UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 _______________
  FORM
10-Q
 _______________
  x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the quarterly period ended April 30, 2009
  o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the transition period from
______to______.
  MEGA
MEDIA GROUP, INC.
 (Exact
name of registrant as specified in Charter)
  Nevada
              
              000-28881
              
              88-0403762(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (Commission
      File No.)
              
              (IRS
      Employee
                Identification
      No.)
 
 1122 Coney Island
Avenue
 Brooklyn,
NY 11235
 (Address
of Principal Executive Offices)
 _______________
  (718)947-1100
 (Issuer
Telephone number)
 _______________
  (Former
Name or Former Address if Changed Since Last Report)
  Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2)has been
subject to such filing requirements for the past 90 days.  Yes x  No o
 
 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 (§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 o No o
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
 See definition of “accelerated filer” and “large accelerated filer” in
Rule 12b-2 of the Exchange Act (Check one):
  Large
Accelerated Filer o     Accelerated
Filer o     Non-Accelerated
Filer o     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
  State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of June 19, 2009: 304,753,677shares of common stock.
  
  
 
  Mega
Media Group, Inc.
 
 FORM
10-Q
 
 April
30, 2009
 
 
 INDEX
    PART
I-- FINANCIAL INFORMATION
  Item
      1.
              Financial
      Statements
              4Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              24Item
      3
              Quantitative
      and Qualitative Disclosures About Market Risk
              26Item
      4T.
              Controls
      and Procedures
              26
  PART
II-- OTHER INFORMATION
  Item
      1
              Legal
      Proceedings
              27Item
      1A.
              Risk
      Factors
              28Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              28Item
      3.
              Defaults
      Upon Senior Securities
              28Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              28Item
      5.
              Other
      Information
              28Item
      6.
              Exhibits
      and Reports on Form 8-K
              29
  SIGNATURE
   
 
 Except as
otherwise required by the context, all references in this report to "we", "us”,
"our", “MMDA”, “Mega Media Group”, “MMG” or "Company" refer to the consolidated
operations of Mega Media Group, Inc., a Nevada corporation, and its wholly-owned
subsidiaries.
 
 Forward-Looking
Statements and Associated Risks
  The Private Securities Litigation
Reform Act of 1995 provides a "safe harbor" for certain forward-looking
statements. Some of the statements contained in this annual report of the
Company discuss future expectations, contain projections of our operations
or financial condition or state other forward-looking information. Some
statements contained in this quarterly report on Form 10-QSB that are not
historical facts (including without limitation statements to the effect that we
"believe," "expect," "anticipate," "plan," "intend," "foresee," or other similar
expressions) and are forward-looking statements. These forward-looking
statements are based on our current expectations and beliefs concerning future
developments and their potential effects on us. There can be no assurance that
future developments affecting us will be those anticipated by us. All comments
concerning our expectations for future revenue and operating results are based
on our forecasts of our plan of operation and do not include the potential
impact of any future acquisitions or operations. These forward-looking
statements involve significant risks and uncertainties (some of which are beyond
our control) and assumptions. Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect, actual results
may vary in material respects from those projected in the forward-looking
statements.
    3
   PART I - FINANCIAL
INFORMATION
 
 Item
1. Financial Statements
  MEGA
      MEDIA GROUP, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSUNAUDITEDApril
      30,
                        
                        
                        January
      31,ASSETS
                        
                        2009
                        
                        
                        2009Current
      Assets
                        
                        (Unaudited)Cash
                        
                        $
                        38,061
                        
                        
                        $
                        13,877Accounts
      receivable, net (Note 3)
                        
                        
                        134,273
                        
                        
                        
                        137,855Prepaid
      Expenses
                        
                        
                        -
                        
                        
                        
                        13,307Note
      Receivable
                        
                        
                        10,000
                        
                        
                        
                        10,000Total
      Current Assets
                        
                        
                        182,334
                        
                        
                        
                        175,038Fixed
      assets, net (Note 4)
                        
                        
                        186,202
                        
                        
                        
                        227,785Master
      records, net (Note 5)
                        
                        
                        -
                        
                        
                        
                        -Other
      intangible assets, net
                        
                        
                        -
                        
                        
                        
                        -Advances
                        
                        
                        20,000
                        
                        
                        
                        20,000Deposits
                        
                        
                        13,486
                        
                        
                        
                        13,486Other
                        
                        
                        16,010
                        
                        
                        
                        16,010TOTAL
      ASSETS
                        
                        $
                        418,032
                        
                        
                        $
                        452,319LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      LiabilitiesAccounts
      payable
                        
                        $
                        538,149
                        
                        
                        $
                        1,138,976Sales
      tax payable
                        
                        
                        616
                        
                        
                        
                        616Payroll
      taxes payable (Note 12)
                        
                        
                        1,200,853
                        
                        
                        
                        1,112,966Accrued
      Offices' Compensation
                        
                        
                        512,093
                        
                        
                        
                        504,893Equipment
      loan - current portion (Note 9)
                        
                        
                        7,248
                        
                        
                        
                        7,248Equipment
      lease - current portion (Note 10)
                        
                        
                        19,440
                        
                        
                        
                        19,440Loans
      payable (Note 7)
                        
                        
                        496,000
                        
                        
                        
                        496,000Due
      to related party (Note 6)
                        
                        
                        69,328
                        
                        
                        
                        69,328Judgement
      Payable (Note 14)
                        
                        
                        266,955
                        
                        
                        
                        296,955Deferred
      revenues
                        
                        
                        164,194
                        
                        
                        
                        135,920Accrued
      expenses
                        
                        
                        49,679
                        
                        
                        
                        57,478Payable
      to shareholders (Note 6)
                        
                        
                        90,148
                        
                        
                        
                        12,148Settlement
      Payable (Note 10)
                        
                        
                        125,000
                        
                        
                        
                        125,000Stock
      Payable
                        
                        
                        -
                        
                        
                        
                        10,000Total
      Current Liabilities
                        
                        
                        3,539,704
                        
                        
                        
                        3,986,968Equipment
      Loan Payable (Note 9)
                        
                        
                        692
                        
                        
                        
                        2,767Equipment
      Lease Payable (Note 10)
                        
                        
                        6,480
                        
                        
                        
                        12,960TOTAL
      LIABILITIES
                        
                        
                        3,546,875
                        
                        
                        
                        4,002,695Commitments
      and contingencies
                        
                        
                        -
                        
                        
                        
                        -Stockholders'
      DeficitPreferred
      stock, $.001 par value, 20,000,000 shares authorized, 0 shares
                          issued
      and outstanding as of 04/30/09 and 01/31/09 (Note 8)
                        
                        
                        -
                        
                        
                        
                        -Common
      stock, $.001 par value, 500,000,000 shares authorized, 297,081,407
                          shares
      issued and outstanding as of 04/30/09 and 261,348,938 shares issued
                          and
      outstanding as of 01/31/09 (Note 8)
                        
                        
                        297,081
                        
                        
                        
                        261,349Additional
      paid-in capital
                        
                        
                        11,637,553
                        
                        
                        
                        10,426,270Deferred
      compensation
                        
                        
                        (136,241
                        )
                        
                        
                        (194,681
                        )Accumulated
      Deficit
                        
                        
                        (14,927,238
                        )
                        
                        
                        (14,043,314
                        )Total
      Stockholders' Deficit
                        
                        
                        (3,128,843
                        )
                        
                        
                        (3,550,376
                        )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                        
                        $
                        418,032
                        
                        
                        $
                        452,319
  The
accompanying notes are an integral part of these financial
statements.
   4
  MEGA
      MEDIA GROUP, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONSUNAUDITEDThree
      Months Ended April 30,2009
                    
                    
                    2008(Unaudited)
                    
                    
                    (Unaudited)Revenues:Advertising
      revenues
                    
                    $
                    361,116
                    
                    
                    $
                    237,250Other
      revenues
                    
                    
                    11,292
                    
                    
                    
                    7,964Total
      Revenues
                    
                    
                    372,409
                    
                    
                    
                    245,214Operating
      expenses
                    
                    
                    383,823
                    
                    
                    
                    770,632Selling,
      general and administrative
                    
                    
                    746,114
                    
                    
                    
                    609,369Depreciation
      and amortization
                    
                    
                    41,583
                    
                    
                    
                    54,4231,171,519
                    
                    
                    
                    1,434,424Net
      loss from operations
                    
                    
                    (799,110
                    )
                    
                    
                    (1,189,210
                    )Other
      Expenses:Interest
      expense
                    
                    
                    47,797
                    
                    
                    
                    81,677Beneficial
      conversion expense
                    
                    
                    37,016
                    
                    
                    
                    525,640Net
      loss before tax benefit
                    
                    
                    (883,924
                    )
                    
                    
                    (1,796,526
                    )Tax
      benefit
                    
                    
                    -
                    
                    
                    
                    -Net
      loss
                    
                    $
                    (883,924
                    )
                    
                    $
                    (1,796,526
                    )Basic
      and diluted loss per share
                    
                    
                    (0.003
                    )
                    
                    
                    (0.023
                    )Weighted-Average
      shares used in computation of basic and diluted loss per
    share
                    
                    
                    269,140,866
                    
                    
                    
                    79,750,352
  The
accompanying notes are an integral part of these financial
statements.
   5
  MEGA
      MEDIA GROUP, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSUNAUDITEDApril
      30,
                                    
                                    
                                    April
      30,2009
                                    
                                    
                                    2008(Unaudited)
                                    
                                    
                                    (Unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                                    
                                    $
                                    (883,924
                                    )
                                    
                                    $
                                    (1,796,526
                                    )Adjustments
      to reconcile net loss to net cashused
      by operating activities:Depreciation
      and amortization
                                    
                                    
                                    41,583
                                    
                                    
                                    
                                    54,423Beneficial
      conversion of loans from shareholders
                                    
                                    
                                    37,016
                                    
                                    
                                    
                                    525,640Stock
      options issued to officers for services
                                    
                                    
                                    -
                                    
                                    
                                    
                                    6,720Stock
      compensation for consulting services
                                    
                                    
                                    58,440
                                    
                                    
                                    
                                    59,097Stock
      compensation for legal services
                                    
                                    
                                    20,000
                                    
                                    
                                    
                                    -Stock
      issued to officers for services
                                    
                                    
                                    20,000
                                    
                                    
                                    
                                    -Changes
      in operating assets and liabilities:(Increase)
      in accounts receivable
                                    
                                    
                                    3,582
                                    
                                    
                                    
                                    (78,150
                                    )(Increase)
      in accrued revenues
                                    
                                    
                                    
                                    
                                    
                                    
                                    (3,222
                                    )(Increase)
      in prepaid expenses
                                    
                                    
                                    13,307
                                    
                                    
                                    
                                    22,995Increase
      in bank overdraft
                                    
                                    
                                    -
                                    
                                    
                                    
                                    14,178Increase
      in accounts payable
                                    
                                    
                                    417,841
                                    
                                    
                                    
                                    302,640Increase
      in stock payable
                                    
                                    
                                    
                                    
                                    
                                    
                                    44,000Increase
      in accrued officers' compensation
                                    
                                    
                                    7,200
                                    
                                    
                                    
                                    18,021Increase
      in accrued expenses
                                    
                                    
                                    63,533
                                    
                                    
                                    
                                    32,521Increase
      in deferred revenue
                                    
                                    
                                    28,274
                                    
                                    
                                    
                                    (15,792
                                    )Increase
      in payroll liabilities
                                    
                                    
                                    87,887
                                    
                                    
                                    
                                    133,988Total
      adjustments
                                    
                                    
                                    798,665
                                    
                                    
                                    
                                    1,117,059NET
      CASH USED BY OPERATING ACTIVITIES
                                    
                                    
                                    (85,260
                                    )
                                    
                                    
                                    (679,467
                                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Master
      records
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Fixed
      assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -CASH
      PROVIDED (USED) BY INVESTING ACTIVITIES
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -CASH
      FLOWS FROM FINANCING ACTIVITIES:Loan
      proceeds
                                    
                                    
                                    -
                                    
                                    
                                    
                                    465,000Equipment
      loan repayments
                                    
                                    
                                    (2,076
                                    )
                                    
                                    
                                    (1,384
                                    )Proceeds
      from loans from shareholders
                                    
                                    
                                    78,000
                                    
                                    
                                    
                                    125,000Repayments
      of loans from related parties
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (12,500
                                    )Repayments
      of judgement payable
                                    
                                    
                                    (30,000
                                    )
                                    
                                    
                                    -Equipment
      lease repayments
                                    
                                    
                                    (6,480
                                    )
                                    
                                    
                                    (4,860
                                    )Capital
      Contributions
                                    
                                    
                                    -
                                    
                                    
                                    
                                    52,719Sale
      of common stock
                                    
                                    
                                    70,000
                                    
                                    
                                    
                                    -Options
      exercised by officers
                                    
                                    
                                    -
                                    
                                    
                                    
                                    55,096CASH
      PROVIDED BY FINANCING ACTIVITIES
                                    
                                    
                                    109,444
                                    
                                    
                                    
                                    679,071NET
      INCREASE IN CASH
                                    
                                    
                                    24,184
                                    
                                    
                                    
                                    (396
                                    )CASH:
      Beginning of period
                                    
                                    
                                    13,877
                                    
                                    
                                    
                                    396End
      of period
                                    
                                    $
                                    38,061
                                    
                                    
                                    $
                                    -
                                    )Supplemental
      disclosure of noncash financing and investing
      activities:Cash
      paid during the period for income taxes
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    2,275Cash
      paid during the period for interest
                                    
                                    $
                                    7,362
                                    
                                    
                                    $
                                    16,674Non
      Cash Financing and Investing Activities:Stock
      issued in exchange for debt
                                    
                                    
                                    1,090,000
                                    
                                    
                                    
                                    -Stock
      issued for conversions of loans payable
                                    
                                    $
                                    10,000
                                    
                                    
                                    $
                                    -Increase
      in note receivable
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    1,400,000Increase
      in note payable
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    1,400,000
  The
accompanying notes are an integral part of these financial
statements.
  6
  MEGA
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (Amounts
and Disclosures at and for the three months
 Ended
April 30, 2009 and 2008 Are Unaudited)
 
 
 NOTE 1 -
ORGANIZATION AND NATURE OF BUSINESS
  Mega
Media Group, Inc. (the “MMG”) was incorporated in New York State on February 3,
2004. The Company is a multi-media holding company with five wholly owned
subsidiaries. The Company’s focus is mainstream entertainment and media. The
corporate headquarters is located in Brooklyn, NY.
 
 As
reflected in the accompanying combined financial statements, the Company has an
accumulated deficit of $14,043,314 at January 31, 2009 that includes losses of
$4,737,845 for the year ended January 31, 2009 and a working deficit of
$3,811,930 at January 31, 2009. Also, as reflected in the accompanying combined
financial statements, the Company has an accumulated deficit of $14,927,238 and
$11,101,995 at April 30, 2009 and 2008 respectively that includes losses of
$883,924 and $1,796,526 for three months ended April 30, 2009 and 2008
respectively and a working deficit of $3,357,370 and $4,252,026 at April 30,
2009 and 2008 respectively. The Company’s shareholders have funded the losses
and cash shortfalls allowing management to develop sales and contingencies
plans. The Company’s also arranging for additional funding. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.
 
 Management
has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. The Company is actively pursing
additional funding and a potential merger or acquisition candidate and strategic
partners, which would enhance stockholders’ investment. Management believes that
the above actions will allow the Company to continue operations through the next
fiscal year.
  NOTE-2 –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of
Consolidation
 
 The
accompanying consolidated financial statements include the accounts of the Mega
Media Group Inc., and its subsidiary Mega Media Film, Inc., Mega Media Studios,
Inc., Mega Media Records, Inc., VSE Magazine, Inc., and Echo Broadcasting Group,
Inc. All significant intercompany balances and transactions have been
eliminated.
 
 Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that effects the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the of the combined financial statements and the reported amounts of revenue and
expenses during the reported period. Actual results could differ from these
estimates.
 
 Cash and Cash
Equivalents
  Short-term
investments with an original maturity of three months or less are considered to
be cash equivalents.
 
 Depreciation and
Amortization
 
 The cost
of furniture and equipment is depreciated over the estimated useful lives of the
related assets. The cost of leaseholds improvements is amortized over the lesser
of the length of the related lease or the estimated useful life of the assets.
Depreciation is computed on a straight line basis, with lives ranging from 3 to
7 years.  Leasehold improvements are amortized over the life of the
lease.
   7
  Master
Records
 
 The
Company records the cost of a record master borne by the Company as an asset if
the past performance and current popularity of the artist provides a sound basis
for estimating that the cost will be recovered from future sales. Otherwise,
that cost is charged to expense. The amount recognized as an asset is amortized
over the estimated life of the recorded performance.
 
 Accounts
Receivable
 
 Accounts
receivable are stated at the amount management expects to collect from
outstanding balances.  Management provides for probable uncollected
amounts through a charge to earnings and a credit to an allowance for bad debts
based on its assessment of the current status of individual
accounts.  Balances that are still outstanding after management has
used reasonable collection efforts are written off through a charge to the
allowance for bad debts and a credit to accounts receivable.
 
 Revenue
Recognition
 
 The
Company recognizes revenue for broadcast advertising when the commercial is
broadcast and is reported, net of agency and outside sales representative
commissions, in accordance with Staff Accounting Bulletin (“SAB”) No. 104,
Topic 13, “Revenue Recognition, Revised and Updated.” Agency and outside
sales representative commissions are calculated based on a stated percentage
applied to gross billing. Generally, clients remit the gross billing amount to
the agency or outside sales representative, and the agency or outside sales
representative remits the gross billing, less their commission, to the
Company.
 
 Financial
Instruments
 
 Due to
their short maturity, the carrying amounts of accounts and notes receivable,
accounts payable, accrued liabilities, and short-term borrowings approximated
their fair values at April 30, 2009 and January 31, 2009.
 
 Income
Taxes
 
 The
Company accounts for income taxes using the liability method. Under this method,
deferred tax assets and liabilities are determined based on differences between
financial reporting bases and tax bases of assets and liabilities and are
measured using the enacted tax rates expected to apply to taxable income in the
periods in which the deferred tax asset or liability is expected to be realized
or settled. Deferred tax assets are reduced by valuation allowances if the
Company believes it is more likely than not that some portion or all of the
assets will not be realized.
 
 Barter
Transactions
 
 The
Company provides broadcast advertising time in exchange for advertising time in
other media, as well as certain goods and services. The terms of the exchanges
generally permit the Company to preempt such broadcast time in favor of
advertisers who purchase time in exchange for cash. The Company includes the
value of such exchanges in both broadcasting net revenues and station operating
expenses. The valuation of barter time is based upon the fair value of the
advertising time provided and goods and services received. For the year ended
January 31, 2009, barter transactions reflected in net broadcast revenue,
operating expenses and selling, general and administrative expenses were
approximately $134,931. For the three months ended April 30, 2009 and 2008,
barter transactions reflected in net broadcast revenue, operating expenses and
selling, general and administrative expenses were approximately $4,000 and
$21,268 respectively.
 8
  Recently Adopted Accounting
Principles
  In
December 2007, FASB issued SFAS No. 141 (revised 2007), Business Combinations
(“SFAS No. 141R”).  SFAS No. 141R is a revision to SFAS No. 141 and
includes substantial changes to the acquisition method used to account for
business combinations (formerly the “purchase accounting” method), including
broadening the definition of a business, as well as revisions to accounting
methods for contingent consideration and other contingencies related to the
acquired business, accounting for transaction costs, and accounting for
adjustments to provisional amounts recorded in connection with
acquisitions.  SFAS No. 141R retains the fundamental requirement of
SFAS No. 141 that the acquisition method of accounting be used for all business
combinations and for an acquirer to be identified for each business
combination.  SFAS No. 141R is applied prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15,
2008.  We adopted SFAS No. 141R effective February 1,
2009.  The adoption of SFAS No. 141R did not have a material impact on
our consolidated financial statements for the three months ended April 30, 2009
because we did not complete any business combinations in the first quarter of
2009.
 
 On
December 4, 2007, the FASB issued SFAS No. 160, “Noncontrolling Interest in
Consolidated Financial Statements”.  SFAS No. 160 requires all
entities to report noncontrolling (minority) interests in subsidiaries as equity
in the consolidated financial statements.  The statement establishes a
single method of accounting for changes in a parent’s ownership interest in a
subsidiary that do not result in deconsolidation and expands disclosures in the
consolidated financial statements.  We adopted SFAS No. 160 effective
February 1, 2009.  The adoption of SFAS No. 160 did not have a
material impact on our consolidated financial statements for the three months
ended April 30, 2009.
 
 In
March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities”.  The new standard
is intended to improve financial reporting about derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors to
better understand their effects on an entity’s financial position, financial
performance, and cash flows.  We adopted SFAS No. 160 effective
February 1, 2009. The adoption of SFAS 161 did not have a material impact on the
Financial Statements.
 
 In April
2008, the FASB issued Staff Position FAS 142-3, “Determination of the Useful
Life of Intangible Assets” (“FSP FAS 142-3”) which amends the factors an entity
should consider in developing renewal or extension assumptions used to determine
the useful life of a recognized intangible asset under FAS No. 142, “Goodwill
and Other Intangible Assets” (“FAS No. 142”).  FSP FAS 142-3 applies
to intangible assets that are acquired individually or with a group of assets
and intangible assets acquired in both business combinations and asset
acquisitions.  It removes a provision under FAS No. 142, requiring an
entity to consider whether a contractual renewal or extension clause can be
accomplished without substantial cost or material modifications of the existing
terms and conditions associated with the asset.  Instead, FSP FAS
142-3 requires that an entity consider its own experience in renewing similar
arrangements.  An entity would consider market participant assumptions
regarding renewal if no such relevant experience exists.   We
adopted SFAS No. 142-3 effective February 1, 2009. The adoption of FSP FAS 142-3
had no impact on the Financial Statements.
 
 In June
2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP
EITF 03-6-1”).  FSP EITF 03-6-1 concludes that unvested share-based
payment awards that contain rights to receive non-forfeitable dividends or
dividend equivalents are participating securities, and thus, should be included
in the two-class method of computing earnings per share
(“EPS”).   We adopted EITF 03-6-1 effective February 1, 2009. The
adoption of FSP EITF 03-6-1 did not have a material impact on the Financial
Statements
  New Accounting
Pronouncements
  In
December 2008, the FASB issued FSP 132(R)-1, “Employers’ Disclosures about
Postretirement Benefit Plan Assets” (FSP 132(R)-1). FSP 132(R)-1 requires
additional disclosures for plan assets of defined benefit pension or other
postretirement plans. The required disclosures include a description of our
investment policies and strategies, the fair value of each major category of
plan assets, the inputs and valuation techniques used to measure the fair value
of plan assets, the effect of fair value measurements using significant
unobservable inputs on changes in plan assets, and the significant
concentrations of risk within plan assets. FSP 132 (R)-1 does not change the
accounting treatment for postretirement benefits plans. FSP 132(R)-1 is
effective for us for fiscal year 2009.
  In
April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4). FSP
157-4 provides guidance on how to determine the fair value of assets and
liabilities when the volume and level of activity for the asset/liability has
significantly decreased. FSP 157-4 also provides guidance on identifying
circumstances that indicate a transaction is not orderly. In addition, FSP 157-4
requires disclosure in interim and annual periods of the inputs and valuation
techniques used to measure fair value and a discussion of changes in valuation
techniques. FSP 157-4 is effective for us beginning in the second quarter of
fiscal year 2009. The adoption of FSP 157-4 is not expected to have a
significant impact on our consolidated financial statements.
  9
  In
April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairment” (FSP 115-2/124-2). FSP
115-2/124-2 amends the requirements for the recognition and measurement of
other-than-temporary impairments for debt securities by modifying the
pre-existing “intent and ability” indicator. Under FSP 115-2/124-2,
another-than-temporary impairment is triggered when there is an intent to sell
the security, it is more likely than not that the security will be required to
be sold before recovery, or the security is not expected to recover the entire
amortized cost basis of the security. Additionally, FSP 115-2/124-2 changes the
presentation of another-than-temporary impairment in the income statement for
those impairments
  In April
2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosure about Fair
Value of Financial Instruments” (FSP 107-1/APB 28-1). FSP 107-1/APB 28-1
requires interim disclosures regarding the fair values of financial instruments
that are within the scope of FAS 107, “Disclosures about the Fair Value of
Financial Instruments.” Additionally, FSP 107-1/APB 28-1 requires disclosure of
the methods and significant assumptions used to estimate the fair value of
financial instruments on an interim basis as well as changes of the methods and
significant assumptions from prior periods. FSP 107-1/APB 28-1 does not change
the accounting treatment for these financial instruments and is effective for us
beginning in the second quarter of fiscal year 2009.
  NOTE 3 –
ACCOUNTS RECEIVABLE
  Accounts
      receivable consist of the following:
                              
                              April
      30, 2009
                              
                              
                              January
      31, 2009Accounts
      receivable-trade
                              
                              $
                              147,273
                              
                              
                              $
                              150,855Allowance
      for doubtful accounts
                              
                              
                              (13,000
                              )
                              
                              
                              (13,000
                              )$
                              134,273
                              
                              
                              $
                              137,855
 NOTE 4 –
FIXED ASSETS
  April 30,
      2009
                      
                      
                      January
      31,2009Fixed
      Assets consist of the following:Equipment
                      
                      $
                      518,210
                      
                      
                      $
                      518,210Leasehold
                      
                      
                      230,969
                      
                      
                      
                      230,969Furniture
                      
                      
                      38,162
                      
                      
                      
                      38,162Trucks
                      
                      
                      41,188
                      
                      
                      
                      41,188Computer
      software
                      
                      
                      45,940
                      
                      
                      
                      45,940874,469
                      
                      
                      
                      874,469Less
      accumulated depreciation
                      
                      
                      688,267
                      
                      
                      
                      646,684$
                      186,202
                      
                      
                      $
                      227,785
 Depreciation
expense was $41,583 and $44,423 for the three months ended April 30, 2009 and
2008 respectively.
 
 10
 
 NOTE 5 –
INTANGIBLE ASSETS
  April
      30, 2009
                            
                            
                            January
      31,2009Intangible
      Assets consist of the following:Master
      records
                            
                            $
                            320,676
                            
                            
                            $
                            320,676Other
      intangible assets (see Notes 2 & 15)
                            
                            
                            -
                            
                            
                            
                            -Less
      accumulated amortization
                            
                            
                            (320,676
                            )
                            
                            
                            (320,676
                            )$
                            -
                            
                            
                            $
                            -
 Amortization expense was $0 and
$10,000 for the three months ended April 30, 2009 and 2008.
  NOTE 6 –
LOANS FROM SHARESHOLDERS AND RELATED PARTY TRANSACTIONS
  During
the year ended January 31, 2009, the Company borrowed from its shareholders five
loans of $50,000, $50,000, $75,000 ($5,000 was repaid), $50,000 and $150,000 a
total of $375,000.
 
 On
January 16, 2009 the Company issued to certain shareholders 63,651,741 shares in
exchange for satisfaction of the loans from shareholders for the principles of
$596,999 and accrued interest of $39,518, at conversion prices of $0.01 per
share.
 
 At
January 31, 2009 total loans payable to shareholders of $12,148 and due to
related party of $69,328.
  During
the three month ended April
30,2009, the Company borrowed from its shareholders three loans of
$40,000, $20,000, and $18,000, for a total of $78,000. Each loan has interest
payable on the unpaid balance at the rate of 9% with the initial maturity date
as of October 1, 2009. Each loan has a beneficial conversion clause providing
the option that the loan can be converted into the company’s common shares at a
discount of 20% to market value, with a conversion price limit not to exceed
$.05 per share. The company recognizes beneficial conversion features in
accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly, for
each loan, the company fully amortized the discount through the interest expense
in the amount of $15,249, $7,624 and $14,143 respectively at the date of
issuance of each loan.
 
 At April
30, 2009 total loans payable to shareholders of $90,148 and due to related party
of $69,328.
  NOTE 7 -
LOANS PAYABLE
 During
fiscal 2006, the Company borrows two loans of $ 220,000 each. A total of
$440,000 payable on June 7, 2008, with the maturity date subsequently extended
June 7, 2009. The interest rate is the ubs rate plus 5.5%.
 During
2007, the Company borrowed $250,000 from First Capital Invest Corp (“FCIC”),
Swiss-based financial institution. Loan is payable in six months from the
inception.
  On July
15, 2008, the Company issued to FCIC 2,729,014 shares in exchange for
satisfaction of the Loan Agreement dated March 14, 2007, for the principal of
$250,000 and accrued interest of $29,301, at conversion price 0.10 per
share.
 
 In August
2007, the Company borrowed $105,000 from Ocean Bridge, Inc. Loan has interest
payable on the unpaid balance at the rate of 12%.
 
 On
January 16, 2009, the Company issued a credit for radio advertising to satisfy
in part the Loan Agreement dated August 17, 2007, for principle of
$25,000.
 
 On
January 16, 2009 the Company issued to Ocean Bridge, Inc. 9,794,220 shares to
satisfy in part the Loan Agreement dated August 17, 2007, for outstanding
principle of $80,000 and accrued interest of $17,942, at a conversion price 0.01
per share.
 
 In
February 2008 the Company borrowed $90,000 from ESJA Enterprises Inc. Loan has
interest payable on the unpaid balance at the rate of 9%. Loan matures on August
20, 2008. Loan has a beneficial conversion clause providing the option that the
loan can be converted into the company’s common shares at a discount of 20% to
market value, with a conversion price limit not to exceed $.40 per share. The
company recognizes beneficial conversion features in accordance with the FASB
Emerging Issues Task Force Issue 98-5. Accordingly, the company fully amortized
the discount through the interest expense in the amount of $75,894 at the date
of issuance of the loan.
  11
  On
January 16, 2009 the Company issued to ESJA Enterprises, Inc. 9,000,000 shares
to satisfy in part the Loan Agreement dated February 21, 2008, for principle of
$90,000, at a conversion price 0.01 per share.
 
 In
February 2008 the Company borrowed $100,000 from FD Import & Export Corp.
Loan has interest payable on the unpaid balance at the rate of 9%. Loan matures
on September 28, 2008. Loan has a beneficial conversion clause providing the
option that the loan can be converted into the company’s common shares at a
discount of 20% to market value, with a conversion price limit not to exceed
$.40 per share. The company recognizes beneficial conversion features in
accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly, the
company fully amortized the discount through the interest expense in the amount
of $100,000 at the date of issuance of the loan.
 
 On August
29, 2008 the Company issued to FD Import & Export Corp. 3,519,308 shares to
satisfy in part the Loan Agreement dated February 28, 2008, for principle of
$71,512, at a conversion price 0.02032 per share.
 
 In March
2008 the Company borrowed another $100,000 from FD Import & Export Corp.
Loan has interest payable on the unpaid balance at the rate of 9%. Loan matures
on September 28, 2008. Loan has a beneficial conversion clause providing the
option that the loan can be converted into the company’s common shares at a
discount of 20% to market value, with a conversion price limit not to exceed
$.40 per share. The company recognizes beneficial conversion features in
accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly, the
company fully amortized the discount through the interest expense in the amount
of $64,031 at the date of issuance of the loan.
 
 On
January 16, 2009 the Company issued to FD Import & Export Corp 14,176,742
shares to satisfy the Loan Agreement dated February 28, 2008, for outstanding
principle of $28,487.67 and Loan Agreement dated March 10, 2008, for principle
of $100,000 and total accrued interest of $13,279, at a conversion price 0.01
per share.
 
 On March
25, 2008 the Company borrowed $75,000 from Tangiers Investors LP. Loan has
interest payable on the unpaid balance at the rate of 9.9%. Loan matures on
March 24, 2010. Loan has a beneficial conversion clause providing the option
that the loan can be converted into the company’s common shares at a discount of
30% to market value, with a conversion price limit not to exceed $.50 per share.
The company recognizes beneficial conversion features in accordance with the
FASB Emerging Issues Task Force Issue 98-5. Accordingly, the company fully
amortized the discount through the interest expense in the amount of $0 at the
date of issuance of the loan.
 
 On
October 2, 2008, the Company issued to Tangiers Investors LP 443,656 shares in
exchange for partial satisfaction of the Loan Agreement dated March 25, 2008,
for the principal of $5,000, at conversion price 0.01127 per share.
 
 On
January 5, 2009, the Company issued to Tangiers Investors LP 350,878 shares in
exchange for partial satisfaction of the Loan Agreement dated March 25, 2008,
for the principal of $2,000, at conversion price 0.0057 per share.
 
 On
January 16, 2009, the Company issued to Tangiers Investors LP 571,428 shares in
exchange for partial satisfaction of the Loan Agreement dated March 25, 2008,
for the principal of $2,000, at conversion price 0.0035 per share.
 
 On May
29, 2008 the Company borrowed $100,000 from Jaworek Capital LLC. Loan had
interest payable on the unpaid balance at the rate of 9% with the initial
maturity date as of May 28, 2009. Loan had a beneficial conversion clause
providing the option that the loan can be converted into the company’s common
shares at a discount of 20% to market value, with a conversion price limit not
to exceed $.40 per share. The company recognizes beneficial conversion features
in accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly,
the company fully amortized the discount through the interest expense in the
amount of $24,309 at the date of issuance of the loan.
  On July
2, 2008, the Company issued to Jaworek Capital LLC 1,229,435 shares in exchange
for satisfaction of the Loan Agreement dated May 29, 2008, for the principal of
$100,000 and accrued interest of $814, at conversion price 0.0820 per
share.
  12
 
 On June
16, 2008 the Company borrowed another $100,000 from Jaworek Capital LLC. Loan
had interest payable on the unpaid balance at the rate of 9% with the initial
maturity date as of June 15, 2009. Loan had a beneficial conversion clause
providing the option that the loan can be converted into the company’s common
shares at a discount of 20% to market value, with a conversion price limit not
to exceed $.40 per share. The company recognizes beneficial conversion features
in accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly,
the company fully amortized the discount through the interest expense in the
amount of $14,679 at the date of issuance of the loan.
 
 On July
2, 2008, the Company issued to Jaworek Capital LLC 1,224,023 shares in exchange
for satisfaction of the Loan Agreement dated June 16, 2008, for the principal of
$100,000 and accrued interest of $370, at conversion price 0.0820 per
share.
 
 On July
1, 2008 the Company borrowed another $100,000 from Jaworek Capital LLC. Loan had
interest payable on the unpaid balance at the rate of 9% with the initial
maturity date as of June 30, 2009. Loan had a beneficial conversion clause
providing the option that the loan can be converted into the company’s common
shares at a discount of 20% to market value, with a conversion price limit not
to exceed $.40 per share. The company recognizes beneficial conversion features
in accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly,
the company fully amortized the discount through the interest expense in the
amount of $34,804 at the date of issuance of the loan.
 
 Also, the
Company entered into a Stock Purchase Agreement with the lender which entitles
the lender to purchase 500,000 shares of the Company's common stock at a price
of $0.11 cents per share for a period of 12 months from the time of the
agreement. The total cost of the stock options granted was $4,350.
 
 On August
6, 2008, the Company issued to Jaworek Capital LLC 3,241,099 shares in exchange
for satisfaction of the Loan Agreement dated July 1, 2008, for the principal of
$100,000 and accrued interest of $863.01, at conversion price 0.0311 per
share.
 
 On July
31, 2008 the Company borrowed another $100,000 from Jaworek Capital LLC. Loan
had interest payable on the unpaid balance at the rate of 9% with the initial
maturity date as of June 30, 2009. Loan had a beneficial conversion clause
providing the option that the loan can be converted into the company’s common
shares at a discount of 20% to market value, with a conversion price limit not
to exceed $.40 per share. The company recognizes beneficial conversion features
in accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly,
the company fully amortized the discount through the interest expense in the
amount of $20,192 at the date of issuance of the loan.
 
 Also, the
Company entered into a Stock Purchase Agreement with the lender which entitles
the lender to purchase 150,000 shares of the Company's common stock at a price
of $0.075 cents per share for a period of 12 months from the time of the
agreement. The total cost of the stock options granted was $0.
 
 On August
8, 2008, the Company issued to Jaworek Capital LLC 3,138,239 shares in exchange
for satisfaction of the Loan Agreement dated July 31, 2008, for the principal of
$100,000 and accrued interest of $173, at conversion price 0.0319 per
share.
 
 On August
29, 2008 the Company borrowed $110,000 from Steven Fruman. Loan had interest
payable on the unpaid balance at the rate of 9% with the initial maturity date
as of June 25, 2009. Loan had a beneficial conversion clause providing the
option that the loan can be converted into the company’s common shares at a
discount of 20% to market value, with a conversion price limit not to exceed
$.20 per share. The company recognizes beneficial conversion features in
accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly, the
company fully amortized the discount through the interest expense in the amount
of $0 at the date of issuance of the loan.
 
 Also, the
Company entered into a Stock Purchase Agreement with the lender which entitles
the lender to purchase 1,000,000 shares of the Company's common stock at a price
of $0.05 cents per share for a period of 12 months from the time of the
agreement. The total cost of the stock options granted was $0.
 
 On
January 16, 2009, the Company issued to Steven Fruman 12,450,000 shares in
exchange for satisfaction of the Loan Agreement dated August 29, 2008, for the
principal of $110,000 and Loan Agreement dated May 12, 2008, for the principle
of $10,000 and a total accrued interest of $4,500, at conversion price 0.01 per
share.
  13
  On
September 11, 2008 the Company borrowed $62,000 from Jaworek Capital LLC. Loan
had interest payable on the unpaid balance at the rate of 9% with the initial
maturity date as of September 25, 2009. Loan had a beneficial conversion clause
providing the option that the loan can be converted into the company’s common
shares at a discount of 20% to market value, with a conversion price limit not
to exceed $.20 per share. The company recognizes beneficial conversion features
in accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly,
the company fully amortized the discount through the interest expense in the
amount of $26,571 at the date of issuance of the loan.
 
 Also, the
Company entered into a Stock Purchase Agreement with the lender which entitles
the lender to purchase 85,000 shares of the Company's common stock at a price of
$0.05 cents per share for a period of 12 months from the time of the agreement.
The total cost of the stock options granted was $0.
 
 On
January 16, 2009, the Company issued to Jaworek Capital LLC 6,322,301 shares in
exchange for satisfaction of the Loan Agreement dated September 11, 2008, for
the principal of $62,000 and accrued interest of $1,223, at conversion price
0.01 per share.
 
 On
October 24, 2008 the Company borrowed $50,000 from Inga Fruman. Loan had
interest payable on the unpaid balance at the rate of 9% with the initial
maturity date as of November 24, 2008.
 On
January 16, 2009, the Company issued to Inga Fruman 5,108,493 shares in exchange
for satisfaction of the Loan Agreement dated October 24, 2008, for the principal
of $50,000 and accrued interest of $1,085, at conversion price 0.01 per
share.
 
 On
December 1, 2008 the Company borrowed $250,000 from Robert Catell. Loan had
interest payable on the unpaid balance at the rate of 10% with the initial
maturity date as of June 1, 2009. Loan had a beneficial conversion clause
providing the option that the loan can be converted into the company’s common
shares at a discount of 20% to market value, with a conversion price limit not
to exceed $.20 per share. The company recognizes beneficial conversion features
in accordance with the FASB Emerging Issues Task Force Issue 98-5. Accordingly,
the company fully amortized the discount through the interest expense in the
amount of $82,447 at the date of issuance of the loan.
 
 On
January 16, 2009, the Company issued to Robert Catell 25,335,616 shares in
exchange for satisfaction of the Loan Agreement dated December 1, 2008, for the
principal of $250,000 and accrued interest of $3,356, at conversion price 0.01
per share.
 
 On March
11, 2009, the Company issued to Tangiers Investors LP 1,452,855 shares in
exchange for partial satisfaction of the Loan Agreement dated March 25, 2008,
for the principal of $10,000, at conversion price 0.006883 per
share.
  NOTE 8 -
PREFERRED AND COMMON STOCK
 
 During
the fiscal year ended January 31, 2008:
 
 In April
2007 the Company sold 50,000 of its $.001 par value common shares to unrelated
investors in private placements for $1.00 per share for proceeds of
$50,000.
 
 In June
2007 the company entered into stock conversion agreements with company's
shareholders according to which all preferred shares issued to shareholders in
the amount of $14,417 shall be converted into shares of common stock at the par
value of 0.001 per share. These conversion agreements were part of the exchange
agreement between the company and Family Healthcare Solutions, Inc., a Nevada
Corporation (see Note 6).
 
 In June
2007 as discussed, in Note 6, the company entered into debt conversion
agreements with company's shareholders according to which loans from
shareholders and certain loans from related party in the amount of $877,000
shall be converted into shares of common stock at the conversion prices of $0.30
and 0.25 per share.
 
 In July
2007 the Company sold 1,000,000 of its $.001 par value common shares to
unrelated investors for $0.30 per share for proceeds of $300,000. Market value
of the stock at the time of sale was $0.60 per share.
 
 In August
2007 the Company sold 166,667 of its $.001 par value common shares to unrelated
investors for $0.30 per share for proceeds of $50,000. Market value of the stock
at the time of sale was $0.35 per share.
  14
  On
November 1, 2007, the Company issued to its attorney 177,420 unrestricted shares
of common stock in pay of past and future legal services. Market value of the
stock at the time of agreement was $0.31 per share.
 
 On
November 9, 2007, the Company issued to Island Broadcasting Company 3,000,000
restricted shares of common stock as a part of new Time Brokerage Agreement (see
Note 10). Market value of the stock at the time of agreement was $0.30 per
share.
 
 On
November 23, 2007, the Company issued to Ronn Torrossian, an independent
consultant, 3,000,000 restricted shares of common stock as a part of new
Consulting Agreement (see Note 11). Market value of the stock at the time of
agreement was $0.16 per share.
 
 On
January 16, 2008, the Company issued to its attorney 229,473 unrestricted shares
of common stock in pay of past and future legal services. Market value of the
stock at the time of agreement was $0.18 per share.
 
 During
the year ended January 31, 2009:
 
 On
February 6, 2008 certain officers and directors of the Company were granted a
total of 3,200,000 stock options to purchase company’s $.001 par value common
shares for $0.31 per share. The total cost of the stock options granted was
$6,720.
 
 In March
2008 certain officers of the Company exercised their options and purchased a
total of 177,730 of the company’s $.001 par value common shares for $0.31 per
share for a total of $55,096.
 
 In May
2008 the Company issued 100,000 shares to its contractor in exchange for
consulting services worth $20,000. Market value of the stock at the time of
agreement was $0.09 per share.
 
 On July
1, 2008, as discussed in the Note 10, the Company issued to Island Broadcasting,
Inc 1,000,000 of the company’s $.001 shares for $0.11 per share for satisfaction
of the payment postponement agreement.
 
 On July
2, 2008, as discussed in the Note 7, the Company issued to Jaworek Capital LLC
1,224,023 shares in exchange for satisfaction of the Loan Agreement dated May
29, 2008, for the principal of $100,000 and accrued interest of $370, at
conversion price 0.0820 per share.
 
 On July
2, 2008, as discussed in the Note 7, the Company issued to Jaworek Capital LLC
1,224,023 shares in exchange for satisfaction of the Loan Agreement dated June
16, 2008, for the principal of $100,000 and accrued interest of $370, at
conversion price 0.0820 per share.
 
 During
the year ended January 31, 2009 Dr. Paukman, a director of the Company made
capital contributions in the amount of $88,228 to VSE Magazine, Inc as
additional paid-in capital. No common stock issued.
 
 On July
15, 2008, as discussed in the Note 7, the Company issued to FCIC 2,729,014
shares in exchange for satisfaction of the Loan Agreement dated March 14, 2007,
for the principal of $250,000 and accrued interest of $29,301, at conversion
price 0.10 per share.
 
 On August
6, 2008, as discussed in the Note 7, the Company issued to Jaworek Capital LLC
3,241,099 shares in exchange for satisfaction of the Loan Agreement dated July
1, 2008, for the principal of $100,000 and accrued interest of $863, at
conversion price 0.0311 per share.
 
 On August
8, 2008, as discussed in the Note 7, the Company issued to Jaworek Capital LLC
3,138,239 shares in exchange for satisfaction of the Loan Agreement dated July
31, 2008, for the principal of $100,000 and accrued interest of $173, at
conversion price 0.0319 per share.
 
 On August
29, 2008, as discussed in the Note 7, the Company issued to FD Import &
Export Corp. 3,519,308 shares to in partial satisfaction of the Loan Agreement
dated February 28, 2008, for principle of $71,512, at a conversion price 0.02032
per share.
  15
  On
October 2, 2008, as discussed in the Note 7, the Company issued to Tangiers
Investors LP 443,656 shares in exchange for partial satisfaction of the Loan
Agreement dated March 25, 2008, for the principal of $5,000, at conversion price
0.01127 per share.
 
 On
October 13, 2008, as discussed in the Note 14, the Company issued to Golden Gate
Investors, Inc 131,579 shares in exchange for partial satisfaction of the Loan
Agreement dated April 18, 2008, for the principal of $1,000, at conversion price
0.0076 per share.
 
 On
November 11, 2008, as discussed in the Note 14, the Company issued to Golden
Gate Investors, Inc 500,000 shares in exchange for partial satisfaction of the
Loan Agreement dated April 18, 2008, for the principal of $2,000, at conversion
price 0.004 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to Tangiers
Investors LP 571,428 shares in exchange for partial satisfaction of the Loan
Agreement dated March 25, 2008, for the principal of $2,000, at conversion price
0.0035 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to Jaworek
Capital LLC 6,322,301 shares in exchange for satisfaction of the Loan Agreement
dated July 31, 2008, for the principal of $62,000 and accrued interest of
$1,223, at conversion price 0.01 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to FD Import
& Export Corp 14,176,742 shares to satisfy the Loan Agreement dated February
28, 2008, for outstanding principle of $28,488 and Loan Agreement dated March
10, 2008, for principle of $100,000 and total accrued interest of $13,280, at a
conversion price 0.01 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to ESJA
Enterprises Inc 9,000,000 shares in exchange for satisfaction of the Loan
Agreement dated February 21, 2008, for the principal of $90,000, at conversion
price 0.01 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to Ocean
Bridge, Inc 9,794,220 shares in exchange for satisfaction of the Loan Agreement
dated August 17, 2008, for the outstanding principal of $80,000 and accrued
interest of $17,942, at conversion price 0.01 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to Steven
Fruman 12,450,000 shares in exchange for satisfaction of the Loan Agreement
dated August 29, 2008, for the principal of $110,000 and Loan Agreement dated
May 12, 2008, for the principle of $10,000 and a total accrued interest of
$4,500, at conversion price 0.01 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to Inga Fruman
5,108,493 shares in exchange for satisfaction of the Loan Agreement dated
October 24, 2008, for the principal of $50,000 and accrued interest of $1,085,
at conversion price 0.01 per share.
 
 On
January 16, 2009, as discussed in the Note 7, the Company issued to Robert
Catell 25,335,616 shares in exchange for satisfaction of the Loan Agreement
dated December 1, 2008, for the principal of $250,000 and accrued interest of
$3,356, at conversion price 0.01 per share.
 
 On
January 16, 2009, as discussed in the Note 6, the Company issued to certain
shareholders 63,651,741 shares in exchange for satisfaction of the loans from
shareholders for the principles of $596,999 and accrued interest of $39,518, at
conversion prices of $0.01 per share.
 In
January 2008 the Company sold 7,700,000 of its $.001 par value common shares to
unrelated investors at $0.01 per share for proceeds of $77,000.
 
 On
January 16, 2009, the Company issued 8,901,182 shares at $0.01 per share to
satisfy its rent obligations for a total of $89,012.
 
 On
February 12, 2009 the Company sold 7,000,000 of its $.001 par value common
shares to unrelated investor at $0.01 per share for proceeds of
$70,000.
  16
  On March
11, 2009, as discussed in the Note 7, the Company issued to Tangiers Investors
LP 1,452,855 shares in exchange for partial satisfaction of the Loan Agreement
dated March 25, 2008, for the principal of $10,000, at conversion price 0.006883
per share.
 
 On April
27, 2009, the Company issued to its attorney 1,000,000 unrestricted shares of
common stock in pay of current legal services. Market value of the stock at the
time of agreement was $0.02 per share.
 
 On April
27, 2009, the Company issued to its officer 1,000,000 unrestricted shares of
common stock in pay for past services. Market value of the stock at the time of
agreement was $0.02 per share.
  NOTE 9 –
EQUIPMENT LOANS PAYABLE
  April
      30, 2009
                                
                                
                                January
      31,2009Equipment
      loans consist of the following:Chrysler
      Credit ("CC")
                                
                                
                                7,940
                                
                                
                                
                                10,0157,940
                                
                                
                                
                                10,015Less
      current portion
                                
                                
                                7,248
                                
                                
                                
                                7,248$
                                692
                                
                                
                                $
                                2,767
 The loan
payable CC is payable in 60 monthly payments of $782 which includes principal
and interest at 6.75% per annum and matures on July 9, 2010.  The loan
is secured by the truck purchased.
  NOTE 10 -
COMMITMENTS AND CONTINGENCIES
 
 Airtime Agreement
(Lease)
 
 The
Company has an agreement (the "Agreement") with Island Broadcasting Company (the
"Licensee") for airtime.  Pursuant to the Agreement the Company has
purchased airtime for the period November 1, 2005 to July 1,
2010.  However, after July 1, 2006 the Licensee may terminate the
Agreement upon 90 days notice to the Company.  Per the Agreement the
airtime is paid monthly.
 
 On
November 7, 2007, Echo Broadcasting Group, Inc. ("Echo  "), a
subsidiary of the Company, amended its Time Brokerage Agreement, originally
dated November 1, 2005, with Island Broadcasting Company. In particular, Echo
extended the term of the Time Brokerage Agreement through December 31, 2012 at
12:00 a.m. EST, modified the events of defaults for both Echo and Island
Broadcasting Company, and converted the $170,000 escrow amount currently being
held by Island Broadcasting Company into a payment from Echo to Island
Broadcasting Company. Additionally, Company issued to Island Broadcasting
Company 3,000,000 restricted shares of common stock, at the price of $0.30 per
share.
 
 Finally,
the amended Time Brokerage Agreement now requires Echo to pay Island
Broadcasting Company five percent of the gross receipts received by or credited
to Echo and derived from advertising payments, sponsorships and other sources
relating to the Station's activities. Echo must make such payments within sixty
days following the close of each of Echo's full fiscal quarter from October 1,
2008 through December 31, 2012.
 
 On April
28, 2008 Echo Broadcasting made a payment postponement agreement with Island
Broadcasting Company. According to this provision, Echo Broadcasting will pay an
annual interest rate charge of 8% on all outstanding monthly balances. In
addition Echo Broadcasting will pay a fee of 200,000 restricted shares of the
Company’s common stock per month for each month for which payment is not made.
All shares are due to be issued on July 1, 2008. Accordingly, on Julyt1, 2008
the Company issued 1,000,000 of its $.001 par value common shares Island
Broadcasting. Market value of the stock at the time when additional provision to
the Time Brokerage Agreement was adopted was $0.11 per share.
  17
  On
January 9, 2009, Echo Broadcasting amended its Time Brokerage Agreement (the
"Amendment Agreement"), originally dated November 1, 2005 and amended November
7, 2007, with Island Broadcasting Company ("Island"). Pursuant to the Amendment
Agreement, Echo shall make payments of $150,000 to Island on the following
dates: February 1, March 1, April 1 and May 1, 2009. In addition, the amount
that was due on December 31, 2008 which is approximately $1,640,000 shall be
reduced by half, and paid $500,000 on March 1, 2009 and $320,000 on May 15,
2009. The $250,000 that was due on January 1, 2009 and the additional $100,000
due on February 1, March 1, April 1 and May 1, 2009 shall be waived. Payments of
$250,000 per month, per the November 7, 2007 agreement, as disclosed in our Form
8-K on November 15, 2008, will commence on June 1, 2009 and continue thereafter.
Additionally, the revenue sharing fees of the November 7, 2007 agreement shall
be waived up to June 1, 2009 and continue thereafter. Effective June1, 2009,
Echo will adhere to the original agreement and its amendment date November 7,
2007.
 
 Both
parties also agreed that the Amendment Agreement will be terminated at 5PM on
the above due dates if any of the amounts stated above are not paid to Island on
or before the due dates
 
 During
the year ended January 31, 2009, the Company paid $1,635,910 for
airtime.
 
 On April
27, 2009, the Company, Echo Broadcasting Group, Inc., a subsidiary of the
Company, entered into certain amended time brokerage agreement (the "Amended and
Restated TBA"), originally dated November 1, 2005, as amended November 7, 2007,
and further amended January 9, 2009 (collectively, the "Original TBA"), with
Island Broadcasting Company ("Island"), pursuant to which we issued 25,279,614
shares of our common stock to Island to satisfy an unpaid fees of $1,090,000
under the Original TBA owned by Echo on April 27, 2009. Both parties agreed that
the Amended and Restated TBA shall satisfy the obligation of Echo and Island
shall have no obligation to provide any other consideration for the shares
issued above. There are 297,081,407 shares of our common stock outstanding as of
to date. Upon issuance of 25,279,614 shares of common stock, Island holds a
total of 29,279,614 shares, which represent 9.9% of the Company's common stock.
Also under the terms of Amended and Restated TBA, Echo shall pay to the Island
fifty percent (50%) of all gross receipts received from advertising or
sponsorship for programming, less only third party commissions to advertising
agencies and/or sales representatives.
 
 During
the three months ended April 30, 2009 and April 30, 2008, the Company incurred
$300,000 and $664,243 in airtime expense respectively.
 
 During
the three months ended April 30, 2009, under the revenue sharing agreement with
Island Broadcasting Company described above, the Company incurred $48,544 in
commission expense.
  Premises and
Equipment
 
 The
Company has entered into lease agreements for office space and equipment, which
expire at various times through April 2009. During the year ended January 31,
2009 the Company paid $156,140 in rent expense. During three months ended April
30, 2009 and April 30, 2008 the Company paid $39,075.60 and $33,018 in rent
expense respectively.
  Capital
Lease
 
 On
October 4, 2006 the Company has entered into a lease agreement of the equipment,
which expire on April 30, 2011. During the year ended January 31, 2009 the
Company paid $17,820 in lieu of the lease. During the three months ended April
30, 2009 and April 30, 2008, the Company paid $6,480 and $4,860 in lieu of the
lease respectively. The commitments under the lease agreement mature as
follows:
   18
 Year Ending January
      31,2010
                              
                              $
                              14,5802011
                              
                              
                              11,340$
                              25,920
 Legal
Contingencies
 
 On
October 7, 2008, the Company and our CEO Aleksandr Shvarts (collectively, the
"Defendants") were served with a summons and complaint filed by AJW Partners,
LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC, and New Millennium Capital
Partners II, LLC (collectively, the "Plaintiffs"). The complaint alleged that
the Company has failed to make payments due on a series of notes from 2004 to
2006 issued by the Company, and failed to make payments of interest due on these
notes, and other unlawful conducts by the Company. The case was filed in the
Supreme Court of the State of New York, County of New York. The plaintiffs seek
all sums due from the notes and other agreements, prejudgment interest,
compensatory damages, punitive damages, and attorneys' fees to be in excess of
$650,000.
  The
Company and Mr. Shvarts deny the allegations made in the complaint and intend to
vigorously contest the allegations. We believe that we did not enter into any of
the above referenced notes with the Plaintiffs and none of the notes or related
legal documents were signed or executed on behalf of the Company or our CEO. We
are in the process of retaining counsel to represent us in this matter and to
file a counterclaim for damages based on breach of contract by the
Plaintiffs.
 
 On
February 27, 2009, Mega Media Group, Inc. the Company and Aleksandr Shvarts,
President and CEO of the Company (collectively, the "Third-Party Defendants"),
were served with a third-party summons and counterclaim filed by Eric Schwartz,
the original defendant (the "Third-Party Plaintiff"). The counterclaim is
grounded in the Third-Party Defendants' failure to repay certain loan agreement.
The Third-Party Plaintiff alleged: (i) fraudulent representations against the
Third-Party Defendants stemming from alleged representations that common stock
of the Company will be issued to plaintiff when the Company becomes a public
company and said shares of common stock will satisfy the amount owed under the
loan agreement, and (ii) that the Company has been unjustly enriched in the
amount of not less than $425,000 by virtue of its receipt of $425,000 from
plaintiff. The case was filed in the Supreme Court of the State of New York,
County of New York. The Third-Party Plaintiff seeks indemnification of not less
than $1,000,000 from the fraudulent representations and not less than $425,000
plus accrued interest because of unjustified enrichment, all in the sum of not
less than $1,425,000.
 The
Company and Mr. Shvarts deny the allegations made in the counterclaim and intend
to vigorously contest the allegations. We have retained Nesenoff &
Miltenberg, LLP as our legal counsel in this matter.
 
 On March
16, 2009, the Company (the "Defendant"), was served with a summons and complaint
filed by Golden State Equity Investors, Inc., a California corporation (the
"Plaintiff"). The complaint is grounded in the Defendant's breach of a certain
investment agreements by failing and refusing to (i) pay to Plaintiff the
interest prepayment required under the terms of certain debenture, and (ii)
deliver shares of common stock of the Defendant in connection with a conversion
of the debenture. The case was filed in the Superior Court of the State of
California, County of San Diego. The Plaintiff seeks $511,967 plus accrued
interest for the cause of action stated above, and costs of suit including
reasonable attorneys' fees.
  NOTE 11 -
STOCK-BASED COMPENSATION
 
 On
November 23, 2007, the Company has issued 3,000,000, $.001 par value, common
shares for future consulting services performed by Ronn Torrosian over a period
two years. Market value of the stock at the time of agreement was $0.16 per
share for a total cost of $480,000. At April 30, 2009, Ronn Torrosian earned
consulting fees in the amount of $344,076.61. The remaining value of the Ronn
Torrosian’s future services in the amount of $135,923.39 are included in
deferred compensation in the equity section of the balance sheets at April 30,
2009.
  NOTE 12 -
PAYROLL TAXES
 
 The
company has outstanding payroll taxes payable as of January 31, 2009 and January
31, 2008. As of January 31, 2009 the company has recorded an estimate for
interest and penalties that are due to the company’s failure to timely pay
payroll taxes for prior periods. The outstanding payroll tax liability is as
following:
   19
 April
      30, 2009
                          
                          
                          January
      31,2009Payroll
      taxes payable
                          
                          $
                          1,065,424
                          
                          
                          $
                          997,152Penalties
      and interest
                          
                          
                          135,429
                          
                          
                          
                          115,814Accrued
      payroll and payroll taxes
                          
                          $
                          1,200,853
                          
                          
                          $
                          1,112,966
 The
Company implemented a payment plan with Internal Revenue Service.
 
 NOTE 13 –
NOTE PAYABLE AND NOTE RECEIVABLE
 
 On April
18, 2008, the Company entered into a Securities Purchase Agreement with Golden
Gate Investors, Inc. The aggregate purchase price was $1,500,000 for the initial
tranche and the investment was as follows:
 
 The
Securities Purchase Agreement includes two tranches. The initial tranche
consists of a 7.00% convertible
debenture (the "Debenture")issued by the Company, in exchange for
$100,000 in cash and a 7.25% Secured Promissory Note  for $1,400,000
issued by the Golden Gate Investors, Inc which matures on May 31, 2012. The
Promissory Note contains a prepayment provision which requires the Golden Gate
Investors, Inc to make prepayments of interest and principal of $200,000 monthly
upon satisfaction of certain conditions. One of the conditions to prepayment is
that shares of the Company's common stock issued pursuant to the conversion
rights under the debenture must be freely tradable under Rule 144 of the
Securities Act of 1933, as amended. Pursuant to the terms of the debenture, the
Golden Gate Investors, Inc shall have the right from time to time, and at any
time on or prior to maturity to convert all or any part of the outstanding and
unpaid principal amount of this debenture into fully paid and non-assessable
shares of the Company's Common Stock, $.001 par value per share. The number of
shares of Common Stock to be issued upon each conversion of the debenture shall
be determined by dividing the amount of principal and accrued interest to be
converted ("Conversion Amount") by the applicable conversion price then in
effect on the date specified in the notice of conversion, as set forth in
Exhibit A to the Debenture (the "Notice of Conversion"). The conversion price
shall be equal to the lesser of: (i) $0.50 or (ii) the average of the lowest
three (3) volume weighted average prices of the Company's Common Stock as
reported on the OTC Bulletin Board (the "Volume Weighted Average Price") during
the twenty (20) trading days prior to the date of the Conversion Notice (the
"Conversion Date") multiplied by .75. As described in the respective
instruments, the Debenture provides for an upward adjustment of the interest
rate under certain circumstances and the Promissory Note provides for a downward
adjustment of the interest rate under certain circumstances. In addition the
Golden Gate Investors, Inc is required to prepay $250,000 of the Promissory Note
issued on April 18, 2008 on the five month anniversary of the purchase of the
Debenture that occurred on April 18, 2008, provided that certain conditions set
forth in the Securities Purchase Agreement are satisfied.
 
 Provided
that no event of default exists, as defined in the Debenture, the second tranche
of the financing consists of the Company selling and the Golden Gate Investors,
Inc purchasing a Debenture in the principal amount of $1,500,000 in exchange for
a purchase price of $1,500,000 (the "Second Debenture"), with such purchase
price paid via a cash payment of $250,000 and the issuance of a promissory note
in the principal amount of $1,250,000 (the "Second Promissory Note"), with the
form of and terms of the Second Debenture and the Second Promissory Note and
payment of the purchase price subject to the same terms and conditions of the
Securities Purchase Agreement, the Debenture and the Promissory Note, provided
that the Discount Multiplier (as defined in the Second Debenture) for the Second
Debenture shall be 90%, and when the Second Debenture is issued, the term
"Debenture" as used in the Securities Purchase Agreement shall be deemed to
include the Second Debenture in all respects and when the Second Promissory Note
is issued, the term "Promissory Note" as used in the Securities Purchase
Agreement shall be deemed to include the Second Promissory Note in all respects.
Pursuant to the Securities Purchase Agreement, the Golden Gate Investors, Inc
may eliminate the requirement to purchase the Second Debenture by a payment to
the Company of $25,000, which payment shall be reduced under certain conditions
to $5,000 or $0. As also set forth in the Securities Purchase Agreement, the
Company has the right, during a specified ten trading day period prior to the
Golden Gate Investors, Inc's purchase of the Second Debenture, subject to the
satisfaction of certain conditions set forth in the Securities Purchase
Agreement, to terminate the right of the Golden Gate Investors, Inc to purchase
the Second Debenture.
  20
  If the
Golden Gate Investors, Inc elects to convert a portion of the Debenture and, on
the day that the election is made, the Volume Weighted Average Price per share
of the Company's Common Stock is below $0.04 per share, the Company shall have
the right to prepay that portion of the Debenture that the Golden Gate
Investors, Inc elected to convert, plus any accrued and unpaid interest, at 125%
of such amount. In the event that the Company elects to prepay that portion of
the Debenture, the Golden Gate Investors, Inc shall have the right to withdraw
its Conversion Notice. Pursuant to its terms, the Golden Gate Investors, Inc may
not convert the principal amount of the Debenture to the extent that, following
such conversion, the Golden Gate Investors, Inc would beneficially own in excess
of 4.99% of the Company's outstanding Common Stock, which cap may be increased
to 9.99% or entirely removed by the Investor on not less than 61 days' prior
notice.
 
 Finally,
in the event that the Company obtains a commitment for any other financing
(either debt, equity, or a combination thereof) which is to close during the
term of the Debenture, Golden Gate Investors shall be entitled to a right of
first refusal to enable it to, at Golden Gate Investors, Inc’s option, either:
(i) match the terms of the other financing, or (ii) add additional principal to
the Debenture, in the amount of such other financing, on the same terms and
conditions as the Debenture.
  Pursuant
to the terms of the Securities Purchase Agreement, the Golden Gate Investors,
Inc does not have any registration rights.
  Other
than their relationship as a result of the Securities Purchase Agreement, there
is no material relationship between the Company and the Golden Gate Investors,
Inc.
 
 The
company recognizes beneficial conversion features in accordance with the FASB
Emerging Issues Task Force Issue 98-5. Accordingly, the company fully amortized
the discount through the interest expense in the amount of $285,715 at the date
of issuance of the loan.
  The
Company’s Common stock as of August 15, 2008 had traded on the Trading Market
(as defined in the Debenture) for ten consecutive days at a price per share that
was less than 0.039. Therefore, the interest rate was increased to 9.75 % as of
August 15, 2008. In addition, under the terms of the Note, the interest rate
applicable to the Note was decreased to 4.75 % effective as of August 15,
2008.
 
 On
October 13, 2008, the Company issued to Golden Gate Investors, Inc 131,579
shares in exchange for partial satisfaction of the Loan Agreement dated April
18, 2008, for the principal of $1,000, at conversion price 0.0076 per
share.
  NOTE 14 –
JUDGMENT PAYABLE
 
 On
September 3, 2008, we were served with a Notice of Motion for Summary Judgment
in Lieu of Complaint filed by David Kokakis (the “Plaintiff”).  In
this Motion, filed in Supreme Court of the State of New York on September 3,
2008, David Kokakis alleged that the Company has filed to make payments due on a
series of notes issued by the Company, and filed to make payments of interest
due on these notes.  David Kokakis asked the court to enter judgment
in his favor in the total amount of $329,500 allegedly due under the notes, plus
accrued interest.
  On
November 11, 2008, the Company settled this litigation and entered into a
settlement agreement (the "Stipulation of Settlement") with Plaintiff. The
Company signed two (2) confessions of judgment (the "Confession of Judgment")
which is in favor of Plaintiff. Pursuant to the first Confession of Judgment, in
the event of default of the Stipulation of Settlement, the Company agrees to pay
Plaintiff a total of $388,810, consisting of a principal amount of $329,500 plus
accrued interests of $59,310. Pursuant to the second Confession of Judgment, in
the event of default of the Stipulation of Settlement , the Company agreed to
pay Plaintiff deferred compensation in the sum of $125,962. The second claim
would be the basis of a second action brought by Plaintiff against the Company,
which Plaintiff was about to commence.
  Both
Confessions of Judgment will be held in escrow by Plaintiff's counsel pending
the Company's compliance with its agreement pursuant to the schedule detailed in
the Stipulation of Settlement. The payments have a maximum of a five (5) day
grace period, that is, they must be in Plaintiff's attorney's possession by no
later than the 6th day of the month.
  If the
Company makes all of the payments, which is $316,955 in total, pursuant to the
payment schedule, the two (2) Confessions of Judgment will not be filed and will
be waived and returned to the Company's attorney. Failing to make the payments,
or failing to pay on time, as a fore described, will be deemed a default and
permit Plaintiff's counsel to file both Confessions of Judgment and Affidavits
of Confession of Judgments with the Clerk of the Court without further
notice.
  At of
April 30, 2009 Company’s total judgment payable is $266,955.
  21
 
 NOTE 15 -
SEGMENT DATA
 
 Currently
the Company has three reportable segments, which it believes best reflects how
the Company is currently managed – radio broadcasting, recorded music and
corporate divisions. The category “other” includes audio & video recording
studios, METRO magazine and other general support services and initiatives.
Revenue and expenses earned and charged between segments are recorded at fair
value and eliminated in consolidation.
  Year Ended January 31,
2009
  Radio
                                
                                
                                Recorded
      Music
                                
                                
                                Corporate
                                
                                
                                Metro
                                
                                
                                Other
                                
                                
                                TotalRevenue
                                
                                $
                                1,314,528
                                
                                
                                $
                                3,213
                                
                                
                                $
                                7,786
                                
                                
                                $
                                101,338
                                
                                
                                $
                                0
                                
                                
                                $
                                1,426,865Direct
      operating expenses
                                
                                
                                1,838,048
                                
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                131,529
                                
                                
                                
                                0
                                
                                
                                
                                1,969,577Selling,
      general and administrative expenses
                                
                                
                                1,769,631
                                
                                
                                
                                417
                                
                                
                                
                                995,630
                                
                                
                                
                                31,480
                                
                                
                                
                                837
                                
                                
                                
                                2,797,995Depreciation
      and amortization
                                
                                
                                64,317
                                
                                
                                
                                134,560
                                
                                
                                
                                104,315
                                
                                
                                
                                16,667
                                
                                
                                
                                363
                                
                                
                                
                                320,222Loss
      on sale of intangible assets
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                40,168
                                
                                
                                
                                0
                                
                                
                                
                                40,168Interest
      expenses
                                
                                
                                95,893
                                
                                
                                
                                0
                                
                                
                                
                                212,213
                                
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                308,106Beneficial
      Conversion
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                728,642
                                
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                728,642Net
      loss before tax benefit
                                
                                $
                                (2,453,361
                                )
                                
                                $
                                (131,764
                                )
                                
                                $
                                (2,033,014
                                )
                                
                                $
                                (118,506
                                )
                                
                                $
                                (1,200
                                )
                                
                                $
                                (4,737,845
                                )
 Three Months
Ended April 30, 2009
 Radio
                                        
                                        
                                        Recorded
      Music
                                        
                                        
                                        Corporate
                                        
                                        
                                        Metro
                                        
                                        
                                        Other
                                        
                                        
                                        TotalRevenue
                                        
                                        $
                                        372,409
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        372,409Direct
      operating expenses
                                        
                                        
                                        383,823
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        383,823Selling,
      general and administrative expenses
                                        
                                        
                                        513,702
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        232,411
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        746,114Depreciation
      and amortization
                                        
                                        
                                        13,821
                                        
                                        
                                        
                                        2,390
                                        
                                        
                                        
                                        25,281
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        91
                                        
                                        
                                        
                                        41,583Interest
      expenses
                                        
                                        
                                        20,071
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        27,727
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        47,797Beneficial
      Conversion
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        37,016
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        37,016Net
      loss before tax benefit
                                        
                                        $
                                        (559,008
                                        )
                                        
                                        $
                                        (2,390
                                        )
                                        
                                        $
                                        (322,435
                                        )
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        (91
                                        )
                                        
                                        $
                                        (883,924
                                        )
 
 
  On May 1,
2009, we entered into 9% convertible promissory notes (the "Notes") with certain
investors (the "Holders") for an aggregate of $115,000. The maturity date of
these Notes is October 1, 2009. Pursuant to the terms of the Notes, the Holders
shall have the right from time to time, and at any time on or prior to maturity
to convert all or any part of the outstanding and unpaid principal amount of
these Notes into fully paid and non-assessable shares of Common Stock, $.001 par
value per share. The number of shares of Common Stock to be issued upon each
conversion of these Notes shall be determined by dividing the amount of
principal and accrued interest to be converted ("Conversion Amount") by the
applicable Conversion Price then in effect on the date specified in the notice
of conversion, in the form attached hereto as Exhibit A (the "Notice of
Conversion"). The Conversion Price shall be equal to the average closing bid
price of the Common Stock (as reported by Bloomberg L.P.) on the OTC Bulletin
Board for the ten (10) trading days prior to the date of the Conversion Notice
(the "Conversion Date") multiplied by .80 provided that the Notice of Conversion
is submitted by to our company before 6:00 p.m., New York, New York time on such
Conversion Date. However, the Conversion Price shall not exceed
$0.05.
   22
 
 On May
13, 2009, the Company and Golden State Equity Investors, Inc., f/k/a Golden Gate
Investors, Inc., a California corporation ("GSEI") entered into a Settlement
Agreement and Mutual General Release (the "Settlement Agreement") to settle that
certain lawsuit filed by GSEI against the Company on March 16, 2009 in the
Superior Court of the State of California, County of San Diego. Under the
Settlement Agreement, we agreed to pay GSEI an aggregate of $250,000 in
installments from June 1, 2009 to November 1, 2010 (the "Settlement Amount"),
and in return GSEI has agreed to dismiss the lawsuit.
  However,
in the event that (i) the Company has satisfied all of the payments through
February 1, 2010, for an aggregate payment amount of $125,000, on or prior to
February 1, 2010, and (ii) an Event of Default has not occurred under the
Settlement Agreement on or prior to February 1, 2010, then the Settlement Amount
shall be deemed paid in full. Should any payment described above not be timely
received by GSEI, such that an Event of Default exists under the Settlement
Agreement, the outstanding Settlement Amount shall accrue interest from the date
hereof at a rate of 9.75% per annum.
  As
disclosed in our Form 8-K filed on March 16, 2009, in this lawsuit, GSEI alleged
that the Company was liable for breach of certain investment agreements by
failing and refusing to (i) pay to GSEI the interest prepayment required under
the terms of certain debenture, and (ii) deliver shares of common stock of the
Company in connection with a conversion of the debenture. The Settlement
Agreement will settle approximately $511,967 plus accrued interest. It also
terminates such investment agreements and releases all liabilities of the
Company under the investment agreements.
  On May
15, 2009, we entered into a Time Brokerage Agreement (the "TBA") with Signal
Above, LLC, a Virginia limited liability company ("Signal Above"). Signal Above
is the holder of the license issued by the Federal Communications Commission for
analog Low Power Television Station WDCN-LP. The effective date of the TBA is
June 1, 2009. The station is currently licensed to operate on channel 6 and is
currently operating with an analog signal. Under the TBA, we will supply
music-oriented, predominantly English audio programming to the audio service
until May 31, 2014. On the same day, we entered into an amendment to TBA with
Signal Above pursuant to which we will pay $50,000 to Signal Above and 7,000,000
shares of common stock of the Company, which is equal to $100,000, as license
fee on or before May 19, 2009.
  The
foregoing is a summary of the material features of the Settlement Agreement and
TBA and its amendment. This summary does not purport to be complete and is
qualified in its entirety by reference to the terms of the agreements, which are
filed as exhibit to this Current Report on Form 8-K, and incorporated herein by
reference.
      23
  Item
2.    Management’s Discussion and Analysis of Financial
Condition and Results of Operation.
  Forward-Looking
Statements
  The
discussion in this section contains certain statements of a forward-looking
nature relating to future events or our future performance. Words such as
“anticipates,” “believes,” “expects,” “intends,” “future,” “may” and similar
expressions or variations of such words are intended to identify forward-looking
statements, but are not the only means of identifying forward-looking
statements. Such statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, you should
specifically consider various factors identified in this report, including the
matters set forth under the caption “business risks,” which could cause actual
results to differ materially from those indicated by such forward-looking
statements.
 
 The
following discussion is provided to afford the reader an understanding of the
material matters of the Company's financial condition, results of operation,
capital resources and liquidity. It should be read in conjunction with the
financial statements and notes thereto and other information appearing elsewhere
in this report.
 
 Background
 
 On June
20, 2007, Mega Media Group, Inc., a Nevada corporation, (formerly named Family
Healthcare Solutions, Inc.) (“the Company”), entered into a Stock Purchase and
Share Exchange Agreement (the “Exchange Agreement”) pursuant to which the
Company acquired 100% of the issued and outstanding capital stock of Mega
Media Group, Inc., a New York corporation ("MMG-NY"), and its wholly owned
subsidiaries, making MMG-NY a wholly owned subsidiary of the Company, and
converted into equity $877,000 in convertible debentures from the MMG-NY Note
Holders, in exchange for the issuance by the company to the MMG-NY Shareholders
and MMG-NY Group Note Holders of 49,990,406 shares of MMDA common stock, par
value $0.001 per share, which constituted 68.50% of the Company’s issued and
outstanding fully diluted common stock after the transaction closed. As
additional consideration, the Company’s Shareholders agreed to cancel 13,161,033
shares of common stock.  The Company’s stockholders immediately prior
to the Closing Date owned 28.50% of the issued and outstanding fully diluted
common stock of MMDA after the transaction closed.  After the closing
of the Share Exchange Agreement, the Company succeeded to the business of MMG-NY
and MMG-NY's wholly-owned subsidiaries as its sole business. The transaction was
accounted for as a reverse acquisition.
 
 RESULTS
OF OPERATIONS
 
 Results
of Operations for the Three Months Ended April 30, 2009 Compared with the Three
Months Ended April 30, 2008
 
 Three
      Months Ended April 30,2009
                                                                                                                                
                                                                                                                                
                                                                                                                                2008(Unaudited)
                                                                                                                                
                                                                                                                                
                                                                                                                                (Unaudited)Revenues:Advertising
      revenues
                                                                                                                                
                                                                                                                                $
                                                                                                                                361,116
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                237,250Other
      revenues
                                                                                                                                
                                                                                                                                
                                                                                                                                11,292
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                7,964Total
      Revenues
                                                                                                                                
                                                                                                                                
                                                                                                                                372,409
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                245,214Operating
      expenses
                                                                                                                                
                                                                                                                                
                                                                                                                                383,823
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                770,632Selling,
      general and administrative
                                                                                                                                
                                                                                                                                
                                                                                                                                746,114
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                609,369Depreciation
      and amortization
                                                                                                                                
                                                                                                                                
                                                                                                                                41,583
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                54,4231,171,519
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                1,434,424Net
      loss from operations
                                                                                                                                
                                                                                                                                
                                                                                                                                (799,110
                                                                                                                                )
                                                                                                                                
                                                                                                                                
                                                                                                                                (1,189,210
                                                                                                                                )Other
      Expenses:Interest
      expense
                                                                                                                                
                                                                                                                                
                                                                                                                                47,797
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                81,677Beneficial
      conversion expense
                                                                                                                                
                                                                                                                                
                                                                                                                                37,016
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                525,640Net
      loss before tax benefit
                                                                                                                                
                                                                                                                                
                                                                                                                                (883,924
                                                                                                                                )
                                                                                                                                
                                                                                                                                
                                                                                                                                (1,796,527
                                                                                                                                )Tax
      benefit
                                                                                                                                
                                                                                                                                
                                                                                                                                -
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                -Net
      loss
                                                                                                                                
                                                                                                                                $
                                                                                                                                (883,924
                                                                                                                                )
                                                                                                                                
                                                                                                                                $
                                                                                                                                (1,796,527
                                                                                                                                )
 
   24
  Revenue
 
 We derive
revenue from sales of advertisements and program sponsorships to local
advertisers, independent promotion agreements, ticket and other revenue related
to special events we sponsor throughout the year and management fees from our
subsidiaries. Advertising revenue is affected primarily by the advertising rates
our radio stations and magazine are able to charge as well as the overall demand
for radio advertising time in a market. For the three months ended
April 30, 2009 our revenue increased by $ 127,195 to $372,409 as compared
to $ 245,214 for the three months ended April 30, 2008. The increase results
primarily from  radio advertising revenues.
  Operating
Expenses
 
 Our
significant operating expenses are broadcast expenses, consisting of (i)
employee salaries and commissions, (ii) programming expenses, (iii) advertising
and promotion expenses, (iv) rental of premises for studios, (v) rental of
transmission tower space and (vi) freelance consultants. We strive to control
these expenses by centralizing certain functions such as finance, accounting,
legal, human resources and management information systems and the overall
programming management function. For the three months ended April 30, 2009
operating expenses decreased by $ 386,809 to $383,823 as compared to $ 770,632
for the three months ended April 30, 2008. The decrease is principally
attributable to decreased broadcasting expenses.
 
 Selling,
General and Administrative Expenses
  Selling,
General and Administrative expenses increased by $136,745 to $746,114for
the  three months ended April 30, 2009 from $609,369 in 2008. The
increase is attributable to higher corporate expenses. Selling expenses are a
significant part of our expenditures and relate directly to the marketing and
development of products. We anticipate similar expenditures for the foreseeable
future.
  Depreciation
and Amortization Expenses
  Depreciation
and Amortization expenses decreased by $ 12,840 to $ 41,583 for the three months
ended April 30, 2009 from $ 54,423 in 2008 due to the decrease in fixed
assets.
 
 
 Interest
Expense
  Interest expensedecreasedby$33,830to $47,797for thethreemonths endedApril 30, 2009from $81,677in 2008due to thedecrease inborrowings.
 
 Beneficial
Conversion Expense
  Beneficial conversion
expensedecreased
by $ 488,624 to $ 37,016 for the three months ended April 30, 2009
from $525,640 in 2008 due to the decrease of borrowings with the attached
beneficial conversion provisions.
 
 Net
Loss
  We have a
net loss of $ 883,924 for three months ended April 30, 2009 as compared to
a net loss of $1,796,526 for the three months ended April 30, 2008. The
decrease in net loss is primarily attributable to the increase in
our operating expenses and decrease in interest
expense.
 LIQUIDITY
AND CAPITAL RESOURCES
 
 As of
April 30, 2009, our Working Capital deficiency is $ 3,357,370.
  Cash used
in operating activities was $85,260 for the three months ended April 30,
2009 as compared to $ 679,467
during the three months ended April 30, 2008. The decrease in cash used in
operating activities reflects the reduced outlays necessary to achieve the
growth in revenues, which should ultimately result in positive operating cash
flow.
  Cash
provided by financing activities was $109,444 for the three months period ended
April 30, 2009 as compared to $679,071 for the six months ended April 30, 2008.
The increase in cash provided by financing activities is primarily due to the
additional borrowings.
 
  25
   Going
Concern
 
 As
reflected in the Company’s Financial Statements which accompany this report, our
consolidated financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and liabilities and commitments in
the normal course of business. In the near term, we expect operating costs to
continue to exceed funds generated from operations. As a result, we expect to
continue to incur operating losses and we may not have sufficient funds to grow
our business in the future. We can give no assurance that we will achieve
profitability or be capable of sustaining profitable operations. As a result,
operations in the near future are expected to continue to use working
capital.
 
 To
successfully grow the individual segments of the business, we must decrease our
cash burn rate, improve our cash position and the revenue base of each segment,
and succeed in our ability to raise additional capital through a combination of
public or private debt and equity offerings or strategic alliances. We also
depend on certain third party contractors and our executives.
  We
incurred net losses of $833,924 and $1,796,526 for the three months ended April
30, 2009 and 2008, respectively, and have an accumulated deficit of $14,927,238
at April 30, 2009. As of April 30, 2009, we had total current assets of $182,334
and total current liabilities of $3,539,704 creating a working capital
deficiency of $ 3,557,370. The Company currently has bank overdraft of
approximately $3,981 as of April 30, 2009. The Company currently has
approximately $38,061 as of April 30, 2009 in cash.
 OFF-BALANCE
SHEET ARRANGEMENTS
 
 We do not
have off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
 
 CRITICAL
ACCOUNTING POLICIES
  Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities revenue and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
  Our
significant accounting policies are summarized in the summary “Background and
Significant Accounting Policies” accompanying our financial statements. While
all these significant accounting policies impact our financial condition and
results of operations, we view certain of these policies as critical. Policies
determined to be critical are those policies that have the most significant
impact on our financial statements and require management to use a greater
degree of judgment and estimates. Actual results may differ from those
estimates. Our management believes that given current facts and circumstances,
it is unlikely that applying any other reasonable judgments or estimate
methodologies would cause effect on our consolidated results of operations,
financial position or liquidity for the periods presented in this
report.
 
 Item
3.                      Quantitative
and Qualitative Disclosures About Market Risk.
  Not
applicable to smaller reporting companies.
 
 Item
4T.                    Controls
and Procedures.
  Evaluation
of Disclosure Controls and Procedures
 
 Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Financial Officer (“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 end of the period covered by this report. Based upon that evaluation,
the Company’s CEO and CFO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the Exchange
Act, is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to the Company’s management, including the Company’s CEO and
CFO, as appropriate, to allow timely decisions regarding required
disclosure.
 
 26
  Changes in Internal
Controls
 
 There
have been no changes in the Company’s internal control over financial reporting
during the latest fiscal quarter that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.
 
 PART
II - OTHER INFORMATION
 
 Item
1.                      Legal
Proceedings.
  Except as
stated below, neither the Company nor any of its subsidiaries is a party to any
pending or threatened legal proceedings.
 
 As
disclosed in our Form 8-K filed on May 15, 2009, on May 13, 2009, we entered
into a Settlement Agreement and Mutual General Release (the “Settlement
Agreement”) with Golden State Equity Investors, Inc., f/k/a Golden Gate
Investors, Inc., a California corporation (“GSEI”) to settle that certain
lawsuit filed by GSEI against the Company on March 16, 2009 in the Superior
Court of the State of California, County of San Diego.  Under the
Settlement Agreement, we agreed to pay GSEI an aggregate of $250,000 in
installments from June 1, 2009 to November 1, 2010 (the “Settlement Amount”),
and in return GSEI has agreed to dismiss the lawsuit.
 
 However,
in the event that (i) the Company has satisfied all of the payments through
February 1, 2010, for an aggregate payment amount of $125,000, on or prior to
February 1, 2010, and (ii) an Event of Default has not occurred under the
Settlement Agreement on or prior to February 1, 2010, then the Settlement Amount
shall be deemed paid in full. Should any payment described above not be timely
received by GSEI, such that an Event of Default exists under the Settlement
Agreement, the outstanding Settlement Amount shall accrue interest from the date
hereof at a rate of 9.75% per annum
 
 As
disclosed in our Form 8-K filed on March 16, 2009, in this lawsuit, GSEI alleged
that the Company was liable for breach of certain investment agreements by
failing and refusing to (i) pay to GSEI the interest prepayment required under
the terms of certain debenture, and (ii) deliver shares of common stock of the
Company in connection with a conversion of the debenture. The Settlement
Agreement will settle approximately $511,966.53 plus accrued interest. It also
terminates such investment agreements and releases all liabilities of the
Company under the investment agreements.
 
 As
disclosed in our Form 8-K filed on March 16, 2009, on February 27, 2009, the
Company and Aleksandr Shvarts, President and CEO of the Company (collectively,
the “Third-Party Defendants”), were served with a third-party summons and
counterclaim filed by Eric Schwartz, the original defendant (the “Third-Party
Plaintiff”).  The counterclaim is grounded in the Third-Party
Defendants’ failure to repay certain loan agreement. The Third-Party Plaintiff
alleged: (i) fraudulent representations against the Third-Party Defendants
stemming from alleged representations that common stock of the Company will be
issued to plaintiff when the Company becomes a public company and said shares of
common stock will satisfy the amount owed under the loan agreement, and (ii)
that the Company has been unjustly enriched in the amount of not less than
$425,000 by virtue of its receipt of $425,000 from plaintiff. The case was filed
in the Supreme Court of the State of New York, County of New York. The
Third-Party Plaintiff seeks indemnification of not less than $1,000,000 from the
fraudulent representations and not less than $425,000 plus accrued interest
because of unjustified enrichment, all in the sum of not less than $1,425,000.
We deny the allegations made in the complaint and have retained Nesenoff &
Miltenberg, LLP as our legal counsel in this matter.
  As
disclosed on our Form 8-K filed on October 14, 2008, on October 7, 2008, we, the
Company, and our CEO Aleksandr Shvarts (collectively, the “Defendants”) were
served with a summons and complaint filed by AJW Partners, LLC, AJW Offshore,
Ltd., AJW Qualified Partners, LLC, and New Millennium Capital Partners II, LLC
(collectively, the “Plaintiffs”).  The complaint alleged that the
Company has failed to make payments due on a series of notes from 2004 to 2006
issued by the Company, and failed to make payments of interest due on these
notes, and other unlawful conducts by the Company. The case was filed in the
Supreme Court of the State of New York, County of New York. The Plaintiffs seek
all sums due from the notes and other agreements, prejudgment interest,
compensatory damages, punitive damages, and attorneys' fees to be in excess of
$650,000. The Company and Mr. Shvarts deny the allegations made in the complaint
and intend to vigorously contest the allegations. We believe that we did not
enter into any of the above referenced notes with the Plaintiffs and none of the
notes or related legal documents were signed or executed on behalf of the
Company or our CEO.  We deny the allegations made in the complaint and have
retained Nesenoff & Miltenberg, LLP as our legal counsel in this
matter.
 
 As
disclosed in our Form 8-K filed on November 21, 2008, on September 3, 2008, we
were served with a Notice of Motion for Summary Judgment in Lieu of Complaint
filed by David Kokakis (“Plaintiff”).  On November 11, 2008, the
Company settled this litigation and entered into a settlement agreement (the
“Stipulation of Settlement”) with Plaintiff. The Company signed two (2)
confessions of judgment (the “Confession of Judgment”) which is in favor of
Plaintiff.  Pursuant to the first Confession of Judgment, in the event
of default of the Stipulation of Settlement, the Company agrees to pay Plaintiff
a total of $388,810, consisting of a principal amount of $329,500 plus accrued
interests of $59,310. Pursuant to the second Confession of Judgment, in the
event of default of the Stipulation of Settlement, the Company agreed to pay
Plaintiff deferred compensation in the sum of $125,962. The second claim would
be the basis of a second action brought by Plaintiff against the Company, which
Plaintiff was about to commence. If the Company makes all of the payments, which
is $329,500 in total, pursuant to the payment schedule, the two (2) Confessions
of Judgment will not be filed and will be waived and returned to the Company’s
attorney. Failing to make the payments, or failing to pay on time, as
aforedescribed, will be deemed a default and permit Plaintiff’s counsel to file
both Confessions of Judgment and Affidavits of Confession of Judgments with the
Clerk of the Court without further notice.
    27
 
 On
October 9, 2008, the Company and Echo (collectively, the “Defendants”) were
served with a summons and complaint filed by Eric Schwartz, the former Director
and Vice President of the Company until January 27, 2008
(“Plaintiff”).  The complaint alleged that during Plaintiff’s
employment by the Company and Echo, Plaintiff is owed the sum of not less than
$119,621 plus accrued interest with respect to the unpaid base salary for 2006,
2007 and January 2008. The case was filed in the Supreme Court of the State of
New York, County of Kings. The plaintiffs seek all sums for the unpaid base
salary plus interest, compensation, liquidated damages equal to 25% of the total
amount of wages due, attorneys’ fees, and a sum not exceeding $50 for expenses
which may be taxed as costs, all in the sum of not less than $149,526.25. The
Company and Echo deny the allegations made in the complaint and intend to
vigorously contest the allegations. We deny the allegations made in the
complaint and have retained Nesenoff & Miltenberg, LLP as our legal counsel
in this matter and have filed a counterclaim against Eric Schwartz.
 
 Item
1A.                    Risk
Factors.
 
 Not
applicable to smaller reporting companies.
 
 Item
2.                      Unregistered Sales of Equity
Securities and Use of Proceeds.
  The
description of unregistered sales of securities is incorporated in our Current
Report Form 8-K.
 
 As
disclosed on our current report Form 8-K filed on May 18, 2009, on May 15, 2009,
we issued 7,000,000 shares of our common stock to Signal Above, LLC pursuant to
certain Amendment to Time Brokerage Agreement.
 
 As
disclosed on our current report Form 8-K filed on May 1, 2009, on April 27,
2009, we issued 25,279,614 shares of our common stock to Island Broadcasting
Company pursuant to certain Amendment to Time Brokerage Agreement.
 
 From
April 27, 2009 to April 30, 2009, we entered into 9% convertible promissory
notes (the “Notes”) with certain investors (the “Holders”) for an aggregate of
$193,000.   The maturity date of these Notes is October 1,
2009.
 
 As
disclosed on our current report Form 8-K filed on February 27, 2009, on February
10, 2009, we issued 7,000,000 shares of our common stock to Robert Catell for a
total of $70,000 pursuant to certain Share Purchase Agreement.
  These
securities are issued in reliance on the exemption under Section 4(2) of the
Securities Act of 1933, as amended (the “Act”). These securities qualified for
exemption under Section 4(2) of the Securities Act of 1933 since the issuance
securities by us did not involve a public offering. The offering was not a
“public offering” as defined in Section 4(2) due to the insubstantial number of
persons involved in the deal, size of the offering, manner of the offering and
number of securities offered. We did not undertake an offering in which we sold
a high number of securities to a high number of investors. In addition, these
shareholders had the necessary investment intent as required by Section 4(2)
since they agreed to and received share certificates bearing a legend stating
that such securities are restricted pursuant to Rule 144 of the 1933 Securities
Act. This restriction ensures that these securities would not be immediately
redistributed into the market and therefore not be part of a “public offering.”
Based on an analysis of the above factors, we have met the requirements to
qualify for exemption under Section 4(2) of the Securities Act of 1933 for this
transaction.
 
 Item
3.                       Defaults
Upon Senior Securities.
  None.
 
 Item
4.                      Submission of Matters to a Vote of
Security Holders.
  None.
 
 Item
5.                       Other
Information.
 
 None.
   28
   Item
6.                       Exhibits.
  Exhibit No.
                      
                      Title
      of Document
                      
                      Location31.1
                      
                      Certification
      of Chief Executive Officer Pursuant to Rule 13a-14(a) of the
      Securities Exchange Act of 1934
                      
                      Filed
      herewith31.2
                      
                      Certification
      of Chief Financial Officer Pursuant to Rule 13a-14(a) of the
      Securities Exchange Act of 1934
                      
                      Filed
      herewith32.1
                      
                      Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                      
                      Filed
      herewith32.2
                      
                      Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                      
                      Filed
      herewith
       29
     SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
 
 MEGA
      MEDIA GROUP, INC.Date: 
      June 19, 2009
                By:
                /s/ Aleksandr
      ShvartsALEKSANDR
      SHVARTS