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 fiscal quarter ended March 31, 2001

Commission file Number 0-28416
or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

=====================================================================
                              ValCom, Inc.
       (Name of small business issuer specified in its charter)
=====================================================================
<TABLE>
<S>     <C>                                      <C>
         Delaware                                  58-1700840
         --------                                  ----------
(State or other jurisdiction of                   (IRS Employer
incorporation or organization)                  Identification Number)

         26030 Avenue Hall - Studio #5, Valencia, California 91355
         -----------------------------------------------------
         (Address of Principal executive offices)       (Zip code)
                           (661) 257-8000
                           --------------
                       Issuer's telephone number
</TABLE>
=====================================================================

Securities registered pursuant to 12(b) of the Act:  None
Securities to be registered pursuant to Section
12(g) of the Act: Common Stock and Preferred Stock

       Common Stock $0.001 Par Value - Preferred 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 [    ]

As of March 31, 2001 the Registrant had 93,311,507 shares of its $0.001 par
value Common Stock Outstanding.

=====================================================================
                               May 18, 2001
=====================================================================
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents
                            ValCom, Inc.
                             FORM 10-QSB
                                INDEX
<S>   <C>            <C>                                   <C>
                                                             Page
  PART I.             FINANCIAL INFORMATION

  Item 1.             Consolidated Financial Statements         4
                      Consolidated Balance Sheets as of
                        December 31, 2000 and
                        and March 31, 2001

                      Consolidated Statements of Operations     6
                        for the three months ended
                        March 31, 2000 and 2001

                      Consolidated Statement of Changes         8
                        in Shareholders' Equity for the three
                        months ended March 31, 2001

                      Consolidated Statements of Cash Flows     7
                        for the three months ended March 31,
                        2000 and 2001

                      Notes to Consolidated Financial State-    9
                        ments

  Item 2.             Management's Discussion and Analysis      14
                        of Financial Condition and Results
                        of Operations Condition

  Part II.            OTHER INFORMATION

  Item 1.             Legal Proceedings                        17

  Item 2.             Changes in Securities                    17

  Item 3.             Defaults Upon Senior Securities          17

  Item 4.             Submission of Matters to a Vote          17
                      of Security  Holders

  Item 5.             Other Information                        17

  Item 6.             Exhibits and Reports on Form 8-K         17

                      Signatures                               18

</TABLE>
                                    -2-
<PAGE>

PART I. FINANCIAL INFORMATION

                   INDEPENDENT ACCOUNTANTS' REPORT
                   -------------------------------
We have reviewed the accompanying consolidated balance sheet, statement
of operations, and cash flows of ValCom, Inc., and subsidiaries as of
March 31, 2001, and for the three-months period then ended. These financial
statements are the responsibility of the company's management.

We conducted our review in accordance with standards established by the
American Institure of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such as opinion.

Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be
conformity with generally accepted accounting principles.

/s/ Jay J. Shapiro, CPA P.C.
----------------------------
JAY J. SHAPIRO, C.P.A.
a professional corporation


May 18, 2001
Encino, California
                                    -3-
<PAGE>

Financial Statements
                     VALCOM, INC. AND SUBSIDIARY
                    -----------------------------
                     CONSOLIDATED BALANCE SHEETS
                    -----------------------------
<TABLE>
<CAPTION>
                                                    March 31,      Dec.31,
                                                       2001          2000
                                                      ------        -----
                                                   (Unaudited)     (Audited)
 <S>                                              <C>           <C>
Cash                                             $    18,660    $    52,777
Accounts receivable                                   88,714        116,322
Other receivables                                     52,634         52,634
Prepaid expenses                                      14,366         11,569
Property held for sale                             3,940,000      3,940,000
                                                  ------------  -------------
Total Current Assets                               4,114,374      4,173,302
                                                  ------------  -------------
Fixed Assets - net                                11,875,160     11,750,687
Production costs                                     113,660        110,201
Prepaid loan fees                                     97,711        100,501
Deposits                                              30,000         30,000
Investment in partnership                            113,523           -0-
                                                   --------------------------
Total Assets                                     $16,344,428   $ 16,164,691
                                               ==============  ==============

         See accompanying notes to consolidated financial statements
                                    -4-
<PAGE>
                  LIABILITIES AND STOCKHOLDERS' EQUITY
                  ------------------------------------

Current liabilities:
Accrued wages due stockholder                    $  700,000    $     670,000
Advances due stockholder                            236,009          200,508
Loan payable affiliate                                 -0-           150,000
Accrued interest payable                            299,240          325,010
Other current liabilities                           265,470           55,661
Credit line payable                                 243,470          110,000
Notes payable -- current portion                  1,389,000        1,289,586
Accounts payable                                    304,831          298,506
                                                  -----------       ---------
                                                  3,438,020        3,099,271
Notes Payable                                     6,012,346        5,902,919
                                                  -----------     -----------
Total Liabilities                                 9,450,366        9,002,190
                                                 ------------     -----------

Commitments and contingencies

Stockholders' equity:
Preferred stock, par value $0.001; 10,000,000 shares
authorized: 1,543,000 shares issued and
outstanding at March 31, 2001 and December 31,
2000 respectively.                                    1,543            1,543
Common stock, par value $.001; 100,000,000 shares
authorized; 93,331,507 and 90,139,843
shares issued and outstanding
at March 31, 2001 and December 31, 2000
respectively.                                        93,332           90,140

Additional Paid in capital                        8,857,206        8,242,899

Retained Earnings (deficit)                      (2,058,019)      (1,172,081)
                                                 ------------     -----------
                                                  6,894,062        7,162,501
                                                 ------------     -----------
                                                $16,344,428      $16,164,691
                                                 ============     ===========
</TABLE>
        See accompanying notes to consolidated financial statements

                                    -5-
<PAGE>

                      VALCOM, INC. AND SUBSIDIARIES
                     -------------------------------
                   CONSOLIDATED STATEMENT OF OPERATIONS
                   -------------------------------------
                   FOR THE THREE MONTHS ENDED MARCH 31,
                   ------------------------------------
                               (UNAUDITED)
<TABLE>
<CAPTION>
                                                        March 31,
                                                    2001        2000
                                                   -----        -----
<C>                                          <S>           <S>
Revenue:
   Rental                                     $ 389,370      $ 380,321
   Production                                   260,000        108,139
   Other                                           -0-           6,833
                                             ------------     ------------
                                              $ 649,370      $ 495,293
Cost and Expenses:
   Production                                   198,172        123,955
   Selling and promotion                         45,202           -0-
   Depreciation                                  46,579         55,831
   Administrative and general                 1,063,979        234,861
                                              -----------     -----------
                                             $1,353,932      $ 414,647
                                              -----------     -----------
Operating income (loss)                      (  704,561)        80,646
Interest Expense                             (  181,377)      (144,187)
                                               -----------    -----------
Net Income (loss)                            ( $885,938)      ($63,541)

Basic net income (loss) per share...........  ($  0.01)         ($0.00)
                                              ============     ===========
Weighted number of shares                     91,735,000      89,900,000
                                             -------------     -----------

</TABLE>
         See accompanying notes to consolidated financial statements

                                    -6-
<PAGE>

                       VALCOM, INC. AND SUBSIDIARIES
                  -----------------------------------------
                     CONSOLIDATED STATEMENTS OF CASH FLOW
                     ------------------------------------
                    FOR THE THREE MONTHS ENDED MARCH 31,
                   --------------------------------------
                                 (UNAUDITED)
<TABLE>
<CAPTION>
                                                     2001               2000
                                                     ----               ----

<S>                                          <C>                  <C>
Operating Activities:
Net Income (Loss)                                ($ 885,938)      $ (63,541)
Items Not Requiring Cash:
    Depreciation and amortization                    49,368          55,831
    Stock issued for services                       262,500          52,500

                                                  -------------   ------------
                                                 ($ 574,070)      $  44,790
                                                  -------------   ------------
Changes in:
    Receivables                                      27,608          22,846
    Mortgage escrow holdback                           -0-         (327,900)
    Prepaid expenses                                ( 2,797)           -0-
    Other assets                                       -0-          (36,245)
    Production costs                                ( 3,459)           -0-
    Accounts payable and other accrued expenses     190,364          37,573
    Loans payable                                   133,470            -0-
    Due to stockholder                               65,501         155,000
                                                    -----------    -----------
                                                   $410,687       ($148,726)
                                                    ===========    ===========
Cash Provided (used) by Operations                 (163,383)      ( 103,936)

Investing Activities:
    Acquisition of fixed assets                    (171,052)      (  17,083)
    Investment in partnership                      (113,523)           -0-
                                                   -----------    -----------
    Cash Used by Investing Activities              (284,575)      (  17,083)
                                                   -----------    -----------
Financing Activities:
    Principal amount on notes payable               208,841          41,753
    Withdrawal of capital contributions                           2,000,000
    Issuance of stock                               205,000
                                                   -----------    ------------
    Cash Provided (Used) by Financial Activities    413,841      (1,958,247)
                                                   ------------   ------------
Increase (Decrease) in Cash and Cash Equivalents   ( 34,117)     (2,079,266)
    Cash and cash equivalents, beginning of year     52,777       2,279,432
                                                   ------------   ------------
    Cash and cash equivalents, end of year         $ 18,660      $  200,166
                                                   ============    ============

Supplemental disclosure of cash flow information:
    Interest paid                                  $181,377        $114,187
                                                   ============    ============
    Income taxes paid                              $    800        $  1,600
                                                   ============    ============

</TABLE>
           See accompanying notes to consolidated financial statements

                                    -7-
<PAGE>
                      VALCOM, INC. AND SUBSIDIARY
                 ---------------------------------------
             UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY
            -----------------------------------------------
               FOR THE THREE MONTHS ENDED MARCH 31, 2001
                 ---------------------------------------
<TABLE>
<CAPTION>
                                                    Additional
                   Common           Preferred         Paid-in    Accumulated
                  -------          ----------         Capital     Deficit
               Shares   Amount  Shares      Amount  ----------  -----------
              -------  -------  ------     -------
<S>        <C>        <C>     <C>        <C>        <C>         <C>
Balance
Jan.1, 2001 90,139,843$90,140   1,543,000  $1,543    $8,101,157  ($1,172,081)
Shares issued
for services 1,500,000  1,500                           261,000  (   218,750)

Shares issued
for debt
retirement     331,664    332                           149,668

Shares issued
for cash       410,000    410                           204,590

Conversion
of preferred

Acquisition of
Half/Day       950,000    950                           140,791

Net loss
for the Period                                                    (  667,188)
            --------- -------  ----------- ---------  ---------    ----------
Balance
March
31, 2001   93,331,507 $93,332   1,543,000    $1,543 $8,857,206   ($2,058,019)
            ========== =======  ==========  ========= ==========  ===========
</TABLE>
         See accompanying notes to consolidated financial statements

                                    -8-
<PAGE>

                       VALCOM, INC. AND SUBSIDIARIES
                    ----------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                UNAUDITED MARCH 31, 2001 AND DECEMBER 31, 2000

NOTE 1 Summary of Significant Accounting Policies
-------------------------------------------------
Following is a summary of the significant accounting policies followed
in the preparation of these financial statements, which policies are in
accordance with generally accepted accounting principles:

Organization
------------
ValCom, Inc. (the "Company"), formerly SBI Communication, 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.
Through shareholder approval dated March 10, 1988, the name was changed to
name of SBI Communications, 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.

In October 2000, the Company was issued 75,709,965 shares by SBI for
100% of the shares outstanding in Valencia Entertainment International
LLC ("VEI"), a California limited liability corporation. This acquisition has
been accounted for as a reverse acquisition merger with VEI becoming the
surviving entity. The corporate name was changed to ValCom, Inc.

Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of the Company
and four wholly-owned subsidiaries of which only SBI Communications, Inc.
Alabama has activity during the periods presented. These financial
statements include all activities as if the acquisition occurred
on January 1, 1999.
                                   -9-
<PAGE>

                              ValCom, Inc.
                              ------------
                 Notes to Consolidated Financial Statements
               --------------------------------------------
              Unaudited March 31, 2001 And December 31, 2000
                       ---------------------------

Note 1 Summary of Significant Accounting Policies (cont'd)
----------------------------------------------------------

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

Commitments, Risk And Contingencies
------------------------------------
Financial instruments that potentially subject the Company to concentrations
of risk consist of trade receivables principally arising from monthly leases
from television producers. Management believes all receivables to be fully
collectible. In addition, the Company has a standby letter of credit for
$30,000 and a price protection agreement with a shareholder for $20,000.

Cash Equivalents
----------------

The Company maintains cash and cash equivalents (short-term highly liquid
investments with original maturity less than three months) with various
financial institutions. From time to time, cash balances may exceed
Federal Deposit Insurance Corporation insurance limits.

Fair Value of Financial Instruments
-----------------------------------

The carrying value of cash, receivables and accounts payable approximates
fair value due to the short maturity of these instruments. The carrying
value of short and long-term debt approximates fair value based on
discounting the projected cash flows using market rates available for
similar instruments. None of the financial instruments are held for
trading purposes.

                                   -10-
<PAGE>

                              ValCom, Inc.
                             --------------
               Notes to Consolidated Financial Statements
              --------------------------------------------
              Unaudited March 31, 2001 And December 31, 2000
                       ---------------------------

Note 1 Summary of Significant Accounting Policies (cont'd)
----------------------------------------------------------

Depreciation
------------
For financial and reporting purposes, the Company follows the policy
of providing depreciation an amortization on the straight-line and accelerated
and accelerated declining balance methods over the estimated useful lives
of the assets, which are as follows:

          Building                          39 years
          Building Improvements             39 years
          Office Furniture and Equipment    5 to 7 years
          Production Equipment              5 to 7 years

Amortization of Prepaid Loan Costs
----------------------------------
For financial reporting purposes, costs are amortized on the straight line
method over 10 years, the life of the related loan.

Income Taxes
------------
The Company provides for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, which requires the use of the asset
and liability method and recognizes deferred income taxes for the
consequences of "temporary differences" by applying enacted statutory tax
rate applicable to future years differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities.

Related Party Transactions
--------------------------
From time to time, a shareholder of the Company Advances money to the
Company for operations. All amounts owed to the shareholders are non-interest
bearing ($236,009 at 03/31/01). In addition to advances, the Company accrued
salaries payable to the shareholder totaling $30,000 and $30,000
for the quarter ended March 31, 2001 and 2000, respectively. All
amounts owed to the shareholders are payable on demand.


                                    -11-
<PAGE>

                               ValCom, Inc.
                              -------------
                 Notes to Consolidated Financial Statements
                --------------------------------------------
               Unaudited March 31, 2001 And December 31, 2000
                        ----------------------------

Note 1 Summary of Significant Account Policies (cont'd)
-------------------------------------------------------

Stock-Based Compensation
------------------------

As provided for in SFAS #123, the Company elected to apply APBO #25
and related interpretations whereby the fair value of stock given is
determined at the grant date.

Impairment of Long-Lived Assets
-------------------------------

Long-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of such assets may not
be recoverable. Determination of recoverability is based on as estimate
of undisclosed future cash flows resulting from the use of the asset and its
eventual disposition. Measurement of an impairment loss for long-lived
assets is based on the fair value of the asset. Long-lived assets to be
disposed of are reported at the lower of carrying amount or fair value less
costs to sell.

Revenue Recognition
-------------------

Revenues from licensing of television programming is recorded when the
material is available for telecasting by the licensee and when certain other
conditions are met. Rental revenue is recognized monthly pursuant to written
contracts.

Note 2 Property and Equipment
-----------------------------

Property and equipment consists of the following:
<TABLE>
<CAPTION>
                                               March 31,       December 31,
                                                  2001            2000
                                               ---------       ----------
  <C>                                      <S>               <S>

Land                                        $ 7,392,292       $ 7,392,292
Building                                      4,028,785         4,028,785
Building Improvements                         1,244,431         1,240,070
Office Furniture and equipment                   56,190            39,500
Production equipment                            669,737           519,737
                                            ------------       -----------
                                            $13,391,435       $13,220,384

Less: Accumulated depreciation             ( 1,516,275)      (  1,469,697)
                                           ------------      -------------
Net Book Value                             $11,875,160        $11,750,687
                                           ============      =============

                                    -12-
<PAGE>


                        VALCOM, INC AND SUBSIDIARIES
                   ----------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                Unaudited March 31, 2001 And  December 31, 2000
                          ---------------------------

NOTE 3 BUSINESS ACQUSISTION
---------------------------
      In March 2001, the company acquired 100% ownership of Half Day Video,
Inc. a California corporation, for 950,000 shares of ValCom, Inc. common
stock. The net book value of Half Day Video, Inc. has been determined to be
the fair market value of the common stock issued.

NOTE 4 INVESTMENT IN PARTNERSHIP
--------------------------------

On March 30, 2001 the Company entered into a partnership with Woody Fraser
Productions to produce various television productions. Under the terms of the
agreement the Company will receive, after certain costs reimbursements, 75%
of the net profits of the venture. This investment is beingg accounted for
using the equity method. As of March 31, 2001 the Company has invested
$113,523 in the partnership and the partnership has on earnings to date.


NOTE 5 SUBSEQUENT EVENT
-----------------------

a)     The Company has listed the Piedmont Property of sale at an asking
price of $4,900,000. The net book value at 12/31/2000 as included in Note
#2 is #3.9 million. Management intends on using proceeds to satisfy current
obligations of approximately $2.5 million. Such obligations are
also subject to negotiation.

b)     The Company has a letter of intent from as investment firm to raise
$10,000,000 subject to certain conditions including a successful $1,000,000
private placement.

                                    -13-
<PAGE>



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

      Introduction
      ------------
Plan of Operation:

ValCom, Inc. operations at present are comprised of four divisions; 1)
Studio Rental, 2) Piedmont Alabama Facility - Auto Auction, 3) Studio
Equipment Rental, and 4) Film Production.

Studio Rental
--------------
The Company owns 6 improved acres with 7 sound stages and one
additional leased stage in Valencia California doing business as Valencia
Entertainment International.  Seven of the eights stages are leased under
long term contracts to two major production companies. Rental income for
the seven stages should remain constant at approximately $1,200,000 annually
with only small cost of living increases. Rental income for the eighth stage
should increase from the current $24,000 per month to approximately $75,000
per month in September 2001.

Piedmont Alabama Facility
-------------------------
The sale of the property located in Piedmont, Alabama for net proceeds of
$3,940,000, pending as of June 30, 2000 was subsequently cancelled
because the purchaser was unable to obtain financing under favorable terms.
The Company decided to develop the property as a venue for auto and antique
and collectible merchandise auction. $75,000 was spent for renovation of this
property during the past year. Since the implementation of the auction business
plan, this segment has not generated any significant revenues.
During 2001 the Company continued, on a limited basis, the auction operation
and held concerts and other entertainment events. Currently, management is
in the process of seeking refinancing of the existing property in the amount of
$2,500,000.  The funds will be used for the payment of the existing mortgage
loan which is in default and for operating capital. The Company has also
executed an irrevocable offer to sell the property for $4,500,000 expiring
July 2001. Management expects to sell theproperty at a substantial gain.

Studio Equipment Rental
-----------------------
In March 2001 the Company acquired for stock Half Day Video, Inc. a
company which rents cameras and other production equipment to various
production companies on a short term basis.  With 5 year equipment financing
the Company intends to purchase additional equipment costing approximately
$350,000.   A 100% return on equipment purchases is expected to take less
than 6 months.

Film Production
---------------
Currently the Company is attempting to obtain production commitments
on two series. Assuming firm commitments are obtained, production would
commence in the first quarter of 2002.

In March 2001 the Company entered into a joint venture with Woody
Fraser Productions to produce various television productions. Under the terms
of the agreement the Company will receive, after certain cost reimbursements,
75% of the net profits of the venture. In March 2001 the venture signed
contracts to produce a series of 13 episodes and a pilot episode for a cable
TV station. Revenue to be earned under these contracts during 2001 will be
$2,800,000. ValCom's percentage of the net income from these productions is
estimated at $400,000. Follow-on contracts and additional productions are
under consideration.

                                   -14-
<PAGE>

 Results of Operation
 --------------------
March 31, 2001 and 2000 Comparison

As of March 31, 2001 the Company had working capital of
$676,354.  As of the prior year working capital was
$1,074,031.  The change was due primarily to increase in accruals.

Total assets were $16,344,428 at March 31, 2001 versus $16,164,691
at December 31, 2000 and additionally total liabilities were $9,450,366 and
$9,002,190 respectively.  The changes in total assets and liabilities are
substantially accounted for by above described changes in current assets and
liabilities.

For quarer ended March 31, 2001 the Company had revenue of $649,372,
operating expenses of $1,453,932 and a net loss of  ($885,937).
The loss before depreciation and interest for the quarter was ($757,981).

Revenue increased $154,079 from the previous quarter or 31.1%.  This increase
was a result of an increase in production revenues, largely, equipment rental.
Although marketing efforts continued during the quarter for two film
production properties, the Company was unable to negotiate any significant
sales distribution contracts. No revenue was generated from the on-site
merchandise and auto auction at the Piedmont facility.  The auction website
in development for years was not launched until March 2001 an still is not
fully operational.

Production costs for the quarter ended March 31, 2001 compared with the
prior quarter have increased from $123,955 to $198,172 or a 59.9% increase.
Marketing costs and costs related to the increased production revenue
accounted for most of the production costs in the first quarter 2001.
Management reviews capitalized production costs on a quarterly basis and
records write-offs as needed.

Selling and promotion costs increased $45,202 from 2000 to 2001. These
costs generally were incurred to promote ValCom's common stock valuation

Depreciation expense decreased $9,252 due to the fully depreciated status
of certain assets.

For the quarter ended March 31, 2001 administrative and general costs expenses
increased by $829,118 or 353% from 2000 amounts. Significant increases
were in the following subcategories.

                                                   2001       2000
                                                  ------     ------
        Legal and accounting                      $157,836  $  23,400
        Management consulting                      218,750       -0-
        Other costs                                229,509    113,643
        Salaries                                   318,022     97,818
        Taxes                                       31,165       -0-
        Rent                                       108,697       -0-
                                          ------------------------------
                  Total                         $1,063,979   $234,861
                                          ==============================

                                   -15-
<PAGE>

Following are reasons for the increase in subcategories of administrative
and general expenses for the quarter ended March 31, 2001 compared with the
quarter ended March 31, 2000.

The $134,436 increase in legal and accounting was due to performance of
audits and preparation of agreements and other legal matters related to the
merger. The $218,750 increase in management consulting was due costs incurred
for reorganization and planning re the newly merged company.

The $215,866 increase in other costs consist of numerous relatively small
changes in a variety of categories.

The $31,165 increase in taxes and licenses was due to prior period under
accrual of taxes due.

The $ 108,697 increase in rent was due to the lease in 2000 of additional
studio space adjacent to the Valencia property.

Interest expense increased $37,190 between the two quarters was due to
increased borrowings.

ValCom did not record any tax expense for either quarter due to taxable
loss or tax loss carry forwards.  The Company's tax loss carryforwards
available balance at the end of fiscal 2000 was in excess of $11 million.

Trends events of uncertainties :
-------------------------------
The Screen Actors Guild and may go on strike starting July 2001.
While not materially affecting the studio operation of
ValCom because of its long-term rental contracts, the strike may affect the
Company's plans for its own productions which could have a material affect on
income for 2001 and 2002.

Capital Resources
-----------------
Internal and external source of funding:
----------------------------------------
     The Company has obtained lines of credit from City National Bank for
$400,000 and projects positive cash flow from its studio division.
ValCom may issued stock for services as a means of maintaining working capital.
ValCom has sufficient funds to operate for the next 12 months through its use
of the credit facility, common stock issues and projected positive cash flow
from its operation of business. The Company is in the process of refinancing
the Piedmont property for $2,500,000. The Company has also executed an
irrevocable offer to sell the property and equipment for $4,500,000.

Statement Re Computation of Earnings Per Share
----------------------------------------------

See Notes To Consolidated Financial Statements included elsewhere in this
filing for a description of the Company's calculation of earnings per share.

                                   -16-
<PAGE>
PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

       NONE


ITEM 2. CHANGES IN SECURITIES

In January the company issued 1,500,000 shares of common stock for services.
Also in February the company issued 410,000 shares of common stock for cash.
In March the Company issued 331,664 shares of common stock to individuals
for the retirement of a debt in the amount of $150,000 and interest. In
March the Company issued 950,000 shares of common stock to individuals
for the acquisition of Half-Day Video.

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

        CHANGE IN MANAGEMENT.

        NONE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         EXHIBITS AND REPORTS ON FORM 8-K
         (A)      EXHIBITS:
                  EXHIBITS DESCRIPTION
                    11         Statement re:  computation of per share
                                              earnings
                    27         Financial data schedule
         (B)      REPORTS ON FORM 8-K:
                  Filed on Edgar February 1  - Change of address
                                 February 12 - Change of Control and
                                               acquisition of Valencia Complete
                                 March 19    - Acquisition of Half-Day Complete


                                   -17-
<PAGE>


                               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: May 18, 2001              By: /s/Vince Vellardita
                                  -------------------------------------
                                  Vince Vellardita Chairman of the
                                  Board and Chief Executive Officer
                                  (principal executive officer)













                                    -18-








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