UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








FORM
10-QSB








x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT
OF 1934





For the
Quarterly period endedFebruary 29,
2008








 ̈
TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 (NO FEE REQUIRED)





For the
transitional period from ______ to ______








Commission File No.0-32923







(Exact
Name of Small Business Issuer in its Charter)







NEVADA
            
            33-0198542(State
      or other jurisdiction of incorporation of organization)
            
            (I.R.S.
      Employer Identification Number)







2355 Main Street, Suite 120,
Irvine, CA 92614


(Address
of principal executive office)







(949)
486-3990


(Issuer's
telephone number)








Check
whether the issuer has (1) filed all reports required by Section 12 or 5(d) of
the Exchange Act during the past 12 months, and (2) been subject to such filing
requirements for the past ninety (90) days.   Yesx   No
 ̈








As of
April 12, 2008, the Company had 60,736,425 shares of Common Stock issued and
outstanding.





Table of Contents




FINANCIAL
MEDIA GROUP, INC.





TABLE
OF CONTENTS





Report on
Form 10-QSB


for the
quarter ended February 29, 2008








PagePART
      I FINANCIAL INFORMATIONItem
      1. Financial StatementsConsolidated Balance Sheet at February 29, 2008
(Unaudited)
            3Consolidated Statements of Operations
      for the Three Month Periods and Six Month Periods
              ended February 29, 2008 and February 28, 2007 (Unaudited)
            4Consolidated
      Statements of Cash Flows for the Three Month Periods and Six Month
      Periods
              ended February 29, 2008 and February 28, 2007 (Unaudited)
            5Notes to the
      Consolidated Financial Statements (Unaudited)
            6 –
      16Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
            17Item
      3. Controls and Procedures
            21PART
      II OTHER INFORMATIONItem
      1. Legal Proceedings
            22Item
      2. Changes in Securities
            22Item
      3. Defaults upon Senior Securities
            22Item
      4. Submission of Matters to Vote of Security Holders
            22Item
      5. Other Information
            22Item
      6. Exhibits and Reports on Form 8-K
            22Signatures and Certifications
            22





- 2
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 Table of Contents


PART
I





Item
1. Consolidated Financial Statements





FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEET


FEBRUARY
29, 2008


(UNAUDITED)





ASSETSCURRENT
      ASSETS:Cash
      & cash equivalents
            
            $
            72,934Accounts
      receivable, net
            
            
            453,422Marketable
      securities
            
            
            4,741,595Other
      current assets
            
            
            98,343Total
      current assets
            
            
            5,366,294PROPERTY
      & EQUIPMENT, Net
            
            
            104,452DEPOSIT
            
            
            28,521Total
      assets
            
            $
            5,499,267LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Accounts
      payable
            
            $
            509,293Accrued
      expenses
            
            
            1,277,134Deferred
      revenue
            
            
            1,996,465Due
      to officers
            
            
            726,920Notes
      payable
            
            
            100,000Shares
      to be Issued
            
            
            64,957Total
      current liabilities
            
            
            4,674,769Commitment
      & contingencies
            
            
            -STOCKHOLDERS'
      EQUITY:Common
      stock, $0.001 par value, 300,000,000 shares authorized,
              58,417,700
      shares issued and outstanding
            
            
            58,418Paid
      in capital
            
            
            10,121,908Unrealized
      gain on marketable securities
            
            
            2,013,948Accumulated
      deficit
            
            
            (11,369,776
            )Total
      stockholders' equity
            
            
            824,499Total
      liabilities and stockholders' equity
            
            $
            5,499,267





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





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 Table of Contents


FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


(UNAUDITED)





For
      the three months periods ended
            
            
            For
      the six months periods endedFebruary
      29, 2008
            
            
            February
      28, 2007
            
            
            February
      29, 2008
            
            
            February
      28, 2007Net
      revenues
            
            $
            2,168,747
            
            
            
            1,527,554
            
            
            $
            4,047,640
            
            
            $
            3,168,780Operating
      expensesSelling,
      general & administrative
            
            
            1,410,640
            
            
            
            1,406,380
            
            
            
            2,994,270
            
            
            
            2,681,290Depreciation
            
            
            13,298
            
            
            
            8,957
            
            
            
            23,914
            
            
            
            17,783Impairments
            
            
            1,469,547
            
            
            
            1,821,801
            
            
            
            2,331,450
            
            
            
            2,924,821Total
      operating expenses
            
            
            2,893,485
            
            
            
            3,237,138
            
            
            
            5,349,634
            
            
            
            5,623,894Loss
      from operations
            
            
            (724,738
            )
            
            
            (1,709,584
            )
            
            
            (1,301,994
            )
            
            
            (2,455,114
            )Non-Operating
      Income (Expense):Interest
      expense
            
            
            (17,720
            )
            
            
            (48,106
            )
            
            
            (65,260
            )
            
            
            (97,176
            )Interest
      income
            
            
            -
            
            
            
            7
            
            
            
            -
            
            
            
            7Loss
      on sale of marketable securities
            
            
            (323,920
            )
            
            
            (33,935
            )
            
            
            (325,645
            )
            
            
            (98,616
            )Total
      non-operating expense
            
            
            (341,641
            )
            
            
            (82,034
            )
            
            
            (390,905
            )
            
            
            (195,785
            )Loss
      from operations before income taxes
            
            
            (1,066,379
            )
            
            
            (1,791,618
            )
            
            
            (1,692,899
            )
            
            
            (2,650,899
            )Provision
      for income tax
            
            
            -
            
            
            
            -
            
            
            
            4,800
            
            
            
            12,524Net
      Loss
            
            
            (1,066,379
            )
            
            
            (1,791,618
            )
            
            
            (1,697,699
            )
            
            
            (2,663,423
            )Other
      comprehensive gain (loss):Unrealized
      gain on marketable securities
            
            
            1,630,903
            
            
            
            -
            
            
            
            1,567,380
            
            
            
            106,468Reclassification
      Adjustment
            
            
            186,850
            
            
            
            (898,272
            )
            
            
            161,647
            
            
            
            (167,330
            )Comprehensive
      gain (loss)
            
            $
            751,375
            
            
            
            (2,689,890
            )
            
            
            31,328
            
            
            $
            (2,724,285
            )Basic
      & diluted net loss per share
            
            $
            (0.02
            )
            
            
            (0.07
            )
            
            
            (0.04
            )
            
            $
            (0.10
            )Weighted
      average shares of share capital outstanding-
      basic & diluted
            
            
            48,732,916
            
            
            
            26,297,111
            
            
            
            41,892,727
            
            
            
            26,074,698





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


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FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(UNAUDITED)





For
      the six months periods endedFebruary
      29, 2008
            
            
            February
      28, 2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (1,697,699
            )
            
            $
            (2,663,423
            )Adjustments
      to reconcile net loss to net cash used
      in operating activities:Bad debts
            
            
            51,710
            
            
            
            45,613Depreciation
      and amortization
            
            
            23,914
            
            
            
            17,783Revenues
      in form of marketable securities
            
            
            (3,309,145
            )
            
            
            (2,867,717
            )Impairment
      of marketable securities
            
            
            2,331,450
            
            
            
            2,924,821Loss
      on sale of marketable securities
            
            
            325,645
            
            
            
            98,616Issuance
      of options and warrants for services
            
            
            64,591
            
            
            
            246,565(Increase)
      decrease in current assets:Receivables
            
            
            (8,813
            )
            
            
            (24,891
            )Other
      current assets
            
            
            (7,932
            )
            
            
            (13,514
            )Increase
      (decrease) in current liabilities:Accounts
      payable
            
            
            182,751
            
            
            
            153,230Accrued
      expenses and other liabilities
            
            
            201,378
            
            
            
            336,307Deferred
      Revenue
            
            
            (179,785
            )
            
            
            47,239Net
      cash used in operating activities
            
            
            (2,021,935
            )
            
            
            (1,699,372
            )CASH
      FLOWS FROM INVESTING ACTIVITIES:Acquisition
      of property & equipment
            
            
            (49,629
            )
            
            
            (9,760
            )Cash
      received from sale marketable securities
            
            
            817,213
            
            
            
            394,922Net
      cash provided by investing activities
            
            
            767,584
            
            
            
            385,162CASH
      FLOWS FROM FINANCING ACTIVITIES:Cash
      received from exercise of options
            
            
            -
            
            
            
            262,500Cash
      received from shares to be issued
            
            
            14,957
            
            
            
            31,240Payment
      of note payable to officer
            
            
            (7,500
            )
            
            
            -Cash
      received from loan from related parties
            
            
            -
            
            
            
            487,985Cash
      received from sale of common stock
            
            
            1,147,814
            
            
            
            648,500Net
      cash provided by financing activities
            
            
            1,155,271
            
            
            
            1,430,225NET
      DECREASE IN CASH & CASH EQUIVALENTS
            
            
            (99,079
            )
            
            
            116,015CASH
      & CASH EQUIVALENTS, BEGINNING BALANCE
            
            
            172,013
            
            
            
            56,830CASH
      & CASH EQUIVALENTS, ENDING BALANCE
            
            $
            72,934
            
            
            $
            172,845





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


- 5
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 Table of Contents


FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)





NOTE
1     NATURE OF BUSINESS AND BASIS
OF PRESENTATION





Financial
Media Group, Inc. (the “Company,” "We," or "FMG") is a full service financial
media company focused on applications that enables the retail investment and
financial communities to collaborate directly with publicly traded companies.
The Company provides Internet based media and advertising services through its
financial website and the Company’s newspaper “WallSt.net Digest.” The Company
provides full array of customized investor awareness programs such as audio and
video of senior management interviews, press releases, newsletter and
editorials, small cap conferences and seminars, email mailings and
forums.





WallStreet
Direct, Inc. (“WallStreet”), a wholly-owned subsidiary of Financial Media Group,
Inc. was incorporated in the State of Nevada on January 5, 2005 as a financial
holding company specializing as a provider of financial news, tools and content
for the global investment community. On January 15, 2005, WallStreet acquired
100% of the assets and outstanding shares of Digital WallStreet, Inc. which was
100% owned by the majority shareholder (86%) of the Company, in exchange for two
promissory notes of $1,500,000 each, carrying interest at 6% per annum, due and
payable on January 31, 2007 and January 31, 2010. On December 11, 2006, the
Company and the majority shareholder agreed to extend the payment due date of
the promissory note due January 31, 2007 to January 31, 2010. On January 4,
2008, the Company agreed to issue to the majority shareholder 15,000,000 shares
of its common stock in exchange for cancellation of two promissory notes of
$1,500,000 each, due on January 31, 2010. As this merger was between entities
under the common control, the issuance of the promissory notes to the majority
shareholder had been recorded as a distribution to the majority shareholder. The
merger has been accounted for on historical cost basis.





Digital
WallStreet, Inc. was incorporated in Nevada on June 12, 2002, and commenced its
operations during the first quarter of 2003. WallStreet is a full service
financial media company focused on applications that enables the retail
investors and financial communities to collaborate directly with publicly traded
companies. The company provides internet based media and advertising services
through its financial website “Wallst.net” and the through its business
newspaper “WallSt.net Digest.”





On
January 6, 2006, Financial Media Group, Inc. acquired 100% of the equity in
WallStreet pursuant to an Agreement and Plan of Reorganization dated September
19, 2005 by and between WallStreet and the Company. Financial Media Group, Inc.,
formerly known as Giant Jr. Investments Corp., was incorporated in Nevada in
1984 as Business Development Company, Inc. Pursuant to the acquisition of
WallStreet, it became the wholly owned subsidiary of Financial Media Group, Inc.
The former shareholders of WallStreet received 19,998,707 shares or 82% of the
issued and outstanding shares of the Company’s common stock in exchange for all
the issued and outstanding shares of WallStreet.





The
acquisition of WallStreet is accounted for as a reverse acquisition under the
purchase method of accounting since the shareholders of WallStreet obtained
control of the consolidated entity. Accordingly, the reorganization of the
two companies is recorded as a recapitalization of WallStreet, with WallStreet
being treated as the continuing operating entity. The historical financial
statements presented herein will be those of WallStreet. The continuing entity
retained August 31 as its fiscal year end.





On
February 10, 2006, Financial Media Group, Inc. established a 100% wholly owned
subsidiary Financial Filings Corp. This business unit focuses on providing
edgarization and newswire services to small and mid-sized public companies.
These compliance services provide formatting of pertinent SEC filings and
distribution of news in more than 30 languages to media outlets in more than 135
countries.





On June
13, 2006, Financial Media Group, Inc. established another wholly owned
subsidiary MyWallStreet, Inc. MyWallStreet, Inc. is presently in the development
stage and will offer a social networking platform that allows members to
collaborate with one another, build personalized web-pages, exchange ideas,
access financial content, and build social networks comprised of other
members, targeted to the financial community.





In
January 2007, the Company acquired the trade name “The Wealth Expo” and formed a
wholly owned subsidiary The Wealth Expo Inc. on June 12, 2007. The Wealth Expo
provides a broad range of information on investing techniques, and tools to
investors through workshops and exhibits held throughout the United
States.





NOTE
2     SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES





Basis
of Presentation





The
accompanying unaudited consolidated financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission for the presentation of interim financial information, but do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. The audited financial
statements for the year ended August 31, 2007 were filed on December 7, 2007
with the Securities and Exchange Commission and is hereby incorporated by
reference. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for the six months
period ended February 29, 2008 are not necessarily indicative of the results
that may be expected for the year ended August 31, 2008.





Principles
of Consolidation





The
consolidated financial statements include the accounts of the Company, its
wholly-owned subsidiaries WallStreet Direct, Inc., Digital Wall Street, Inc.,
Financial Filings, Corp., My WallStreet, Inc. and Wealth Expo Inc. All
significant inter-company accounts and transactions have been
eliminated.




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FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)





Use
of Estimates





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





Marketable
Securities





The
Company’s investments in securities are classified as available-for-sale and, as
such, are carried at fair value based on quoted market prices. Securities
classified as available-for-sale may be sold in response to changes in interest
rates, liquidity needs, and for other purposes.





Unrealized
holding gains and losses for available-for-sale securities are excluded from
earnings and reported as a separate component of stockholders’ equity. Realized
and unrealized gains and losses for securities classified as available-for-sale
are included in the statement of operations and comprehensive gain,
respectively. On February 29, 2008, marketable securities have been recorded at
$4,741,595 based upon the fair value of the marketable securities as of that
date.





Revenue
Recognition





The
Company’s primary source of revenue is generated from providing Internet based
media and advertising services and a full array of customized investor awareness
programs to small and medium sized companies through its financial websites
www.wallset.net and www.mywallst.net. The services include audio and video
production of senior management interviews, newsletters and editorials, small
cap companies’ conferences and seminars, e-mail mailings and forums, media and
advertising. These services are provided by the Company’s subsidiaries
WallStreet Direct, Inc. and Digital WallStreet, Inc. Revenues from Internet
based media and advertising services are recognized and recorded pursuant to the
guidelines established under Staff Accounting Bulletin 104 when the Company
executes a contractual agreement with the client for a fixed fee for services
performed, delivery of services has occurred, and collectibility of the fees is
reasonably assured.





The
Company provides news wire and compliance services to small and medium size
publicly traded companies including preparation of registration statements,
electronic filings and reporting of SEC documents (EDGAR), preparation of proxy
materials and news distribution. Such services are provided by the Company’s
subsidiary Financial Filings Corp. Revenues are recognized and recorded pursuant
to the guidelines established under Staff Accounting Bulletin 104 when the
Company executes a contractual agreement with the client for a fixed fee,
delivery of the services has occurred and collectibility of the fees is
reasonably assured.





The
Company provides a broad range of information on investing techniques and
education tools to investors through workshops and exhibits. The Company’s
subsidiary Wealth Expo provides revenue streams for the Company through
exhibition sales, speaking presentation sales, collateral material sales and
advertising sales. Revenues from Wealth Expo services is recognized and recorded
pursuant to the guidelines established under Staff Accounting Bulletin 104 when
the Company executes a contractual agreement with the client for a fixed fee for
such services performed, delivery of such services has occurred, and
collectibility of the fees is reasonably assured.





The
Company recognizes revenue for services which is to be provided in future
periods, on a pro-rata basis over the term of the agreement. Payments received
in advance of services provided, are recorded as deferred revenue. As of
February 29, 2008, the deferred revenue was $1,996,465.





Fair
Value of Financial Instruments





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





Reporting
Segments





Statement
of financial accounting standards No. 131, Disclosures about segments of an
enterprise and related information (SFAS No. 131), which superseded statement of
financial accounting standards No. 14, Financial reporting for segments of a
business enterprise, establishes standards for the way that public enterprises
report information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in interim
financial statements regarding products and services, geographic areas and major
customers. SFAS No. 131 defines operating segments as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performances.





Although
the Company offers and provides a broad range of services to its clients, the
primary source of revenues is generated from providing Internet based media and
advertising services and a full array of customized investor awareness programs
to small and medium sized companies through its financial websites
www.wallst.net and www.mywallst.net.





The
Company also provides news wire and compliance services including preparation of
registration statements, electronic filings and reporting of SEC documents
(EDGAR), preparation of proxy materials and news distribution to the similar
types of clients whom the Company provides Internet based media and advertising
services. The Company started to offer a broad range of information on investing
techniques and education tools to investors through workshops, exhibition sales,
speaking presentation sales, collateral material sales and advertising sales.
However, the revenue generated, assets and loss from these two sources is less
than 10% of the total revenue, total assets and total loss, respectively. Hence,
currently, SFAS 131 has no effect on the Company's financial statements as
substantially all of the Company's operations are conducted in one industry
segment.




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FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)






Stock-Based
Compensation





The
Company adopted SFAS No. 123 (Revised 2004), Share Based Payment(“SFAS
No. 123R”), under the modified-prospective transition method on January 1, 2006.
SFAS No. 123R requires companies to measure and recognize the cost of
employee services received in exchange for an award of equity instruments based
on the grant-date fair value. Share-based compensation recognized under the
modified-prospective transition method of SFAS No. 123R includes share-based
compensation based on the grant-date fair value determined in accordance with
the original provisions of SFAS No. 123, Accounting for Stock-Based
Compensation,for all share-based payments granted prior to and not yet
vested as of January 1, 2006 and share-based compensation based on the
grant-date fair-value determined in accordance with SFAS No. 123R for all
share-based payments granted after January 1, 2006. SFAS No. 123R
eliminates the ability to account for the award of these instruments under the
intrinsic value method prescribed by Accounting Principles Board (“APB”) Opinion
No. 25, Accounting for Stock
Issued to Employees, and allowed under the original provisions of SFAS
No. 123. Prior to the adoption of SFAS No. 123R, the Company accounted for our
stock option plans using the intrinsic value method in accordance with the
provisions of APB Opinion No. 25 and related interpretations.





Comprehensive
Income




Statement
of financial accounting standards No. 130, Reporting comprehensive income (SFAS
No. 130), establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is defined
to include all changes in equity, except those resulting from investments by
owners and distributions to owners. Among other disclosures, SFAS No. 130
requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in
financial statements that are displayed with the same prominence as other
financial statements.





Reclassifications





Certain
comparative amounts have been reclassified to conform to the current period’s
presentation.





Recent
Accounting Pronouncements





In
September 2006, FASB issued SFAS 157 ‘Fair Value Measurements.’ This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Management is currently
evaluating the effect of this pronouncement on financial
statements.





In
September 2006, FASB issued SFAS 158 “Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans” - an amendment of FASB Statements No.
87, 88, 106, and 132(R)’ This Statement improves financial reporting by
requiring an employer to recognize the over funded or under funded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This Statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions. An employer with publicly traded equity securities is required to
initially recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after December 15, 2006. An employer without publicly traded equity securities
is required to recognize the funded status of a defined benefit postretirement
plan and to provide the required disclosures as of the end of the fiscal year
ending after June 15, 2007. However, an employer without publicly traded equity
securities is required to disclose the following information in the notes to
financial statements for a fiscal year ending after December 15, 2006, but
before June 16, 2007, unless it has applied the recognition provisions of this
Statement in preparing those financial statements:





a)
            A
      brief description of the provisions of this Statementb)
            The
      date that adoption is requiredc)
            The
      date the employer plans to adopt the recognition provisions of this
      Statement, if earlier.





The
requirement to measure plan assets and benefit obligations as of the date of the
employer’s fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. Management is currently evaluating
the effect of this pronouncement on financial statements.





In
February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. FASB 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption is permitted subject to
specific requirements outlined in the new Statement. Therefore, calendar-year
companies may be able to adopt FASB 159 for their first quarter 2007 financial
statements.




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FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)


The new
Statement allows entities to choose, at specified election dates, to measure
eligible financial assets and liabilities at fair value that are not otherwise
required to be measured at fair value. If a company elects the fair value option
for an eligible item, changes in that item's fair value in subsequent reporting
periods must be recognized in current earnings. FASB 159 also establishes
presentation and disclosure requirements designed to draw comparison between
entities that elect different measurement attributes for similar assets and
liabilities. Management is currently evaluating the effect of this pronouncement
on financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to establish
accounting and reporting standards for the non-controlling (minority) interest
in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
non-controlling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the Company’s fiscal year
beginning October 1, 2009. Management is currently evaluating the effect of this
pronouncement on financial statements.





In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This
Statement replaces SFAS No. 141, Business Combinations. This Statement retains
the fundamental requirements in Statement 141 that the acquisition method of
accounting (which Statement 141 called the purchase method) be used for all
business combinations and for an acquirer to be identified for each business
combination. This Statement also establishes principles and requirements for how
the acquirer: a) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree; b) recognizes and measures the goodwill acquired in
the business combination or a gain from a bargain purchase and c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141(R) will apply prospectively to business combinations for which the
acquisition date is on or after Company’s fiscal year beginning October 1, 2009.
While the Company has not yet evaluated this statement for the impact, if any,
that SFAS No. 141(R) will have on its consolidated financial statements, the
Company will be required to expense costs related to any acquisitions after
September 30, 2009.





FASB
Staff Position on FAS No. 115-1 and FAS No. 124-1 (“the FSP”), “The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments,” was
issued in November 2005 and addresses the determination of when an investment is
considered impaired, whether the impairment on an investment is
other-than-temporary and how to measure an impairment loss. The FSP also
addresses accounting considerations subsequent to the recognition of
other-than-temporary impairments on a debt security, and requires certain
disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. The FSP replaces the impairment guidance on
Emerging Issues Task Force (EITF) Issue No. 03-1 with references to
existing authoritative literature concerning other-than-temporary
determinations. Under the FSP, losses arising from impairment deemed to be
other-than-temporary, must be recognized in earnings at an amount equal to the
entire difference between the securities cost and its fair value at the
financial statement date, without considering partial recoveries subsequent to
that date. The FSP also required that an investor recognize other-than-temporary
impairment losses when a decision to sell a security has been made and the
investor does not expect the fair value of the security to fully recover prior
to the expected time of sale. The FSP is effective for reporting periods
beginning after December 15, 2005. The adoption of this statement will not have
a material impact on our consolidated financial statements.





In March,
2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative
Instruments and Hedging Activities”. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows. FASB Statement
No. 161 achieves these improvements by requiring disclosure of the fair values
of derivative instruments and their gains and losses in a tabular format. It
also provides more information about an entity’s liquidity by requiring
disclosure of derivative features that are credit risk–related. Finally, it
requires cross-referencing within footnotes to enable financial statement users
to locate important. Based on current conditions, the Company does not expect
the adoption of SFAS 161 to have a significant impact on its results of
operations or financial position.





NOTE
3     MARKETABLE
SECURITIES





In most
of the revenue contracts, the Company receives securities of client companies as
payment in full for services rendered. The number of shares the Company receives
is based on contracts and the value is determined based on the market price at
the time of signing the agreement. The Company’s securities are classified as
available-for-sale and, as such, are carried at fair value. The securities
comprised of shares of common stock of third party customers and securities
purchased. Securities classified as available-for-sale may be sold in response
to changes in interest rates, liquidity needs, and for other purposes. The
Company does not currently have any held-to-maturity or trading
securities.





Unrealized
holding gains and losses for available-for-sale securities are excluded from
earnings and reported as a separate component of stockholder’s equity. Realized
gains and losses for securities classified as available-for-sale are reported in
earnings based upon the adjusted cost of the specific security
sold.





The
Company sold marketable securities during the three months and six months ended
February 29, 2008 and recorded a realized loss of $323,920 and $325,645 compared
to a realized loss of $33,935 and $98,616 during the same periods ended as of
February 28, 2007.





It is the Company’s policy to assess its marketable securities for
impairment on a quarterly basis, or more frequently if warranted by
circumstances. The Company recognized an impairment expense on the marketable
securities of $1,469,547 and $2,331,450 during the three months and six months
periods ended February 29, 2008 compared to $1,821,801 and $2,924,821 during the
same periods ended February 28, 2007, respectively.


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 FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)







Marketable
securities classified as available for sale consisted of the following as of
February 29, 2008:





Equity
      Securities Name and Symbol
            
            Number
      of
              Shares
      Held
            
            Cost
            
            Market
      Value
            
            Accumulated
      Unrealized Gain
            
            Accumulated
      Unrealized Loss
            
            Traded
      onPink
      Sheets (PK) orBulletin
      Board (BB)Axial
      Vector Engine (AXVC)
            
            
            410,958
            
            
            287,671
            
            
            207,534
            
            
            -
            
            
            (80,137
            )
            PKCanAm
      Uranium Corp. (CAUI)
            
            
            1,180,000
            
            
            70,800
            
            
            70,800
            
            
            -
            
            
            -
            
            BBCEO
      America Inc. (CEOA)
            
            
            1,000,000
            
            
            9,000
            
            
            60,000
            
            
            51,000
            
            
            -
            
            PKData
      Call Technologies (DCLT)
            
            
            800,000
            
            
            80,000
            
            
            56,000
            
            
            -
            
            
            (24,000
            )
            BBExobox
      Technology (EXBX)
            
            
            2,500,000
            
            
            225,000
            
            
            700,000
            
            
            475,000
            
            
            -
            
            PKeWorld
      Companies Inc (EWRL)
            
            
            36,667
            
            
            58,000
            
            
            286,000
            
            
            228,000
            
            
            -
            
            PKGenco
      Corporation (GNCC)
            
            
            294,118
            
            
            147,059
            
            
            147,059
            
            
            -
            
            
            -
            
            PKiFinix
      Corporation (INIX)
            
            
            2,500,000
            
            
            55,000
            
            
            55,000
            
            
            -
            
            
            -
            
            PKIngen
      Technology (IGTG)
            
            
            12,500,000
            
            
            125,000
            
            
            187,500
            
            
            62,500
            
            
            -
            
            PKISE
      Blu Equity Corp. (ISBL)
            
            
            30,000,000
            
            
            96,000
            
            
            87,000
            
            
            -
            
            
            (9,000
            )
            PKNutripure
      Beverages (NUBV)
            
            
            250,033,333
            
            
            10
            
            
            50,007
            
            
            40,007
            
            
            -
            
            PKMagplane
      Technology, Inc. (MAGP)
            
            
            3,000,000
            
            
            60,000
            
            
            174,000
            
            
            114,000
            
            
            -
            
            BBMyStarU.Com
      Inc. (MYST)
            
            
            526,316
            
            
            138,947
            
            
            110,526
            
            
            -
            
            
            (28,421
            )
            BBNew
      Medium Enterprises (NMEN)
            
            
            1,500,000
            
            
            94,500
            
            
            94,500
            
            
            -
            
            
            -
            
            BBOrganic
      Recycling Technologies (ORCY)
            
            
            1,396,000
            
            
            502,000
            
            
            1,005,120
            
            
            553,120
            
            
            -
            
            BBPSM
      Holdings Inc. (PSMH)
            
            
            157,895
            
            
            142,106
            
            
            142,106
            
            
            -
            
            
            -
            
            PKRaven
      Moon Entertainment (RAEM)
            
            
            2,500,624,843
            
            
            250,000
            
            
            250,062
            
            
            62
            
            
            -
            
            BBSteadfast
      Holding (STHG)
            
            
            129,412
            
            
            53,058
            
            
            51,765
            
            
            -
            
            
            (1,293
            )
            PKSunrise
      Consulting Group (SNRS)
            
            
            1,015,000,000
            
            
            210,000
            
            
            710,500
            
            
            500,500
            
            
            -
            
            PKOther
      Securities
            
            
            
            
            
            113,506
            
            
            296,116
            
            
            182,610
            
            
            -
            
            PK/BB$
            2,727,647
            
            $
            4,741,595
            
            $
            2,156,799
            
            $
            (142,851
            )





As of
February 29, 2008, the Company evaluated its marketable securities holdings by
valuing the securities according to the quoted price of the
securities.





NOTE
4    PROPERTY AND
EQUIPMENT





Property
and equipment at February 29, 2008 consist of the following:





Office
      and computer equipment
            
            $
            186,699Less
      accumulated depreciation:
            
            
            (83,247
            )$
            104,452





Depreciation
expense for the three months and six months periods ended February 29, 2008 was
$13,298 and $23,914 compared to $8,957 and $17,783 for the same periods ended
February 28, 2007, respectively.


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 FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)





NOTE
5     OTHER
ASSETS





Other
assets as of February 29, 2008 comprise of the following:





Other
      Current Assets:Receivable
      against marketable securities sold to a third party
            
            $
            87,500Rent
      deposit
            
            
            9,000Prepaid
      expenses
            
            
            243Employee
      advances
            
            
            1,600$
            98,343Other
      Assets:Rent
      deposit
            
            $
            28,521$
            28,521





NOTE
6    DEFERRED
REVENUES





The
Company receives marketable securities and cash for services to be provided in
future periods. The Company recognizes revenue on a pro-rata basis over the term
of the agreement. The Company recorded $1,996,465 in deferred revenues at
February 29, 2008 which will be recognized over the next six (6) to twelve (12)
months.




NOTE
7    ACCRUED
EXPENSES





Accrued
expenses consist of the following at February 29, 2008:





Accrued
      consulting fees
            
            $
            623,520Accrued
      interest
            
            
            31,957Accrued
      salaries and payroll taxes
            
            
            621,657$
            1,277,134





NOTE
8    DUE TO
OFFICERS





Due to
officers consist of the following at February 29, 2008:





Accrued
      officer’s compensation
            
            $
            448,398Accrued
      consulting fees
            
            
            30,149Accrued
      interest
            
            
            248,373$
            726,920





The
Company recorded an expense of $184,375 and $184,375 for the six months ended
February 29, 2008 and 2007 for compensation and benefits provided to the Chief
Executive Officer of the Company.





NOTE
9    NOTE
PAYABLE





In August
2004, the Company executed a promissory note of $100,000 from a third party,
unsecured, interest at 9% per annum and due on demand. The Company recorded an
interest expense of $2,250 and $4,500 in the accompanying financial statements
for the three months and six months periods ended February 29, 2008 and 2007,
respectively.




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 FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)







NOTE
10    RELATED PARTY
TRANSACTIONS





In
September 2005, the Company executed a promissory note of $7,500 with an
officer, unsecured, interest at 8% per annum and due on demand. The Company paid
$9,600 to settle the payment of the promissory note in full, including accrued
interest of $2,100 as of February 29, 2008.





On
January 15, 2005, the Company acquired 100% of the assets and outstanding shares
of Digital WallStreet, Inc. which is 100% owned by the majority shareholder
(86%) of the Company in exchange for two $1,500,000 promissory notes, carrying
interest at 6% per annum, notes are due and payable on January 31, 2010. As this
merger is between entities under the common control, the issuance of the two
$1,500,000 promissory notes to the majority shareholder has been recorded as a
distribution to the majority shareholder. On January 4, 2008, the Company issued
to the officer 15,000,000 shares of its common stock in exchange for settlement
of the two promissory notes of $1,500,000 each, due on January 31,
2010.





The
Company recorded an interest expense of $17,085 and $62,235 on the above notes
to the officers for the three months and six months ended February 29, 2008
compared to $45,150 and $90,300 for the same periods ended as of February 28,
2007, respectively.





NOTE
11     EQUITY
TRANSACTIONS





Common
Stock





The
Company initiated a private placement on September 1, 2006, offering 335 units
to accredited investors through its placement agent, Westcap Securities, Inc., a
NASD member. The minimum subscription was $15,000 for each unit. Each unit
consisted of 10,000 shares of Common Stock, par value $0.001 per share, 5,000
redeemable Class A1 Warrant and 5,000 redeemable Class A2 Warrant of the
Company's common stock. Class A1 and A2 Warrants entitles the registered
holder thereof to purchase, at any time until the September 1, 2007 and
September 1, 2008 respectively, shares of Common Stock at an exercise price of
$2.50 and $3.50, respectively, subject to adjustment. The Class A1 and A2
Warrants are redeemable by the Company, at a redemption price of $0.05 per
share, upon at least 30 days’ prior written notice, commencing on the completion
of an effective Registration Statement of the said securities or after September
1, 2007, whichever is earlier, if the average of the closing bid price of the
common stock, for 20 consecutive business days exceeds $3.50 per share for the
Class A1Warrants, and $4.50 per share for the Class A2 Warrants. The exercise
prices and the number of shares issuable upon the exercise of Warrants are
subject to adjustment in certain circumstances.  The Company closed
the private placement on February 23, 2007. During the year ended August 31,
2007, the Company received a cash consideration of $648,500 from the sale of
432,333 shares of Common Stock under this private placement. Class A1 Warrants
expired on August 31, 2007 and Class A2 Warrants expire on August 31, 2008,
respectively. Class A2 warrant holders did not exercise any warrants during the
six months period ended February 29, 2008.





Through a
private placement memorandum of My WallStreet dated March 20, 2007, MyWallStreet
offered to sell to accredited investors 6,400,000 units at $0.25 per unit, with
each unit consisting of one share of Common Stock, par value $0.001 per share
and a redeemable Class A Warrant of My WallStreet, Inc. Each Class A Warrant
entitles the registered holder to purchase, at any time until the second
anniversary of the date of this memorandum, one share of Common Stock at an
exercise price of $0.25. As of February 29, 2008, the Company received $50,000
under this private placement and has not issued the 200,000 shares of Common
Stock of My WallStreet, Inc. Class A warrant holders did not exercise their
warrants as of February 29, 2008.





On June
28, 2007, the Company entered into a Stock Purchase Agreement with an investor
for private placement of shares under Regulation S as promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
As of February 29, 2008, the Company sold 9,715,238 shares of its common stock
under Regulation S to the investors and received cash proceeds of $1,102,137
which amounted to approximately 35% of the total proceeds from such sale of its
shares. These shares were sold at a price equal to the previous day's last bid
price as traded on the Over the Counter Bulletin Board Exchange.





The
Company has not issued 196,764 of such shares of its common stock to the
investors as of February 29, 2008. The Company has recorded $14,957 of the cash
proceeds received for such shares as shares to be issued as a current liability
in its financial statements as of February 29, 2008.





On June
29, 2007, the Company entered into a Regulation S Distribution Agreement to sell
up to $3,000,000 worth of common shares through private placement of shares
under Regulation S as promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended. The term of the Distribution
Agreement expired on November 29, 2007. As of February 29, 2008, the Company has
issued 906,080 shares of its common stock under Regulation S to the investors
and received cash proceeds of $141,320 which amounted to approximately 33.5% of
the total proceeds from the sale of its shares. These shares were sold at a
price equal to the previous day's last bid price as traded on the Over the
Counter Bulletin Board Exchange.


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 FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)





Outstanding
Warrants:





Following
is a summary of the various classes of warrants outstanding at February 29,
2008:





Description
      of Warrants
            
            Exercise
      Price
            
            Expiration
      Date
            
            Warrants
      Outstanding at August 31, 2007
            
            
            Warrants
      Issued during the period
            
            
            Warrants
      Exercised during the period
            
            
            Warrants
      Expired during the period
            
            
            Warrants
      Outstanding at February 29, 2008Class
      D Warrant
            
            $
            2.25
            
            Jan
      25, 2008
            
            
            165,000
            
            
            
            -
            
            
            
            -
            
            
            
            (165,000
            )
            
            
            -Class
      E Warrant
            
            $
            3.75
            
            Jan
      25, 2009
            
            
            165,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            165,000Class
      A2 Warrant
            
            $
            3.50
            
            Sep
      1, 2008
            
            
            244,667
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            244,667Class
      A - MWS
            
            $
            1.00
            
            Mar
      20, 2009
            
            
            200,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            200,000774,667
            
            
            
            -
            
            
            
            -
            
            
            
            (165,000
            )
            
            
            609,667





The
number and weighted average exercise prices of warrants granted by the Company
as of February 29, 2008 are as follows:





Number
      of Warrants
            
            
            Weighted
              Average Exercise
    Price
            
            
            Aggregate
              Intrinsic ValueOutstanding
      August 31, 2007
            
            
            774,667
            
            
            $
            2.64
            
            
            $
            -Issued
      during the period
            
            
            -
            
            
            
            -Expired
            
            
            (165,000
            )
            
            
            -Exercised
            
            
            -
            
            
            
            -Outstanding
      February 29, 2008
            
            
            609,667
            
            
            $
            2.75
            
            
            $
            -





Following
is a summary of the status of warrants outstanding at February 29,
2008:





Range
      of Exercise Prices
            
            
            Total
      Warrants Outstanding
            
            
            Weighted
      Average Remaining Life (Years)
            
            
            Weighted
      Average Exercise Price
            
            
            Warrants
              Exercisable
            
            
            Weighted
      Average Exercise Price of Exercisable Warrants$1.00
      - $3.75
            
            
            
            609,667
            
            
            
            0.79
            
            
            $
            2.75
            
            
            
            609,667
            
            
            $
            2.75609,667
            
            
            
            0.79
            
            
            $
            2.75
            
            
            
            609,,667
            
            
            $
            2.75





Outstanding Stock
Options:





2007 Non-Qualified Stock
Option Plan (“Non-Qualified Plan”):


On
January 5, 2007, the Company adopted the Non-Qualified Plan and reserved a
maximum of 3,000,000 shares of common stock as Options to grant to employees,
non-employee directors, consultants and advisors. The stock subject to Options
granted under the Non-Qualified Plan shall be shares of the Company’s Common
Stock, par value $0.001 per share. The Non-Qualified Plan shall terminate within
ten (10) years from the date of adoption by the Board of Directors or sooner,
and no Options shall be granted after termination of the plan. The Options have
been granted to certain employees and consultants to purchase Common Shares at
prices equal to fair market value on the date of grant.





The
number and weighted average exercise prices of options granted by the Company as
of February 29, 2008 are as follows:





Options
              Outstanding
            
            Weighted
      Average Exercise Price
            
            Aggregate
              Intrinsic
      ValueOutstanding
      August 31, 2007
            
            750,000
            
            $
            1.05
            
            $
            -Granted
            
            600,000
            
            
            0.30
            
            
            -Exercised
            
            -
            
            
            -
            
            
            -Expired/forfeited
            
            (750,000)
            
            
            (1.05)
            
            
            -Outstanding
      February 29, 2008
            
            600,000
            
            $
            0.30
            
            $
            -




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 FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)





Following
is a summary of the status of stock options outstanding at February 29,
2008:





Range
      of
              Exercise
      Prices
            
            Total
      Options Outstanding
            
            Weighted
      Average Remaining Life (Years)
            
            Total
      Weighted Average Exercise Price
            
            Options
              Exercisable
            
            Weighted Average
              Exercise
      Price$0.01
      - $0.30
            
            
            600,000
            
            
            9.81
            
            $
            0.30
            
            
            39,247
            
            $
            0.30600,000
            
            
            9.81
            
            $
            0.30
            
            
            39,247
            
            $
            0.30





The
Company issued 600,000 options to an officer and a consultant at the exercise
prices of $0.30 with the fair value of the options valued at $147,297 calculated
using the Black-Scholes option pricing model using the assumptions of risk free
interest rate of 3.50%, volatility of 148%, ten (10) years term, and dividend
yield of 0%.





2007 Incentive Stock Option
Plan (“Incentive Plan”):


On
January 5, 2007, the Company adopted the Incentive Plan and reserved a maximum
of 3,000,000 shares of common stock as Options to grant to employees, directors
and consultants. The stock subject to Options granted under the Incentive Plan
shall be the Common Shares of the Company’s common stock, par value $0.001 per
share. Only employees of the Company shall be eligible to receive an Incentive
Stock Option. The Incentive Plan shall become effective and shall remain in
effect until all Common Shares subject to the Incentive Plan have been purchased
or acquired according to the terms of the Incentive Plan or the Incentive Plan
is terminated by the Board or January 4, 2017, whichever is earlier. No stock
Options shall be granted after termination of the plan. The Options have been
granted to certain employees to purchase Common Shares at prices equal to fair
market value on the date of grant.





The
number and weighted average exercise prices of stock Options granted by the
Company are as follows:





Options Outstanding
            
            
            Weighted
      Average Exercise Price
            
            
            Aggregate
              Intrinsic
      ValueOutstanding
      August 31, 2007
            
            
            -
            
            
            $
            -
            
            
            $
            -Granted
            
            
            2,990,000
            
            
            
            0.30
            
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            
            -Expired/forfeited
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding
      February 29, 2008
            
            
            2,990,000
            
            
            $
            0.30
            
            
            $
            -





Following
is a summary of the status of stock Options outstanding at February 29,
2008:





Range of Exercise
      Prices
            
            Total
      Options
              Outstanding
            
            Weighted
      Average Remaining Life (Years)
            
            Total
      Weighted Average Exercise Price
            
            Options
              Exercisable
            
            Weighted
      Average
              Exercise
      Price$0.01
      - $0.30
            
            
            2,990,000
            
            
            9.81
            
            $
            0.30
            
            
            195,582
            
            $
            0.302,990,000
            
            
            9.81
            
            $
            0.30
            
            
            195,582
            
            $
            0.30





The
Company issued 2,990,000 stock options to employees at the exercise prices of
$0.30 with the fair value of the options of $734,029 calculated using the
Black-Scholes option pricing model using the assumptions of risk free interest
rate of 3.5%, volatility of 148%, ten (10) years term, and dividend yield of
0%.




The stock
option expense under both stock option plans for the six months periods ended
February 29, 2008 and February 28, 2007 was $50,917 and $0,
respectively.




- 14
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 Table of Contents
 FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)









NOTE
12    BASIC AND DILUTED NET LOSS
PER SHARE





Net loss
per share is calculated in accordance with the Statement of financial accounting
standards No. 128 (SFAS No. 128), “Earnings per share.” SFAS No. 128 superseded
Accounting Principles Board Opinion No.15 (APB 15). Net loss per share for all
periods presented has been restated to reflect the adoption of SFAS No. 128.
Basic net loss per share is based upon the weighted average number of common
shares outstanding. Diluted net loss per share is based on the assumption that
all dilutive convertible shares and stock options and warrants were converted or
exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.





Weighted
average number of shares used to compute basic and diluted loss per share is the
same since the effect of dilutive securities is anti-dilutive. The following
potential common shares have been excluded from the computation of diluted net
loss per share for the six months period ended February 29, 2008 and 2007,
respectively.





Six
      months endedFebruary
      29, 2008
            
            
            February
      28, 2007Stock
      options issued to employees
            
            
            3,490,000
            
            
            
            500,000Stock
      options issued to consultants
            
            
            100,000
            
            
            
            -Warrants
      granted for financing
            
            
            609,667
            
            
            
            3,505,1714,199,667
            
            
            
            4,005,171





NOTE
13    SUPPLEMENTAL DISCLOSURES OF
CASH FLOWS





The
Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95. The Company paid $2,100
for interest for the six months periods ended February 29, 2008 compared to $0
for the same periods ended February 28, 2007. The Company paid $4,800 for income
taxes for the six months periods ended February 29, 2008 compared to $0 for the
same periods ended February 28, 2007.  During the six months period
ended February 29, 2008, the Company issued 15,000,000 shares of common stock
with fair value of $3 million to settle notes payable to an officer of
$3,000,000.





NOTE
14    COMMITMENTS





Operating
Lease





The
Company leases its corporate office facilities in California from a third party
under an operating lease that terminates on February 28, 2010. The office
facility in New York is leased on a month-to-month basis starting June 1, 2007.
Rent expense under the operating lease for the three months and six months ended
February 29, 2008 was $115,104 and $237,209 compared to $82,075 and $166,315 for
the same periods ended February 28, 2007, respectively. The Company has future
minimum lease obligations as follows:





Twelve
      months ending February 29,
            
            Amount2009
            
            $
            311,3372010
            
            
            318,2562011
            
            
            26,521$
            656,114





Employment
Agreement





On
January 26, 2007, the Company entered into an employment agreement with its
Chief Financial Officer for a three year period, to provide salary, bonuses, and
other fringe benefits. The Company recorded a compensation expense of
$41,250 and $78,750 in general and administrative expenses for the three months
and six months periods ended February 29, 2008 compared to $25,000 and $25,000
for the same periods ended February 28, 2007. The Company has future minimum
salary commitments as follows:





Twelve
      months ending February 29,
            
            Amount2009
            
            $
            176,8132010
            
            
            165,313$
            342,126




- 15
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 Table of Contents
 FINANCIAL
MEDIA GROUP, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FEBRUARY
29, 2008
 (UNAUDITED)




Contingencies





From time
to time, the Company may be involved in various claims, lawsuits, and disputes
with third parties, actions involving allegations of discrimination or breach of
contract actions incidental to the normal operations of the business. Other than
as disclosed herein, the Company is not currently involved in any litigation
which it believes could have a material adverse effect on its financial position
or results of operations.





NOTE 15GOING
CONCERN





The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. This basis of accounting contemplates the recovery
of the Company's assets and the satisfaction of its liabilities in the normal
course of business. The Company had an accumulated deficit of $11,369,776
as of February 29, 2008 and has incurred net loss of $1,697,699 for the six
months ended February 29, 2008. In view of the matters described in the
preceding paragraph, recoverability of a major portion of the recorded asset
amounts shown in the accompanying balance sheet is dependent upon continued
operations of the Company, which in turn is dependent upon the Company's ability
to raise additional capital, obtain financing and to succeed in its future
operations. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.





Management
has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. Management devoted considerable effort
during the period ended February 29, 2008 towards (i) obtaining additional
equity financing, (ii) evaluation of its distribution and marketing methods, and
(iii) further streamlining and reducing costs.





NOTE
16    SUBSEQUENT
EVENTS





As of
April 12, 2008, the Company received a cash consideration of $209,637 from sale
of 2,318,725 shares of common stock under the June 28, 2007 private placement of
shares under Regulation S as promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended. The Company has not
issued 666,418 shares of common stock as of April 12, 2008.







- 16
-
 Table of Contents




Item
2. Management’s Discussion and Analysis of Financial Condition





Description
of Business





Financial
Media Group, Inc. is a full service financial media company focused on
applications that enables the retail investment and financial communities to
collaborate directly with publicly traded companies. The Company provides
Internet based media and advertising services through its financial website and
the Company’s newspaper “WallSt.net Digest.” The Company provides full array of
customized investor awareness programs such as audio and video of senior
management interviews; press releases; newsletter and editorials; small cap
conferences and seminars; email mailings and forums.





WallStreet
Direct, Inc. (“WallStreet”), a wholly-owned subsidiary of Financial Media Group,
Inc. (the “Company”), was incorporated in the State of Nevada on January 5, 2005
as a financial holding company specializing in a premier provider of financial
news, tools and content for the global investment community. On January 15,
2005, WallStreet acquired 100% of the assets and outstanding shares of Digital
WallStreet, Inc. in exchange for two promissory notes of $1,500,000 each,
carrying interest at 6% per annum, due and payable on January 31, 2007 and
January 31, 2010. On January 4, 2008, the Company agreed to issue to the
majority shareholder 15,000,000 shares of its common stock in exchange for
cancellation of two promissory notes of $1,500,000 each, due on January 31,
2010. As this merger is between entities under the common control, the issuance
of the promissory notes to the majority shareholder had been recorded as a
distribution to the majority shareholder. The merger has been accounted for on
historical cost basis.





Digital
WallStreet, Inc. was incorporated in Nevada on June 12, 2002 and commenced its
operations during the first quarter of 2003. The company is a full service
financial media company focused on applications that enables the retail
investors and financial communities to collaborate directly with publicly traded
companies. The company provides internet based media and advertising services
through its financial website “Wallst.net” and the company’s business newspaper
“WallSt.net Digest.”





On
January 6, 2006, Financial Media Group, Inc. acquired 100% of the equity in
WallStreet pursuant to an Agreement and Plan of Reorganization dated September
19, 2005 by and between WallStreet and the Company. Financial Media Group, Inc.,
formerly known as Giant Jr. Investments Corp. was incorporated in Nevada in 1984
as Southern Development Company, Inc. Pursuant to the acquisition of WallStreet,
WallStreet became the wholly owned subsidiary of Financial Media Group, Inc. and
both entities continued as the surviving companies. The former shareholders of
WallStreet received 19,998,707 shares or 82% of the issued and outstanding
shares of the Company’s common stock in exchange for all the issued and
outstanding shares of WallStreet.





The
acquisition of WallStreet is accounted for as a reverse acquisition under the
purchase method of accounting since the shareholders of WallStreet obtained
control of the consolidated entity. Accordingly, the merger of the two companies
is recorded as a recapitalization of WallStreet, with WallStreet being treated
as the continuing operating entity. The historical financial statements
presented herein will be those of WallStreet. The continuing entity retained
August 31 as its fiscal year end.





On
February 10, 2006, Financial Media Group, Inc. established a 100% wholly owned
subsidiary Financial Filings Corp. This business unit focuses on providing
Edgarization and newswire services to small and mid-sized public companies.
These compliance services provide formatting of pertinent SEC filings and
distribution of news in more than 30 languages to media outlets in more than 135
countries.





On June
13, 2006, Financial Media Group, Inc. established another wholly owned
subsidiary MyWallStreet, Inc. MyWallst.net is presently in the development stage
and will offer a social networking platform that allows members to collaborate
with one another, build personalized WebPages, exchange ideas, access premium
content, and build social networks comprised of other members, targeted to the
financial community.





On
January 30, 2007, Financial Media Group, Inc. completed the acquisition of the
brand “Wealth Expo” from a third party for a consideration valued at $139,000.
The acquisition included rights to the web site and series of investor
expositions which are designed to provide information on investing techniques
and tools to investors, through workshops and exhibits throughout the United
States. Wealth Expo has provided a broad range of information to thousands of
individual investors on various types of investments, trading, portfolio
management, retirement planning and personal finance.





Corporate
History





The
Company was incorporated in Nevada in 1984 as Southern Development Company, Inc.
("SDC"). In December 1994, SDC merged with Integrated Communications Access
Network, Inc. ("ICAN"). In March 1996, the Company was renamed SDC, and in
September 1998, the Company changed its name to EssxSport Corp. At that time,
the Company had no assets and no liabilities. From September 1998 until August
31, 2004, the Company was primarily engaged in the manufacture and distribution
of athletic equipment, primarily for pole vaulting and other track and field
activities. The Company sold, transferred and delivered all of its assets
relating to its pole vault and sports business to its former President and
director. The assets sold included names, logos, trademarks, and endorsements
relating to name "EssxSport," all the equipment, tools, inventory at the Texas
location and 100% ownership stock certificates for Eonlinesports.com,
Inc.





On May
20, 2004, the Company's shareholders approved amending the Articles of
Incorporation to change name to "Giant Jr. Investments Corp."





On June
30, 2004, the Company filed with the Securities and Exchange Commission ("SEC")
to become a Business Development Company (BDC) under the 1940 Act and on
September 1, 2004 it began its BDC operations.





- 17
-
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On April
11, 2005, the Company entered into a share exchange agreement, to acquire 16
million shares of WallStreet representing approximately 40% of the issued and
outstanding common shares of WallStreet, in exchange for 7 million common shares
of the Company. On May 25, 2005, the Company and WallStreet mutually agreed to
terminate the agreement citing the timing of merger was not right for both the
companies.





On June
1, 2005, the Company’s Board of Directors and the shareholders owning
approximately 52% of the Company’s common stock consented in writing and
terminated the Company’s status as a Business Development Company. After the
termination, the Company is governed by the rules and regulations promulgated
under the Securities Act of 1933 and the Securities and Exchange Act of
1934.





On
September 19, 2005, the Company entered into an Agreement and Plan of
Reorganization, as amended on September 21, 2005 (the “Agreement”), pursuant to
which the Company agreed to acquire all of the issued and outstanding common
stock of WallStreet in exchange for up to 20,000,000 shares of the Company’s
common stock.





On
January 6, 2006, the acquisition of WallStreet transaction was completed and
WallStreet became a wholly-owned subsidiary of the Company. The current Company
shareholders owned 4,394,530 shares or 18% of the issued and outstanding shares
of the Company’s common stock, and the former shareholders of WallStreet owned
19,998,707 shares or 82% of the issued and outstanding shares of the Company’s
common stock.





Plan
of Operations





Since the
termination of its BDC status in June 2005, the Company's objective has been to
acquire business entities that will have experienced management and
opportunities for growth in exchange for its securities. The Company completed
its acquisition of WallStreet in January 2006 and WallStreet became a
wholly-owned subsidiary of the Company.





The
Company’s current operations consist of the operations of WallStreet, a
financial media and advertising company that provides various financial Internet
solutions, tools, content and services to individual investors, media,
corporate, and financial services companies, Financial Filings Corp., a news
distribution and financial documents preparer and filing entity, and Wealth
Expo, an entity holding investors conference and exhibits
across  North America.





Advertising
on WallSt.net consists of continuous or rotating client profiles on various Web
pages within WallSt.net. Delivery of these profiles is based on a certain number
of impressions on WallSt.net depending on our client agreements. An impression
is defined as a single instance of an advertisement being displayed. WallStreet
also provides E-mail services to its clients, which are mailings sent to a
targeted list of e-mail addresses, with delivery consisting solely of
transmitting the mailing to the e-mail targets. E-mail services may be purchased
on a per-transmittal basis, for which revenue is recorded when the transmittal
occurs, or on a fixed-fee basis in which the client receives access to a fixed
number of transmittals per-month. The Company records the revenue on the
fixed-fee basis pro rated over the term of the client agreement.





The
Company’s primary source of revenue is generated by its wholly owned subsidiary
WallStreet Direct, Inc. which provides Internet based media and advertising
services and a full array of customized investor awareness programs to small and
medium sized companies through its financial websites www.wallst.net and
www.mywallst.net. The
services include audio and video production of senior management interviews,
newsletters and editorials, small cap companies’ conferences and seminars,
e-mail mailings and forums, media and advertising. These services are provided
by the Company’s subsidiaries WallStreet Direct, Inc. and Digital WallStreet,
Inc.





The
Company provides news wire and compliance services to small and medium size
publicly traded companies including preparation of registration statements,
electronic filings and reporting of SEC documents (EDGAR), preparation of proxy
materials and news distribution. Such services are provided by the Company’s
subsidiary Financial Filings Corp. Revenues are recognized and recorded when the
Company executes a contractual agreement with the client for a fixed fee,
delivery of the services has occurred and collectibility of the fees is
reasonably assured. The Company recorded revenues of $149,135 or 3.6% of its
total revenues from the services provided by Financial Filing Corp. for the six
months ended February 29, 2008.





The
Company provides a broad range of information on investing techniques and
education tools to investors through workshops and exhibits. The Company’s
subsidiary Wealth Expo provides revenue streams for the Company through
exhibition sales, speaking presentation sales, collateral material sales and
advertising sales. Revenues from Wealth Expo services is recognized and recorded
when the Company executes a contractual agreement with the client for a fixed
fee for such services performed, delivery of such services has occurred, and
collectibility of the fees is reasonably assured.





Results
of Operations





The
consolidated results of operations of the Company for the three months and six
months ended February 29, 2008  consisted of the operations of the
Company, its wholly-owned subsidiary WallStreet Direct, Inc., its wholly-owned
subsidiary Financial Filings Corp., its wholly-owned subsidiary My WallStreet,
Inc. and its wholly-owned subsidiary Wealth Expo Inc., compared to the
consolidated results of operations of the Company, its wholly-owned subsidiary
WallStreet Direct, Inc., its wholly-owned subsidiary Financial Filings Corp.,
and its wholly-owned subsidiary My WallStreet, Inc. for the same periods in
2007. The acquisition of WallStreet is accounted for as a reverse acquisition
under the purchase method of accounting since the shareholders of WallStreet
obtained control of the consolidated entity. Accordingly, the merger of the two
companies is recorded as a recapitalization of WallStreet, with WallStreet being
treated as the continuing entity. The historical financial statements to be
presented will be those of WallStreet.





The
Company reported net losses of $1,066,379 and $1,697,699 for the three months
and six months ended February 29, 2008 compared to net losses of $1,791,618 and
$2,663,423 for the same periods in 2007.





- 18
-
 Table of Contents






Revenues





Revenues
for the three months and six months periods ended February 29, 2008 were
$2,168,747 and $4,047,640 compared to $1,527,554 and $3,168,780 for the same
periods in 2007. Revenues increased by $641,193 (42%) and $878,860 (27.7%)
during the three months and six months ended February 29, 2008 when compared to
the same periods in 2007 due to the Company’s expanded effort in marketing its
Internet advertising and media services and gaining new clients.





Operating
Expenses





Selling,
general and administrative expenses (S,G&A) for the three months and six
months ended February 29, 2008 were $1,410,640 and $2,994,270 compared to
$1,406,380 and $2,681,290 for the same period in 2007. S,G&A expenses
increased by $4,260 during the three months ended February 29, 2008 and
increased by $312,980 during the six months ended February 29, 2008 as compared
to the same period in 2007, primarily due to increase in payroll costs of sales
and marketing personnel of new hires, and increase in administrative, sales and
marketing costs due to Company’s opening a new office in New York in March
2007.





Impairment
includes the write down of marketable securities and write-off of advances from
third parties. Impairment for the three months and six months ended February 29,
2008 was $1,469,547 and $2,331,450 compared to $1,821,801 and $2,924,821 for the
same periods in 2007. Impairment expense was recorded because the market value
of certain securities received by the Company as compensation for services
declined more than 50% of their market value. The Company took a conservative
approach of recording the increased impairment expense. The Company recorded an
impairment of $25,000 in write-off of loans advanced to third parties during the
three months and six months ended February 29, 2008. No such loans were impaired
during the comparable periods in 2007. Depreciation expense for the three months
and six months ended February 29, 2008 was $13,298 and $23,914 compared to
$8,957 and $17,783 for the same periods in 2007.





Interest
expense for the three months and six months ended February 29, 2008 was $17,720
and $65,260 compared to $48,106 and $97,176 for the same periods in 2007.
Interest expense decreased during the three months and six months period ended
February 29, 2008 as compared to the same periods in 2007 due to the conversion
of the $3.0 million promissory notes to equity on January 4, 2008. Realized loss
on sale of marketable securities for the three months and six months ended
February 29, 2008 was $323,920 and $325,645 as compared to $33,935 and $98,616
for the same periods in 2007. The Company sold a significant number of
non-performing marketable securities held in its possession during the three
months ended February 29, 2008 compared to the same periods in 2007 and to
better manage its portfolio as of February 29, 2008. Unrealized gain for the
three months and six months ended February 29, 2008 was $1,630,903 and
$1,567,380 compared to $0 and $106,468 for the same periods in 2007. Unrealized
gain or loss resulted due to the increase or decrease in market value of the
marketable securities held at February 29, 2008 and February 28, 2007,
respectively.




Liquidity
and Capital Resources





Cash and
cash equivalents at February 29, 2008 were $72,934 compared to $172,845 at
February 29, 2007. No assurance can be made that the Company will have access to
the capital markets in future, or that financing will be available on acceptable
terms to satisfy the Company’s cash requirements needed to implement its
business strategies. The Company’s inability to access the capital markets or
obtain acceptable financing could have a material adverse affect on its results
of operations and financial condition, and could severely threaten the Company’s
ability as a going concern.





As shown
in the accompanying consolidated financial statements, the Company recorded a
loss of $1,697,699 for the six months ended February 29, 2008 compared to a loss
of $2,663,423 for the same period in 2007. Although the Company’s current assets
exceeded its current liabilities by $691,525 at February 29, 2008, and net cash
used in operating activities for the six months ended February 29, 2008 was
$2,021,935. These factors and the Company’s ability to meet its debt obligations
from current operations, and the need to raise additional capital to accomplish
its objectives create a substantial doubt about the Company’s ability to
continue as a going concern.





Operating
Activities





Net cash
used in operating activities for the six months ended February 29, 2008 was
$2,021,935. The increase in net cash used in operating activities resulted due
to an increase in receivables of $8,813, increase in other current assets of
$7,932, an increase in accounts payable of $182,751, an increase in accrued
expenses and other liabilities of $201,378, and decrease in deferred revenues of
$179,785.





Investing
Activities





Net cash
provided by investing activities for the six months ended February 29, 2008 was
$767,584. The Company received $817,213 in cash proceeds from sale of marketable
securities. The Company expended cash of $49,629 for purchase of property and
equipment.





Financing
Activities





Net cash
provided by financing activities for the six months ended February 29, 2008 was
$1,155,271 due to cash received from sale of common stock amounting to
$1,147,814, payment of note payable to an officer of $7,500, and cash received
of $14,957 for the common stock to be issued as of February 29,
2008.





As a
result of the above activities, the Company experienced a net decrease in cash
of $99,079 for the six months ended February 29, 2008. The ability of the
Company to continue as a going concern is still dependent on its success in
obtaining additional financing from investors through the sale of its
securities.





- 19
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 Table of Contents






Application
of Critical Accounting Policies and Estimates





Marketable
Securities





The
Company’s investments in securities are classified as available-for-sale and, as
such, are carried at fair value based on quoted market prices. Securities
classified as available-for-sale may be sold in response to changes in interest
rates, liquidity needs, and for other purposes.





Unrealized
holding gains and losses for available-for-sale securities are excluded from
earnings and reported as a separate component of stockholders’ equity. Realized
and unrealized gains and losses for securities classified as available-for-sale
are included in the statement of operations and comprehensive gain,
respectively.





Revenue
Recognition





The
Company generates its revenues from awareness products and advertising
promotions related to marketing public companies and professional investment
concerns. This is facilitated through the Company’s financial website,
investment conferences and printing of publications and newspaper.





Revenues
from Internet based media and advertising services are recognized and recorded
pursuant to the guidelines established under Staff Accounting Bulletin 104 when
the Company executes a contractual agreement with the client for a fixed fee for
services performed, delivery of services has occurred, and collectibility of the
fees is reasonably assured.





Revenues
from news wire and compliance services are recognized and recorded pursuant to
the guidelines established under Staff Accounting Bulletin 104 when the Company
executes a contractual agreement with the client for a fixed fee, delivery of
the services has occurred and collectibility of the fees is reasonably
assured.





Revenue
from exhibition sales and investing tools services is recognized and recorded
pursuant to the guidelines established under Staff Accounting Bulletin 104 when
the Company executes a contractual agreement with the client for a fixed fee for
such services performed, delivery of such services has occurred, and
collectibility of the fees is reasonably assured.





The
Company recognizes revenue for services which is to be provided in future
periods, on a pro-rata basis over the term of the agreement. Payments received
in advance of services provided, are recorded as deferred revenue.





Impact
of Accounting Pronouncements





In
September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The management is currently
evaluating the effect of this pronouncement on financial
statements.





In
September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
employer to recognize the over funded or under funded status of a defined
benefit postretirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income of a business entity or changes in unrestricted net assets of a
not-for-profit organization. This Statement also improves financial reporting by
requiring an employer to measure the funded status of a plan as of the date of
its year-end statement of financial position, with limited exceptions. An
employer with publicly traded equity securities is required to initially
recognize the funded status of a defined benefit postretirement plan and to
provide the required disclosures as of the end of the fiscal year ending after
December 15, 2006. An employer without publicly traded equity securities is
required to recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after June 15, 2007. However, an employer without publicly traded equity
securities is required to disclose the following information in the notes to
financial statements for a fiscal year ending after December 15, 2006, but
before June 16, 2007, unless it has applied the recognition provisions of this
Statement in preparing those financial statements:





a)
            A
      brief description of the provisions of this Statementb)
            The
      date that adoption is requiredc)
            The
      date the employer plans to adopt the recognition provisions of this
      Statement, if earlier.





The
requirement to measure plan assets and benefit obligations as of the date of the
employer’s fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. The management is currently
evaluating the effect of this pronouncement on financial
statements.





In
February 2007, FASB issued FASB Statement No. 159 “The Fair Value Option for
Financial Assets and Financial Liabilities”. FASB 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption is permitted subject to
specific requirements outlined in the new Statement. Therefore, calendar-year
companies may be able to adopt FASB 159 for their first quarter 2007 financial
statements.





- 20
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The new
Statement allows entities to choose, at specified election dates, to measure
eligible financial assets and liabilities at fair value that are not otherwise
required to be measured at fair value. If a company elects the fair value option
for an eligible item, changes in that item's fair value in subsequent reporting
periods must be recognized in current earnings. FASB 159 also establishes
presentation and disclosure requirements designed to draw comparison between
entities that elect different measurement attributes for similar assets and
liabilities.





In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to establish
accounting and reporting standards for the non-controlling (minority) interest
in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
non-controlling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the Company’s fiscal year
beginning October 1, 2009. Management is currently evaluating the effect of this
pronouncement on financial statements.





In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This
Statement replaces SFAS No. 141, Business Combinations. This Statement retains
the fundamental requirements in Statement 141 that the acquisition method of
accounting (which Statement 141 called the purchase method) be used for all
business combinations and for an acquirer to be identified for each business
combination. This Statement also establishes principles and requirements for how
the acquirer: a) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree; b) recognizes and measures the goodwill acquired in
the business combination or a gain from a bargain purchase and c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141(R) will apply prospectively to business combinations for which the
acquisition date is on or after Company’s fiscal year beginning October 1, 2009.
While the Company has not yet evaluated this statement for the impact, if any,
that SFAS No. 141(R) will have on its consolidated financial statements, the
Company will be required to expense costs related to any acquisitions after
September 30, 2009.





FASB
Staff Position on FAS No. 115-1 and FAS No. 124-1 (“the FSP”), “The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments,” was
issued in November 2005 and addresses the determination of when an investment is
considered impaired, whether the impairment on an investment is
other-than-temporary and how to measure an impairment loss. The FSP also
addresses accounting considerations subsequent to the recognition of
other-than-temporary impairments on a debt security, and requires certain
disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. The FSP replaces the impairment guidance on
Emerging Issues Task Force (EITF) Issue No. 03-1 with references to
existing authoritative literature concerning other-than-temporary
determinations. Under the FSP, losses arising from impairment deemed to be
other-than-temporary, must be recognized in earnings at an amount equal to the
entire difference between the securities cost and its fair value at the
financial statement date, without considering partial recoveries subsequent to
that date. The FSP also required that an investor recognize other-than-temporary
impairment losses when a decision to sell a security has been made and the
investor does not expect the fair value of the security to fully recover prior
to the expected time of sale. The FSP is effective for reporting periods
beginning after December 15, 2005. The adoption of this statement will not have
a material impact on our consolidated financial statements.





Caution
Regarding Forward-Looking Statements





The
Company occasionally makes forward-looking statements concerning its plans,
goals, product and service offerings, and anticipated financial performance.
These forward-looking statements may generally be identified by introductions
such as "outlook" for an upcoming period of time, or words and phrases such as
"should," "expect," "hope," "plans," "projected," "believes," "forward-looking"
(or variants of those words and phrases) or similar language indicating the
expression of an opinion or view concerning the future.





These
forward-looking statements are subject to risks and uncertainties based on a
number of factors and actual results or events may differ materially from those
anticipated by such forward-looking statements. These factors include, but are
not limited to: the growth rate of the Company's revenue and market share; the
consummation of new, and the non-termination of, existing contracts; new
competitors entering the Company's business, the Company's ability to
effectively manage its business functions while growing its business in a
rapidly changing environment; the Company's ability to adapt and expand its
services in such an environment; the Company's ability to successfully refinance
or extend its line of credit or obtain alternative sources of financing; the
effective and efficient management of the Company's inventory levels and
processing of sales orders; the quality of the Company's plans and strategies;
and the Company's ability to execute such plans and strategies.





In
addition, forward-looking statements concerning the Company's expected revenue
or earnings levels are subject to many additional uncertainties applicable to
competitors generally and to general economic conditions over which the Company
has no control. The Company does not plan to generally publicly update prior
forward-looking statements for unanticipated events or otherwise and,
accordingly, prior forward-looking statements should not be considered to be
"fresh" simply because the Company has not made additional comments on those
forward-looking statements.





Item
3. Controls and Procedures





Evaluation
of disclosure controls and procedures: The Company maintains controls and
procedures designed to ensure that information required to be disclosed in this
report is recorded, processed, accumulated and communicated to our management,
including our chief executive officer and principal accounting officer, to allow
timely decisions regarding the required disclosure. Within the 90 days prior to
the filing date of this report, our management, with the participation of our
chief executive officer and principal accounting officer, carried out an
evaluation of the effectiveness of the design and operation of these disclosure
controls and procedures. Our chief executive officer and principal accounting
officer concluded, as of fifteen days prior to the filing date of this report,
that these disclosure controls and procedures are effective.





Changes
in internal controls: Subsequent to the date of the above evaluation, the
Company made no significant changes in its internal controls or in other factors
that could significantly affect these controls, nor did it take any corrective
action, as the evaluation revealed no significant deficiencies or material
weaknesses.





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PART
II - OTHER INFORMATION





Item 1. Legal Proceedings





None.





Item 2. Changes in Securities





During
the three months ended February 29, 2008, the Company sold 4,783,713 shares of
restricted common stock to investors pursuant to an exemption from registration
under Regulation S. The shares were sold to investors at a price ranging from
$0.16 to $0.47 per share for total proceeds of $507,553 after issuing
expenses. The Company issued 15,000,000 shares of its common stock to AMC
Capital Group, Inc., a corporation which the Chief Executive Officer of the
Company is a principal shareholder, officer and director, in exchange of
settlement of $3,000,000 debt owed to the Chief Executive Officer of the
Company.





Item 3. Defaults Upon Senior
Securities





None.





Item 4. Submission of Matters to a Vote of
Securities Holders





None.





Item 5. Other Information





None.





Item 6. Exhibits and Reports on Form
8-K





a)
            Form
      8-K -- Filed on January 8, 2008 – SEC Film No. 08518562, Incorporated by
      referenceForm
      8-K -- Filed on January 14, 2008 – SEC Film No. 08528836, Incorporated by
      referenceForm
      8-K -- Filed on January 16, 2008 – SEC Film No. 08534031, Incorporated by
      reference





b)
            Exhibits





Exhibit
      Number
            
            Description31.1
            
            Section
      302 Certification31.2
            
            Section
      302 Certification32.1
            
            Section
      906 Certification








SIGNATURES





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








Dated:
      April 12, 2008
            Financial
      Media Group, Inc.By:
      /s/ Albert AimersAlbert
      AimersChief
      Executive Officer





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