SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K/A

(Amendment No. 2)





(Mark One)

|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2006

OR



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------

For the transition period from  to

Commission file number 000-28395





INTEREP NATIONAL RADIO SALES, INC.

(Exact name of registrant as specified in
its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|New York                                                       |  | 13-1865151                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|100 Park Avenue, New York, New York                            |  | 10017                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(212) 916-0700

(Registrants telephone number, including area code)





Securities registered under
Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act:



|                                                |  |                                          
|----------------------------------------------- |  | -----------------------------------------
|Title of Each Class                             |  | Name of Each Exchange on Which Registered
|Class A Common Stock, par value $0.01 per share |  | None                                     





Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes  x    No   ̈

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   ̈

Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.     ̈

Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.



|                                              |  |                      |  |                          |  |                             
|--------------------------------------------- |  | -------------------- |  | ------------------------ |  | ----------------------------
|Large accelerated filer   ̈                    |  | Accelerated filer   ̈ |  | Non-accelerated filer   ̈ |  | Smaller reporting company  x
|(Do not check if a smaller reporting company)

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

The
aggregate market value of the Class A Common Stock, par value $.01 per share, and Class B Common Stock, par value $.01 per share, held by non-affiliates of the registrant, based upon the last reported sale price for the registrants
Class A Common Stock on The Nasdaq OTC Bulletin Board, was $3,357,311 as of June 30, 2006 (this excludes shares owned beneficially by directors, executive officers and the registrants Stock Growth Plan).

The number of shares of the registrants Common Stock outstanding as of the close of business on March 7, 2008, was 7,723,939 shares of
Class A Common Stock, and 3,571,937 shares of Class B Common Stock.











---

The registrant hereby amends Item IV of its Annual Report on Form 10-K filed on April 2, 2007 by the
substitution of a revised Report of Independent Registered Public Accounting Firm in order to clarify that the consolidated statements of operations, capital deficit, and cash flows for each of the three years in the period ending December 31,
2006 were audited by registrants independent auditors. Such revised Report was first filed with the Securities and Exchange Commission under cover of Form 10-K/A on December 11, 2007 and is being supplemented in this Form 10-K/A by
(i) the refiling of the registrants financial statements for the period reported on in such Report, which financial statements are unchanged from those originally filed on April 2, 2007, and (ii) the filing of an updated Consent
of Independent Registered Public Accounting Firm (Exhibit 23.1).



2



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INTEREP NATIONAL RADIO SALES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                |  |     
|----------------------------------------------------------------------------------------------- |  | ----
|                                                                                                |  | Page
|Report of Independent Registered Public Accounting Firm                                         |  | F-2 
|                                                                                                | 
|Consolidated Balance Sheets as of December 31, 2006 and 2005                                    |  | F-3 
|                                                                                                | 
|Consolidated Statements of Operations for the Years Ended December 31, 2006, 2005 and 2004      |  | F-4 
|                                                                                                | 
|Consolidated Statements of Capital Deficit for the Years Ended December 31, 2006, 2005 and 2004 |  | F-5 
|                                                                                                | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004      |  | F-6 
|                                                                                                | 
|Notes to Consolidated Financial Statements                                                      |  | F-7 
|                                                                                                | 
|Financial Statement Schedule for the Years Ended December 31, 2006, 2005 and 2004:              |  |     
|                                                                                                | 
|Schedule IIValuation and Qualifying Accounts                                                   |  | F-25



F-1



---

Report of Independent Registered Public Accounting Firm

Board of Directors

Interep National Radio Sales, Inc.

New York, New York

We have audited the accompanying consolidated balance sheets of Interep National Radio Sales, Inc. (a New York corporation) and subsidiaries as of December 31, 2006
and 2005, and the related consolidated statements of operations, capital deficit, and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the Index at
Item 15(a). These financial statements and schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Interep National Radio Sales,
Inc. and subsidiaries at December 31, 2006 and 2005 and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 1 to the Consolidated Financial Statements, effective January 1, 2006 the Company adopted Statements of Financial Accounting Standards
No. 123(R), Share-Based Payment.



|                         |  |                     
|------------------------ |  | --------------------
|West Palm Beach, Florida |  | /s/ BDO Seidman, LLP
|March 29, 2007           |  |                     



F-2



---

INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands except share information)



|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -------- | - | ---- | - | -------- | -
|                                                                                                                                                                                            |  | December 31, |         
|                                                                                                                                                                                            |  | 2006         |          |   | 2005 |  
|ASSETS                                                                                                                                                                                      |  |              |          |   |      |   |          |  
|Current assets:                                                                                                                                                                             |  |              |          |   |      |   |          |  
|Cash and cash equivalents                                                                                                                                                                   |  | $            | 10,426   |   |      | $ | 6,928    |  
|Receivables, less allowance for doubtful accounts of $580 and $623                                                                                                                          |  |              | 22,631   |   |      |   | 20,905   |  
|Representation contract buyouts receivable                                                                                                                                                  |  |              | 7,054    |   |      |   | 12,054   |  
|Current portion of deferred representation contract costs                                                                                                                                   |  |              | 8,654    |   |      |   | 11,082   |  
|Prepaid expenses and other currents assets                                                                                                                                                  |  |              | 1,257    |   |      |   | 1,616    |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|Total current assets                                                                                                                                                                        |  |              | 50,022   |   |      |   | 52,585   |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|Fixed assets, net                                                                                                                                                                           |  |              | 3,170    |   |      |   | 3,594    |  
|Deferred representation contract costs                                                                                                                                                      |  |              | 16,649   |   |      |   | 21,799   |  
|Representation contract buyouts receivable                                                                                                                                                  |  |              | 47       |   |      |   | 5,123    |  
|Investments and other assets                                                                                                                                                                |  |              | 3,568    |   |      |   | 5,858    |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|                                                                                                                                                                                            |  | $            | 73,456   |   |      | $ | 88,959   |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|LIABILITIES AND CAPITAL DEFICIT                                                                                                                                                             |  |              |          |   |      |   |          |  
|Current liabilities:                                                                                                                                                                        |  |              |          |   |      |   |          |  
|Accounts payable and accrued expenses                                                                                                                                                       |  | $            | 17,669   |   |      | $ | 19,287   |  
|Accrued interest                                                                                                                                                                            |  |              | 4,950    |   |      |   | 4,950    |  
|Representation contract buyouts payable                                                                                                                                                     |  |              | 1,758    |   |      |   | 5,135    |  
|Accrued employee related liabilities                                                                                                                                                        |  |              | 5,297    |   |      |   | 4,358    |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|Total current liabilities                                                                                                                                                                   |  |              | 29,674   |   |      |   | 33,730   |  
|Long-term debt                                                                                                                                                                              |  |              | 99,000   |   |      |   | 99,000   |  
|Representation contract buyouts payable                                                                                                                                                     |  |              | 697      |   |      |   | 1,063    |  
|Other noncurrent liabilities                                                                                                                                                                |  |              | 6,777    |   |      |   | 3,644    |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|Total liabilities                                                                                                                                                                           |  |              | 136,148  |   |      |   | 137,437  |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|Commitments and Contingencies                                                                                                                                                               |  |              |          |   |      |   |          |  
|                                                                                                                                                                                            |  |             
|Capital deficit:                                                                                                                                                                            |  |              |          |   |      |   |          |  
|4% Series A cumulative convertible preferred stock, $0.01 par value400,000 shares authorized, 128,276 and 123,342 shares issued and
outstanding (aggregate liquidation preference$12,828) |  |              | 1        |   |      |   | 1        |  
|Class A common stock, $.01 par value20,000,000 shares authorized, 7,347,262 and 7,022,446 shares issued and
outstanding                                                                    |  |              | 74       |   |      |   | 70       |  
|Class B common stock, $.01 par value10,000,000 shares authorized, 3,948,614 and 4,273,430 shares issued and outstanding, convertible
into Class A common stock                             |  |              | 39       |   |      |   | 43       |  
|Additional paid-in-capital                                                                                                                                                                  |  |              | 52,545   |   |      |   | 52,512   |  
|Accumulated deficit                                                                                                                                                                         |  |              | (115,351 | ) |      |   | (101,104 | )
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|Total capital deficit                                                                                                                                                                       |  |              | (62,692  | ) |      |   | (48,478  | )
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  
|                                                                                                                                                                                            |  | $            | 73,456   |   |      | $ | 88,959   |  
|                                                                                                                                                                                            |  |              |          |   |      |   |          |  

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



F-3



---

INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share data)



|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|-------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                 |  | For the Year Ended December 31, |        
|                                                                                 |  | 2006                            |         |   | 2005 |   |         | 2004 | 
|Revenues:                                                                        |  |                                 |         |   |      |   |         |      |  |   |         |  
|Commission                                                                       |  | $                               | 73,891  |   |      | $ | 80,068  |      |  | $ | 78,455  |  
|Contract termination                                                             |  |                                 | 7,326   |   |      |   | 20,001  |      |  |   | 24,462  |  
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Total revenues                                                                   |  |                                 | 81,217  |   |      |   | 100,069 |      |  |   | 102,917 |  
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Operating expenses:                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Selling                                                                          |  |                                 | 70,092  |   |      |   | 61,462  |      |  |   | 63,690  |  
|General and administrative                                                       |  |                                 | 10,591  |   |      |   | 11,541  |      |  |   | 15,138  |  
|Depreciation and amortization                                                    |  |                                 | 11,667  |   |      |   | 20,050  |      |  |   | 19,783  |  
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Total operating expenses                                                         |  |                                 | 92,350  |   |      |   | 93,053  |      |  |   | 98,611  |  
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Operating (loss) income                                                          |  |                                 | (11,133 | ) |      |   | 7,016   |      |  |   | 4,306   |  
|Interest expense, net                                                            |  |                                 | (10,515 | ) |      |   | (10,297 | )    |  |   | (10,563 | )
|Gain on sale of investment                                                       |  |                                 | 7,965   |   |      |   |        |      |  |   |        |  
|Net undistributed income of equity investee                                      |  |                                 | 93      |   |      |   | 377     |      |  |   | 84      |  
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Loss before income taxes and loss from cumulative change in accounting principle |  |                                 | (13,590 | ) |      |   | (2,904  | )    |  |   | (6,173  | )
|Income taxes                                                                     |  |                                 | 657     |   |      |   | 134     |      |  |   | 261     |  
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Loss before cumulative change in accounting principle                            |  |                                 | (14,247 | ) |      |   | (3,038  | )    |  |   | (6,434  | )
|Cumulative change in accounting principle                                        |  |                                 |        |   |      |   |        |      |  |   | (598    | )
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net loss                                                                         |  |                                 | (14,247 | ) |      |   | (3,038  | )    |  |   | (7,032  | )
|Preferred stock dividend                                                         |  |                                 | 506     |   |      |   | 486     |      |  |   | 468     |  
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net loss applicable to common shareholders                                       |  | $                               | (14,753 | ) |      | $ | (3,524  | )    |  | $ | (7,500  | )
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Basic and diluted loss per common share:                                         |  |                                 |         |   |      |   |         |      |  |   |         |  
|Before cumulative effect of change in accounting principle                       |  | $                               | (1.26   | ) |      | $ | (0.27   | )    |  | $ | (0.60   | )
|Cumulative effect of change in accounting principle                              |  |                                 |        |   |      |   |        |      |  |   | (0.06   | )
|Preferred stock dividend                                                         |  |                                 | (0.05   | ) |      |   | (0.04   | )    |  |   | (0.04   | )
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  
|Total                                                                            |  | $                               | (1.31   | ) |      | $ | (0.31   | )    |  | $ | (0.70   | )
|                                                                                 |  |                                 |         |   |      |   |         |      |  |   |         |  

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



F-4



---

INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED STATEMENTS OF CAPITAL DEFICIT

(in thousands except share information)



|                                     |  |                                               |  |                     |   |                     |           |        |                          |        |  |                    |        |  |       |    |   |  |   |        |   |  |   |          |   |  |   |         |  
|------------------------------------ |  | --------------------------------------------- |  | ------------------- | - | ------------------- | --------- | ------ | ------------------------ | ------ |  | ------------------ | ------ |  | ----- | -- | - |  | - | ------ | - |  | - | -------- | - |  | - | ------- | -
|                                     |  | Series A CumulativeConvertiblePreferred Stock |  | Class ACommon Stock |   | Class BCommon Stock |           |        | AdditionalPaid-inCapital |        |  | AccumulatedDeficit |        |  | Total |   
|                                     |  | Shares                                        |  | Amount              |   | Shares              |           | Amount |                          | Shares |  |                    | Amount |  |       |    |  
|Balance, January 1, 2004             |  | 114,037                                       |  | $                   | 1 |                     | 6,189,460 |        | $                        | 62     |  | 4,058,699          |        |  | $     | 40 |   |  | $ | 51,149 |   |  | $ | (91,034  | ) |  | $ | (39,782 | )
|Net loss                             |  |                                              |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   |       |   |  |   | (7,032   | ) |  |   | (7,032  | )
|Conversion of common stock           |  |                                              |  |                     |  |                     | 446,428   |        |                          | 4      |  | (446,428           | )      |  |       | (4 | ) |  |   |       |   |  |   |         |   |  |   |        |  
|Issuance to Stock Growth Plan        |  |                                              |  |                     |  |                     |          |        |                          |       |  | 1,014,384          |        |  |       | 10 |   |  |   | 1,362  |   |  |   |         |   |  |   | 1,372   |  
|Issuance of 33,333 shares            |  |                                              |  |                     |  |                     | 33,333    |        |                          | 1      |  |                   |        |  |       |   |   |  |   | 26     |   |  |   |         |   |  |   | 27      |  
|Preferred dividend                   |  |                                              |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   | (468   | ) |  |   |         |   |  |   | (468    | )
|Issuance of preferred stock dividend |  | 4,561                                         |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   | 456    |   |  |   |         |   |  |   | 456     |  
|                                     |  |                                               |  |                     |   |                     |           |        |                          |        |  |                    |        |  |       |    |   |  |   |        |   |  |   |          |   |  |   |         |  
|Balance, December 31, 2004           |  | 118,598                                       |  | $                   | 1 |                     | 6,669,221 |        | $                        | 67     |  | 4,626,655          |        |  | $     | 46 |   |  | $ | 52,525 |   |  | $ | (98,066  | ) |  | $ | (45,427 | )
|Net loss                             |  |                                              |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   |       |   |  |   | (3,038   | ) |  |   | (3,038  | )
|Conversion of common stock           |  |                                              |  |                     |  |                     | 353,225   |        |                          | 3      |  | (353,225           | )      |  |       | (3 | ) |  |   |       |   |  |   |         |   |  |   |        |  
|Preferred dividend                   |  |                                              |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   | (486   | ) |  |   |         |   |  |   | (486    | )
|Issuance of preferred stock dividend |  | 4,744                                         |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   | 473    |   |  |   |         |   |  |   | 473     |  
|                                     |  |                                               |  |                     |   |                     |           |        |                          |        |  |                    |        |  |       |    |   |  |   |        |   |  |   |          |   |  |   |         |  
|Balance, December 31, 2005           |  | 123,342                                       |  | $                   | 1 |                     | 7,022,446 |        | $                        | 70     |  | 4,273,430          |        |  | $     | 43 |   |  | $ | 52,512 |   |  | $ | (101,104 | ) |  | $ | (48,478 | )
|Net loss                             |  |                                              |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   |       |   |  |   | (14,247  | ) |  |   | (14,247 | )
|Conversion of common stock           |  |                                              |  |                     |  |                     | 324,816   |        |                          | 4      |  | (324,816           | )      |  |       | (4 | ) |  |   |       |   |  |   |         |   |  |   |        |  
|Non-cash stock based compensation    |  |                                              |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   | 46     |   |  |   |         |   |  |   | 46      |  
|Preferred dividend                   |  |                                              |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   | (506   | ) |  |   |         |   |  |   | (506    | )
|Issuance of preferred stock dividend |  | 4,934                                         |  |                     |  |                     |          |        |                          |       |  |                   |        |  |       |   |   |  |   | 493    |   |  |   |         |   |  |   | 493     |  
|                                     |  |                                               |  |                     |   |                     |           |        |                          |        |  |                    |        |  |       |    |   |  |   |        |   |  |   |          |   |  |   |         |  
|Balance, December 31, 2006           |  | 128,276                                       |  | $                   | 1 |                     | 7,347,262 |        | $                        | 74     |  | 3,948,614          |        |  | $     | 39 |   |  | $ | 52,545 |   |  | $ | (115,351 | ) |  | $ | (62,692 | )
|                                     |  |                                               |  |                     |   |                     |           |        |                          |        |  |                    |        |  |       |    |   |  |   |        |   |  |   |          |   |  |   |         |  

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



F-5



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INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|----------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                              |  | For the Year Ended December 31, |        
|                                                                              |  | 2006                            |         |   | 2005 |   |         | 2004 | 
|Cash flows from operating activities:                                         |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net loss                                                                      |  | $                               | (14,247 | ) |      | $ | (3,038  | )    |  | $ | (7,032  | )
|Adjustments to reconcile income to net cash provided by operating activities: |  |                                 |         |   |      |   |         |      |  |   |         |  
|Depreciation and amortization                                                 |  |                                 | 11,667  |   |      |   | 20,050  |      |  |   | 19,783  |  
|Amortization of renewal payments                                              |  |                                 | 1,182   |   |      |   | 241     |      |  |   | 207     |  
|Gain on sale of investment                                                    |  |                                 | (7,965  | ) |      |   |        |      |  |   |        |  
|Net undistributed income of equity investee                                   |  |                                 | (93     | ) |      |   | (377    | )    |  |   | (84     | )
|Cumulative change in accounting principle                                     |  |                                 |        |   |      |   |        |      |  |   | 598     |  
|Non-cash compensation expense                                                 |  |                                 | 46      |   |      |   |        |      |  |   |        |  
|Non-cash consulting expense                                                   |  |                                 |        |   |      |   |        |      |  |   | 27      |  
|Changes in assets and liabilities:                                            |  |                                 |         |   |      |   |         |      |  |   |         |  
|Receivables                                                                   |  |                                 | (1,726  | ) |      |   | 3,136   |      |  |   | 3,544   |  
|Representation contract buyouts receivable                                    |  |                                 | 10,076  |   |      |   | (11,854 | )    |  |   | (4,855  | )
|Prepaid expenses and other current assets                                     |  |                                 | 359     |   |      |   | (332    | )    |  |   | (177    | )
|Other noncurrent assets                                                       |  |                                 | (246    | ) |      |   | (380    | )    |  |   | (1,191  | )
|Accounts payable and accrued expenses                                         |  |                                 | (1,631  | ) |      |   | 1,062   |      |  |   | (1,795  | )
|Accrued employee related liabilities                                          |  |                                 | 939     |   |      |   | 678     |      |  |   | 367     |  
|Other noncurrent liabilities                                                  |  |                                 | 3,133   |   |      |   | (454    | )    |  |   | (1,587  | )
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net cash provided by operating activities                                     |  |                                 | 1,494   |   |      |   | 8,732   |      |  |   | 7,805   |  
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Cash flows from investing activities:                                         |  |                                 |         |   |      |   |         |      |  |   |         |  
|Additions to fixed assets                                                     |  |                                 | (547    | ) |      |   | (2,442  | )    |  |   | (918    | )
|Proceeds from sale of investment                                              |  |                                 | 9,947   |   |      |   |        |      |  |   |        |  
|Increase in other investments                                                 |  |                                 |        |   |      |   |        |      |  |   | (5      | )
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net cash provided by (used in) investing activities                           |  |                                 | 9,400   |   |      |   | (2,442  | )    |  |   | (923    | )
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Cash flows from financing activities:                                         |  |                                 |         |   |      |   |         |      |  |   |         |  
|Representation contract payments                                              |  |                                 | (7,396  | ) |      |   | (6,104  | )    |  |   | (6,978  | )
|Gross borrowings on credit facility                                           |  |                                 | 7,549   |   |      |   | 27,330  |      |  |   | 21,650  |  
|Gross repayments on credit facility                                           |  |                                 | (7,549  | ) |      |   | (27,330 | )    |  |   | (25,650 | )
|Reimbursement by landlord for leasehold improvements                          |  |                                 |        |   |      |   | 1,805   |      |  |   |        |  
|Issuance of common stock                                                      |  |                                 |        |   |      |   |        |      |  |   | 1,372   |  
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net cash used in financing activities                                         |  |                                 | (7,396  | ) |      |   | (4,299  | )    |  |   | (9,606  | )
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net increase (decrease) in cash and cash equivalents                          |  |                                 | 3,498   |   |      |   | 1,991   |      |  |   | (2,724  | )
|Cash and cash equivalents, beginning of year                                  |  |                                 | 6,928   |   |      |   | 4,937   |      |  |   | 7,661   |  
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Cash and cash equivalents, end of year                                        |  | $                               | 10,426  |   |      | $ | 6,928   |      |  | $ | 4,937   |  
|                                                                              |  |                                 |         |   |      |   |         |      |  |   |         |  
|Supplemental disclosures of cash flow information:                            |  |                                 |         |   |      |   |         |      |  |   |         |  
|Cash paid during the year for:                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|Interest                                                                      |  | $                               | 9,961   |   |      | $ | 9,991   |      |  | $ | 10,206  |  
|Income taxes, net                                                             |  |                                 | 348     |   |      |   | 134     |      |  |   | 261     |  
|Non-cash investing and financing activities:                                  |  |                                 |         |   |      |   |         |      |  |   |         |  
|Station representation contracts acquired                                     |  | $                               | 3,654   |   |      | $ | 4,135   |      |  | $ | 2,935   |  
|Preferred stock dividend                                                      |  |                                 | 506     |   |      |   | 486     |      |  |   | 468     |  
|Issuance of warrants and common stock                                         |  |                                 |        |   |      |   |        |      |  |   | 27      |  

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



F-6



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except share information)



|1. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

Principles of Consolidation

The consolidated financial statements include the accounts of Interep National Radio Sales,
Inc. (Interep), together with its subsidiaries (collectively, the Company or we). All significant intercompany transactions and balances have been eliminated.

Use of Estimates

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

Allowance for doubtful accounts

We
provide an allowance for doubtful accounts equal to our estimated uncollectible accounts receivable. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each
customers trade accounts receivable. We write off uncollectible accounts after we have exhausted all avenues of collection.

Revenue Recognition

We are a national representation firm serving radio broadcast clients and certain internet service
providers throughout the United States. Commission revenues are derived from sales of advertising time for radio stations under representation contracts. Commissions and fees are recognized in the month the advertisement is broadcast. In connection
with our unwired network business, we collect fees for unwired network radio advertising and, after deducting our commissions, remit the fees to the respective radio stations. In instances when we are not legally obligated to pay a station or
service provider until the corresponding receivable is paid, fees payable to stations have been offset against the related receivable from advertising agencies in the accompanying consolidated balance sheets. We record all commission revenues on a
net basis. Commissions are recognized based on the standard broadcast calendar that ends on the last Sunday in each reporting period. The broadcast calendar for the calendar year ended December 31, 2006 was 53 weeks, while the broadcast
calendar for the years ended December 31, 2005, and 2004 each had 52 weeks.

Representation Contract Termination Revenue and
Contract Acquisition Costs

Our station representation contracts have stated initial terms, and thereafter usually renew automatically
from year to year unless either party provides written notice of termination at least twelve months prior to the next automatic renewal date. In accordance with industry practice, in lieu of termination, an arrangement is normally made for the
purchase of such contracts by a successor representative firm. The purchase price paid by the successor representation firm is generally based upon historic commission income projected over the remaining contract period plus two months. Income
earned from the sale of station representation contracts (contract termination revenue) is recognized on the effective date of the buyout agreement. Costs of obtaining station representation contracts are deferred and amortized over the life of the
new contract. Such amortization is included in the accompanying consolidated statements of operations as a component of depreciation and amortization expense. Amounts which are to be amortized during the next year are included as current assets in
the accompanying consolidated balance sheets. We review the realizability of these deferred costs on a quarterly basis. From time to time, we have paid inducements to extend the life of contracts with our radio groups. These inducement payments are
recorded as deferred costs and expensed in the period benefited. Estimated overall amortization for the five years following December 31, 2006 is as follows: 2007$8,700; 2008$6,300; 2009$4,700; 2010$3,300 and
2011$1,700.



F-7



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



In 2006, we recorded approximately $7,300 of contract termination revenue primarily related to the
termination of our rep contract with the former Susquehanna stations after their acquisition by Cumulus Broadcasting. In 2005, we recorded approximately $20,000 of contract termination revenue primarily related to Cumulus Broadcasting and Radio
Ones termination of their representation contracts with us. In 2004, we recorded approximately $24,500 of contract termination revenue substantially all of which was attributable to the Citadel representation contract termination in 2003.

Cash and Cash Equivalents

We consider cash in banks and investments with an original maturity of three months or less to be cash equivalents.

Fixed
Assets, net

Furniture, fixtures and equipment are recorded at cost and are depreciated over three to ten-year lives, and leasehold
improvements are amortized over the shorter of the lives of the leases or assets, all on a straight-line basis. The cost of such computer software is amortized on a straight-line basis over three years.

Depreciation and Amortization Expense

A summary of annual depreciation and amortization expense is as follows:



|                                           |  |      |        |      |   |        |  |   |       
|------------------------------------------ |  | ---- | ------ | ---- | - | ------ |  | - | ------
|                                           |  | 2006 |        | 2005 |   | 2004  
|Depreciation of fixed assets               |  | $    | 971    |      | $ | 1,827  |  | $ | 2,314 
|Amortization of contract acquisition costs |  |      | 10,049 |      |   | 17,514 |  |   | 16,282
|Amortization of other assets               |  |      | 647    |      |   | 709    |  |   | 1,187 
|                                           |  |      |        |      |   |        |  |   |       
|                                           |  | $    | 11,667 |      | $ | 20,050 |  | $ | 19,783
|                                           |  |      |        |      |   |        |  |   |       

In 2005, the amortization of contract acquisition costs included the writeoff of approximately
$3,600 of deferred contract acquisition costs related Cumulus Broadcasting and Radio Ones termination of their representation contracts with us.



F-8



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



Long-Lived Assets

We assess the impairment of our long-lived assets in accordance with SFAS No. 144, which requires testing when events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. We reevaluate intangible assets each reporting period to determine whether events and circumstances warrant a revision in their remaining life. SFAS No. 144, which also
applies to other long-lived assets such as plant, property and equipment, as well as groups of assets, provides examples of indicators of potential impairment such as: a significant decrease in market price of the asset; a significant adverse change
in the extent or manner in which the asset is used; a significant adverse change in legal factors or the business climate; an adverse action or assessment by a regulator; excess cost accumulation for the acquisition or construction of the asset;
current period operating cash flow losses combined with a similar history or a projection of future losses; and a more likely than not expectation that the asset will be sold. If any indicators were present, we would test for recoverability by
comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e. the asset is not recoverable), we would perform the
next step which is to determine the fair value of the asset and record an impairment, if any.

Stock Growth Plan

We maintain a Stock Growth Plan (SGP) for eligible employees. Cash contributions made by us to the SGP are recorded as compensation expense.
Shares of our stock owned by the SGP are treated as outstanding common stock.

Stock-Based Compensation

Effective January 1, 2006, we adopted SFAS No. 123(R), Share-Based Payment (SFAS No. 123R), using the modified prospective
application transition method. SFAS No. 123R revises SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No. 123). Under the modified prospective method, we have recorded compensation cost for the unvested portion
of previously issued awards that remain outstanding at the initial date of adoption (using the amounts previously measured under SFAS No. 123 for pro forma disclosure purposes). Since we have chosen the modified prospective application
transition method, the financial statements for the prior interim period have not been restated.

SFAS No. 123R requires us to
estimate forfeitures in calculating the expense relating to stock-based compensation as opposed to recognizing these forfeitures and the corresponding reduction in expense as they occur. In addition, SFAS No. 123R requires the Company to
reflect the tax savings resulting from tax deductions in excess of compensation expense reflected in its financial statements as a cash inflow from financing activities in its statement of cash flows rather than as an operating cash flow as in prior
periods.



F-9



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



Prior to January 1, 2006 as permitted under generally accepted accounting principles, we
accounted for our employee stock-based compensation plan using the intrinsic value method, as prescribed by APB No. 25 Accounting for Stock Issued to Employees and interpretations thereof (collectively APB 25) versus the fair value
method allowed by SFAS No. 123. We implemented the disclosure provision of SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure. This statement amended the disclosure provisions of SFAS No. 123, to
require prominent disclosure of the effect on reported net income of an entitys accounting policy decisions with respect to stock-based employee compensation and amended APB Opinion No. 28, Interim Financial Reporting, to require
disclosure of those effects in interim financial information. Accordingly, no compensation cost has been recognized in the accompanying Consolidated Statements of Operations for years ended December 31, 2005 and 2004 in respect of stock options
granted during that period. Had compensation cost for these options been determined consistent with SFAS No. 123 and SFAS No. 148, our net loss applicable to common shareholders, basic and diluted loss per share would have been as follows:



|                                                                                                                                            |  |      |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                                                                                                            |  | 2005 |        |   | 2004 |  
|Net loss applicable to common shareholders, as reported                                                                                     |  | $    | (3,524 | ) |      | $ | (7,500 | )
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |  |      | (761   | ) |      |   | (807   | )
|                                                                                                                                            |  |      |        |   |      |   |        |  
|Pro forma net loss                                                                                                                          |  | $    | (4,285 | ) |      | $ | (8,307 | )
|                                                                                                                                            |  |      |        |   |      |   |        |  
|Loss per share:                                                                                                                             |  |      |        |   |      |   |        |  
|Basic and dilutedas reported                                                                                                               |  | $    | (0.31  | ) |      | $ | (0.70  | )
|Basic and dilutedpro forma                                                                                                                 |  | $    | (0.38  | ) |      | $ | (0.78  | )

Pro forma information regarding net income and earnings per share, as presented in Note 1, is
required by SFAS No. 123, as amended by SFAS No. 148, and has been determined as if we had accounted for our employee stock options under the fair value method of SFAS No. 123 as of its effective date. The weighted averaged fair value
for options was estimated at the dates of grants using the Black-Scholes option-pricing model to be $0.33 for 2005 and $1.43 for 2004, with the following weighted average assumptions: risk free interest rate of 3.25% for 2005 and 2004; expected
volatility factors of 94% and 107% for 2005 and 2004, expected dividend yield of 0% for 2005 and 2004; and estimated option lives of 5 years for 2005 and 2004.

Consistent with prior years, the fair value of each stock option granted during the year ended December 31, 2006 was estimated at the date of grant using a Black-Scholes option pricing model based on the
assumptions of expected volatility of 280%, expected dividend yield of 0%, expected term of 5 years and a risk-free interest rate of 7.00%. The expected volatility is based on our consideration of the historical volatility of our stock based on our
historical stock prices. The expected term of an option is based on our historical review of employee exercise behavior based on the employee class (executive or non-executive) and based on our consideration of the remaining contractual term if
limited exercise activity existed for a certain employee class. The risk-free interest rate is the constant maturity interest rate for U.S. Treasury instruments with terms consistent with the expected lives of the awards.



F-10



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



A summary of stock option activity as of December 31, 2006 and changes during the year ended
December 31, 2006 is presented below (in thousands except share and per share amounts):



|                                         |  |                 |   |  |                                |      |                                                  |     |                          |   |  
|---------------------------------------- |  | --------------- | - |  | ------------------------------ | ---- | ------------------------------------------------ | --- | ------------------------ | - | -
|                                         |  | Number ofShares |   |  | Weighted-AverageExercise Price |      | Weighted-AverageRemainingContractualTerm (Years) |     | AggregateIntrinsic Value
|Options Outstanding at January 1, 2006   |  | 4,508,885       |   |  | $                              | 2.00 |                                                  |    |                          | $ | 2
|Granted                                  |  | 20,000          |   |  |                                | 0.36 |                                                  |    |                          |   | 2
|Exercised                                |  |                |   |  |                                |     |                                                  |    |                          |   | 
|Cancelled                                |  | (355,500        | ) |  |                                | 1.86 |                                                  |    |                          |   | 
|                                         |  |                 |   |  |                                |      |                                                  |     |                          |   |  
|Options Outstanding at December 31, 2006 |  | 4,173,385       |   |  | $                              | 2.00 |                                                  | 6.0 |                          | $ | 4
|                                         |  |                 |   |  |                                |      |                                                  |     |                          |   |  
|Exercisable at December 31, 2006         |  | 4,128,383       |   |  | $                              | 2.01 |                                                  | 6.0 |                          | $ | 3
|                                         |  |                 |   |  |                                |      |                                                  |     |                          |   |  

The weighted average grant-date fair value of stock options granted during the year ended
December 31, 2006 was $0.25.

During the year ended December 31, 2006, we expensed $46 as non-cash stock-based compensation. As
of December 31, 2006, we had $17 of total unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of 0.6 years.

Recent Accounting Pronouncements

In
February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115
(SFAS No. 159). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We do
not expect the adoption of SFAS No. 159 to have a material impact on our financial position or results of operations.

In
September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin 108, Considering the Effects on Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements, (SAB 108). SAB 108 requires registrants to quantify errors using both the income statement method (i.e. iron curtain method) and the rollover method and requires adjustment if either method indicates a material error.
If a correction in the current year relating to prior year errors is material to the current year, then the prior year financial information needs to be corrected. A correction to the prior year results that are not material to those years, would
not require a restatement process where prior financials would be amended. SAB 108 is effective for fiscal years ending after November 15, 2006. The adoption of SAB 108 did not have a material effect on our financial position
or results of operations.



F-11



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS
No. 157) to clarify the definition of fair value, establish a framework for measuring fair value and expand the disclosures on fair value measurements. SFAS No. 157 defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). SFAS No. 157 also stipulates that, as a market-based measurement, fair value measurement should be determined
based on the assumptions that market participants would use in pricing the asset or liability, and establishes a fair value hierarchy that distinguishes between (a) market participant assumptions developed based on market data obtained from
sources independent of the reporting entity (observable inputs) and (b) the reporting entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable
inputs). SFAS No. 157 will be effective for fiscal years beginning after November 15, 2007. We do not expect implementation of the standard will have a material effect on our results of operations or financial position.

In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income
Taxes  An Interpretation of FASB Statement No. 109 (FIN 48), which will become effective for the company on January 1, 2007. This standard clarifies the accounting for uncertainty in income taxes recognized in
a companys financial statements. A company can only recognize the tax position in the financial statements if the position is more-likely-than-not to be upheld on audit based only on the technical merits of the tax position. This accounting
standard also provides guidance on thresholds, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial-statement comparability among
different companies. We do not expect implementation of the standard will have a material effect on its results of operations or financial position.

Restructuring and Severance Charges

In 2006, we continued to offer an early retirement program,
which was accepted by 43 people, including five executives, to reduce compensation costs on a going forward basis. We accrued $7,274 in 2006 for the 43 terminations, and $3,078 in 2005 for 18 terminations. In accordance with SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities,we recorded this liability at fair value as of the time the liability was incurred. We paid approximately $3,294 and $2,611 of termination benefits during the years ended
December 31, 2006 and 2005, and have accreted approximately $203 and $156 of interest expense in 2006 and 2005. At December 31, 2006 and 2005, the accompanying consolidated balance sheets include accruals relating to the restructuring
program of $5,888 and $1,705, of which $2,778 and $1,705 are included in accrued employee related liabilities and $3,110 is included in other noncurrent liabilities in 2006.



F-12



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



Loss per Share

Basic loss per share for each of the respective years has been computed by dividing the net loss applicable to common shareholders by the weighted average number of common shares outstanding during the year which was
11,295,876, 11,295,876, and 10,695,410 for the years ended December 31, 2006, 2005, and 2004, respectively. Diluted loss per share would reflect the potential dilution that could occur if the outstanding options to purchase common stock were
exercised. For the years ended December 31, 2006, 2005, and 2004, the exercise of outstanding options would have an antidilutive effect and therefore have been excluded from the calculation. Shares issuable under options that have not been
included in the fully diluted loss per share calculation because of their antidilutive effect were 4,173,385, 4,508,885, and 5,166,155 at December 31, 2006, 2005 and 2004.

Leasehold Improvements

In the fourth
quarter of 2004, we renewed the lease on our New York City office space for an additional 15 years. As part of the lease, the landlord is to reimburse us for leasehold improvements made to the property. We substantially completed these improvements
in the third quarter of 2005. The reimbursement of $1,800, almost all of which has been received from the landlord at December 31, 2005, is capitalized as leasehold improvements and will be amortized over the remaining term of the lease. We
recognize rent expense on a straight-line basis over the term of the lease, taking into account scheduled rent increases, rent abatement and leasehold improvement allowances, such as the one described above.

Income Taxes

Deferred taxes are
provided for temporary differences arising from the differences between financial statement and income tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates. Valuation allowances are
established when necessary to reduce deferred tax assets and liabilities to amounts considered more likely than not to be realized.

Reclassification

Certain reclassifications have been made to prior period financial statements to conform to current
periods presentation.



|2. | Investments
|-- | -----------

Effective July 2004, we applied the
principles of Emerging Issues Task Force (EITF) No. 03-16 Accounting for Investments in Limited Liability Companies. The effect of this cumulative change in accounting principle is a $598 reduction of our investment in a
limited liability company. Beginning July 2004, we began to use the equity method to account for this investment and recognized $93 of income in 2006, $377 in 2005 and $84 in 2004. Prior to 2004, we accounted for our investments using the cost
method of accounting, as we do not have the ability to exercise significant influence over operating and financial policies. The total carrying value of these investments was approximately $1,900 in 2005, representing a range of ownership from 8% to
16% of the affiliated companies.

On April 21, 2006, we sold our investment in Burst Media in conjunction with its initial public
offering. We realized net proceeds of approximately $9,947 on the sale. The carrying value of the investment at the time of sale was approximately $1,982. A one-time bonus payment of $1,737 was paid to an executive of the Companys
interactive subsidiary, as required by the bonus provisions of his employment agreement, and included in selling expenses.



F-13



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



|3. | Fixed Assets
|-- | ------------

Fixed assets are comprised of the
following:



|                                               |  |              |        |      |   |       
|---------------------------------------------- |  | ------------ | ------ | ---- | - | ------
|                                               |  | December 31,
|                                               |  | 2006         |        | 2005
|Furniture and equipment                        |  | $            | 20,179 |      | $ | 19,775
|Computer software                              |  |              | 4,598  |      |   | 4,455 
|Leasehold improvements                         |  |              | 6,987  |      |   | 6,987 
|                                               |  |              |        |      |   |       
|                                               |  |              | 31,764 |      |   | 31,217
|LessAccumulated depreciation and amortization |  |              | 28,594 |      |   | 27,623
|                                               |  |              |        |      |   |       
|Fixed assets, net                              |  | $            | 3,170  |      | $ | 3,594 
|                                               |  |              |        |      |   |       



|4. | Employee Stock Plans
|-- | --------------------

Stock Growth Plan

On January 1, 1995, we established the Stock Growth Plan, a qualified stock bonus plan through which certain qualified employee
compensation is allocated to the plan. Participation in the Stock Growth Plan is mandatory and non-contributory for all eligible employees. Stock Growth Plan participants are at all times fully vested in their accounts without regard to age or years
of service. We make regular quarterly cash contributions to the Stock Growth Plan. For the years ended December 31, 2006, 2005, and 2004, we recorded compensation expense of $2,338, $2,337, and $2,299, in relation to these contributions. Our
contributions to the Stock Growth Plan were used to purchase shares of Interep Class B common stock from us in 2004. In 2006 and 2005, no stock was purchased and the funds are in either the Stock Growth Plan or have been transferred to employee
401(K) Plan accounts. No accrual was required as of December 31, 2006 and 2005.

During 2004, the Company issued 1,014,384 shares of
Class B common stock to the Interep Stock Growth Plan for net cash proceeds of approximately $1,372. The shares were issued at the estimated current fair market value on the date of issuance, determined based on the trailing 15-day trading average
of the Companys Class A common stock. During 2004, the Stock Growth Plan purchased 14,247 shares of Class A common stock, on the open market at a weighted average fair value of $1.45. As of December 31, 2006 and 2005, the Stock
Growth Plan owned 3,302,849 and 3,690,544 Class B common shares, and 529,230 and 576,764 of Class A common shares, representing approximately 33.9% and 37.8% of the Companys total shares outstanding, before consideration of common stock
equivalents. Shares owned by the Stock Growth Plan are recorded as outstanding stock of the Company. Distributions to participants are made in the shares of the Companys Class B common stock allocated to their plan accounts upon termination of
employment.



F-14



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



Stock Options

As discussed in Note 1, Effective January 1, 2006, we adopted SFAS No. 123(R), using the modified prospective application transition method. Under the modified prospective method, we have recorded
compensation cost for the unvested portion of previously issued awards that remain outstanding at the initial date of adoption (using the amounts previously measured under SFAS No. 123 for pro forma disclosure purposes). Since we have chosen
the modified prospective application transition method, the financial statements for the prior periods have not been restated.

SFAS
No. 123R requires us to estimate forfeitures in calculating the expense relating to stock-based compensation as opposed to recognizing these forfeitures and the corresponding reduction in expense as they occur. In addition, SFAS No. 123R
requires the Company to reflect the tax savings resulting from tax deductions in excess of compensation expense reflected in its financial statements as a cash inflow from financing activities in its statement of cash flows rather than as an
operating cash flow as in prior periods.

In 1999, we adopted the 1999 Stock Incentive Plan. The plan provides for the granting of options
and appreciation rights of the Companys Class A and Class B common stock. The option price per share may not be less than the fair market value of the Class A and Class B common stock on the date the option is granted. The aggregate
number of shares may not exceed 666,667 for any participant during any three consecutive 12-month periods, and the maximum term of an option may not exceed ten years. Options primarily vest in three equal annual installments. Under the terms of the
plan, we are authorized to grant options to purchase up to a total of 2,000,000 shares of Class A and Class B common stock.

A summary
of the stock options outstanding during the years ended December 31, 2006, 2005, and 2004 is set forth below:



|                                 |  |                 |   |  |                              |     
|-------------------------------- |  | --------------- | - |  | ---------------------------- | ----
|                                 |  | Number ofShares |   |  | WeightedAverageExercisePrice
|Outstanding at January 1, 2004   |  | 5,121,405       |   |  | $                            | 3.56
|Granted during 2004              |  | 95,000          |   |  |                              | 1.81
|Forfeited during 2004            |  | (50,250         | ) |  |                              | 2.81
|                                 |  |                 |   |  |                              |     
|Outstanding at December 31, 2004 |  | 5,166,155       |   |  | $                            | 3.53
|Granted during 2005              |  | 275,000         |   |  |                              | 0.50
|Expired during 2005              |  | (915,320        | ) |  |                              | 3.01
|Forfeited during 2005            |  | (16,950         | ) |  |                              | 2.81
|                                 |  |                 |   |  |                              |     
|Outstanding at December 31, 2005 |  | 4,508,885       |   |  | $                            | 2.00
|Granted during 2006              |  | 20,000          |   |  |                              | 0.36
|Forfeited during 2006            |  | (355,500        | ) |  |                              | 1.86
|                                 |  |                 |   |  |                              |     
|Outstanding at December 31, 2006 |  | 4,173,385       |   |  | $                            | 2.01
|                                 |  |                 |   |  |                              |     



F-15



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



The following table summarizes information regarding the stock options outstanding at
December 31, 2006, either pursuant to the terms of the Plan or pursuant to the terms of the option grant, if granted prior to the adoption of the Plan:



|                             |  |                                  |  |                |  |                           
|---------------------------- |  | -------------------------------- |  | -------------- |  | --------------------------
|Number of optionsoutstanding |  | Number of
options    exercisable |  | Exercise Price |  | Remaining Contractual Life
|208,959                      |  | 208,959                          |  | 3.80           |  | 1.5 Years                 
|731,360                      |  | 731,360                          |  | 4.02           |  | 1.5 Years                 
|417,920                      |  | 417,920                          |  | 4.20           |  | 2 Years                   
|397,267                      |  | 397,267                          |  | 2.81           |  | 3.5 Years                 
|10,000                       |  | 10,000                           |  | 3.32           |  | 5.5 Years                 
|40,000                       |  | 40,000                           |  | 1.73           |  | 6.3 Years                 
|20,000                       |  | 13,332                           |  | 2.25           |  | 7.2 Years                 
|25,000                       |  | 16,666                           |  | 2.09           |  | 7.7 Years                 
|45,000                       |  | 15,000                           |  | 0.46           |  | 8.2 Years                 
|200,000                      |  | 200,000                          |  | 0.51           |  | 8.2 Years                 
|2,057,879                    |  | 2,057,879                        |  | 0.69           |  | 9 Years                   
|20,000                       |  | 20,000                           |  | 0.36           |  | 9 Years                   
|                             |  |                                  |  |                |  |                           
|4,173,385                    |  | 4,128,383                        |  |                |  |                           
|                             |  |                                  |  |                |  |                           

On January 2, 2006, we granted 20,000 options to an executive at an exercise price of $0.36,
which was the fair market value at the date of grant. These options were fully vested on the date of grant. The weighted averaged fair value for options was estimated at the dates of grant using a Black-Scholes option-pricing model to be $0.25 for
the year ended December 31, 2006, with the following weighted average assumptions: risk free interest rate of 7.0%; expected volatility factor of 280%, which is based upon historical volatility; expected dividend yield of 0%; and estimated
option lives of 5 years. See Note 1 above for additional information on Stock-based employee compensation.

On March 29, 2005, we
granted, for Board-related service, 15,000 options to each of five Directors and Officers at an exercise price of $0.46, which was the fair market value per share of our Class A Common Stock at the date of grant as quoted on the OTC Bulletin
Board. On April 27, 2005, we granted 200,000 options to an executive at an exercise price of $0.51, which was 110% of the fair market value on the date of grant. On January 5, 2004, we granted 50,000 options to an executive at an exercise
price of $1.50, which was the fair market value at the date of grant. On March 12, 2004, we granted 20,000 options, 10,000 each to two employees, at an exercise price of $2.25, which was the fair market value at the date of grant. On
April 15, 2004, we granted 25,000 options to an executive at an exercise price of $2.09, which was the fair market value at the date of grant. These options vest over a three-year period, except for the 200,000 options which were granted on
April 27, 2005. Those options vested on the date of grant.



F-16



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



On April 27, 2005, we reduced the exercise price of certain stock options held by one of our
executives. The original exercise prices and number of shares were as follows: 626,880 shares at $3.80 per share; 1,253,759 shares at $4.02 per share; 52,240 shares at $4.20 per share and 125,000 at $2.81 per share. The price per share was reduced
to $0.69 per share, which represented 150% of the $0.46 per share closing price of our Class A Common Stock on April 27, 2005. The termination date of these options was changed to December 31, 2015. In accordance with generally
accepted accounting principles, we have adopted variable plan accounting for these options from the date of the repricing. At December 31, 2005, the price of the stock had dropped below the repriced level; accordingly, no compensation expense
was required as of such date.

In prior years, we repriced 775,300 options with an exercise price of $8.77 to an exercise price of $2.81,
which represented the fair market value on the date of the repricing. In accordance with generally accepted accounting principles, we adopted variable plan accounting for these options from the date of the repricing and reduced compensation expense
of $1,251 in 2002. The price of the stock dropped below the repriced levels after trading at prices higher than the repriced levels. No compensation expense was required in 2006 and 2005.

On January 5, 2004, we granted 50,000 options to an executive at an exercise price of $1.50, which was the fair market value at the date of grant.
On March 12, 2004, we granted 20,000 options, 10,000 each to two employees, at an exercise price of $2.25, which was the fair market value at the date of grant. On April 15, 2004, we granted 25,000 options to an executive at an exercise
price of $2.09, which was the fair market value at the date of grant. All the options vest over a three-year period.



|5. | Employee Benefit Plans
|-- | ----------------------

Managers Incentive
Compensation Plans

We maintain various managers incentive compensation plans for substantially all managerial employees. The
plans provide for incentives to be earned based on attainment of threshold operating profit and market share goals established each year, as defined. We provided approximately $1,851, $1,688, and $1,998 for such compensation during 2006, 2005, and
2004.

401(k) Plan

We
have a defined contribution plan, the 401(k) Plan, which covers substantially all employees who have completed ninety days of service with us. Under the terms of the 401(k) Plan, we may contribute a matching contribution percentage determined by,
and at the discretion of, the Board of Directors but not in excess of the maximum amount deductible for federal income tax purposes. Company contributions vest to the employees at 20% per year over a five-year period. We contributed $682, $684,
and $728 in 2006, 2005, and 2004.

Deferred Compensation Plans

Certain of our subsidiaries maintain deferred compensation plans which cover employees selected at the discretion of management. Participants are entitled
to deferred compensation and other benefits under these plans. In 2006, 2005, and 2004, we provided compensation expense of $160, $197, and $67 related to these plans.



F-17



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



We have agreements with several of our employees to provide supplemental income benefits. The
benefits under these plans were fully vested as of December 31, 2006. We provided $98, $114 and $129 in 2006, 2005, and 2004 for these plans, which principally represented interest on the vested benefits. Amounts due under these plans and
agreements are $1,649 as of December 31, 2006 and are recorded as accrued expenses $372 and other noncurrent liabilities of $1,277 on our consolidated balance sheets; however, they remain subject to further appreciation/depreciation upon
changes in value (as defined).

Other

We have life insurance policies on certain of our executives for which Interep is the beneficiary. Proceeds from these policies will be used to partially fund certain of the retirement benefits under these
supplemental agreements. Such policies had cash surrender values of $2,705 and $2,515 as of December 31, 2006 and 2005, and offsetting loans of $1,276 and $1,129, which are included in Investments and Other Assets on the accompanying
consolidated balance sheets.



|6. | Income Taxes
|-- | ------------

Interep and its subsidiaries file a
consolidated federal tax return. However, for state tax purposes, separate tax returns are filed in various jurisdictions where losses on certain subsidiaries are not available to offset income on other subsidiaries, and tax benefits on such losses
may not be realized. As a result, the consolidated tax provisions are determined considering this tax reporting structure and may not fluctuate directly with consolidated pretax income. We have recorded a valuation allowance to reflect uncertainties
with regard to when in the future we will realize our net deferred tax assets.

Components of income taxes are as follows:



|                    |  |                         |        |   |      |   |      |      |  |   |        |  
|------------------- |  | ----------------------- | ------ | - | ---- | - | ---- | ---- |  | - | ------ | -
|                    |  | Year ended December 31, |       
|                    |  | 2006                    |        |   | 2005 |   |      | 2004 | 
|Current:            |  |                         |        |   |      |   |      |      |  |   |        |  
|Federal             |  | $                       | 50     |   |      | $ |     |      |  | $ |       |  
|State               |  |                         | 607    |   |      |   | 134  |      |  |   | 261    |  
|Deferred:           |  |                         |        |   |      |   |      |      |  |   |        |  
|Federal             |  |                         | (5,713 | ) |      |   | (668 | )    |  |   | (2,736 | )
|Valuation Allowance |  |                         | 5,713  |   |      |   | 668  |      |  |   | 2,736  |  
|                    |  |                         |        |   |      |   |      |      |  |   |        |  
|Total Income Taxes  |  | $                       | 657    |   |      | $ | 134  |      |  | $ | 261    |  
|                    |  |                         |        |   |      |   |      |      |  |   |        |  



F-18



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



A reconciliation of the U.S. federal statutory tax rate to the effective tax rate on the loss before
income taxes for the periods ended December 31, 2006, 2005, and 2004, is as follows:



|                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                         |  | 2006 |        |   | 2005 |   |        | 2004 | 
|Benefit computed at the federal statutory rate of 34%    |  | $    | (4,827 | ) |      | $ | (1,033 | )    |  | $ | (2,391 | )
|State and local taxes, net of federal income tax benefit |  |      | (609   | ) |      |   | (130   | )    |  |   | (302   | )
|Change in valuation allowance and other adjustments      |  |      | 5,713  |   |      |   | 668    |      |  |   | 2,736  |  
|Nondeductible travel and entertainment expense           |  |      | 139    |   |      |   | 60     |      |  |   | 135    |  
|Nondeductible insurance premiums                         |  |      | (5     | ) |      |   | (74    | )    |  |   | (29    | )
|Other                                                    |  |      | 246    |   |      |   | 643    |      |  |   | 112    |  
|                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|Total                                                    |  | $    | 657    |   |      | $ | 134    |      |  | $ | 261    |  
|                                                         |  |      |        |   |      |   |        |      |  |   |        |  

Temporary differences and carryforwards which gave rise to deferred tax assets and liabilities at
December 31, 2006 and 2005, are as follows:



|                                                   |  |              |         |   |      |   |         |  
|-------------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                                   |  | December 31, |        
|                                                   |  | 2006         |         |   | 2005 |  
|Deferred tax assets:                               |  |              |         |   |      |   |         |  
|Depreciation and amortization                      |  | $            | 3,832   |   |      | $ | 4,338   |  
|Accruals not currently deductible for tax purposes |  |              | 2,977   |   |      |   | 1,470   |  
|Consolidated net operating loss carryforward       |  |              | 34,292  |   |      |   | 34,976  |  
|Other                                              |  |              | 1,749   |   |      |   | 2,534   |  
|                                                   |  |              |         |   |      |   |         |  
|                                                   |  |              | 42,850  |   |      |   | 43,318  |  
|Deferred tax liabilities:                          |  |              |         |   |      |   |         |  
|Buyout receivable                                  |  |              | (2,422  | ) |      |   | (5,890  | )
|Unamortized representation contracts               |  |              | (5,794  | ) |      |   | (8,069  | )
|Other                                              |  |              | (77     | ) |      |   | (515    | )
|                                                   |  |              |         |   |      |   |         |  
|Net deferred tax asset                             |  |              | 34,557  |   |      |   | 28,844  |  
|Valuation allowance                                |  |              | (34,557 | ) |      |   | (28,844 | )
|                                                   |  |              |         |   |      |   |         |  
|Net deferred tax asset (liability)                 |  | $            |        |   |      | $ |        |  
|                                                   |  |              |         |   |      |   |         |  

As of December 31, 2006 and 2005, we had an accrued federal and state income tax liability of
$475 and $166 on our consolidated balance sheets. We have a tax net operating loss of $85,730 as of December 31, 2006 that expires 2018 through 2026.



|7. | Long-Term Debt
|-- | --------------

Long-term debt at December 31,
2006 and 2005 was comprised of $99,000 in 10.0% Senior Subordinated Notes due July 1, 2008 (the Notes). At December 31, 2006 and 2005, there were no advances outstanding under the $10,000 senior secured revolving credit
facility, maturing in December 2007. In 2004, the senior secured revolving credit facility was to mature in September 2006, but was amended in July 2005.



F-19



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



The Notes are general unsecured obligations of the Company, and the indenture for the Notes provides,
among other things, restrictions on incurring additional indebtedness, payment of dividends, repurchase of equity interests (as defined), creation of liens (as defined), transactions with affiliates (as defined), sales of assets or certain mergers
and consolidations. Management believes that we are in compliance with these covenants. The Notes bear interest at the rate of 10.0% per annum, payable semiannually on January 1 and July 1. The Notes are subject to redemption at the
option of the Company, in whole or in part. All of our subsidiaries are guarantors of the Notes. Each guarantee is full, unconditional and joint and several with the other guarantees. We have no other assets or operations separate from our
investment in the subsidiaries.

We capitalized $4,689 of costs incurred in the offering of the Notes which is being amortized over the ten
year life of the Notes. At December 31, 2006, the remaining balance is $702.

We have a $10,000 senior secured revolving credit
facility with Commerce Bank, N.A. that enables us to efficiently manage our cash, as we may borrow, repay and re-borrow funds as needed. The term of the credit facility expires on December 31, 2007. The credit facility is secured by a first
priority lien on all of our and our subsidiaries property and assets, tangible and intangible. Interest is payable monthly on the borrowings at rates based on either a prime rate or LIBOR, plus a premium of 1% for prime rate borrowings, and 4%
for LIBOR borrowings. In addition to covenants similar to those in the indenture governing the Notes, the credit facility requires, among other things, that we (i) maintain certain 12-month trailing Operating EBITDA levels (Operating
EBITDA, defined in the Loan and Security Agreement for any period as: (a) Net Income (Loss), plus (b) all taxes on income plus state and local franchise and corporation taxes paid by the Borrower and any of its Subsidiaries plus
(c) all interest expense deducted in determining such Net Income, plus (d) all depreciation and amortization expense and other non-cash charges (including, without limitation, non-cash charges resulting from the repricing of employee stock
options), plus (e) severance costs expensed but not yet paid in cash, less (f) extraordinary gains, plus (g) extraordinary losses, less (h) Contract Termination Revenue, but plus Contract Termination Revenue received in cash and
(i) less Contract Acquisition Payments, in each case for such period, in each case in connection with Borrower and its Subsidiaries, on a consolidated basis); (ii) have a certain minimum accounts receivable balance as of the end of each
quarter; (iii) have not less than $200,000 of representation contract value (as defined) as of the end of each quarter; and (iv) have not less than $2,000 of cash and cash equivalents as of the end of each quarter. Management believes that
we are in compliance with these covenants. We incurred approximately $500 in legal and other costs directly related to the revolving credit facility and an additional $200 of such costs related to an amendment of the revolving credit facility in
July 2005, which are being amortized as interest expense over the life of the extended facility. Substantially all of our subsidiaries, jointly, severally and unconditionally guarantee the credit facility. At December 31, 2006, we had $10,000
available under our credit facility.



F-20



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



The Amendment was entered into on July 21, 2005. The principal change effected by the Amendment
was to extend the term of our revolving credit facility from September 25, 2006 through December 31, 2007. The Amendment also revised certain of the financial covenants to more appropriately reflect our current business operations. It also
revised the definition of Operating EBITDA as for any period: (a) Net Income (Loss), plus (b) all taxes on income plus state and local franchise and corporation taxes paid by the Borrower and any of its Subsidiaries plus
(c) all interest expense deducted in determining such Net Income, plus (d) all depreciation and amortization expense and other non-cash charges (including, without limitation, non-cash charges resulting from the repricing of employee stock
options), plus (e) severance costs expensed but not yet paid in cash, less (f) extraordinary gains, plus (g) extraordinary losses, less (h) Contract Termination Revenue, but plus Contract Termination Revenue received in cash and
(i) less Contract Acquisition Payments, in each case for such period, in each case in connection with Borrower and its Subsidiaries, on a consolidated basis.



|8. | Capital Deficit
|-- | ---------------

In May 2002, we amended our
certificate of incorporation for the purpose of establishing a series of preferred stock referred to as the Series A Convertible Preferred Stock (the Series A Stock), with the authorization to issue up to 400,000 shares. The Series A
Stock has a face value of $100 per share and a liquidation preference in such amount in priority over our Class A and Class B common stock. Each share of the Series A Stock may be converted at the option of the holder at any time into 25 shares
of Class A common stock at an initial conversion price of $4.00 per share (subject to anti-dilution adjustments). If the market price of our Class A common stock is $8.00 or more for 30 consecutive trading days, the Series A Stock will
automatically be converted into shares of Class A common stock at the then applicable conversion price. The Series A Stock bears a 4% annual cumulative dividend that may be paid in cash or in kind (in additional shares of the Series A Stock) at
our discretion. We expect to pay such dividends in kind for the foreseeable future. Holders of shares of the Series A Stock vote on most matters on an as converted basis, together with the holders of Class A and Class B common
stock. During 2002, we completed a series of private placements to issue 110,000 units for an aggregate purchase price of $11,000. Each unit consists of one share of Series A Stock and 6.25 warrants to acquire an equal number of shares of
Class A common stock. The warrants are exercisable at any time from the date of grant and expire five years from the date of grant. We allocated the net proceeds of approximately $10,230 from the sale of Series A Stock between the convertible
preferred stock and the warrants, both of which are classified in additional paid in capital. We incurred approximately $770 in legal and other costs directly related to the private placements. A stock dividend for the Series A Stock in the amount
of 4,934 and 4,744 shares was paid as of May 1, 2006 and 2005, respectively.

Each share of Class B common stock is convertible into
one share of Class A common stock at the option of the holder or automatically under certain circumstances. Each share of the Class B common stock is entitled to 10 votes per share in all matters presented to the shareholders, except for
certain amendments to the Restated Certificate of Incorporation, certain going private transactions and as otherwise required by applicable law. The shares of Class A common stock are entitled to one vote per share on all matters.

During 2006 and 2005, primarily in connection with employee terminations, 324,816 and 353,225 shares of Class B common stock were
converted into Class A common stock.



F-21



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



|9. | Related Party Transactions
|-- | --------------------------

Since 1997, we have had
an agreement with Media Financial Services, Inc., an affiliate of one of our executives, whereby Media Financial Services provides financial and accounting services to us. The fee for these services amounted to approximately $3,400, $3,500, and
$3,500 in 2006, 2005 and 2004.



|10. | Commitments and Contingencies
|--- | -----------------------------

At December 31,
2006, we were committed under operating leases, principally for office space, which expire at various dates through 2020. Certain leases are subject to rent reviews and require payment of expenses under escalation clauses. Rent expense was $5,375,
$5,454, and $5,390 in 2006, 2005 and 2004. The noncash portion of rent expense that relates to the effect of free rent and abatements was $336, $157, and $456 for 2006, 2005 and 2004. Future minimum rental commitments under noncancellable operating
leases are as follows:



|           |  |   |       
|---------- |  | - | ------
|2007       |  | $ | 4,790 
|2008       |  |   | 4,303 
|2009       |  |   | 3,558 
|2010       |  |   | 2,852 
|2011       |  |   | 2,863 
|Thereafter |  |   | 22,608

As of December 31, 2006, the total minimum sublease rentals to be received in the future
under noncancellable operating subleases were $1,425.

Representation contract buyouts payable are due over the next five years, as
follows:



|     |  |   |      
|---- |  | - | -----
|2007 |  | $ | 1,757
|2008 |  |   | 347  
|2009 |  |   | 201  
|2010 |  |   | 150  
|2011 |  |   |     

We have employment agreements with certain of our officers and employees for terms ranging from
two to five years with annual compensation aggregating approximately $4,067. These agreements include escalation clauses (as defined) and provide for certain additional bonus and incentive compensation.

We are involved in various legal actions from time to time arising in the normal course of business. In the opinion of management, there are no matters
outstanding that would have a material adverse effect on the consolidated financial position or results of our operations.

We maintain
some of our cash in bank deposit accounts, money market funds and certificates of deposits, which at December 31, 2006 exceeded federally insured limits by approximately $9,757. These accounts are maintained in high credit quality financial
institutions in order to reduce the risk of potential losses. We have not experienced any losses in these accounts.



F-22



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



|11. | Supplemental Information
|--- | ------------------------

Interest expense is shown
net of interest income of $351, $41, and $36 in 2006, 2005, and 2004.

Revenues from CBS were approximately 29%, 28% and 28% of our total
revenues in 2006, 2005 and 2004. CBS also represented approximately 21% and 22% of our trade account receivable in 2006 and 2005. Revenues from Entercom were approximately 11% of our total revenues in 2006. Entercom also represented approximately
14% of our trade account receivable in 2006.



|12. | Fair Value of Financial Instruments
|--- | -----------------------------------

The estimated
fair values of other financial instruments subject to fair value disclosures were determined based on broker quotes or quoted market prices. However, considerable judgment is required in interpreting market data to develop the estimates of fair
value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect
on the estimated fair value amounts.



|               |  |                |        |                     |   |                |  |                     |        |  |   |       
|-------------- |  | -------------- | ------ | ------------------- | - | -------------- |  | ------------------- | ------ |  | - | ------
|               |  | December 31,  
|               |  | 2006           |        | 2005               
|               |  | CarryingAmount |        | EstimatedFair Value |   | CarryingAmount |  | EstimatedFair Value
|Long-term debt |  | $              | 99,000 |                     | $ | 84,645         |  | $                   | 99,000 |  | $ | 84,150

We also have a $10,000 senior secured credit facility, none of which was outstanding at
December 31, 2006 and 2005.

The fair value of cash and cash equivalents, accounts receivables and accounts payables approximate the
carrying amount due to the short maturity of those instruments.



|13. | Liquidity
|--- | ---------

We believe that the anticipated cash
from continuing operations and the availability from our $10,000 senior secured credit facility, should be sufficient to fund our operations and anticipated needs for required representation contract acquisition payments, and to make the required
10% annual interest payments on the Senior Subordinated Notes, as well as the monthly interest payments under our senior secured revolving loan facility, for at least the next 12 months. We may not, however, generate sufficient cash flow for these
purposes or to repay the notes at maturity.

Our ability to fund our operations and required contract acquisition payments and to make
scheduled principal and interest payments will depend on our future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We may also
need to refinance all or a portion of the Senior Subordinated Notes on or prior to maturity. There can be no assurance that we will be able to effect any such refinancing on commercially reasonable terms, if at all.



F-23



---

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(in thousands
except share information)



At December 31, 2006, $5,888 of restructuring and severance charges remained in accrued
liabilities related to the termination of five executives and 38 other employees during 2006. These payments will continue into 2013. Our liquidity and cash flows will be impacted by these headcount reductions. It is anticipated that our operations
over the long term will further benefit from these terminations as well as other material cost efficiency measures implemented since 2004.



|14. | Quarterly Financial Information (Unaudited)
|--- | -------------------------------------------



|                                                    |  |          |        |   |         |   |        |              |  |   |             |   |           |   |        |  |   |         |  
|--------------------------------------------------- |  | -------- | ------ | - | ------- | - | ------ | ------------ |  | - | ----------- | - | --------- | - | ------ |  | - | ------- | -
|2006 Quarter Ended                                  |  | March 31 |        |   | June 30 |   |        | September 30 |  |   | December 31 |   | 2006 Year |  
|Commission revenues                                 |  | $        | 15,135 |   |         | $ | 18,900 |              |  | $ | 17,855      |   |           | $ | 22,001 |  | $ | 73,891  |  
|Contract termination revenue                        |  |          | 110    |   |         |   | 270    |              |  |   | 598         |   |           |   | 6,348  |  |   | 7,326   |  
|                                                    |  |          |        |   |         |   |        |              |  |   |             |   |           |   |        |  |   |         |  
|Total Revenues                                      |  |          | 15,245 |   |         |   | 19,170 |              |  |   | 18,453      |   |           |   | 28,349 |  |   | 81,217  |  
|Operating expenses                                  |  |          | 21,785 |   |         |   | 23,463 |              |  |   | 25,292      |   |           |   | 21,810 |  |   | 92,350  |  
|                                                    |  |          |        |   |         |   |        |              |  |   |             |   |           |   |        |  |   |         |  
|Operating (loss) income                             |  | $        | (6,540 | ) |         | $ | (4,293 | )            |  | $ | (6,839      | ) |           | $ | 6,539  |  | $ | (11,133 | )
|                                                    |  |          |        |   |         |   |        |              |  |   |             |   |           |   |        |  |   |         |  
|Net (loss) income applicable to common shareholders |  | $        | (9,193 | ) |         | $ | 515    |              |  | $ | (9,464      | ) |           | $ | 3,389  |  | $ | (14,753 | )
|                                                    |  |          |        |   |         |   |        |              |  |   |             |   |           |   |        |  |   |         |  
|Basic and diluted (loss) income per share           |  | $        | (0.81  | ) |         | $ | 0.05   |              |  | $ | (0.84       | ) |           | $ | 0.30   |  | $ | (1.31   | )
|                                                    |  |          |        |   |         |   |        |              |  |   |             |   |           |   |        |  |   |         |  



|                                                    |  |          |        |   |         |   |              |  |             |        |  |           |        |   |  |   |         |  
|--------------------------------------------------- |  | -------- | ------ | - | ------- | - | ------------ |  | ----------- | ------ |  | --------- | ------ | - |  | - | ------- | -
|2005 Quarter Ended                                  |  | March 31 |        |   | June 30 |   | September 30 |  | December 31 |        |  | 2005 Year |       
|Commission revenues                                 |  | $        | 17,447 |   |         | $ | 21,718       |  | $           | 20,135 |  | $         | 20,768 |   |  | $ | 80,068  |  
|Contract termination revenue                        |  |          | 226    |   |         |   | 13,189       |  |             | 5,943  |  |           | 643    |   |  |   | 20,001  |  
|                                                    |  |          |        |   |         |   |              |  |             |        |  |           |        |   |  |   |         |  
|Total Revenues                                      |  |          | 17,673 |   |         |   | 34,907       |  |             | 26,078 |  |           | 21,411 |   |  |   | 100,069 |  
|Operating expenses                                  |  |          | 20,711 |   |         |   | 26,359       |  |             | 22,939 |  |           | 23,044 |   |  |   | 93,053  |  
|                                                    |  |          |        |   |         |   |              |  |             |        |  |           |        |   |  |   |         |  
|Operating (loss) income                             |  | $        | (3,038 | ) |         | $ | 8,548        |  | $           | 3,139  |  | $         | (1,633 | ) |  | $ | 7,016   |  
|                                                    |  |          |        |   |         |   |              |  |             |        |  |           |        |   |  |   |         |  
|Net (loss) income applicable to common shareholders |  | $        | (5,749 | ) |         | $ | 5,891        |  | $           | 479    |  | $         | (4,145 | ) |  | $ | (3,524  | )
|                                                    |  |          |        |   |         |   |              |  |             |        |  |           |        |   |  |   |         |  
|Basic and diluted (loss) income per share           |  | $        | (0.51  | ) |         | $ | 0.52         |  | $           | 0.04   |  | $         | (0.37  | ) |  | $ | (0.31   | )
|                                                    |  |          |        |   |         |   |              |  |             |        |  |           |        |   |  |   |         |  



F-24



---

Schedule II

INTEREP NATIONAL RADIO SALES, INC.

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)



|                                           |  |                           |        |                                               |       |            |      |   |                      |   |       
|------------------------------------------ |  | ------------------------- | ------ | --------------------------------------------- | ----- | ---------- | ---- | - | -------------------- | - | ------
|                                           |  | Balanceatbeginningof year |        | Additionscharged(credited)to costsandexpenses |       | Deductions |      |   | Balanceat end ofyear
|December 31, 2004                          |  |                           |        |                                               |       |            |      |   |                      |   |       
|Allowance for Doubtful Accounts            |  | $                         | 808    |                                               | 70    |            | (108 | ) |                      | $ | 770   
|Valuation Allowance on Deferred Tax Assets |  | $                         | 25,440 |                                               | 2,736 |            |     |   |                      | $ | 28,176
|December 31, 2005                          |  |                           |        |                                               |       |            |      |   |                      |   |       
|Allowance for Doubtful Accounts            |  | $                         | 770    |                                               | 100   |            | (247 | ) |                      | $ | 623   
|Valuation Allowance on Deferred Tax Assets |  | $                         | 28,176 |                                               | 668   |            |     |   |                      | $ | 28,844
|December 31, 2006                          |  |                           |        |                                               |       |            |      |   |                      |   |       
|Allowance for Doubtful Accounts            |  | $                         | 623    |                                               | 294   |            | (337 | ) |                      | $ | 580   
|Valuation Allowance on Deferred Tax Assets |  | $                         | 28,844 |                                               | 5,713 |            |     |   |                      | $ | 34,557



F-25



---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in
the City of New York, State of New York.

March 14, 2008



INTEREP NATIONAL RADIO SALES, INC.By:

/S/ DAVID E. KENNEDYDavid E. KennedyChief Executive Officer and Vice Chairman of the Board (principal executive officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



| |  |                         |  |                                                                                         |  |               
| |  | ----------------------- |  | --------------------------------------------------------------------------------------- |  | --------------
| |  | /S/ DAVID E. KENNEDY    |  | Chief Executive Officer and Vice Chairman of the Board                                  |  | March 14, 2008
| |  | David E. Kennedy        |  |                                                                                        
| |  |                         | 
| |  | *                       |  | Chairman of the Board and Director                                                      |  | March 14, 2008
| |  | Ralph C. Guild          |  |                                                                                         | 
| |  |                         | 
| |  | *                       |  | President, Marketing Division; Director                                                 |  | March 14, 2008
| |  | Marc G. Guild           |  |                                                                                         | 
| |  |                         | 
| |  | *                       |  | Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |  | March 14, 2008
| |  | William J. McEntee, Jr. |  |                                                                                        
| |  |                         | 
| |  | *                       |  | Director                                                                                |  | March 14, 2008
| |  | Howard M. Brenner       |  |                                                                                         | 
| |  |                         | 
| |  | *                       |  | Director                                                                                |  | March 14, 2008
| |  | John E. Palmer          |  |                                                                                         | 
| |  |                         | 
| |  | *                       |  | Director                                                                                |  | March 14, 2008
| |  | Arnie Semsky            |  |                                                                                         | 



|     |  |                      |  |  |  | 
|---- |  | -------------------- |  |  |  | 
|     |  |                      | 
|*By: |  | /S/ DAVID E. KENNEDY |  |  |  | 
|     |  | David E. Kennedy     |  |  |  | 
|     |  | Attorney In Fact     |  |  |  | 

|
|



---

Exhibit Index



|              |  |                                                                                                                                                 
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                     
|              | 
|23.1          |  | Consent of BDO Seidman, LLP                                                                                                                     
|              | 
|31.1          |  | Certification of Chief Executive Officer pursuant to Rule 15d-14(a)                                                                             
|              | 
|31.2          |  | Certification of Chief Financial Officer pursuant to Rule 15d-14(a)                                                                             
|              | 
|32.1          |  | Certification of Chief Executive Officer pursuant to Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §
1350(a), (b))
|              | 
|32.2          |  | Certification of Chief Financial Officer pursuant to Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §
1350(a), (b))