
declining advertising revenues and a very competitive environment. At the same
time, the viewer are seeking continued technology improvements such as High
Definition broadcast which requires continued investment and higher costs of
operation. The investment required for this and the additional investment in
improved programming cannot guarantee that the broadcast networks will retain
its viewing audience or be attractive for advertisers in the future.

IF OUR REAL ESTATE WE SELL BY LIVE TV AUCTION OR BY DIRECT SALE IS NOT ACCEPTED
BY THE MARKET OR CARRIES ANY RESIDUAL LIABILITY, THIS MAY HAVE AN ADVERSE
EFFECT ON OUR PROFITS.

There is no guarantee that the TV auction sales or other real estate
sales will be successful, or that the company will be able to continue to
source properties suitable for live TV auction sales or that these properties,
due to the fact that most of these are foreclosed properties, may carry some
contingent or other liability.

ITEM 2. PROPERTIES

ValCom's Studio Division is composed of leased studio facility at 14375
Myerlake Circle, Clearwater, Florida and its corporate office at 2113A Gulf
Blvd, Indian Rocks Beach , Florida, 33785.

ValCom also holds a 1/3 equity interest in the real estate of 7.5 acres,
160,000 square feet of commercial space.

ITEM 3 - LEGAL PROCEEDINGS

Any significant legal action involving the company during the financial year
and currently are set out below. The company also pursues legal action where
appropriate in the normal course of business such as for the collection of
receivables or in the defense of frivolous claims on the company.

CHAPTER 11 BANKRUPTCY

During August 2008, the Company emerged from bankruptcy following approval of a
plan of re-organization by the United States Bankruptcy Court, Central District
of California on August 5, 2008 and during 2008 and 2009 completed the approved
plan of re-organization.

ValCom had filed a voluntary chapter 11 bankruptcy petition on July 14, 2007
and obtained the status of Debtor in Possession. Valcom had initiated a suit
against Chicago Title and The Laurus Master Fund in October 2005 because it
claimed that Laurus and Chicago Title had retained the $500,000 overage arising
out of the proceeding in 2003/4. Subsequently, the trial court entered summary
judgment in favor of Chicago Title and Laurus. Valcom appealed, contending that
there were triable issues as to whether: (1) Valcom suffered damages; (2)
Chicago Title and Laurus violated Civil Code sections 2924K, 2924d, and 2924h;
and (3) Chicago Title breached its duties as the foreclosure trustee.
Additionally, at the time that the trial court granted Summary Judgment against
Valcom, the trial court awarded costs and attorney fees of $562,127.30, and
Valcom argued in its appeal that Chicago Title was not entitled to attorney
fees, and that the attorney fees awarded to Laurus were excessive.

LAURUS MASTER FUND AND CHICAGO TITLE

Valcom had initiated an action against Chicago Title and The Laurus Master Fund
in October 2005 because it claimed that Laurus and Chicago Title had retained
the $500,000 overage arising out of the proceeding in 2003/4. Subsequently, the
trial court entered summary judgment in favor of Chicago Title and Laurus.
Valcom appealed, contending that there were triable issues as to whether: (1)
Valcom suffered damages; (2) Chicago Title and Laurus violated Civil Code
sections 2924K, 2924d, and 2924h; and (3) Chicago Title breached its duties as
the foreclosure trustee. Additionally, at the time that the trial court granted
Summary Judgment against Valcom, the trial court awarded costs and attorney
fees of $562,127.30, and Valcom argued in its appeal that Chicago Title was not
entitled to attorney fees, and that the attorney fees awarded to Laurus were
excessive.

Valcom has reasserted its claim against Laurus and Chicago Title for money
damages based upon a foreclosure conducted by them. The case is set for trial
on April 6, 2009. No action or claim has been asserted against ValCom by these
defendants.

On March 24, 2009, Valcom and Laurus Master Fund, Ltd, a company organized
under the laws of the Cayman Islands and Chicago Title Company, a California
Corporation entered into a Settlement Agreement whereby Valcom resolved its
previously asserted claims against Laurus and Chicago Title. Pursuant to the
terms of the Agreement, Laurus agrees to pay the Company five hundred and fifty
thousand dollars ($550,000) which was received by the Company's attorney on
March 30th. Within ten calendar days after the Company receives payment from
Laurus, the Company filed a Request for Dismissal of its claims, with
prejudice, of its actions against Laurus and Chicago Title and Chicago Title.
This settlement is reflected as `Other Income' with full accrual made for legal
costs relating to the settlement.

VALCOM, INC. V. TTL PRODUCTIONS, INC., TROY LINGER, CHRIS LENTO DBA BRENTWOOD
MAGAZINE,

Case number SC094099. This matter involves breach of contract and fraud against
the Defendants for $380,000 filed on June 1, 2007 in the Superior Court of Los
Angeles, Santa Monica District alleging breach of contract, specific
performance, injunctive relief, declaratory relief, accounting and negligence.
In this matter, Valcom is the plaintiff and sued the defendants for breach of
contract with respect to Valcom's purchase of Brentwood Magazine. This matter
is currently scheduled for a post-mediation conference on February 4, 2009 and
the parties subsequently reached agreement and settlement on this matter.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NONE.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR COMMON EQUITY.

The Company's common stock is traded on the NASD Over-the-Counter Electronic
Bulletin Board under the symbol VLCO upon the effectuation of a one-for-twenty
reverse stock split on December 11, 2006. The Company's common stock was
previously traded on the NASD Over-the-Counter Electronic Bulletin Board under
the symbol VACM. The Company's trading symbol on the Frankfurt XETRA is "VAM"
and its security code is #940589.

The following table sets forth in United States dollars the high and low bid
and ask quotations for the Company's common stock for each quarter within the
last two fiscal years. Such bid and ask quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commissions, and do not necessarily
represent actual transactions. The source of the following information is the
NASD Over-the-Counter Electronic Bulletin Board.

COMMON STOCK

Year to September 30 2009 Low High
------------------------- ------- -------
First Quarter $ 0.05 $ 0.20
------- -------
Second Quarter $ 0.04 $ 0.12
------- -------
Third Quarter $ 0.03 $ 0.05
------- -------
Fourth Quarter $ 0.04 $ 0.10
------- -------

Year to September 30 2008
-------------------------
First Quarter $ 0.03 $ 0.29
------- -------
Second Quarter $ 0.03 $ 0.10
------- -------
Third Quarter $ 0.04 $ 0.09
------- -------
Fourth Quarter $ 0.08 $ 0.22
------- -------

Year to September 30 2007
-------------------------
First Quarter $ 0.03 $ 1.00
------- -------
Second Quarter $ 0.51 $ 0.08
------- -------
Third Quarter $ 0.14 $ 0.27
------- -------
Fourth Quarter $ 0.06 $ 0.37
------- -------

Year to September 2006
----------------------
First Quarter $ 0.06 $ 0.21
------- -------
Second Quarter $ 0.06 $ 0.20
------- -------
Third Quarter $ 0.06 $ 0.20
------- -------
Fourth Quarter $ 0.07 $ 0.14
------- -------

Prices quoted reflect a one share-for-twenty reverse split effective on
February 1, 1993, a two share-for-one forward split effective on August 14,
2000, a one share-for-ten reverse split effective on September 27, 2001 and a
one-for-twenty reverse split effective on December 11, 2006.

As of September 30, 2009, we had 39,064,158 shares of common stock outstanding,
with approximately 6.3m shares in the public float and approximately 1440
shareholders of record.

DIVIDENDS

There have been no cash dividends declared or paid since the inception of the
Company. Continental Stock Transfer & Trust Company, 17 Battery Place; New
York, New York 10004, acts as transfer agent and registrar for the Company's
common and preferred stock.

DESCRIPTION OF SECURITIES

The Company is authorized to issue 275,000,000 shares of capital stock,
250,000,000 shares of which are designated as common stock, $0.001 par value
per share, and the balance of which are designated as preferred stock, $0.001
par value per share.

The holders of common stock do not have cumulative voting rights and are
entitled to one vote per share on all matters to be voted upon by the
stockholders. Our common stock is not entitled to preemptive rights and is not
subject to redemption (including sinking fund provisions) or conversion. Upon
our liquidation, dissolution or winding-up, the assets (if any) legally
available for distribution to stockholders are distributable ratably among the
holders of our common stock after payment of all classes or series of our
preferred stock. All outstanding shares of our common stock are validly issued,
fully-paid and non-assessable. The rights, preferences and privileges of
holders of our common stock are subject to the preferential rights of all
classes or series of preferred stock that we may issue in the future.

PREFERRED STOCK

At September 30, 2009, the Company had three series of convertible preferred
stock: B, C and D. Series B Preferred Stock has no voting rights, is entitled
to receive cumulative dividends in preference to any dividend on the common
stock at a rate of 10% per share, per year, to be issued if and when declared
by the Board of Directors and can be converted at any time into common stock on
a one for five basis. In the event of any liquidation, the holders of shares of
Series B Preferred Stock then outstanding shall be entitled to receive an
amount equal to the purchase price per share, plus an amount equal to declared
but unpaid dividends thereon, if any, to the date of payment. Series C
Preferred Stock has no voting rights, is entitled to receive cumulative
dividends in preference to any dividend on the common stock at a rate of 10%
per share, per year, to be issued if and when declared by the Board of
Directors and can be converted at any time into common stock on a one for one
basis. In the event of any liquidation, the holders of shares of Series C
Preferred Stock then outstanding shall be entitled to receive an amount equal
to the purchase price per share, plus an amount equal to declared but unpaid
dividends thereon, if any, to the date of payment. Series D Preferred Stock has
no voting rights, no dividends and can be converted at any time to common stock
on a one for one basis. In the event of any liquidation, the holder of shares
of Series C Preferred Stock then outstanding shall be entitled to receive an
amount equal to the purchase price per share. With respect to rights on
liquidation, Series B, C and D Preferred Stock shall rank senior to the common
stock but Series C Preferred Stock shall be senior to both Series B and D
Preferred Stock while Series D Preferred Stock shall be junior to both Series B
and C Preferred Stock. The Board of Directors has not declared any dividends
for any of the series of convertible preferred stock.

EQUITY COMPENSATION PLAN

The Company has a 2004 Employee Stock Compensation Plan (the "ESCP") to enhance
its ability to attract, retain and compensate experienced employees, officers,
directors and consultants. The effective date of the ESCP is January 10, 2004.
A total of 2,000,000 shares of common stock were registered for issuance under
the ESCP on Form S-8 registration statement filed December 30, 2003. Pursuant
to the ESCP, the Compensation Committee or the Board of Directors may award
registered shares of the Company's common stock to employees, officers,
directors or consultants for cash, property, services rendered or other form of
payment constituting lawful consideration. Plan shares awarded for other than
services rendered shall be sold at not less than fair market value on the date
of grant. During the fiscal year ended September 30, 2004, the Company issued
an aggregate of 1,000,000 shares of registered common stock to employees,
officers, directors and consultants pursuant to the ESCP for services rendered.

The following table shows information with respect to each equity compensation
plan under which our common stock is authorized for issuance as of the fiscal
year ended September 30, 2009.

EQUITY COMPENSATION PLAN INFORMATION.

Plan category NUMBER OF WEIGHTED AVERAGE NUMBER OF SECURITIES
SECURITIES EXERCISE PRICE OF REMAINING
TO BE ISSUED OUTSTANDING OPTIONS, AVAILABLE PLANS
UPON EXERCISE OF WARRANTS FOR FUTURE ISSUANCE
OUTSTANDING AND RIGHTS UNDER EQUITY PLANS
OPTIONS, (EXCLUDING SECURITIES
WARRANTS REFLECTED IN
AND RIGHTS COLUMN (A)
(A) (B) (C)
---------------- ---------------- ---------------------
EQUITY COMPENSATION
PLANS APPROVED BY
SECURITY HOLDERS

EQUITY COMPENSATION
PLANS NOT APPROVED BY
SECURITY HOLDERS
TOTAL Nil Nil Nil

RECENT ISSUANCES OF UNREGISTERED SECURITIES

(A) COMMON STOCK

The Company claims an exemption from the registration requirements of the Act
for the issuance of the Preferred Stock and Common Stock, as set forth above,
pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder
since, as among other things, the transaction did not involve a public
offering, the investors and/or purchasers were each an accredited investor
and/or qualified institutional buyer, the investors had access to information
about the Company and their investment, the investors took the preferred and
common stock for investment and not resale and the Company took appropriate
measures to restrict the transfer of the preferred and common stock.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS.

Certain statements in "Management's Discussion and Analysis or Plan of
Operation" below, and elsewhere in this annual report, are not related to
historical results, and are forward-looking statements. Forward-looking
statements present our expectations or forecasts of future events. You can
identify these statements by the fact that they do not relate strictly to
historical or current facts. These statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of
activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed or
implied by such forward- looking statements. Forward-looking statements
frequently are accompanied by such words such as "may," "will," "should,"
"could," "expects," "plans," "intends," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue," or the negative of such terms or other
words and terms of similar meaning. Although we believe that the expectations
reflected in the forward- looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance, achievements, or
timeliness of such results. Moreover, neither we nor any other person assumes
responsibility for the accuracy and completeness of such forward-looking
statements. We are under no duty to update any of the forward-looking
statements after the date of this annual report. Subsequent written and oral
forward looking statements attributable to us or to persons acting in our
behalf are expressly qualified in their entirety by the cautionary statements
and risk factors set forth below and elsewhere in this annual report, and in
other reports filed by us with the SEC.

INTRODUCTION

PLAN OF OPERATION

As of September 30, 2009, ValCom, Inc. operations were comprised of the
following activities:

1. BROADCASTING

On August 1, 2008, ValCom signed a letter of intent to acquire 100% of Faith TV
LLC, a Christian TV network operating through 65 television broadcast
affiliates and through IPTV & LPTV networks. On December 15, 2008, Valcom
closed the agreement for the 100% purchase of Faith TV and has re-branded the
network and launched it as "MyFamily TV", a new family focused TV network with
plans to add significantly more broadcast affiliates. My Family TV is a strong
family oriented network with a core established audience and broadcasts to over
50m households on full-time and part-time through its extensive affiliate
network. My Family TV is a new network created for American families,
broadcasting over 80 movies per month and in July 2009 launched Kid Mango, a
daily 3 hour kids block in a venture with Porchlight Entertainment which is
carried on Sky Angel, iLife and on the ION digital channel and featuring major
kids programs including Emmy Award winning titles such as Jakkers, Jay Jay the
Jet Plane and Denis the Menace.

With the acquisition of My Family TV, Valcom now has a library of over 1,000
films, over 200 episodic TV series and more than 500 individual TV one-off
specials and documentary programs.

2. FILM AND TV PROGRAM PRODUCTION DIVISION

ValCom's business includes television production for network and syndication
programming, motion pictures, and real estate holdings. Revenue is primarily
generated through the lease of the sound stages and production. Our past and
present clients include Paramount Pictures, Don Belisarious Productions, Warner
Brothers, Universal Studios, MGM, HBO, NBC, 20th Century Fox, Disney, CBS,
Sony, Showtime, the USA Network, the Game Show Network, Endemol, BET Home
Shopping Network and Sullivan Studios.

ValCom has a long history of TV and film production and continuously develops
projects for productions and considers proposals for co-production. ValCom has
developed and produced a number of live action series pilots and full length
feature film projects such as PCH (Pacific Coast Highway) and the 40 episode TV
series AJ's Time Travelers. Valcom has been commissioned to produce pilots such
as Truster for Fox, It also produces development pilots itself for pitching to
networks such as the New York based sitcom Fuhgedabowit and Lets Do It Again
featuring Frankie Avalon. With its integrated studio operation, studio
equipment and post production facility, ValCom has the opportunity to co-
produce by way of the provision of services with the opportunity to defer costs
and also to provide executive producer services to assist with development,
planning, financing and distribution.

In 2009, Valcom produced the documentary feature film `Michel Le Grand is
Music'. The documentary pays tribute to Michel Legrand's five-decade, multiple
award-winning career composing many of the most memorable film and television
scores and songs of all time. ValCom Inc. will premiere the documentary in a
limited week-long theatrical run in New York City on September 18th at the
Coliseum Theater. In addition, the documentary will premiere in Los Angeles on
September 16th at the Laemmle Grand Cineplex 4. "Michel Legrand Is Music"
honors the work of the three-time Academy Award-winning French music composer,
arranger, conductor and pianist Michel Legrand. Legrand composed more than 200
film and television scores and numerous jazz, popular and classical musical
albums. He won Academy Awards for Best Music, Original Song for "The Windmills
of Your Mind" from "The Thomas Crown Affair" (1969), Best Music, Original
Dramatic Score for "Summer of '42" (1971) and Best Music, Original Song for
Barbra Streisand Movie "Yentl" (1983). Academy Award-winning actor Jon Voight
narrates the documentary.

3. LIVE THEATRE AND EVENT DIVISION

Valcom is producing a live theatre event based on Michel LeGrand and his music
scheduled for March 2010 at the MGM Grand, Las Vegas and featuring a line-up of
major international recording stars.

4. DISTRIBUTION

5. REAL ESTATE AND OTHER BROADCAST EVENT AUCTIONS

In 2009, Valcom pioneered the process of live event auctions covering a wide
range of events for TV broadcast and live webcast. Combining the expertise in
TV production, live event promotion and now as the owner of a broadcast TV
network, the opportunity offers a synergistic approach to such events. In 2008
and 2009, Valcom produced a wide range live TV and webcast events including
1. The Hilton `Make a Wish Foundation' broadcast live from the Hilton mansion
in Beverly Hills in December 2008
2. The Universal Studios `Battlestar Galactica' prop and memorabilia auction
by live web-cast in 2009 over a number of days from the Pasadena
Convention Centre
3. The Grammy Awards `Music Cares' auction as part of the 2009 Grammy Awards

RESULTS OF OPERATIONS

FISCAL YEAR ENDED SEPTEMBER 30, 2009 COMPARED TO FISCAL YEAR ENDED SEPTEMBER
30, 2008

Revenues for the year ended September 30, 2009 decreased by $169,336 or 18%
from $935,691 for the year ended September 30, 2008 to $766,355 for the same
period in 2009. The decrease in revenue was principally due to reduced
production activity.

Production costs for the year ended September 30, 2009 increased by $177,832 or
59% to $478,993 for the year ended September 30, 2009 compared to $301,161 for
the same period in 2008. The increase in production costs was principally
due to additional direct production costs.

Advertising and marketing costs for the year ended September 30, 2009 decreased
by $168,357 or 75% to $56,437 compared to $224,794 for the year ended September
30, 2008. The decrease was due principally to decreased promotion spend.

Depreciation and amortization expense for the year ended September 30, 2009
increased by $42,200 or 37% from $112,701 for the year ended September 30, 2008
to $154,901 for the same period in 2009. The increase was primarily due to
additional assets from the acquisitiono of Faith TV.

General and administrative expenses for the year ended September 30, 2009
increased by $1,46,699 or 86% to $2,481,574 for the year ended September 30,
2009 from $1,334,875 for the same period in 2008. The decrease was due
principally to increased costs from the acquisition of subsidiaries.

Interest expense for the year ended September 30, 2009 increased by $77,594 or
123% from $63,054 for the year ended September 30, 2008 to $140,348 for the
same period in 2009. The decrease was due principally to reduction in interest
bearing loan notes.

Due to the factors described above, the Company's net loss increased by
$1,182,199 or 232% from a net loss of $510,130 for the year ended September
30, 2008 to a loss of $1,692,329 for the year ended September 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

The Company's consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in the
consolidated financial statements, the Company has a net loss of $1,692,329 and
a negative cash flow from operations of $549,962 for the year ended September
30, 2009, and an accumulated deficit of $20,501,749 at September 30, 2009.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. Cash totaled $110,846 on September 30, 2009,
compared to $86,415 at September 30, 2008. During the fiscal year 2009, net
cash used by operating activities totaled $549,962 compared to $315,170 for
the year ended September 30, 2008. A significant portion of operating
activities included payments for accounting and legal fees, consulting fees,
salaries, and rent. Net cash increase by financing activities for fiscal year
2009 totaled $1,276,250. Net cash used by investing activities during fiscal
year 2009 totaled $701,857 with ,the ,purchase of subsidiaries and fixed
assets.

The above cash flow activities yielded a net cash increase of $24,431 during
fiscal year 2009 compared to a net cash increase of $80,489 during the year
ended September 30, 2008.

There can be no assurance that the Company will be able to raise capital on
terms acceptable to the Company, if at all. The total shareholders' equity
deficit increased to $680,430 in fiscal year 2009. Additional paid in capital
increased by $1,628,250 in fiscal year ended September 30, 2009.

INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY

During the last fiscal year, the Company financed its operations with cash from
its operating activities and private offerings of its securities to directors
of the Company. On September 15, 2008, the Company converted $1,669,729 in debt
by issuing 1,669,729 shares of Series C Preferred Stock

The Company anticipates that its stock issuances and projected positive cash
flow from operations collectively will generate sufficient funds for the
Company's operations for the next 12 months. If the Company's existing cash
combined with cash from operating activities is not adequate to finance the
Company's operations during the next 12 months, the Company will consider one
or more of the following options: (1) issuing equity securities in exchange for
services, (2) selling additional equity or debt securities or (3) reducing the
number of its employees and reducing its operating costs.

FUTURE FUNDING REQUIREMENTS

The Company's capital requirements have been and will continue to be
significant. The Company's adequacy of available funds during the next fiscal
year and thereafter will depend on many factors, including whether the Company
will be able to: (1) retain its existing tenants (2) rent its production
equipment and personnel profitably, (3) develop additional distribution
channels for its programming. Assuming funds are available, during the next
fiscal year, the Company expects to spend approximately $2,000,000 for
facilities, equipment and growth.

There can be no assurance that additional private or public financing,
including debt or equity financing, will be available as needed, or, if
available, on terms favorable to the Company. Any additional equity financing
may be dilutive to stockholders and such additional equity securities may have
rights, preferences or privileges that are senior to those of the Company's
existing common or preferred stock. Furthermore, debt financing, if available,
will require payment of interest and may involve restrictive covenants that
could impose limitations on the operating flexibility of the Company. The
Company's failure to successfully obtain additional future funding may
jeopardize its ability to continue its business and operations.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Valcom, Inc
Indian Rocks Beach, Florida

We have audited the consolidated balance sheet of Valcom, Inc. and subsidiaries
(the "Company") as of September 30, 2009 and 2008, and the related consolidated
statements of operations, stockholders'deficit, and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of Company as of September 30, 2009
and 2008, and the results of their operations and their cash flows for the
years then ended, in conformity with accounting principles generally accepted
in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that Valcom, Inc. will continue as a going concern. As discussed in Note 3 to
the financial statements, Valcom, Inc. suffered losses from operations and has
a working capital deficit, which raises substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters also
are described in Note 3. The consolidated financial statements do not include
any adjustments to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classification of liabilities
that may result from the outcome of this uncertainty.

/s/MaloneBailey, LLP
www.malone-bailey.com
Houston, Texas
February 22, 2010

F-1

VALCOM, INC.
Balance Sheets

Assets

September 30, September 30,
2009 2008
Restated Restated
-------------- --------------

CURRENT ASSETS

Cash $ 110,846 $ 86,415
Restricted cash 60,230
Accounts receivable, net 44,303 25,947
Inventory 487,324
-------------- --------------

Total Current Assets 702,703 112,362
-------------- --------------

FIXED ASSETS
Film library, net of accumulated
depreciation of $44,859 and $- 205,141 -
Property and equipment, net of accumulated
depreciation of $5,831 and $- 33,523 -
Intangible assets, net of accumulated
amortization of $104,211 and $- 290,695 -
-------------- --------------

TOTAL ASSETS $ 1,232,062 $ 112,362
============== ==============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable and
accrued expenses $ 633,605 $ 425,945
Due to related parties 900,048 -
Convertible notes payable 157,589
Notes payable 221,250 177,500
-------------- --------------

Total Current Liabilities 1,912,492 751,201
------------- --------------

TOTAL LIABILITIES 1,912,492 751,201
-------------- --------------

STOCKHOLDERS' DEFICIT

Series B Preferred stock,
1,000,000 shares authorized at
par value of $0.001, 38,000
shares issued and outstanding 38 38

Series C Preferred stock,
25,000,000 shares authorized
at par v alue of $0.001,
14,691,395, 9,591,395 and
shares issued 14,691 9,591
and outstanding, respectively

Common stock, 250,000,000 shares
authorized at par value
of $0.001, 39,064,158, 21,676,099
and shares issued and outstanding,
respectively 39,064 21,676

Treasury stock, 35,000 shares (23,522) (23,522)
Additional paid-in capital 20,014,218 18,162,798
Accumulated deficit (20,724,919) (18,809,420)
-------------- --------------

Total Stockholders' Deficit (680,430) (638,839)
-------------- --------------

TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 1,232,062 $ 112,362
============== ==============

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

F-2

VALCOM, INC.
Statements of Operations

For the Year Ended
September 30,
------------------
2009 2008
Restated Restated
----------- ------------

REVENUES $ 766,355 $ 935,691
COST OF GOODS SOLD (478,993) (301,161)
----------- ------------
GROSS MARGIN 287,362 634,530

OPERATING EXPENSES

Advertising and marketing 56,437 224,794
Depreciation expense 154,901 112,701
General and administrative 2,481,574 1,334,875
----------- ------------

Total Operating Expenses 2,692,912 1,672,370
----------- ------------

LOSS FROM OPERATIONS (2,405,550) (1,037,840)
----------- ------------

OTHER INCOME

Interest expense, net (140,648) (63,054)
Gain on settlement of litigation 550,000 -
Gain on extinguishment of debt - 588,462
Gain on derivative liabilities 60,672 -
Other Income(Expense) 20,027 2,302
----------- ------------

TOTAL OTHER INCOME (EXPENSE) 490,051 527,710
----------- ------------

LOSS BEFORE INCOME TAXES (1,915,499) (510,130)

PROVISION FOR INCOME TAXES - -
----------- ------------

NET LOSS $(1,915,499) $ (510,130)
=========== ============

BASIC LOSS PER SHARE $ (0.07) $ (0.03)

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 28,762,932 14,775,061
=========== ============

The accompanying notes are a integral part of these financials statements.

F-3

VALCOM, INC.
Condensed consolidated Statements of Stockholders' Equity (Deficit)
(These Financial Statements are Unaudited)

Series B Preferred Stock Series C Preferred Stock Common Stock
Shares Amount Shares Amount Shares Amount
Restated Restated Restated
------ -------- --------- -------- ----------- --------

Balance,
September 30, 2007 - as filed 38,000 38 7,921,666 7,921 10,376,099 10,376

Correction of an error - - - - - -

Balance,
September 30, 2007 - Restated 38,000 38 7,921,666 7,921 10,376,099 10,376

Common stock issued
for services - - - - 6,130,000 6,130

Preferred stock
issued for debt - - 1,669,729 1,670 - -

Common stock issued
for debt - - - - 500,000 500

Common stock issued
for interest 600,000 600

Common stock issued for
cash - - - - 4,070,000 4,070

Net loss for the year
ended September 30,
2008 - - - - - -
------ ------ --------- ------- ----------- -------
Balance, September 30,
2008 38,000 $ 38 9,591,395 $ 9,591 21,676,099 $21,676
====== ====== ========= ======= =========== =======
Balance, September 30,
2008 38,000 $ 38 9,591,395 $ 9,591 21,676,099 $21,676

Common stock issued
for services - - 4,497,059 4,497

Preferred stock issued
for cash - - 5,000,000 5,000

Preferred stock issued for
Subsidiary Acquisition 100,000 100

Common stock issued for
debt extension - - 75,000 75

Common stock issued for
cash - - 10,125,000 10,125

Common Stock issued for
Subsidiary Acquisition 1,500,000 1,500

Common Stock issued for
registration rights
penalties 1,191,000 1,191

Derivative liability -
tainted warrants

Derivative liability -
settlement

Net loss for the year
ended September 30,
2009 - -
------ ------ --------- ------- ----------- -------
Balance, September 30,
2009 - Restated 38,000 $ 38 14,691,395 $14,691 39,064,158 $39,064
====== ====== ========== ======= =========== =======

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

F-4

VALCOM, INC.
Condensed consolidated Statements of Stockholders' Equity (Deficit)
(These Financial Statements are Unaudited)
(CONTINUED)

Total
Additional Stockholders'
Treasury Paid-In Accumulated Equity
Stock Capital Deficit (Deficit)
Restated Restated
--------- ---------- ----------- ------------
Balance,September 30, 2007
- as filed (23,522) 15,081,739 (17,299,290) (2,222,738)

Correction of an error - - (1,000,000) (1,000,000)

Balance, September 30, 2007
- Restated (23,522) 15,081,739 (18,299,290) (3,222,738)

Common stock issued for services - 835,170 - 841,300

Preferred stock issued for debt - 1,668,059 - 1,669,729

Common stock issued for debt - 79,500 - 80,000

Common stock issued for interest 95,400 - 96,000

Common stock issued for
cash - 402,930 - 407,000

Net loss for the year
ended September 30, 2008 - - (510,130) (510,130)
--------- ----------- ------------ ------------
Balance, September 30, 2008 $ (23,522) $18,162,798 $(18,809,420) $ (638,839)
========= =========== ============ ============
Balance, September 30, 2008 $ (23,522) $18,162,798 $(18,809,420) $ (638,839)

Common stock issued for services - 360,150 364,647

Preferred stock issued for cash 245,000 250,000

Preferred stock issued for
Subsidiary Acquisition 8,900 9,000

Common stock issued for debt
extension 4,800 4,875

Common stock issued for cash 732,375 742,500

Common Stock issued for
Subsidiary Acquisition 57,900 59,400

Common Stock issued for
registration rights penalties 79,797 80,988

Warrants issued to settle registration
rights penalities 223,170 223,170

Derivative liability -
tainted warrants (103,220) (103,220)

Derivative liability -
settlement 242,548 242,548

Net loss for the year
ended September 30, 2009 (1,915,499) (1,915,499)
--------- ----------- ------------ ------------
Balance, September 30, 2009 $ (23,522) $20,014,218 $(20,724,919) $ (680,430)
- Restated ========= =========== ============ ============

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

F-5

VALCOM, INC.
Statements of Cash Flows

For the Year Ended September 30,
2009 2008
Restated Restated
------------- -------------
OPERATING ACTIVITIES

Net loss $ (1,915,499) $ (510,130)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation expense 154,901 112,701
Common stock issued for services 364,647 841,300
Common stock issued for debt extension 4,875 -
Common stock issued for registration rights penalty 80,988 -
Warrants issued to settle registration rights penalties 223,170 -
Gain on derivative liabilities (60,672) -

Amortization of debt discount 117,589 -
Provision for bad debt 228,536 -
Gain on sale of fixed assets (22,000) -
Gain on debt extinguishment - (588,463)

Changes in operating assets and liabilities
(Increase) decrease in accounts receivable (123,013) 147,381
(Increase) decrease in inventory (487,324) -
Increase (decrease) in accounts payable 194,048 (344,009)
and accrued expenses
Increase (decrease) in due to related parties 752,292 (132,803)
(Increase)decrease in prepaid and other
current assets (62,500) 158,853
------------- -------------
Net Cash Used in Operating Activities (549,962) (315,170)
------------- -------------

INVESTING ACTIVITIES

Proceeds from sale of equipment 22,000 -
Cash paid for acquisition of MyFamily TV (661,092) -
Increase in restricted cash (60,230) -
Purchase of property and equipment (2,535) (11,341)
------------- -------------
Net Cash Used in Investing Activities (701,857) (11,341)
------------- -------------

FINANCING ACTIVITIES

Proceeds from sale of common stock 742,500 407,000
Borrowings on debt 390,000 -
Repayment of debt (106,250) -
Proceeds from sale of preferred stock 250,000 -
------------- -------------
Net Cash Provided by Financing Activities 1,276,250 407,000
------------- -------------

NET CHANGE IN CASH 24,431 80,489

CASH AT BEGINNING OF YEAR 86,415 5,926
------------- -------------

CASH AT END OF YEAR $ 110,846 $ 86,415
============= =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:

Interest $ 8,750 $ -
Income Taxes $ - $ -

NON CASH FINANCING ACTIVITIES:
Debt discount due to embedded conversion
option and warrants issued with debt 200,000 -
Common stock warrants tainted as derivative
liability 103,220 -
Preferred stock issued for related party payables - 1,669,729
Common stock issued for debt - 79,500
Common stock issued for accrued interest - 96,000
Resolution of tainted derivative liabilities 242,548 -
Common stock issued for acquisition of
My Family TV 59,400 -
Preferred stock issued for acquisition of
My Family TV 9,000 -

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

F-6

VALCOM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2009

NOTE 1. DESCRIPTION OF BUSINESS

ValCom, Inc and its Subsidiaries' (collectively the Company) businesses include
television production for network and syndication programming, motion pictures,
and real estate holdings, however, revenue is primarily generated through the
lease of the sound stages and production, a TV network and live event
broadcasting including real estate auctions. The Company's past and present
clients include movie studios and television networks. In addition to leasing
its sound stages, the Company also a library of television content for
worldwide distribution and acquired a further library of film and television
series with the acquisition of Faith TV (now renamed My Family TV) during the
year.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared by the
Company in accordance with accounting principles generally accepted in the
United States of America ("US GAAP").

This summary of significant accounting policies of the Company is presented to
assist in understanding the consolidated financial statements. The consolidated
financial statements and notes are representations of the Company's management,
which is responsible for their integrity and objectivity. These accounting
policies conform to accounting principles generally accepted in the United
States of America and have been consistently applied in the preparation of the
consolidated financial statements.

b. PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Valcom, Inc. and
four wholly-owned subsidiaries, VEI, which was acquired effective February
2001, and Half Day Video, Inc., which was acquired effective March 2001. ValCom
Nevada which was acquired effective March 1, 2004, and New Zoo Revue which was
acquired effective October 2003. Faith TV, LLC (now renamed My Family TV) was
acquired in December 2008 and Sun Investments, 51% owned by Valcom Inc was set
up in June 2009. Investments in affiliated companies over which the Company has
a significant influence or ownership of more than 20% but less than or equal to
50% are accounted for under the equity method. The Company has no equity
affiliates as of September 30, 2009.

We have a 45% ownership in a limited liability company. The company has had
minimal operations since inception and our investment was reduced to zero in
prior years. As of September 30, 2009 and 2008, we have no assets or
liabilities recorded on our balance sheet related to this investment. In
addition, losses attributable to Valcom, Inc. are limited to allocable gains.
Therefore, we have not recorded any loss related to this investment for the
two years presented in these financial statements.

c. USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles 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 from those estimates.

d. FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC820 "Fair Value Measurements and Disclosures", adopted January 1, 2008,
defines fair value, establishes a three-level valuation hierarchy for
disclosures of fair value measurement and enhances disclosure requirements for
fair value measures. The carrying amounts reported in the balance sheets for
current receivables and payables qualify as financial instruments. Management
concluded the carrying values are a reasonable estimate of fair value because
of the short period of time between the origination of such instruments and
their expected realization and if applicable, their stated interest rate
approximates current rates available. The three levels are defined as follows:

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted)
for identical assets or liabilities in active markets.

Level 2 - inputs to the valuation methodology include quoted prices for similar
assets and liabilities in active markets, and inputs that are observable for
the assets or liability, either directly or indirectly, for substantially the
full term of the financial instruments.

Level 3 - inputs to the valuation methodology are unobservable and significant
to the fair value.

e. RECLASSIFICATIONS

Certain amounts from prior periods have been reclassified to conform to the
current year presentation.

F-7

f. DEPRECIATION AND AMORTIZATION

For financial and reporting purposes, the Company follows the policy of
providing depreciationon the straight-line method over the estimated useful
lives of the assets.

The company amortizes the film lilbrary using the film forcecast methodology.
Unamortized cost related to the film library was $205,141 at September 30, 2009.

The esitmated useful lives of these assets are:

Film Library 5 years
Production and Office Equipment 3 to 5 years

g. INCOME TAXES

The Company accounts for income taxes in accordance with ASC740 "Accounting for
Income Taxes". ASC 740 requires an asset and liability approach for financial
accounting and reporting for income taxes and allows recognition and
measurement of deferred tax assets based upon the likelihood of realization of
tax benefits in future years. Under the asset and liability approach, deferred
taxes are provided for the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. A valuation allowance is provided for
deferred tax assets if it is more likely than not these items will either
expire before the Company is able to realize their benefits, or that future
deductibility is uncertain.

The Company adopted the accounting standard for uncertainty in income taxes
which prescribes a comprehensive model for how a company should recognize,
measure, present and disclose in its financial statements uncertain tax
positions that the Company has taken or expects to take on a tax return
(including a decision whether to file or not to file a return in a particular
jurisdiction).

h. SHARE-BASED COMPENSATION

The Company accounts for stock options in accordance with FASB ASC 718, "Share-
Based Payment" and FASB ASC 505-50, "Equity-Equity-Based Payments to Non-
Employees." (See Note 10)

i. REVENUE RECOGNITION

Revenues from studio and equipment rentals are recognized ratably over the
contract terms. Revenues from the production and licensing of television
programming are recognized when the films or series are available for telecast
and certain contractual terms of the related production and licensing
agreements have been met. Revenues from the television network are principally
advertising revenue and payment for program broadcast and both are recognized
over the period of the broadcast.

j. CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject us to concentrations of credit
risk, consist principally of cash and trade receivables. Concentrations of
credit risk with respect to trade receivables are limited due to the clients
that comprise our customer base and their dispersion across different business
and geographic areas. We estimate and maintain an allowance for potentially
uncollectible accounts and such estimates have historically been within
management's expectations. Our cash balances are maintained in accounts held by
major banks and financial institutions located in the United States. The
Company occasionally maintains amounts on deposit with a financial institution
that are in excess of the federally insured limit of $100,000. Statement of
Financial Accounting Standards No. 105 identifies this as a concentration of
credit risk requiring disclosure, regardless of the degree of risk. The risk is
managed by maintaining all deposits in high quality financial institutions. The
Company had no amounts in excess of federally insured limits at September 30,
2009.

k. CASH AND CASH EQUIVALENTS

For purposes of financial statement presentation, the Company considers all
highly liquid investments with a maturity of three months or less, from the
date of purchase, to be cash equivalents.

l. TREASURY STOCK

Treasury stock is accounted for by the cost method. Issuance of treasury shares
is accounted for on a first in, first-out basis. Differences between the cost
of treasury shares and the re-issuance proceeds are charged to additional paid-
in capital, if reissued. During July 2002, the Company purchased 35,000 shares
of its common stock at a total cost of $23,522. No shares have been reissued as
of September 30, 2009.

F-8

m. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2009, the Financial Accounting Standards Board (FASB) issued a standard
that established the FASB Accounting Standards Codification (ASC) and amended
the hierarchy of generally accepted accounting principles (ASC) and amended the
hierarchy of generally accepted accounting principles (GAAP) such that the ASC
became the single source of authoritative nongovernmental U.S. GAAP. The ASC
did not change current U.S. GAAP, but was intended to simplify user access to
all authoritative U.S. GAAP by providing all the authoritative literature
related to a particular topic in one place. All previously existing accounting
standard documents were superseded and all other accounting literature not
included in the ASC is considered non-authoritative. New accounting standards
issued subsequent to June 30, 2009 are communicated by the FASB through
Accounting Standards Updates (ASUs). The Company adopted the ASC on July 1,
2009. This standard did not have an impact on the Company's consolidated
results of operations or financial condition. However, throughout the notes to
the consolidated financial statements references that were previously made to
various former authoritative U.S. GAAP pronouncements have been changed to
coincide with the appropriate section of the ASC.

In December 2007, the FASB issued a new standard which established the
accounting for and reporting of noncontrolling interests (NCIs) in partially
owned consolidated subsidiaries and the loss of control of subsidiaries.
Certain provisions of this standard indicate, among other things, that NCIs
(previously referred to as minority interests) be treated as a separate
component of equity, not as a liability (as was previously the case); that
increases and decreases in the parent's ownership interest that leave control
intact be treated as equity transactions, rather than as step acquisitions or
dilution gains or losses; and that losses of a partially owned consolidated
subsidiary be allocated to the NCI even when such allocation might result in a
deficit balance. This standard also required changes to certain presentation
and disclosure requirements.

In June 2009, the FASB issued a new standard regarding the accounting for
transfers of financial assets amending the existing guidance on transfers of
financial assets to, among other things, eliminate the qualifying special-
purpose entity concept, include a new unit of account definition that must be
met for transfers of portions of financial assets to be eligible for sale
accounting, clarify and change the derecognition criteria for a transfer to be
accounted for as a sale, and require significant additional disclosure. The
standard is effective for new transfers of financial assets beginning October
1, 2010. The adoption of this standard is not expected to have a material
impact on the Company's consolidated results of operations or financial
condition.

In June 2009, the FASB issued an accounting standard that revised the
consolidation guidance for variable-interest entities. The modifications
include the elimination of the exemption for qualifying special purpose
entities, a new approach for determining who should consolidate a variable-
interest entity, and changes to when it is necessary to reassess who should
consolidate a variable-interest entity. The standard is effective October 1,
2010. The Company is currently evaluating the impact of this standard, but
would not expect it to have a material impact on the Company's consolidated
results of operations or financial condition.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" (Now ASC 855),
which provides guidance to establish general standards of accounting for and
disclosures of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. ASC 855 also
requires entities to disclose the date through which subsequent events were
evaluated as well as the rationale for why that date was selected. This
disclosure should alert all users of financial statements that an entity has
not evaluated subsequent events after that date in the set of financial
statements being presented. ASC 855 is effective for interim and annual periods
ending after June 15, 2009. We do not expect the adoption of ASC 855 will have
a material impact on our financial position, results of operations or cash
flows.

n. ACCOUNTS RECEIVABLE

Accounts receivable are carried at original invoice amount less an estimate
made for doubtful receivables based on a review of all outstanding amounts on a
monthly basis. Specific reserves are estimated by management based on certain
assumptions and variables, including the customer's financial condition, age of
the customer's receivables, and changes in payment histories. As of September
30, 2009 an allowance for doubtful receivables $412,305 was considered
necessary. Recoveries of trade receivables previously written off are recorded
when received.

o. BASIC LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss by the weighted-
average number of common shares outstanding. Diluted net loss per share is
computed based on the weighted-average number of common shares outstanding
increased by dilutive common stock equivalents. For the years ended December
31, 2008 and 2007, potential dilutive securities had an anti-dilutive effect
and were not included in the calculation of diluted earnings per common share.

p. ADVERTISING AND MARKETING

The Company expenses advertising costs in the period in which they are
incurred. Advertising and marketing expense was $56,437 and $224,794 for the
years ended September 30, 2009 and 2008, respectively.

q. INVENTORY

Inventory consists of real property, which is sold in our live event auctions.
Inventory is carried a the lower of cost or fair value. We review for
impairment whenever events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. Inventory at September 30,
2009 consists of three groups of houses with an aggregate cost of $487,324.

r. IMPAIRMENT

Amortizable intangible assets and other long-lived assets are tested for
impairment utilizing an income approach based on undiscounted cash flows upon
the occurrence of certain triggering events and, if impaired, written down to
fair value. Goodwill and indefinite-lived intangible assets are tested for
impairment using a fair value approach at the reporting unit level for
goodwill. A reporting unit is the operating segment, or a business which is one
level below that operating segment. For all periods presented, the Company's
reporting units are consistent with its operating segments in all material
respects.

s. PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation is calculated using the
straight-line method. Costs associated with repairs and maintenance of property
and equipment are expensed as incurred.

F-9

t. BUSINESS COMBINATIONS AND INTANGIBLE ASSETS INCLUDING GOODWILL

The Company accounts for business combinations using the purchase method of
accounting, which allocated the consideration to the fair value of the net
assets acquired, including intangible assets, with the residual allocated to
goodwill. Beginning October 1, 2009, the Company will account for business
combinations using the acquisition method of accounting. Under the acquisition
method, once control is obtained of a business, 100% of the assets, liabilities
and certain contingent liabilities acquired, including amounts attributed to
noncontrolling interests, are recorded at fair value. Goodwill represents the
residual difference between the fair value of consideration paid and the net
assets acquired, and transaction costs are expensed as incurred.

Identifiable intangible assets with finite lives are amortized over their
estimated useful lives, which is 5 years. Goodwill and identifiable intangible
assets with indefinite lives are not amortized, but rather are tested annually
for impairment, or sooner when circumstances indicate impairment may exist.

NOTE 3. GOING CONCERN

The Company's financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
in the normal course of business. As of and for the year ended September 30,
2009, the Company has a negative working capital, has incurred significant net
losses, and has negative cash flows from operating activities. In addition, the
Company had an accumulated loss of $20,501,749. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on the
Company increasing sales to the point it becomes profitable. The Company may
need to raise additional capital for marketing to increase its sales. If the
Company is unable to increase sales sufficiently or obtain adequate capital, it
could be forced to cease operation. The accompanying financial statements do
not include any adjustments relating to the recoverability and classification
of asset carrying amounts or the amount and classification of liabilities that
might result from the outcome of this uncertainty.

Management Plans to Continue as a Going Concern

Management plans to increase sales by increasing its activity at its recently
acquired acquisitions and new business and to obtain additional capital from
the private placement of shares of its common stock. However, management cannot
provide any assurances that the Company will be successful in accomplishing any
of its plans.

F-10

NOTE 4. RESTATEMENT

2009 RESTATEMENT
----------------

Subsequent to filing the September 30, 2009 Form 10-K, we discovered a number
of errors that impacted the balance sheet, statement of operations and
statement of cash flow. Specifically, these adjustments reflect the following
errors:

- Restricted cash - certain cash balances are restricted and should be
reported separately on the fact of the balance sheet.

- Intangible assets - a purchase price adjustment was not properly considered,
which decreased intangible assets and related amortization expense. This
error also impacted accounts payable and depreciation expense.

- Share-based compensation - certain grants of common stock for services were
not appropriately recorded, which resulted in an adjustment of $77,200.
In addition, there was an adjustment related to stock issued for a debt
extension which was valued at $4,875.

- Retained earnings - adjustments to retained earnings relate to errors in
stock compensation recognized in 2008. The 2008 statements are restated to
reflect these adjustments to opening retained earnings.

- Registration rights penalty - an additional expense of $223,170 was recorded
in general and administrative expense related to warrants issued to settle
registration rights penalties in March 2009.

BALANCE SHEET AS OF SEPTEMBER 30, 2009:
AS REPORTED ADJUSTMENT AS RESTATED

Cash & Equivalents $ 171,076 $ (60,230) $ 110,846
Restricted cash - 60,230 60,230
Intangible assets, net 411,349 (120,654) 290,695

NON-CURRENT ASSETS 650,013 (120,654) 529,359

TOTAL ASSET 1,352,716 (120,654) 1,232,062

Accounts payable and accrued expenses 797,513 (163,908) 633,605

TOTAL LIABILITIES 2,076,400 (163,908) 1,912,492

Additional paid-in capital 19,860,148 154,070 20,014,218
Accumulated deficit (20,614,103) (110,816) (20,724,919)

TOTAL STOCKHOLDER'S DEFICIT (723,684) 43,254 (680,430)

TOTAL LIABILITY AND EQUITY 1,352,716 (120,654) 1,232,062

STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2009:

AS REPORTED ADJUSTMENT AS RESTATED

General and administrative 2,131,205 350,369 2,481,574
Depreciation expense 198,155 (43,254) 154,901

OPERATING EXPENSES 2,385,797 (307,115) 2,692,912

NET LOSS (1,608,384) (307,115) (1,915,499)

EPS - BASIC (0.05) (0.02) (0.07)

WEIGHTED AVERAGE SHARES OS 30,649,326 (1,886,394) 28,762,932

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2009:

AS REPORTED ADJUSTMENT AS RESTATED

Net loss (1,608,384) (307,115) (1,915,499)
Adjustments to reconcile net loss to -
net cash used by operating activities: -
Depreciation expense 198,155 (43,254) 154,901
Common stock issued for services 287,447 77,200 364,647
Common stock for debt extension - 4,875 4,875
Common stock issued for registration rights penalty - 80,988 80,988
Warrants issued to settle registration rights penalties - 223,170 223,170
Amortization of debt discount 122,464 (4,875) 117,589
Increase (decrease) in accounts payable and accrued expenses 355,591 (161,543) 194,048

NET CASH USED IN OPERATING (419,408 (130,554) (549,962)

INVESTING ACTIVITY

Cash paid for acquisition of MYFamily TV (822,633) 161,541 (661,092)

NET CASH PROVIDED BY INVESTING (863,398) (701,857)

FINANCING ACTIVITY

Proceeds from sale of common stock 692,500 50,000 742,500
Common stock issued for exercise of warrants 80,988 (80,988) -
NET CASH PROVIDED BY FINANCING 1,307,238 (30,988) 1,276,250

Net increase in cash 24,432 (1) 24,431
Cash at beginning of year 86,415 86,415
CASH AT END OF YEAR 110,847 (1) 110,846

F-11

During the review of the ownership related to the building and lot in Las
Vegas, we determined that the company may have to take legal proceedings to
exert its rights for this ownership share. Due to the uncertainty of the
outcome of any such potential action, we determined that it was appropriate to
impair the value of property fully. Because the circumstances surrounding the
ownership existed prior to September 30, 2007, the asset was removed from our
books as an opening balance adjustment to our fiscal year 2008.

The 2008 financial statements have been restated to reflect numerous errors.
The following significant items were adjusted:

- Investment in Las Vegas building and lot - as discussed above, we no longer
have ownership rights to this property. These rights were lost prior to
2008. The adjustment resulted in a reduction of assets and equity by
$1,000,000

- Extinguishment of debt - certain uncollateralized notes payable incorrectly
recorded or were absolved through bankruptcy proceedings. We executed a plan
of reorganization and emerged from bankruptcy during fiscal 2008. The
adjustment resulted in a reduction of liabilities and a gain on
extinguishment of debt totaling $588,462; and a reduction of accrued
interest and interest expense of $72,367.

- Judgment payable - during 2008, a note holder received a judgment against
Valcom for $165,000. At the time of the judgment, only $100,000 was recorded
in notes payable. The adjustment resulted in an increase in liabilities and
additional expense of $57,000, net of $8,000 in accrued interest.

- Other errors related to accounts payable cutoff, and amortization of prepaid
assets resulted in additional expense of $95,395.

The effects of the restatement on reported amounts for the year ended September
30, 2008 are presented below in the following tables:

SEPTEMBER 30, 2008
--------------------------------------------------------------
AS REPORTED ADJUSTMENTS AS RESTATED
-------------- -------------- ------------------
Cash & Equivalents $ 86,416 $ (1) $ 86,415
Prepaid Expenses 24,434 (24,434) -
Receivables - 25,947 25,947
-------------- -------------- ------------------
Current Assets 110,850 1,512 112,362

Property, Plant and Equipment, net 76,020 (76,020) -
Other Assets 1,000,000 (1,000,000) -
-------------- -------------- ------------------
Non-Current Assets 1,076,020 (1,076,058) -
-------------- -------------- ------------------
TOTAL ASSET $ 1,186,870 (1,074,020) $ 112,362
============== ============== ==================
Accounts Payable and Accrued Liabilities $ 468,364 (42,419) $ 425,945
Accounts Payable - Related Party 86,181 61,575 147,756
Accrued Interest 166,061 (166,061) -
Notes payable 412,173 (234,673) 177,500
-------------- -------------- ------------------
Total Liabilities 1,132,779 (381,578) 751,201

Series B - Preferred Stock 38 - 38
Series C - Preferred Stock 9,591 - 9,591
Common Stock 22,776 (1,100) 21,676
Additional Paid In Capital 17,778,314 384,484 18,162,798
Accumulated Deficit (17,733,106) (1,076,314) (18,809,420)
Treasury Stock (23,522) - (23,522)
-------------- -------------- ------------------
Equity 54,091 (692,930) (638,839)
-------------- -------------- ------------------
TOTAL LIABILITIES AND EQUITY $ 1,186,870 (1,074,508) $ 112,362
============== ============== ==================

F-12

YEAR ENDED SEPTEMBER 30, 2008
------------------------------------------------
AS REPORTED ADJUSTMENTS AS RESTATED
-------------- -------------- --------------
Revenue $ 953,209 $ (17,518) $ 935,691
Cost of Revenue (6,383) (294,778) (301,161)
-------------- -------------- --------------
Gross Margin 946,826 (312,296) 634,530

Selling, General and Administrative 1,267,929 66,946 1,334,875
Advertising and Promotion 12,294 212,500 224,794
Depreciation and Amortization Expense 25,340 87,361 112,701

Operating Expenses 1,305,563 366,807 1,672,370
-------------- -------------- --------------
Other income (expense)

Interest Expense (79,085) 16,031 (63,054)
Other Income 4,006 (1,705) 2,301
Gain on extinguishment of debt - 588,463 588,463
-------------- -------------- --------------
Total other income (expense) 75,079 (600,843) 527,710
-------------- -------------- --------------
TOTAL EXPENSE 1,380,642 (235,982) 1,144,660
-------------- -------------- --------------
NET LOSS $ (433,816) (76,314) $ (510,130)
============== ============== ==============
EPS - Basic $ (0.03) $ (0.03)

Weighted average shares OS 15,827,349 14,775,061

F-13

YEAR ENDED SEPTEMBER 30, 2008
---------------------------------------
AS REPORTED ADJUSTMENTS AS RESTATED
----------- ----------- -----------

Operating
Net loss (433,816) (76,314) (510,130)
Depreciation expense 25,340 87,361 112,701
Common stock issued for services 518,915 322,385 841,300
Gain on extinguishment of debt - (588,463) (588,463)
Accounts receivable 173,328 (25,947) 147,381
Prepaid expenses (24,434) 24,434 -
Accrued interest payable 2,271 (2,271) -
Accounts payable (438,610) 94,601 (344,009)
AP related party - (132,803) (132,803)
Deposits 158,853 - 158,853
----------- ----------- -----------
(18,153) (297,017) (315,170)

Investing
Acquisition of Fixed Assets - (11,341) (11,341)

Financing

Sale of stock 502,000 (95,000) 407,000
Repayment of note (403,357) 403,357 -
----------- ----------- -----------
98,643 308,357 407,000

Net increase in cash 80,490 (1) 80,489
Cash at beginning of year 5,926 - 5,926
----------- ----------- -----------
Cash at end of year 86,416 (1) 86,415
----------- ----------- -----------

F-14

NOTE 5. ACQUISITION OF FAITH TV, LLC

On December 15, 2008, we purchased 100% of the outstanding shares of FaithTV,
LLC. The purchase is reflected in the financial statements along with the
operating results of FaithTV, LLC from December 16, 2008 through September 30,
2009. The purchase price included 100,000 shares of convertible preferred stock
valued at $9,000 based on an "as if" converted basis; 1,500,000 shares of
common stock valued at $59,400 based on the Company's quoted stock price; cash
payments totaling $661,092. The adjusted purchase price was $729,492. The
preferred stock is convertible to shares of the Company's common stock on a one
share for one share basis.

The revised purchase price was allocated based upon the fair value of the
assets purchased as follows:

Equipment $ 36,819
Film library 250,000
Paid programming contracts 394,906
Cash 2,365
Accounts receivable, net 126,379
Allowance (65,000)
Other current assets 2,300
Accounts payable (17,558)
Other (719)
----------
$ 729,492
==========

The following table summarizes the required disclosures of the unaudited pro
forma combined entity, as if the acquisitions occurred at November 1, 2007:

For the years ended September 30
--------------------------------
2009 2008
-------------- -------------

Revenue $ 827,239 $ 1,515,019
Net loss (1,607,487) (544,070)
Earnings per share $ (0.06) $ (0.04)

The unaudited pro forma results above have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which actually would have resulted had the acquisitions occurred at November
1, 2007 and 2008, respectively, nor is it necessarily indicative of future
operating results.

NOTE 6. PROPERTY AND EQUIPMENT, FILM LIBRARY AND INTANGIBLES

Property and equipment and intangibles consists of the following at September
30:

September 30, September 30,
2009 2008
------------ ------------
Production Equipment $ 39,354 $ 76,020
Accumulated Depreciation (5,831) (76,020)
------------ ------------
Net property and equipment $ 33,523 $ -
============ ============

Film library $ 250,000 $ -
Accumulated Depreciation (44,859) -
------------ ------------
Net property and equipment $ 205,141 $ -
============ ============

Intangible assets:
Paid programming contracts $ 394,906 $ -
Accumulated amortization (104,211) -
------------ ------------
Net intangible assets $ 290,695 $ -

Depreciation expense for the years ended September 30, 2009 was $154,901.

F-15

NOTE 7. NOTES AND JUDGMENTS PAYABLE

September 30, December 31,
2009 2008
--------- ----------
Convertible Notes Payable $ 240,000 $ -
Other notes Payable 62,500 12,500
Judgments Payable 158,750 165,000

Less: unamortized discount (82,411) -
--------- ----------
Total $ 378,839 $ 177,500
========= ==========

Convertible notes

On November 25, 2008, we entered into a convertible note agreement. The terms
of the note are as follows: principal amount $100,000; annual interest rate of
15%; maturity date of January 24, 2009. The note was convertible into common
shares based on the lower of 70% of the lowest 3-day average quoted stock price
over the 20 trading days preceding the conversion date or $0.10. The note was
repaid in February 2009. In connection with the note, we issued 400,000
warrants with an exercise price of $0.10. These warrants, which vested
immediately, were valued using the Black Scholes Option Pricing Model. In
connection with these warrants, $100,000 was recorded as a discount to the note
and was amortized over the life of the note using the effective interest method.
For the years ended September 30, 2009, we amortized $100,000 of the discount
into interest expense. This note was paid in full in February 2009.

On January 24, 2009, we modified the terms of this loan to extend the maturity
date through February 5, 2009. In connection with the extension, we issued the
lender 75,000 common shares valued at $4,875. We evaluated the modification
under FASB ASC 470-50 and concluded that the revised terms constituted a debt
modification rather than a debt extinguishment. Accordingly, the fair value of
the shares issued were recorded as a discount on the debt and amortized over
the remaining life of the modified loan using the effective interest rate
method. The entire discount was amortized to interest expense during the year
ended September 30, 2009.

On January 6, 2009, we entered into a convertible note agreement. The terms of
the note are as follows: principal amount $100,000; annual interest rate of
10%; maturity date of January 6, 2010. The note is convertible into common
shares at a rate of $0.10. In connection with the note, we issued 1,000,000
warrants with an exercise price of $0.20. These warrants, which vested
immediately, were valued using the Black Scholes Option Pricing Model.
$100,000 was recorded as a discount to the note and was amortized
over the life of the note using the effective interest method. For the years
ended September 30, 2009, we amortized $17,589 of the discount into
interest expense.

F-16

In June 2009, we entered into 2 participation agreements related to the
acquisition of real property. Under the terms of these agreements, we borrowed
$140,000 to purchase certain real estate properties. Any profits from the sale
of the real estate properties are shared equally between Valcom and the lender.
The loans are secured by the real property purchased with the proceeds. The
terms of the notes are as follows, in aggregate: principal amount $140,000;
annual interest rate of 10%; maturity date of June 2010. These notes are
convertible into Valcom's common stock at $0.10 per share.

One of the convertible notes included a conversion feature that is based on the
market value of the stock at the date of conversion. This conversion feature
was evaluated under FAS 133 and EITF 00-19 and was determined under EITF 00-19
to have characteristics of a liability and therefore a derivative liability
under FAS 133. The conversion price was variable which caused the Company to
conclude it was possible at some point in the future to not have available the
number of common shares required to share settle all common stock equivalent
instruments. This caused warrants not subject to FAS 123 and all other
convertible debt to also be classified as derivative liabilities under FAS 133.
Each reporting period, this derivative liability is marked-to-market with the
non-cash gain or loss recorded in the period as a gain or loss on derivatives.
During the year ended September 30, 2009, the convertible note creating the
derivative liability was repaid. As a result, we marked the derivative
liability to fair value through February 13, 2009, the date in which the note
was paid, recording the change in fair value as a gain/loss on derivative
liability. On the date of the repayment, we removed the derivative liability
and recognized the unamortized debt discount in connection with the derivative
liability, we recognized a gain of deriative liabilities of $60,672

Other notes payable

On July 13, 2009, we entered into a participation agreement for the acquisition
of real property. Under the terms of these agreements, we borrowed $50,000 to
purchase certain real estate properties. Any profits from the sale of the real
estate properties are shared equally between Valcom and the lender. As of
September 30, 2009, there were no sales of properties related to this
agreement.

On July 19, 2007, we borrowed $12,500. The loan is not interst bearing and is
payable on demand. The full amount was outstanding at September 30, 2009

During fiscal year 2008, we received notice of a judgment against Valcom in
the amount of $165,000. The judgment relates to claim for paymnet on an
outstanding debt plus interest. We initially recorded the full amount of the
judgment and are currently negotiation a settlement. As of September 30, 2009
we accrued $158,750 related to this judgment.

NOTE 8. RELATED PARTY TRANSACTIONS

At September 30, 2009 and 2008, related party payables to Directors and
Shareholders of the Company totaled $900,048 and $147,756, respectively.

At September 30, 2008, related party payables represent $1,950,288 payable to
the President of the Company and Directors for various advances to the Company.
The advances are non interest bearing and due upon demand. During the year
ended September 30, 2009, $1,669,729 of the related party payables were
converted to 1,669,729 shares of the Company's convertible preferred stock.

F-17

NOTE 9. FILM LIBRARY AND INTANGIBLES

With the acquisition of Faith TV (now My Family TV), the company acquired a
library of over 800 films and TV programs. An aggregate value of $250,000 was
allocated to the film library in purchase accounting. The film library is
being amortized over its estimated useful life of five years using the film
forecasting methodology. During the year ended September 30, 2009, we recorded
depreciation expense of $44,859.

In connection with the acquisition of Faith TW, we acquired certain paid
programming contracts. An aggregate value of $394,906 was allocated to paid
programming contracts in purchase accounting. The balance is amortized over
the life of the agreements. During the year ended September 30, 2009, we
recorded amortization expense of $104,211.

NOTE 10. INCOME TAXES

No provision for Federal and state income taxes has been recorded as the
Company has incurred net operating losses through September 30, 2009. At
September 30, 2009, the Company had approximately $20,322,950 of net operating
loss carry-forwards for Federal income tax reporting purposes available to
offset future taxable income. Such carry-forwards expire beginning in 2010.

Deferred tax assets at September 30, 2009 consist primarily of the tax effect
of net operating loss carry-forwards, which amounted to approximately
$6,640,093. Other deferred tax assets and liabilities are not significant. We
provided a full valuation allowance on the deferred tax assets at September 30,
2009 to reduce such deferred income tax assets to zero, as we believe that
realization of such amounts is not considered more likely than not.

The following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Statement of
Operations:

September 30, September 30,
2009 2008
------------ ------------
Tax Expense (Benefit) at Statutory Rate (34)% (34)%
State Tax Rate, Net of Federal (6) (6)
Change In Valuation Allowance 40 40
------------ ------------
Effective Tax Rate 0 % 0 %
============ ============

The components of the net deferred tax asset are summarized below:

September 30, September 30,
2009 2008
Restated Restated
------------ ------------
Deferred Tax Asset:
Net Operating Losses $ 8,129,180 $ 7,630,502
Less: Valuation Allowance (8,129,180) (7,630,502)
------------ ------------
Total $ - $ -
============ ============

F-18

NOTE 11. COMMITMENTS

In September 2008, the Company leased facilities in Clearwater, Florida. The
lease has a term of five years. Initial monthly base rent is $11,000 with no
increases, and a corporate office at Indian Rocks Beach at $1000 per month.

At September 30, 2009, future minimum lease payments due under non-cancelable
leases were:

2010 $ 57,844
2011 59,580
2012 61,367
2013 52,411
2014 -
Thereafter -
--------
Total $231,202
========

NOTE 12. STOCK ACTIVITY

a. CONVERTIBLE PREFERRED STOCK

At September 30, 2009, we authorized three series of convertible Preferred
Stock: B, C and D.

Series B Preferred Stock has no voting rights, is entitled to receive
cumulative dividends in preference to any dividend on the common stock at a
rate of 10% per share, per year, to be issued if and when declared by the Board
of Directors and can be converted at any time into common stock on a 1 for 5
basis. In the event of any liquidation, the holders of shares of Series B
Preferred Stock then outstanding shall be entitled to receive an amount equal
to the purchase price per share, plus an amount equal to declared but unpaid
dividends thereon, if any, to the date of payment. As of September 30, 2009,
38,000 shares of preferred stock with a par value of $38 were issued and
outstanding.

Series C Preferred Stock has no voting rights, is entitled to receive
cumulative dividends in preference to any dividend on the common stock at a
rate of 10% per share, per year, to be issued if and when declared by the Board
of Directors and can be converted at any time into common stock on a 1 for 1
basis. In the event of any liquidation, the holders of shares of Series C
Preferred Stock then outstanding shall be entitled to receive an amount equal
to the purchase price per share, plus an amount equal to declared but unpaid
dividends thereon, if any, to the date of payment. In connection with the
acquisition of Faith TV, we issued 100,000 shares of Series C Preferred Stock
valued at $9,000. We also sold 5,000,000 shares of Series C Preferred Stock for
$250,000. As of September 30, 2009, 14,691,395 shares of preferred stock with a
par value of $14,691 were issued and outstanding.

Series D Preferred Stock has no voting rights, no dividends and can be
converted at any time to common stock on a 1 for 1 basis. In the event of any
liquidation, the holders of shares of Series C Preferred Stock then outstanding
shall be entitled to receive an amount equal to the purchase price per share.
No shares were issued as of September 30, 2009

With respect to rights on liquidation, Series B, C and D Preferred Stock shall
rank senior to the common stock but Series C Preferred Stock shall be senior to
both Series B and D Preferred Stock while Series D Preferred Stock shall be
junior to both Series B and C Preferred Stock. The Board of Directors declared
no dividends for any of the Series of convertible Preferred Stock during the
fiscal year ended September 30, 2009.

F-19

b. WARRANTS

At September 30, 2009 and 2008, we had 4,209,000 and 1,000,000 warrants granted
and outstanding, respectively. There were no warrants granted during fiscal
year 2008. During fiscal 2009, we granted 1,400,000 warrants in connection
with certain notes payable. These warrants had a weighted average
exercise price of $0.17. The aggregate fair value of these warrants, which was
computed using the Black Scholes Option Pricing Model was $133,296 and
was recorded as a discount to the respectively notes payable. In
connection with the settlement of certain registration rights penalties, we
issued 2,809,000 warrants on March 2, 2009. On the same day, we cancelled the
1,000,000 warrants previously issued. This resulted in additional expense of
$223,170. At September 30, 2009, there were $4,209,000 warrants
outstanding with a weighted average exercise price was $0.09; the weighted
average remaining life was 4.55 years; the aggregate intrinsic value was
$137,641; and all warrants were exercisable.

b. COMMON STOCK

Stock for cash

During fiscal year 2009, we issued an aggregate 10,125,000 shares of common
stock for $742,500 cash.

During fiscal year 2008, we issued an aggregate 4,070,000 shares of common
stock for $407,000.

Stock for services

During fiscal year 2009, we granted 4,497,059 shares of common stock for
various services. These shares vested immediately and had an aggregate fair
value of $364,647, which was recorded as share-based compensation. The fair
value was determined based on the quoted stock price on the date of grant.

During fiscal year 2008, we granted 6,130,000 shares of common stock for
various services. These shares vested immediately and had an aggregate fair
value of $841,300, which was recorded as share-based compensation. The fair
value was determined based on the quoted stock price on the date of grant.

Stock for debt

On February 1, 2009, we issued 75,000 shares of common stock in return for an
extension on a note payable. We concluded that the debt was modified under FASB
ASC 470-50. The fair value ($4,875) of the shares issued was recorded as a
discount on the debt.

During fiscal year 2008, we issued 500,000 shares of common stock to settle
$50,000 in debt. The common shares were valued at $80,000 based on the quoted
stock price on the date of grant. The difference between the fair value of the
common shares and the book value of the loan was recorded as additional
expense.

F-20

During fiscal year 2008, we issued 600,000 shares of common stock in lieu of
cash for payment of interest on two notes.

Stock for acquisition

On December 15, 2008, we purchased 100% of the outstanding shares of FaithTV,
LLC. In connection with the acquisition, we issued 1,500,000 shares of common
stock, in aggregate, valued at $59,400 based on the Company's quoted stock
price. We also issued 100,000 shares of preferred stock valued at $9,000.

Stock and warrants to settle registration rights penalties

On April 17, 2009, we issued 1,191,000 shares of common stock to settle certain
registration rights penalties associated with warrants issued in prior years.
The share were valued at $80,988, based on the quoted market value on the date
of grant, and recorded as an expense. We also issued 2,809,000 warrants on
March 2, 2009 to settle these penalties. Concurrently, we cancelled 1,000,000
warrants previously issued to these two investors. We recorded an aggregate
expense of $223,170 related to these warrants.

Stock options

The Company has a 2001 Employee Stock Compensation Plan (the "ESCP") to enhance
its ability to attract, retain and compensate experienced employees, officers,
directors and consultants. The effective date of the ESCP is January 2001. A
total of 2,600,000 shares of common stock were registered for issuance under
the ESCP on three Form S-8 registration statements filed January 16, 2001,
March 26, 2001 and October 19, 2001. Pursuant to the ESCP, the Compensation
Committee or Board of Directors may award registered shares of the Company's
common stock to employees, officers, directors or consultants for cash,
property, services rendered or other form of payment constituting lawful
consideration. Plan shares awarded for other than services rendered shall be
sold at not less than the fair market value on the date of grant. During the
fiscal year ended September 30, 2005, the Company issued an aggregate of
1,572,500 shares of registered common stock to employees, officers, directors
and consultants pursuant to the ESCP. No employee stock options were issued or
outstanding as September 30, 2009.

Registration rights

During 2005, we entered into two stock subscription agreements. In addition to
shares, the purchasers received 1,000,000 warrants in aggregate to purchase
stock at an exercise price of $0.06 per share. The subscription agreements
included a requirement to register the shares underlying the warrants. The
penalty for failing to register the shares by the prescribed date was 10,000
shares of common stock per day until the shares were registered. We failed to
meet the registration requirement and entered into the penalty period. In
February 2009, we settled the penalty by issuing 1,191,000 shares of common
stock and exchanging the 1,000,000 warrants for 2,809,000 in aggregate of new
warrants with an exercise price of $0.05. In connection with this settlement,
we recorded additional expense of $223,170.

F-21

NOTE 13. SEGMENTS

The following is a discussion of our operating segments:

- MyFamily TV - is a TV network and broadcasting division centered
primarily on Christian ministry paid programming, older and public domain
movies, and family programming such as Here's Lucy and the Beverly
Hillbillies.

- Film & TV Productions - has over 1000 movie titles and 200 television
episodes and 5000 songs which are typically licensed out for seven
years.

- Real Estate Auctions - is primarily designed to sell discounted
foreclosed properties to a TV audience through a live auction.

Years ended September 30,
2009 2008

REVENUE:
My Family TV 301,842 -
Film and TV Production 397,763 935,691
Real Estate Auction 667,750 -

OPERATING INCOME:
My Family TV (266,171) -
Film and TV Production (1,710,009) (1,933,179)
Real Estate Auction (206,200) -

TOTAL ASSETS:
My Family TV 583,557 -
Film and TV Production 84,743 112,362
Real Estate Auction 563,762 -

NOTE 14. BANKRUPTCY FILING

On August 5, 2008, the United States Bankruptcy Court for the Central District
of California entered an Order Confirming Second Amended Plan of Reorganization
under Chapter 11 of the Bankruptcy Code (the "Plan") of the Company. The Plan
classifies claims and interest in various Classes according to their right to
priority of payments as provided in the United States Bankruptcy Code, 11
U.S.C.{section} 101 et seq. (the "Bankruptcy Code"). The Plan provides that
upon payment of all obligations pursuant to the Plan, the Company was
discharged of liability for payment of debts, claims and liabilities incurred
before confirmation of the Plan, to the extent specified in {section}1141 of
the Bankruptcy Code.

The Plan provided for the treatment of each Class, and for the cash payments
that each Class of creditors will receive and for the existing equity interests
and rights that equity security holders will retain under the Plan. The
effective date of the Plan is August 5, 2008 (the "Effective Date"). The
Company funded the Plan through cash on hand and accumulated by the Effective
Date to pay off the allowed Priority Unsecured Tax claims of $191,164, and the
first month's payment interest to its non-priority unsecured creditors took
place in September 2008 . The Company had on hand approximately $170,000 and
$300,000 was required for the completse for disbursement of the priority and
unsecured amount outstanding.

On the Effective Date, unexpired leases and executory contracts shall be
assumed as obligations of the reorganized Company. By agreement with Naomi
Partners Inc., the lease for the Burbank Studio was surrendered by agreement
with no further liability to the Company other than the retention of the lease
deposit held by Naomi Partners Inc and to be applied to rents due on the
effective date. If these reports have been filed then this can be confirmed.

All persons or entities holding preferred or common stock in the Company are
referred to in the Plan as "Interest Holders". The pre-existing pre-petition
equity ownership interests and rights of all Interest Holders will be left
intact and unimpaired. The Directors and President of the company elected to
convert their debt of $1,670,000 to 1,669,729 shares of Series C Preferred
Convertible Stock.

NOTE 15. LITIGATION, CONTINGENCIES AND COMMITMENTS

Laurus Master Fund Settlement

On March 24, 2009, Valcom and Laurus Master Fund, Ltd, a company organized
under the laws of the Cayman Islands and Chicago Title Company, a California
Corporation entered into a Settlement Agreement whereby Valcom resolved its
previously asserted claims against Laurus and Chicago Title.
Pursuant to the terms of the Agreement, Laurus agrees to pay the Company five
hundred and fifty thousand dollars ($550,000) which was received by the
Company's attorney on March 30, 2009. Within ten calendar days after the
Company receives payment from Laurus, the Company filed a Request for Dismissal
of its claims, with prejudice, of its actions against Laurus and Chicago Title
and Chicago Title. This settlement is reflected as `Other Income' with full
accrual made for legal costs relating to the settlement.

Other litigation

NOTE 16. SUBSEQUENT EVENTS

Management has reviewed the subsequent events through February 19, 2010 and all
significant events are disclosed.

We granted 300,000 shares of common stock to an officer for services. The shares
were valued at $27,000 based on teh quoted stock price on the date of grant.

We received $85,000 from investors to purchase stock. The stock has not yet been
issued.

F-22

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On January 18, 2010, the board of directors of Valcom, Inc. (the
"Company") dismissed Seale & Beers CPAs("S&B") as the Company's independent
registered public accounting firm.

On January 18, 2010, the Company engaged Malone & Bailey ("M&B") as its
independent registered public accounting firm for the Company's fiscal year
ended September 30, 2009. The change in the Company's independent registered
public accounting firm was approved by the Company's Board of Directors on
January 18, 2010.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Pursuant to Rule 13a-15(b) under the Securities Exchange Act ("Exchange Act")
of 1934, the Company carried out an evaluation with the participation of the
Company's management, including Vince Vellardita, the Company's Chief Executive
Officer and Chief Financial Officer ("CEO/CFO"), of the effectiveness of the
Company's disclosure controls and procedures (as defined under Rule 13a-15(e)
under the Exchange Act) as of the year ended September 30, 2009. Based upon
that evaluation, the Company's CEO /CFO concluded that the Company's disclosure
controls and procedures are not effective primarily due to an overreliance on
consultants to review critical accounting areas and disclosures; and a lack of
sufficient qualified accounting staff.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Valcom, Inc. is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under
the Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company's principal executive and principal financial
officers and effected by the Company's board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures that:

- Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the company;

- Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the
company; and

- Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's assets
that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. All internal
control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Because of the inherent limitations of internal control, there is
a risk that material misstatements may not be prevented or detected on a timely
basis by internal control over financial reporting. However, these inherent
limitations are known features of the financial reporting process. Therefore,
it is possible to design into the process safeguards to reduce, though not
eliminate, this risk.

Management assessed the effectiveness of the Company's internal control over
financial reporting as of September 30, 2009. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated
Framework.

Based on its assessment, management concluded that, as of September 30, 2009,
the Company's internal control over financial reporting is not effective based
on those criteria. In performing this assessment, management identified the
following material weaknesses:

- Lack of adequate segregation of controls
- Lack of adequate and qualified accounting staff to oversee the
accounting and financial statement close process
- Lack of adequate controls over debt and equity transactions
- Lack of controls over the expense cycle

This annual report does not include an attestation report of the Company's
registered accounting firm regarding internal control over financial
reporting. The management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No changes in the Company's internal control over financial reporting have come
to management's attention during the Company's last fiscal year that have
materially affected, or are likely to materially affect, the Company's internal
control over financial reporting.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and ages of the Company's directors
and executive officers, the positions with the Company held by each, and the
period during which each such person has held such position.

Name Age Position Since
------------------ --- --------------------------------------- -----
Vince Vellardita 52 CEO/CFO/President/Chairman of the Board 2000
Richard Shintaku 67 Director 2003
Frank O Donnell 59 Director 2006
Carl Austin Powers 47 Director/Vice President of Sales 2009
and Marketing
Patrick Wilemsen 35 Director 2009

All directors hold office until the next annual meeting of stockholders of the
Company and until their successors are elected and qualified. Officers hold
office until the first meeting of directors following the annual meeting of
stockholders and until their successors are elected and qualified, subject to
earlier removal by the Board of Directors.

BIOGRAPHIES OF THE COMPANY'S EXECUTIVE OFFICERS AND DIRECTORS

VINCE VELLARDITA - CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT

VINCE VELLARDITA, Chairman and Chief Executive Officer for Valcom, Inc.,
has utilized his 30 years of experience in the entertainment industry and
successfully turned Valcom, Inc., into an Independent Entertainment Company
having a 275 million dollar market cap. Mr. Vellardita strategically led the
Company in acquiring property and studios in Las Vegas, Los Angeles, and
Palm Springs. These entertainment studios combined consisted of 20 sound
stages with back lot at 350 thousand sq. ft. on over 20 acres of land. He has
been very instrumental in acquiring 143 films, 10 TV series, millions of
dollars worth of equipment, and an ownership of a TV station KVPS Palm Springs.
Valcom has maintained long-term contracts with Paramount Pictures CBS's series
"JAG" and "NCIS", and Walt Disney's Sabans "Mighty Morphin Power Rangers".
Mr. Vellardita has consulted with Broadcasters and Studios all over the world
and continues long-standing relationships throughout the entertainment
industry.

Mr. Vellardita began his career in 1977 as a fast-paced music producer and
promoter of over 200 live events and concerts with some of the biggest acts in
the world. He also produced a Presidential campaign, Super Bowl events and
Broadway Theater and Las Vegas shows. In 1987, Mr. Vellardita bought his first
TV station in Nashville and built it into a television network with over 35 TV
stations servicing over 9 million households, housing multiple sound stages and
edit bays, as well as increasing revenues by bring in national accounts to this
network. With Mr. Vellardita's diversified background and successful track
record in Nashville, he relocated to Los Angeles and developed independent
productions studios and focused on film and television from building the sound
stages to all aspects of deal making, as well as luring some of the biggest
names in the television and motion picture community, including Paramount,
Warner Brothers and Disney. Mr. Vellardita's excellent reputation in the
entertainment industry allowed him to maintain a 95% occupancy rate while being
involved in the production of several thousand episodes of television and
hundreds of films.

At fifty two years of age, Mr. Vellardita has been married to his wife
Teresa for 20 years and has 2 sons, Jesse 26 and Anthony 23. Vince and Teresa
reside in Florida and keep residence in both Los Angeles and Las Vegas, Nevada.

RICHARD SHINTAKU - DIRECTOR

Richard Shintaku has served on the Board since August 5, 2003. He is currently
President and CEO of Inter-Continental Associates Group, LLC and ICAG, Inc.
ICAG is a Merrill Lynch investment "Alliance Partner". He is currently Vice
President and principal of MRI International, Inc., one of the nation's largest
medical receivables funding companies, Executive Vice President and principal
of JMR Nevada, Inc. (Harmon Medical Center), and KK JMR (Medical, Japan
centers). Mr. Shintaku is also Chairman and CEO of Premier Entertainment
Services, Inc., (product placement in Digatech International, Inc. (Gaming
technology) and Owner/Proprietor of The Royal Hawaiian Farms
(Pistachio/Grapes). He is a Partner of Super Nova Financial Services (NY
Mercantile Exchange). He also serves on various board of directors of many
Asian and domestic firms. He has recently been asked to serve as the first
Honorary Consul General of Japan in the State of Nevada and is presently
serving as the Nevada representative on the Republican Presidential Roundtable.

FRANK O'DONNELL- DIRECTOR

The Company appointed Frank to the Board in 2007. Frank O'Donnell is also Vice-
Chairman of TVcompass and a founder of the Company. From 1996 to 2004, Mr.
O'Donnell was the founder and President of Evolve Products, Inc. From 1986 to
1995, he was the founder and Vice President of Universal Electronics, Inc. and
from 1979 to 1986 he was the founder and President of Cable Business
Associates, Inc. Further, he previously managed the custom designs for Time
Warner Cable and Comcast (AT&T/TCI) universal remote controls.

CARL AUSTIN POWERS- DIRECTOR

Carl Austin Powers joined the Company's Board on February 06th 2009 and was
also appointed as Executive Vice President Sales and Marketing on the same
date. Mr. Powers had a successful career in the telecommunications industry
starting with Cable and Wireless Communications in 1986 as National Account
Manager and then in 1990 MCI Communications, Inc. as Florida Regional Manager,
Global Accounts and then MCI Worldcom as Southern Region Executive Director. In
2001 he joined Global Crossing Communications as Southern Regional Vice
President of Global Network Solutions and in 2002 becoming North America
managing director , alternative channel sales for Primus Telecommunications,
Inc.

PATRICK WILLEMSEN- DIRECTOR

On September 22, 2009, the Company's Board of Directors appointed Patrick
Willemsen as a director of the Company. Mr. Willemsen started his professional
career with a Dutch foundation that was responsible for the implementation of
the first Internet-over-cable and TV-shopping mall solution for a Dutch CATV
operator. In 1995 he started a trading company in the Netherlands and imported
food products from the Middle East to Europe, US and Asia. In 1997 Mr.
Willemsen started a telecom company and quickly led the company to a market cap
of over 250 million USD. Early 2003 Mr. Willemsen moved to the USA and started
the company Emergo Consultancy. Emergo is active in consultancy and
international business opportunities. The company assists small and medium
sized companies in growth and provides an emphasis on international expansion.
In 2007 Mr. Willemsen began ABEX Capital INC, which was founded to manage
investment funds used for structuring and acquiring distressed real estate and
notes. Mr. Willemsen studied economics and management in Amsterdam at the
Hogeschool van Amsterdam.

FAMILY RELATIONSHIPS

There are no family relationships among our executive officers and directors.

LEGAL PROCEEDINGS

There are no material proceedings to which any of our directors, executive
officers, affiliates or stockholders is a party adverse to us. There are no
orders, judgments, or decrees of any governmental agency or administrator, or
of any court of competent jurisdiction, revoking or suspending for cause any
license, permit or other authority to engage in the securities business or in
the sale of a particular security or temporarily or permanently restraining any
of our officers or directors from engaging in or continuing any conduct,
practice or employment in connection with the purchase or sale of securities,
or convicting such person of any felony or misdemeanor involving a security, or
any aspect of the securities business or of theft or of any felony or any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding.

SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers and persons who beneficially own more than ten percent of a
registered class of our equity securities to file with the SEC initial reports
of ownership and reports of change in ownership of common stock and other
equity securities of our company. Officers, directors and greater than ten
percent stockholders are required by SEC regulations to furnish us with copies
of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and
4 and amendments thereto furnished to us under Rule 16a-3(e) during the fiscal
year ended September 30, 2009, and Forms 5 and amendments thereto furnished to
us with respect to the fiscal year ended September 30, 2009, we believe that
during the year ended September 30, 2009, our executive officers, directors and
all persons who own more than ten percent of a registered class of our equity
securities have complied with all Section 16(a) filing requirements.

THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Our Board of Directors is responsible for establishing broad corporate policies
and for overseeing our overall management. In addition to considering various
matters which require Board approval, the Board provides advice and counsel to,
and ultimately monitors the performance of, our senior management.

We do not have a standing Audit Committee, a Compensation Committee, or a
Nominations and Governance Committee of the board of directors. Our directors
perform the functions of audit, nominating and compensation committees. Our
directors, Vincent Vellardita, Richard Shintaku and Frank O Donnell,
participate in the consideration of director nominees. Due to the small size of
our company and our board, the board of directors does not believe that
establishing a separate nominating committee is necessary for effective
governance. When additional members of the Board of Directors are appointed or
elected, we will consider creating a nominating committee. The entire Board of
Directors participates in audit related matters of our company, including, but
not limited to, reviewing and discussing our audited financial statements with
management and our auditors and recommending to the board of directors that the
financial statements be included in our Annual Reports on Form 10-K. In
performing their role equivalent to an audit committee, the Board of Directors

(i) reviewed and discussed the Company's audited financial statements in the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2008 with management, (ii) discussed with the Company's independent registered
public accounting firm the matters required to be discussed pursuant to
Statement on Auditing Standards No. 61 (Communication With Audit Committees),

(iii) discussed with its independent registered public accounting firm matters
relating to independence, including the disclosures made to the Board as
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees ), and (iv) in reliance on the aforementioned
reviews and discussions, recommended to management the inclusion of the
Company's audited financial statements in the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 2008 for filing with the
Securities and Exchange Commission. Messrs. Vellardita, Shintaku and O Donnell
are not considered independent directors as defined by any national securities
exchange registered pursuant to Section 6(a) of the Securities Exchange Act of
1934 or by any national securities association registered pursuant to Section
15A(a) of the Securities Exchange Act of 1934.

The Board and our management strive to perform and fulfill their respective
duties and obligations in a responsible and ethical manner. The Board performs
annual self-evaluations. We have adopted a comprehensive Code of Ethics for all
directors, officers and employees.

During 2009, the Board of Directors met and/or executed unanimous written
consents of the Board of Directors ____ times. While we do not have a formal
policy requiring members of the Board to attend the Annual Meeting of
Stockholders, we strongly encourage all directors to attend. No director
attended fewer than 90% of the total number of meetings.

DIRECTOR COMPENSATION

The Company has not paid and does not presently propose to pay cash
compensation to any director for acting in such capacity. However, the Company
will give the directors a grant of shares of common stock and reimbursement for
reasonable out-of-pocket expenses for attending meetings. Outside directors
received no cash compensation for their services; however they were reimbursed
for their expenses associated with attendance at meetings or otherwise incurred
in connection with the discharge of their duties as directors of the Company.
No officer of the Company receives any additional compensation for his services
as a director, and the Company does not contribute to any retirement, pension,
or profit sharing plans covering its directors.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the cash compensation (including cash bonuses)
paid or accrued by us for our years ended September 30, 2009, 2008 and 2007 to
our Chief Executive Officer and our four most highly compensated officers other
than the Chief Executive Officer at September 30, 2009.

SUMMARY COMPENSATION TABLE

Name & Year Salary Bonus Other Restricted Options LTIP All
Position Stock Other
------------ ---- -------- ----- ----- ---------- ------- ---- -----
Vincent 2009 $125,000
Vellardita 2008 $ 0 0.000 0 100,000 0 0 0
CEO 2007 $ 0 0.000 0 0 0 0 0
C. A. Powers 2009 $ 58,863

2004 EMPLOYEE STOCK COMPENSATION PLAN

OPTIONS GRANTS IN LAST FISCAL YEAR
None

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
None.

EMPLOYMENT AGREEMENT

The Company entered into an Employment Agreement with Vince Vellardita, the
Company's Chairman of the Board, Chief Executive Officer and President,
effective October 1, 2000. The term of the Agreement is for five years. The
Board of Directors may terminate, for just cause Mr. Vellardita's employment at
any time. The Agreement shall be automatically renewed for successive five year
terms, unless either party gives written notice of termination three months
prior to the end of the term. The Agreement provides for an annual salary of
$120,000 for the first year, $150,000 for the second year and $200,000 for the
third year, plus a bonus if authorized by the Board of Directors. If the
Company is involved in a merger or consolidation in which it does not survive,
or if the Company transfers substantially all of its assets, the surviving
entity in the merger or consolidation or the transferee of the Company's assets
shall be bound by the Agreement. With the exception of ownership of up to five
percent of the equity securities of another publicly traded corporation, the
Agreement prohibits Mr. Vellardita from engaging in any activity competitive
with or adverse to the Company's business or welfare without the Company's
prior written consent.

The Company entered into an Employment Agreement with Carl Austin Powers, the
Company's Executive Vice President Sales and Marketing and Director effective
06th February 2009. The term of the agreement is 3 years and the agreement may
be terminated in accordance with the terms of the agreement and for just cause.
The annual compensation commences at $80,000 per year and increased to $120,000
per year after 90 days and under the terms of the agreement, Mr. Powers will
enjoy the benefits of such pension, 401 (k), profit sharing, bonus, life
insurance, hospitalization, major medical, are in effect at any time during
the term, to the extent the Executive is eligible under the terms of those
Plans and will participate in an executive incentive compensation plan with
others sharing in an amount equal to 5% of the company's net after tax profits
for each fiscal year during the term of the agreement; if and when the Company
participates in such programs.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHODLER MATTERS

The following table sets forth information as to the shares of our common stock
beneficially owned as of September 30, 2008 by (i) each person known to us to
be the beneficial owner of more than 5% of our common stock; (ii) each director
and nominee for director; (iii) each executive officer; and (iv) all of our
directors and executive officers as a group. Unless otherwise indicated in the
footnotes following the table, the persons as to whom the information is given
had sole voting and investment power over the shares of common stock shown as
beneficially owned by them. Unless otherwise indicated, the address of each
person shown is c/o ValCom, Inc., 2113A Gulf Boulevard, Indian Rocks Beach,
Florida 33785.

Title of Name and Amount and Percent(2)
Class Address of Nature of of Class
Beneficial Owner Beneficial Owner (1)
---------- ---------------- ---------------- ---
Common Vince Vellardita 6,100,000 13.8%
Preferred (CEO, CFO, Chairman) 2,715,729 21.4%
Common Richard Shintaku 3,700,000 8.3%
Preferred (Director) 1,537,333 8.2%
Common Frank O'Donnell 550,000 1.2%
Preferred (Director) 1,000,000 5.4%
Preferred Carl Austin Powers (Director)* 29.1%
(Executive Vice President) 5,000,000
Common Patrick Wilemsen (Director)* 5,000,000 9.1%
Preferred 4,000,000 21.4%
Common 15,350,000 32.4%
All Officers and Directors as a Group
(Five (5) individuals)

* Represent 5,000,000 shares of Series C Preferred Class stock owned by Rain
Day Holdings, LLC. Rain Day Holdings LLC is owned by Tracey A. Powers, wife of
Carl Austin Powers. Carl Austin Powers is the authorized agent for Rain Day
Holdings LLC and holds all the voting rights on said shares.

**Represents 4,000,000 shares of common stock held by Abex Capital, Inc. and
1,000,000 shares of common stock held by Florida Opportunities, both entities
for which Patrick Willemsen holds voting and dispositive power and 4,000,000
shares of Series C Preferred Stock held by Abex Capital Inc, for which Patrick
Willemsen holds voting and dispositive power.

(2)

*Less than one percent.

(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended,
and the information is not necessarily indicative of beneficial ownership for
any other purpose. Under such rule, beneficial ownership includes any shares as
to which the selling stockholder has sole or shared voting power or investment
power and also any shares, which the selling stockholder has the right to
acquire within 60 days. "Shares Beneficially Owned After the Offering" assumes
the sale of all of the common shares offered by this prospectus and no other
purchases or sales of our common shares by the selling stockholders.

(2) Based upon 39,064,158 share of common stock issued and outstanding as of
September 30, 2009.

CHANGES IN CONTROL

To the best of the knowledge and belief of the Company, there are no
arrangements, understandings, or other agreements relative to the disposition
of the Company's securities, the operation of which would, at a subsequent
date, result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

NONE

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate fees billed by Malone and Bailey, Certified Public Accountants,
Seale and Bears, Certified Public Accountants and Moore and Associates,
Certified Public Accountants for professional services rendered for the audit
of the Company's annual financial statements for the years ended September 30,
2009 and 2008 and the review of the financial statements included in the
Company's Forms 10-Q, totaled as follows:

2009 2008
--------- ---------
Audit fees $ 27,000 $ 13,000
Quarterly reviews $ 13,000 $ 12,000
Total $ 40,000 $ 25,000

PART IV

ITEM 15. EXHIBITS; FINANCIAL STATEMENT SCHEDULES

Ex. 2.1 Second Amended Plan of Reorganization (Incorporated by reference to the
Company's current report on Form 8-K as filed with the Securities and Exchange
Commission on August 15, 2008).

Ex. 3.1 Articles of Incorporation (Incorporated by reference to the Company's
Form 10SB filed with the Securities and Exchange Commission, File # 000-28416)

Ex. 3.2 Bylaws (Incorporated by reference to the Company's Form 10SB filed with
the Securities and Exchange Commission, File # 000-28416)

Ex. 3.3 Certificate of Amendment to Certificate of Incorporation (Incorporated
by reference to the Company's Schedule Def 14A filed with the Securities and
Exchange Commission on October 20, 2006).

Ex. 10.1 Form of Convertible Debenture dated November 25, 2008, by and between
Valcom, Inc. and Able Income Fund LLC (Incorporated by reference to the
Company's current report on Form 8-K as filed with the Securities and Exchange
Commission on December 1, 2008)

Ex. 10.2 Form of Guaranty dated November 25, 2008, by and between Valcom, Inc.
and Able Income Fund LLC (Incorporated by reference to the Company's current
report on Form 8-K as filed with the Securities and Exchange Commission on
December 1, 2008)

Ex. 10.3 Form of Pledge Agreement dated November 25, 2008, by and between
Valcom, Inc. and Able Income Fund LLC (Incorporated by reference to the
Company's current report on Form 8-K as filed with the Securities and Exchange
Commission on December 1, 2008)

Ex. 10.4 Form of Warrant dated November 25, 2008, by and between Valcom, Inc.
and Able Income Fund LLC (Incorporated by reference to the Company's current
report on Form 8-K as filed with the Securities and Exchange Commission on
December 1, 2008)

Ex. 10.5 Form of Agreement for the Purchase and Sale of Common Stock by and
among Faith TV LLC, A. Kenneth Curtis, William Curtis, Jim West, Mark McGregor
and Valcom, Inc. (Incorporated by reference to the Company's current report on
Form 8-K as filed with the Securities and Exchange Commission on December 19,
2008)

Ex. 10.6 Form of Note Purchase Agreement dated January 6, 2009 by and between
Valcom, Inc. and OmniReliant holdings, Inc. (Incorporated by reference to the
Company's current report on Form 8-K as filed with the Securities and Exchange
Commission on January 9, 2009)

Ex. 10.7 Form of 10% Secured Promissory Note dated January 6, 2009 by and
between Valcom, Inc. and OmniReliant Holdings, Inc. (Incorporated by reference
to the Company's current report on Form 8-K as filed with the Securities and
Exchange Commission on January 9, 2009)

Exhibit 10.8 Form of Security Agreement dated January 6, 2009 by and between
Valcom, Inc. and OmniReliant Holdings, Inc. (Incorporated by reference to the
Company's current report on Form 8-K as filed with the Securities and Exchange
Commission on January 9, 2009)

Ex. 10.9 Form of Warrant dated January 6, 2009 (Incorporated by reference to
the Company's current report on Form 8-K as filed with the Securities and
Exchange Commission on January 9, 2009)

Ex. 10.10 Memorandum of Understanding by and between Valcom, Inc. and
Jeremiah's International Trading Co. Inc (Incorporated by reference to the
Company's current report on Form 8-K as filed with the Securities and Exchange
Commission on February 12, 2009)

Ex. 10.11 Form of Securities Purchase Agreement dated September 22, 2009
(Incorporated by reference to the Company's current report on Form 8-K as filed
with the Securities and Exchange Commission on September 30, 2009)

Ex. 16.1 Letter from Kempisty & Company, dated August 19, 2008 (Incorporated by
reference to the Company's current report on Form 8-K as filed with the
Securities and Exchange Commission on August 20, 2008)

Ex. 31.1 Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002

Ex. 32.1 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002

Ex. 99.1 Order Confirming Second Amended Plan of Reorganization under Chapter
11 of the Bankruptcy Code, entered on August 5, 2008 (Incorporated by reference
to the Company's current report on Form 8-K as filed with the Securities and
Exchange Commission on August 15, 2008).

29
SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the issuer caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated: February 22, 2010

VALCOM, INC., A DELAWARE CORPORATION

By:/s/ Vince Vellardita
--------------------
Vince Vellardita
Chief Executive Officer
(Principal Executive Officer)
and Chief Financial Officer (Principal
Accounting and Financial Officer)

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the issuer and in the capacities and on the
dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

By: /s/ Vince Vellardita Chief Executive Officer,
---------------- Chairman of the Board February 22, 2010
Vince Vellardita

By: /s/ Richard Shintaku Director February 22, 2010
----------------
Richard Shintaku

By: /s/ Frank O Donnell Director February 22, 2010
---------------
Frank O Donnell

By: /s/ Carl Austin Powers Director February 22, 2010
------------------
Carl Austin Powers

By: /s/ Patrick Wilemsen Director February 22, 2010
----------------
Patrick Wilemsen

VALCOM, INC - FORM 10-K/A - February 22, 2010

Attached files

VALCOM, INC Reports