UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-KSB

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

                 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006

           SECURITIES AND EXCHANGE COMMISSION FILE NUMBER 000-28416

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


          Delaware                                           58-1700840
--------------------------------                      -----------------------
(State or other jurisdiction of                        (I.R.S.  Employer
incorporation  or  organization)                      Identification  Number)


              2525 North Naomi Street, Burbank, California 91504
	      ---------------------------------------------------
              (Address of Principal executive offices) (Zip Code)

                                 (818) 848-5800
			  ---------------------------
                          (Issuer's telephone number)

             920 South Commerce Street, Las Vegas, Nevada  89106
	  ----------------------------------------------------------
          (Former address of principal executive offices) (zip Code)

      Securities registered under Section 12(b) of the Exchange Act: None
        Securities registered under Section 12(g) of the Exchange Act:
     COMMON STOCK, PAR VALUE $0.001 AND PREFERRED STOCK, PAR VALUE $0.001

Check  whether the issuer (1) 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. [X] YES [ ] NO

Check if disclosure of delinquent filers  in response to Item 405 of Regulation
S-B is not contained in this form, and will  not  be  contained, to the best of
the   issuer's  knowledge,  in  definitive  proxy  or  information   statements
incorporated  by  reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [  ]

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

Issuer's revenues for its most current fiscal year: $3,402,278

Aggregate market value  of the voting and non-voting common equity held by non-
affiliates as of January 12, 2007: $1,965,746

Number of common shares outstanding  as of January 12, 2007 at $.001 par value:
4,914,365 shares.

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE

Transitional Small Business Disclosure Format: [  ] YES [X] NO


                               TABLE  OF  CONTENTS
                               ===================


Item      Page
Number    Number  Item
--------  ------  -------------
Part  I
-------
Item  1.    _    Description of Business
Item  2.    _    Description of Property
Item  3.    _    Legal Proceedings
Item  4.    _    Submission of Matters to a Vote of Security Holders

Part  II
-------
Item  5.    _    Market for Common Equity and Related Stockholder Matters
Item  6.    _    Management's Discussion and Analysis or Plan of Operation
Item  7.    _    Financial Statements
Item  8.    _    Changes in and Disagreements with Accountants on Accounting
                        and Financial Disclosure
Item  8A.   _    Controls and Procedures
Item  8B.   _    Other Information

Part  III
--------
Item  9.    _    Directors, Executive Officers, Promoters and Control Persons;
                 Compliance with Section 16(a) of the Exchange Act
Item  10.   _    Executive Compensation
Item  11.   _    Security Ownership of Certain Beneficial Owners and Management
                 Related Stockholder Matters
Item  12.   _    Certain Relationships and Related Transactions
Item  13.   _    Exhibits
Item  14.   _    Principal Accountant Fees and Services

Signatures  _

Ex.  31.1    Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act
             of 2002
Ex.  32.1    Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act
             of 2002



                                    PART I

ITEM 1. DESCRIPTION OF BUSINESS

BACKGROUND



ValCom,  Inc.,  a  publicly  held Delaware  corporation  (the  "Company"),  was
originally organized in the State  of  Utah  on  September  23, 1983, under the
corporate  name Alpine Survival Products, Inc. Its name was changed  to  Justin
Land and Development,  Inc.  during  October  1984  and  to  Supermin,  Inc. on
November 20, 1985.

The  Company  was  originally  formed  to  engage  in  the  acquisition  of any
speculative  investment  or business opportunity without restriction as to type
or  classification.  On  September   29,   1986,  Supermin,  Inc.  concluded  a
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1954,
as amended, pursuant to which it exchanged 200,000  shares of its common stock,
$.001 par value (all share numbers, unless otherwise stated, have been adjusted
to reflect a one-for-20 reverse stock split) for all  of  the  capital stock of
Satellite Bingo, Inc., a Georgia corporation organized on January 10, 1986, and
the  originator  of  the Company's current business (the "SBI Subsidiary").  In
conjunction with such  reorganization,  the  former  stockholders  of  the  SBI
Subsidiary  acquired control of the Company and the Company changed its name to
Satellite Bingo, Inc.

On March 10,  1988,  the  Company changed its name to SBI Communications, Inc.,
and on January 28, 1993, the  Company  reincorporated  in  Delaware  through  a
statutory  merger  with  a  wholly-owned Delaware subsidiary in reliance on the
exemption from registration requirements  of Section 5 of the Securities Act of
1933, as amended, provided by Rule 145(a)(2) promulgated thereunder.

On August 21, 2000, the principals of Valencia Entertainment International, LLC
("VEI") and SBI Communications, Inc. ("SBI")  executed  a  letter  of intent to
consummate  a  merger. On October 16, 2000, the majority stockholders  approved
the Agreement and Plan of Merger. Pursuant to the Merger Agreement, the Company
appointed new Board  members,  changed  the  par  value of the Preferred Stock,
increased  the authorized Common Stock and changed its  name  to  ValCom,  Inc.
("ValCom").  A Schedule 14C Information Statement was filed with the Securities
and Exchange Commission.  The  Securities  and Exchange Commission approved the
definitive Schedule 14C Information Statement  on February 13, 2001. The Merger
was finalized on March 6, 2001.

VALCOM'S CORPORATE STRUCTURE

As  of  September  30,  2006,  ValCom,  Inc.  had four  subsidiaries:  Valencia
Entertainment International, LLC, a California  limited liability company; Half
Day Video, Inc., a California corporation; 80% equity in ValCom Studios, Inc. a
Nevada Corporation and 45% equity interest in ValCom  Broadcasting,  LLC, a New
York limited liability company, which operates KVPS (Channel 8), an independent
broadcaster. Unless the context requires otherwise, the term "Company" includes
ValCom,  Inc.,  a  publicly  held  Delaware  corporation and, its subsidiaries,
predecessors and affiliates whose operations or  assets have been taken over by
ValCom, Inc.

The Company is a diversified entertainment company with the following operating
activities:

a) Studio rental - ValCom's business includes television production for network
and  syndication  programming,  motion  pictures,  and  real  estate  holdings,
however, revenue is primarily generated through the  lease  of the sound stages
and  production.  ValCom's  past and present clients in addition  to  Paramount
Pictures and Don Belisarious  Productions,  include  Warner Brothers, Universal
Studios, MGM, HBO, NBC, 20th Century Fox, Disney, CBS,  Sony, Showtime, and the
USA Network. In addition to leasing its sound stages, ValCom  also owns a small
library  of  television content, which is ready for worldwide distribution  and
several major  television  series  in  advanced stages of development. ValCom's
Studio Division is composed of two properties:  920  South  Commerce  and  2525
North  Naomi  Street,  Burbank,  California  91504  which  is leased. Corporate
offices  are  located  at  the Burbank Studios which houses a state-of-the  art
production studio, broadcast  facilities,  recording studios, production design
construction, animation and post-production.

VALCOM BURBANK STUDIOS, one of Burbank's television production facilities, with
three edit bays, two sound stages and over 25,000  square  feet  of  production
support was recently acquired by ValCom, Inc. The Burbank Studios was  the home
of  'Jeopardy'  and  the  'Wheel of Fortune' post production for many years  in
addition to a past client base  consisting  of:  HGTV, D.I.V., History Channel,
Discovery, Food Network, Sony Pictures T.V., PAX,  MTV,  Disney  Channel,  HBO,
ABC,  CBS,  NBC,  Sci  Fi, GSN, Comedy Central, VH-1, FOX Television, Lifetime,
over a period of 12 years.

b) Studio equipment and rental - operating under the name Half Day Video, Inc.,
the  Company  supplies  and  rents  personnel,  cameras  and  other  production
equipment to various production companies on a short-term or long-term basis.

c) Jeff Franklin Film and  TV production - Jeff Franklin, Executive Producer of
"Funny Money" and founder of FWE Picture Company began his entertainment career
in the music industry managing  the  careers  of music icons George Clinton and
Marvin  Gaye.   Franklin  recently  began working with  Stan  Lee  on  two  new
pictures, including "Light Speed" and  "The  Harpy."   Cumulatively, theatrical
features that Franklin has produced and executive produced,  such  as "Casper,"
"Kull-The  Conquerer,"  "Cold  Around  the  Heart," "Stuart Little" and "Stuart
Little 2," have grossed over one billion dollars.   Franklin  has also produced
many television series, as well as producing on and off-Broadway.

Stan  Lee,  chairman  and  chief  creative officer of POW!, is the creator  and
inventor of the modern superhero. A  prolific  author,  Lee  revolutionized the
comic   book   industry   by   creating   compelling  characters  who,  despite
extraordinary powers and talents, are nonetheless  plagued  by  the same doubts
and  difficulties  experienced  by  ordinary people. Some of his most  enduring
characters,  like  Spider-Man{trademark},   The  Hulk{trademark},  and  the  X-
Men{trademark}, have spun off into television programs and feature films

d) Broadcast Television - The Company owns a  45%  equity  interest  in  ValCom
Broadcasting,  LLC,  a  New York limited liability company, which operates KVPS
(Channel  8),  an independent  television  broadcaster  in  the  Palm  Springs,
California market,  which  is strategically located in the middle of four major
markets including Los Angeles, Phoenix, Las Vegas and San Diego.

e) ValCom, Inc. signed a letter  of  intent to acquire Digital Animation Media,
Ltd.,  a privately held Irish corporation  headquartered  in  Dublin,  Ireland.
Digital  Animation  Media,  Ltd.,  is  one of the premier independent animation
companies  in Europe and a leading provider  of  animation  software  to  other
production companies  worldwide. With its production capability and proprietary
technology, the company  is  well positioned to take advantage of the growth in
existing  animation  markets as  well  as  a  burgeoning  market  for  wireless
animation tools and content with clients such as Disney, Warner and The New Zoo
Revue.

BUSINESS OVERVIEW

We are a diversified entertainment company with the following operating
activities:

STUDIO RENTAL

ValCom's business includes  television  production  for network and syndication
programming,  motion pictures, and real estate holdings,  however,  revenue  is
primarily generated  through  the  lease  of  the  sound stages and production.
ValCom's  past and present clients in addition to Paramount  Pictures  and  Don
Belisarious  Productions, include Warner Brothers, Universal Studios, MGM, HBO,
NBC, 20th Century  Fox,  Disney,  CBS,  Sony, Showtime, and the USA Network. In
addition to leasing its sound stages, ValCom  also  owns  a  small  library  of
television content, which is ready for worldwide distribution and several major
television  series  in advanced stages of development. ValCom's Studio Division
is composed of two properties:  920 South Commerce which is leased and 41 North
Mojave which ValCom has 1/3 equity  in  the  real  estate of 7.5 acres, 160,000
square feet of commercial space, giving ValCom a total of 11 sound stages and a
recording studio. Corporate offices are located at the  Commerce  Studios which
houses  a  state-of-the art production studio, broadcast facilities,  recording
studios, animation and post-production.

VALCOM BURBANK STUDIOS, one of Burbank's television production facilities, with
three edit bays,  two  sound  stages  and over 25,000 square feet of production
support was recently acquired by ValCom,  Inc. The Burbank Studios was the home
of 'Jeopardy' and the 'Wheel of Fortune' post  production  for  many  years  in
addition  to  a  past client base consisting of: HGTV, D.I.V., History Channel,
Discovery, Food Network,  Sony  Pictures  T.V.,  PAX, MTV, Disney Channel, HBO,
ABC,  CBS, NBC, Sci Fi, GSN, Comedy Central, VH-1,  FOX  Television,  Lifetime,
over a period of 12 years.

FILM PRODUCTION DIVISION

Jeff Franklin,  Executive  Producer of "Funny Money" and founder of FWE Picture
Company began his entertainment  career  in  the  music  industry  managing the
careers of music icons George Clinton and Marvin Gaye.  Franklin recently began
working  with  Stan  Lee on two new pictures, including "Light Speed" and  "The
Harpy."  Cumulatively,  theatrical  features  that  Franklin  has  produced and
executive  produced,  such as "Casper," "Kull-The Conquerer," "Cold Around  the
Heart," "Stuart Little"  and  "Stuart  Little 2," have grossed over one billion
dollars.   Franklin  has  also produced many  television  series,  as  well  as
producing on and off-Broadway.

ValCom, Inc. entered a joint  venture with entertainment giant, Stan Lee's POW!
Entertainment. POW! (Purveyors  of  Wonder)  Entertainment,  Inc. is founded by
Stan  Lee,  together with Gill Champion and Arthur Lieberman. POW's  principals
combined  have  over  a  hundred  years  experience  creating,  producing,  and
licensing original  intellectual properties. POW! specializes in franchises for
the entertainment industry,  including animation and live-action feature films,
plus  television,  DVDs,  video games,  merchandising,  and  related  ancillary
markets. POW! partners with  studios  and networks in creating new and exciting
characters.  In some cases, POW! creates  `custom-tailored'  properties  for  a
specific star or director.

Stan Lee, chairman  and  chief  creative  officer  of  POW!, is the creator and
inventor  of  the modern superhero. A prolific author, Lee  revolutionized  the
comic  book  industry   by   creating   compelling   characters   who,  despite
extraordinary  powers  and talents, are nonetheless plagued by the same  doubts
and difficulties experienced  by  ordinary  people.  Some  of his most enduring
characters,  like  Spider-Man{trademark},  The  Hulk{trademark},   and  the  X-
Men{trademark}, have spun off into television programs and feature films

LIVE THEATRE DIVISION

February  9,  2006,  ValCom  Inc. named Jeff Kutash as President of their  Live
Theatre Division. The first venture,  a  theatre  production called "Headlights
and Tailpipes" opened at the Las Vegas Stardust Casino  and  Hotel  on April 3,
2006.

Kutash's experience in the field of theatre, television and film create  a vast
knowledge of the entertainment field.

Several  large-scale  productions  put Kutash on the map for live entertainment
including  the first rock n' roll revue  "Gold  Ol'  Rock  n'  Roll,"  "Dancin'
Machine" and  most  notably  "Splash,"  which  recently  celebrated its 20 year
anniversary. Kutash received accolades for the choreography  he staged for John
Travolta's  appearance  in  the  film "Saturday Night Fever." Kutash  continued
staging  and  began co-producing television  for  ABC,  NBC,  CBS,  Viacom  and
Filmways.  His  television   work   garnered   an  Emmy{trademark}  and  Golden
Globe{trademark}  for  his participation on "Taxi",  and  was  responsible  for
staging the 20th Anniversary  Grammy{trademark}  Awards.  He has spent the last
several  years  commuting  to and from Europe on a regular basis,  coordinating
international talent, music, theatrical, and television productions.

ValCom,  Inc. introduced a live  theatre  production  debuting  April  4,  2006
entitled  "Headlights   and   Tailpipes"  at  the  Stardust  Resort  &  Casino.
"Headlights and Tailpipes", starring  Playboy  Playmate  Lauren  Anderson (July
2002),  recently  captured  the  city's  top spot as the number one adult-style
production in Las Vegas. The show, performing  in  the  Stardust Theater at the
Stardust  Resort & Casino, is a sexy and seductive production  that  celebrates
America's love  affair with fast cars, beautiful girls, and heart-pounding rock
`n roll.

The show consist  of a series of exotic dance numbers that are choreographed to
hit rock `n roll songs around a motorcycle or hot rod. Featured cars range from
a vintage Ford Thunderbird  to a new 2007 Shelby Cobra. Perhaps the most famous
of these automobiles is Starsky & Hutch's 1976 Ford Gran Torino.

ANIMATION DIVISION

October 1, 2003, we formed New  Zoo  Revue  LLC  pursuant  to  a  joint venture
agreement  with  O  Atlas Enterprises Inc., a California corporation.  New  Zoo
Revue LLC was formed  for  the  development and production of "New Zoo Revue" a
feature film and television series  and  marketing of existing episodes. ValCom
shall contribute all funding required for  the  development  of  the above to a
maximum of $1,000,000 and O Atlas shall contribute an exclusive ten  (10)  year
worldwide  license  in  and  to  all  rights, music and characters as its equal
contribution towards Capital. The net profit  after all expenses will be shared
equally by ValCom Inc. and O Atlas..

On September 27, 2005,ValCom, Inc. signed a letter of intent to acquire Digital
Animation  Media,  Ltd.,  a privately held Irish corporation  headquartered  in
Dublin,  Ireland.  Digital Animation  Media,  Ltd.,  an  independent  animation
companies in Europe  and  a  provider of animation software to other production
companies worldwide. With its production capability and proprietary technology,
we believe that the company is well positioned to take advantage of the

growth  in existing animation markets  as  well  as  a  burgeoning  market  for
wireless  animation  tools  and content with clients such as Disney, Warner and
The New Zoo Revue.

CHANNEL 8 IN PALM SPRINGS, CALIFORNIA

In connection with our joint  venture  with New Global Communications, Inc., we
own  a 45% equity interest in ValCom Broadcasting,  LLC,  a  New  York  limited
liability  company,  which operates KVPS (Channel 8), an independent television
broadcaster in the Palm Springs, California market.

EXPANSION PLANS

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

It is imperative  that  the Company continues to grow its operational revenues.
The Company has made a significant investment in assembling its management team
and operational infrastructure.  This  investment cost is now relatively fixed,
however,  the  Company  has  the  potential  to   significantly   leverage  its
profitability through incremental revenue increases. The Company will therefore
continue to employ an aggressive yet methodical growth strategy. It  intends to
make strategic expansions in markets with: (i) accommodating regulations;  (ii)
favorable  demographics;  (iii)  successful  operations  management;  and  (iv)
customer acceptance and patronization.

The Company intends to grow through both acquisitions and developments. It uses
extensive  review  procedures  to  evaluate  expansion opportunities, including
market studies, legal evaluations, financial analyses  and operational reviews.
The Company determines development budgets and acquisition  prices based on the
proposed  investment's  expected  financial  performance,  competitive   market
position,   risk  profile  and  overall  strategic  fit  within  the  Company's
operational plans.  Acquisition terms typically include cash payments, issuance
of Company securities and seller-financed notes. Consulting and non-competition
agreements with the target companies' principals may also be included.

The development of telecommunications,  the emergence of new technology and the
international nature of the Internet has  created opportunities to develop new,
efficient and secure ways to deliver entertainment  to customers. As one of the
companies that plans to employ these new technologies  on  the Internet, ValCom
intends  to  capitalize on its expertise in the analysis of consumer  data  and
information to  become a world leader in online entertainment. The Company will
utilize its assets of  film library, broadcast station and studio facilities to
expand in the IP world.

BROADCASTING, LLC

In May 2002, the Company entered into a joint venture agreement with New Global
Communications, Inc. ("Global") whereby Global agreed to contribute $500,000 to
the joint venture  in  exchange for a 55% equity interest in a new entity known
as ValCom Broadcasting,  LLC,a  New  York  limited  liability  company, and the
Company would contribute certain fixed assets and manage the operations  of the
joint  venture for a 45% equity interest in ValCom Broadcasting, LLC. The joint
venture  operates  a  newly  developed  low  power television broadcast station
K08MX-LP in Indio-Palm Springs, California operating  on Channel 8. The Company
believes  that  the  investment  in  the joint venture adds  to  the  Company's
infrastructure  of  becoming  a  full-service  television  and  motion  picture
company. The amount contributed to  the joint venture by Global will be used to
purchase  the  license  for  the television  station  from  the  licensee.  The
effectiveness of the joint venture  agreement  was dependent on approval by the
Federal Communications Commission (the"FCC"). On  September  20,  2002, the FCC
approved the transaction.

FILM ENTERTAINMENT OVERVIEW

Competition in the film entertainment business is diverse and fragmented,  with
scores  of  companies  operating at various levels of product budget and scope.
The market is overwhelmingly dominated by the major Hollywood studios, with the
top-ranked company, Disney  in 1999, usually commanding 15 to 20 percent of the
domestic market share in any given year.

ValCom plans to succeed by choosing  its  projects  and  markets carefully, and
selecting  segments  and  geographic  areas  where  it  can  build  proprietary
competitive  advantages.  With  the proper positioning and segment  focus,  the
Company believes it can insulate  itself  from  the brunt of competition in the
entertainment  content  business.  Since  the sector's  revenues  from  foreign
markets  are growing rapidly, a sound niche  strategy  should  ensure  superior
profitability.

INDEPENDENT PRODUCTION COMPANIES

Consolidation   through   acquisition   has  recently  reduced  the  number  of
independent  production  companies in operation.  However,  barriers  to  entry
remain relatively low, and  management  anticipates that the market segments in
which it intends to compete will remain highly competitive.

THE COMPANY'S COMPETITIVE POSITION

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

ValCom experiences competition from three market segments:

1) Traditional television, game shows and reality television drama

2) Movies for television and theatrical releases

3) Other entertainment/media companies

OTHER ACTIVITIES

INTERACTIVE TECHNOLOGY

The Company has experience in the interactive  communications and entertainment
fields,  which brings together elements of the "Information  Superhighway."  It
has created  and  broadcast  interactive  national and international television
programs  using  state-of-the-art  computer  technology,  proprietary  software
programs, satellite communications, and advanced telecommunications systems.

The  Company's  management  believes  that  its experience  in  developing  and
delivering  interactive  television  programs, as  well  as  its  ownership  of
proprietary  systems  and  software,  enhances   its   ability  to  launch  new
entertainment and information programs based on comparable resources.

DEPENDENCE ON STUDIO FACILITIES

The Company emerged as one of the top studio facilities  over the years and has
been very successful with an occupancy rate of 95%. With ValCom's  most  recent
purchase  of  the Burbank Studios, the Company is focusing on its core business
and capitalizes  on  its  reputation  in  the Hollywood to increase its revenue
base. The Company does not rely on a small  group  of  customers.  It  may rent
facilities, production equipment and personnel to any motion picture studio  or
production  company.  The Company's television broadcast operations do not rely
on a small group of customers;  rather,  any advertiser who wishes to advertise
on Channel 8 in Indio-Palm Springs, California may generate revenues.

PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, FRANCHISES, CONCESSIONS,

 ROYALTY AGREEMENTS OR LABOR CONTRACTS, INCLUDING DURATION

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

SATELLITE BINGO:

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

"HANGIN WITH THE BOYZ":

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

"WHO CAN YOU TRUST?"

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

"FUHGEDABOWDIT":

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

"ULTIMATE DRIVER":

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

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

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

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

HEADLIGHTS AND TAILPIPES

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

SIN CITY RECORDS

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

MOTOWN PARTNERS, LLC

Live Theatre, Production Revenue and Concerts

EMPLOYEES

As of  January 15, 2007, the Company had 14  full-time employees, including two
officers   and  three  professional  staff.  No  employee  of  the  Company  is
represented  by  a  labor  union  or  is  subject  to  a  collective bargaining
agreement. We have never experienced a work stoppage and believe  our  employee
relations are very good.

ITEM 2. DESCRIPTION OF PROPERTY

ValCom's  Studio  Division  is  composed  of  two  properties: 2525 North Naomi
Street, Burbank, California 91504 and 920 South Commerce  which  are leased for
$33,000  and  $2,000.  per  month.  ValCom also holds a 1/3 equity in the  real
estate of 7.5 acres, 160,000 square feet  of  commercial  space without access.
Corporate offices are located at the Burbank Studios which  houses  a state-of-
the  art production studio, broadcast facilities, recording studios, production
design construction, animation and post-production.

ITEM 3 - LEGAL PROCEEDINGS

On April  7, 2003, the Company filed on an emergency basis, a voluntary Chapter
11 bankruptcy  petition.  The  case  is pending in the United States Bankruptcy
Court, Central District of California,  San  Fernando  Valley Division, as Case
No. SV 03-12998-GM. As of June 30, 2004, the Company was  in  compliance of all
of  its duties under the Bankruptcy Code and all applicable guidelines  of  the
Office of the United States Trustee.

The Company  requires  the  use  of  its  secured creditor's cash collateral to
operate. Throughout the pendency of this case,  the Company has worked with its
two real estate secured lenders, Finance Unlimited, LLC and Laurus Master Fund,
Limited on the details of cash collateral stipulation.  An  order  approving  a
global  interim  cash  collateral stipulation with Finance Unlimited and Laurus
was entered on August 26, 2003. This stipulation permitted the Company's use of
the lenders' cash collateral through March 31, 2004.

On  April  28,  2004  the  court   approved   two  additional  cash  collateral
stipulations,  one  each  with Finance Unlimited and  Laurus,  authorizing  the
Company's continued use of  cash  collateral  through  May  31, 2004. The court
approved an extension and granted the restructuring of notes/debt  with Finance
Unlimited and Laurus for settlement and to be discharged from bankruptcy.

In May 2004, Laurus paid off Finance and was subrogated to Finance's $6,565,998
claim,  which became included in the senior of Laurus' two claims. Laurus  then
sought to  conduct  a  non-judicial  foreclosure  sale of the Property, and VEI
objected.  The Bankruptcy Court issued an order on June  3,  2004,  that  while
Laurus could  conduct  a  non-judicial foreclosure sale of the Property, Laurus
would not be entitled to any  deficiency claim against either VEI or ValCom, or
any other assets other than the  Property  itself  (and  the  rents  and leases
appurtenant thereto).

On  June  10,  2004, Laurus had the Property sold. At this sale, Laurus claimed
that its senior  note had a balance of $7,407,873 and its junior note a balance
of  $2,405,093.  Virtually   all  of  the  disputed  penalties,  along  with  a
disproportionate share of disputed  legal  fees and expenses, were incorporated
into  the  junior  balance, while the senior included  the  $6,565,998  million
subrogated from the  Finance  claim.  The sale was conducted through the junior
note, and the Property was sold for $2.9 million to a third party. An affiliate
of  this  third party then purchased the  senior  note  directly  from  Laurus,
without a second sale.

As a result  of  the Bankruptcy Court's order and the subsequent trustee's sale
of the Property, neither  VEI nor ValCom are subject to any further liabilities
on account of the notes and  deeds  of  trust  previously  held  by Finance and
Laurus.  Even  though  the  senior  note still technically exists, it has  been
rendered  non-recourse by the Bankruptcy  Court's  order,  and  could  only  be
enforced against  the  Property  itself  (which  no longer belongs to VEI). Any
liability owed to the third party, which purchased  the Property with regard to
the rents collected for June 2004, has been resolved  by  settlement  with that
party.

On October 5, 2004, ValCom, Inc. and Valencia Entertainment International, LLC,
commenced  a  lawsuit  in  the Los Angeles Superior Court, State of California,
against Chicago Title Company  and  Laurus  Master Fund, Ltd. The suit seeks an
accounting of the amount due in connection with a non-judicial foreclosure of a
deed of trust securing a promissory note executed  by  ValCom  and Valencia. It
also  alleges  that  Chicago  Title  breached  its trustee's duties and  Laurus
breached  the  terms  of the promissory note and deed  of  trust  securing  it.
ValCom's attorney has expressed  his belief that the lawsuit it meritorious but
at this stage in the proceeding, he  is  unable to state how much, if any, will
be recovered in the lawsuit. The defendants  won  a summary judgment motion and
the  company  is  pursuing  the appellant process. The  company  anticipate  an
appellate herring in late 2007.

LLOYD KURTZ

Pending  or  Threatened  Litigation,   Claims  and  Assessments  by  the  prior
contractor for the renovations, at ValCom  Studios in Nevada has been replaced.
Mr. Lloyd Kurtz filed suit on October 25, 2004  against ValCom, Inc., A private
Nevada Corporation which is 80% owned by ValCom,  Inc.  a Delaware Corporation,
ValCom, Inc. a Delaware Corporation and Vincent Vellardita.  The suit alleges a
violation of Securities Act of 1933 and states that Mr. Kurtz purchased 600,000
shares  of  ValCom - Delaware at $0.25 per share and that the shares  were  not
registered. He  claims he is owed an additional $303,000. Mr. Kurtz has filed a
Mechanic's Lien for  $303,000.  A  motion to dismiss the claim of Mr. Kurtz has
been filed. If the corporation does  not  prevail on its Motions to Dismiss the
corporation  will  file its full defense and  counterclaims  which  exceed  the
amount claimed by Mr. Kurtz.

BONNIE NELSON

Ms. Bonnie Nelson, a  former  ValCom  employee  and Director filed suit against
ValCom,  Inc.  The  suit  alleges  a  breach of oral agreement  and  employment
contract.  ValCom,  Inc. terminated Ms. Nelson  for  cause  in  breach  of  her
employment agreement.  ValCom  is  countersuing  Ms.  Nelson for defamation and
breach of fiduciary duties to both the Company and its shareholders.

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

1. On November 20, 2006, the Company held a Special Meeting of Stockholders at
the Company's offices at 920 South Commerce Street, Las Vegas, Nevada 89106 at
10:00 A.M. local time.

2. There were present in person or by proxy 58,146,661 shares of Common Stock,
of a total of 105,243,318 shares of Common Stock entitled to vote.

3. The number of shares voted in favor of the election of the following
nominees for director is set forth opposite each nominee's name:

        Nominee            Number of Shares
---------------------   ----------------------
Vincent Vellardita            54,514,041
Richard Shintaku              54,514,041
Ian Adlington                 54,514,041


4.  54,514,041  shares  were  voted  in  favor of amending our  Certificate  of
Incorporation to increase the number of authorized  shares of common stock, par
value $.001 per share, of the Company from 100,000,000  shares  to  250,000,000
shares.

5.  54,514,041  shares  were  voted  in  favor  of amending our Certificate  of
Incorporation  to increase the number of authorized  shares  of  "blank  check"
preferred stock,  par  value  $.001  per  share, of the Company from 10,000,000
shares to 25,000,000 shares.

6.   54,514,041  shares  were voted in favor of  amending  our  Certificate  of
Incorporation to effect a  reverse  stock  split  of  the issued an outstanding
shares  of common stock of the Company at a ratio of either  one-for-two,  one-
for-five,  one-for-ten, one-for-twenty, as determined by the Board of Directors
to be in the  best  interests  of  the  Company  without  further approval from
stockholders.


                                    PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET FOR COMMON EQUITY

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

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

COMMON STOCK



Date              Low      High
-----            ------  -------
2007
====
First  Quarter   $ 1.76  $  0.40
                 ------  -------
Second  Quarter* $ 0.51  $  0.35
                 ------  -------
2006
====
First  Quarter   $ 4.10  $  0.90
                 ------  -------
Second  Quarter  $ 4.00  $  1.26
                 ------  -------
Third  Quarter   $ 3.98  $  1.16
                 ------  -------
Fourth  Quarter  $ 2.80  $  1.34
                 ------  -------
2005
====
First  Quarter   $ 4.80  $  1.44
                 ------  -------
Second  Quarter* $ 2.40  $  1.00
                 ------  -------
Third  Quarter   $ 2.00  $  0.80
                 ------  -------
Fourth  Quarter  $ 4.00  $  0.40
                 ------  -------
2004
=====
First  Quarter   $11.00  $  6.00
                 ------  -------
Second  Quarter  $ 9.40  $  4.60
                 ------  -------
Third  Quarter   $ 7.00  $  1.80
                 ------  -------
Fourth  Quarter  $ 5.20  $  1.80
---------------  ------  -------


*Through January 11, 2007

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

As  of  January  12,  2007,  the  Company  had 4,914,365 shares of common stock
outstanding,  with  approximately  1,  450,000  in   the   public   float   and
approximately 2,110 shareholders of record.

DIVIDENDS

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

DESCRIPTION OF SECURITIES

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

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

PREFERRED STOCK

At  September  30,  2006, the Company had three series of convertible preferred
stock: B, C and D. Series  B  Preferred Stock has no voting rights, is entitled
to receive cumulative dividends  in  preference  to  any dividend on the common
stock at a rate of 10% per share, per year, to be issued  if  and when declared
by the Board of Directors and can be converted at any time into common stock on
a one for five basis. In the event of any liquidation, the holders of shares of
Series  B  Preferred  Stock  then outstanding shall be entitled to  receive  an
amount equal to the purchase price  per share, plus an amount equal to declared
but  unpaid  dividends thereon, if any,  to  the  date  of  payment.  Series  C
Preferred Stock  has  no  voting  rights,  is  entitled  to  receive cumulative
dividends in preference to any dividend on the common stock at  a  rate  of 10%
per  share,  per  year,  to  be  issued  if  and  when declared by the Board of
Directors and can be converted at any time into common  stock  on a one for one
basis.  In  the  event  of any liquidation, the holders of shares of  Series  C
Preferred Stock then outstanding  shall  be entitled to receive an amount equal
to the purchase price per share, plus an amount  equal  to  declared but unpaid
dividends thereon, if any, to the date of payment. Series D Preferred Stock has
no voting rights, no dividends and can be converted at any time to common stock
on a one for one basis. In the event of any liquidation, the  holder  of shares
of  Series  C Preferred Stock then outstanding shall be entitled to receive  an
amount equal  to  the  purchase  price  per  share.  With  respect to rights on
liquidation, Series B, C and D Preferred Stock shall rank senior  to the common
stock  but  Series  C  Preferred Stock shall be senior to both Series B  and  D
Preferred Stock while Series D Preferred Stock shall be junior to both Series B
and C Preferred Stock. The  Board  of  Directors has not declared any dividends
for any of the series of convertible preferred stock.

EQUITY COMPENSATION PLAN

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

The following table  shows information with respect to each equity compensation
plan under which our common  stock  is authorized for issuance as of the fiscal
year ended September 30, 2006.

                     EQUITY COMPENSATION PLAN INFORMATION




Plan category           NUMBER OF    WEIGHTED        NUMBER OF SECURITIES
                        SECURITIES   AVERAGE       REMAINING AVAILABLE PLANS
                       TO BE ISSUED  EXERCISE         FOR FUTURE ISSUANCE
                           UPON      PRICE OF            UNDER EQUITY
                       EXERCISE OF OUTSTANDING           COMPENSATION
                       OUTSTANDING   OPTIONS,     PLANS (EXCLUDING SECURITIES
                         OPTIONS,  WARRANTS AND          REFLECTED IN
                       WARRANTS AND   RIGHTS              COLUMN (A)
                          RIGHTS
                       ------------ -----------   ----------------------------
                           (A)         (B)                  (C)
EQUITY COMPENSATION        -0-         -0-                  -0-
PLANS APPROVED BY
SECURITY HOLDERS

EQUITY COMPENSATION        -0-         -0-                  -0-
PLANS NOT APPROVED BY
SECURITY HOLDERS
                       ------------ -----------   ----------------------------
TOTAL                      -0-         -0-                  -0-
                       ------------ -----------   ----------------------------

RECENT ISSUANCES OF UNREGISTERED SECURITIES


On January 24, 2006, the Company issued 4,000,000 shares of Series C Preferred
Stock in lieu of cash payment.


(A) COMMON STOCK:

During the three months ended December  31,  2005,  the  Company issued 750,000
shares  of  common  stock  in  lieu  of  compensation for legal and  consulting
services performed. The value of the legal  and  consulting  services performed
totaled approximately $42,500, which was computed based upon the  market prices
of the common stock on the applicable payment dates.

During  the  three  months  ended December 31, 2005, the Company issued  25,000
shares  of  common stock in lieu  of  compensation,  salaries  and  bonuses  to
employees.  Total   value   of  the  compensation,  salaries  and  bonuses  was
approximately $1,250, which was  computed  based  upon the market prices of the
common stock on the applicable payment dates.

During  the three months ended December 31, 2005, the  Company  issued  810,000
shares of common stock pursuant to its private placement memorandum in exchange
for $198,000 in cash.

During the  three  months ended December 31, 2005, the Company issued 1,495,269
shares of common stock to convert $89,669 in liabilities.

On May 19, 2006, the  Company  issued  1,000,000 shares of the Company's common
stock, $0.001 par value per share, to Media  City  Teleproductions  as  partial
consideration  of  the  purchase  price to be paid pursuant to a certain Letter
Agreement of equal date entered into  by  the Company and MCT for the Company's
purchase of Media City Studios.

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

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

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

INTRODUCTION

PLAN OF OPERATION

As of September 30, 2006, ValCom, Inc. operations were comprised of the
following divisions:

1. Studio Division

2. Rental Division

3. Broadcast Television

4. Film and Television Production; and Animation Division.

5. Live Theater

RENTAL

ValCom's business includes  television  production  for network and syndication
programming,  motion pictures, and real estate holdings,  however,  revenue  is
primarily generated  through  the  lease  of  the  sound stages and production.
ValCom's  past and present clients in addition to Paramount  Pictures  and  Don
Belisarious  Productions, include Warner Brothers, Universal Studios, MGM, HBO,
NBC, 20th Century  Fox,  Disney,  CBS,  Sony, Showtime, and the USA Network. In
addition to leasing its sound stages, ValCom  also  owns  a  small  library  of
television content, which is ready for worldwide distribution and several major
television  series  in advanced stages of development. ValCom's Studio Division
is composed of two properties:  920 South Commerce which is leased and 41 North
Mojave which ValCom has 1/3 equity  in  the  real  estate of 7.5 acres, 160,000
square feet of commercial space, giving ValCom a total  of 9 sound stages and a
recording studio. Corporate offices are located at the Commerce  Studios  which
houses  a  state-of-the  art production studio, broadcast facilities, recording
studios, production design construction, animation and post-production.

TELEVISION, FILM, & ANIMATION PRODUCTION

Jeff Franklin, Executive Producer  of  "Funny Money" and founder of FWE Picture
Company  began his entertainment career in  the  music  industry  managing  the
careers of music icons George Clinton and Marvin Gaye.  Franklin recently began
working with  Stan  Lee  on  two new pictures, including "Light Speed" and "The
Harpy."  Cumulatively, theatrical  features  that  Franklin  has  produced  and
executive  produced,  such  as "Casper," "Kull-The Conquerer," "Cold Around the
Heart," "Stuart Little" and "Stuart  Little  2,"  have grossed over one billion
dollars.   Franklin  has  also  produced many television  series,  as  well  as
producing on and off-Broadway.

Stan Lee, chairman and chief creative  officer  of  POW!,  is  the  creator and
inventor  of  the  modern superhero. A prolific author, Lee revolutionized  the
comic  book  industry   by   creating   compelling   characters   who,  despite
extraordinary  powers  and talents, are nonetheless plagued by the same  doubts
and difficulties experienced  by  ordinary  people.  Some  of his most enduring
characters,  like  Spider-Man{trademark},  The  Hulk{trademark},   and  the  X-
Men{trademark}, have spun off into television programs and feature films

October  1,  2003,  we  formed  New  Zoo  Revue LLC pursuant to a joint venture
agreement with O Atlas Enterprises Inc.,a California corporation. New Zoo Revue
LLC was formed for the development and production  of "New Zoo Revue" a feature
film  and television series and marketing of existing  episodes.  ValCom  shall
contribute  all  funding required for the development of the above to a maximum
of $1,000,000 and O Atlas shall contribute an exclusive ten (10) year worldwide
license in and to  all  rights,  music and characters as its equal contribution
towards Capital. The net profit after  all  expenses  will be shared equally by
ValCom Inc. and O Atlas. New Zoo Review LLC is expected  to generate revenue by
2005 and expected to grow based on our ability to sell the TV Series of New Zoo
Revue.

CHANNEL 8 IN PALM SPRINGS, CALIFORNIA

In connection with our joint venture with New Global Communications,  Inc.,  we
own  a  45%  equity  interest  in  ValCom Broadcasting, LLC, a New York limited
liability company, which operates KVPS  (Channel  8), an independent television
broadcaster in the Palm Springs, California market.

VALCOM BURBANK STUDIOS, one of Burbank's television production facilities, with
three  edit bays, two sound stages and over 25,000 square  feet  of  production
support  was recently acquired by ValCom, Inc. The Burbank Studios was the home
of 'Jeopardy'  and  the  'Wheel  of  Fortune' post production for many years in
addition to a past client base consisting  of:  HGTV,  D.I.V., History Channel,
Discovery,  Food  Network, Sony Pictures T.V., PAX, MTV, Disney  Channel,  HBO,
ABC, CBS, NBC, Sci  Fi,  GSN,  Comedy  Central, VH-1, FOX Television, Lifetime,
over a period of 12 years.

RESULTS OF OPERATIONS

FISCAL YEAR ENDED SEPT. 30, 2006 COMPARED TO FISCAL YEAR ENDED SEP. 30, 2005

Revenues  for  the  year  ended September 30, 2006 increased by $2,472,171 from
$930,107 for the same period in 2005 to $3,402,278 for the year ended September
30, 2006. The increase in revenue was principally due to increase in production
revenue.

Production costs for the year  ended September 30, 2006 increased by $2,608,462
or 60% from $430,082 for the year  ended  September  30, 2005 to $3,038,544 for
the same period in 2006. The increase in production costs  was  principally due
to increased production.

Selling and promotion costs for the year ended September 30, 2006  increased by
$892,469or  2503.77%  from $35,645 for the same period in 2005 to $928,114  for
the  year ended September  30,  2006.  The  increase  was  due  principally  to
production increases, requisitions and acquisitions of new entities.

Depreciation  and  amortization  expense  for the year ended September 30, 2006
decreased by $11,989 or 13.03% from $92,001  for  the  year ended September 30,
2005 to $80,012 for the same period in 2006. The decrease  in  depreciation and
amortization expense was due to ending of asset cycle.

General  and  administrative  expenses  for the year ended September  30,  2006
increased by $938,813 or 98% from $955,690  for  the  year  ended September 30,
2005  to  $1,894,503  for  the  same  period  in  2006.  The increase  was  due
principally to increased production.

Consulting  and  professional  fees  for  the  year  ended September  30,  2006
decreased by $66,552 or by 95.11% from $1,301,907 for  the year ended September
30, 2005 to $1,235,355 for the same period in 2006. The  decrease in consulting
and professional fees was principally due to increased control by management of
these expenses.

Bad debt expense for the year ended September 30, 2006 decrease  by  $39,536 or
66.7% from the year ended September 30, 2005 to $19,757 for the same period  in
2006.

Interest  expense for the year ended September 30, 2006 increased by $26,766 or
52% from $51,567  for the year ended September 30, 2005 to $78,328 for the same
period in 2006. The  increase  was  due  principally to new acquisitions of the
Burbank Studios.

Due  to  the  factors  described above, the Company's  net  loss  increased  by
$2,711,434 or 148.95% from  a  net  loss  of  $1,820,022  for  the  year  ended
September  30,  2005  to  a loss of $4,531,472 for the year ended September 30,
2006.

STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE

See Notes to Consolidated Financial Statements in Part F/S for a description of
the Company's calculation of earnings per share.

LIQUIDITY AND CAPITAL RESOURCES

The Company's consolidated  financial  statements  have  been prepared assuming
that  the  Company  will  continue  as  a  going concern. As discussed  in  the
consolidated financial statements, the Company has a net loss of $4,531,476 and
a negative cash flow from operations of $2,719,429 for the year ended September
30,  2006, and an accumulated deficit of $14,876,826  at  September  30,  2006.
These  conditions  raise  substantial  doubt  about  the  Company's  ability to
continue  as  a  going  concern.  Cash  totaled  $52,807 on September 30, 2006,
compared to $276,280 at September 30, 2005. During  the  fiscal  year 2006, net
cash  used  by  operating activities totaled $2,719,429 compared to a  negative
cash flow of $52,734  for  the  year  ended  September  30, 2005. A significant
portion  of  operating  activities included payments for accounting  and  legal
fees, consulting fees, salaries,  and  rent.  Net  cash  increase  by financing
activities for fiscal year 2006 totaled $3,074,303. Net cash used by  investing
activities  during  fiscal  year  2006  totaled $578,346 from purchase of fixed
assets and increased expenditures for the purchase of equipment.

The above cash flow activities yielded a  net  cash decrease of $223,472 during
fiscal  year  2006  compared to a increase of $10,363  during  the  year  ended
September 30, 2005.

There can be no assurance  that  the  Company  will be able to raise capital on
terms  acceptable  to  the  Company,  if  at  all. Total  shareholders'  equity
decreased  to  $(788,782)in  fiscal  year  2006.  Additional  paid  in  capital
increased to $13,993,462 in fiscal year ended September 30, 2006.

                  INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY

During the last fiscal year, the Company financed its operations with cash from
its operating activities and through  sales  of equipment and private offerings
of its securities to a director of the Company.

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

                          FUTURE FUNDING REQUIREMENTS

The   Company's  capital  requirements  have  been  and  will  continue  to  be
significant.  The  Company's adequacy of available funds during the next fiscal
year and thereafter  will depend on many factors, including whether the Company
will be able to: (1) retain  its  existing  tenants  (2)  rent  its  production
equipment   and  personnel  profitably,  (3)  develop  additional  distribution
channels for  its  programming.  Assuming  funds are available, during the next
fiscal  year,  the  Company  expects  to  spend approximately  $1,000,000.  for
facility,  equipment  and growth. There can be  no  assurance  that  additional
private or public financing,  including  debt  or  equity  financing,  will  be
available  as  needed, or, if available, on terms favorable to the Company. Any
additional equity financing may be dilutive to stockholders and such additional
equity securities may have rights, preferences or privileges that are senior to
those of the Company's  existing  common  or preferred stock. Furthermore, debt
financing,  if available, will require payment  of  interest  and  may  involve
restrictive  covenants   that   could   impose  limitations  on  the  operating
flexibility  of  the  Company. The Company's  failure  to  successfully  obtain
additional future funding  may  jeopardize its ability to continue its business
and operations.
<PAGE>

ITEM 7. FINANCIAL STATEMENTS AND SUMMARY FINANCIAL DATA



                             FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                        VALCOM, INC. AND SUBSIDIARIES
                         Consolidated Balance Sheets

<S>   <C>   <C>
                                        ASSETS

                                            As of                   As of
                                        September 30,           September 30,
                                            2006                    2005
                                        ------------            -------------


CURRENT ASSETS
   Cash                                 $     52,807            $     276,280
   Accounts receivable, net                  432,813                   87,620
   Prepaid expenses                           40,000                        -
   Notes receivable                          449,000                        -
                                        ------------            -------------

     Total Current Assets                    974,620                  363,899

NET PROPERTY & EQUIPMENT                     673,678                   95,422

OTHER ASSETS
   Deposits                                  108,350                    8,350
   Other assets                            1,150,000                1,150,000
                                        ------------            -------------
     Total Other Assets                    1,258,350                1,158,350
                                        ------------            -------------
        TOTAL ASSETS                    $  2,906,738            $   1,617,672
                                        ============            =============
<S>
</TABLE>

<TABLE>
<CAPTION>
                        LIABILITIES AND STOCKHOLDERS' EQUITY
<S>   <C>   <C>

CURRENT LIABILITIES
   Accounts payable                     $    692,059             $    525,478
   Accrued interest                           68,172                   33,370
   Accrued expenses                          106,951                   20,000
   Deferred Income                            26,100                  120,000
   Due to related parties                  1,672,456                  267,955
   Notes payable                           1,129,782                  416,480
                                        ------------            -------------

     Total Current Liabilities             3,695,520                1,383,284

LIABILITIES SUBJECT TO COMPROMISE
    Mortgage payable                               -                       -
    Long term loans                                -                       -
                                        ------------            -------------

Total Liabilities subject
    to compromise                                  -                       -


TOTAL LIABILITIES                          3,695,520                1,383,284

STOCKHOLDERS' EQUITY
    Convertible preferred stock: all
      with par value of $0.001; shares
      authorized and outstanding as of
      September 30, 2006 and 2004 are
      as follow:
    Series B, 1,000,000 shares
      authorized; 38,000 shares issued
      and outstanding.                            38                       38
    Series C, 25,000,000 shares
      authorized; 9,267,416 and 6,517,416
      shares issued and outstanding as
      of September 30, 2006 and 2005,
      respectively.                            9,267                    6,517
    Series D, 1,250,000 shares
      authorized;  -0- and 1,250,000
      shares issued and outstanding as
      of  September 30, 2005 and 2004,
      respectively.
   Common stock ($0.001 par value,
      100,000,000 shares authorized;
      85,312,064 and 41,884,000 shares
      issued and  outstanding as of
      September 30, 2006 and 2005,
      respectively)                           85,312                   41,884
   Treasury stock                                (35)                     (35)
   Minority Interest                               -                        -
   Additional paid-in capital             13,993,462               10,531,335
   Retained (deficit)                    (14,876,826)             (10,345,312)
                                        ------------            -------------

     Total Stockholders' Equity             (788,782)                 234,389


TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY                    $  2,906,738            $   1,617,672
                                        ============            =============


See accompanying notes to financial statements.
<S>
</TABLE>


<TABLE>
<CAPTION>
                           VALCOM, INC. AND SUBSIDIARIES
                        Consolidated Statements of Operations
<S>   <C>   <C>


                                         Year Ended              Year Ended
                                        September 30,           September 30,
                                            2006                    2005
                                        -------------           ------------

REVENUES
 Rental income                          $     708,588           $    377,931
 Production income                          2,669,118                548,582
 Other income                                  23,439                  3,594
                                        -------------           ------------
Total Revenues                              3,402,278                930,108

COSTS AND EXPENSES
 Production                                 3,038,544                430,082
 Selling and promotion                        928,114                 35,645
 Depreciation and amortization                 80,012                 92,001
 General and administrative                 1,894,503                955,690
 Consulting and professional fees           1,235,355              1,301,907
 Bad debts                                     19,757                 59,293
                                        -------------           ------------

Total Costs and Expenses                    7,196,285              2,874,618
                                        -------------           ------------


OPERATING LOSS                             (3,794,007)            (1,944,510)

OTHER INCOME & (EXPENSES)

 Interest expense                             (78,328)              ( 51,562)
 Other expense                               (703,432)                     -
 Gain on sale of assets                             -                176,051
 Interest Income                                    -                      -
 Other income                                  44,291                      -
                                        -------------           ------------

Total Other Income & (Expenses)              (737,469)               124,489
                                        -------------           ------------


NET LOSS                                $  (4,531,476)          $ (1,820,021)
                                        =============           ============

BASIC AND DILUTED
EARNINGS (LOSS) PER SHARE

BASIC AND DILUTED
EARNINGS (LOSS) PER SHARE               $       (0.06)          $     (0.05)
                                        =============           ===========

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                 49,376,756            36,257,129
                                        =============           ===========

See accompanying notes to financial statements.
<S>
</TABLE>

<TABLE>
<CAPTION>

<S><C><C><C>

                                        VALCOM INC. AND SUBSIDIARIES
                                Consolidated Statement of Stockholders' Equity
                                From October 1, 2003 through September 30, 2006


                                                                                                    Series C - Preferred
                             Preferred Series B      Preferred Series C        Preferred Series D      Stock to be issued
                             Shares      Amount      Shares      Amount        Shares      Amount      Shares      Amount
			     ------	 ------	     ----------	 ------	     ----------	 ----------    ------	   ------
Balance
October 1, 2003              38,000          38       1,480,000   1,480       1,250,000       1,250         -           -

Intercompany transfer
 of assets and discontinue
 subsidiary   ***

Shares issued for services

Shares issued for debt
 retirement

Private Placement Memorandum

Conversion of preferred
 stock                           	      	      2,999,999   3,000      (1,250,000)     (1,250)

Less treasury stock

Net Loss
			     ------	 ------	     ----------	 ------	     ----------	 ----------    ------	   ------
Balance
September 30, 2004           38,000          38       4,479,999   4,480              -            -	    -	        -

Shares issued for services

Private Placement Memorandum

Preferred stock issued for
 cash, net                                            2,537,417   2,537

Conversion to common                                   (500,000)   (500)

Net Loss                                                                     		 (1,820,021)
			     ------	 ------	     ----------	 ------	     ----------	 ----------    ------	   ------
Balance
September 30, 2005           38,000          38       6,517,416   6,517               -       	  -         -           -

Preferred Stock issued
 for services                     		      4,000,000   4,000

Shares issued for services

Shares issued for notes
 and settlements

Notes conversions to stock                           (1,250,000) (1,250)

Net Loss
			     ------	 ------	     ----------	 ------	     ----------	 ----------    ------	   ------
Balance
September 30, 2006           38,000          38       9,267,416   9,267               -       	  -         -           -
			     ======	 ======	     ==========  ======	     ==========  ==========    ======	   ======

See accompanying notes to financial statements.
</TABLE>

<TABLE>
<CAPTION>

<S><C><C><C>

                                        VALCOM INC. AND SUBSIDIARIES
                                Consolidated Statement of Stockholders' Equity
                                From October 1, 2003 through September 30, 2006
						   (Continued)


								Additional
					 Common           	 Paid-in    	Treasury        Retained
				 Shares         Amount   	 Capital      	Stock       	Earnings        Total
				 ----------	------		----------	--------	-----------	----------

Balance
October 1, 2003                  12,925,833     12,926  	13,108,874             -        (10,423,007)     2,701,562

Intercompany transfer of
 assets and discontinue
 subsidiary   ***						(8,207,252)                       7,827,392       (379,860)

Shares issued for services	  9,248,617      9,849    	 2,230,574                                       2,240,423

Shares issued for debt
 retirement			  1,198,333        598      	   224,052                                         224,650

Private Placement Memorandum	  4,746,666      4,747    	 1,406,526                                       1,411,273

Conversion of preferred
 stock														     1,750

Less treasury stock								     (35)                              (35)

Net Loss											 (5,929,714)    (5,929,714)
				 ----------	------		----------	--------	-----------	----------
Balance
September 30, 2004               28,119,449     28,120  	 8,762,774           (35)        (8,525,329)       270,049

Shares issued for services	  7,139,268      7,139    	 1,286,344                                       1,293,483

Private Placement Memorandum	  6,125,000      6,125      	   348,875                                         355,000

Preferred stock issued for
  cash, net													     2,537

Conversion to common		    500,000        500                                                           	 -

Net Loss			 (1,820,021)
				 ----------	------		----------	--------	-----------	----------
Balance
September 30, 2005		 41,883,717     41,884  	10,397,993           (35)       (10,345,350)       101,047

Preferred Stock issued
 for services							   196,000                                         200,000

Shares issued for services	  5,924,575      5,925     	   534,783                                         540,708

Shares issued for notes
 and settlements		 33,948,503     33,949     	 2,579,321                                       2,613,270

Notes conversions to stock	  2,745,269      2,745        	    88,174                                          88,669

Net Loss											 (4,531,476)    (4,531,476)
				 ----------	------		----------	--------	-----------	----------
Balance
September 30, 2006		 85,312,064     85,312   	13,993,462           (35)       (14,876,826)      (788,781)
				 ==========	======		==========	========	===========	==========

See accompanying notes to financial statements.

</TABLE>



<TABLE>
<CAPTION>

 						VALCOM, INC.
 				   Consolidated Statements of Cash Flows

<S> <C> <C>

							 Year Ended			 Year Ended
							September 30,			September 30,
							    2005			    2006
							-------------                   -------------


CASH FLOWS FROM OPERATING ACTIVITIES

   Net (loss)                                           $  (1,820,021)			$   (1,820,021)
   Adjustments to reconcile net loss to net
    cash (used in) provided
    by operating activities:
   Depreciation expense                                        92,001				92,001
   Beneficial interest                                              -			     	     -
   Stock issued for compensation                                    -			     	     -
   Stock issued for services                                1,293,483		     	     1,293,483
   Investment write off                                             -			     	     -
   Changes in operating assets and liabilities:
   Receivables                                                (58,853)		       	       (58,853)
   Production in Progress                                      91,201				91,201
   Deposits                                                    32,281				32,281
   Deferred compensation                                            -			     	     -
   Deferred interest                                                -		 	     	     -
   Accounts payable and accrued expenses                       82,798				82,798
                                                        -------------		 	 -------------
    Net Cash Provided by (Used in)
        Operating Activities                                 (287,110)		              (287,110)

CASH FLOWS FROM INVESTING ACTIVITIES

   Proceeds from sale of fixed assets                          55,432				55,432
                                                        -------------		   	 -------------
    Net Cash Provided by (Used in)
        Investing Activities                                   55,432				55,432

CASH FLOWS FROM FINANCING ACTIVITIES

  Principal repayment of notes payable                              -			     	     -
  Preferred stock issued for cash                               2,537			 	 2,537
  Common tock issued for cash                                 355,000		               355,000
  Principal borrowings on notes                               (39,002)		               (39,002)
  Net borrowings from related parties                         167,955		               167,955
                                                        -------------		 	 -------------
    Net Cash Provided by (Used in)
        Financing Activities                                  486,490		               486,490
                                                        -------------		 	 -------------
    Net Increase (Decrease) in Cash                           254,812		               254,812

  Cash at Beginning of Year                                    21,468				21,468
                                                        -------------		 	 -------------

  Cash at End of Year                                   $     276,280			 $     276,280
                                                        =============			 =============
  Supplemental  Cash Flow Disclosures:

  Cash paid during period for interest                  $           -			 $           -
                                                        =============			 =============
  Cash paid during period for taxes                     $         800			 $         800
                                                        =============			 =============

<S>
</TABLE>

See accompanying notes to VALCOM, INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



AS OF SEPTEMBER 30, 2006


NOTE 1. DESCRIPTION OF BUSINESS

ValCom's business includes television  production  for  network and syndication
programming,  motion  pictures, and real estate holdings, however,  revenue  is
primarily generated through  the  lease  of  the  sound  stages and production.
ValCom's  past and present clients in addition to Paramount  Pictures  and  Don
Belisarious  Productions, include Warner Brothers, Universal Studios, MGM, HBO,
NBC, 20th Century  Fox,  Disney,  CBS,  Sony, Showtime, and the USA Network. In
addition to leasing its sound stages, ValCom  also  owns  a  small  library  of
television content, which is ready for worldwide distribution and several major
television  series  in advanced stages of development. ValCom's Studio Division
is composed of two properties:  920 South Commerce which is leased and 41 North
Mojave which ValCom has 1/3 equity  in  the  real  estate of 7.5 acres, 160,000
square feet of commercial space, giving ValCom a total  of 9 sound stages and a
recording studio. Corporate offices are located at the Commerce  Studios  which
houses  a  state-of-the  art production studio, broadcast facilities, recording
studios, production design construction, animation and post-production.

VALCOM BURBANK STUDIOS, assets  were  purchased on May 19, 2006 from Media City
Teleproductions("MCT") pursuant to which  parties expressed their intention and
set  forth  the  principal  terms for the Company's  purchase  of  Media   City
Studios,  including  certain equipment  and  facilities  contained therein (the
"Studio") such as all  studio   production  equipment.  ValCom Burbank Studios,
one of Burbank's finest television production facilities, with three edit bays,
two sound stages and over 25,000 square feet of production support was recently
acquired by ValCom, Inc.  The Burbank Studios was the home  of  'Jeopardy'  and
the  'Wheel  of  Fortune'  post production for many years in addition to a past
client  base consisting of: HGTV,  D.I.V.,  History  Channel,  Discovery,  Food
Network,  Sony Pictures T.V., PAX, MTV, Disney Channel, HBO, ABC, CBS, NBC, Sci
Fi, GSN, Comedy  Central,  VH-1,  FOX Television, Lifetime, over a period of 12
years

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Following is a summary of the significant  accounting  policies followed in the
preparation of these consolidated financial statements,  which  policies are in
accordance  with accounting principles generally accepted in the United  States
of America.

a. BASIS OF PRESENTATION

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

b. PRINCIPLES OF CONSOLIDATION

The consolidated financial  statements include the accounts of Valcom, Inc. and
four two wholly-owned subsidiaries,  VEI, which was acquired effective February
2001, and Half Day Video, Inc., which was acquired effective March 2001. ValCom
Nevada which was acquired effective March  1, 2004, and New Zoo Revue which was
acquired effective October 2003. Investments in affiliated companies over which
the Company has a significant influence or ownership  of more than 20% but less
than or equal to 50% are accounted for under the equity method.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

c. USE OF ESTIMATES

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

d. FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of financial accounting standard  No.  107,  Disclosures  about  fair
value  of  financial  instruments, requires that the Company disclose estimated
fair values of financial  instruments.  The  carrying  amounts  reported in the
statements  of  financial  position  for current assets and current liabilities
qualifying, as financial instruments are a reasonable estimate of fair value.

e. DEPRECIATION AND AMORTIZATION

For  financial  and reporting purposes,  the  Company  follows  the  policy  of
providing depreciation  and  amortization  on the straight-line method over the
estimated useful lives of the assets, which are as follows:


Building                       39 years
-------------------------  ------------
Building Improvements          39 years
-------------------------  ------------
Production Equipment            5 years
                           ------------
Office Furniture & Equip.  5 to 7 years
                           ------------
Leasehold Improvements          5 years
                           ------------
Autos and Trucks                5 years
-------------------------  ------------


f. RECLASSIFICATIONS

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

g. INCOME TAXES

Deferred income tax assets or liabilities are  computed based on the difference
between the financial reporting and income tax basis  of assets and liabilities
using the enacted marginal tax rate. Deferred income tax  expenses  or benefits
are based on the changes in the asset or liability from period to period.

h. STOCK-BASED COMPENSATION

The Company accounts for its stock-based employee compensation plans  using the
intrinsic value based method, under which compensation cost is measured  as the
excess  of  the  stock's  market  price  at  the  grant date over the amount an
employee must pay to acquire the stock.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

i. REVENUE RECOGNITION

Revenues  from  studio and equipment rentals are recognized  ratably  over  the
contract terms. Revenues  from  the  production  and  licensing  of  television
programming are recognized when the films or series are available for  telecast
and   certain  contractual  terms  of  the  related  production  and  licensing
agreements have been met.

j. TREASURY STOCK

Treasury stock is accounted for by the cost method. Issuance of treasury shares
is accounted  for  on a first in, first-out basis. Differences between the cost
of treasury shares and the re-issuance proceeds are charged to additional paid-
in capital, if reissued.  During July 2002, the Company purchased 35,000 shares
of its common stock at a total cost of $23,522. No shares have been reissued as
of September 30, 2005. In September 2004, the Company retired these shares back
into the treasury.

k. NEW ACCOUNTING PRONOUNCEMENTS

In November 2004, the Financial  Accounting  Standards Board (FASB) issued SFAS
151, Inventory Costs - an amendment of ARB No.  43,  Chapter  4. This Statement
amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing,"  to  clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs,  and  wasted  material  (spoilage).  Paragraph  5  of ARB 43, Chapter 4,
previously stated that "{ellipsis} under some circumstances, items such as idle
facility expense, excessive spoilage, double freight, and re-handling costs may
be  so  abnormal  as  to require treatment as current period charges{ellipsis}"
This Statement requires  that  those  items  be  recognized  as  current-period
charges  regardless  of  whether  they meet the criterion of "so abnormal."  In
addition, this Statement requires that allocation of fixed production overheads
to the costs of conversion be based  on  the  normal capacity of the production
facilities.  This Statement is effective for inventory  costs  incurred  during
fiscal years beginning  after  June  15,  2005. Management does not believe the
adoption  of  this Statement will have any immediate  material  impact  on  the
Company.

On  December 16,  2004,  the  Financial  Accounting  Standards  Board  ("FASB")
published  Statement  of Financial Accounting Standards No. 123 (Revised 2004),
Shared-Based Payment ("SFAS  123R).  SFAS  123R requires that compensation cost
related to share-based payment transactions  be  recognized  in  the  financial
statements.  Share-based  payment  transactions  within  the scope of SFAS 123R
include stock options, restricted stock plans, performance-based  awards, stock
appreciation rights, and employee share purchase plans. The provisions  of SFAS
123R  are  effective as of the first interim period that begins after June  15,
2005. Accordingly, the Company will implement the revised standard in the third
quarter of fiscal  year  2005.  Currently,  the Company accounts for its share-
based payment transactions under the provisions  of  APB  25,  which  does  not
necessarily  require  the  recognition  of  compensation  cost in the financial
statements.  The  Company does not anticipate that the implementation  of  this
standard will have  a  material  impact  on  its financial position, results of
operations or cash flows.

On December 16, 2004, FASB issued Statement of  Financial  Accounting Standards
No. 153, Exchanges of Non-monetary Assets, an amendment of APB  Opinion No. 29,
Accounting  for  Non-monetary transactions ("SFAS 153"). This statement  amends
APB Opinion 29 to  eliminate the exception for no monetary exchanges of similar
productive assets and  replaces  it with a general exception of exchanges of no
monetary assets that do not have commercial  substance. Under SFAS 153, if a no
monetary  exchange of similar productive assets  meets  a  commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value  resulting  in  recognition  of  any  gain  or  loss. SFAS 153 is
effective for non-monetary transactions in fiscal periods that begin after June
15,  2005.  The  Company  does not anticipate that the implementation  of  this
standard will have a material  impact  on  its  financial  position, results of
operations or cash flows.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:


                                September     September
                                 30,2006      30, 2005
                               ----------  ------------
Land                           $       -     $        -
Building                               -              -
Building Improvements              4,500          4,500
Production Equipment             723,094         68,708
Leasehold Improvements            62,677         62,677
Autos and Trucks                  33,971         33,971
Office Furniture and Equipment    48,421         44,814
Video Equipment                  181,877        181,877
                               ----------   -----------
                               1,054,540        396,547
Less: accumulated depreciation  (380,772)      (301,125)
                                ----------  -----------
Net book value . . . . . . .    $673,768     $   95,422
                              ==========    ===========


Depreciation expense for the years ended September 30, 2006 and 2005 was
$80,012 and $92,001, respectively.

NOTE 4. CONVERTIBLE NOTES PAYABLE

The  following are convertible notes issued in 2004. All of these  notes  incur
interest  at  8%  per  annum with different due dates. All related interest has
been accrued and reflected in the financial statements. Four of following eight
notes were converted common  shares  of the Company's stock subsequent to year-
end.


1. Richard Shintaku        30,000
                         --------
2. AJW Partner             40,000
                         --------
3. AJW Partner             85,000
                         --------
4. AJW Qualified          110,000
                         --------
5. AJW Off Shore           92,500
                         --------
6. Jeff Gleckman           11,500
                         --------
7. Condor Financial        39,980
                         --------
8. New Millenium Capital    7,500
                         --------
                         $416,480
                         ========

NOTE 5. RELATED PARTY TRANSACTIONS

At  September 30, 2005, related party payables  represent  $267,955  due  to  a
Director and Shareholder of the Company.

At September  30,  2006, related party payables represent $1,672,456 due to the
President of the Company for his salary and various advances to the Company.

NOTE 6. TREASURY STOCK

Treasury stock is accounted for by the cost method. Issuance of treasury shares
is accounted for on  a  first-in, first-out basis. Differences between the cost
of treasury shares and the re-issuance proceeds are charged to additional paid-
in capital, if reissued.

NOTE 7. INCOME TAXES

No provision for Federal  and  state  income  taxes  has  been  recorded as the
Company  has  incurred  net  operating  losses  through September 30, 2006.  At
September 30, 2006, the Company had approximately  $14,876,826 of net operating
loss  carry-forwards  for Federal income tax reporting  purposes  available  to
offset future taxable income.  Such  carry-forwards  expire  beginning in 2003.
Under  the  Tax  Reform  Act  of  1986,  the amounts of and benefits  from  net
operating losses and capital losses carried  forward may be impaired or limited
in certain circumstances. Events, which may cause  limitations in the amount of
net operating losses that the Company may utilize in any one year, include, but
are  not limited to, a cumulative ownership change of  more  than  50%  over  a
three-year period.

Deferred  tax  assets at September 30, 2006 consist primarily of the tax effect
of  net  operating   loss   carry-forwards,  which  amounted  to  approximately
$3,719,279. Other deferred tax  assets and liabilities are not significant. The
Company has provided a full valuation  allowance  on the deferred tax assets at
September 30, 2006 to reduce such deferred income tax  assets to zero, as it is
management's  belief that realization of such amounts is  not  considered  more
likely than not.

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


                                 September 30, 2006     September 30, 2006
                                 -------------------    ------------------
Tax expense (credit)
at  statutory rate-federal              (34)%                   (34)%
                                 -------------------    ------------------
State tax expense net of
federal tax                              (6)                     (6)
                                 -------------------    ------------------
Changes in valuation allowance           40                      40
                                 -------------------    ------------------
Tax  expense  at  actual  rate            -                       -
                                 -------------------    ------------------


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



                                 September 30, 2005     September 30, 2004
                                 -------------------    ------------------
Deferred tax asset
Net operating losses             $         3,719,279             2,586,338
                                 -------------------    ------------------
Less:  valuation allowance                (3,719,279)           (2,586,338)
                                 -------------------    ------------------
                                 $               -0-                   -0-
                                 -------------------    ------------------


NOTE 8. STOCKHOLDERS' EQUITY

a. EQUITY INVESTMENT

The Company accounts for its investments in companies  over  which  the Company
has significant influence or ownership of more than 20% but less than  or equal
to  50%  under  the  equity  method. The Company's 45% investment in a recently
acquired television station has  been  accounted for as an investment under the
equity method.

b. TREASURY STOCK

Treasury stock is accounted for by the cost method. Issuance of treasury shares
is accounted for on a first-in, first-out  basis.  Differences between the cost
of treasury shares and the re-issuance proceeds are charged to additional paid-
in capital, if reissued.

c. LOSS PER COMMON SHARE

Basic  loss  per  common  share is based on net loss divided  by  the  weighted
average number of common shares  outstanding. Common stock equivalents were not
included in the calculation of diluted  loss per share as their effect would be
anti-dilutive.

NOTE 9. COMMITMENTS

In May 2005, the Company leased facilities in Las Vegas Nevada. The lease has a
term of three years. Initial monthly base rent is $8,250 with no increases, and
the initial monthly base rent expense for  Burbank is $30,000. Rent expense for
the  year  ended  September  30,  2006  and 2005 were  $219,535  and  $159,905,
respectively.

FUTURE COMMITMENTS:


           Total          Las Vegas        Burbank

1      $ 517,080          $  99,000       $418,080
2        528,572             82,500        446,072
3        459,455                           459,455
4        473,238                           473,238
5        487,435                           487,435
----------------        -----------    -----------
Total   $459,531        $   181,500    $ 2,284,281
================        ===========    ===========


NOTE 10. STOCK ACTIVITY

a. CONVERTIBLE PREFERRED STOCK

At September 30, 2006 and 2005, the Company  had  three  series  of convertible
Preferred Stock: B, C and D. Series B Preferred Stock has no voting  rights, is
entitled to receive cumulative dividends in preference to any dividend  on  the
common  stock  at  a  rate of 10% per share, per year, to be issued if and when
declared by the Board of Directors and can be converted at any time into common
stock on a 1 for 5 basis.  In  the  event  of  any  liquidation, the holders of
shares  of  Series  B  Preferred Stock then outstanding shall  be  entitled  to
receive an amount equal  to  the purchase price per share, plus an amount equal
to declared but unpaid dividends  thereon,  if  any,  to  the  date of payment.
Series  C  Preferred  Stock  has  no  voting  rights,  is  entitled  to receive
cumulative  dividends  in preference to any dividend on the common stock  at  a
rate of 10% per share, per year, to be issued if and when declared by the Board
of Directors and can be  converted  at  any time into common stock on a 1 for 1
basis. In the event of any liquidation, the  holders  of  shares  of  Series  C
Preferred  Stock  then outstanding shall be entitled to receive an amount equal
to the purchase price  per  share,  plus an amount equal to declared but unpaid
dividends thereon, if any, to the date of payment. Series D Preferred Stock has
no voting rights, no dividends and can be converted at any time to common stock
on a 1 for 1 basis. In the event of any  liquidation,  the holders of shares of
Series  C  Preferred  Stock then outstanding shall be entitled  to  receive  an
amount equal to the purchase price per share.

With respect to rights  on liquidation, Series B, C and D Preferred Stock shall
rank senior to the common stock but Series C Preferred Stock shall be senior to
both Series B and D Preferred  Stock  while  Series  D Preferred Stock shall be
junior to both Series B and C Preferred Stock. The Board  of Directors declared
no dividends for any of the Series of convertible Preferred  Stock  during  the
fiscal year ended September 30, 2006.

b) WARRANTS

During the fiscal year ended September 30, 2003, the Company issued warrants to
purchase  2,083,334  shares  of  the  Company's  common  stock to a director in
connection  with  services  provided  and  to be provided to the  company.  The
weighted average exercise price for the warrants  issued  was $0.12, and all of
the warrants begin to expire in September 2005. No warrants  were exercised for
the period ending September 30, 2005.

NOTE 11. STOCK COMPENSATION PLAN AND NON-QUALIFIED STOCK OPTIONS

The Company has a 2001 Employee Stock Compensation Plan (the "ESCP") to enhance
its ability to attract, retain and compensate experienced employees,  officers,
directors  and  consultants. The effective date of the ESCP is January 2001.  A
total of 2,600,000  shares  of  common stock were registered for issuance under
the ESCP on three Form S-8 registration  statements  filed  January  16,  2001,
March  26,  2001  and  October 19, 2001. Pursuant to the ESCP, the Compensation
Committee or Board of Directors  may  award  registered shares of the Company's
common  stock  to  employees,  officers, directors  or  consultants  for  cash,
property,  services  rendered or other  form  of  payment  constituting  lawful
consideration. Plan shares  awarded  for  other than services rendered shall be
sold at not less than the fair market value on the date of grant.

During  the  fiscal  year  ended September 30,  2005,  the  Company  issued  an
aggregate  of  1,572,500  shares  of  registered  common  stock  to  employees,
officers, directors and consultants  pursuant to the ESCP. The expense recorded
during fiscal year 2005 under the ESCP  amounted  to  $151,722 and was based on
the closing trading price of the Company's common stock on the date granted.

NOTE 12. LITIGATION

On April 7, 2003, the Company filed on an emergency basis  a  voluntary Chapter
11  bankruptcy  petition.  The case is pending in the United States  Bankruptcy
Court, Central District of California,  San  Fernando  Valley Division, as Case
No. SV 03-12998-GM. As of December 31, 2003, the company  was  in compliance of
all its duties under the Bankruptcy Code and all applicable guidelines  of  the
Office of the United States Trustee.

The  Company  requires  the  use  of  its secured creditor's cash collateral to
operate. Throughout the pendency of this  case, the Company has worked with its
two real estate secured lenders, Finance Unlimited, LLC and Laurus Master Fund,
Limited on the details of cash collateral stipulation.  An  order  approving  a
global  interim  cash  collateral stipulation with Finance Unlimited and Laurus
was entered on August 26, 2003. This stipulation permitted the Company's use of
the lenders' cash collateral through December 31, 2003.

On  January  15,  2004, the  Court  approved  two  additional  cash  collateral
stipulations, one each  with  Finance  Unlimited  and  Laurus,  authorizing the
Company's  continued  use  of  cash  collateral through March 31, 2004  (Second
Interim Stipulation). The Second Interim  Stipulation  generally  grant Finance
Unlimited and Laurus relief from the automatic bankruptcy stay effective  March
31,  2004,  and the right to hold foreclosures sales on their real and personal
property collateral as early as April 1, 2004.

On June 26, 2003,  the  Company  filed  within its bankruptcy case an adversary
complaint  against  six  creditors for injunctive  relief  and  to  extend  the
protections of the automatic stay arising under section 362 of Bankruptcy Code.
Through  this  action, the Company  seeks  to  bar  temporarily  the  defendant
creditors from attempting to collect on their allowed claims from the Company's
key personnel.

BANKRUPTCY DISMISSAL

VEI filed a voluntary  chapter  11  bankruptcy  petition  on  April 7, 2003 and
obtained  the status of Debtor in Possession. After successfully  settling  the
debts owed  to  secured  creditors  through sale of property as per court order
dated June 3,2004 VEI applied to the  United  States  Bankruptcy Court, Central
District of California, San Fernando Valley Division for  a  Motion  to dismiss
Chapter 11 Bankruptcy case ("the Motion"). The Court on August 3, 2004,  having
considered  the  Motion  and  pleadings  filed in support thereof, having heard
argument  of  counsel,  finding that notice was  proper,  and  for  good  cause
appearing therefore, ordered  (1)  The  Motion  granted (2) Debtor's Chapter 11
bankruptcy case dismissed.

On October 5, 2004, Valcom, Inc. and Valencia Entertainment International, LLC,
commenced  a lawsuit in the Los Angeles Superior Court,  State  of  California,
against Chicago  Title  Company  and Laurus Master Fund, Ltd. The suit seeks an
accounting of the amount due in connection with a non-judicial foreclosure of a
deed of trust securing a promissory  note  executed  by Valcom and Valencia. It
also  alleges  that  Chicago  Title breached its trustee's  duties  and  Laurus
breached the terms of the promissory  note  and  deed  of  trust  securing  it.
Valcom's  attorney has expressed his belief that the lawsuit it meritorious but
at this stage  in  the proceeding, he is unable to state how much, if any, will
be recovered in the  lawsuit.   On  June 14, 2006, the defendants won a summary
judgment motion.  Valcom has filed for  a  new  trial and will vigorously fight
for the shareholders.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Armando C. Ibarra sold the firm to Park Lee, Certified  Public Accountants.  On
June 1, 2006 , the Registrant engaged Park Lee, Certified  Public  Accountants,
as  the  Registrant's  independent  accountants  to  report  on  the  Company's
consolidated   balance  sheet  as  of  September  30,  2006,  and  the  related
consolidated statements  of income, stockholders' equity and cash flows for the
year then ended. The decision to appoint Park Lee, Certified Public Accountants
was approved by the Registrant's Board of Directors.

The  Registrant  auditors, Armando  C.  Ibarra,  Certified  Public  Accountants
(herein after "Ibarra,") resigned effective June 1, 2006 due to the sale of the
business to Park Lee,  Certified  Public  Accountants.  Ibarra  served  as  the
Registrant's  independent  auditors'  for  the  Registrant's fiscal years ended
September  30,  2005  and  2004, as well through the  date  of  its  dismissal.
Ibarra's report on the Registrant's  consolidated  financial statements for the
registrant's  fiscal  year  September  30,  2005 and September  30,  2004  (the
"Reports") does not contain an adverse opinion or disclaimer of opinion and was
not  qualified  or  modified  as  to uncertainty,  audit  scope  or  accounting
principles,  however,  it was modified  to  include  an  explanatory  paragraph
wherein they expressed substantial  doubt  about  the  Registrant's  ability to
continue as a going concern.

During  the  Registrant's  association  with Ibarra as Registrant's independent
accountants until Ibarra's resignation, there were no disagreements with Ibarra
within the meaning of item 304 of regulation  S-B  or  any matter of accounting
principles or practices, financial disclosure, or auditing  scope or procedure,
which disagreements if not resolved to Ibarra's satisfaction, would have caused
Ibarra  to  make  reference  to  the  subject  matter  of the disagreements  in
connection with its reports.

ITEM 8A. CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures. Based  on  an evaluation
of  our  disclosure  controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Securities  Exchange  Act  of  1934,  as  amended) required by
paragraph  (b) of  Rule 13a-15 or Rule 15d-15, as of September  30,  2006,  our
Chief Executive Officer  and  Chief  Financial  Officer have concluded that our
disclosure controls and procedures were effective  in ensuring that information
required to be disclosed by us in the reports that we  file or submit under the
Exchange Act is recorded, processed, summarized and reported  within  the  time
periods  specified  in  the  Commission's  rules and forms. Our Chief Executive
Officer and Chief Financial Officer also concluded  that,  as  of September 30,
2006,  our  disclosure controls and procedures were effective in ensuring  that
information required  to  be  disclosed  by  us  in the reports that we file or
submit  under  the  Exchange  Act  is  accumulated  and  communicated   to  our
management,  including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure..

(b)  Changes in Internal Controls. During the quarter ended September 30, 2006,
there  were no  changes  in  our  internal  control  over  financial  reporting
identified  in connection with the evaluation required by paragraph (d) of Rule
13a-15 or Rule  15d-15 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

None

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

DIRECTORS AND EXECUTIVE OFFICERS

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


Name                  Age                Position                Since
-------------------  -----             -----------              --------
Vince Vellardita. .     49  CEO/President/Chairman of the Board   2000
Richard Shintaku. .     57  Director                              2003
Ian Adlington . . .     62  Director                              2006
Sandra Markham. . .     46  Secretary/Treasurer                   2005



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

BIOGRAPHIES OF THE COMPANY'S EXECUTIVE OFFICERS AND DIRECTORS

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

Vince Vellardita has served as the Company's President, Chief Executive Officer
and Chairman of the Board since October 2000. Mr.  Vellardita  was instrumental
in  having  Valencia Entertainment International, LLC acquire a 180,000  square
foot production  facility  in  Valencia,  California that houses eight film and
production sound stages that have been occupied  for the past four years by the
hit CBS series JAG and Fox's Power Rangers. Mr. Vellardita  began his career in
1977  as  a  music  producer  and  promoter of live shows and is credited  with
bringing Duran/Duran and U2 to North  America for their first US tours. He also
produced a benefit tour for the 1980 Presidential  campaign  of  John Anderson.
Mr.  Vellardita  is  a  25-year  veteran production executive with a successful
track  record. While in Nashville,  Mr.  Vellardita  was  responsible  for  the
turnaround  for  a  production  house  for  music  into  a television satellite
network,  housing  multiple  sound- stages and edit bays. Mr.  Vellardita  also
increased  revenues  by  bringing   national  accounts  to  this  network.  Mr.
Vellardita has been involved in over  10,000  episodes  of  television  and 100
films.  After  Mr.  Vellardita's success in Nashville, he moved to Los Angeles,
focusing on film and  television,  where  he  developed  independent production
studios. Mr. Vellardita handled everything from the coordination  of  sales and
contracts  negotiations, to the launching of marketing strategies to lure  some
of the biggest  names  in  the  television  community. These include Paramount,
Warner  Brothers, and Disney. Mr. Vellardita does  not  currently  serve  as  a
director of any other reporting company.

RICHARD SHINTAKU - DIRECTOR

Richard Shintaku  has served on the Board since August 5, 2003. He is currently
President and CEO of Inter-Continental Associates Group, LLC and ICAG, Inc. Mr.
Shintaku has been married  for  36  years  and  has  two  daughters  and  three
grandsons  and  resides  at  Lake  Las  Vegas,  Nevada. ICAG has been a leading
investment and consulting firm in the Asia/Pacific region since 1973. ICAG is a
Merrill Lynch investment "Alliance Partner". He is currently Vice President and
principal  of  MRI  International,  Inc., one of the  nations  largest  medical
receivables funding companies, Executive  Vice  President  and principal of JMR
Nevada, Inc. (Harmon Medical Center), and KK JMR (Medical, Japan  centers). Mr.
Shintaku  is  also  Chairman  and CEO of Premier Entertainment Services,  Inc.,
(product placement in Digatech  International,  Inc.  (Gaming  technology)  and
Owner/Proprietor  of  The  Royal  Hawaiian  Farms  (Pistachio/Grapes).  He is a
Partner  of  Super  Nova  Financial  Services (NY Mercantile Exchange). He also
serves on various board of directors of  many  Asian and domestic firms. He has
recently been asked to serve as the first Honorary  Consul  General of Japan in
the  State  of Nevada and is presently serving as the Nevada representative  on
the Republican Presidential Roundtable.

IAN ADLINGTON - DIRECTOR

Ian Adlington  has served as the founder and Chief Executive Officer of Newport
Capital Group from  1998  to  the  present,  a  venture  capital  company which
provides  Bio  Science  advice.  He  is a Member of the Institute of Management
Services, the British Institute of Management  and  the Institute of Bankers as
well as a Fellow at the Institute of Directors. In 1979, Mr. Adlington received
his  B.A. with honors in Math and Economics from the University  of  Keele.  In
addition,  he  received  his  M.A. in Economics from the University of Keele in
1980. Mr. Adlington also received  his  M.B.A.  from  Open  Business School and
Plymouth School in 1993 as well as a PhD from the Plymouth Business  School and
his  D.B.A.  from  the Chartered Institute of Marketing in 1997. Currently  Mr.
Adlington serves of  the  Board  of  Directors  of  over  twenty  domestic  and
international companies.

SANDY MARKHAM - TREASURER AND SECRETARY

Sandy  Markham  was appointed to the position of Secretary and Treasurer of the
Corporation in July  22,  2005.  She has been with ValCom since March 2005. Ms.
Markham  holds  a  Bachelor  Degree  in   Business  Administration  from  Regis
University and has extensive experience in  executive secretarial business. She
has  provided  corporate support for the past 25  years  for  the  casino/hotel
industry in addition  to other government, profit and non-profit organizations.
She has extensive background  in  the  field of advertising, marketing, special
event coordinator, and personnel management  was  appointed  Secretary  of  the
Company  on  September  14,  2004.  Ms.  Aws  has  served  as Vice President of
Administration  of RWT, the Company's wholly owned subsidiary,  since  February
2004.  Prior to that,  Ms.  Aws  served  as  Executive  Administrator,  General
Mortgage  Corporation  of  America,  from  August  24,  2003  to February 2004;
Director  of  Just  for  Kids,  an  after  school  and summer camp program  for
children, from December 2002 to August 2003; Assistant  to  the Chief Executive
Officer  of  RWT  from December 2002 through February 2004; and  Administrative
Assistant to Vice President of Marketing and Sales and Manager of Proposals and
Contracts Administration for RWT.

                             FAMILY RELATIONSHIPS

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

                               LEGAL PROCEEDINGS

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

SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers and persons  who beneficially own more than ten percent of a
registered class of our equity securities  to file with the SEC initial reports
of  ownership and reports of change in ownership  of  common  stock  and  other
equity  securities  of  our  company.  Officers, directors and greater than ten
percent stockholders are required by SEC  regulations to furnish us with copies
of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and
4 and amendments thereto furnished to us under  Rule 16a-3(e) during the fiscal
year ended September 30, 2006, and Forms 5 and amendments  thereto furnished to
us with respect to the fiscal year ended September 30, 2006,  we  believe  that
during the year ended September 30, 2006, our executive officers, directors and
all  persons  who own more than ten percent of a registered class of our equity
securities complied with all Section 16(a) filing requirements.

                THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

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

We do not have a standing  Audit  Committee,  a  Compensation  Committee,  or a
Nominations  and  Governance Committee of the board of directors. Our directors
perform the functions  of  audit,  nominating  and compensation committees. Our
directors, Vincent Vellardita, Richard Shintaku  and Ian Adlington, participate
in the consideration of director nominees. Due to the small size of our company
and  our  board, the board of directors does not believe  that  establishing  a
separate nominating  committee  is  necessary  for  effective  governance. When
additional members of the Board of Directors are appointed or elected,  we will
consider  creating  a  nominating  committee.  The  entire  Board  of Directors
participates  in  audit  related  matters  of  our company, including, but  not
limited  to,  reviewing and discussing our audited  financial  statements  with
management and our auditors and recommending to the board of directors that the
financial statements  be  included  in  our  Annual  Reports on Form 10-KSB. In
performing their role equivalent to an audit committee,  the Board of Directors
(i) reviewed and discussed the Company's audited financial  statements  in  the
Company's  Annual Report on Form 10-KSB for the fiscal year ended September 30,
2005 with management,  (ii) discussed with the Company's independent registered
public  accounting firm the  matters  required  to  be  discussed  pursuant  to
Statement  on  Auditing Standards No. 61 (Communication With Audit Committees),
(iii) discussed  with its independent registered public accounting firm matters
relating to independence,  including  the  disclosures  made  to  the  Board as
required  by  the  Independence  Standards  Board  Standard No. 1 (Independence
Discussions with Audit Committees ), and (iv) in reliance on the aforementioned
reviews  and  discussions,  recommended  to  management the  inclusion  of  the
Company's audited financial statements in the  Company's  Annual Report on Form
10-KSB  for  the  fiscal  year  ended  September 30, 2005 for filing  with  the
Securities and Exchange Commission. Messrs.  Vellardita, Shintaku and Adlington
are not considered independent directors as defined  by any national securities
exchange registered pursuant to Section 6(a) of the Securities  Exchange Act of
1934 or by any national securities association registered pursuant  to  Section
15A(a) of the Securities Exchange Act of 1934.

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

During 2006, the Board of  Directors  met  and/or  executed  unanimous  written
consents  of  the  Board  of  Directors 15 times. While we do not have a formal
policy  requiring  members  of the  Board  to  attend  the  Annual  Meeting  of
Stockholders,  we strongly encourage  all  directors  to  attend.  No  director
attended fewer than 90% of the total number of meetings.

                             DIRECTOR COMPENSATION

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

ITEM 10 EXECUTIVE COMPENSATION

The  following  table sets forth the cash compensation (including cash bonuses)
paid or accrued by  us for our years ended September 30, 2006, 2005 and 2004 to
our Chief Executive Officer and our four most highly compensated officers other
than the Chief Executive Officer at September 30, 2005.

<TABLE>
<CAPTION>
                          SUMMARY COMPENSATION TABLE
<S>			    <C>     <C>        <C>        <C>         <C>          <C>      <C>      <C>
                                                                   Restricted
Name & Position             Year   Salary      Bonus      Other       Stock      Options   LTIP   All Other
-----------------------     ----   ------      -----      -----    ----------    -------   ----   ---------
Vincent Vellardita,         2006   $           0.000        0         140,400       0        0         0
Chairman and CEO            2005   $           0.000        0         140,400       0        0         0
                            2004   $           0.000        0         140,400       0        0         0

Sandy Markham               2006   $           0.000        0          48,800       0        0         0
Treasurer and Secretary     2005   $           0.000        0          48,800       0        0         0

</TABLE>

2004 EMPLOYEE STOCK COMPENSATION PLAN

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

OPTIONS GRANTS IN LAST FISCAL YEAR

The following table sets forth information with respect to grants of options to
purchase  our common stock to the named executive officers  during  the  fiscal
year ended September 30, 2006.

<TABLE>
<CAPTION>
<S>   <C>   <C>   <C>   <C>  <C>  <C>

                                OPTIONS IN YEAR ENDED SEPTEMBER 30, 2006
                                            INDIVIDUAL GRANTS

Name    Number of Shares Underlying     % of Total Options Granted to   Exercise   Market    Expiration
                  Options                          Employees             Price     Price        Date
----    ---------------------------     -----------------------------   --------   ------    ----------
N/A                  0                               0                        --       --            --
N/A                  0                               0                        --       --            --
N/A                  0                               0                        --       --            --


</TABLE>

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

The following  table  sets  forth  information  as  of  September 30, 2006 with
respect  to the named executive officers information with  respect  to  options
exercised,  unexercised  options  and  year-end option values in each case with
respect to options to purchase shares of our common stock.

<TABLE>
<CAPTION>
<S>  <C>  <C>  <C>  <C>  <C>  <C>   <C>

                                   Number of Securities Underlying      Value of Unexercised In The
                                       Unexercised Options at                Money Options At
                                         September 30, 2006                 September 30, 2006
                                   -------------------------------     -----------------------------
          Shares        Value
       Acquired on    Realized     Exercisable      Unexercisable      Exercisable     Unexercisable
Name   Exercise (#)      ($)           (#)               (#)               ($)              ($)
----   ------------   --------     -----------      -------------      -----------     -------------
N/A              0          0               --                 --                0                 0
N/A              0          0               --                 --                0                 0
N/A              0          0               --                 --                0                 0


</TABLE>


EMPLOYMENT AGREEMENT

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT

        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as to the shares of our common stock
beneficially owned  as of January 16, 2007 by (i) each person known to us to be
the beneficial owner  of  more  than 5% of our common stock; (ii) each director
and nominee for director; (iii) each  executive  officer;  and  (iv) all of our
directors and executive officers as a group. Unless otherwise indicated  in the
footnotes  following the table, the persons as to whom the information is given
had sole voting  and  investment power over the shares of common stock shown as
beneficially owned by them.  Unless  otherwise  indicated,  the address of each
person shown is c/o ValCom, Inc., 2525 North Naomi Street, Burbank,  California
91504.

<TABLE>
<CAPTION>
<S>  <C>  <C>


Vincent Vellardita, Chief Executive Officer and Chairman       9,441,049      11.22 %

Steven Cantrock, Chief Financial Officer                               0          0 %

Richard Shintaku, Director                                     3,395,833       4.04 %

Ian Adlington, Director                                                0          0 %

Sandy Markham, Treasurer and Corporate Secretary                 105,000            *

Directors and Officers as a Group (6 persons)                 13,341,882      15.85 %

</TABLE>

*Less than one percent.

CHANGES IN CONTROL

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

At  September  30, 2005, related  party  payables  represent $267,955  due to a
Director and shareholder of the Company.

At September 30, 2006, related party payables  represent  $1,672,456,  $845,158
due to Vince Vellardita and $827,298 due to Richard Shintaku.

We believe that these transactions were advantageous to us and were on terms no
less favorable to us than could have  been  obtained  from  unaffiliated  third
parties.

ITEM 13. EXHIBITS

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

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

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate fees  billed  by  Armando C. Ibarra, Certified Public Accountants
for professional services rendered  for  the  audit  of  the  Company's  annual
financial  statements  for  the  years  ended  September 30, 2006 and 2005, the
review  of  the financial statements included in the  Company's  Forms  10-QSB,
totaled $21,500 and $21,500 as follows:

                       2006        2005
		     --------	 -------
Audit fees           $ 17,000    $17,000
Quarterly reviews    $  4,500    $ 4,500

Total                $ 21,500    $21,500



                                  SIGNATURES

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


Dated:  January 16, 2007      VALCOM,  INC.,  a  Delaware  Corporation

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


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



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

By:  /s/ Vince  Vellardita    Chief Executive Officer,       January 16, 2007
    --------------------      Chairman  of  the  Board
    Vince  Vellardita

By:  /s/ Richard Shintaku     Director                       January 16, 2007
     ----------------------
     Richard  Shintaku

By:  /s/ Ian Adlington        Director                       January 16, 2007
     ---------------------
     Ian Adlington