UNITED STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C., 20549




FORM
10-Q


(Mark
one)




x Quarterly
Report Pursuant to Section 13 or 15(d) of theSecurities
Exchange Act of 1934




FOR
THE FISCAL QUARTER ENDED DECEMBER 31, 2008




Commission
file Number 0-28416




or




o Transition
Report Pursuant to Section 13 or 15(d) of theSecurities
Exchange Act of 1934




VALCOM,
INC.


(Name of
small business issuer specified in its charter)





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





2113A Gulf Boulevard, Indian
Rocks Beach, Florida 33785


(Address
of Principal executive offices) (Zip code)





(727) 953 -
9778


Issuer's
telephone number




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


registered
pursuant to Section 12(g) of the Act:




COMMON STOCK $0.001 PAR
VALUE


(Title of
Class)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES x NO o




As of
February 19, 2009, the issuer had 24,823,158 shares of its $0.001 par value
common stock outstanding.




UNAUDITED
INTERIM FINANCIAL STATEMENTS




The
accompanying financial statements are unaudited and are prepared in accordance
with rules and regulations of the Securities and Exchange Commission for interim
quarterly reporting. Accordingly, these financial statements do not include all
disclosures required under generally accepted accounting
principles.




In the
opinion of management, the accompanying consolidated financial statements
contain all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position of ValCom, Inc. and
subsidiaries as of December 31, 2008 and the results of their operations and
their cash flows for the three months ended December 31, 2008. These
consolidated financial statements include the accounts of ValCom, Inc. and its
subsidiary companies (together "the Company"). Results for the three months
ended December 31, 2008, are not necessarily indicative of the operations, which
may occur during the year ending September 30, 2008. Refer to the Company's
Annual Report on Form 10- K for the year ended September 30, 2008 for further
information.










VALCOM,
INC.




FORM
10-Q





PagePART
      I -FINANCIAL
      INFORMATION
            3Item
      1.
            Financial
      Statements
            3Item
      2.
            Management's
      Discussion and Analysis or Plan of Operation
            9Item
      3.
            Quantitative
      and Qualitative Market Risk
            11Item
      4.
            Controls
      and Procedures
            11PART
      II -OTHER
      INFORMATION
            12Item
      1.
            Legal
      Proceedings
            12Item
      1A.
            Risk
      Factors
            12Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            12Item
      3.
            Defaults
      Upon Senior Securities
            12Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            12Item
      5.
            Other
      Information
            12Item
      6.
            Exhibits
            13SIGNATURES
            14




2




PART
I -
FINANCIAL INFORMATION




ITEM
1. FINANCIAL STATEMENTS




VALCOM,
INC.
 Balance
Sheets
  ASSETS


December
      31,
              
              
              September
      30,2008
              
              
              2008CURRENT
      ASSETS
              
              (unaudited)Cash
              
              $
              34,224
              
              
              $
              86,416Accounts
      receivable, net
              
              
              27,331
              
              
              
              -Prepaid
      expense
              
              
              18,325
              
              
              
              24,434Total
      Current Assets
              
              
              79,880
              
              
              
              110,850FIXED
      ASSETS, net
              
              
              328,703
              
              
              
              76,020OTHER
      ASSETSGoodwill
              
              
              366,278
              
              
              
              -Other
      assets
              
              
              1,250,000
              
              
              
              1,000,000Total
      Other Assets
              
              
              1,616,278
              
              
              
              1,000,000TOTAL
      ASSETS
              
              $
              2,024,861
              
              
              $
              1,186,870LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable and accrued expenses
              
              $
              349,751
              
              
              $
              468,364Accrued
      interest payable
              
              
              186,564
              
              
              
              166,061Due
      to related parties
              
              
              568,532
              
              
              
              86,181Notes
      payable
              
              
              1,114,673
              
              
              
              412,173Total
      Current Liabilities
              
              
              2,219,520
              
              
              
              1,132,779LONG-TERM
      LIABILITIESNotes
      payable
              
              
              -
              
              
              
              -Total
      Long-Term Liabilities
              
              
              -
              
              
              
              -TOTAL
      LIABILITIES
              
              
              2,219,520
              
              
              
              1,132,779STOCKHOLDERS'
      EQUITY (DEFICIT)Series
      B Preferred stock, 1,000,000 shares authorized at parvalue
      of $0.001, 38,000 shares issued and outstanding
              
              
              38
              
              
              
              38Series
      C Preferred stock, 25,000,000 shares authorized at parvalue
      of $0.001, 9,691,666 and 9,591,666 shares issued and
              
              
              9,691
              
              
              
              9,591outstanding,
      respectivelyCommon
      stock, 250,000,000 shares authorized at par valueof
      $0.001, 24,645,828 and  22,776,099 sharesissued
      and outstanding, respectively
              
              
              24,646
              
              
              
              22,776Treasury
      stock, 35,000 shares
              
              
              (23,522
              )
              
              
              (23,522
              )Additional
      paid-in capital
              
              
              17,972,317
              
              
              
              17,778,314Accumulated
      deficit
              
              
              (18,177,829
              )
              
              
              (17,733,106
              )Total
      Stockholders' Equity (Deficit)
              
              
              (194,659
              )
              
              
              54,091TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY
      (DEFICIT)
              
              $
              2,024,861
              
              
              $
              1,186,870




The
accompanying notes are an integral part of these financial
statements.
  3
  VALCOM,
INC.
 Statements
of Operations
 (Unaudited)


For
      the Three Months EndedDecember
      31,2008
              
              
              2007REVENUES
              
              $
              66,269
              
              
              $
              267,636COST
      OF GOODS SOLD
              
              
              107
              
              
              
              -GROSS
      MARGIN
              
              
              66,162
              
              
              
              267,636OPERATING
      EXPENSESAdvertising
      and marketing
              
              
              54,138
              
              
              
              541Depreciation
      expense
              
              
              22,788
              
              
              
              6,335General
      and administrative
              
              
              413,616
              
              
              
              664,569Total
      Operating Expenses
              
              
              490,542
              
              
              
              671,445LOSS
      FROM OPERATIONS
              
              
              (424,380
              )
              
              
              (403,809
              )OTHER
      INCOME (EXPENSE)Interest
      expense
              
              
              (20,503
              )
              
              
              (15,278
              )Other
      income
              
              
              160
              
              
              
              -TOTAL
      OTHER INCOME (EXPENSE)
              
              
              (20,343
              )
              
              
              (15,278
              )LOSS
      BEFORE INCOME TAXES
              
              
              (444,723
              )
              
              
              (419,087
              )PROVISION
      FOR INCOME TAXES
              
              
              -
              
              
              
              -NET
      LOSS
              
              $
              (444,723
              )
              
              $
              (419,087
              )BASIC
      LOSS PER SHARE
              
              $
              (0.02
              )
              
              $
              (0.03
              )WEIGHTED
      AVERAGE NUMBEROF
      SHARES OUTSTANDING
              
              
              23,710,964
              
              
              
              12,176,099


The
accompanying notes are a integral part of these financials
statements.
  4


VALCOM,
INC.
 Statements
of Stockholders' Equity (Deficit)
 (Unaudited)




Series
      B
                Preferred
      Stock
              
              
              Series
      C
                Preferred
      Stock
              
              
              Common
      Stock
              
              
              Treasury
              
              
              AdditionalPaid-In
              
              
              Accumulated
              
              
              TotalStockholders'EquityShares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Stock
              
              
              Capital
              
              
              Deficit
              
              
              (Deficit)Balance,
      September 30, 2007
              
              
              38,000
              
              
              $
              38
              
              
              
              7,921,666
              
              
              $
              7,921
              
              
              
              10,376,099
              
              
              $
              10,376
              
              
              $
              (23,522
              )
              
              $
              15,081,739
              
              
              $
              (17,299,290
              )
              
              $
              (2,222,738
              )Common
      stock issued forservices
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              7,630,000
              
              
              
              7,630
              
              
              
              -
              
              
              
              511,285
              
              
              
              -
              
              
              
              518,915Preferred
      stock issued fordebt
              
              
              -
              
              
              
              -
              
              
              
              1,670,000
              
              
              
              1,670
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,668,060
              
              
              
              -
              
              
              
              1,669,730Common
      stock issued fordebt
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              250,000
              
              
              
              250
              
              
              
              -
              
              
              
              19,750
              
              
              
              -
              
              
              
              20,000Common
      stock issued forcash
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              4,520,000
              
              
              
              4,520
              
              
              
              -
              
              
              
              497,480
              
              
              
              -
              
              
              
              502,000Net
      loss for the yearended September 30, 2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (433,816
              )
              
              
              (433,816
              )Balance,
      September 30, 2008
              
              
              38,000
              
              
              
              38
              
              
              
              9,591,666
              
              
              
              9,591
              
              
              
              22,776,099
              
              
              
              22,776
              
              
              
              (23,522
              )
              
              
              17,778,314
              
              
              
              (17,733,106
              )
              
              
              54,091Preferred
      stock issued forpurchase of Faith TV
              
              
              -
              
              
              
              -
              
              
              
              100,000
              
              
              
              100
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              8,900
              
              
              
              -
              
              
              
              9,000Common
      stock issued forservices
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              869,729
              
              
              
              870
              
              
              
              -
              
              
              
              86,103
              
              
              
              -
              
              
              
              86,973Common
      stock issued fordebt
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,000,000
              
              
              
              1,000
              
              
              
              -
              
              
              
              99,000
              
              
              
              -
              
              
              
              100,000Net
      loss for the three monthsended December 31,
    2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (444,723
              )
              
              
              (444,723
              )Balance,
      December 31, 2008
              
              
              38,000
              
              
              $
              38
              
              
              
              9,691,666
              
              
              $
              9,691
              
              
              
              24,645,828
              
              
              $
              24,646
              
              
              $
              (23,522
              )
              
              $
              17,972,317
              
              
              $
              (18,177,829
              )
              
              $
              (194,659
              )




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




VALCOM,
INC.
 Statements
of Cash Flows
 (Unaudited)


For
      the Three
              
              
              For
      the ThreeMonths
      Ended
              
              
              Months
      EndedDecember
      31,
              
              
              December
      31,2008
              
              
              2007OPERATING
      ACTIVITIESNet
      loss
              
              $
              (444,723
              )
              
              $
              (419,087
              )Adjustments
      to reconcile net loss tonet cash used by operating
      activities:Depreciation
      expense
              
              
              22,788
              
              
              
              6,335Common
      stock issued for services
              
              
              86,973
              
              
              
              180,000Impairment
      of asset
              
              
              -
              
              
              
              -Changes
      in operating assets and liabilities(Increase)
      decrease in accounts receivable
              
              
              (111,877
              )
              
              
              59,261(Increase)
      decrease in prepaid expenses
              
              
              6,109
              
              
              
              30,503Increase
      (decrease) in accrued interest payable
              
              
              20,503
              
              
              
              15,278Increase
      (decrease) in accounts payable
              
              
              (118,613
              )
              
              
              58,672(Increase)
      decrease in deposits
              
              
              -
              
              
              
              -Net
      Cash Used in Operating Activities
              
              
              (538,840
              )
              
              
              (69,038
              )INVESTING
      ACTIVITIESPurchase
      of property and equipment
              
              
              (48,203
              )
              
              
              -Net
      Cash Used in Investing Activities
              
              
              (48,203
              )
              
              
              -FINANCING
      ACTIVITIESRepayment
      of notes payable
              
              
              -
              
              
              
              -Proceeds
      from note payable
              
              
              51,500
              
              
              
              65,000Proceeds
      from related party payable
              
              
              482,351
              
              
              
              -Net
      Cash Provided by Financing Activities
              
              
              533,851
              
              
              
              65,000NET
      DECREASE IN CASH
              
              
              (53,192
              )
              
              
              (4,038
              )CASH
      AT BEGINNING OF YEAR
              
              
              86,416
              
              
              
              5,926CASH
      AT END OF YEAR
              
              $
              33,224
              
              
              $
              1,888SUPPLEMENTAL
      DISCLOSURES OFCASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
              
              $
              -
              
              
              $
              -Income
      Taxes
              
              $
              -
              
              
              $
              -NON
      CASH FINANCING ACTIVITIES:Common
      stock issued for debt
              
              $
              100,000
              
              
              $
              -Preferred
      stock issued for subsidiary
              
              $
              9,000
              
              
              $
              -Debt
      issued for subsidiary
              
              $
              750,000
              
              
              $
              -Debt
      assumed in acquisition of subsidiary
              
              $
              116,278
              
              
              $
              -




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




6




VALCOM,
INC.
 (A
Development Stage Company)
 Notes to
the Financial Statements
 NOTE
1 – CONDENSED FINANCIAL STATEMENTS
 
 The
accompanying financial statements have been prepared by the Company without
audit.  In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at December 31, 2008 and for all
periods presented have been made.
  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is suggested that
these condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's September 30, 2008
audited financial statements.  The results of operations for the
period ended December 31, 2008 and 2007 are not necessarily indicative of the
operating results for the full years.
 
 NOTE
2 – GOING CONCERN
 
 The
Company’s financial statements are prepared using generally accepted accounting
principles applicable to a going concern which contemplates the realization of
assets and liquidation of liabilities in the normal course of
business.
  In order
to continue as a going concern and achieve a profitable level of operations, the
Company will need, among other things, additional capital resources and to
develop a consistent source of revenues.  Management’s plans include
of investing in and developing all types of businesses related to the
entertainment industry.
  The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan described in the preceding paragraph
and eventually attain profitable operations.  The accompanying
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
 
 NOTE 3 –
SIGNIFICANT EVENTS
 
 On
December 15, 2008, the Company purchased all shares of FaithTV, LLC making it a
wholly owned subsidiary of the Company.  The purchase is reflected in
the financial statements along with the operating results of FaithTV, LLC from
December 16, 2008 through December 31, 2008. The purchase price was 100,000
shares of the Company’s preferred stock valued at $0.09 per share. The Company
also paid cash of $150,000 and issued a note payable for $750,000 for a total
purchase price of $909,000. The preferred stock is convertible to shares of the
Company’s common stock on a one share for one share basis. The purchase price
was allocated based upon the fair value of the assets purchased as
follows:
   Equipment
              
              $
              250,000Film
    Library
              
              
              250,000Goodwill
              
              
              281,732Net Operating Assets
      of FaithTV
              
              
              127,268Total
              
              $
              909,000
  During
the three months ended December 31, 2008, the Company issued 1,000,000 shares of
its common stock upon the conversion of debt of $100,000. The Company also
issued 869,729 shares of its common stock for services valued at $0.10 per
share.
  7
 VALCOM,
INC.
 (A
Development Stage Company)
 Notes to
the Financial Statements
  NOTE 4 –
SIGNIFICANT ACCOUNTING POLICIES
 
 Use of
Estimates
  The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
  Recent Accounting
Pronouncements
  In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our consolidated financial positionand results of
operations if adopted.
  In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial
Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”.SFAS
No. 163 clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement of  premium
revenue and claims liabilities. This statement also requires expanded
disclosures about financial guarantee insurance contracts. SFAS No. 163 is
effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
  In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally
Accepted Accounting Principles”.SFAS No. 162 sets forth
the level of authority to a given accounting pronouncement or document by
category. Where there
might be conflicting guidance between two categories, the more authoritative
category will prevail. SFAS No. 162 will become effective 60 days after the SEC
approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional
Standards. SFAS No. 162 has no effect on the Company’s financial position,
statements of operations, or cash flows at this time.




8




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




SPECIAL
NOTE ON FORWARD-LOOKING STATEMENTS.




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




INTRODUCTION




PLAN
OF OPERATION




As of
December 31, 2008, ValCom, Inc. operations were comprised of the following
divisions:




1. Studio
Rental Division




2. TV
Stations and Broadcast Division




3. Film
and Television Production




4.
Distribution





Corporate
offices are located at 2113A Indian Rocks Beach, Florida.





1. STUDIO
DIVISION




ValCom's
business includes television production for network and syndication programming,
motion pictures, and real estate holdings, however, revenue is primarily
generated through the lease of the sound stages and production. ValCom's past
and present clients include Paramount Pictures, Don Belisarious Productions,
Warner Brothers, Universal Studios, MGM, HBO, NBC, 20th Century Fox, Disney,
CBS, Sony, Showtime, the USA Network, the Game Show Network, Endemol, BET Home
Shopping Network and Sullivan Studios. ValCom's Studio Division is composed of
its studio at 14375 Myerlake Circle, Clearwater, Florida which houses a
state-of- the art production studio, broadcast facilities, recording
studios, production design construction, animation and
post-production.




ValCom,
Inc. manages and operates the Tele-Production Center in Clearwater, Florida, an
area having more Television Networks than any other city in the United States.
This multi-million dollar state of the art facility in Clearwater, Florida, is a
33,000 square foot facility that sits on 5 1⁄2 acres and is a favorite of all
major film studios and television networks. It houses two sound stages and a
Broadcast Center. ValCom offers several flexible studio configuration
options.  It offers digital control rooms and studios that are perfectly
suited for music video productions, commercials, television programs, industrial
and training productions, direct response, media and satellite tours, webcasting
events and videoconferencing.




2. TV
STATIONS AND BROADCAST DIVISION




On
15th
December 2008, Valcom acquired a 100% interest in Faith TV LLC, now re-branded
and launched as “MyFamily TV”, a new family focused TV network broadcasting
through 69 affiliate TV stations as of February 19th 2009
and with plans to add significantly more to this. In
addition Valcom has a joint venture with New Global Communications, Inc. and
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. Valcom has not realized
significant revenues from this joint venture to date.





In
February 2009, Valcom signed a memorandum to purchase America's Auction Network,
one of the world's largest independent auction houses and one of the fastest
growing shopping networks with the most diverse niche product lines from art,
antiques, coins, collectibles, jewelry, gems and real estate -- even meteorites
from outer space. Shows and auctions are available to 48 million plus U.S.
households via MOS Cable Systems, Broadcast Stations and Direct TV and Dish
Network simulcast around the world




9




3. FILM
PRODUCTION DIVISION




ValCom
has a long history of TV and film production and continuously develops
projects for productions and considers proposals for co-production. ValCom has
developed and produced a number of live action series pilots and full length
feature film projects such as PCH (Pacific Coast Highway) and the 40 episode TV
series AJ’s Time Travelers. With its integrated studio operation, studio
equipment and post production facility, ValCom has the opportunity to co-produce
by way of the provision of services with the opportunity to defer costs and also
to provide executive producer services to assist with development, planning,
financing and distribution.





4. DISTRIBUTION





ValCom
also owns a small library of television content, which it distributes through
Valencia Entertainment International. On November 6, 2007, Valencia
Entertainment signed an agreement with Porchlight Distribution Inc. from Santa
Monica Blvd., Los Angeles, for the worldwide distribution of all 40 episodes of
A.J.’s Time Travelers. In December 2008, Valencia signed an agreement with
Xtreme Fighting Championships (XFC) to produce and distribute 13 episodes of
XFC’s mixed martial arts fighting championships worldwide and also to distribute
future XFC promoted events for TV broadcast and home entertainment. In January
2009, XFC also contracted with HD Net to promote and broadcast new events during
2009 which Valencia will distribute worldwide outside of the HD Net
broadcast.




RESULTS OF
OPERATIONS




THREE
MONTHS ENDED DECEMBER 31, 2007 VS. DECEMBER 31, 2008




Revenues
for the three months December 31, 2008 decreased by $201,367 or 75.2% % from
$267,636 for the three months ended December 31, 2007 to $66,269 for the same
period in 2008. The decrease in revenue was principally due to limited
production contracts for the studio operations and the delay in the acquisition
of MyFamily TV until December 2008.




Production
costs for the three months ended December 31, 2008 increased from $0 for the
three months ended December 31, 2007 to $107 for the same period in 2008.The increase was primarily due to limited
activity.




Depreciation
and amortization expense for the three months ended December 31, 2008 increased
by $16,453 or 259% from $6,335 for the three months ended December 31, 2007 to
$22,788 for the same period in 2008. The increase was due to the acquisition of
capital equipment in the form of satellite trucks and production assets at
MyFamily TV.




General
and administrative expenses for the three months ended December 31, 2008
decreased by $250,953 or 37.8 % from $664,569 for the three months ended
December 31, 2007 to $413,542 for the same period in 2008. The decrease was due
principally to limited production activity.




Interest
expense for the three months ended December 31, 2008 decreased by $5,225 or 34.2
% from $15,278 for the three months ended December 31, 2007 to $20,343for the
same period in 2008. The increase was due principally to some short term finance
arrangements.




Due to
the factors described above, the Company's net loss increased by $25,636 from
$419,087 for the three months ended December 31, 2007 to $444,723 for the same
period in 2008.




FUTURE
OUTLOOK COMPANY UPDATE




On
15th
December 2008, Valcom acquired a 100% interest in Faith TV LLC, now re-branded
and launched as “MyFamily TV”, a new family focused TV network broadcasting
through 69 affiliate TV stations as of February 2009 and with plans to add
significantly more affiliates to this. Currently broadcasting to over 17 million
households, MyFamily TV has also secured significant program blocks such the
joint venture with PorchLight Entertainment, one of the world's leading
independent suppliers of high quality entertainment, to launch a new children's
programming block called KidMango. This will feature major kids titles such as
Jay Jay the Jet Plane, Four Eyes and My Goldfish is Evil.




Valcom
also signed a 3 year facilities and production agreement for television
programming and related services with the Auction Network, a live-bid-to-picture
interactive auction entertainment network that offers audiences compelling
interactive programming merging the sport and spirit of live auction with the
ability to watch, bid and win live, real-time, in H-D from anywhere in the
world. These include the production ofthe
51st Annual Grammy Awards Live Charity Auction Benefiting MusiCares and
Christmas with the Stars Celebrity Auction Benefits the Make-A-Wish Foundation
hosted by Kathy, Rick, and Paris Hilton. Valcom will also broadcast some of
these auction events on MyFamily TV, including the upcoming Busch Gardens ‘Art
by Animals’ in March 28, 2009.




In
February 2009, Valcom signed a memorandum to purchase America's Auction Network,
one of the world's largest independent auction houses and one of the fastest
growing shopping networks with the most diverse niche product lines from art,
antiques, coins, collectibles, jewelry, gems and real estate -- even meteorites
from outer space. Shows and auctions are available to 48 million plus U.S.
households via MOS Cable Systems, Broadcast Stations and Direct TV and Dish
Network simulcast around the world




10




LIQUIDITY
AND CAPITAL RESOURCES




The
Company's condensed consolidated financial statements have been prepared,
assuming that the Company will continue as a going concern. The Company has a
net loss of $444,723 and a negative cash flow from operations of $538,840 for
the three months ended December 31, 2008, a working capital deficiency of
$2,055,094 and an accumulated deficit of $18,177,829 at December 31, 2008. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern.




Cash
totaled $34,224 on December 31, 2008 compared to $1,888 as at December 31, 2007.
During the three months ended December 31, 2008, net cash used by operating
activities totaled $538,840 compared to net cash used by operating activities of
$69,038 for the comparable three - month period in 2007. Net cash provided by
financing activities for the three months ended December 31, 2008 totaled
$533.851 compared to $65,000 for the comparable three-month period in
2007.




The above
cash flow activities yielded a net cash decrease of $ 53,192 during the three
months ended December 31, 2008 compared to a decrease of $4,038 during the
comparable prior year period.




Net
working capital (current assets less current liabilities) was a $ 2,055,094 as
of December 31, 2008. The Company will need 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.




ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.




N/A




ITEM
4. CONTROLS AND PROCEDURES.




EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES




Our
management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer's management, including its principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.




Pursuant
to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation
with the participation of the Company's management, including Vince Vellardita,
the Company's Chief Executive Officer and Chief Financial Officer ("CEO/CFO"),
of the effectiveness of the Company's disclosure controls and procedures (as
defined under Rule 13a-15(e) under the Exchange Act) as of the three months
ended December 31, 2008. Based upon that evaluation, the Company's CEO /CFO
concluded that the Company's disclosure controls and procedures are not
effective to ensure that information required to be disclosed by the Company in
the reports that the Company files or submits under the Exchange Act, is
recorded, processed, summarized and reported, within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to the Company's management, including the Company's CEO /CFO, as
appropriate, to allow timely decisions regarding required
disclosure.




CHANGES
IN INTERNAL CONTROLS.




Our
management, with the participation the Principal Executive Officer and Principal
Accounting Officer performed an evaluation as to whether any change in our
internal controls over financial reporting occurred during the Quarter ended
December 31, 2008. Based on that evaluation, the Company's CEO/CFO concluded
that no change occurred in the Company's internal controls over financial
reporting during the Quarter ended December 31, 2008 that has materially
affected, or is reasonably likely to materially affect, the Company's internal
controls over financial reporting.




11




PART
II - OTHER INFORMATION




ITEM
1. LEGAL PROCEEDINGS





Laurus
Master Fund and Chicago Title




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




Valcom,
through appeals counsel, filed an appeal, and oral argument on the appeal
occurred December 17, 2007. On February 13, 2008, the Court of Appeals for the
Second Appellate District, Division Two, case number B193714, ruled in favor of
Valcom Inc and it was concluded in the judgment that there were triable issues
as to Valcom’s causes of action for accounting, breach of contract, conversion
and violation of the Civil Code section 2924k.




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




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




Case
number SC094099. This matter involves breach of contract and fraud against the
Defendants for $380,000 filed on June 1, 2007 in the Superior Court of Los
Angeles, Santa Monica District alleging breach of contract, specific
performance, injunctive relief, declaratory relief, accounting and negligence.
In this matter, Valcom is the plaintiff and sued the defendants for breach of
contract with respect to Valcom’s purchase of Brentwood Magazine.  The
parties are in settlement discussions and anticipate a settlement of this case
at any time.





ITEM
1A. RISK FACTORS




There
have been no material changes from the Risk Factors described in our Annual
Report on Form 10-K for the fiscal year ended September 30, 2008.




ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




On
November 25, 2008, the Company executed a convertible debenture in the principal
amount of $100,000 payable to Able Income Fund, LLC convertible at the lower of
(1) the VWAP for the three Regular Trading Days (which need not be consecutive)
selected by the Holder from the 20 trading days ending on the trading day
immediately before the relevant conversion date, multiplied by 70% or (2) $0.10
and warrants to purchase 400,000 shares of the Company’s common stock at an
exercise price of $0.10 per share. The Company paid off the note in February
2009.




On
January 6, 2009, the Company and Omnireliant Holdings, Inc. (“Omnireliant”)
entered into a Note Purchase Agreement whereby the Company sold to Omnireliant a
10% Secured Convertible Promissory Note with a conversion price of $0.10 per
share and a warrant to purchase 1,000,000 shares of the Company’s Common Stock
at an exercise price of $0.20 per share. The note may also be converted by the
purchase by the Omnireliant from the Company of broadcast airtime or commercial
slots at an ageed discount to the standard published rate card for such airtime
or commercial slots.


ITEM
3. DEFAULTS UPON SENIOR SECURITIES
  None
  ITEM
4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
  None
  ITEM
5. OTHER INFORMATION




12




ITEM
6. EXHIBITS.




(A)
Exhibits




10.1
            Form
      of Convertible Debenture dated November 25, 2008 by and between Valcom,
      Inc. and Able Income Fund, LLC (Incorporated by reference to the Company’s
      Current Report on Form 8-K as filed with the SEC on December 1,
      2008)




10.2
            Form
      of Guaranty dated November 25, 2008 by and between Valcom, Inc. and Able
      Income Fund, LLC (Incorporated by reference to the Company’s Current
      Report on Form 8-K as filed with the SEC on December 1,
    2008)




10.3
            Form
      of Pledge Agreement dated November 25, 2008 by and between Valcom, Inc.
      and Able Income Fund, LLC (Incorporated by reference to the Company’s
      Current Report on Form 8-K as filed with the SEC on December 1,
      2008)




10.4
            Form
      of Warrant dated November 25, 2008 by and between Valcom, Inc. and Able
      Income Fund, LLC (Incorporated by reference to the Company’s Current
      Report on Form 8-K as filed with the SEC on December 1,
    2008)




10.5
            Form
      of Agreement for the Purchase and Sale of Common Stock by and among Faith
      TV LLC, A. Kenneth Curtis, Jim West, Mark McGregor and Valcom, Inc.
      (Incorporated by reference to the Company’s Current Report on Form 8-K as
      filed with the SEC on December 19,
2008)




10.6
            Form
      of Note Purchase Agreement dated January 6, 2009 by and between Valcom,
      Inc. and Omnireliant Holdings, Inc. (Incorporated by reference to the
      Company’s Current Report on Form 8-K as filed with the SEC on January 9,
      2009)




10.7
            Form
      of 10% Secured Promissory Note dated January 6, 2009 by and between
      Valcom, Inc. and Omnireliant Holdings, Inc. (Incorporated by reference to
      the Company’s Current Report on Form 8-K as filed with the SEC on January
      9, 2009)




10.8
            Form
      of Security Agreement dated January 6, 2009 by and between Valcom, Inc.
      and Omnireliant Holdings, Inc. (Incorporated by reference to the Company’s
      Current Report on Form 8-K as filed with the SEC on January 9,
      2009)




10.9
            Form
      of Warrant dated January 6, 2009 by and between Valcom, Inc. and
      Omnireliant Holdings, Inc. (Incorporated by reference to the Company’s
      Current Report on Form 8-K as filed with the SEC on January 9,
      2009)




31.1
            Certification
      by Chief Executive Officer and Chief Financial Officer pursuant to Section
      302 of Sarbanes Oxley Act of 2002.




32.1
            Certification
      of Chief Executive Officer and Chief Financial Officer Pursuant to 18
      U.S.C. Section 1350.




The Company incorporates by reference
all exhibits to its Form 10-K for the year ending September 30,
2008.




13




SIGNATURES




In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.






VALCOM, INC., a Delaware
      CorporationDated:
      February 23, 2009
              By:
              /s/ Vince
      VellarditaVince VellarditaChief  Executive Officer
      (Principal Executive Officer)and
                Chief Financial Officer(Principal
      Accountingand
                Financial
      Officer)




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






SIGNATURE
            
            TITLE
            
            DATEBy:  /s/ Vince Vellardita
            
            Chief Executive
      Officer,
            
            February 23,
      2009Vince Vellardita
            
            Chairman  of  the  BoardBy:  /s/ Richard Shintaku
            
            Director
            
            February 23,
      2009Richard
      ShintakuBy:  /s/ Frank O Donnell
            
            Director
            
            February 23,
      2009Frank O
      Donnell










14