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

                               AMENDMENT NO. 1 TO
                                   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, 2002

             Securities and Exchange Commission File Number O-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)

            26030 Avenue Hall - Studio #5, Valencia, California 91355
            ---------------------------------------------------------
               (Address of Principal executive offices) (Zip Code)

                                 (661) 257-8000
                                 --------------
                           (Issuer's telephone number)


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 - Preferred Stock, Par Value $0.001
       ------------------------------------------------------------------
                                (Title of Class)

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.  [X]

Issuer's  revenues  for  its  most  current  fiscal  year:      $12,211,329.00
Aggregate  market  value  of  the  voting  stock  held  by
non-affiliates  as  of  December  15,  2002:                     $3,563,760.00
Number  of  common  shares  outstanding  as  of  9/30/02
at  $.001  par  value:                                              11,011,933

Documents  Incorporated  By  Reference:  None

Transitional  Small  Business  Disclosure  Format:  Yes  ____  No  _X_

                             DATED FEBRUARY 19, 2003

<PAGE>

                        Table  of  Contents
Item      Page
Number    Number    Item  Caption
------    ------    -------------

Part  I
-------

Item  1.   3    Description  of  Business
Item  2.   6    Description  of  Properties
Item  3.   7    Legal  Proceedings
Item  4.   8    Submission  of  Matters  to  a  Vote  of  Security  Holders

Part  II
--------

Item  5.   9    Market  for  Common
                Equity  and  Related  Stockholder  Matters
Item  6.   12   Management's  Discussion  and  Analysis  or  Plan  of  Operation

Item  7.   17   Financial  Statements  and  Summary  Financial  Data
Item  8.   43   Changes  in  and  Disagreements  with  Accountants  on
                Accounting  and  Financial  Disclosure

Part  III
---------

Item  9.   43   Directors,  Executive  Officers,  Promoters and Control Persons;
                Compliance  with  Section  16(a)  of  the  Exchange  Act
Item  10.  47   Executive  Compensation
Item  11.  58   Security  Ownership  of  Certain  Beneficial  Owners  and
                Management  and  Related  Stockholder  Matters
Item  12.  50   Certain  Relationships  and  Related  Transactions
Item  13.  50   Exhibits,  Financial  Statement  Schedules,  and  Reports  on
                Form  8-K
Item  14.  50   Disclosure  Controls  and  Procedures

Signatures 53

Ex.  23    54   Consent of Jay J. Shapiro, C.P.A., P.C.

Ex.  99.1  55   Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act
                of  2002
Ex.  99.2  56   Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act
                of  2002

                                        2
<PAGE>

                                     PART I
                                     ------

Statements  contained  in  this  Annual  Report  on  Form  10-KSB  that  are not
historical  facts  are forward-looking statements as that term is defined in the
Private  Securities  Litigation  Reform  Act  of  1995.  Such  forward-looking
statements  are  subject  to  risk  and  uncertainties, which could cause actual
results  to  differ materially from estimated results. Certain of such risks and
uncertainties  are  described  in  the Company's filings with the Securities and
Exchange  Commission  and  in  Item  1  ("DESCRIPTION  OF  BUSINESS") and Item 6
("MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF
OPERATION")  below.

ITEM  I.  DESCRIPTION  OF  BUSINESS
-----------------------------------

GENERAL
-------

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 of 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  July  20,  2000, the Board of Directors approved a "2-1 forward stock split"
with  a  distribution  date  of August 14, 2001 and a stockholder record date of
August  10,  2000.  The  purpose  of  the  forward  split  was to strengthen the
Company's  flexibility  and  address  the  liquidity  issue  in  increasing  the
available  float  in  the  market.

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.

<PAGE>

VALCOM'S  CORPORATE  STRUCTURE
------------------------------
As  of  September  30,  2002,  ValCom,  Inc.  had  three  subsidiaries: Valencia
Entertainment  International,  LLC, a California limited liability company; Half
Day  Video,  Inc.,  a  California  corporation;  and  PTL  Productions, Inc. dba
Brentwood  Magazine,  a  California  corporation.  In  January 2003, the Company
entered  into  a Memorandum of Understanding to cancel the Agreement and Plan of
Reorganization, dated August 2, 2002, pursuant to which the Company acquired PTL
Productions,  Inc. dba Brentwood Magazine and sell PTL Productions, Inc. back to
the  seller.  See  Note  16  (Subsequent  Events)  to the Consolidated Financial
Statements.  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.

BUSINESS  OVERVIEW
------------------
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. ValCom, which owns
six  acres  of  real  property  and a 120,000 square foot production facility in
Valencia, California, is currently the studio set for JAG, produced by Paramount
Pictures  and  Power  Rangers produced by Saban productions. The Company's sound
stages  have  been  operating at full capacity since 1996. ValCom also leases an
additional  three  acres  and  a  52,000  square  foot  production facility that
includes  two  full-service  sound  stages,  for  a total of eight sound stages.
ValCom's  past  and  present clients 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.

                                        4
<PAGE>

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,  and  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.

JOINT  VENTURE  AGREEMENT  WITH  WOODY  FRASER  PRODUCTIONS,  INC.
------------------------------------------------------------------
In  January  2001,  ValCom  executed a joint venture agreement with Woody Fraser
Productions,  Inc.,  a  California corporation, in which the parties agreed that
Woody  Fraser  and his production company, Woody Fraser Productions, Inc., would
serve  exclusively  as  a  television production company for ValCom. The primary
purpose  of  the  joint  venture  is  the  development and production of various
television  projects.  However,  the Company has a dispute with Woody Fraser and
Woody  Fraser  Productions, Inc., which is currently arbitrated. Thus, it is not
clear  how  much  ValCom  will  recover  from  the  joint  venture  agreement.
See  Part  I,  Item  3  ("Legal  Proceedings").

ACQUISITION  OF  HALF  DAY  VIDEO,  INC.
----------------------------------------
On  March  8, 2001, the Company executed a definitive agreement for the purchase
of  100% of the stock of Half Day Video, Inc. ("Half Day"). Half Day specializes
in  supporting  the  entertainment  industry  with television and film equipment
rentals.  Half  Day's client list includes The Academy Awards, Emmy Awards, NBC,
Entertainment  Tonight,  MTV,  Oscar  Awards,  General  Hospital and other major
entertainment  and  production companies. Half Day has approximately $786,000 in
assets,  not  including  depreciation, with current revenues of $1,300,000. Half
Day  leases  its offices and warehouse facility in Valencia, California and will
continue  to  operate  and  service  its  clients  using  its current employees.

Effective  November  8,  2002,  the Company terminated Clay Harrison, the former
President  of Half Day Video, Inc.  Mr. Harrison has filed a lawsuit against the
Company  alleging  breach of his employment contract.  See Part I, Item 3 (Legal
Proceedings).

JOINT  VENTURE  AGREEMENT  WITH  NEW  GLOBAL  COMMUNICATIONS,  INC.  -    VALCOM
--------------------------------------------------------------------------------
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

                                        5
<PAGE>

the  joint  venture  agreement  was  dependent  on  approval  by  the    Federal
Communications  Commission (the "FCC").  On September 20, 2002, the FCC approved
the  transaction.  As  of September 30, 2002, Global had contributed $400,000 to
the  joint  venture.  Since  Global  has  not  contributed  the entire amount of
$500,000  to  the  joint  venture  as  of  September  30, 2002, and, as such the
transfer  of  the license has not been finalized, the Company has not recognized
any  investment  in  the  joint  venture  at  September 30, 2002.  Subsequent to
September 30, 2002, Global has not contributed any additional funds to the joint
venture.

ACQUISITION  OF  PTL  PRODUCTIONS,  INC.  DBA  BRENTWOOD  MAGAZINE
------------------------------------------------------------------
On August 2, 2002, the Company executed an Agreement and Plan of Reorganization,
pursuant  to  which  the  Company acquired 100% of the stock of PTL Productions,
Inc.  dba  Brentwood  Magazine.  Brentwood  Magazine,  a  Southern  California
entertainment  publication,  has been setting trends in Southern California from
Santa  Barbara  to  San  Diego  for  over  seven  years, covering entertainment,
business,  luxurious  lifestyles,  travel  and fashion.  The Company anticipated
that  its acquisition of Brentwood Magazine would help promote and establish the
Company  as  a  total entertainment company with several promotional avenues. In
connection  with the acquisition of Brentwood Magazine, the Company formed a new
division,  Valcom  Publishing.

Effective  December  27,  2002,  the Company terminated Phillip Troy Linger, the
President  of  PTL  Productions,  Inc.

In  January  2003,  the  Company  entered  into a Memorandum of Understanding to
cancel  the  Agreement and Plan of Reorganization and sell PTL Productions, Inc.
back  to  Mr.  Linger.

COMPETITION
-----------

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,  both  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.

                                        6
<PAGE>

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,  enhance  its  ability  to  launch  new
entertainment  and  information  programs  based  on  comparable  resources.

DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
------------------------------------------

The  Company  has  three  customers who accounted for approximately 99% of total
real  estate  rental  revenues  for the year and nine months ended September 30,
2002  and  2001,  respectively.  As  of  September 30, 2002, all eight sound and
production  stages  were under non-cancelable operating leases for one year from
two major production companies.  The Company's subsidiary, Half Day Video, Inc.,
does  not  rely on a small group of customers.  It may rent 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.  The  Company's former publishing
operations  did  not  rely on a small group of customers; rather, any advertiser
who wished to advertise in Brentwood Magazine could generate revenues.  See Part
I,  Item  1  ("Acquisition  of  PTL  Productions,  Inc.").


EMPLOYEES
---------
As  of September 30, 2002, the Company had 25 full-time employees, including two
officers  and  five  professional  staff.

No  employee  of  the Company is represented by a labor union or is subject to a
collective  bargaining  agreement.

ITEM  2.  DESCRIPTION  OF  PROPERTY
-----------------------------------
                                    PREMISES

The  Company's  corporate  offices  are located at 26030 Avenue Hall, Studio #5,
Valencia,  California. The Company owns six acres and leases three acres of land
in  Valencia,  California.  The  Company  operates eight production sound stages
consisting  of  approximately  425,000 square feet, 270,000 square feet of which
are  owned  and  the  balance  of which are leased. Offices occupy 60,000 square
feet.

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,

                                        7
<PAGE>

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

GLOBALOT  BINGO:
----------------
International  Class  41  (production and distribution of television game shows)
applied  for  on  September  24,  1993,  by  SBI  Communications,  Inc.

RICO  BINGO:
------------
International  Class  41  (production and distribution of television game shows)
applied  for  on  September  24,  1993,  by  SBI  Communications,  Inc.

C-NOTE:
-------
International  Class  41  (production and distribution of television game shows)
applied  for  on  September  24,  1993,  by  SBI  Communications,  Inc.

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.

ITEM  3  -  LEGAL  PROCEEDINGS
------------------------------

Diane  Russomanno  and  Knowledge  Booster,  Inc.  v.  Valencia  Entertainment
International,  ValCom,  Inc.,  Vince  Vellardita,  Tom  Grimmett, Nalin Rathod,
Aburizal  Bakrie,  Nirwan Bakrie, Linda Layton, Barak Isaacs, and Does 1 through
                                                                         -------
20  (Los  Angeles  Superior  Court  Case  No.  BC257989)
 -------------------------------------------------------

On  September  14, 2001, plaintiffs Diane Russomanno and Knowledge Booster, Inc.
commenced  an action in the Superior Court of the State of California, County of
Los  Angeles  against  the  foregoing  defendants.  The complaint arises from an
underlying  action in which the plaintiffs alleged, among other things, that the
show  "A.J.'s  Time  Travelers"  violated  plaintiffs'  rights  in  a children's
television show called "Rickey Rocket".  That case went to trial, and plaintiffs
obtained  judgments  against  several  defendants,  including  a  judgment  for
$3,000,000  against  Rickey  Rocket  Enterprises  ("RREI")  and  a  judgment for
$1,200,000  against  Time  Travelers,  Inc. ("TTI").  The complaint asserted two
causes  of action against the Company, Valencia Entertainment International, LLC
and  other  defendants.  The  first cause of action alleges that the Company was
the  "alter  ego"  of  RREI and/or TTI and is therefore liable for the judgments
against  those entities.  Plaintiffs seek payment of the judgments in the amount
of  $4,200,000  plus  interest  under  this  cause  of  action.  Depositions are
currently being taken.  A motion for summary judgment may be heard in June 2003.

Valencia  Entertainment  International,  LLC  became a distributor for A.J. Time
Travelers, Inc., but not until four years after the alleged wrongdoing occurred.
Therefore,  the  Company  believes  that  the  allegations are without merit and
intends  to  vigorously  defend  itself.  In  addition,  a  related  party  will
indemnify  the  Company  if  the  Company  sustains  any  loss  in  this  case.

Further,  Plaintiffs'  second  cause  of action concerning malicious prosecution
alleged  alter  ego liability. Plaintiffs alleged that Ricky Rocket Enterprises,
Inc.  and  AJ  Time  Travelers,  Inc.  filed a cross-complaint in the underlying
litigation  without  any  probable  cause and for an improper motive or purpose.
Plaintiffs  similarly  alleged  that we, and other defendants, are alter egos of
Ricky  Rocket  Enterprises, Inc. and AJ Time Travelers, Inc. and are, therefore,
liable  for  such  malicious  prosecution.  Plaintiffs  sought  unspecified
compensatory  and punitive damages under this cause of action.  The parties have
executed a settlement agreement resolving this second cause of action at no cost
to  the  Company.  The  court  has  dismissed  the  second  cause of action with
prejudice.
                                        8
<PAGE>

Valcom,  Inc.  v.  Woody  Fraser  Productions,  Inc.  and  Woody  Fraser
------------------------------------------------------------------------

On  January  1,  2001,  the  Company entered into a joint venture agreement with
Woody  Fraser Productions, Inc. in which, among other things, the Company agreed
to  pay  Woody  Fraser  Productions, Inc. a production fee in exchange for Woody
Fraser  Productions,  Inc.'s  agreement  to  act  as  the  exclusive  television
production company for the Company.  The Company alleged breach of the exclusive
nature  of  the  joint  venture  agreement,  and  Woody Fraser Productions, Inc.
alleges  non-payment  under  the  joint  venture  agreement.  The  Company  is
vigorously  defending  the  claims,  and  aggressively  seeking recovery for its
damages.  Binding  arbitration  is  scheduled  to  occur  in  February, 2003. No
discovery  has  been  undertaken  in  this  matter.


Clay Harrison v. SBI Communications, Inc. and Valcom, Inc. (Los Angeles Superior
----------------------------------------------------------
Court  Case  No.  BC  035014)

On  December  19,  2002, Clay Harrison filed a complaint, seeking an unspecified
amount  of  damages,  for breach of his alleged employment contract. The dispute
involves  Mr.  Harrison's  termination  of  employment  as President of Half Day
Video,  Inc.,  a  wholly-owned  subsidiary  of  Valcom.  The  Company  disputes
liability  and  is  vigorously  defending  the claims.  The matter is not yet at
issue  and  no  discovery  has  yet  taken  place.

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


The  Company  did  not  hold  an  annual  meeting  of  stockholders during 2002.

                                        9
<PAGE>

                                     PART II

ITEM  5.  MARKET  FOR  COMMON  EQUITY AND RELATED STOCKHOLDER MATTERS; PREFERRED
--------------------------------------------------------------------------------
STOCK
-----

At  September  30,  2002,  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 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 has not declared any dividends  for any of the series of
convertible  preferred  stock.


MARKET  FOR  COMMON  EQUITY
---------------------------

The  Company's  common  stock  is traded on the NASD Over-the-Counter Electronic
Bulletin  Board  under the symbol of VACM. As of September 30, 2002, the Company
had  11,011,933 shares of common stock outstanding, with approximately 2,000,000
in  the  public  float  and  approximately 3,200 shareholders of record. For the
fiscal  year  ended  September  30,  2002,  the  Company  reported  revenues  of
$12,211,329  and  a  net  loss  of  $4,827,818.

The  Company's  trading  symbol  on the Frankurt XETRA is "VAM" and its security
code  is #940589. No common equity is subject to options or warrants to purchase
or  securities  convertible  into  common stock, except for the currently issued
2,688,000  shares of preferred stock which are convertible into common stock and
72,737  warrants  to  purchase  common  stock.


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.

Date                                     Bid                    Ask
----                                    -----                  -----

                                    Low        High        Low        High
                                    ---        ----        ---        ----


2000
----
First   Quarter                  $ 1.100     $ 3.800     $ 1.600   $ 5.000
Second  Quarter                  $ 0.938     $ 3.125     $ 1.650   $ 3.438
Third   Quarter                  $ 1.255     $35.300     $19.000   $35.313
Fourth  Quarter                  $ 2.300     $21.400     $21.563   $25.000

                                       10
<PAGE>

2001
----
First   Quarter                  $ 0.688     $ 1.560     $ 0.750   $ 1.625
Second  Quarter                  $ 2.100     $ 6.420     $ 3.100   $ 7.300
Third   Quarter                  $ 0.510     $ 0.700     $ 1.100   $ 3.000

2002
----

First   Quarter                  $ 0.240     $ 1.350     $ 0.250   $ 1.990
Second  Quarter                  $ 0.310     $ 1.350     $ 0.330   $ 1.450
Third   Quarter                  $ 0.690     $ 1.260     $ 0.720   $ 1.350
Fourth  Quarter                  $ 0.310     $ 0.690     $ 0.390   $ 0.750


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 and a
one  share-for-ten  reverse  split  effective  on  September  27,  2001.

MARKET
------

The  Company's  securities  are  currently  quoted  on the Nation Association of
Securities  Dealers, Inc.'s NASDAQ Over-the-Counter Bulletin Board:  VACM and on
the  Frankfurt  XETRA:  "VAM".

SECURITY  HOLDERS
-----------------

As  of  September  30,  2002,  the  Company had approximately 3,200 common stock
holders.

DIVIDENDS
---------

There  have  been  no cash dividends declared or paid since the inception of the
Company  and no dividends are contemplated to be paid in the foreseeable future.

DESCRIPTION  OF  SECURITIES
---------------------------

                                     GENERAL
                                     -------

The  Company  is  authorized  to  issue  110,000,000  shares  of  capital stock,
100,000,000 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.

As  of  September  30, 2002, 11,011,933  shares of Common Stock were outstanding
and held of record by approximately 3,200 persons. In addition, 2,688,000 shares
of  preferred  stock  were  outstanding, and held by approximately five persons.

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.
                                       11
<PAGE>

EQUITY  COMPENSATION  PLAN
--------------------------

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 15, 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  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,  2002,  the  Company  issued  an  aggregate  of 585,000 shares of
registered  common  stock  to  employees,  officers,  directors  and consultants
pursuant  to  the  ESCP  for  services  rendered.

RECENT  SALES  OF  UNREGISTERED  SECURITIES
-------------------------------------------

On  May  20,  2002, pursuant to the Employment Agreement between the Company and
Donald  P.  Magier,  the  Company  granted  Mr.  Magier,  its  Controller  who
subsequently was appointed as the Treasurer, Secretary and a director, an option
to  purchase  up  to  25,000 shares of the Company's common stock at an exercise
price  of  $0.01  per  share. The Employment Agreement provides that the Company
will  grant  Mr.  Magier an option to purchase an additional 25,000 shares at an
exercise  price  of $0.01 per share on the first and second anniversaries of the
Employment  Agreement.  He  must  exercise the options within 60 days after each
anniversary date. Twenty-five percent of the common stock issuable upon exercise
of  the  options  will  be  freely  trading  and the remaining 75% of the shares
issuable  will be restricted pursuant to Rule 144 of the Securities Act of 1933,
as amended. This issuance of securities was exempt from registration pursuant to
Section  4(2)  of  the  Securities  Act  of  1933,  as  amended.

On  May 24, 2002, the Company issued to Laurus Master Fund, Ltd. 12% convertible
notes in the aggregate principal amount of $2,000,000. The notes are convertible
into  the  Company's common stock at a fixed conversion price of $.95 per share.
This  issuance of securities was exempt from registration pursuant to Regulation
D  under  the  Securities  Act  of  1933,  as  amended.

On  May  29,  2002, the Company issued 250,000 shares of its common stock to the
Laurus  Master  Fund, Ltd. pursuant to that certain Settlement Agreement between
the parties, dated on or about May 24, 2002.  This issuance of shares was exempt
from  registration pursuant to Regulation D under the Securities Act of 1933, as
amended.

In  June  2002, the Company issued to High Capital Funding, LLC 1,250,000 shares
of  Series  D  Preferred Stock and a warrant to purchase 1,250,000 shares of its
common  stock  at  an exercise price of $.80 per share for an aggregate purchase
price  of  $1,000,000.  This issuance of securities was exempt from registration
pursuant  to  Regulation  D  under  the  Securities  Act  of  1933,  as amended.

In  June  2002,  the  Company  issued to High Capital Funding, LLC an additional
warrant  to  purchase  50,000 shares of its common stock at an exercise price of
$.80  per  share  for  an aggregate purchase price of $40,000.  This issuance of
securities  was  exempt  from  registration  pursuant  to Regulation D under the
Securities  Act  of  1933,  as  amended.

In June 2002, in connection with the financing by High Capital Funding, LLC, the
Company collectively issued to Bathgate Capital Partners, LLC and its principals
a  placement agent fee including an aggregate of 125,000 "VACM Units", each unit
comprised  of  one  share of common stock and a warrant to purchase one share of
common  stock  at an exercise price of $.80 per share, for an aggregate purchase
price  of  $100,000.  This  issuance  of securities was exempt from registration
pursuant  to  Regulation  D  under  the  Securities  Act  of  1933,  as amended.

In June 2002, in connection with the financing by High Capital Funding, LLC, the
Company  desposited  into  escrow an aggregate of 2,800,000 shares of its common
stock as a deposit in anticipation of (1) the preferred stockholder's conversion
of 1,250,000 shares of Series D Preferred Stock, (2) the preferred stockholder's
                                       12
<PAGE>


exercise  of  warrants to purchase 1,300,000 shares of common stock, and (3) the
placement  agent's  exercise of its VACM Units.  None of the 2,800,000 shares of
common  stock  will  be  released  from  escrow  until the preferred stockholder
converts  its  Series D Preferred Stock and/or exercises its warrants and/or the
placement  agent  exercises  its  VACM  Units.

On July 24, 2002, the Company issued 1,000 shares of its common stock to each of
two  employees  at  a  price of $.63 per share as a bonus for services rendered.
These issuances of shares were exempt from registration pursuant to Section 4(2)
of  the  Securities  Act  of  1933,  as  amended.

On  July  31, 2002, the Company issued 100,000 shares of its common stock to the
Laurus  Master  Fund, Ltd. at a price of $.56 per share as part of a settlement.
This  issuance  of  shares  was  exempt  from registration pursuant to under the
Securities  Act  of  1933,  as  amended.

On  August  7,  2002,  the Company issued 5,000 shares of its common stock to an
individual  at a price of $.58 per share for consulting services.  This issuance
of  shares  was  exempt  from  registration  pursuant  to  Section  4(2)  of the
Securities  Act  of  1933,  as  amended.

The  Company has disclosed additional sales of unregistered securities in Item 2
("Changes  in  Securities") in its Form 10-KSB for the fiscal quarter ended June
30,  2002,  which it filed with the Securities and Exchange Commission on August
20,  2002.

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

INTRODUCTION

PLAN  OF  OPERATION

As  of  September  30,  2002,  ValCom,  Inc.  operations  were comprised of five
divisions:  (1)  Studio  Rental,  (2) Studio Equipment and Personnel Rental, (3)
Broadcast  Television, (4) Film and Television Production and (5) Publishing. In
January  2003, the Company divested itself of its publishing division.  See Part
I,  Item  1  ("Acquisition  of  PTL  Productions, Inc. dba Brentwood Magazine").

STUDIO  RENTAL
--------------

The  Company's  subsidiary,  Valencia Entertainment International, LLC, operates
eight  sound  stages  in  Valencia,  California.  Valencia  Entertainment
International,  LLC owns six improved acres on which six of the sound stages are
located.  Valencia  Entertainment  International, LLC leases the other two sound
stages.  Valencia  Entertainment International, LLC has one-year, written leases
with  two  major  production  companies, which lease six of the sound stages and
sublease  two  of  the  sound stages.  Rental income from the eight sound stages
should  remain  constant  at  approximately  $2,000,000  annually  including
cost-of-living  increases.

STUDIO  EQUIPMENT  RENTAL
-------------------------

The  Company's subsidiary, Half Day Video, Inc., supplies personnel, cameras and
other  production  equipment  to  various  production  companies on a short-term
basis.  As  a  result  of additional equipment purchases and increased activity,
from  both  internal  and  external  sources, we anticipate that Half Day Video,
Inc.'s  revenues  should  increase  significantly.

                                       13
<PAGE>

TELEVISION AND FILM  PRODUCTION
-------------------------------

In  January  2001, the Company entered into a joint venture agreement with Woody
Fraser  Productions,  Inc.  to  produce  various  television  productions on its
behalf.  Under the terms of the agreement, we will fund up to $500,000 of annual
production  development  costs.  In  return,  we  will  retain  after  costs  of
production, 75% of the net savings derived from all production, 75% of ownership
of  foreign and syndication plus executive producer fees. In January 2002, Woody
Fraser  Productions,  Inc.,  as  part  of  its  Joint Venture agreement with the
Company,  signed contracts with a cable television network to produce the second
season  of  a  television  series  consisting of 13 episodes. Revenue under this
contract during 2002 was approximately $2,500,000. The Company was to retain 75%
of  any  possible  net  savings from the productions and a percentage of foreign
sales  and  merchandising.  Half  Day  Video,  Inc.  handled  a  majority of the
production  rental  needs.  However, the Company has a dispute with Woody Fraser
and  Woody  Fraser Productions, Inc., which is currently being arbitrated. Thus,
it  is  not clear how much ValCom will recover from the joint venture agreement.
See  Part  I,  Item  3  ("Legal  Proceedings").

Additionally,  the  Company  signed a contract with a different Cable Television
Network  to  produce  six  (6)  episodes  of a television series at a contracted
amount of approximately $500,000. After costs of production, we will retain 100%
of  any  savings  plus  a  portion  of  the  executive producer fees. Additional
productions are in the development process. Revenues will be recognized when all
individual  programs  are  available.

CHANNEL  8  IN  PALM  SPRINGS,  CALIFORNIA
------------------------------------------
In  connection  with  its  joint  venture  with Global Communications, Inc., 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. See Part I, Item 1 ("Joint Venture Agreement
with  New  Global  Communications,  Inc.  -  Valcom  Broadcasting,  LLC").

We plan to acquire additional television stations and utilize the infrastructure
of full-service television and motion picture studios. This would enable Channel
8  to  operate  at  a fraction of the cost compared to other broadcasters in the
market.

PUBLISHING
----------

In  August,  2002,  the  Company  acquired  PTL  Productions, Inc. dba Brentwood
Magazine, which publishes a Southern California entertainment magazine which has
been  setting  trends in Southern California from Santa Barbara to San Diego for
over  seven years covering entertainment, business, luxurious lifestyles, travel
and  fashion.  In  January  2003,  the  Company  entered  into  a  Memorandum of
Understanding  to  cancel the Agreement and Plan of Reorganization, dated August
2,  2002,  pursuant  to  which  the  Company  acquired PTL Productions, Inc. dba
Brentwood  Magazine and sell PTL Productions, Inc. back to the seller.  See Note
16  (Subsequent  Events)  to  the  Consolidated  Financial  Statements.

RESULTS  OF  OPERATIONS

In  December  2001,  he  Company changed its fiscal year end from December 31 to
September 30. The year end of September 30 will more closely match the Company's
natural  business  cycle.

FISCAL YEAR ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------
2001
----

Revenues for the year ended September 30, 2002 increased by $9,798,069 or 406.0%
from  $2,413,260 for the nine months ended September 30, 2001 to $12,211,329 for
the year ended September 30, 2002.  The increase in revenues was principally due
to  revenues  associated  with the Company's acquisition of Half Day Video, Inc.
and  its  joint  venture  with  Woody  Fraser  Productions,  Inc., both of which
occurred  in  the  first  fiscal  quarter  of  2001.
                                       14
<PAGE>


Production  costs  for the year ended September 30, 2002 increased by $6,783,693
or  691.0%  from  $981,667  for  the  nine  months  ended  September 30, 2001 to
$7,765,360  for  the  year ended September 30, 2002.  The increase in production
costs  was  principally  due  to  the  acquisition  of  Half Day Video, Inc. and
production  and  development  costs  incurred by Woody Fraser Productions, Inc.,
which  the  Company  paid  for  pursuant  to  the  joint  venture  agreement.

General  and  administrative  expenses  for  the  year  ended September 30, 2002
increased  by  $2,116,440  or  99.9%  from  $2,119,348 for the nine months ended
September  30,  2001  to  $4,235,788 for the year ended September 30, 2002.  The
increase  was  due  principally to increases in settlement charges in connection
with  issuances  of  common  stock, insurance expense, personnel costs and rent.

Consulting and professional fees for the year ended September 30, 2002 increased
by  $379,163 or 97.3% from $389,713 for the nine months ended September 30, 2001
to  $768,876  for  the  year  ended  September  30,  2002.  The increase was due
principally  to  increases in consulting fees and outside services in connection
with  issuances  of  common  stock.

Reserve for doubtful accounts and other receivables for the year ended September
30,  2002  increased  by $1,869,302 or 9,346.5% from $20,000 for the nine months
ended  September  30,  2001 to $1,889,302 for the year ended September 30, 2002.
The  increase  is  due  principally  to  the  write-off of an uncollectible note
receivable  from  a  former  officer  and director of the Company and write-offs
associated  with  the  production agreement between the Company and Woody Fraser
Productions, Inc. See Note 5 (Production Agreement) to the Financial Statements.

Depreciation  and  amortization  expense  for  the year ended September 30, 2002
increased  by  $209,587  or  109.2%  from  $191,925  for  the  nine months ended
September  30,  2001  to  $401,512  for  the year ended September 30, 2002.  The
increase  in  depreciation  and  amortization  expense is a result of additional
assets  being  depreciated.

Goodwill  impairment for the year ended September 30, 2002 increased by $424,634
from  $0  for  the nine months ended September 30, 2001 to $424,634 for the year
ended  September  30,  2002.  The increase in goodwill impairment was due to the
goodwill  associated  with  the  Brentwood  Magazine  acquisition  being  fully
impaired.

Selling  and  promotion costs for the year ended September 30, 2002 decreased by
$66,207  or  28.7% from $230,483 for the nine months ended September 30, 2001 to
$164,276  for  the  year  ended  September  30,  2002.  The  decrease  was  due
principally  to  a  decrease  in  travel  expenses.

Interest  expense for the year ended September 30, 2002 increased by $791,421 or
130.5%  from $606,415 for the nine months ended September 30, 2001 to $1,397,836
for  the  year  ended  September  30, 2002.  The increase was due principally to
interest  associated  with  the  pay  off  of the Laurus Master Fund, Ltd. loan.

Due  to  the  factors  described  above,  the  Company's  net  loss increased by
$2,701,527  from  a  loss  of $2,126,291 for the nine months ended September 30,
2001  to  $4,827,818  for  the  year  ended  September  30,  2002.

FISCAL  YEAR ENDED SEPTEMBER 30, 2001 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------

In  December  2001,  he  Company changed its fiscal year end from December 31 to
September 30. The year end of September 30 will more closely match the Company's
natural  business  cycle.

As of September 30, 2001, the Company had working capital of $537,646. As of the
prior  year, working capital was $1,074,031. The change was due primarily to the
increase  in  accounts  payable  and  accrued  liabilities.

Total  assets  were  $14,580,597  at  September  30,  2001 versus $16,008,529 at
December  31,  2000  and  additionally  total  liabilities  were  $8,355,823 and
$8,987,769,  respectively.  The  changes  in  total  assets  and liabilities are
substantially accounted for by the above-described changes in current assets and
liabilities.

For  the  nine  months  ended  September  30,  2001, the Company had revenues of
$2,413,260,  operating  expenses  of  $3,933,136 and net losses of $(2,126,291).
Loss  before  depreciation  and  interest  was  $(1,327,951)  for the nine-month
period.
                                       15
<PAGE>


Rental  revenues  increased  $93,251  for  the  nine  months  compared  with the
corresponding  prior  year.  This increase was the result of the revenues earned
from  two  additional  sound  stages  and contractual rate increases. Production
revenues  increased  $914,734  for  the  nine  months  versus  the  prior  year.

Production  costs increased $708,450 for the nine months compared with the prior
year.  This increase relates to the increase in production activity and expensed
development  costs.

Selling  and  promotion  costs  increased  $126,307  for  the nine months due to
increased  efforts  to  promote  the  Company  and  its  services/productions.

Depreciation expense decrease of $79,789 was due to the fully depreciated status
of  certain  assets  as  of  September  30,  2001.

For  the  nine months ended September 30, 2001, administrative and general costs
increased  by $797,903. This increase was the result of significant increases in
Legal  and  Accounting,  Management  Consulting, Salaries and Fringes, Taxes and
Licenses,  Development  Costs  and  Rent  Expense  categories  for the following
reasons:

A  $34,059 increase in Legal and Accounting was due to the performance of audits
and the preparation of agreements and other legal matters related to the merger.

A  $207,250  increases in Management Consulting was due to costs incurred in the
planning  and  reorganization  of  the  newly  merged  companies.

A  $53,172  increase  in  Taxes and Licenses was due to adjustments made for the
under  adjacent  to  the  Valencia  studio  property.

A  $368,194  increase  in  Salaries  and Fringes was primarily due to management
staffing  increases.

FUTURE  OUTLOOK
---------------

The  sale  of PTL Productions, Inc. dba Brentwood Magazine back to the seller is
not  expected  to  have  a  significant  impact on the Company's revenues but is
expected to reduce overall losses.  Through September 30, 2002, PTL Productions,
Inc.  generated  only  $59,590  or  0.5%  of  the  Company's  total sales, while
contributing  $589,403  or  12.2%  to  the  Company's  net  loss.

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 Note 17 to the
consolidated  financial statements, the Company has a net loss of $4,827,818 and
a  negative cash flow from operations of $2,005,392 for the year ended September
30, 2002, and a working capital deficiency of $594,990 and an accumulated defici
of  $8,126,190  at  September 30, 2002. These conditions raise substantial doubt
about  the  Company's  ability  to  continue  as  a  going  concern.

Cash  totaled  $343,400 on September 30, 2002, compared to $420,900 at September
30,  2001.  During  the  fiscal year 2002, net cash used by operating activities
totaled  $2,005,400  compared  to  cash  provided  by  operating  activities  of
$1,494,400  for  the nine months ended September 30, 2001. A significant portion
of  operating  activities  included  payments  for  accounting  and  legal fees,
consulting  fees,  salaries,  and  rent.

Net  cash  provided  by  financing  activities  for  fiscal  year  2002  totaled
$1,917,900 compared to cash used of $625,100 for the nine months ended September
30,  2001.  Net  cash  provided  by investing activities during fiscal year 2002
totaled  $10,000  compared to cash used of $501,200 during the nine months ended
September  30, 2001, for proceeds of notes receivable and decreased expenditures
for the purchase of equipment. The above cash flow activities yielded a net cash
decrease  of  $77,500 during fiscal year 2002 compared to a net cash increase of
$368,100  during  the  nine  months  ended  September  30,  2001.
                                       16
<PAGE>


Net  working  capital  (current  assets less current liabilities) was a negative
$595,000  as  of  September 30, 2002 and a positive $484,300 as of September 30,
2001.  During  the  twelve  months  ended September 30, 2002, the Company raised
$2,930,000,  net  of  placement  fees  of  approximately  $70,000  from  private
placements  of  common stock and Series D Preferred Stock. The Company will need
to continue to raise funds through various financings to maintain its operations
until  such  time  as  cash  generated  by  operations is sufficient to meet its
operating  and  capital requirements. There can be no assurance that the Company
will  be  able  to  raise such capital on terms acceptable to the Company, if at
all.  Long-term  debt  as  of  September  30,  2002  and 2001 was $6,702,600 and
$6,636,700  and  related  primarily  to  the  Company's  owned  real  estate.

Total  shareholders'  equity  decreased  to  $4,891,000 in fiscal year 2002 from
$6,224,800  for  the  nine  months  ended  September 30, 2001. Stock options and
warrants  increased  to  $253,100  in fiscal year 2002 from $10,400 for the nine
months  ended  September  30,  2001.  Additional  paid  in  capital increased to
$12,787,600  in  fiscal  year  2002  from  $9,512,700  for the nine months ended
September  30,  2001.

     INTERNAL  AND  EXTERNAL  SOURCES  OF  LIQUIDITY

During  the last fiscal year, the Company financed its operations with cash from
its  operating activities and through private offerings of its securities to the
Laurus  Master Fund, Ltd. and High Capital Funding, LLC.  These transactions are
described  below.

On  May  24,  2002, the Company repaid the remaining $1,089,616 convertible note
due  to the Laurus Master Fund, Ltd.  In connection with the payoff of the note,
the  Company  expensed  $109,000  in  unamortized prepaid loan fees, $245,000 of
unamortized  discounts  and  $295,000  of  interest  expense.

In  May  and  June  2002,  the  Company  issued  to Laurus Master Fund, Ltd. 12%
convertible  notes  in  the aggregate principal amount of $2,000,000.  The notes
mature  on May 24, 2004 and are convertible into the Company's common stock at a
fixed conversion price of $.95 per share and are payable monthly over 22 months.
The  convertible  notes  are  secured  by  a  second  deed  of trust on our real
property.  In  addition,  in  connection  with  the  issuance of the convertible
notes,  the  Company  issued  warrants  to purchase 300,000 shares of its common
stock  at  an  exercise price of $1.20 per share exercisable until May 24, 2007.

In  June  2002, the Company issued to High Capital Funding, LLC 1,250,000 shares
of  its  Series  D Preferred Stock and a warrant to purchase 1,250,000 shares of
its  common  stock  at  an  exercise  price  of  $.80  per share in exchange for
$1,000,000.  The  Series D Preferred Stock is convertible into common stock at a
ratio  of  one  for  one.  The  Company paid Bathgate Capital Partners, LLC a 7%
placement  agent  fee  in cash.  In addition, the Company collectively issued to
Bathgate  Capital Partners, LLC and its principals an aggregate of 125,000 "VACM
Units",  each  Unit  consisting of one share of the Company's common stock and a
warrant  to  purchase one share of common stock at an exercise price of $.80 per
share,  for  an  aggregate  purchase  price  of  $100,000.

On  July  1,  2002, the Company acquired all of the outstanding shares of common
stock  of  Digital  Cut  Post, Inc.  Digital Cut Post, Inc. is a computer-based,
non-linear,  post-production  editorial  facility  specializing  in  independent
feature  film  and broadcast television.  This acquisition provides for the sole
shareholder of Digital Cut Post, Inc. to receive $1,100,000 and 1,400,000 shares
of  Series C Preferred Stock over a four-year period.  On November 20, 2002, the
Company  and  Digital  Cut Post, Inc. mutually agreed upon a rescission of their
Agreement  and  Plan  of  Reorganization.  Pursuant to the rescission agreement,
Digital  Cut  Post,  Inc.  agreed to repay the Company approximately $281,000 in
cash.  As  of  the  date of this filing, Digital Cut Post, Inc. owes the Company
approximately  $95,000  and  has  agreed  to  pay  this amount by June 26, 2003.

In  December  2002,  an  unaffiliated  company  offered to purchase up to an 85%
equity  interest  in  the Company in exchange for contributing equity financing.
The  Company and the unaffiliated company signed a non-binding letter of intent.
The  closing  of  the  transaction is subject to various conditions. There is no
assurance  that  the  transaction  will  ever  be  consummated,  or  if  it  is

                                       17
<PAGE>

consummated, that it will be consummated on the terms set forth in the letter of
intent.

On  January  14,  2003,  the  Company's  subsidiary,  Valencia  Entertainment
International,  LLC,  entered  into  an Exclusive Sales Listing Agreement with a
commercial real estate broker to sell the real property serving as the Company's
headquarters located at 26030 Avenue Hall in Valencia, California. The Exclusive
Sales  Listing  Agreement lists the property at $11,850,000. The Exclusive Sales
Listing  Agreement  requires  Valencia Entertainment International, LLC to pay a
commission  to the broker of four percent of the gross sales price if the broker
sells  the  real  property.  The  Company  intends to engage in a sale-leaseback
transaction  with  respect  to  its  real property to generate funds for working
capital  and payment of debts. However, there is no assurance that the Company's
property  will  be  sold  for $11,850,000 or on terms otherwise favorable to the
Company.

The Company's subsidiary, Valencia Entertainment International, LLC, is actively
negotiating  to  lease  several  of  the  Company's  vacant production stages to
production companies that produce television series and motion pictures.  If the
production  companies  sign  leases  for  production  stages,  the  Company will
recommend  that the production companies rent production equipment and personnel
from  Half  Day  Video,  Inc.,  another Company subsidiary.  Thus, the Company's
synergistic  relationship  with  Half  Day Video, Inc. may enable it to possibly
enhance  its  revenue-generation.

The  Company  anticipates  that  its  proposed sale-leaseback of its studio real
estate,  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) lease its vacant production stages, (2) rent its production
equipment and personnel profitably, (3) develop additional distribution channels
for its programming, and (4) generate sufficient advertising revenues to support
its  television  station  operations.  Assuming  funds are available, during the
next  fiscal year, the Company expects to spend approximately $500,000 for plant
and  equipment.

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.

                                       18
<PAGE>

ITEM  7.  FINANCIAL  STATEMENTS  AND  SUMMARY  FINANCIAL  DATA
--------------------------------------------------------------

                              FINANCIAL STATEMENTS
                              --------------------
The  audited consolidated balance sheets of the Company as of September 30, 2002
and  2001  and  the related consolidated statements of operations, stockholder's
equity  and  cash  flows  for  the  years  then  ended  are  submitted herewith.

                               CONTENTS OF REPORT



                               CONTENTS OF REPORT

Independent  Auditors'  Reports                                   F-1/F-2
Consolidated  Balance  Sheets                                     F-3/F-4
Consolidated  Statements  of  Operations                          F-5
Consolidated  Statements  of  Stockholders  Equity                F-6/F-7
Consolidated  Statements  of  Cash  Flow                          F-8/F-19
Notes  to  Consolidated  Financial  Statements                    F-10/F-25




                                       19
<PAGE>

                          INDEPENDENT AUDITORS' REPORTS
                          -----------------------------


To  the  Board  of  Directors:
Valcom,  Inc.  and  Subsidiaries


We  have  audited  the  accompanying  consolidated balance sheet of Valcom, Inc.
and  subsidiaries  (the  "Company")  as  of  September  30, 2002 and the related
consolidated  statements of operations, changes in stockholders' equity and cash
flows  for  the year then ended. These consolidated financial statements are the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  based  on  our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  These  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An  audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit  provides  a  reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Valcom,
Inc.  and  subsidiaries  as  of  September  30,  2002  and  the results of their
operations  and  their  cash  flows  for  the year then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will continue as a going concern. As discussed in Note 17 to
the  consolidated financial statements, the Company has a net loss of $4,827,818
and  a  negative  cash  flow  from  operations  of $2,005,392 for the year ended
September  30,  2002,  and  a  working  capital  deficiency  of  $594,990 and an
accumulated  deficit of $8,126,190 at September 30, 2002. These conditions raise
substantial  doubt  about  the Company's ability to continue as a going concern.
Management's  plan in regards to these matters is also described in Note 17. The
accompanying  consolidated  financial  statements do not include any adjustments
that  might  result  from  the  outcome  of  this  uncertainty,




WEINBERG  &  COMPANY,  P.A.

Los  Angeles,  California
January  8,  2003

                                       F1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------



To  the  Board  of  Directors
ValCom,  Inc.:


We  have audited the accompanying consolidated balance sheet of ValCom, Inc. and
subsidiaries  (the  "Company")  as  of  September  30,  2001,  and  the  related
consolidated  statements  of operations, stockholders' equity and cash flows for
the  nine-month  period ended September 30, 2001. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an  opinion  on  these  financial  statements  based  on  our  audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those  standards require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  financial  statements  are  free  from  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts and disclosures in the financial statements. An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that  our  audit  provides  a  reasonable  basis  for  our opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material respects, the consolidated financial position of the Company as of
September  30, 2001, and the consolidated results of its operations and its cash
flows  for the nine months ended September 30, 2001 in conformity with generally
accepted  accounting  principles.


                            /s/JAY J. SHAPIRO, C.P.A.
                            a professional corporation
                            Encino, California
                            December 27, 2001

                                       F2
<PAGE>

                          VALCOM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                                September  30,  September  30
                                                         2002         2001
                                                        ------       ------
                                     ASSETS
                                     ------
Current  Assets:
Cash                                             $     343,374    $   420,857
Accounts  receivable,  net                              99,864        156,179
Other  receivables                                     281,471              -
Receivable  from  Woody  Fraser  Productions              -           150,000
Prepaid  development  costs                             80,932         40,699
Related  party  receivables,  net                       29,000      1,274,000
Note  receivable,  current                              71,566        161,667
Deferred  compensation                                 404,548              -
                                                   -----------    -----------
Total  Current  Assets                               1,310,755      2,203,402

Property  and  equipment  -  net                    11,849,037     11,959,941
Deferred  financing  costs                             275,220        232,171
Deposits  and  other  assets                            39,413         31,750
Note  receivable,  long-term                            64,892        153,333
                                                  ------------    -----------
Total  Assets                                   $  13,539,317   $  14,580,597
                                                  ============   ============

         See accompanying notes to the consolidated financial statements

                                       F3
<PAGE>

                          VALCOM, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current  liabilities:
Accounts  payable                                $      263,539    $     540,983
Accrued  interest                                        38,764           20,384
Accrued  expenses                                       300,850          107,824
Due  to  related  parties,  current portion              51,635                -
Notes  payable,  current  portion                     1,238,357          284,242
Preferred  stock  payable                                12,600                -
Production  advances,  net                                    -          765,656
                                                    -----------        ---------
Total  Current  Liabilities                           1,905,745        1,719,089
Due  to  related  parties,  net of current portion       40,000                -
Notes  payable,  net  of  current portion             6,702,593        6,636,734
                                                    -----------       ----------
Total  Liabilities                                 $  8,648,338       $8,355,823
                                                    -----------       ----------

Commitments  and  contingencies

Stockholders'  equity:
Convertible  preferred  stock:  all  with  par  value
$0.001;
Series  B,  1,000,000  shares  authorized;  38,000
shares  issued  and  outstanding,  respectively              38               38
Series  C,  5,000,000  shares  authorized;  1,400,000  and
1,500,000  shares  issued  and  outstanding, respectively 1,400            1,500
Series  D,  1,250,000  shares  authorized;1,250,000  and
0  shares  issued  and  outstanding, respectively         1,250                -
Common  stock,  par  value  $.001;  100,000,000  shares
authorized;  11,011,933  and  8,909,401
shares  issued  and  outstanding,  respectively          11,012            8,909

Series C preferred stock to be issued (380,000 shares)  239,400                -

Additional  Paid-in  capital                         12,787,591        9,512,699

Accumulated  deficit                                (8,126,190)      (3,298,372)

Treasury  stock,  at  cost  (35,000 shares)            (23,522)                -
                                                    -----------      -----------
Total  Stockholders'  Equity                          4,890,979        6,224,774
                                                    -----------      -----------
Total  Liabilities  and  Stockholders'  Equity      $13,539,317      $14,580,597
                                                    ===========      ===========

         See accompanying notes to the consolidated financial statements

                                       F4
<PAGE>

<TABLE>
<CAPTION>

                          VALCOM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                     For the Nine
                                        For the Year Ended           Months Ended
                                        September 30, 2002     September 30, 2001
                                        ------------------     ------------------
<S>                                    <C>                   <C>
Revenue:
Rental                                 $         3,426,405   $          1,422,033
Production                                       8,733,278                952,234
Other                                               51,646                 38,993
                                                    ------                 ------

Total Revenue                                   12,211,329              2,413,260
                                                ----------              ---------

Cost and Expenses:
Production                                       7,765,360               981,667
General and administrative                       4,235,788             2,119,348
Consulting and professional fees                   768,876               389,713
Bad debts                                        1,889,302                20,000
Depreciation and amortization                      401,512               191,925
Goodwill impairment                                424,634                  -
Selling and promotion                              164,276                230,483
                                                   -------                -------

Total Cost and Expenses                         15,649,748             3,933,136
                                       --------------------  --------------------

Operating loss                                  (3,438,419)           (1,519,876)

Other Income (Expense):
Interest expense                                (1,397,836)             (606,415)
Other income                                         8,437                     -
                                                 ---------              ---------

Total Other Income (Expense)                    (1,389,399)             (606,415)
                                       --------------------  --------------------

Net loss                               $        (4,827,818)  $        (2,126,291)
                                       ====================  ====================

Net loss per common share:
Basic and diluted                      $             (0.48)  $             (0.23)
                                       ====================  ====================

Weighted average shares outstanding:
Basic and diluted                               10,152,597             9,135,419
                                       ====================  ====================

</TABLE>

         See accompanying notes to the consolidated financial statements

                                       F-5

<PAGE>

<TABLE>
<CAPTION>

                          VALCOM, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                          Common               Preferred Series B          Preferred Series C
                                     Shares      Amount       Shares       Amount        Shares        Amount
                                   ----------   ---------    ----------------------    -----------   ----------
<S>                           <C>           <C>          <C>           <C>          <C>            <C>
Balance, December 31, 2000         90,139,843   $ 90,140        43,000   $    43        1,500,000      $ 1,500

Acquisition of Half Day               950,000        950            -          -             -             -

Discount on convertible debt               -          -             -          -             -             -

Shares issued for services          1,600,000      1,600            -                        -             -

Shares issued for debt retirement     869,162        869            -          -             -             -

Shares issued for cash                410,000        410            -          -              -            -

Conversion of preferred shares         25,000         25        (5,000)       (5)             -            -

Correction of shares issued upon
merger                                100,000        100            -          -              -            -

Canceled                           (5,000,000)    (5,000)           -          -              -            -

Reverse split 1:10                (80,184,604)   (80,185)           -          -              -            -

Net loss                                 -           -              -          -              -            -
                                  ------------  ---------       -------  --------        ----------   ---------

Balance September 30, 2001          8,909,401      8,909        38,000        38        1,500,000        1,500

Shares issued for services            440,284        440            -          -              -            -

Shares issued for debt retirement     552,748        553            -          -              -            -

Shares issued to employees as
compensation                          759,500        760            -          -              -            -

Shares issued for payment of
penalties and fees - Laurus Master
Fund, Ltd. loan                       350,000        350            -          -              -            -

Preferred stock issued for cash, net      -          -              -          -              -            -

Warrants issued with preferred stock
payable                                   -          -              -          -              -            -

Issuance of warrants with
convertible notes                         -          -              -          -              -            -

VACM Units issued to placement
agents                                    -          -              -          -              -            -

Issuance of common stock warrants
and options                               -          -              -          -              -            -

Cancellation of Series C Preferred
Stock at par                              -          -               -         -         (100,000)        (100)

Less treasury stock, at cost              -          -               -         -              -            -

Preferred stock to be issued              -          -               -         -              -            -

Net loss                                  -          -               -         -              -            -
                                 -------------  ---------      --------  --------      -----------    ---------

Balance September 30, 2002         11,011,933   $ 11,012        38,000   $    38        1,400,000      $ 1,400
                                 =============  =========      ========  ========      ===========    =========

</TABLE>

         See accompanying notes to the consolidated financial statements
                                       F-6

<PAGE>

<TABLE>
<CAPTION>


                                              VALCOM, INC. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (CONTINUED)

                                                                  Series C
                                                                  Preferred Stock        Additional
                                           Preferred Series D     To be issued            Paid-In      Treasury      Accumulated
                                           Shares    Amount     Shares    Amount          Capital       Stock          Deficit
                                         --------- ---------   --------  -----------   -------------    ---------     ------------
<S>                                   <C>        <C>      <C>          <C>          <C>              <C>          <C>
Balance, December 31, 2000                   -     $  -          -      $   -        $    8,101,157   $      -  $(1,172,081)

Acquisition of Half Day                      -        -          -          -               140,792          -                -

Discount on convertible debt                 -        -          -          -               375,000          -                -

Shares issued for services                   -        -          -          -               378,400          -                -

Shares issued for debt retirement            -        -          -          -               227,695          -                -

Shares issued for cash                       -        -          -          -               204,590          -                -

Conversion of preferred shares               -        -          -          -                   (20)         -                -

Correction of shares issued                  -        -          -          -                  (100)         -                -
upon merger

Canceled                                     -        -          -          -                 5,000          -                -

Reverse split 1:10                           -        -          -          -                80,185          -                -

Net loss                                     -        -          -          -                      -          -        (2,126,291)

Balance September 30, 2001                   -        -          -          -              9,512,699          -        (3,298,372)

Shares issued for services                   -        -          -          -                430,843          -               -

Shares issued for debt retirement            -        -          -          -                144,959          -               -

Shares issued to employees for compensation  -        -          -          -                718,846          -               -

Shares issued for payment of                 -        -          -          -                255,650          -               -
  penalties and fees- Laurus
  Master Fund, Ltd. loan

Preferred stock issued for             1,250,000     1,250       -          -                468,797          -               -
  cash, net

Warrants issued with preferred               -       -           -         -                 441,203          -               -
  stock

Issuance of warrants with                    -       -           -         -                  77,300          -               -
  convertible notes

VACM Units issued to                         -       -           -         -                  60,995          -               -
  placement agents

Issuance of common stock                     -       -           -         -                 676,199          -               -
  warrants and options

Cancellation of Series C                     -       -           -         -                     100          -               -
  Preferred Stock at par

Less treasury stock, at cost                 -       -           -         -                     -       (23,522)             -

Preferred stock to be issued in              -       -        380,000      239,400               -            -               -
acquisition

Net loss                                     -       -           -          -                    -            -        (4,827,818)
                                     ------------   -------   -------     --------      -----------     ---------     ------------
Balance September 30, 2002             1,250,000    $ 1,250   380,000     $239,400      $12,787,591     $(23,522)     $(8,126,190)
                                     ============   =======   =======     ========      ===========     =========     ============

                                                Total
<S>                                          <C>
Balance, December 31, 2000                   $ 7,020,759

Acquisition of Half Day                          141,742

Discount on convertible debt                     375,000

Shares issued for services                       380,000

Shares issued for debt retirement                228,564

Shares issued for cash                           205,000

Conversion of preferred shares                         -

Correction of shares issued                            -
 upon merger

Canceled                                               -

Reverse split 1:10                                     -

Net loss                                      (2,126,291)
                                              -----------

Balance September 30, 2001                     6,224,774

Shares issued for services                       431,283

Shares issued for debt retirement                145,512

Shares issued to employees for compensation      719,606

Shares issued for payment of                     256,000
  penalties and fees- Laurus
  Master Fund, Ltd. loan

Preferred stock issued for                       470,047
  cash, net

Warrants issued with preferred                   441,203
  stock

Issuance of warrants with                         77,300
  convertible notes

VACM Units issued to                              60,995
  placement agents

Issuance of common stock                         676,199
  warrants and options

Cancellation of Series C                               -
  Preferred Stock at par

Less treasury stock, at cost                     (23,522)

Preferred stock to be issued in                  239,400
acquisition

Net loss                                      (4,827,818)
                                             ------------

Balance September 30, 2002                   $ 4,890,979
                                             ============
</TABLE>


         See accompanying notes to the consolidated financial statements

                                       F-7

<PAGE>
------
<TABLE>
<CAPTION>


                                          VALCOM, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                  For the Year     For the Nine
                                                                                      Ended        Months Ended
                                                                                  September 30,    September 30,
                                                                                      2002             2001
                                                                                 --------------  ----------------
<S>                                                                              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                                                       $   (4,827,818)  $   (2,126,291)
  Adjustments to reconcile net loss to net cash (used in) provided by operating
  activities:
    Depreciation and amortization                                                       401,512          191,925
    Bad debt expense                                                                  1,889,302                -
    Goodwill impairment                                                                 424,634                -
    Discount on note receivable                                                          16,875                -
    Warrants and options issued for compensation                                        271,651          280,000
    Warrants issued to placement agent                                                   42,245                -
    Stock issued for payment of fees and penalties                                      256,000                -
    Stock issued for compensation                                                       719,606                -
    Stock issued for services                                                           431,283                -
  Changes in operating assets and liabilities:
    Increase in receivables                                                            (295,878)         (61,223)
    Increase in other receivables                                                      (281,471)               -
    Increase in prepaid development costs                                               (40,233)         (80,498)
    Increase in related party receivables                                               (65,000)               -
    (Increase) decrease in deposits and other assets                                     (7,063)           9,819
    (Decrease) increase in accounts payable and accrued expenses                       (175,381)       2,515,014
    (Decrease) increase in production advances                                         (765,656)         765,656
                                                                                 ---------------  ---------------
      Net Cash (Used In) Provided By Operating Activities                            (2,005,392)       1,494,402
                                                                                 ---------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                                                 (111,658)        (401,179)
  Proceeds from (payment for) note receivable                                           121,667         (100,000)
                                                                                 --------------   ---------------
      Net Cash Provided By (Used In) Investing Activities                                10,009         (501,179)
                                                                                 ---------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of convertible debt                                          2,000,000          131,198
  Payment of loan costs on new debt                                                    (221,999)        (131,670)
  Repayment of notes payable                                                           (757,214)        (381,529)
  Repayment of amounts due to related parties                                            (9,365)        (448,142)
  Purchase of treasury stock                                                            (23,522)               -
  Proceeds from issuance of preferred stock and warrants                                930,000          205,000
                                                                                 --------------   ---------------
      Net Cash Provided By (Used In) Financing Activities                             1,917,900         (625,143)
                                                                                 ---------------  ---------------

NET (DECREASE) INCREASE IN CASH                                                         (77,483)         368,080

CASH AT BEGINNING OF YEAR                                                               420,857           52,777
                                                                                  -------------    --------------

CASH AT END OF YEAR                                                              $      343,374   $      420,857
                                                                                  =============    ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
-------------------------------------------------

Cash paid for interest                                                           $    1,371,810   $      299,000
                                                                                  -------------    --------------
Cash paid for income taxes                                                       $          800   $            -
                                                                                 ---------------  ---------------
</TABLE>

                                       F-8

<PAGE>

SUPPLEMENTAL  DISCLOSURE  OF  NON-CASH  INVESTING  AND  FINANCING  ACTIVITIES:
------------------------------------------------------------------------------

During  the  year ended September 30, 2002, the Company issued 552,748 shares of
common  stock  to  convert  $145,512  of  principal  and interest on convertible
debentures  (See  Note  7).

During  the  year  ended  September  30,  2002,  the Company acquired all of the
outstanding  shares  of  common  stock  of  PTL Productions, Inc. (dba Brentwood
Magazine)  for  the  assumption  of  approximately $109,343 of debt and accounts
payable,  recorded  due  to  related  parties  of $101,000 and 400,000 shares of
Series C Preferred Stock (See Note 4). In January 2003, the Company entered into
a Memorandum of Understanding to cancel the Agreement and Plan of Reorganization
dated  August  2,  2002, pursuant to which the Company acquired PTL Productions,
Inc.  (dba Brentwood Magazine) and sell PTL Productions, Inc. back to the seller
(See  Note  16).

During  the year ended September 30, 2002, the Company issued 2,075,000 warrants
and  425,000  options  to  consultants  having a fair value of $676,170 of which
$404,548  has  been  classified  as  deferred compensation and $271,651 has been
expensed  (See  Notes  13  and  14).

During  the  year ended September 30, 2002, the Company cancelled 100,000 shares
of  Series  C  Preferred  Stock  for  no  consideration.

                                      F-9

<PAGE>

                          VALCOM, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2002 AND 2001

NOTE  1  DESCRIPTION  OF BUSINESS AND 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.

DESCRIPTION OF BUSINESS
-----------------------
ValCom,  Inc.  and  subsidiaries  (the  "Company"), formerly SBI Communications,
Inc., was originally organized in the State of Utah on September 23, 1983, under
the  corporate  name of Alpine Survival Products, Inc. Its name was subsequently
changed to Supermin, Inc. on November 20, 1985. On September 29, 1986, Satellite
Bingo,  Inc.  became  the  surviving corporate entity in a statutory merger with
Supermin,  Inc.  In connection with the above merger, the former shareholders of
Satellite  Bingo,  Inc.  acquired  control  of the merged entity and changed the
corporate name to Satellite Bingo, Inc. On January 1, 1993, the Company executed
a  plan  of merger that effectively changed the Company's state of domicile from
Utah  to  Delaware.  Through shareholder approval dated March 10, 1998, the name
was  changed  to  SBI  Communications,  Inc.

In  October 2000, the Company was issued 7,570,997 shares by SBI for 100% of the
shares  outstanding  in  Valencia  Entertainment  International,  LLC ("VEI"), a
California limited liability company. This acquisition has been accounted for as
a  reverse  acquisition  merger  with VEI as the surviving entity. The corporate
name  was  changed  to  ValCom,  Inc.  effective  March  21,  2001.

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

          a)   Studio  rental  -  the  Company leases eight sound and production
               stages  to  production  companies.  Six  of  the  eight sound and
               production  stages  are  owned by the Company while the remaining
               two stages are leased from a third party under an operating lease
               agreement.

          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)   Film  and  TV  production  -  the  Company  has  a  joint-venture
               agreement  with  Woody  Fraser Productions, Inc. ("Woody Fraser")
               pursuant  to  which  the Company and Woody Fraser produce various
               television productions for the broadcast networks, cable networks
               or  first-run  television  syndication  and  may  be subsequently
               licensed  to  foreign or domestic cable and syndicated television
               markets.  However,  the  Company  is  currently in a dispute with
               Woody  Fraser  (See  Note  5).

          d)   Magazine  publication  -  Operating  under  the  name  Brentwood
               Magazine,  the  Company  derives  advertising  revenues  from the
               publishing  of  a  southern  California  magazine  covering
               entertainment,  business,  luxurious  lifestyles,  travel  and
               fashions.  The  Company  also  uses  the magazine as a source for
               additional promotion of the Company. In January 2003, the Company
               entered  into  a  Memorandum  of  Understanding  to  cancel  the
               Agreement  and  Plan  of  Reorganization  dated  August  2, 2002,
               pursuant  to  which  the  Company  acquired  PTL Productions (dba
               Brentwood Magazine) and sell PTL Productions, Inc. (dba Brentwood
               Magazine)  back  to  the  seller  (See  Note  16).

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.  During  the  fiscal year 2001, the Company
changed  its  year-end  to  September  30 from December 31 to better reflect its
operating  cycle.

                               F-10

<PAGE>

                          VALCOM, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2002 AND 2001

PRINCIPLES OF CONSOLIDATION
----------------------------
The  consolidated  financial statements include the accounts of ValCom, Inc. and
three  wholly-owned  subsidiaries,  VEI,  which  was acquired effective February
2001,  Half  Day  Video,  Inc.,  which was acquired effective March 2001 and PTL
Productions,  Inc.,  (dba  Brentwood Magazine) which was acquired in August 2002
(See  Note  4).  In  January  2003,  the  Company  entered  into a Memorandum of
Understanding to cancel the Agreement and Plan of Reorganization dated August 2,
2002,  pursuant  to  which  the  Company acquired PTL Productions (dba Brentwood
Magazine)  and  sell  PTL Productions, Inc. (dba Brentwood Magazine) back to the
seller (See Note 16).

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.

USE OF ESTIMATES
------------------
The  preparation  of  consolidated  financial  statements  in  conformity  with
accounting  principles  generally  accepted  in  the  United  States  of America
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  consolidated  financial  statements and the
reported  amounts  of  revenue  and expenses during the reporting period. Actual
results  could  materially  differ  form  those  estimates.

CONCENTRATIONS  AND  CREDIT  RISK
---------------------------------
The  Company  has  three  customers who accounted for approximately 99% of total
rental  revenues for the year and nine months ended September 30, 2002 and 2001,
respectively.  As  of  September 30, 2002, all eight sound and production stages
were  under  non-cancelable  operating  leases  for  one  year  from  two  major
production  companies.

Woody  Fraser  accounted  for  approximately  91%  and  22%  of total production
revenues  for  the  year  and  nine  months  ended  September 30, 2002 and 2001,
respectively.  During  fiscal  year 2002, the Company, in association with Woody
Fraser,  produced  three  television  pilots  or  series, two of which have been
"picked  up"  by  network  companies  for  the  next  season.

Financial  instruments that potentially subject the Company to concentrations of
risk  consist  of trade receivables principally arising from monthly leases from
television producers. The Company continuously monitors the credit-worthiness of
its  customers  to  minimize  its  credit  risk.

FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The  carrying  value of cash, receivables and accounts payable approximates fair
value  due  to  the  short  maturity of these instruments. The carrying value of
short  and  long-term  debt  approximates  fair  value  based on discounting the
projected  cash flows using market rates available for similar instruments. None
of  the financial instruments are held for trading purposes. As of September 30,
2002, accounts receivable is reported net of a $496,190 allowance for bad debts.

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:


<TABLE>
<CAPTION>

<S>                             <C>           <C>       <C>      <C>
Building                                      39 years
Building Improvements                         39 years
Production Equipment                           5 years
Office Furniture and Equipment                 5 to 7 years
Leasehold Improvements                         5 years
Autos and Trucks                               5 years
</TABLE>

DEFERRED LOAN COSTS
-------------------
Deferred  loan  costs are amortized on the straight-line method over the term of
the  related  loan.

                                      F-11

<PAGE>

                                 ValCom, INC. AND SUBSIDIARIES
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  SEPTEMBER 30, 2002 AND 2001


INCOME  TAXES
-------------
Deferred  income  tax assets or liabilities are computed based on the difference
between  the  financial reporting and income tax bases 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.

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.  Expenses related to stock options and warrants
issued  to  non-employees  are  accounted for using the fair value based method,
under  which  the  fair  value  of the security is measured at the date of grant
based  on  the  Black-Scholes  pricing  model.

PREPAID  DEVELOPMENT  COSTS
---------------------------
Prepaid  development  costs  consist  principally of direct production costs and
production  overhead  and  are  expensed when the Company records the applicable
revenues  and  the films or series are available for telecast or all contractual
obligations  have  been  met  by  the  Company. The Company has recorded prepaid
development  as  a  current  asset  due to the short-term nature of the films or
series being produced. Production costs incurred on films or series that are not
expected  to  be  telecast  within  one year are classified as long-term prepaid
development  costs.  At  September  30,  2002 and 2001, prepaid production costs
totaled  $80,932 and $40,699, respectively. None of the prepaid production costs
have  been  classified  as  long-term.

IMPAIRMENT  OF  LONG-LIVED  ASSETS
----------------------------------
Long-lived  assets  are  reviewed  for  impairment whenever events or changes in
circumstances  indicate  that  the  carrying  amount  of  such assets may not be
recoverable.  Determination  of  recoverability  is  based  on  an  estimate  of
undiscounted  future  cash  flows  resulting  from  the use of the asset and its
eventual disposition. Measurement of an impairment loss for long-lived assets is
based  on  the  fair value of the asset. Long-lived assets to be disposed of are
reported  at  the  lower  of  carrying  amount or fair value less costs to sell.
During  the  fourth quarter of fiscal year ended September 30, 2002, the Company
recorded  an  impairment  charge  amounting to $424,634 relating to the goodwill
recorded  for  the  acquisition  of  PTL  Productions,  Inc.  (See  Note  4).

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.  Advertising revenues are recognized in the period during which
the  advertising is published in the Company's magazine, Brentwood Magazine.  In
January  2003,  the Company entered into a Memorandum of Understanding to cancel
the Agreement and Plan of Reorganization dated August 2, 2002, pursuant to which
the  Company  acquired  PTL  Productions  (dba  Brentwood Magazine) and sell PTL
Productions,  Inc.  (dba  Brentwood  Magazine) back to the seller (See Note 16).

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  (See  Note  15)


                                      F-12

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2002 AND 2001

TREASURY
--------
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,  2002.


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.

The  Company had a 1 for 10 reverse stock split of its shares of common stock in
September  2001.  The  weighted average shares outstanding and loss per share in
2001  have  been  restated  to  reflect  this  change.

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

NEW  ACCOUNTING  PRONOUNCEMENTS
-------------------------------
The  Financial  Accounting  Standards  Board  has  recently  issued  several new
Statements  of  Financial  Accounting  Standards  ("SFAS").  Statement  No. 141,
"Business  Combinations"  supersedes Accounting Principles Board ("APB") Opinion
No.  16  and  various  related  pronouncements.  Pursuant to the new guidance in
Statement  No.  141,  all  business combinations must be accounted for under the
purchase  method  of  accounting;  the  pooling-of-interests method is no longer
permitted.  SFAS  141  also  establishes new rules concerning the recognition of
goodwill  and other intangible assets arising in a purchase business combination
and requires disclosure of more information concerning a business combination in
the  period in which it is completed.  This statement is generally effective for
business  combinations  initiated  on or after July 1, 2001.  Statement No. 142,
"Goodwill  and  Other  Intangible  Assets" supercedes APB Opinion 17 and related
interpretations.  Statement  No. 142 establishes new rules on accounting for the
acquisition  of  intangible  assets  acquired  in a business combination and the
manner  in  which  goodwill  and  all  other intangibles should be accounted for
subsequent  to their initial recognition in a business combination accounted for
under SFAS No. 141.  Under SFAS No. 142, intangible assets should be recorded at
fair value.  Intangible assets with finite useful lives should be amortized over
such  period  and  those  with  indefinite  lives  should not be amortized.  All
intangible  assets  being  amortized  as  well  as  those that are not, are both
subject  to  review for potential impairment under SFAS No. 121, "Accounting for
the  Impairment  of  Long-Lived  Assets and for Long-Lived Assets to be Disposed
of".  SFAS No. 142 also requires that goodwill arising in a business combination
should  not  be  amortized but is subject to impairment testing at the reporting
unit  level  to  which  the  goodwill  was  assigned at the date of the business
combination.

SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 and
must  be  applied  as  of  the  beginning of such year to all goodwill and other
intangible assets that have already been recorded in the balance sheet as of the
first  day  in  which SFAS No. 142 is initially applied, regardless of when such
assets  were  acquired.  Goodwill  acquired  in  a  business  combination  whose
acquisition  date  is  on  or  after  July 1, 2001, should not be amortized, but
should be reviewed for impairment pursuant to SFAS No. 121, even though SFAS No.
142  has  not  yet  been  adopted.  However, previously acquired goodwill should
continue to be amortized until SFAS No. 142 is first adopted. Statement No. 143,
"Accounting  for  Asset  Retirement  Obligations"  establishes standards for the
initial  measurement  and  subsequent accounting for obligations associated with
the  sale,  abandonment, or other type of disposal of long-lived tangible assets
arising  from  the  acquisition,  construction,  or  development  and/or  normal
operation  of such assets.  SFAS No. 143 is effective for fiscal years beginning
after  June  15,  2002,  with  earlier  application  encouraged.

                                      F-13

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

In  August  2001,  the  FASB  issued SFAS 144, "Accounting for the Impairment or
Disposal  of  Long-Lived Assets".  This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets and supercedes
FASB  Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for  Long-Lived  Assets to be Disposed Of".  The provisions of the statement are
effective  for  financial  statements  issued  for  fiscal years beginning after
December  15,  2001.  The  Company will apply the provisions of SFAS 144 for the
listing  of  its  property  (See  Note  17).

In  April  2002, the FASB issued SFAS 145, "Rescission of FASB Statements No. 4,
44,  and  64,  Amendment  of  FASB Statement No. 13, and Technical Corrections".
SFAS  145  rescinds  the  provisions  of SFAS No. 4, which requires companies to
classify  certain  gains  and  losses from debt extinguishments as extraordinary
items,  eliminates  the  provisions  of  SFAS No. 44 regarding transition to the
Motor  Carrier  Act  of 1980 and amends the provisions of SFAS No. 13 to require
that certain lease modifications be treated as sale leaseback transactions.  The
provisions  of  SFAS  145  related to classification of debt extinguishments are
effective for fiscal years beginning after May 15, 2002.  Earlier application is
encouraged.

In  July  2002,  the  FASB  issued  SFAS  No. 146, "Accounting for Restructuring
Costs."  SFAS  146  applies to costs associated with an exit activity (including
restructuring)  or  with  a disposal of long-lived assets.  Those activities can
include  eliminating  or  reducing  product  lines,  terminating  employees  and
contracts  and  relocating  plant  facilities or personnel.  Under SFAS 146, the
Company  will  record a liability for a cost associated with an exit or disposal
activity  when  that  liability  is  incurred and can be measured at fair value.
SFAS  146  will  require  the Company to disclose information about its exit and
disposal  activities, the related costs, and changes in those costs in the notes
to  the interim and annual financial statements that include the period in which
an exit activity is initiated and in any subsequent period until the activity is
completed.  SFAS  146 is effective prospectively for exit or disposal activities
initiated after December 31, 2002, with earlier adoption encouraged.  Under SFAS
146, a company cannot restate its previously issued financial statements and the
new  statement  grandfathers  the  accounting for liabilities that a company had
previously  recorded  under  Emerging  Issues  Task  Force  Issue  94-3.

In  October  2002,  the  FASB  issued  SFAS  No.  147,  "Acquisitions of Certain
Financial  Institutions."  SFAS 147 addresses financial accounting and reporting
for  the  acquisition  of  all  or part of a financial institution, except for a
transaction  between  two  or  more  mutual enterprises.  SFAS 147 also provides
guidance  on the accounting for the impairment or disposal of acquired long-term
customer  relationship  intangible  assets  of financial institutions, including
those  acquired  in  transactions between two or more mutual enterprises.  These
provisions  of  the  statement  will  be  effective for acquisitions on or after
October  1,  2002.

In  December  2002,  the  FASB  issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition  and  Disclosure  -  an  amendment of FASB Statement No.
123."  SFAS  148  amends  FASB  Statement  No.  123, "Accounting for Stock Based
Compensation"  and  provides  alternative methods for accounting for a change by
registrants to the fair value method of accounting for stock-based compensation.
Additionally, SFAS 148 amends the disclosure requirements of SFAS 123 to require
disclosure  in  the  significant  accounting  policy footnote of both annual and
interim  financial  statements  of  the  method  of  accounting  for  stock
based-compensation  and  the  related  pro  forma disclosures when the intrinsic
value  method continues to be used.  The statement is effective for fiscal years
beginning  after  December 15, 2002, and disclosures are effective for the first
fiscal  quarter  beginning  after  December  15,  2002.

With  the  exception  of  SFAS  144, the adoption of these pronouncements is not
expected  to  have  a  material  effect  on the Company's consolidated financial
statements.


                                      F-14

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

NOTE  2  PROPERTY  AND  EQUIPMENT
---------------------------------
Property  and  equipment  consists  of  the  following  at:

<TABLE>
<CAPTION>

                                       September 30,

                                    2002          2001
                                 ---------      ----------
<S>                             <C>           <C>
Land                            $ 7,392,292   $ 7,392,292
Building                          4,028,785     4,028.785
Building Improvements             1,161,256     1,154,406
Production Equipment                757,207       699,286
Leasehold Improvements               62,677        50,164
Autos and Trucks                     96,787        89,087
Office Furniture and Equipment       99,917        73,243
                                 -----------    --- ------
                                 13,598,921    13,487,263
Less: accumulated depreciation   (1,749,884)   (1,527,322)
                                 -----------    ----------

Net book value                  $11,849,037    $11,959,941
                                 ===========    ==========
</TABLE>

NOTE  3  NOTE  RECEIVABLE
-------------------------
In  September  2001, the Company sold production equipment to an unrelated third
party  under  an  asset  purchase agreement for $350,000. Under the terms of the
agreement,  $150,000 was to be paid at signing and the remaining $200,000 was to
be  paid  in  24  monthly  installments of $8,333.  The $150,000 was paid to the
Company,  however, none of the $8,333 monthly payments were made.  In July 2002,
the  Company restructured the note to forgive $40,000 of the note and extend the
maturity  date  one  year,  thereby reducing the monthly payments to $6,667.  In
connection  with  the  sale,  the  Company  recorded a loss of $25,312, which is
included  in  general  and  administrative  expenses  for  the fiscal year ended
September  30,  2002.  Additionally,  the Company recorded a $40,000 loss on the
restructuring  of  the note which is also included in general and administrative
expenses.  The note is non-interest bearing.  The Company recorded a discount on
the  note  amounting  to $25,312 and the discount is accreted to interest income
over  the  term  of  the  note.  In  connection  with  the discount, the Company
recorded interest income of $8,437 for the fiscal year ended September 30, 2002.
As  of  September  30,  2002,  the balance due on the note is $136,458, of which
$71,566  is  due  within  one  year.  The third party is current with the $6,667
monthly  payments  on  the note.  The note is secured by the equipment sold.  In
January  2003,  the Company also entered into an agreement to receive $40,000 of
the  equipment  back  from  the  seller.

NOTE  4  BUSINESS  ACQUISITIONS
-------------------------------
In  March 2001, the Company acquired 100% of the common stock of Half Day Video,
Inc., a California corporation, for 950,000 shares of ValCom, Inc. common stock.
The  net  book  value of Half Day Video, Inc. has been determined to be the fair
market  value of the common stock issued and therefore no goodwill was recorded.

Effective  July  1,  2002, the Company acquired all of the outstanding shares of
common stock of Digital Cut Post, Inc. in exchange for the issuance of 1,400,000
shares  of  Series C Convertible Preferred Stock and $1,100,000 in cash. Digital
Cut  Post,  Inc  is  a  computer  based,  non-linear,  post production editorial
facility  specializing  in  independent  feature  film and broadcast television.
Total consideration for this acquisition was approximately $1,600,000 to be paid
over  four  years.  However,  on  November 20, 2002, the Company and Digital Cut
Post, Inc. mutually agreed to rescind the stock purchase agreement and therefore
the  accounts  of  Digital  Cut  Post,  Inc.  are  not included in the Company's
consolidated financial statements at September 30, 2002. Any agreements that the
Company  had  entered  into  on  behalf of Digital Cut Post, Inc. were cancelled
without  prejudice.  Also,  the preferred shares issued to the owners of Digital
Cut  Post,  Inc. by the Company in connection with the acquisition were returned
and  subsequently  cancelled. Cash paid by the Company in the amount of $225,000
to  the  owners  of  Digital  Cut Post, Inc. will be returned subject to certain
adjustments.  As  of September 30, 2002, Digital Cut Post, Inc. owes the Company
approximately  $281,000  representing  the  cash  consideration  given  for  the
acquisition  of  Digital Cut Post, Inc., and operating expenses and payroll paid
on  behalf  of  Digital  Cut  Post,  Inc.
by  the  Company.  The  total  amount  due  from Digital Cut Post, Inc. has been
included  in other receivables in the accompanying Consolidated Balance Sheet as
of  September  30,  2002.

                                      F-15

<PAGE>

Effective  August 2, 2002, the Company acquired all of the outstanding shares of
common  stock  of PTL Productions, Inc. (dba Brentwood Magazine) in exchange for
the  assumption  of  approximately  $109,343  of  debt and accounts payable, the
payment of $101,000 in cash and an agreement to issue 400,000 shares of Series C
Convertible Preferred Stock, convertible 1 for 1 into common shares. The Company
also acquired approximately $38,000 of accounts receivable and other assets. The
value  of  the preferred stock to be issued was $252,000 or $.63 per share based
on the value of the Company's common stock on the date of the acquisition. As of
September 30, 2002, the preferred stock had not been issued, however on December
6,  2002 the Company issued 380,000 shares of Series C Preferred Stock.  As such
at  September  30, 2002, the value of 380,000 shares of Series C Preferred Stock
($239,400)  is  presented  as  preferred stock to be issued and the value of the
20,000  shares  ($12,600)  still  to  be  issued  is included in preferred stock
payable in the accompanying balance sheet.  The cash is to be paid over a period
of  one  year  subject to the collections of certain accounts receivable amounts
and  the accuracy of the accounts payable assumed. As of September 30, 2002, the
balance  owed  to the former owners was $91,635.  Brentwood Magazine, a Southern
California  entertainment  publication,  has been setting the trends in Southern
California  from  Santa  Barbara  to  San  Diego  for over seven years, covering
entertainment,  business,  luxurious lifestyles, travel and fashion. The Company
anticipated  that  its  acquisition of Brentwood Magazine would help promote and
establish  the Company as a total entertainment company with several promotional
avenues.  In  connection with the acquisition of Brentwood Magazine, the Company
formed  a  new  division, Valcom Publishing. This acquisition has been accounted
for by the purchase method of accounting and, accordingly, the operating results
have  been included in the Company's consolidated results of operations from the
date  of the acquisition. As a result of the Brentwood Magazine acquisition, the
Company  recorded  goodwill in the amount of approximately $424,634.  During the
fourth  quarter  of  the  fiscal  year  ended September 30, 2002, management has
determined that the goodwill associated with this acquisition was fully impaired
and  has  written-off  the  total  goodwill  recorded.

In  connection  with  the  acquisition  of  PTL Productions, Inc. (dba Brentwood
Magazine),  the  Company  entered  into  an employment agreement with the former
owner  of  the  magazine for a period of three years. Pursuant to the employment
agreement,  the  Company agreed, subject to certain terms and conditions, to pay
the  former owner a salary of $100,000 per year and a $20,000 bonus in the first
year  and a $40,000 bonus payment in the following year.  At September 30, 2002,
the  Company  accrued  approximately  $57,700 for the former owner's bonus.  The
Company  has  accounted for the amounts paid to the former owner as compensation
expense  ratably  over the term of the employment agreement.  Effective December
27,  2002, the Company terminated the former owner and stopped paying his salary
and  bonuses.  In  January  2003,  the  Company  entered  into  a  Memorandum of
Understanding to cancel the Agreement and Plan of Reorganization dated August 2,
2002,  pursuant  to  which  the  Company  acquired  PTL  Productions,  Inc. (dba
Brentwood  Magazine) and sell PTL Productions, Inc. back to the seller (See Note
16).

NOTE  5  PRODUCTION  AGREEMENT
------------------------------
In  January  2001,  the  Company  entered into an agreement with Woody Fraser to
produce  various  television  productions  on its behalf. Under the terms of the
agreement,  the  Company  was  to fund $500,000 of annual production development
costs  in  the form of a recoverable draw. The amount was to be paid in 10 equal
installments  of  $50,000  throughout  the year. In return, the Company retains,
after  costs  of production, 75% of the net savings derived from all production,
75%  of  ownership  of foreign and syndication plus executive producer fees. The
remaining  25% of the net profits from any productions are paid to Woody Fraser.
The  Company was to retain 75% of any possible net savings from the productions.
Half  Day  Video,  Inc.,  a  subsidiary  of  the Company, provided most of Woody
Fraser's  production rental needs. After costs of production, the Company was to
retain  100%  of  any savings plus a portion of the executive producer fees. The
agreement  expires  December  31,  2003.

                                      F-16

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

In  November  2001,  due  to disputes among the parties and the failure of Woody
Fraser  Productions,  Inc. to perform its respective duties under the production
agreement,  the  Company  stopped  paying Woody Fraser Productions, Inc. monthly
payments  of  $50,000  for production costs. Both parties claimed an unspecified
amount  of  damages are owed to them and have not distributed any of the profits
or  allocated  any  of  the  production  costs in accordance with the production
agreement.  The  production agreement provides that disputes must be resolved by
binding  arbitration  rather  than  litigation.  The  dispute is currently being
arbitrated.  The  Company  believes that Woody Fraser's claims are without merit
and will vigorously defend itself. As of September 30, 2002, no accrual has been
recorded  with  respect  to  the  arbitration.

Through  September  30,  2002,  Woody  Fraser Productions, Inc. owed the Company
approximately  $400,000  pertaining  to  amounts  advanced  to  Woody Fraser for
production  costs  and  $371,910  for  accounts  receivable.  Woody  Fraser
Productions,  Inc.  also  owes the Company 75% of the net profits generated from
certain  television  shows  it  produced  as  well as executive producer fees of
$115,000  for  which  the  Company  has  not  recorded  a  receivable due to the
uncertainty  of  collection.  The  Company  has reserved $150,000 for production
costs during the fourth quarter of fiscal year 2002 and the Company reserved the
remaining $250,000 in the prior fiscal year.  The Company also reserved $371,910
for  accounts  receivable  associated with Woody Fraser Productions, Inc. in the
fourth  quarter  of  fiscal  year  ended  September  30,  2002.

NOTE  6  NOTES  PAYABLE
-----------------------
Notes  payable  consist  of  the  following  at:

<TABLE>
<CAPTION>

                                                                               September 30,
                                                                              2002         2001
                                                                            =========     ========
<S>                                                                       <C>           <C>
Promissory note payable to Hawthorne Savings, formerly known as First     $ 5,869,212   $5,927,508
Fidelity, monthly installments of principal and interest of $54,648.
Interest is variable based on a 6-month US T-Bill rate. The note is
secured by a Deed of Trust on the Valencia Studio property and matures
January 2010.

Convertible promissory note, net of discount of $336,000 at September               -      586,388
30, 2001. On May 24, 2002, the Company repaid the note. See Note 7 for
further description.

Convertible promissory note, net of discount of $64,416 at September 30,    1,845,346            -
2002. See Note 7 for further description.

Promissory note payable to City National Bank, interest at 11.25%,            113,516      150,837
maturing February 28, 2006.  The note is collateralized by production
equipment

Other, 8.00% - 11.00% interest, maturing from 2003 to 2006                    112,876      256,243
                                                                          ------------  -----------
Total                                                                       7,940,950    6,920,976
Less current maturities                                                    (1,238,357)    (284,242)
                                                                          ------------  -----------

Long-term notes payable                                                   $ 6,702,593   $6,636,734
                                                                          ============  ===========
</TABLE>

                                      F-17

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

Future  maturities  on  the  notes  are  as  follows:

<TABLE>
<CAPTION>

<S>         <C>
2003        $1,238,357
2004           925,035
2005           119,877
2006           129,487
2007           132,635
Thereafter  $5,395,559
            ----------

            $7,940,950
            ==========

</TABLE>

NOTE  7  CONVERTIBLE  NOTES  PAYABLE
------------------------------------
On  June  6,  2001  and  September  7,  2001,  the Company borrowed $750,000 and
$250,000,  respectively,  from  the  Laurus Master Fund, Ltd The borrowings were
evidenced  by  convertible  promissory  notes  due June 7, 2003 and September 7,
2003,  respectively.  Interest at 8% per annum was payable quarterly. Any or all
principal or interest was convertible into common stock of the Company at 80% of
the  average  of the lowest closing stock prices during the preceding 60 trading
days.  The  convertible  notes  were  also  issued  with  detachable warrants to
purchase  up  to  72,737  shares of common stock of the Company at the lesser of
$.548  per share or 120% of the average three lowest closing stock prices during
the  immediately  preceding 10 trading days prior to exercise of the warrants. A
discount of $375,000 was recognized on the convertible features of this debt and
the  detachable  warrants.

On  May  24,  2002, the Company repaid the remaining $1,089,616 convertible note
due  to the Laurus Master Fund, Ltd.  In connection with the payoff of the note,
the  Company  expensed  $109,000  in  unamortized prepaid loan fees, $245,000 of
unamortized  discounts  and  $295,000  of  interest  expense.

In  May  and  June 2002, the Company issued to the Laurus Master Fund, Ltd. 12 %
convertible  notes  in  the  aggregate principal amount of $2,000,000. The notes
mature  on  May  24,  2004, are convertible into the Company's common stock at a
fixed conversion price of $.95 per share and are payable monthly over 22 months.
In  addition,  in  connection  with  the  issuance of the convertible notes, the
Company  issued  warrants  to  purchase  300,000  shares  of  common stock at an
exercise  price  of  $1.20 exercisable until May 24, 2007. The convertible notes
are  secured  by  a  second mortgage on the Company's properties. The fair value
assigned  to  the  warrants  amounted  to  $77,300  and was determined using the
Black-Scholes  pricing  model.  Such  amount  is  included  in  additional
paid-in-capital  at September 30, 2002. The convertible note is presented in the
accompanying  consolidated balance sheet at September 30, 2002 net of a discount
of  $64,416.

During  the  year ended September 30, 2002, the Company issued 552,748 shares of
common  stock  to  the  holders  of its convertible notes payable for payment of
principal and accrued interest.  Principal and accrued interest converted during
the  year  ended  September  30,  2002 totaled approximately $145,512, which was
computed  based  upon  terms  stipulated in the applicable convertible notes. In
connection  with  the  repayment  of  the  June  6,  2001  and September 7, 2001
convertible  notes  and the issuance of the May and June 2002 convertible notes,
the  Company  issued  350,000  restricted  shares  of its common stock to Laurus
Master  Fund,  Ltd.  for payment of late fees and penalties. The total amount of
the  late  fees  and  penalties paid with common stock amounted to approximately
$256,000, which was computed based upon the market prices of the common stock on
the  applicable  conversion  dates and is included in general and administrative
expenses  in  the accompanying consolidated statement of operations for the year
ended  September  30,  2002.

During  the  nine  months  ended  September 30, 2001, the Company issued 537,498
shares  of  common  stock  to  the  holders of its convertible notes payable for
payment  of  principal  and  accrued  interest.  Principal  and accrued interest
converted during the nine months ended September 30, 2001 totaled $78,564, which
was  computed

                                      F-18

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

based  upon  terms  stipulated in the applicable convertible notes.  The Company
also  issued  331,664  shares  of  common  stock  during  the  nine months ended
September  30,  2001  for  satisfaction  of  debt.  The  value  of  debt totaled
$150,000,  which  was  computed based on the market price of the common stock on
the  applicable  payment  date.

NOTE  8  INCOME  TAXES
----------------------
No provision for Federal and state income taxes has been recorded as the Company
has  incurred  net operating losses through September 30, 2002. At September 30,
2002,  the  Company  had  approximately  $7,770,896  of  net  operating  loss
carryforwards  for  Federal  income  tax  reporting purposes available to offset
future  taxable  income.  Such carryforwards 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, 2002 and 2001 consist primarily of the tax
effect  of  net  operating  loss  carryforwards, which amounted to approximately
$1,844,079  and  $800,412,  respectively.  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, 2002 and 2001 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.

NOTE  9  RELATED  PARTY  TRANSACTIONS
-------------------------------------
At  September  30,  2002,  related party receivables, net represents $24,000 due
from  the  President  and  $5,000  due from a former officer of the Company, and
$1,260,000  of  principal  and accrued interest due from a former officer of the
Company that is discussed in the following paragraph and is fully reserved.  The
amounts  due  from  the  President  and  the  former  officer are due on demand.

In  connection  with  the  reverse  merger  with  SBI  (See Note 1), the Company
acquired  property  in  Piedmont, Alabama.  During fiscal year 2001, the Company
sold  the  property  to  a then officer of the Company who was also the majority
stockholder  of  SBI prior to the reverse merger.  The Company sold the property
to  the then officer for $1,200,000, net of the mortgage and accrued expenses on
the  property of $2,700,000.  The bank mortgage was also transferred to the then
officer.  The  then officer ceased being an officer of the Company during fiscal
year 2002.  In connection with the sale, the Company received a promissory note,
subordinated  to  the  bank mortgage on the property.  The note is due on demand
with  interest  at  5%  per  annum.  The  former  officer  defaulted on the bank
mortgage and has been unsuccessful at selling the property.  Additionally, there
are  unpaid taxes and insurance on the property.  Since the former officer is in
default  of  the  bank  mortgage  and  has been unable to sell the property, the
Company  believes that the collection of the promissory note is doubtful and has
therefore  reserved  the  entire  note  and accrued interest.  Additionally, the
Company  ceased  accruing  interest  on  the  note.

At September 30, 2001, related party receivables represented $1,200,000 due from
a  former  officer  for  the  sale of the Alabama property, $24,000 due from the
Company's  President  and $50,000 due from a former stockholder and President of
Half Day Video, Inc.  During fiscal year 2002, the Company demanded repayment of
the  $50,000  loan  and  has  reserved  this  amount.

In  connection  with  the  acquisition  of  PTL Productions, Inc. (dba Brentwood
Magazine),  as  of September 30, 2002, the Company owed approximately $91,635 to
its former owners, representing their buyout interests in Brentwood Magazine. Of
the  $91,635  amount due, $51,635 was to be due August 2, 2003 and the remaining
$40,000 was to be due August 2, 2004.  In January 2003, the Company entered into
a Memorandum of Understanding to cancel the Agreement and Plan of Reorganization
dated  August  2,  2002, pursuant to which the Company acquired PTL Productions,
Inc.  (dba  Brentwood  Magazine)  and  sell PTL Productions, Inc. (dba Brentwood
Magazine)  back  to  the  seller  (See  Note  16).

                                      F-19

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

NOTE  10  COMMITMENTS
---------------------
In  May  2000, the Company leased additional facilities adjacent to its location
in  Valencia.  The  lease has a term of five years. Initial monthly base rent is
$29,000  with  annual  increases until 2004 when base rent will be $34,585. Rent
expense  for  the  year  and  nine months ended September 30, 2002 and 2001 were
$470,354  and  $173,650,  respectively.

The  Company  has  employment  agreements  with  certain  officers and other key
employees,  most  of  which  expire  in  2005.  These  agreements  provide  for
compensation  aggregating  $300,000  per  annum.

NOTE  11  SEGMENT  INFORMATION
------------------------------
The  Company  classifies  its  business  interests into three fundamental areas:
Studio  Rental,  consisting principally of sound and production stage rentals to
production  companies,  Studio  Equipment  Rental,  consisting  principally  of
personnel,  camera  and other production equipment rentals to various production
companies  on  a  short-term  or  long-term  basis, and Film and TV Productions,
consisting  principally  of  television  productions for the broadcast networks,
cable  networks  or  first-run  television  syndication.

<TABLE>
<CAPTION>

                                                  Studio      Studio Equip    Film & TV
                                                  Rental         Rental       Production      Total
                                               ------------   ------------    ----------      -----
<S>                                            <C>           <C>             <C>           <C>

For the year ended September 30, 2002
---------------------------------------------
Revenues                                       $ 3,426,405   $   1,314,797   $ 7,470,127   $12,211,329
Operating Income (Loss)                         (3,511,871)        (54,776)      128,228    (3,438,419)
Total Assets                                    13,197,107         212,918       129,292    13,539,317
Depreciation and Amortization                      352,805          48,707             -       401,512

For the nine months ended September 30, 2001
---------------------------------------------
Revenues                                       $ 1,422,033   $      38,993   $   952,234   $ 2,413,260
Operating (Loss) Income                         (1,090,443)        (39,658)     (389,775)   (1,519,876)
Total Assets                                    13,819,527         422,493       338,577    14,580,597
Depreciation and Amortization                      180,386          11,539             -       191,925
</TABLE>

The  Studio  Rental  segment  above  includes  the  operating  activities of the
corporate  division.

NOTE  12  LITIGATION
--------------------
In  September  2001,  a  complaint  was filed in the Los Angeles County Superior
Court,  Russomano  et  al.  v.  VEI et al., BC 257989.  The plaintiffs are Diane
Russomano  and  Knowledge  Booster, Inc. and the defendants include Valcom, Inc.
and  Valencia  Entertainment International ("Valencia"), the Company's president
and  others.  The  complaint  revolves  around  prior  litigation  in  which the
plaintiffs  alleged,  among  other things, that the show "A.J.'s Time Travelers"
violated  plaintiffs'  rights  in  a  children's  television show called "Rickey
Rocket".  That  case  went to trial, and plaintiffs obtained judgments against a
number  of  defendants, including a judgment in the amount of $3 million against
Rickey  Rocket Enterprises ("RREI") and a judgment in the amount of $1.2 million
against  Time  Travelers,  Inc.  ("TTI").  The  complaint asserted two causes of
action  against  the Company, Valencia and other defendants.  The first cause of
action  alleges  the  Company  was  the  "alter  ego"  of RREI and/or TTI and is
therefore  liable for the judgments against those entities.  The second cause of
action  was  for  malicious  prosecution  and that cause has been dismissed with
prejudice.  Valencia  became a distributor for A.J. Time Travelers, Inc. but not
until  four  years  after the alleged wrongdoing occurred.  Therefore management
believes  it  should  not  be a party to this action.  Depositions are currently
being  taken.  A  motion  for summary judgment may be heard in June 2003.  There
are  no  accruals in the accompanying consolidated financial statements for this
matter.  The  Company  believes the allegations are without merit and intends to
vigorously  defend  itself.  In  addition,  a  related  party will indemnify the
Company  if  the  Company  sustains  any  loss  in  this  case.

                                      F-20

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

Further,  Plaintiffs'  second  cause  of action concerning malicious prosecution
alleged  alter-ego liability.  Plaintiffs alleged that Ricky Rocket Enterprises,
Inc.  and  AJ  Time  Travelers,  Inc.  filed a cross complaint in the underlying
litigation  without  any  probable  cause and for an improper motive or purpose.
Plaintiffs  similarly  alleged  that  the Company and other defendants are alter
egos of that Ricky Rocket Enterprises, Inc. and AJ Time Travelers, Inc. and are,
therefore, liable for such malicious prosecution.  Plaintiffs sought unspecified
compensatory  and punitive damages under this cause of action.  The parties have
executed  a settlement agreement resolving the second cause of action at no cost
to  the  Company.  The  court  has  dismissed  the  second  cause of action with
prejudice.

On  November  26,  2001,  Valencia  Entertainment  International,  LLC  filed  a
complaint  alleging  a  breach  of  contract,  conversion,  intentional
misrepresentation  and negligent misrepresentation. On March 28, 2002, Tri-Crown
Productions,  Inc.  filed  a  Cross-Complaint  against  Valencia  Entertainment
International, LLC, Valcom, Inc., Valencia Entertainment International, LTD. and
Vince  Vellardita,  seeking  $50,000 in specified damages, for breach of written
contract, breach of oral contract, quantum meruit, unjust enrichment, conversion
and replevin. The dispute involves the ownership of certain equipment and claims
of  non-payment  for  services  rendered.  Each  side  seeks  return  of certain
equipment  and  damages  for  non-payment  of the services rendered. The parties
executed  a  settlement  agreement on January 15, 2003 resolving this dispute in
full,  and  are  now  in  the  process of performing the terms of the settlement
agreement.

On  March 7, 2002, Quebecor World USA filed a complaint against PTL Productions,
Inc.  dba  Brentwood  Magazine, a subsidiary of ValCom, and against Phillip Troy
Linger,  the  former  President of PTL Productions, Inc., for open book account,
account  stated,  goods sold and delivered and breach of personal guaranty.  The
dispute  involves alleged non-payment for printing services. The complaint seeks
approximately  $65,000 in damages. The Company has accrued $14,700, representing
the  amount  owed  to  Quebecor  World USA for printing services. This amount is
included  in  accounts payable on the accompanying consolidated balance sheet as
of  September  30, 2002.  In January 2003, the Company entered into a Memorandum
of Understanding to cancel the Agreement and Plan of Reorganization dated August
2,  2002,  pursuant to which the Company acquired PTL Productions, Inc. and sell
PTL  Productions, Inc. back to Mr. Linger.  Also see Note 16.  Since the Company
has  divested  itself  of PTL Productions, Inc., the Company does not believe it
has  any  exposure  to  loss  regarding  the  outcome  of  this  litigation.

On  October  30, 2002, Coffin Communications Group, Inc. filed a lawsuit against
the  Company  for  breach  of  a  public  relations  consulting contract. Coffin
Communications  Group,  Inc.  seeks  monetary damages in the amount of $197,000,
plus punitive damages. The Company estimates the potential loss from the lawsuit
to  be between $5,000 and $70,000 and has accrued $40,000 for the potential loss
at  September 30, 2002.  The Company will vigorously defend itself against these
claims.

On  December 9, 2002, a complaint was filed by Clay Harrison against the Company
and  SBI  Communications,  Inc.  seeking  damages  for  breach  of  his  alleged
employment  contract.  The  dispute  involves  Mr. Harrison's termination as the
President  of  Half  Day  Video, Inc., a wholly-owned subsidiary of the Company.
The  Company  disputes  liability  and  is vigorously defending the claims.  The
matter  is  not  yet at issue and no discovery has yet taken place.  There is no
accrual  relating  to this matter in the accompanying consolidated balance sheet
at  September  30,  2002.

The  Company  is involved from time to time in legal proceedings incident to the
normal  course  of  business.  Management  believes  that  the ultimate outcome,
except  the cases mentioned above, of any pending or threatened litigation would
not  have  a  material  adverse  effect  on the Company's consolidated financial
position,  results  of  operations  or  cash  flows.

                                      F-21

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

NOTE  13  STOCKHOLDERS'  EQUITY
-------------------------------
(A)  CONVERTIBLE  PREFERRED  STOCK
----------------------------------
At  September  30,  2002,  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.
No  dividends have been declared by the Board of Directors for any of the Series
of  convertible  Preferred  Stock  for the fiscal year ended September 30, 2002.

On  June  6,  2002,  the  Company  received  $930,000,  net  for the issuance of
1,250,000  shares  of  Series  D  Convertible  Preferred  Stock to an accredited
investor.  In  connection with the transaction, the Company also issued warrants
to the preferred stockholder to purchase an aggregate of 1,300,000 shares of the
Company's  common stock at an exercise price of $.80 per share, expiring on June
18,  2007.  The Company allocated the net proceeds received from the sale of the
preferred  stock  to  the  warrants  using the Black-Scholes pricing model.  The
allocation  of  the  net  proceeds  to  the warrants amounted to $466,908 and is
included  in  additional  paid-in  capital  in  the  accompanying  condensed
consolidated  balance  sheet at September 30, 2002.  Also in connection with the
sale  of  the  Series  D  Convertible Preferred Stock, the Company incurred a 7%
placement  agent  fee and also issued the placement agents 125,000 "VACM Units",
each  unit  comprised of one share of common stock and a warrant to purchase one
share  of  common  stock  at  an  exercise price of $.80 per share.  The Company
recorded  the  $70,000  placement  agent  fee  as  a  reduction  of the proceeds
received,  thereby  reducing  additional paid-in capital by $70,000 at September
30,  2002.  Each  VACM Unit is exercisable at $.80 per unit and the unit and the
underlying  warrant  expire  June 18, 2007.  The Company valued the VACM Unit by
apportioning  value  to  the  underlying  warrant  and  common  stock  using the
Black-Scholes  pricing model, and by measuring the intrinsic value of the common
stock.  The value of the 125,000 VACM Units amounted to $60,745 and was recorded
as  an  increase  in  additional  paid-in  capital  at  September  30,  2002.

In  connection with the Series D Preferred Stock financing, the Company has also
issued  2,800,000 shares of its common stock to be held in escrow based upon the
terms  of the financing agreement.  The financing agreement requires the Company
to  hold in escrow 1,250,000 shares of common stock as a deposit in anticipation
of  the  preferred  stockholder's  conversion  of  1,250,000  shares of Series D
Preferred  Stock, an additional 1,300,000 shares of common stock as a deposit in
anticipation  of  the  preferred  stockholder's exercise of warrants to purchase
1,300,000  shares  of  common  stock, and an additional 250,000 shares of common
stock as a deposit in anticipation of the placement agents' exercise of its VACM
Units.  As discussed above, the Series D Preferred Stock can be converted at any
time  to  common  stock  on a 1 for 1 basis.  At September 30, 2002, none of the
2,800,000  common  shares  have been released from escrow and are not considered
outstanding  for  purposes  of  computing  weighted  average shares outstanding.

                                      F-22

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

(B)  COMMON  STOCK
------------------
During  the  fiscal  year  ended  September 30, 2002, the Company issued 440,284
shares  of  common stock in lieu of compensation for consulting and professional
services  performed.  The  value  of  the  consulting  and professional services
performed  totaled  approximately  $431,283,  which  was computed based upon the
market  prices  of  the  common  stock  on  the  applicable  payment  dates.

During  the  fiscal  year  ended  September 30, 2002, the Company issued 759,500
shares  of  common  stock  in  lieu  of  compensation,  salaries  and bonuses to
employees.  Total  value  of  the  compensation,  salaries  and  bonuses  was
approximately  $719,606,  which was computed based upon the market prices of the
common  stock  on  the  applicable  payment dates.  During the nine months ended
September  30, 2001, the Company issued 1,600,000 shares of common stock for the
payment  of  consulting  and  professional services performed.  The value of the
consulting  and  professional  services  performed  totaled  $380,000, which was
computed  based  on  the  market  prices  of  the common stock on the applicable
payment  dates.

See  Note  7  for  common  stock  issued  for  debt  repayment.

(C)  WARRANTS
-------------
During  the fiscal year ended September 30, 2002, the Company issued warrants to
purchase  2,075,000  shares of the Company's common stock to certain individuals
and  companies  in connection with the issuance of Series D Preferred Stock (see
Note  13(A))  and consulting agreements. The weighted average exercise price for
the warrants issued was $0.75, and all of the warrants begin to expire in fiscal
year  2007.  There  were  no  warrants  outstanding  prior  to fiscal year 2002.
Additionally,  the Company recorded consulting expense of $271,651 in connection
with warrants issued to consultants.  These warrants were valued using the Black
Scholes  pricing  model.  The  Company  also  recorded  $324,724  of  deferred
compensation  in  connection  with the consulting agreements in the accompanying
consolidated  balance  sheet  at  September  30,  2002.

NOTE  14  EMPLOYEE  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,
2002,  the  Company  issued  an aggregate of 585,000 shares of registered common
stock  to  employees,  officers, directors and consultants pursuant to the ESCP.
The  expense  recorded  during  fiscal  year  2002  under  the  ESCP amounted to
$532,960,  and  was  based  on the closing trading price of the Company's common
stock  on  the  date  granted.

During  the  fiscal year ended September 30, 2002, the Company issued options to
consultants  to  purchase  425,000  shares  of  the Company's common stock.  The
options  were  valued  using  the  Black-Scholes  pricing  model and resulted in
$221,692  of  consulting  expense  and $79,824 of deferred compensation expense.
The options expire from December 5, 2002 through February 1, 2003.  The weighted
average  exercise  price  and  fair  value  of the options are $.64 and $.71 per
share,  respectively.

                                      F-23

<PAGE>
                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

NOTE  15  JOINT  VENTURE
------------------------
In  May 2002, the Company entered into a joint venture agreement with New Global
Communications,  Inc. ("Global") whereby Global would contribute $500,000 to the
joint  venture  in  exchange for a 55% interest and the Company would contribute
certain  fixed  assets  and manage the operations of the joint venture for a 45%
interest.  The  newly formed joint venture is Valcom Broadcasting, LLC.  The net
book  value of the fixed assets contributed are insignificant and are maintained
on  the  Company's  premises.  The  joint venture operated 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 the approval by the Federal Communications Commission ("FCC").  On
September 20, 2002, the FCC approved the transaction.  As of September 30, 2002,
Global  contributed  $400,000  to the joint venture.  Since the entire amount of
$500,000 was not contributed to the joint venture as of September 30, 2002, and,
as  such the transfer of the license has not been finalized, the Company has not
recognized  any  investment  in  the  joint  venture  at  September  30,  2002.
Subsequent  to  September  30,  2002,  Global has not contributed any additional
funds  to  the  joint  venture.

NOTE  16  SUBSEQUENT  EVENTS
----------------------------

On January 18, 2003, the Company entered into a Memorandum of Understanding with
PTL  Productions, Inc. (dba Brentwood Magazine) to cancel the Agreement and Plan
of  Reorganization  dated August 2, 2002, pursuant to which the Company acquired
PTL  Productions,  Inc.  (dba  Brentwood  Magazine)  and  sell  PTL Productions,
Inc.  (dba  Brentwood  Magazine)  back  to the seller.  The unaudited, pro forma
information  and  results,  as  if  the  PTL  Productions,  Inc.  (dba Brentwood
Magazine)  had  not  occurred  as of and for the fiscal year ended September 30,
2002,  are:

<TABLE>
<CAPTION>

<S>                        <C>
Total assets               $13,456,314
Total liabilities          $ 8,450,200
Net sales                  $12,151,739
Net loss                   $(4,238,415)

Net loss per common share  $     (0.42)
</TABLE>



Also  see  Note  17  for  additional  subsequent  events.

NOTE 17 GOING CONCERN
---------------------

The  accompanying  consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has a net loss of
$4,827,818  and  a  negative cash flow from operations of $2,005392 for the year
ended  September  30,  2002, and a working capital deficiency of $594,990 and an
accumulated  deficit of $8,126,190 at September 30, 2002. These conditions raise
substantial  doubt  about  the Company's ability to continue as a going concern.

In  December  2002,  an  unaffiliated  company  offered to purchase up to an 85%
equity  interest  in  the Company in exchange for contributing equity financing.
The  Company and the unaffiliated company signed a non-binding letter of intent.
The  closing  of  the  transaction is subject to various conditions. There is no
assurance  that  the  transaction  will  ever  be  consummated,  or  if  it  is
consummated, that it will be consummated on the terms set forth in the letter of
intent.

                                      F-24

<PAGE>

                          ValCom, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2002 AND 2001

On  January  14,  2003,  the  Company's  subsidiary,  Valencia  Entertainment
International,  LLC,  entered  into  an Exclusive Sales Listing Agreement with a
commercial real estate broker to sell the real property serving as the Company's
headquarters located at 26030 Avenue Hall in Valencia, California. The Exclusive
Sales  Listing  Agreement lists the property at $11,850,000. The Exclusive Sales
Listing  Agreement  requires  Valencia Entertainment International, LLC to pay a
commission  to the broker of four percent of the gross sales price if the broker
sells  the  real  property.  The  Company intends to engage in a sale- leaseback
transaction  with  respect  to  its  real property to generate funds for working
capital  and payment of debts. However, there is no assurance that the Company's
property  will  be  sold  for $11,850,000 or on terms otherwise favorable to the
Company.

The Company's subsidiary, Valencia Entertainment International, LLC, is actively
negotiating  to  lease  several  of  the  Company's  vacant production stages to
production companies that produce television series and motion pictures.  If the
production  companies  sign  leases  for  production  stages,  the  Company will
recommend  that the production companies rent production equipment and personnel
from  Half  Day  Video,  Inc.,  another Company subsidiary.  Thus, the Company's
synergistic  relationship  with  Half  Day Video, Inc. may enable it to possibly
enhance  its  revenue-generation.

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 equity or debt securities or
(3)  reducing  the  number  of  its  employees.

The  Company's  capital  requirements  have  been  and  will  continue  to  be
significant.  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.


                                      F-25

<PAGE>

ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE
Jay  J.  Shapiro, C.P.A., P.C., the Company's former auditor, resigned effective
April 23, 2002.  Mr. Shapiro's reports on the Company's financial statements for
the  past  two  fiscal years did not contain an adverse opinion or disclaimer of
opinion,  nor  were  his  reports  modified  as  to  uncertainty, audit scope or
accounting  principles.  The  Company  had  no  disagreements  with Mr. Shapiro.

The  Board  of  Directors authorized the engagement of Weinberg & Company, P.A.,
located  at  6100  Glades Road, Suite 314, Boca Raton, Florida 33434, as the new
principal  auditors  for  the  Company  and all its subsidiaries effective as of
April  23,  2002.  Weinberg  &  Company,  P.A.  expects to rely on the Company's
management  in  issuing  its  reports  on  the  Company's consolidated financial
statements.

This  Company  previously  disclosed this information in its Form 8-K filed with
the  Securities and Exchange Commission on April 24, 2002, its Amendment to Form
8-K  filed  on  May 6, 2002 and its Amendment to Form 8-K filed on May 10, 2002.

                                    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.

<TABLE>
<CAPTION>

Name               Age                   Position                    Since
-----------------  ---  -------------------------------------------  -----

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

Vince Vellardita    45  CEO/President/Chairman of the Board           2000

Stephen A. Weber    54  Director                                      2001

Ronald Foster (1)   61  Treasurer/Secretary/Vice President/Director   1986

David Weiner        43  Director                                      2001
<FN>

(1)  Effective  September  30,  2002,  Ronald  Foster  resigned  as  Treasurer,
Secretary, Vice President and Director. Effective November 1, 2002, the Board of
Directors  appointed  Donald  P. Magier, the Company's Controller, as Treasurer,
Secretary  and  Director  to  replace  Mr.  Foster.
</TABLE>

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  -  45
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

                                       43

<PAGE>

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.

Ronald  Foster  -  61
Treasurer,  Secretary,  Vice  President  and  Director

Ronald  Foster,  during  the fiscal year ended September 30, 2002, served as the
Company's  Treasurer,  Secretary, Vice President and director. He resigned as an
officer  and director effective September 30, 2002.  Mr. Foster has been working
with the Company since its inception in 1984.  He  served as the Company's Chief
Executive  Officer,  President  and Chairman of the Board from September 1986 to
October  2000.  He became a Vice President and remained as a member of the Board
of Directors after resigning as Chairman in October 2000.  In April 2001, he was
appointed  Treasurer  and  Secretary.  His  primary  responsibilities  included
finance,  marketing  and  technical  review. In addition to his responsibilities
with  the  Company,  Mr.  Foster has held a number of other management positions
over  the years. From 1984 to 1986, he was executive vice president and producer
of Pioneer Games of American Satellite Bingo, in Albany, Georgia. Mr. Foster was
also  the  owner  and  operator  of  Artist Management & Promotions where he was
responsible  for  coordinating television entertainers, sports figures and other
celebrities  for  department  store promotions. Previously, Mr. Foster served as
president  and  director of Ed-Phills, Inc., a Nevada corporation, and executive
vice  president and member of the Board of Directors of Golden American Network,
a  California  corporation.  From  1984  to 1994, he was the president and chief
executive  officer  of  ROPA  Communications,  Inc.,  which  owned  and operated
WTAU-TV-19  in  Albany,  Georgia. He created and produced "Stock Outlook 87, 88,
and 89," a video presentation of public companies through Financial News Network
(FNN),  a  national  cable  network. Mr. Foster also has experience as technical
director  and  associate  producer  for numerous national live sports broadcasts
produced  by  ABC,  CBS  and WTBS. Mr. Foster is Director/Producer/Writer of the
Company Interactive Broadcast Programs. Mr. Foster does not currently serve as a
director  of  any  other  reporting  company.

David  Weiner  -  43
Director

David  Weiner has served as a director of ValCom, Inc. since February 2001.  Mr.
Weiner  received  his  MBA  degree  from  U.C.L.A.  and gained a wide variety of
business  experiences  early in his career working in the investment banking and
pension  fund  management  arena. He joined the consulting group of Deloitte and
Touche  in  1988,  where  he  provided  general and corporate finance consulting
services  to  a  wide  variety  of entertainment, telecommunications, and direct
response clients including K-tel, International, Inc. Mr. Weiner joined K-tel in
1993,  as Vice President of Corporate Development and was appointed President in
September  of  1996.  His  responsibilities included directing all United States
operations of the company as well as its wholly-owned subsidiaries in the Untied
Kingdom,  Germany and Finland. Mr. Weiner resigned as President of K-tel in 1998
to  form  W-Net, Inc., an Internet and software development and consulting firm.
Mr.  Weiner  does  not  currently  serve  as  a  director of any other reporting
company.

                                       44

<PAGE>

Stephen  A.  Weber  -  54
Director

Stephen  A.  Weber has served as a director of ValCom, Inc. since February 2001.
Mr.  Weber served as the Company's Chief Financial Officer from March 2001 until
March  2002. Mr. Weber has over 20 years of background in Finance and Management
and is a certified public accountant. Prior to joining ValCom, Mr. Weber was the
Co-founder  and President of a publicly traded marketing company that had annual
revenues  of  $60 million. Mr. Weber was instrumental in negotiating the sale of
the  company  to  a  NYSE corporation. Prior to joining ValCom, Mr. Weber, was a
practicing  CPA  for  13 years, where he was the managing partner for a regional
audit  firm.  Currently,  in  addition  to  his duties at ValCom, Mr. Weber also
consults  for  a  publicly  traded  Internet  company,  GenesisIntermedia, Inc.,
formerly  known  as  GenesisIntermedia.com,  Inc., where he sits on the Board of
Directors  and  is  Chairman  of  the  Audit  Committee.

Donald  P.  Magier  -  36
Treasurer,  Secretary,  Controller  and  Director

Donald  P.  Magier  has served as the Company's Secretary, Treasurer, Controller
and  Director since November 2002.  Mr. Magier commenced working for the Company
in  April 2002 as its Controller and was subsequently promoted.  He received his
accounting  degree  from  California  Sate  University, Northridge and began his
accounting  career  in  1989  as  an auditor with Weber Lipshie and Co., CPAs, a
small  national  accounting firm specializing in the garment industry.  In 1992,
Mr.  Magier  joined  Falcon  Cable  TV,  the  fifth largest cable company in the
country,  as  a  Regional  Controller  until  he left in 2000.  He then joined a
publicly  traded  internet  company,  GenesisIntermedia,  Inc.,  a  Delaware
corporation formerly known as GenesisIntermedia.com, Inc., as Controller of both
the  company  and  two of its subsidiaries until he joined Valcom, Inc. in 2002.
Mr.  Magier  does  not  hold  a  directorship  in  any  other reporting company.

Section  16(a)  Compliance

Section  16(a)  of  the  Securities  Exchange  Act of 1934, as amended, requires
officers,  directors  and  beneficial  owners  of  more than 10% of any class of
equity  securities  of a public company to file with the Securities and Exchange
Commission certain individual periodic reports -- (Form 3) (Initial Statement of
Beneficial  Ownership of Securities), Form 4 (Statement of Changes of Beneficial
Ownership of Securities) and Form 5 (Annual Statement of Beneficial Ownership of
Securities)  --  which  disclose  their  beneficial  ownership  of the company's
securities.   Securities  and  Exchange Commission regulations require officers,
directors  and  greater than 10% stockholders to furnish the Company with copies
of all such forms they file.  David Weiner, a Director of the Company, failed to
file  a  Form  3  within  10  calendar days after he was elected to the Board of
Directors  effective  February  13,  2001.  Mr.  Weiner  does not own any of the
Company's  common  stock.  The  Company's other directors and executive officers
and  more  than  10% stockholders filed their Section 16(a) reports as required.

                                       45

<PAGE>

                MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
                -------------------------------------------------

Each  director  is  elected  to  serve for a term of one (1) year until the next
annual  meeting  of  stockholders  or  until  a  successor  is  duly elected and
qualified.  There  are  no  family  relationships  among  directors  or  persons
nominated  or  chosen  by  the Company to become a director. The present term of
office  of each director will expire at the next annual meeting of stockholders.

During  the fiscal year ended September 30, 2002, the Board of Directors held 20
meetings.  No  director attended fewer than 75% of the total number of 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.

The  Board  of  Directors  has  two  committees,  the  Audit  Committee  and the
Compensation  Committee.  The  sole  member of the Audit Committee is Stephen A.
Weber.  As of September 30, 2002, the members of the Compensation Committee were
Vince  Vellardita  and  Ronald  Foster.  Effective  November  1, 2002, Donald P.
Magier  replaced  Ronald  Foster  on  the  Compensation  Committee.

                                       46
<PAGE>

ITEM  10  EXECUTIVE  COMPENSATION
---------------------------------

The  Summary  Compensation  Table  below sets forth all compensation paid to the
Company's  officers  and  directors  during the fiscal years ended September 30,
2002,  2001  and  2000.


<TABLE>
<CAPTION>
                                           SUMMARY COMPENSATION TABLE
                                                                     Long Term Compensation
                                      Annual Compensation              Awards            Payouts

(a)                          (b)     (c)      (d)      (e)         (f)          (g)        (h)      (i)
Name & Principle Position   Year    Salary   Bonus    Other    Restricted   Securities     LTIP     All
                                     ($)      ($)     Annual      Stock     Underlying   Payouts   Other
                                                     Compen-    Award(s)     Options/      ($)     Comp-
                                                      sation       ($)         SARs                ensa-
                                                       ($)                      (#)                 tion
                                                                                                    ($)
<S>                         <C>    <C>       <C>     <C>       <C>          <C>          <C>       <C>
Vince                        2000   120,000       *         *            *            *         *       *
Vellardita,   Chairman,
CEO &
President
                             2001   130,000       *         *            *            *         *       *
                             2002   140,000       *         *            *            *         *       *
Ronald Foster,               2000   120,000       *         *            *            *         *       *
Treasurer, Secretary,
Vice
President,
Director (1)
                             2001   130,000
                             2002   130,000       *         *            *            *         *       *
Wayne                        2000         *       *         *            *            *         *       *
Lepoff,
COO (2)

                             2001   120,000       *         *            *            *         *       *
                             2002         *       *         *            *            *         *       *
<FN>


*None

(1)     Mr.  Foster  served as the Company's Treasurer, Secretary, Vice President and Director during the
fiscal  year  ended  September  30,  2002.  Effective  September  30, 2002, he resigned as an officer and
director.  Effective  November  1,  2002,  the  Board  of Directors appointed Donald Magier as Treasurer,
Secretary  and  Director  to  replace Mr. Foster.  Mr. Magier has also served as the Company's Controller
since  April  15,  2002.

(2)     Mr.  Lepoff  served  as the Company's Chief Operating Officer from June 2001 until November 2001.
</TABLE>

EMPLOYMENT  AGREEMENTS
----------------------
The  Company  is  a party to employment agreements with Vince Vellardita, Ronald
Foster  and  Donald  P.  Magier.

Vince  Vellardita

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

                                       47
<PAGE>

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.

Ronald  Foster

The  Company  entered  into  an  Employment  Agreement  with  Ronald Foster, the
Company's  Treasurer,  Secretary, Vice President and Director, effective October
19,  2000.  The term of the Agreement is for five years.  The Board of Directors
may  terminate  Mr.  Foster'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 $100,000 for the first year, $120,000
for the second year and $140,000 for the third through fifth years, 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.
Foster  from  engaging  in  any  activity  competitive  with  or  adverse to the
Company's  business  or  welfare  without  the  Company's prior written consent.

Donald  P.  Magier

The  Company entered into an Employment Agreement with Mr. Magier, the Company's
Controller,  effective  May  20,  2002.  The  term of the Agreement is for three
years.  The  Board  of  Directors  may  terminate Mr. Magier'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 Company pays Mr. Magier an annual salary of
$80,000,  with  a  $5,000  increase  on each anniversary date if approved by the
Board  of  Directors.  The Agreement requires the Company to grant Mr. Magier an
annual  option  to purchase up to 25,000 shares of the Company's common stock at
an  exercise  price  of $0.01 per share for each year of the Agreement.  He must
exercise  the  option  within  60 days after each anniversary date.  Twenty-five
percent of the common stock issuable upon exercise of the options will be freely
trading and the remaining 75% of the shares issuable will be restricted pursuant
to  Rule  144  of  the  Securities  Act  of 1933, as amended.  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.  Magier 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
------------------------------------------------------------------------------

The  following  table  sets  forth,  as  of  September  30, 2002, the number and
percentage  of  shares  of  common stock owned of record and beneficially by any
"group"  (as that term is defined in Item 403 of Regulation S-B), person or firm
that  owns more than five percent (5%) of the Company's outstanding common stock
(the  Company's  only  class  of  voting  securities).

                                       48
<PAGE>

(a)  Security  Ownership  of  Certain  Beneficial  Owners



      Name  and  Address  of       Amount  of     Nature  of      Percent  of
      Beneficial  Owner            Shares  (1)    Ownership       Class
      -----------------            -----------    ---------       -----


      Vince Vellardita              1,308,249     Record &         11.9%  Common
      26030  Avenue  Hall                         Beneficial
      Valencia,  California  91355

      E-Blaster  International      3,000,000     Record  &        27.2%  Common
      JL.  H.R.  Rasuna  Said  Kav.               Beneficial
      B-1  6th  Floor,
      Jakarta,  12920
      Indonesia  (2)

      Radorm  Technology  Limited     567,824     Record  &         5.2%  Common
      Jakarta,  12920                             Beneficial
      Indonesia  (2)

      Great  Asian  Holdings  Ltd.  2,110,422     Record  &        19.2%  Common
      Jakarta,  12920                             Beneficial
      Indonesia  (2)

(1)  Includes  all  stock  held  either  personally  or  by  affiliates.

(2)  These  three entities together comprise a "group" as defined in Item 403 of
Regulation  S-B.



(b)  Security  Ownership  of  Management
----------------------------------------

The  following  table  sets  forth,  as  of  September  30, 2002, the number and
percentage  of the equity securities of the Company, its parent or subsidiaries,
owned  of  record or beneficially by each officer, director and person nominated
to  hold  such  office  and  by  all  officers  and  directors  as  a  group.

<TABLE>
<CAPTION>

Title of            Name of           Amount of Shares (1)  Nature of Percent of
--------           ---------          --------------------
Class          Beneficial Owner                              Ownership Class
--------       ----------------                              ---------------

<S>       <C>                          <C>                   <C>
Common    Ronald Foster                               0 (2)              00.00%

Common    Vince Vellardita                       1,308,249               11.90%

Common    Stephen A. Weber                       40,050 (2)              00.004%

Common    David Weiner                                   0               00.00%

Common    All officers and directors             1,348,299               12.24%
          as a group (4  people)
<FN>

(1)     Includes  all  stock  held  either  personally  or  by  affiliates.

(2)     Includes  ownership  of  record  and  beneficial  ownership.
</TABLE>

                                       49
<PAGE>

CHANGES  IN  CONTROL
--------------------
To  the  best  knowledge  and  belief of the Company, there are no arrangements,
understandings,  or  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
-------------------------------------------------------------
There are no family relationships among directors, executive officers or persons
chosen by the Company to be nominated as a director or appointed as an executive
officer  of  the  Company  of  any  of  its  affiliated  subsidiaries.

In connection with the Company's reverse merger with SBI Communications, Inc. in
or around February 2001, the Company acquired real property in Piedmont, Alabama
(the "Piedmont Property").  In September 2001, the Company sold this property to
Ronald  Foster,  its  Treasurer, Secretary, Vice President and Director, who was
also  the  majority stockholder of SBI Communications, Inc. prior to the reverse
merger.  The  Company  sold  the Piedmont Property to Mr. Foster for $1,200,000,
net of the mortgage and accrued expenses of $2,700,000 on the Piedmont Property.
The  bank  mortage  on the Piedmont Property was transferred to Mr. Foster.  Mr.
Foster  executed  a  Promissory  Note, dated September 30, 2001, in favor of the
Company  in the principal amount of $1,200,000 with interest at five percent per
year  and  all  principal  and  accrued interest due by September 30, 2002.  The
Promissory  Note was subordinated to the bank mortgage.  Mr. Foster defaulted on
the  bank  mortgage and the Promissory Note and has been unsuccessful at selling
the Piedmont Property.  In addition, there are unpaid taxes and insurance on the
Piedmont  Property.  Because  Mr.  Foster is in default on the bank mortgage and
has  been  unable  to  sell the Piedmont Property, the Company believes that the
collection  of  the  Promissory  Note is doubtful and has therefore reserved the
entire $1,260,000 in principal and accrued interest owing on the Promissory Note
as  of  September  30,  2002.  In  addition,  the  Company  has stopped accruing
interest  on  the  Promissory  Note.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K
------------------------------------------------
REPORTS  ON  FORM  8-K FILED DURING THE FISCAL QUARTER ENDED SEPTEMBER 30, 2002:

1.     The Company filed a Current Report on Form 8-K, dated June 27, 2002, with
the  Securities and Exchange Commission on July 17, 2002 to report the Company's
execution  of  an  Agreement and Plan of Reorganization between ValCom, Inc. and
Digital  Cut  Post,  Inc.  on June 26, 2002.  No financial statements were filed
with  this  Form  8-K.

2.     The Company filed an Amendment to its Current Report on Form 8-K/A, dated
July  18, 2002, with the Securities and Exchange Commission on July 18, 2002, to
report additional information regarding the Company's acquisition of Digital Cut
Post,  Inc.  No  financial  statements  were  filed  with  this  Form  8-K.

ITEM  14.  DISCLOSURE  CONTROLS  AND  PROCEDURES

Evaluation  of  Disclosure  Controls  and  Procedures

Disclosure  controls  and  procedures  are  designed  to ensure that information
required  to  be  disclosed  in  the  Company's  periodic reports filed with the
Securities  and Exchange Commission under the Securities Exchange Act of 1934 is
recorded,  processed, summarized and reported, within the time periods specified
in  the  rules  and forms of the Securities and Exchange Commission.  Disclosure
controls  and  procedures  include,  without limitation, controls and procedures
designed  to  ensure  that  information required to be disclosed in the periodic

                                       50
<PAGE>

reports  filed  under  the  Securities  Exchange  Act of 1934 is accumulated and
communicated  to management, including the Chief Executive Officer and Principal
Financial  Officer, as appropriate, to allow timely decisions regarding required
disclosure.

Within  the  90  days  prior  to  the  filing  date  of this Report, the Company
conducted  an evaluation of the effectiveness of the design and operation of its
disclosure  controls  and  procedures  pursuant  to Securities Exchange Act Rule
13a-14.  This  evaluation  was  conducted  under  the  supervision  and with the
participation  of  the Company's Chief Executive Officer and Principal Financial
Officer.

     Effective  Disclosure  Controls
     -------------------------------

Based  upon  that  evaluation, the Company's officers concluded that many of the
Company's  disclosure  controls  and  procedures  are  effective  in  gathering,
analyzing  and disclosing information needed to satisfy the Company's disclosure
obligations  under  the  Securities  Exchange  Act  of  1934.  For  example, the
Company's  internal controls, particularly the areas of payroll, control of cash
and  accounts  payable,  are  effective.  In addition, the Audit Committee meets
with  the principal accounting officer on a regular basis to review and evaluate
the Company's financial position.  The Audit Committee also reports to the Board
of  Directors  on  the  accounting  and  finance  functions  on a regular basis.

     Weaknesses  in  Disclosure  Controls
     ------------------------------------

The  Company's  officers  also  identified  several  weaknesses in the Company's
disclosure  controls.  Such  weaknesses, and the steps the Company plans to take
to  remedy  the  weaknesses,  are  discussed  below.

1.     The  Company's  records of stock and equity related transactions were not
updated  on  a  timely  basis  and  do  not reflect the current ownership of the
Company  as  accurately as they might.  Remedy:  The Company intends to engage a
stock  transfer  agent  to handle issuances and conversions of all series of its
preferred stock. In addition, the Company will maintain more accurate records of
all  equity  transactions  during  the year.  The Board of Directors will ensure
that  it  authorizes  all stock, warrants and options granted in accordance with
applicable  agreements  and/or  compensation  plans  to avoid the possibility of
unauthorized  issuances  of  stock,  warrants  and  options.

2.     The Company recorded a significant number of audit adjustments during the
fourth  quarter,  which  were required to properly state the account balances at
September  30,  2002.  Remedy:  The Company will implement comprehensive closing
procedures,  including an analysis of all balance sheet accounts and significant
income  statement  accounts.

3.     The  minutes  of  the Board of Directors' and stockholders' meetings were
not  always complete.  Remedy:  The Company will implement procedures to be more
comprehensive in the preparation of its minutes to include all important matters
that  affect  the Company's operations.  The Company will take appropriate steps
to  ensure  that  all minutes are properly approved and signed by the applicable
parties.

4.     The  Company  drafted  several  agreements  without  consulting its legal
counsel.  Therefore, some of the agreements had terms and provisions that either
changed  the  purpose  of  the  agreement or undermined the purpose or intent of
management.  Remedy:  The  Company  will  consult  its  legal  counsel as to the
legality  of  future  agreements  and  consult its auditors regarding the proper
accounting  treatment of such agreements in order to preserve the purpose of the
agreements  and  the  intent  of  management.

Changes  in  Internal  Controls
-------------------------------

There were no significant changes in the Company's internal controls or in other
factors  that  could  significantly  affect those controls since the most recent
evaluation  of  such  controls.  The  Company  intends  to  make  extensive
improvements,  as  outlined  above,  to  its  disclosure  controls.

                                       51
<PAGE>

                             ADDITIONAL INFORMATION
                             ----------------------

                                  HEADQUARTERS
                                  ------------

VALCOM,  INC.
-------------

26030  Avenue  Hall
Studio  #5
Valencia,  California  91355

                                  SUBSIDIARIES
                                  ------------

VALENCIA  ENTERTAINMENT  INTERNATIONAL,  LLC
--------------------------------------------

26030  Avenue  Hall
Studio  #5
Valencia,  California  91355

HALF  DAY  VIDEO,  INC.
-----------------------

28170  Avenue  Crocker,  Suite  104
Valencia,  California  91355

                             OFFICERS AND DIRECTORS
                             ----------------------

Vince  Vellardita:  Chairman of the Board, President and Chief Executive Officer
Donald  P.  Magier:  Treasurer,  Secretary,  Controller  and  Director
Stephen  A.  Weber:  Director
David  Weiner:  Director

                                    AUDITORS
                                    --------

Weinberg  &  Company,  P.A.,  6100  Glades  Road, Suite 314, Boca Raton, Florida
33434.

                                 TRANSFER AGENT
                                 --------------

Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York
10004

Exhibits to this Form 10-KSB will be provided, subject to payment of actual copy
costs,  to  stockholders  of the Company upon written request addressed to Shari
Edwards,  ValCom,  Inc.,  at  the  Company's  headquarters  listed  above.

                                       52
<PAGE>

                                   SIGNATURES
                                   ----------

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


Dated:  February  19,  2003                 VALCOM,  INC.,
                                            a  Delaware  corporation


                                            By:     /s/Vince Vellardita
                                               ------------------------
                                                     Vince  Vellardita
                                                     Chief  Executive  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,      February  19,  2003
    --------------------
     Vince  Vellardita         President, and Chairman of the Board


By: /s/Donald P. Magier        Treasurer, Controller          February  19, 2003
    ---------------------
     Donald  P.  Magier        (principal  accounting  officer),
                               Secretary  and  Director


By:  /s/Stephen  A. Weber      Director                       February  19, 2003
     --------------------
     Stephen  A.  Weber


By:  /s/  David  Weiner        Director                       February  19, 2003
     ------------------
     David  Weiner

                                       53
<PAGE>

                                                                     EXHIBIT  23

                                AUDITORS' CONSENT



Dated:  February  19,  2003

I, Jay Shapiro, CPA consent to the inclusion of my independent auditors' report,
dated December 27, 2001 on the consolidated financial statements of ValCom, Inc.
as  of and for the nine month Period ended September 30, 2001 in Form 10-KSB for
fiscal  year  ended  September  30,  2002.

                         By:     /s/Jay J. Shapiro
                                 -----------------
                                 Jay J. Shapiro
                                 C.P.A.
                                 A professional corporation
                                       54
<PAGE>

                                                                    EXHIBIT 99.1

                           CERTIFICATIONS PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of ValCom, Inc. a Delaware corporation
(the  "Company"),  on  Form  10-KSB for the period ending September 30, 2002, as
filed  with  the  Securities  and  Exchange  Commission  on the date hereof (the
"Report"),  I,  Vince  Vellardita,  the  Company's  Chief Executive Officer (the
"Officer"),  certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section  906  of  the  Sarbanes-Oxley  Act  of  2002,  that:

     (1)     The Report fully complies with the requirements of Section 13(a) or
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  Company's  financial  condition  and  results  of  operations.

Dated:  February  19,  2003

                         By:     /s/  Vince  Vellardita
                            ---------------------------
                                  Vince  Vellardita
                                  Chief  Executive  Officer

     In  connection  with  the  Annual  Report  of  ValCom,  Inc.,  a  Delaware
corporation  (the "Company"), on Form 10-KSB for the period ending September 30,
2002,  as  filed  with the Securities and Exchange Commission on the date hereof
(the  "Report"),  I,  Donald  Magier,  the  Company's  Treasurer, Controller and
principal  accounting  officer  (the  "Officer"), certify, pursuant to 18 U.S.C.
Section  1350,  as  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002,  that:

     (1)     The Report fully complies with the requirements of Section 13(a) or
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  Company's  financial  condition  and  results  of  operations.

Dated:  February  19,  2003



                         By:     /s/  Donald  P.  Magier
                            ----------------------------
                                  Donald  P.  Magier
                                  Treasurer,  Controller  and
                                  principal  accounting  officer

                                       55
<PAGE>

                                                                    EXHIBIT 99.2


                           CERTIFICATIONS PURSUANT TO
                         RULES 13A-14 AND 15D-14 OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


     In  connection  with  the  Annual  Report  of  ValCom,  Inc.,  a  Delaware
corporation  (the "Company"), on Form 10-KSB for the period ending September 30,
2002,  as  filed  with the Securities and Exchange Commission on the date hereof
(the  "Report"), I, Vince Vellardita, the Company's Chief Executive Officer (the
"Officer"),  certify,  pursuant  to  Rule  13a-14  or  15d-14  of the Securities
Exchange  Act  of  1934,  as  amended,  that:

     (1)     The  Officer  has  reviewed  the  Report.

(2)     Based on the Officer's knowledge, the Report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by the Report.

     (3)     Based  on  the  Officer's  knowledge,  the financial statements and
other  financial  information  included  in  the  Report  fairly  present in all
material respects the Company's financial condition and results of operations as
of,  and  for,  the  periods  presented  in  the  Report.

     (4)     The  Officer  and  the  other  certifying  officer:

     (a)     Are  responsible  for  establishing  and  maintaining  "disclosure
controls and procedures," as that term is defined by the Securities and Exchange
Commission,  for  the  Company.

(b)     Have  designed  such  disclosure  controls and procedures to ensure that
material information relating to the Company is made known to them, particularly
during  the  period  in  which  the  periodic  Report  is  being  prepared.

          (c)     Have  evaluated  the effectiveness of the Company's disclosure
controls  and  procedures within 90 days prior to the filing date of the Report.

          (d)     Have  presented  in  the  Report  their  conclusions about the
effectiveness  of  the  disclosure controls and procedures based on the required
evaluation  as  of  that  date.

     (5)     The  Officer and the other certifying officer have disclosed to the
Company's  auditors  and  audit  committee of the board of directors (or persons
fulfilling  the  equivalent  function):

     (a)     All significant deficiencies in the design or operation of internal
controls,  as  that  term  is defined by the Securities and Exchange Commission,
which could adversely affect the Company's ability to record, process, summarize
and  report  financial  data  and have identified for the Company's auditors any
material  weaknesses  in  internal  controls;  and

     (b)     Any  fraud,  whether  or  not material, that involves management or
other  employees who have a significant role in the Company's internal controls.

                                       56
<PAGE>

     (6)     The  Officer and the other certifying officer have indicated in the
Report  whether or not there were significant changes in internal controls or in
other  factors  that  could significantly affect internal controls subsequent to
the  date  of  their evaluation, including any corrective actions with regard to
significant  deficiencies  and  material  weaknesses.


Dated:  February  19,  2003



                         By:     /s/  Vince  Vellardita
                                 ----------------------
                                 Vince  Vellardita
                                 Chief  Executive  Officer


     In  connection  with  the  Annual  Report  of  ValCom,  Inc.,  a  Delaware
corporation  (the "Company"), on Form 10-KSB for the period ending September 30,
2002,  as  filed  with the Securities and Exchange Commission on the date hereof
(the  "Report"),  I,  Donald  Magier,  the  Company's  Treasurer, Controller and
principal  accounting  officer (the "Officer"), certify, pursuant to Rule 13a-14
or  15d-14  of  the  Securities  Exchange  Act  of  1934,  as  amended,  that:

     (1)     The  Officer  has  reviewed  the  Report.

(2)     Based on the Officer's knowledge, the Report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by the Report.

     (3)     Based  on  the  Officer's  knowledge,  the financial statements and
other  financial  information  included  in  the  Report  fairly  present in all
material respects the Company's financial condition and results of operations as
of,  and  for,  the  periods  presented  in  the  Report.

     (4)     The  Officer  and  the  other  certifying  officer:

     (a)     Are  responsible  for  establishing  and  maintaining  "disclosure
controls and procedures," as that term is defined by the Securities and Exchange
Commission,  for  the  Company.

(b)     Have  designed  such  disclosure  controls and procedures to ensure that
material information relating to the Company is made known to them, particularly
during  the  period  in  which  the  periodic  Report  is  being  prepared.

          (c)     Have  evaluated  the effectiveness of the Company's disclosure
controls  and  procedures within 90 days prior to the filing date of the Report.

          (d)     Have  presented  in  the  Report  their  conclusions about the
effectiveness  of  the  disclosure controls and procedures based on the required
evaluation  as  of  that  date.

     (5)     The  Officer and the other certifying officer have disclosed to the
Company's  auditors  and  audit  committee of the board of directors (or persons
fulfilling  the  equivalent  function):

     (a)     All significant deficiencies in the design or operation of internal
controls,  as  that  term  is defined by the Securities and Exchange Commission,
which could adversely affect the Company's ability to record, process, summarize
and  report  financial  data  and have identified for the Company's auditors any
material  weaknesses  in  internal  controls;  and

                                       57
<PAGE>

(b)     Any  fraud,  whether  or not material, that involves management or other
employees  who  have  a  significant  role  in  the Company's internal controls.

     (6)     The  Officer and the other certifying officer have indicated in the
Report  whether or not there were significant changes in internal controls or in
other  factors  that  could significantly affect internal controls subsequent to
the  date  of  their evaluation, including any corrective actions with regard to
significant  deficiencies  and  material  weaknesses.


Dated:  February  19,  2003



                         By:  /s/  Donald  P.  Magier
                                 -----------------------
                              Donald  P.  Magier
                              Treasurer,  Controller  and
                              principal  accounting  officer

                                       58
<PAGE>