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 JUNE 30, 2005

                        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)
    ======================================================================

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




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

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

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

                         COMMON STOCK $0.001 PAR VALUE
                         -----------------------------
                               (Title of Class)

Indicate  by  check  mark  whether the registrant (1)  has  filed  all  reports
required to be filed by Section  13  or 15(d) of the Securities Exchange Act of
1934 during the  preceding  12  months   (or   for such shorter period that the
registrant was required  to  file  such  reports),  and (2)  has  been  subject
to such filing requirements  for  the  past  90  days.

                 YES  [  X  ]  NO  [  ]

As  of  July 8, 2005 the issuer had 35,787,925 shares of its $0.001 par value
common  stock  outstanding.



                                      -1-





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, 2005 and the results  of their
operations  and  their  cash   flows   for  the  nine  months  ended  June  30,
2005.   These  consolidated financial statements   include   the   accounts  of
ValCom,  Inc.  and   its  subsidiary  companies   (together   "the   Company").
Results   for   the three  and  nine  months  ended  June  30,  2005,  are  not
necessarily indicative  of  the  operations,  which  may occur  during the year
ending September 30, 2005.  Refer to the Company's Annual Report  on  Form  10-
KSB  for  the  year  ended  September  30, 2004 for further information.


                                      -2-


                                 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,  2005  (unaudited)					4-5

           Condensed  Consolidated  Statements  of  Operations
           for the three and nine month periods ended June 30,
           2005  and  2004  (unaudited)					6-7

           Condensed  Consolidated  Statements  of  Cash  Flows
           for  the  nine  month  periods  ended  June  30,  2005
           and 2004  (unaudited)					8

           Notes  to  Condensed  Consolidated  Financial  State-
           ments (unaudited)						9-12

Item  2.   Management's  Discussion  and  Analysis  of  Financial
           Condition  and  Results  of  Operations			13

Item  3.   Disclosure  Controls  and  Procedures			14


Part  II.   OTHER  INFORMATION

Item  1.    Legal  Proceedings 						15

Item  2.    Changes  in  Securities					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


SIGNATURES




                                         -3-






                          VALCOM, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2005
                                   (UNAUDITED)
                                   -----------


                                     ASSETS
                                     ------
Current  Assets:
Cash  &  Cash  equivalents                          $    31,831
Accounts  receivable,  net                               83,958
                                                    -----------
Total  Current  Assets                                  115,789

Property  and  equipment  -  net                        141,671
Deposits                                                    100
Other  assets                                         1,150,000
                                                   ------------
Total  Assets                                      $  1,407,560
                                                   ============

    See accompanying notes to the condensed consolidated financial statements
                                       -4-



                          VALCOM, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
                                  JUNE 30, 2005
                                   (UNAUDITED)

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      ------------------------------------

Current  liabilities:
Accounts  payable                                           $  586,646
Deferred Revenue                                               150,000
Due  to  related  parties                                      105,174
Notes  payable                                                  45,845
Notes Convertible                                              335,000
                                                            ----------
Total Current Liabilities                                    1,222,665

Long term Loans                                                 19,822
                                                           -----------
Total  Current  Liabilities                                  1,242,487


Commitments  and  contingencies

Stockholders'  deficit:

Convertible  preferred  stock:  all  with  par value $0.001;

Series  B,  1,000,000  shares  authorized;
  38,000 shares issued  and  outstanding                            38
Series  C,  5,000,000  shares  authorized;
  5,692,416 shares issued  and  outstanding                      5,692
Common  stock,  par  value  $.001;  100,000,000
  shares authorized; 35,,822,925 shares  issued
  and  outstanding					        35,824
Treasury stock 35,000 shares                                       (35)
Additional  Paid-in  capital                                 9,709,345
Accumulated  deficit                                        (9,585,791)
Total  Stockholders'  deficit                                  165,073
                                                            ----------
Total  Liabilities  and  Stockholders'  deficit             $1,407,560
                                                            ==========

    See accompanying notes to the condensed consolidated financial statements
                                       -5-


                                     ------
                          VALCOM, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                           For the three	 For the three
					   month period		 month period
                                      	       ended	             ended
                                           June 30, 2005	 June 30, 2004
					   -------------	 -------------

Revenue:
Rental 					   $	  37,270         $     525,212
Production					 239,435		28,427
Other									 1,596
					   -------------	 -------------
	                                         276,705	       555,235
					   -------------	 -------------

Cost and Expenses:
Production					 200,701	        30,311
Selling and promotion				   1,590	        75,858
Depreciation and amortization			  32,638	       231,955
General and administrative			 161,409	       385,591
Consulting and professional expenses		  59,009	       635,183
Total Cost and Expenses				 457,027	     1,358,898

Operating Profit (Loss)				(178,642)	      (803,663)

Other income (expense):
    Interest expense				  (1,680)	      (112,784)
        Gain on sale of assets			       -	             -
        Loss on equity investment		       -	             -
					   -------------	 -------------
Total Other Income (Expense)			  (1,680)	      (112,784)
					   -------------	 -------------

Loss from continuing operations			(180,322)	      (916,447)

Discontinued Operations:
Operation loss from discontinued
  operations					       -	             -
Net gain on disposal of discontinued
  operations					       -	             -
					   -------------	 -------------
Total discontinued operations			       -	             -
					   -------------	 -------------
Net loss					(180,322)        $    (916,447)
					   =============	 =============

Basic and diluted loss per share from
continuing operations				  (0.005)        $	 (0.04)

Basic and diluted loss per share from
Discontinued operations				   (0.00)        $	 (0.00)

Basic and diluted loss per share		  (0.005)        $	 (0.04)

Weighted average shares outstanding:
Basic and diluted	                      35,787,925	    22,799,352




    See accompanying notes to the condensed consolidated financial statements

                                      -6-




                          VALCOM, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


		                                  For the nine month	 For the nine month
		                                     period ended	    period ended
                                           	     June 30,2005	    June 30,2004
						  ------------------	 ------------------

Revenue:
Rental						    $	  446,042	    $  1,618,987
Production						  369,963	          87,612
Other										   7,433
						    -------------	    ------------
          Total Revenue					  816,005	       1,714,032
						    -------------	    ------------
Cost and Expenses:
Production						  289,015	          47,014
Loss on impairment of property and equipment				       1,438,250
Litigation						   55,867	       1,405,656
Selling and promotion					    8,020		 105,422
Depreciation and amortization				   63,222		 702,122
General and administrative 				  944,771	       2,087,741
Consulting and professional services			  724,357	       1,149,843
						    -------------	    ------------
Total Cost and Expenses					2,085,252	       6,936,048
						    -------------	    ------------
Operating loss 					       (1,269,247)	      (5,222,016)
Other Income (Expense):
    Interest expense 					   (8,239)	        (794,161)
       Gain on sale of assets				  321,395	          60,230
   Other income					           28,971		       -
						    -------------	    ------------
Total Other Income (Expense)			          342,127	        (740,610)
						    -------------	    ------------
Loss from continuing operations				 (927,120)	      (5,962,626)

Discontinued operations:
 Operating loss from discontinued operations					       -
 Net gain on disposal of discontinued operations				       -
						    -------------	    ------------
 Total discontinued operations							       -
						    -------------	    ------------
Net Loss 					         (927,120)	      (5,962,626)
						    =============	    ============

Basic and diluted loss per share from
  continuing operations				    $	    (0.02)	    $	   (0.29)
Basic and diluted loss per share from
  discontinued operations			    $	    (0.00)	    $	   (0.00)
						    -------------	    ------------
    Basic and diluted loss per share		    $	    (0.02)	    $	   (0.29)
						    =============	    ============
Weighted average shares outstanding:
Basic and diluted		                       35,787,925	      20,161,930
						    =============	    ============


    See accompanying notes to the condensed consolidated financial statements
                                      -7-



                          VALCOM, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                          	 For the nine        For the nine
                                      		 month period        month period
                                          	     ended               ended
                                      		 June 30, 2004       June 30, 2003
						 -------------	     -------------
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                   	$     (927,12 )      $	(5,962,626)
Adjustments to reconcile net loss to net
cash used in operating activities:
Impairment of property and equipment		                         1,438,250
Depreciation and amortization                		63,772             702,122
Bad debt expense		                        70,646	            56,606
Gain on sale of fixed assets		                                   (60,230)
Stock issued for services and compensation		55,866           1,049,058
Changes in operating assets and liabilities:
Receivables		                              (128,246)	            61,185
Prepaid expenses                                              		  (148,959)
Production in Process		                        91,201
Other assets		                                45,332 	           153,060
Deferred Compensation 			                                    49,533
Deposits		                                                  (112,616)
Accounts payable and accrued expenses		       178,055	           980,185
						 -------------	     -------------
Net cash used by operating activities		       (52,734)	        (1,851,038)
						 -------------	     -------------
CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition/disposal of property & equipment	      (363,663)	          (464,293)
Notes receivable payments				                    35,178
 Proceeds from sale of property & equipment		                    57,200
						 -------------	     -------------
Net Cash Provided by (Used In)
Investing Activities 				      (363,663)		  (371,915)
						 -------------	     -------------
CASH FLOWS FROM FINANCING ACTIVITIES:

Cash proceeds from sale of stock		        93,673	         1,024,000
Principal repayment of notes			                           (10,924)
 Cash received for options exercised		                           282,000
 Cash received for shares to be issued			                   350,000
Principal borrowings on notes and mortgages	       334,813	           200,000
Due to related parties				        (1,726)		   239,989
						 -------------	     -------------
Net Cash Provided By (Used In)
Financing Activities				       426,760	         2,085,065
						 -------------	     -------------
NET DECREASE IN CASH & CASH EQUIVALENTS		        10,363	          (137,888)

CASH & CASH EQUIVALENTS - BEGINNING			21,468	           211,682
						 -------------	     -------------
CASH & CASH EQUIVALENTS - ENDING		 $      31,831       $	    73,794
						 =============	     =============


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

Interest paid					 $           -       $	   470,070

Income tax paid					 $           -       $		 -
						 =============	     =============

    See accompanying notes to the condensed consolidated financial statements
                                      -8-

                          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:

a)    Studio    rental    -    The   Company   and   its  subsidiary,  Valencia
Entertainment International,  LLC,   operated   eight sound stages in Valencia,
California until June  10,2004  when  six  of  the  sound  stages were sold off
to  pay the debts of Laurus  and  Finance  Unlimited.  The Company  leases  the
other  two  sound stages. Beginning  June  2003, the Company and its subsidiary
signed one-year  lease  with  five  one-year options for its sound stages.  The
Company has acquired seven and  one   half  acres  of  property  in Nevada with
162,000 square feet of buildings, which   are   being   renovated   into  seven
sound  stages  for rental.  The Company's subsidiary,  Half  Day  Video,  Inc.,
supplies  personnel,   cameras,   and  other production  equipment  to  various
production  companies on a short-term basis.

b)  Film,  TV, & Animation Production -The  Company,  in  addition to producing
its  own   television   and   motion  picture  programming,  has  an  exclusive
facilities agreement  in  place  for  productions  in  Los Angeles County for a
three-year term with  Woody  Fraser/Woody  Fraser  Productions.


BASIS  OF  PRESENTATION
-----------------------
The   accompanying  unaudited  consolidated  financial  statements   have  been
prepared in  accordance  with  generally  accepted  accounting  principles  for
interim  financial   information   and   with  the instructions to Form 10-QSB.
Accordingly,  they   do   not  include  all  of the information  and  footnotes
required by generally accepted  accounting  principles  for  complete financial
statements and related notes  included  in  the  Company's  Form  10-KSB.

The  audited consolidated financial statements  of  the  Company  for  the year
ended  September   30,   2004   were   filed   on   March  10,  2005,  with the
Securities  and  Exchange   Commission   and   are  hereby  referenced.  In the
opinion  of  management, the  accompanying  unaudited  consolidated   financial
statements  contain   all  adjustments   (consisting  only  of normal recurring
accruals)  considered  necessary for fair presentation has been  included.  The
results of operations for  the  three and  nine  months  ended  June  30,  2004
are not necessarily indicative of  the  results   to   be   expected   for  the
entire  year.

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


PRINCIPLES  OF  CONSOLIDATION
-----------------------------
The  consolidated  financial statements include  the  accounts  of ValCom, Inc.
and two  wholly-owned subsidiaries, Valencia Entertainment International,  LLC,
which  was   acquired   effective  February  2001  and  Half  Day  Video, Inc.,
which was acquired  effective  March  2001.

Investments   in   affiliated    companies    over  which  the  Company  has  a
significant influence  or  ownership  of  more   than   20%   but  less than or
equal to 50% are accounted  for  under  the  equity  method.


USE  OF  ESTIMATES
------------------
The  preparation  of  consolidated  financial  statements  in  conformity  with
accounting   principles   generally   accepted   in   the   United   States  of
America. Management  is  required  to  make  estimates  and  assumptions   that
affect  the  reported   amounts   of  assets  and liabilities and disclosure of
contingent assets and  liabilities  at  the  date of the consolidated financial
statements  and  the reported  amounts  of  revenue  and  expenses  during  the
reporting period.   Actual  results   could   materially   differ   form  those
estimates.


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

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


CONCENTRATIONS  AND  CREDIT  RISK
---------------------------------
The   Company   has   two   customers  who  accounted for approximately 99%  of
total rental  revenues for the  nine  months  ended  June  30,  2005  and 2004,
respectively. As  of  June 30, 2005, all sound and production stages were under
non-cancelable  operating  leases  for  one  year  from  two  major  production
companies.

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


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


IMPAIRMENT  OF  LONG-LIVED  ASSETS
----------------------------------
Effective  January  1,  2003,  the  Company  adopted   Statement  of  Financial
Accounting Standards  No.  144,  "Accounting  for  the Impairment  or  Disposal
of  Long-Lived  Assets" ("SFAS 144"), which addresses financial accounting  and
reporting  for the  impairment   or   disposal   of   long-lived   assets   and
supersedes   SFAS  No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be  Disposed Of," and the accounting and reporting
provisions of APB Opinion  No.  30,   "Reporting   the  Results  of  Operations
for   a  Disposal  of  a  Segment  of  a Business."  The  Company  periodically
evaluates the carrying value of long-lived  assets  to  be  held  and  used  in
accordance  with  SFAS  144.   SFAS 144 requires  impairment   losses   to   be
recorded  on  long-lived  assets  used   in   operations  when  indicators   of
impairment  are  present  and  the undiscounted cash  flows  estimated  to   be
generated by those assets are less  than the assets' carrying amounts.  In that
event,  a  loss  is  recognized  based  on  the  amount  by  which the carrying
amount  exceeds  the  fair  market  value  of  the  long-lived   assets.   Loss
on  long-lived   assets   to  be disposed of is determined in a similar manner,
except that  fair  market   values   are  reduced  for  the  cost  of  disposal
As  per  Court  order  dated June 3, 2004  and  based  on  the  deed  of  trust
bearing  instrument  nos.  99-2400871,  02-1209820 and 02-1209821, the property
belonging to VEI,  as defined in the instruments  was  auctioned  for sale. The
properties  which  were   valued  at  Land  $7,392,292 Building $4,028,785  and
Building improvements $1,154,406  and  Accumulated  Depreciation  of $1,294,088
were sold to repay the obligations   to   Laurus   (Laurus   having   paid  the
obligations owed to Finance Unlimited)  under  Trust  Sale  Nos:  8413-40   and
8414-30.Consequently  the  loss incurred  due  to  this  sale  is  recorded  as
$1,405,656  under  the  heading  "Impairment  of Property and Equipment" in the
Profit and loss account of VEI for the  nine  months  ending  June  30,  2004.


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


EQUITY  INVESTMENT
------------------
The Company accounts for its investments  in  companies  over which the Company
has significant  influence  or  ownership of more than 20%  but  less  than  or
equal to 50%  under  the  equity  method.


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  $927,120   and  a working capital deficiency of $956,876 and
an accumulated deficit of $9,585,792 at June 30, 2005.

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, 2005, 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.

                                      -9-

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

NEW  ACCOUNTING  PRONOUNCEMENTS
-------------------------------

On   May  15  2003,  the  FASB  issued  FASB Statement No.  150  ("SFAS  150"),
Accounting for  Certain  Financial Instruments  with  Characteristics  of  both
Liabilities  and Equity.  SFAS 150 changes the accounting for certain financial
instruments that,  under  previous  guidance,  could be classified as equity or
"mezzanine" equity, by now  requiring  those  instruments  to  be classified as
liabilities (or assets in some  circumstances)  in  the statement  of financial
position.  Further,  SFAS  150 requires  disclosure  regarding  the  terms   of
those  instruments  and  settlement   alternatives.   SFAS   150   affects   an
entity's   classification  of  the  following   freestanding   instruments:  a)
Mandatorily  redeemable instruments b) Financial instruments to  repurchase  an
entity's    own    equity   instruments  c)  Financial  instruments   embodying
obligations that the  issuer  must  or  could  choose  to settle by  issuing  a
variable  number of its shares or other equity instruments  based solely on (i)
a  fixed  monetary  amount  known  at  inception or (ii) something  other  than
changes  in  its  own  equity  instruments   d)   SFAS  150  does  not apply to
features   embedded   in  a  financial  instrument that is not a derivative  in
its entirety.  The  guidance   in   SFAS   150  is  generally effective for all
financial instruments  entered  into  or  modified  after   May   31, 2003, and
is otherwise effective  at the beginning of the first interim period  beginning
after June 15, 2003.  For  private  companies, mandatorily redeemable financial
instruments  are  subject   to   the   provisions   of  SFAS 150 for the fiscal
period beginning after December  15, 2003. The adoption  of  SFAS  No. 150 does
not have a material impact on  the  Company's  financial  position   or results
of operations or cash flows.

In  December  2003,  the  Financial  Accounting  Standards Board (FASB)  issued
a  revised   Interpretation   No.   46,  "Consolidation  of  Variable  Interest
Entities"  (FIN  46R).  FIN 46R addresses consolidation by business enterprises
of variable  interest   entities  and  significantly  changes the consolidation
application of consolidation   policies  to  variable  interest  entities  and,
thus   improves  comparability   between   enterprises   engaged   in   similar
activities when those activities   are   conducted   through  variable interest
entities. The Company does not  hold  any  variable  interest  entities.


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  35,787,925  and   35,759,343  for  the  three  and nine
months  ended  June   30, 2005 and 22,799,352 and 22,799,352 for the three  and
nine months ended June  30, 2004, 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  4  SEGMENT  INFORMATION
-----------------------------
As  of  and  for  the  nine  months ended  June  30, 2005



                          Equip. Rental   Film & TV Production    Total
                          -------------   -------------------- ========
Revenues                  $	446,042   $	       369,963 $816,005
                          -------------   -------------------- --------
Operating (Loss) Income         327,613		        80,948  408,561
                          -------------   -------------------- --------
Total Assets                    213,641		       281,497  495,138
                          -------------   -------------------- --------
Depreciation and
  Amortization			 40,995		        22,227   63,222
                          -------------   -------------------- --------


                                      -10-

                         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.

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.


NOTE  6  IMPAIRMENT  OF  PROPERTY  AND  EQUIPMENT


VALENCIA PROPERTY

The property  and  equipment  was  recorded  in  the  books  at  net  value  of
$11,251,216 (net  of  depreciation  of  $  1,324,266).  On  June  10, 2004, the
property  was foreclosed  for $ 9,812,966 and the proceeds were used to pay off
the notes from  Laurus.   The  Company  has  adjusted the value of the property
to its subsequent disposal   value. The Company recorded difference between the
liabilities settled from foreclosure of the property and the net book value, as
an impairment of the property  and equipment and recorded impairment costs of $
1,438,250  during the period  ending  June  30,  2004.

 The impaired  property  and  equipment  comprised  of  the  following:

   Land                                  $    7,392,292
   Building                                   5,183,190
   Accumulated  depreciation                 (1,324,266)
                         Total               11,251,216
   Exchange  for  payment  of  liability     (9,812,966)
   Impairment  loss                      $   (1,438,250)


NOTE  7  RELATED  PARTY  TRANSACTIONS
-------------------------------------
Mr. Vince Vellardita, CEO has  loaned  $75,173  to  the  Company as on June 30,
2005. Also Mr.Richard Shintaku, Director has loaned $30,000  to  the Company as
at June 30, 2005.


NOTE  8  STOCKHOLDERS'  EQUITY
------------------------------

(A)  CONVERTIBLE  PREFERRED  STOCK
----------------------------------
On   June   30,  2004,  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 nine  months  ended  June  30,  2005.

During the six month periods ending March 31, 2005,  the Company issued 379,084
Series  C  Preferred  Stock  in  lieu  of  cash payment. The Company granted no
warrants associated with the issuance of the preferred stock.

On January 24 Company issued 833,333 shares  of  C  preferred  Stock in lieu of
cash payment.


The Company granted 300,000 warrants  associated  with   the  issuance  of  the
preferred stock during 2004. The Company recorded  $51,568  in expenses for the
warrants granted based on Black Scholes calculation.

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



                                      -11-


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

(B)  COMMON  STOCK
-----------------

COMMON STOCK ISSUED IN 2005

During  the  three  months  ended  December  31,  2004,  the Company issued  an
aggregate  of 2,500,000 shares of common stock under the Company  stock  option
plan to employee.  Total  value  of the compensation was approximately $25,000,
which was computed based upon the  market  prices  of  the  common stock on the
applicable payment dates. This issuance of shares was exempt  from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended. During  the
three months ended December 31, 2004, the Company issued   2,000,000  shares of
common   stock   in  lieu  of  compensation  for  legal and consulting services
performed.  The value  of  the legal and consulting services  performed totaled
approximately $480,000, which  was computed based upon the market prices of the
common stock on the applicable payment dates.


During the three months  ended  December  31,  2004, the Company issued 193,500
shares  of  common  stock  in lieu of compensation,  salaries  and  bonuses  to
employees.  Total  value  of  the   compensation,   salaries  and  bonuses  was
approximately $30,471, which was computed based upon  the  market prices of the
common stock on the applicable payment dates.


During  the  three months ended December 31, 2004, the Company  issued  760,000
shares of common  stock  to  convert  $95,000  in  liabilities from Great Asian
Holding.

During the Quarter ending March 31, 2005 Company issued  2,000,000  shares   of
Common Stock to Mr. Dadon for joining the Board.

During  the  Quarter  ending  March  31,  2005 Company issued 750,000 shares of
Common Stock to Maheu.

COMMON STOCK ISSUED IN 2004

During the nine months ended June  30,  2004, the Company issued 208,333 shares
of common  stock in lieu of debt retirement.   The  value  of  the debt retired
totaled approximately  $25,000.

During  the nine months ended June 30, 2004, the Company issued 500,000  shares
of common  stock  in  lieu  of  prepaid  development  costs.   The value of the
development  costs   totaled  approximately $215,000, which was computed  based
upon the market prices   of   the   common  stock  on  the  applicable  payment
dates.

During  the  nine  months ended June,  2004,  the Company issued 650,000 shares
of common  stock  in  lieu  of prepaid acquisition and development costs of the
Las  Vegas   Studios.   The   value   of   the   development    costs   totaled
approximately $266,500, which was computed based upon the market  prices of the
common stock on the  applicable  payment  dates.

During   the  nine  months  ended  June  30, 2004, the Company issued 1,900,000
shares of common stock in lieu of compensation  consultancy  services performed
and   compensation.    The    value   of   the   services   performed   totaled
approximately $797,600, which was  computed based upon the market prices of the
common stock on the  applicable  payment  dates.

During  the  nine  months  ended June  30,  2004,  the  Company  issued  30,000
shares  of  common   stock   to  a  director  in lieu of an interest payment of
$3,000, which was computed  based  upon the market price of common stock at the
applicable payment date.

During  the  nine  months ended June, 2004, the  Company  issued 500,000 shares
of common  stock  to  a  director  in lieu for compensation  valued at  $95,000
and principal  loan repayment for $50,000, which was computed  based  upon  the
market price  of  common  stock  at  the  applicable  payment  date.

During  the  nine  months ended June 30,2004, the Company issued 250,000 shares
of  common  stock  to  a  director in lieu of services valued at $35,000, which
was computed   based   upon  the market price of common stock at the applicable
payment date.

During the nine months ended June  30,  2004, the Company issued 300,000 shares
of common  stock  to  a director in lieu  of  retirement  of  a  loan which was
computed  based   upon   the   market  prices of common stock on the applicable
payment dates.

During the nine months ended June 30, 2004,  the Company issued an aggregate of
315,750  shares of common stock in lieu of compensation,  salaries  and bonuses
to  employees.   Total   value   of  the  compensation,  salaries  and  bonuses
was approximately  $121,458,  which  was  computed based upon the market prices
of the common  stock  on  the  applicable   payment   dates.   This issuance of
shares was exempt from registration pursuant to Section 4(2) of  the Securities
Act of 1933, as  amended.

During  the nine months ended June 30, 2004, the Company issued 600,000  shares
of  common  stock  in  exchange  for  600,000  shares  of  series  C  preferred
convertible  on  a   one   on  one  basis  and  retired 110,000  to treasury as
part of settlement agreement.

During  the nine months ended  June  30,  2004,  the  Company  issued 1,344,667
shares of  common  stock  for  options  exercised  amounting  to  $282,000.

During   the  nine  months  ended  June 30, 2004, the Company issued  2,792,468
shares  of   common   stock  to  individuals   through   a   Private  Placement
Memorandum for $1,024,000.

NOTE  9  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   June10,   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.

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

                                      -12-

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

INTRODUCTION

PLAN OF OPERATION

As of June 30, 2005, ValCom,  Inc. operations were comprised of four divisions:
(1)  Studio  (2) Equipment and Personnel  Rental,  (3)  Film   and   Television
Production.

RENTAL
------
The Company  acquired seven  and  one  half  acres  of  property in Nevada with
162,000 square feet of buildings,  which  are  being renovated into seven sound
stages for rental  in  2004.  However  this  property  was  sold  off to Studio
Properties, LLC. to settle the Mortgage for $3,000,000. Valcom will  earn a 33%
profit  and  Equity  interest  in  the  Studio  Properties,  LLC. The Company's
subsidiary,   Half   Day  Video, Inc., supplies personnel, cameras,  and  other
production  equipment   to   various   production   companies  on  a short-term
basis.

TELEVISION,  FILM,  &  ANIMATION  PRODUCTION
--------------------------------------------

The   Company,   in   addition   to   producing  its  own television and motion
picture  programming,   has   an exclusive facilities agreement  in  place  for
productions in Los  Angeles  County   for   a   three-year   term   with  Woody
Fraser/Woody Fraser Productions  (See  Note  5).


RESULTS  OF  OPERATIONS


THREE  MONTHS  ENDED  JUNE  30,  2005  VS.  JUNE  30,  2004
-----------------------------------------------------------

Revenues  for  the  three  months June 30, 2005 decreased by $278,530 or 50.16%
from  $555,235   for  the  three  months  ended  June 30, 2004 to $276,705  for
the same period  in  2005.  The  decrease  in  revenue  was  principally due to
decreased rental revenues  associated  with  the  Valencia Asset.

Production  costs   for  the  three  months  ended  June  30, 2005 increased by
$170,390  or   562% from $30,311 for the three months ended June  30,  2004  to
$200,701 for the  same  period  in  2005.  The increase in production costs was
principally due to  increased   production   associated   with   Woody   Fraser
Productions as described above.

Depreciation   and   amortization  expense  for the three months ended June 30,
2005 decreased  by  $199,317 or 85.93% from $231,955 for the three months ended
June 30, 2004  to  $32,638  for  the  same  period  in  2005.

General  and  administrative  expenses  for the  three  months  ended  June 30,
2005  decreased   by   $224,182   or  58.14% from $385,591 for the three months
ended June 30, 2004  to  $161,409 for the same period in 2005. The decrease was
due principally to decreased  personnel  costs  for  the  new  projects.

Interest   expense  for the three months  ended  June  30,  2005  decreased  by
$111,104 or  98.51%  from  $112,784 for the three months ended June 30, 2004 to
$1,680 for the  same  period  in  2005. The decrease was due principally to the
decrease in interest  rates  associated  with  the  company's  mortgage  loans.

Due to the factors  described  above,  the  Company's  net  loss  decreased  by
$736,125  from   $916,447  for the three months ended June 30, 2004 to $180,322
for the same period  in  2005.


NINE  MONTHS  ENDED  JUNE 30, 2005 VS. NINE MONTHS ENDED JUNE 30, 2004
----------------------------------------------------------------------

Revenues  for  the  nine months  ended  June  30, 2005 decreased by $898,027 or
52.39% from  $1,714,032  for  the nine months ended  June  30, 2004 to $816,005
for the same  period  in  2005. The decrease in revenue was  principally due to
decreased production revenues associated with  the  joint  venture  with  Woody
Fraser Productions and Rental income from Valencia property.

Production costs  for the nine months ended June 30, 2005 increased by $242,001
or   514.74% from $47,014 for the nine months ended June 30, 2004  to  $289,015
for the  same   period   in   2005.   The  decrease  in  production  costs  was
principally   due   to   decreased  production  associated  with  Woody  Fraser
Productions as described above.

Impairment of property and  equipment  decreased  by $1,438,250 to zero for the
nine  months  ended   June  30,  2005  compared  to  $1,438,250  for  the  nine
months ended June 30, 2004  primarily due to sale of property of VEI to pay off
Finance Unlimited and Laurus Notes.

The  Litigation costs decreased  by  $1,349,789  to $55,867 for the nine months
ended June 30, 2005  compared  to  $1,405,656  for  the  nine months ended June
30,  2004  primarily due to additional  interest, penalties,  and  acceleration
payment and lawyer's fee paid for  the  settlement  of  Laurus  Notes in 2004.

Depreciation   and   amortization   expense  for the nine months ended June 30,
2005 decreased  by  $638,900  or 90.99% from 702,122  for the nine months ended
June 30, 2004 to $63,222 for the same period in 2005, mainly  due  to write off
of certain balance  sheet  items in 2004.

General   and   administrative   expenses  for  the nine months ended June  30,
2005 decreased  by $1,142,970 or 54.75%  from  $2,087,741  for  the nine months
ended  June  30,  2004   to   $944,771  for  the  same  period  in  2005.   The
decrease was due to decreased  personnel  costs,  legal  and  accounting  fees,
outside services and consulting  fees  and  bad  debt  expense.

Interest   expense  for the nine  months  ended  June  30,  2005  decreased  by
$785,922 or  98.96%  from  $794,161  for the nine months ended June 30, 2004 to
$6,239 for the same  period  ended  June  30,  2005.

Other  income  for the nine months ended  June  30,  2005  increased by $28,971
from  $0  for  the  nine  months ended June 30, 2004 to $28,971  for  the  same
period in 2005.

Due  to   the   factors  described  above,  the  Company  incurred  a  net loss
of $927,120  for   the  nine  months  ended  June 30, 2005 compared to net loss
of $5,962,626  for  the  same  period  in  2004.

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.

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  $927,120 and a negative cash flow from operations
of $52,734 for   the   nine  months  ended  June  30,  2005,  a working capital
deficiency of $1,106,857  and  an accumulated deficit of $9,585,791 at June 30,
2005.  These conditions  raise substantial doubt about the Company's ability to
continue as a going  concern.

Cash  totaled $31,831 on June 30, 2005 compared to $73,794 as at June 30, 2004.
During   the  nine  months   ended   June   30,   2005,   net   cash   used  by
operating  activities   totaled  $52,734 compared to net cash used by operating
activities  of $1,574,879 for the comparable  nine-month  period  in  2004.   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  30,2005 totaled $426,760  compared
to $1,391,179  for the comparable nine-month period in 2004.  Negative net cash
provided by investing  activities  during  the  nine months ended June 30, 2005
totaled  $363,663  compared  to  net  cash  provided of  $45,812   during   the
comparable prior year period due to proceeds from sale of fixed  assets.

The  above  cash  flow activities yielded a net cash increase of $10,363 during
the   nine  months  ended June 30, 2005 compared  to  a  decrease  of  $137,888
during the  comparable  prior  year  period.

Net  working   capital   (current   assets  less  current  liabilities)  was  a
negative  $1,106,876  as   of  June  30,  2005.  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.

                                      -13-

ITEM  3.  DISCLOSURE  CONTROLS  AND  PROCEDURES


Evaluation  of  Disclosure  Controls  and  Procedures
-----------------------------------------------------

Disclosure    controls    and   procedures   are   designed   to  ensure   that
information required  to  be   disclosed   in  the  Company's  periodic reports
filed  with  the  Securities   and  Exchange Commission  under  the  Securities
Exchange Act of 1934 is recorded,  processed,  summarized  and reported, within
the  time  periods specified in  the  rules  and  forms of the  Securities  and
Exchange Commission.  Disclosure  controls   and  procedures  include,  without
limitation, controls and procedures designed   to   ensure   that   information
required to be disclosed in the periodic reports  filed  under  the  Securities
Exchange  Act of 1934 is accumulated and communicated  to management, including
the  Chief  Executive Officer and Principal Financial  Officer, as appropriate,
to allow timely decisions regarding required disclosure.

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


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

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


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

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

1. The  Company's  records of stock and equity  related  transactions  were not
updated   on   a  timely  basis  and  do  not reflect the current ownership  of
the Company  as   accurately  as  they  might.  Remedy:  The Company intends to
engage a stock transfer agent to handle issuances and conversions of all series
of its preferred stock. In addition, the  Company  will  maintain more accurate
records of all equity transactions during the year.

The Board of Directors will ensure that it authorizes all  stock,  warrants and
options  granted  in  accordance with applicable agreements and/or compensation
plans to avoid the possibility of unauthorized issuances of stock, warrants and
options.

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

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

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


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

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

                                      -14-


PART  II--OTHER  INFORMATION


ITEM  1.  LEGAL  PROCEEDINGS
----------------------------

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


ITEM  2.  CHANGES  IN  SECURITIES
---------------------------------

(A) PREFERRED STOCK:

During the six month periods ending March  31, 2005, the Company issued 379,084
Series  C  Preferred  Stock in lieu of cash payment.  The  Company  granted  no
warrants associated with the issuance of the preferred stock.

On January 24 Company issued  833,333  shares  of  C preferred Stock in lieu of
cash payment.

(B)  COMMON  STOCK
------------------

During  the  three  months  ended  December  31,  2004,  the Company issued  an
aggregate  of 2,500,000 shares of common stock under the Company  stock  option
plan to employee.  Total  value  of the compensation was approximately $25,000,
which was computed based upon the  market  prices  of  the  common stock on the
applicable payment dates. This issuance of shares was exempt  from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended. During  the
three months ended December 31, 2004,  the  Company issued  2,000,000 shares of
common  stock  in  lieu  of  compensation  for   legal  and consulting services
performed.  The value of the legal and consulting services   performed  totaled
approximately $480,000, which was computed based upon the market prices of  the
common stock on the applicable payment dates.

During the three months  ended  December  31,  2004, the Company issued 193,500
shares  of  common  stock  in lieu of compensation,  salaries  and  bonuses  to
employees.  Total  value  of  the   compensation,   salaries  and  bonuses  was
approximately $30,471, which was computed based upon  the  market prices of the
common stock on the applicable payment dates.

During  the  three months ended December 31, 2004, the Company  issued  760,000
shares of common  stock  to  convert  $95,000  in  liabilities from Great Asian
Holding.

During the Quarter ending March 31, 2005 Company issued  2,000,000  shares   of
Common Stock to Mr. Dadon for joining the Board.

During  the  Quarter  ending  March  31,  2005 Company issued 750,000 shares of
Common Stock to Maheu.

                                      -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
----------------------------

99.2  Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(B)  REPORTS  ON  FORM  8-K

1. Resignation of Krishna Swamy Alladi from  the  Board of Director (filed with
Edgar on December 13, 2004.

2. ITEM 4.01. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT filed with Edgar on
February 1, 2005

3. ITEM  4.01.  CHANGES  IN  REGISTRANT'S  CERTIFYING  ACCOUNTANT

On   February  1,  2005,  the  Registrant  engaged Armando C. Ibarra, Certified
Public  Accountants,   as   the   Registrant's   independent   accountants   to
report on the Company's  consolidated   balance sheet as of September 30, 2004,
and the related consolidated  statements   of  income, stockholders' equity and
cash  flows  for the year  then  ended. The  decision  to  appoint  Armando  C.
Ibarra, Certified  Public  Accountants   was   approved   by  the  Registrant's
Board  of  Directors.

The   Registrant auditors, Kabani  &  Company, Inc.  PA  (herein   after  "KC")
resigned effective February 1, 2005.  KC served as the Registrant's independent
auditors'   for   the  Registrant's  fiscal  years ended September 30, 2003 and
2002,  as   well  through  the  date  of  its dismissal.  KC's  report  on  the
Registrant's consolidated financial statements for the registrant's fiscal year
September 30,  2003  and September 30, 2002 (the "Reports") does not contain an
adverse opinion  or   disclaimer  of  opinion and was not qualified or modified
as to uncertainty, audit   scope   or   accounting  principles, however, it was
modified  to  include  an  explanatory   paragraph   wherein   they   expressed
substantial   doubt  about  the Registrant's   ability   to   continue   as   a
going  concern.

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

During   the  Registrant's  two most recent fiscal  years  and  any  subsequent
interim period  prior to the  engagement  of  Armando  C.  Ibarra,  neither the
Registrant nor anyone  on  the  Registrant's  behalf consulted with Armando  C.
Ibarra  regarding  either   (i)  the  application of accounting principles to a
specified transaction, either  contemplated   or   proposed,   or   the type of
audit   opinion  that  might  be  rendered   on   the   Registrant's  financial
statements   or   (ii)  any  matter  that  was  either   the   subject   of   a
"disagreement"  or  a  "reportable  event."

The  Registrant  has   requested  KC  to review the disclosure contained herein
and has  provided  KC  the  opportunity   to   furnish  the  Registrant  with a
letter   addressed   to   the  Commission  containing  any   new   information,
clarification  of the Registrant's   expression   of   KC   's  views,  or  the
respects in which  KC does not agree  with  the  statements  contained  herein.
KC has reviewed the  disclosure  contained   herein   and   has provided to the
Registrant  a  letter  addressed  to  the Securities  and  Exchange  Commission
stating that it has reviewed the disclosure provided  in  this  Current  Report
and   has  no disagreement with the relevant  portions   of   this  disclosure,
pursuant to the requirements of Item 304(a)(3) of Regulation  S-B.  A  copy  of
such letter is filed as Exhibit 16 to this Current

                                      -16-

Exhibit  16  Letter  from  Kabani  &  Company,  Inc.

ITEM 8.1. The Companys Change of address from 28309 Avenue Crocker, Valencia,
California 91355 to 41 North Mojave Road, Las Vegas, Nevada 89101-4812

ITEM 5.02. RESIGNATION OF REGISTRANT'S DIRECTORS

A.) March 31st 2005 the Registrant's Board of Directors has accepted
the resignation of one of its member of the Board of Directors, Mr.
David Dadon, effective immediately. Mr. David Dadon's resignation
terminates all agreements and contracts previously in place. Mr.
David Dadon had no disagreement with the Registrant.


	A.)  July  7,  2005  the Registrant's Board of Directors has accepted
	the resignation of one of its members of the Board of Directors,  Ms.
	Karien   Anderson,  effective   immediately.  Ms.  Karien  Anderson's
	resignation  terminates  all  agreements  and contracts previously in
	place. Ms. Karien Anderson had no disagreement with the registrant.

	B.)  July 7, 2005 the Registrant's Board of Directors  has  appointed
	Bonnie  Nelson  to its Board of Directors effective immediately.  Ms.
	Bonnie  Nelson  has  been  involved  in Investment Banking and Public
	Companies for over twenty-five years.

	A.)  July 22, 2005 the Registrant's Board of Directors has  appointed
	Mrs.Sandy Markham to Secretary and Treasurer of the Corporation. Mrs.
	Sandy  Markham  has  been  provided corporate support for the past 25
	years for the casino/hotel industry, in addition to other profit  and
	non-profit organizations.


                                   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 15,  2005

                                  By:  /s/Vince  Vellardita
                                  -------------------------------------
                                  Vince  Vellardita  Chairman  of  the
                                  Board  and  Chief  Executive  Officer
                                  (Principal  executive  officer)




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


Signature	                       Title	                Date
---------	                       -----	                ----

BY:  /s/  Vince  Vellardita	    CEO/President	  August 15, 2005
---------------------------	Chairman of the Board
Vince  Vellardita


BY:  /s/  Sandy Markham		     Secretary	          August 15, 2005
-----------------------   (Principal Accounting Officer)
Sandy Markham