UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C., 20549

                                  FORM 10-QSB

                                  (Mark one)



          [X] Quarterly Report Pursuant to Section 13 or 15(d) of the

                        Securities Exchange Act of 1934

                 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006

                                      or

         [ ] Transition Report Pursuant to Section 13 or 15(d) of the

                        Securities Exchange Act of 1934

                        Commission file Number 0-28416



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




          Delaware                                         58-1700840
          --------                                         ----------
(State  or  other  jurisdiction  of                        (IRS Employer
    incorporation  or  organization)                    Identification  No.)


                  920 S. Commerce Street, Las Vegas, NV 89106
		  -------------------------------------------
                   (Address of Principal executive offices)

                                (702) 385-9000
			  ---------------------------
                          (Issuer's telephone number)

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

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

As of August 7, 2006 the issuer had 76,223,346 shares of its $0.001  par  value
common stock issued and outstanding.



<PAGE>



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 June 30, 2006 and the results of their operations  and
their cash flows for  the  nine  months ended June 30, 2006. These consolidated
financial statements include the accounts  of  ValCom,  Inc. and its subsidiary
companies (together "the Company"). Results for the nine  months ended June 30,
2006, are not necessarily indicative of the operations, which  may occur during
the  year  ending September 30, 2006. Refer to the Company's Annual  Report  on
Form 10-KSB for the year ended September 30, 2005 for further information.



<PAGE>



                                  VALCOM, INC.

                                  FORM 10-QSB


INDEX                                                                      Page
-----                                                                      ----
PART  I.   FINANCIAL INFORMATION

Item  1.   Condensed  Consolidated  Financial  Statements:
           Condensed  Consolidated  Balance  Sheet  as  of
           June 30,  2006  (unaudited)                                       4

           Condensed  Consolidated  Statements  of  Operations
           for the three month period ended June 30,
           2006 and  2005  (unaudited)                                       5

           Condensed Consolidated Statements of Cash Flows
           for the nine month period ended June 30, 2006
           and 2005  (unaudited)                                             6

           Notes  to  Condensed  Consolidated  Financial
           Statements (unaudited)                                            7

Item  2.   Management's Discussion and Analysis and Plan
           of Operation                                                     13

Item  3.   Controls and Procedures                                          14


Part  II.   OTHER INFORMATION

Item  1.    Legal Proceedings                                               15

Item  2.    Unregistered Sales of Equity Securities and
            Use of Proceeds                                                 15

Item  3.    Defaults Upon Senior Securities                                 16

Item  4.    Submission of Matters to a Vote of Security Holders             16

Item  5.    Other Information                                               16

Item 6.     Exhibits


SIGNATURES                                                                  16






<PAGE>







                         VALCOM, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>


						    As of
						   June 30,
						     2006
						  (unaudited)
						---------------
<S>							<C>
CURRENT ASSETS
  Cash 						$	117,681
  Accounts receivable, net		 		166,522
  Prepaid expenses		 			 25,000
  Notes receivable		 			449,000
						---------------

     Total Current Assets		 		758,203

NET PROPERTY & EQUIPMENT		 		122,520

OTHER ASSETS
  Deposits		 				108,350
  Other assets		 			      1,150,000
						---------------

     Total Other Assets		 		      1,258,350
						---------------

                  TOTAL ASSETS			$     2,139,073
						===============
</TABLE>





  See accompanying notes to the condensed consolidated financial statements


                         VALCOM, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
						     As of
						  December 31,
						     2005
						  (unaudited)
						---------------
<S>						<C>
CURRENT LIABILITIES
  Accounts payable				$	655,901
  Accrued interest		 			 43,061
  Accrued expenses		 			133,670
  Deferred income
  Due to related parties		 		949,537
  Notes payable		 			      1,418,440
						---------------

  Total Current Liabilities		 	      3,200,609

LIABILITIES SUBJECT TO COMPROMISE
  Mortgage payable		 			      -
  Long term loans
						---------------
  Total Liabilities		 			      -
						---------------
TOTAL LIABILITIES		 		      3,200,609

STOCKHOLDERS' EQUITY
   Convertible preferred stock: all with
    par value of $0.001; shares authorized
    and outstanding as of September 30, 2005
    and 2004 are as follow: Series B,
    1,000,000 shares authorized; 38,000
    shares issued and outstanding.	  		     38
   Series C, 15,000,000 shares authorized;
    10,517,000 shares issued and outstanding
    as of December 31, 2005				 10,517

   Common stock ($0.001 par value, 100,000,000
    shares authorized; 74,752,247 shares issued
    and outstanding as of June 30, 2006			 74,752
   Treasury stock			  		    (35)
   Additional paid-in capital		 	     13,076,956
   Retained (deficit)				    (14,223,764)
						---------------
     Total Stockholders' Equity		 	     (1,061,536)
						---------------
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY				$     2,139,073
						===============


</TABLE>


   See accompanying notes to the condensed consolidated financial statements

<PAGE>  4


                         VALCOM, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

								3 Month Period Ended			9 Month Period Ended
							  June 30		  June 30	  June 30		  June 30
							   2006			   2005		   2006			   2005
							(unaudited)		(unaudited)	(unaudited)		(unaudited)
							-----------		-----------	-----------		-----------
<S>							<C>				<C>	<C>				<C>
REVENUES
   Rental income					$    69,421 		$    37,270         201,351 		$   446,042
   Production income		 			    562,578 		    239,435 	  2,537,461 		    369,963
   Other income		 					  - 			  - 		350 			  -
							-----------		-----------	-----------		-----------
Total Revenues		 				    631,999 		    276,705 	  2,739,162 		    816,005

COSTS AND EXPENSES
   Production		 				    415,714 		    200,701 	  3,013,097 		    289,015
   Selling and promotion		 		    563,936 		      1,590 	    636,002 		      8,020
   Depreciation and amortization		 	      8,650 		     32,638 	     25,950 		     63,222
   General and administrative				    499,586 		    161,409 	  1,208,635 		  1,000,638
   Consulting and professional fees		 	     89,794 		     59,009 	  1,069,465 		    724,357
   Bad debts							  - 			  - 	     19,757 			  -
   Impairment of assets		 				  - 			  - 		  - 			  -
							-----------		-----------	-----------		-----------
Total Costs and Expenses		 		  1,577,680 		    455,347 	  5,972,906 		  2,085,252

OPERATING LOSS		 				   (945,681)		   (178,642)	 (3,233,744)		 (1,269,247)

OTHER INCOME & (EXPENSES)

   Interest expense		 			    (18,523)		     (1,680)	    (49,910)		     (8,239)
   Other expense		 			   (360,745)		   		   (636,056)		  	  -
   Gain on sale of assets		 			  - 					  - 		    321,395
   Other income		 				      3,977 			  - 	     41,296 		     28,971
							-----------		-----------	-----------		-----------
Total Other Income & (Expenses)		 		   (375,290)		     (1,680)	   (644,670)		    342,127
							-----------		-----------	-----------		-----------
NET GAIN (LOSS)	$	 				 (1,320,972)		$  (180,322)	 (3,878,414)		$  (927,120)
							===========		===========	===========		===========
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE							      (0.06)		$      0.02
												===========		===========
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING							 			  - 	  	 35,787,925
												===========		===========

</TABLE>

   See accompanying notes to the condensed consolidated financial statements

<PAGE>  5

                         VALCOM, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>



									9 Month Period Ended
								   June 30		  June 30
								    2006		    2005
								 (unaudited)		 (unaudited)
								------------		------------
<S>								<C>			<C>
CASH FLOWS FROM OPERATING ACTIVITIES

    Net (loss)							$ (3,878,414)		$   (927,120)
    Adjustments to reconcile net loss
	to net cash (used in) provided
	by operating activities:
      Accrued interest expense		 			      35,868
      Depreciation expense		 			      25,950 		      63,772
      Bad Debt Expense		 					   - 		      70,646
      Stock issued for settelments 		 		     390,311
      Stock issued for services & compensation		 	     543,723 		     550,866
     Preferd Stock issued for services & compensation		     200,000


   Changes in operating assets and liabilities:
      Receivables		 				      78,902 		    (128,246)
      Note receivables		 				     449,000 		      91,201
       Production in progress					      45,332
      Deposits							    (100,000)
      Prepaid Expenses		 				     (25,000)
      Accounts payable and accrued expenses		 	    (231,039)		     178,055
								------------		------------

     Net Cash Provided by (Used in)
	Operating Activities		 			  (2,510,699)		     (52,734)

CASH FLOWS FROM INVESTING ACTIVITIES
      Acquisition of property plant and equipment		     (44,442)			   -
      Disposition of property and equipment		 		   - 		    (363,663)
								------------		------------
     Net Cash Provided by (Used in)
	Investing Activities		 			     (44,442)		    (363,663)

CASH FLOWS FROM FINANCING ACTIVITIES

     Principal repayment of notes payable		 		   - 			   -
     Preferred stock issued for cash		 			   - 			   -
     Cash proceeds from sale of stock		 			   - 		      93,673
     Common tock issued for cash		 		     713,000 			   -
     Principal borrowings on notes		 		   1,001,960 		     334,813
     Net borrowings from related parties		 	     681,582 		      (1,726)
								------------		------------
     Net Cash Provided by (Used in) Financing Activities	   2,396,542 		     426,760
								------------		------------
     Net Increase (Decrease) in Cash		 		    (158,599)		      10,363
								------------		------------
     Cash at Beginning of Year		 			     276,280 		      21,468
								------------		------------
     Cash at End of Year					$    117,681 		$     31,831
								============		============
     Supplemental  Cash Flow Disclosures:

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

     Supplemental  Cash Flow Disclosures:
								============		============
     Stock issued for services					$    543,723 		$	   -
								============		============
     Stock issued for note conversions & Settlements		$    390,311 		$	   -
								============		============

</TABLE>

   See accompanying notes to the condensed consolidated financial statements

<PAGE>  6

                         VALCOM, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE  1  BANKRUPTCY  PROCEEDINGS,  DESCRIPTION  OF  BUSINESS   AND  SUMMARY  OF
SIGNIFICANT  ACCOUNTING  POLICIES

On  April 7, 2003, the Company filed on an emergency basis a voluntary  Chapter
11 bankruptcy  petition.

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

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

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

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

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

On August   3, 2004, the Bankruptcy Court granted the motion for  dismissal  of
Chapter  11  bankruptcy  case  against  the  Company.


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:

1.  STUDIO  RENTAL.

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

2.  FILM, PRODUCTION DIVISION.

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

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

3.  LIVE THEATRE.

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

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

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

4.  ANIMATION DIVISION.

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

On September 27, 2005,ValCom, Inc. signed a letter of intent to acquire Digital
Animation  Media,  Ltd., a privately held Irish  corporation  headquartered  in
Dublin, Ireland. Digital  Animation Media, Ltd., one of the premier independent
animation companies in Europe  and  a leading provider of animation software to
other  production  companies worldwide.  With  its  production  capability  and
proprietary technology, the company is well positioned to take advantage of the
growth in existing animation  markets  as  well  as  a  burgeoning  market  for
wireless  animation  tools  and content with clients such as Disney, Warner and
The New Zoo Revue.

5.  BROADCAST  TELEVISION.

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

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


BASIS  OF  PRESENTATION

In  the  opinion of management, the accompanying unaudited consolidated interim
financial  statements  reflect  all  adjustments (consisting of only normal and
recurring adjustments) necessary to present  fairly  the  financial position of
Valcom,  Inc.  (the "Company"), as of March 31, 2006, and the  results  of  its
operations and cash  flows  for  the  six-month period ended March 31, 2006 and
2005. The results of operations for such  interim  periods  are not necessarily
indicative of the results for a full year. The accompanying unaudited condensed
interim financial statements have been prepared in accordance  with  accounting
principles  generally  accepted  in  the  United  States of America for interim
financial reporting and with instructions to Form 10-QSB  and,  accordingly, do
not  include  all  disclosures  required  by  accounting  principles  generally
accepted  in  the  United States of America. The condensed financial statements
should be read in conjunction  with  the  audited  financial statements and the
notes to the audited financial statements included in  the  Company's  Form 10-
KSBregistration report for the period ending September 30, 2005 filed with  the
Securities  and  Exchange  Commission.  The  accounting  policies  followed for
interim financial reporting are the same as those disclosed under Note 1 in the
notes  to  the  financial  statements  included  in  the  Company's Form 10-KSB
registration report for the year ended June 30, 2005.

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  to date of  $3,878,414   and a working capital deficiency  of  $2,442,406
and an accumulated deficit of $14,233,764 at June 30, 2006.

Valencia    Entertainment    International, LLC, a California limited liability
company   and  the  Registrant's   subsidiary   filed  on  April  7,   2003,  a
voluntary petition  in  bankruptcy  for  reorganization  under  Chapter   11 of
the   U.S.   Bankruptcy  Code  in  the  United  States Bankruptcy Court for the
Southern  District  of California  (note   8).   The    main    income  of  the
Registrant  is  from the operations of Valencia Entertainment International. As
of  May  30th,  2005,  we  have  closed the operation at Valencia Entertainment
International, California.

Management   has   taken    various   steps   to   revise   its   operating and
financial requirements,  which   it believes  are  sufficient  to  provide  the
Company with  the  ability   to  continue  on in next twelve months. Management
devoted considerable effort during   the  period ended  June 30, 2006,  towards
management  of  liabilities  and  improving   the  operations.   The management
believes that the above actions  will   allow   the  Company  to  continue  its
operations through the next twelve months.


                         VALCOM, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)

NEW  ACCOUNTING  PRONOUNCEMENTS

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

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

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

RECLASSIFICATION

Certain   prior   period   amounts  have  been reclassified to conform  to  the
current period's  presentation.


NOTE  2  NET  INCOME  (LOSS)  PER  SHARE

The   Company's   net   loss per share was calculated  using  weighted  average
shares  outstanding  of  45,197,572  for  the  nine   months   ended   June 30,
2006   and 35,787,925 for  the  six months  ended June  30, 2005, respectively.
Although convertible  preferred  stock,  convertible  debt,  and  warrants  are
common stock equivalents, they are not included in the calculation  of  diluted
earnings  per  share  as  their effect  would  be anti-dilutive.


NOTE 3.  PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:

                                                June		September
                                              30, 2006       	30, 2005
                                              ---------  	---------
Building Improvements                     	  4,500             4,500
Production Equipment                    	 68,708            68,708
Leasehold Improvements                		 62,677            62,677
Autos and Trucks                            	 33,971            33,971
Office Furniture and Equipment    		 44,814            44,814
Video Equipment                          	181,877           181,877
Recording Studio                           	 44,442           	-
                                              ---------  	---------
                                                440,989        	  396,547
Less: accumulated depreciation  	       (318,469)         (301,125)
                                              ---------  	---------
Net book value . . . . . . .                  $ 122,520       	$  95,422
					      =========		=========

Depreciation expense for the periods ended June 30,  2006 and September 30,
2005 was $17,300 and $92,001, respectively.


NOTE 4. NOTES PAYABLE

The following  are  notes  issued  as of March 31, 2006.   All  of  these notes
incur interest  at  10%  per  annum  with  different  due  dates.  All  related
interest has been accrued and reflected in the financial statements.


1.  Vince Vellardita                  $   360,000
2.  ICAG, Inc.                        $   125,000
3.  Condor Financial                  $    40,000
4.  Other Notes                       $ 1,722,000





VALCOM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

NOTE  5  LITIGATION

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

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

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

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

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

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

On October 5, 2004, Valcom, Inc. and Valencia Entertainment International, LLC,
commenced a lawsuit in  the  Los  Angeles  Superior Court, State of California,
against Chicago Title Company and Laurus Master  Fund,  Ltd.  The suit seeks an
accounting of the amount due in connection with a non-judicial  foreclosure  of
a deed of trust securing a promissory note executed by Valcom and Valencia.  It
also  alleges  that  Chicago  Title  breached  its  trustee's duties and Laurus
breached   the  terms  of the promissory note and deed of  trust  securing  it.
Valcom's attorney has expressed  his belief that the lawsuit it meritorious but
at this stage in the proceeding, he  is  unable to state how much, if any, will
be recovered in the lawsuit.  The trial date has been set for July 17, 2006.

Lloyd Kurtz

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

Farkhanda Rana

On October 20, 2004 a shareholder of  ValCom initiated suit against the Company
and its President alleging violations of State and Federal Securities Law along
with Fraud and Breach of Contract.  The  lawsuit  captioned  Farkhanda Rana vs.
ValCom, Inc., Valencia Entertainment and Vince Vellardita et al.  were filed in
Los Angeles Superior Court as Case Number PC035673.  On November 23, 2004 after
a  hearing  the  Plaintiff  in  this  matter  obtained  a pre-judgment writ  of
attachment against the Company for $325,000.00.  The case  has  been settled as
of November 2005.


NOTE  6  RELATED  PARTY  TRANSACTIONS

Mr. Vince Vellardita, CEO is owed 496,106 from advances, cash and accrued wages
from the Company as of December 31, 2005.

NOTE  7  STOCKHOLDERS'  EQUITY

(A)  CONVERTIBLE  PREFERRED  STOCK

On June 31,  2006,  the  Company  had three series of convertible Preferred
Stock: B,  C,  and  D.

Series   B   Preferred  Stock has no voting  rights,  is  entitled  to  receive
cumulative  dividends in  preference  to  any dividend on the common stock at a
rate of 8% per share, per year. Series B Preferred Stock is 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  8%  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 D 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.  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 three months ended December 31, 2005.


Assumption  used  (for  Black  Scholes  calculations):
======================================================

Exercise  Price                                            $.25
Life							   12  months
Volatility						   125%
Interest Rate						   8%
The  following  is  the  summary  of
warrants as  of  June  30,  2005:
Warrants as of September 30, 2003                          0
Warrants issued during the period                          300,000
Warrants  exercised  during the period                     0
Warrants  expired  during  the  period                     0
Warrants  outstanding  as  of  June  30, 2004              300,000


                         VALCOM, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)

COMMON STOCK ISSUED

During    the    three    months   ended   June 30,  2006,  the Company  issued
61,165  shares of common    stock   in  lieu   of  compensation  for  legal and
consulting  services performed.   The value   of    the  legal  and  consulting
services  performed  totaled  approximately  $3,085,  which  was computed based
upon the market prices of the common stock on the applicable payment dates.

During the three months  ended  June  30,   2006, the Company issued  7,500,000
shares  of  common  stock  for cash.  Total  cash  received  for  these  shares
was approximately $515,000.

  During    the    three  months ended  June  30,  2006,  the  Company   issued
900,000 shares of common  stock   to   convert   $115,000   for liabilities and
legal settlements.


NOTE 8  DISPOSAL OF BUILDING (UNDER THE ORDER OF BANKRUPTCY COURT)

VEI  filed  a voluntary  chapter  11  bankruptcy petition on April 7, 2003.  By
May 2004,  the  Property was subject to three (3) secured claims.  These were a
note  and   first-priority   deed  of trust  held  by  Finance  Unlimited,  LLC
("Finance")  in the  amount  of  $6,565,998   and   two   notes,   secured   by
second-priority   and third-priority deeds of trust, both held by Laurus Master
Fund, Ltd. ("Laurus").  Laurus  claimed  that it was owed a total of $2,978,876
plus additional penalties and  additional  legal  fees on the two notes but VEI
disputed  many  of  the penalty claims  by  Laurus.  The   Finance   note   was
solely  the obligation  of  VEI,  but ValCom,  Inc.  was  also  an  obligor  on
the   two   Laurus   notes. In  May 2004,  Laurus  paid  off  Finance  and  was
subrogated to Finance's $6,565,998 claim,  which  became included in the senior
of Laurus' two claims.   Laurus  then  sought   to   conduct   a   non-judicial
foreclosure   sale  of the Property, and VEI objected.  The  Bankruptcy   Court
issued  an  order on  June  3, 2004, that while Laurus  could  conduct  a  non-
judicial foreclosure sale of  the  Property,  Laurus would  not  be entitled to
any deficiency claim against either VEI or valium, or any  other  assets  other
than  the  Property  itself (and the rents and leases appurtenant  thereto).

On   June  10,2004,   Laurus  had  the Property sold.   At  this  sale,  Laurus
claimed that  its  senior  note had a balance of $7,407,873 and its junior note
a balance of  $2,405,093.  Virtually  all  of  the  disputed  penalties,  along
with  a disproportionate  share   of   disputed  legal  fees and expenses, were
incorporated  into   the   junior  balance,  while  the  senior   included  the
$6,565,998  million  subrogated   from   the   Finance  claim.   The  sale  was
conducted through the  junior  note, and the Property was sold for $2.9 million
to a third party.  An affiliate  of  this third party then purchased the senior
note  directly  from Laurus, without a   second   sale.  As  a  result  of  the
Bankruptcy Court's  order  and  the subsequent trustee's sale of the  Property,
neither VEI nor ValCom are subject  to  any  further liabilities on account  of
the  notes  and  deeds of trust previously held by  Finance  and  Laurus.  Even
though  the  senior  note  still  technically exists, it has been rendered non-
recourse by the Bankruptcy  Court's  order,  and could only be enforced against
the Property itself (which no longer belongs to  VEI).   Any  liability owed to
the  third  party,  which  purchased  the  Property  with  regard to the  rents
collected  for  June   2004,  has  been  resolved  by  settlement   with   that
party.

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

On October 5, 2004, Valcom, Inc. and Valencia Entertainment International, LLC,
commenced a lawsuit in  the  Los  Angeles  Superior Court, State of California,
against Chicago Title Company and Laurus Master  Fund,  Ltd.  The suit seeks an
accounting of the amount due in connection with a non-judicial  foreclosure  of
a deed of trust securing a promissory note executed by Valcom and Valencia.  It
also  alleges  that  Chicago  Title  breached  its  trustee's duties and Laurus
breached  the  terms  of the promissory  note and deed of  trust  securing  it.
Valcom's attorney has expressed  his belief that the lawsuit it meritorious but
at this stage in the proceeding, he  is  unable to state how much, if any, will
be recovered in the lawsuit.  The trial date has been set for July 17, 2006.


<PAGE>  7



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

INTRODUCTION

PLAN OF OPERATION

As of June 30, 2006, ValCom, Inc. operations were comprised of five divisions:

STUDIO RENTAL

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

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


FILM PRODUCTION DIVISION

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

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


<PAGE>  8


LIVE THEATRE DIVISION

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

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

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


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


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

<PAGE>  9

ANIMATION DIVISION

October  1,  2003,  we  formed  New  Zoo  Revue LLC pursuant to a joint venture
agreement  with O Atlas Enterprises Inc., a  California  corporation.  New  Zoo
Revue LLC was  formed  for  the development and production of "New Zoo Revue" a
feature film and television series  and  marketing of existing episodes. ValCom
shall contribute all funding required for  the  development  of  the above to a
maximum of $1,000,000 and O Atlas shall contribute an exclusive ten

(10) year worldwide license in and to all rights, music and characters  as  its
equal  contribution  towards Capital. The net profit after all expenses will be
shared equally by ValCom  Inc.  and  O Atlas. New Zoo Review LLC is expected to
generate revenue by 2005 and expected  to grow based on our ability to sell the
TV Series of New Zoo Revue.

On September 27, 2005,ValCom, Inc. signed a letter of intent to acquire Digital
Animation  Media, Ltd., a privately held  Irish  corporation  headquartered  in
Dublin, Ireland.  Digital Animation Media, Ltd., one of the premier independent
animation companies  in  Europe and a leading provider of animation software to
other  production companies  worldwide.  With  its  production  capability  and
proprietary technology, the company is well positioned to take advantage of the
growth in  existing  animation  markets  as  well  as  a  burgeoning market for
wireless  animation tools and content with clients such as Disney,  Warner  and
The New Zoo Revue.

<PAGE>  10

CHANNEL 8 IN PALM SPRINGS, CALIFORNIA

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

RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2006 VS. JUNE 30, 2005

Revenues for the three months ended June 30, 2006 increased by $355,294 or 128%
from $276,705 for the three months ended June 30, 2005 to $631,999 for the same
period in 2006.  The  increase  in  revenue  was  principally  due to increased
production revenues associated with the Valcom's activities.

Production costs for the three months ended June 30, 2006 increased by $215,013
from $ 200,701for the three months ended June 30, 2005 to $415,714 for the same
period  in  2006.  The  increase  in  production costs was principally  due  to
increased production associated with Valcom Productions.

Depreciation and amortization expense for  the three months ended June 30, 2006
decreased by $ 23,99or 73.1% from $32,638 for  the  three months ended June 30,
2005 to $8,650 for the same period in 2006.

General and administrative expenses for the three months  ended  June  30, 2006
increased by $ 338177 or 210.2 % from $ 161,409 for the three months ended June
30,  2005  to  $  499,586  for  the  same  period in 2006. The increase was due
principally to increased overall activities and costs for the new projects.

Consulting  and professional fees for the three  months  ended  June  30,  2006
increased by $ 30,785 or 52.3% from $59,009 for the three months ended June 30,
2005 to $89,792  for  the same period in 2006. The increase was due principally
to increases in use of professionals.

Interest expense for the  three months ended June 30, 2006 increased by $16,843
or 1003% from $1,680 for the  three  months  ended June 30, 2005 to $18,523 for
the same period in 2006. The increase was due  principally  to  the increase in
notes payables.

Due  to  the  factors  described  above,  the  Company's net loss increased  by
$1,140,650 from $180,332 for the three months ended June 30, 2005 to $1,320,972
for the same period in 2006.

RESULTS OF OPERATIONS - NINE MONTHS ENDED JUNE 30, 2006 VS. JUNE 30, 2005

Revenues for the nine months ended June 30, 2006  increased  by  $1,923,157  or
235.5%  from $816,009 for the nine months ended June 30, 2005 to $2,739,162 for
the same  period  in  2006.  The  increase  in  revenue  was principally due to
increased production revenues associated with the Valcom's activities.

Production  costs  for  the  nine  months  ended  June  30,  2006 increased  by
$2,724,082 from $289,015 for the nine months ended June 30, 2005  to $3,017,097
for  the  same period in 2006. The increase in production costs was principally
due to increased production associated with Valcom Productions.

Depreciation  and  amortization expense for the nine months ended June 30, 2006
decreased by $37,272  or  58.9% from $63,222 for the nine months ended June 30,
2005 to $25,950 for the same period in 2006.

General and administrative  expenses  for  the  nine months ended June 30, 2006
increased by $207,947 or 20.8% from $1,000,638 for  the  nine months ended June
30,  2005  to  $1,208,635  for  the same period in 2006. The increase  was  due
principally to increased overall activities and costs for the new projects.

Consulting and professional fees  for  the  nine  months  ended  June  30, 2006
increased by $ 345,108 or 47.6% from $724,357for the nine months ended June 30,
2005  to  $1,069,465  for  the  same  period  in  2006.  The  increase  was due
principally to increases in use of professionals.

Interest  expense  for the nine months ended June 30, 2006 increased by $41,671
or 505.8% from $8,239  for  the  nine months ended June 30, 2005 to $49,910 for
the same period in 2006. The increase  was  due  principally to the increase in
notes payables.

Due  to  the  factors  described above, the Company's  net  loss  increased  by
$2,951,294 from $927,170  for the nine months ended June 30, 2005 to $3,878,424
for the same period in 2006.

FUTURE OUTLOOK

The  Company  has  entered  into  a  joint  venture  agreement  with  O.  Atlas
Enterprises to produce an animation  movie  and  an  animation TV series called
"New Zoo Revue" based on an American Classic of the same name, which was highly
successful. BCI/Navarre has purchased an exclusive agreement  to distribute 195
existing  shows of New Zoo Revue for the retail market. We anticipate  the  New
Zoo Revue to be available to consumers through 4,000 Wal-Mart retail outlets by
August 31,  2004.  The  Company has already incurred start-up costs, which have
been reflected in the financial  statements  for the six months ended March 31,
2004.

The Company has entered into agreement with Q Television Network, Palm Springs,
CA on April 1, 2005. The Company has granted Q  Television Network a License to
use 142 films and television shows for a period of  seven  years.  Q Television
Network issued 50,000,000 shares of the Company valued at $150,000 as advance.

September  22,  2005,  ValCom  Inc.  entered  into a production agreement  with
entertainment industry billion dollar producer  Jeff  Franklin  who  also joins
ValCom's Strategic Advisory Board. Franklin has brought in more than $2 billion
in  domestic  box office sales and with the addition of the film division.  Mr.
Franklin is one  of  producers  of  the  theatrical  feature,  "Casper"  and is
executive  producer  on "Kull, The Conqueror," "Cold Around The Heart," "Stuart
Little," and "Stuart Little 2."

On September 27, 2005,  ValCom,  Inc.  signed  a  letter  of  intent to acquire
Digital Animation Media, Ltd., a privately held Irish corporation headquartered
in  Dublin,  Ireland.  Digital  Animation  Media,  Ltd.,  one  of  the  premier
independent  animation companies in Europe and a provider of animation software
to other production  companies  worldwide.  With  its production capability and
proprietary technology, the company is well positioned to take advantage of the
growth  in  existing  animation  markets  as  well as a burgeoning  market  for
wireless animation tools and content with clients  such  as  Disney, Warner and
The New Zoo Revue.

ValCom,  Inc.  entered  a  joint  venture  in February, 2006 with entertainment
giant, Stan Lee's POW! Entertainment. POW! (Purveyors of Wonder) Entertainment,
Inc. is founded by Stan Lee, together with Gill  Champion and Arthur Lieberman.
POW's  principals  combined  have  over  a hundred years  experience  creating,
producing, and licensing original intellectual  properties. POW! specializes in
franchises for the entertainment industry, including  animation and live-action
feature films, plus television, DVDs, video games, merchandising,  and  related
ancillary markets. POW! partners with studios and networks in creating new  and
exciting  characters.  In some cases, POW! creates 'custom-tailored' properties
for a specific star or director.

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

<PAGE>  11

On February 9, 2006 ValCom,  Inc.  named Jeff Kutash as President of their Live
Theatre  Division.  The  first venture  Kutash  will  undertake  is  a  theater
production called 'Headlights  and  Tailpipes'  that  will be unveiled at a Las
Vegas hotel and casino. In heading up this division, Kutash will be responsible
for  developing  and  directing  new  productions  and  live theatrical  events
throughout the world. Kutash's experience in the field of  theatre,  television
and film create a vast knowledge of the entertainment field.

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

ValCom Burbank Studios  was  purchased  June 1, 2006, for cash and stock. It is
one of Burbank's finest television production facilities, with three edit bays,
two sound stages and over 25,000 square feet of production support.


Blue Chip Client Base


ValCom Burbank Studios' past client base  consisted  of:  HGTV, D.I.V., History
Channel, Discovery, Food Network, Sony Pictures T.V., PAX, MTV, Disney Channel,
HBO,  ABC,  CBS,  NBC,  Sci  Fi,  GSN,  Comedy  Central, VH-1, FOX  Television,
Lifetime, over a period of 12 years.  This turn-key,  state-of-the-art facility
was the home of 'Jeopardy' and the 'Wheel of Fortune' post  production for many
years.


On June 28, 2006, ValCom, Inc. along with entertainment giants, Stan Lee's POW!
Entertainment and entertainment industry producer Jeff Franklin  announced  the
second  of three upcoming films, a Stan Lee Sci-Fi picture entitled "The Harpy"
written by DeClan O'Brien and directed by Josh Becker.


"The Harpy"  will star Steven Baldwin who appeared in "The Usual Suspects," "28
Days," "Nuts"  and  "Brief  Encounter"  and  Peter  Jason,  whose  more notable
appearances  include  John  Carpenter  films  such as "The Prince of Darkness,"
"They Live," "Village of the Damned," "Escape from L.A." and "Ghosts of Mars."

<PAGE>  12

"Pre-production of "The Harpy" started Monday,  June  26th at ValCom's recently
acquired Burbank Studios. This film means $2.5 million  worth  of  revenue  for
ValCom and is for NBC Universal Sci-Fi Network to be aired in May 2007.


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


Jeff  Franklin  lends  years  of entertainment production experience  where  he
facilitates the overall vision  of each project. 'It's a privilege to join with
ValCom and POW!

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 $3,878,414and a negative cash flow from operations  of  $158599 for
the  nine monthsended June 30, 2006, a working capital deficiency of $1,061,596
and an  accumulated  deficit  of $14,232,764 at June 30, 2006. These conditions
raise substantial doubt about the  Company's  ability  to  continue  as a going
concern.

Cash totaled $117,681on June 30, 2006 compared to $31,831 as at June 30,  2005.
During  the  nine  months  ended  June  30,  2006,  net  cash used by operating
activities  totaled  $2,510,669  compared  to  net cash provided  by  operating
activities  of  $52,734  for  the  comparable  nine-month  period  in  2005.  A
significant portion of operating activities included  payments for interest and
production  development costs. Net cash used by financing  activities  for  the
nine months ended June 30, 2006 totaled $2,396,342 compared to $426,760 for the
comparable nine-month period in 2005.

The above cash  flow  activities yielded a net cash decrease of $158,599 during
the nine months ended June  30,  2006  compared to a increase of $10,363 during
the comparable prior year period.

Net working capital (current assets less  current  liabilities)  was a negative
$2,442,406  as  of June 30, 2006. 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.

SUBSEQUENT EVENTS

Purchase of Media City Studios

On  May  19, 2006, the Company entered into a letter agreement with Media  City
Teleproductions  ("MCT")  pursuant to which parties  expressed  their intention
and  set  forth  the principal terms for the Company's purchase of Media   City
Studios,  including  certain equipment  and  facilities  contained therein (the
"Studio") such as  all   studio   production equipment.  The purchase price for
the Studio is:

      *  $750,000, $100,000 of which  was  paid  to  MCT  by the Company on May
29, 2006 and the balance of $550,000 is to be  paid no later than 60 days after
the date of execution of final definitive agreements; and

      *  1,000,000  shares (the "Shares") of the Company's  common  stock,  par
value $.001 per share, which the Company issued to MCT on June 12, 2006.

The  completion  of  the  transaction  is  contingent  upon  the  completion of
satisfactory  due  diligence  by  the parties and negotiation and execution  of
final definitive agreements.

<PAGE>  13

ITEM 3. DISCLOSURE CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure  Controls  and  Procedures.  As  of the end of the
period  covered  by  this  report,  we  conducted  an  evaluation,  under   the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer of our disclosure controls and procedures (as defined in Rule
13a-15(e)  and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation,
our Chief Executive  Officer  and  Chief  Financial  Officer concluded that our
disclosure  controls  and procedures are effective to ensure  that  information
required to be disclosed  by us in the reports that we file or submit under the
Exchange Act is recorded, processed,  summarized  and reported, within the time
periods specified in the Commission's rules and forms.

(b) Changes in internal controls. There was no change  in our internal controls
or  in other factors that could affect these controls during  our  last  fiscal
quarter  that  has  materially  affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

<PAGE> 14

PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS


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

LLOYD KURTZ

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

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

(A) COMMON STOCK:

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

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

<PAGE>  15

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

	Not applicable

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

	Not applicable

ITEM 5. OTHER INFORMATION

	None.

ITEM 6. EXHIBITS

(A) Exhibits

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

31.2 Certification by Chief  Financial  Officer  pursuant  to  Section  302  of
     Sarbanes Oxley Act of 2002.

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

32.2 Certification of Chief Financial  Officer  Pursuant  to  18 U.S.C. Section
     1350.



                                  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.


Date:  August 21, 2006

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




Date:  August 21, 2006

By:  /s/ Steven Cantrock
-------------------------------------
Steven Cantrock
Chief Financial Officer and
Principal Accounting Officer

<PAGE>  16