UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





Form 10-KSB





[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2006



[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934





Commission file number: 000-29147





AMERICAN RADIO EMPIRE, INC.

(formerly Stone Field Management Company, Inc.)

(Exact name of small business issuer as specified in its charter)





Wyoming                                                                                                                             86-0970014

(State or other jurisdiction of incorporation or organization)                                                               (IRS Employer Identification No.)



13210 Kerrville Folkway, Building G, Austin, Texas                                             78729

(Address of principal executive offices)                                                      (Zip Code)



Tel: 512-249-9600

(Issuer's telephone number)





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



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  [   ]



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



Issuer's revenues for its most recent fiscal year:  None



The Registrants common stock outstanding as of December 31, 2006, was
49,976
shares.



As of December 31, 2006, there were 49,976 shares of the issuer's common stock issued and outstanding, after taking into account the 104 to 1 reverse stock split that occurred on June 16, 2007. There is only a limited trading market in the shares of the issuer's common stock at the date of the filing of the Form 10-KSB. Affiliates of the Issuer own 48,076 shares of the Issuer's issued and outstanding common stock. 1,900 shares are held by non-affiliates. Affiliates for the purposes of this Annual Report refer to the officers, directors and/or persons or firms owning 5% or more of Issuer's common stock, both of record and beneficially and affiliates thereof.



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TABLE OF CONTENTS



PART I



Item 1. Description of Business

Item 2. Description of Property

Item 3. Legal Proceedings

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



PART II



Item 5. Market for Common Equity and Related Stockholder Matters

Item 6. Management's Discussion and Analysis

Item 7. Financial Statements

Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Item 8A. Controls and Procedures

Item 8B. Other Information



PART III



Item 9. Directors, Executive Officers, Promoters and Control Persons

Item 10. Executive Compensation

Item 11. Security Ownership of Certain Beneficial Owners and Management

Item 12. Certain Relationships and Related Transactions

Item 13. Exhibits and Reports on Form 8-K

Item 14. Principal Accountants Fees and Services



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PART I





ITEM 1.  DESCRIPTION OF BUSINESS



Safe Harbor Statement



This Form 10-KSB contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions that are not statements of historical facts. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. The words "believe," "expect," "anticipate," "intends," "estimates," "forecast," "project" and similar expressions identify forward-looking statements.



The forward-looking statements in this document are based upon various assumptions, many of which are based on management's discussion and analysis or plan of operation and elsewhere in this report. Although we believe that these assumptions were reasonable when made, these statements are not guarantees of future performance and are subject to certain risks and uncertainties, some of which are beyond our control, and are difficult to predict. Actual results could differ materially from those expressed in forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements, which reflect management's view only as of the date of this report. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequence events or circumstances. Readers are also encouraged to review the Company's publicly available filings with the Securities and Exchange Commission.



American Radio Empire, Inc., a Wyoming corporation (the "Company") was  incorporated on June 19, 1997 as Stone Field Management Company, and was formed specifically to be a "clean  public  shell"  and for the  purpose of either  merging  with or acquiring an operating company with operating history and assets.  On  December 15, 2005, the Company entered into a merger agreement with American Radio Empire, Inc., a Nevada corporation.  Pursuant to the terms of the agreement, on December 31, 2005 (the "Closing Date") all of the issued and outstanding shares of ARE common stock were converted, by virtue of the merger, into shares of Stone Field common stock (the "Merger Securities"). On the Closing Date, each Shareholder of ARE surrendered their outstanding shares of ARE common stock to the Company. Upon such surrender, shares of ARE common stock so surrendered were no longer outstanding and were automatically canceled and retired and ceased to exist.



The Company then amended its Articles of Incorporation in order to change its corporate name to "American Radio Empire, Inc." in order to better reflect the newly-acquired business and general business model.  American Radio Empire, Inc., a Nevada corporation, is a wholly-owned subsidiary of the Company and the Company has adopted the subsidiary's business plans and operations as its own.



The Company was created to acquire, accumulate and operate small town radio stations across the United States.  American Radio proposes to tie the radio station group together with its own media rep firm for national and regional advertising sales. American Radio currently has an executed nonbinding Letter of Intent for the acquisition of an existing, established media rep firm to speed its entry into that segment of the business. Additionally the Company has nonbinding letters of intent for the acquisition of a radio station in Pennsylvania, two stations in Mississippi and three stations in Wyoming.



American Radio will provide listeners and advertisers with select internet services and partner with an established Wireless internet Service Provider (WIFI) group for the ability to offer high speed internet access, satellite television and cell phone services as well. American Radio has commenced negotiations for strategic partnerships with service providers for its WIFI and internet services.





Overview of Business



The Company proposes to start with the possible acquisition of various radio stations spread between Pennsylvania, Mississippi and Wyoming, though stations located in other states may replace some of these proposed acquisitions or be added to the acquisition list. American Radio intends to pursue a regionally focused acquisition strategy, adding clusters of stations primarily across the Southwest, Southeast and Mid-West quadrants of the country, to accumulate stations within the group. The total number of stations acquired will be a function of availability, timing and marketing feasibility.



American Radio's Management believes that all of these opportunities can be linked together quickly for efficient operation. The strategy is a combination of a small market radio station consolidation and a very specific internet and WIFI approach that is cross-market oriented.



American Radio proposes to buy stations with a combination of senior bank debt/private equity and public stock. Sellers will become stockholders in American Radio. Each seller will be invited to become of member of a Board of Advisors that the Company will form.





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Besides its regional focus, our core strategy is based upon achieving certain economies of scale.  For example, under current market conditions, an advertiser is unable to initiate an advertising campaign targeting smaller markets without entering into multiple separate media purchases with each radio station.



Our salespeople will be thoroughly trained in marketing their respective stations.  In order to attract and retain qualified personnel, we recognize the need for a fair and appealing compensation plan.  Management intends to use bonus programs selectively as a method of rewarding outstanding salespeople.  Finally, we are committed to providing ongoing sales training and motivational programs to help our salespeople develop their full potential.





Radio Industry Revenue Overview



Radio stations primarily derive revenues from the sale of commercial advertising spots or programs to national, regional, and local advertisers.  Advertising rates that stations charge depend on their performance in the rating periods in larger markets and on relationships and results in smaller markets.  Ratings are based on estimates of the number of persons listening to the station, as well as the number of homes in the station's services area.  The national radio audience measuring service, Arbitron, serves the entire country and provides even the smallest towns with semi-annual ratings service. American Radio will not rely entirely on these semiannual ratings but will, instead, work on building sound results-based relationships with its advertisers.





Radio Industry Consolidation



The radio broadcast industry is evolving, and consolidation is having a major impact on the competitive landscape.  Local ownership limits by the Federal Communications Commission ("FCC") of one AM and one FM station per market and a total limit of 14 total stations prevented radio groups from amassing greater size to attract outside capital.  Because of these strict limits, radio station ownership was highly fragmented and characterized by "mom and pop" operations in even the largest markets.  By 1984, however, FCC rules began relaxing, with major expansion in ownership limits occurring in 1992 and 1994.



The passage of the 1996 Telecommunications Act (the "Telecom Act") eliminated the national limits on the number of radio stations that one entity could own and eased local ownership rules to allow one operating entity to control up to eight stations (versus 4 previously) in most medium and major markets.  Much of the consolidation activity to date has been centered on major markets, resulting in increased competition and higher valuations.



Management believes that there are opportunities to acquire small market properties at more acceptable prices and build a group comparable in size to major market operators such as Clear Channel Communications, Cumulus, Citadel, or CBS.





Radio Industry Conditions



American Radio competes in an industry that is constantly evolving.  Deregulation by the FCC has created widespread opportunities within the radio industry, but competitive pressures have also increased.  The resulting consolidation moves have swept through the larger-market radio stations and are now working their way through the smaller-sized markets. Among all of the usual advertising-supported media, radio's growth has been among the fastest, although cable, network television, outdoor and satellite radio have also experienced strong demand.





Competition



The Company is not concerned about satellite radio intrusion into the small towns it looks to serve since those services do not provide localized small town news and sports information. Management believes that American Radio's primary competition in these sizes of markets will be local newspapers and occasionally cable television operators and some billboard operations.  The Company has the capability of providing multimedia services in the form of both radio and internet entertainment coupled with a variety of services possible through WIFI.





Broadcast Equipment



We will use each acquired station's existing transmitter, audio chain equipment, antenna and tower space wherever possible or feasible.  We will upgrade particular station equipment on an as-needed basis.  All other equipment required to tie each station into headquarters will either be purchased or leased. The use of high-speed internet connections will allow the rapid transfer of data between our stations.





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Competitive Position In the Market



American Radio's target markets are rural broadcast areas throughout the United States.  If we are able to implement our business plan successfully on a significant level, we can be a dominant small market group operator.





Government Regulation - Federal Communications Commission



The Federal Communications Commission ("FCC") regulates the radio broadcast industry. The FCC is led by five (5) Commissioners, who are appointed by the President subject to confirmation by the Senate.  Formed in 1934, the Commission is responsible for granting licenses to all stations and insuring compliance with its rules and regulations.



Currently there are no FCC ownership restrictions relating to the total number of stations one company may own across the US.  This is due to the passage of the 1996 Telecommunications Act by Congress.  The stations we propose to acquire are in small, unrated markets and have already been clustered together by the current owner with FCC approval.



There is no pending legislation before Congress, nor is there any pending rule making before the FCC that we believe would adversely effect our activities or plans for the future.  Our officers are all experienced broadcasters who have a proven track record in operations.  None of our officers and directors have ever been investigated or fined by the FCC, nor has the FCC ever failed to approve a license transfer in which any of our officers has been a party.





Acquisition and Closing Process



We plan to streamline the negotiating and closing process on the proposed station purchases by, among other things, standardizing the transaction documents as much as possible, including creating a form of purchase option agreement and purchase agreement.  Following the execution of a definitive purchase agreement (subject to FCC approval, and satisfactory completion of our due diligence), the Company and the station's seller will submit the appropriate transfer documents to the FCC. While the FCC has the authority to approve or reject a transfer request, transfer requests are, in the normal course, generally approved within approximately three to six months of submission of all required applications and related documents.



Management believes that a major consideration for ensuring the success of its planned acquisitions is to do so in as timely and low profile a manner as possible.  Normally, the sale of stations in the market sizes we propose would be significant events within their respective marketplaces.  To maintain the stations' stability and consistency under our planned ownership, it is important that the listeners and advertisers notice little, if any, change to the current operation.



Assuming receipt of final FCC notification of transfer approval, we will immediately proceed to closing, and then commence implementing the operational changes deemed necessary as a result of the due diligence investigation.



After completing an acquisition, corporate operating controls are planned for each station, including careful tracking of expenses and actively searching for vendors willing to provide us with group discounts for using their service or product.  All station computer systems will be networked with headquarters to produce station-level information on a real time and on request basis.  We will regionalize administrative and accounting controls wherever it is feasible and prudent to do so.





Employees



At this time, American Radio has one contract employee - Dain Schult, our Chief Executive Officer, President and Chairman of the Board. We have executed employment agreements with Harry Hedges and Herb Neu which are more fully described below. We intend to hire additional marketing and other personnel as management believes may be required.



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RISK FACTORS



We cannot assure that we will ever be profitable.  American Radio was incorporated in November 1997, and is a development stage company with no operating history or revenues. The operating losses reflect expenses encountered in the organization and initial operations of the entity.  Funds were raised for operating expenses to service providers via both convertible and redeemable notes issued by the company along with warrant agreements.  Additionally, some of the funds raised via these notes were utilized to cover the costs involved in due diligence of prospective radio station deals for American Radio to pursue.



At present, we have no agreements currently in place to receive any capital.  We cannot assure that we will be successful or that we will ever be profitable.



We anticipate net losses for the foreseeable future.  The primary reasons for these anticipated losses are significant charges for depreciation and amortization relating to our proposed acquisition of radio stations, as well as interest charges on debt that we expect to incur in connection with those acquisitions.  If we acquire additional stations, these charges will likely increase further.  We cannot assure you that we will be profitable in the future, and our failure to do so could harm our business and cause the value of our common stock to decline.  We have experienced losses since inception.  Our net loss from inception through December 31, 2006 was approximately $1,209,487. American Radio has been dependent upon loans from management and third parties in the aggregate amount of approximately $763,800, exclusive of interest, to sustain our development activities to date.  In the event we are unable to raise sufficient capital and to become profitable, our business will fail.



We cannot assure that we will ever acquire any radio stations.  We signed a purchase agreement to acquire two radio stations in Lampasas, Texas, as well as nonbinding letters of intent to acquire a media rep firm and a radio station in Pennsylvania, three radio stations in Wyoming and two radio stations in Mississippi.  Negotiations on all of these transactions continue to progress, and management believes it is likely that some, if not all, of these acquisitions can close.  We resolved litigation during 2006 with the owners of the Lampasas stations about the interpretation of the purchase agreement, with each side releasing the other from liability.  We cannot assure that we will successfully acquire any radio stations.  Failure to acquire radio stations in accordance with our business plan would result in the failure of our business.



We have no current agreements to provide the substantial additional capital required to implement our business plan.  As of December 31, 2006, we had a working capital deficit of approximately $1,212,000.  In the event we fail to obtain sufficient capital, we will be unable to acquire radio stations and implement our business plan, and investors may lose all of their investment.  While we are in negotiations with several potential funding groups, we have no definitive agreements yet with anyone to provide us with additional financing.



Our independent auditors have expressed doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.  In their report dated December 31, 2007, our independent auditors stated that deficits in stockholders' equity raises substantial doubt of our ability to continue as a going concern. Our ability to continue as a going concern is subject to our ability to generate a profit or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, producing revenue by acquiring radio stations, or obtaining loans. The going concern qualification in the auditor's report increases the difficulty in meeting these goals, and we cannot assurance that we will prove successful at raising capital.



Management controls American Radio and will be able to control the outcome of any vote on major decisions.  Currently, our management owns and controls approximately 65% of our outstanding common stock.  As a result, our management effectively controls our affairs, including the election of all of the members of our Board of Directors, the issuance of additional shares of common stock, the distribution and timing of dividends, if any, and all other matters.  This means that although shareholders are entitled to vote on certain matters affecting American Radio and its business, management will be able to control the outcome of any vote on major decisions, even if all of American Radio's non-management shareholders oppose a management decision.



There may not be a market for our common stock.  We do not currently meet the requirements - such as income, shareholders' equity and number of public shares outstanding - to have our shares listed on a stock exchange in the United States or quoted on the NASDAQ Stock Market.  Therefore, our common stock may be an illiquid long-term investment.  We anticipate that our common stock will, however, be eligible for trading through some medium.



Any market for the shares, which does develop, may be illiquid.  There may be only a limited trading market for our common stock.  We expect that initially any market will be on the "Pink Sheets."  Shares that are thinly traded on the Pink Sheets often trade only infrequently and experience a significant spread between the market maker's "bid" and "ask" prices.  As a result, it may be difficult or expensive to sell shares even if there is a market.



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ITEM 2.  DESCRIPTION OF PROPERTY



Our executive offices are located at 13210 Kerrville Folkway, Building G, Austin, Texas 78729-7522. The offices are leased from Dain Schult under a renewable lease with monthly lease payments of $500 or $6,000 annually.  Management believes such facilities are adequate for its current needs.





ITEM 3.  LEGAL PROCEEDINGS



With the exception of what is listed below, there are no legal proceedings pending or threatened against the Company.



American Radio executed an agreement in 2003 to purchase two radio stations, for $400,000 of common stock (number of shares to be determined on the day of Closing based on market value of common stock on that date) plus $375,000. An additional $25,000 was to be paid to the sellers in exchange for a non-compete agreement. This agreement was contingent upon the registration of common stock and American Radio obtaining the additional cash resources for financing purposes.



In May 2004, the Company filed a petition in a court of competent jurisdiction against the owners of those two radio stations. The litigation arose out of the Asset Purchase Agreement that American Radio executed with the owners in October 2003, for the purchase of those stations. After the execution of the Asset Purchase Agreement, a dispute arose between American Radio and the owners. American Radio believes that the owners violated the Asset Purchase Agreement by failing to provide necessary information on a timely basis and by failing to cooperate with American Radio's efforts to complete the acquisition. The Company's petition seeks specific performance of the agreement as well as damages for breach of contract and attorneys' fees.



The owners have filed a counterclaim that denies the enforceability of the Asset Purchase Agreement and requested that the court declare it unenforceable or, in the alternative, determine that American Radio fraudulently induced them to sign it. The Company executed a settlement agreement on September 25, 2006 whereby all parties released all claims against the others, all non-suit claims against the others in Cause No.:15466, American Radio Empire v. Witcher, Et al., in the District Court of Lampasas County, Texas, 27th Judicial District; and all parties paid their own costs.





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



None.



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PART II





ITEM 5.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS



(A) Common Stock



Market Information



There is no market for transactions related to shares of the Company's common stock.  Private sales or transfers are permitted under the respective state and Federal securities laws, subject to compliance with exemptions set forth under the respective statutory guidelines.  No estimate can be made of the viability of this secondary market.



Dividend Policy



Any payment of cash dividends will depend upon the Company's financial condition, results of operations, capital requirements and other factors and will be at the discretion of the Board of Directors. The Company does not anticipate paying cash dividends on its common stock in the foreseeable future. Furthermore, the Company may incur additional indebtedness that may severely restrict or prohibit the payment of dividends.



Securities Authorized for Issuance Under Equity Compensation Plans



The following table shows information with respect to each equity compensation plan under which our common stock is authorized for issuance as of the 100,000,000.



|                                                       |                                                                                             |                                                                             |                                                                                                                                           
|------------------------------------------------------ | ------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------
|Plan Category                                          | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities
remaining available for future
issuance under equity
compensation plans
(excluding securities
reflected in column (a)
|                                                       | (a)                                                                                         | (b)                                                                         | (c)                                                                                                                                       
|Equity compensation plans approved by security holders | 0                                                                                           |                                                                             |                                                                                                                                           
|                                                       |                                                                                             |                                                                             |                                                                                                                                           



|                                                           |   |  | 
|---------------------------------------------------------- | - |  | 
|Equity compensation plans not approved by security holders | 0 |  | 
|                                                           |   |  | 
|Total                                                      | 0 |  | 





(B) Holders



As of December 31, 2006, there were 29 shareholders.





(C) Dividends



Holders of common stock are entitled to dividends when, as, and if declared by the Board of Directors, out of funds legally available therefore. The Company has never paid cash dividends on its common stock. The Board of Directors does not anticipate paying cash dividends in the foreseeable future as it intends to retain future earnings to finance the growth of the Company's businesses.





Recent Sales of Unregistered Securities:



None.



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ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS



The following discussion of our financial condition and results of operations should be read in conjunction with the accompanying financial statements and the related footnotes thereto.





Critical Accounting Policies



Convertible Debt



The convertible debt and the related warrants have been accounted for in accordance with Emerging Issues Task Force No. 98-5, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios", EITF No. 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," EITF 00-27, Application of issue 98-5 to Certain Convertible Instruments, EITF 05-02 Meaning of Conventional Convertible Debt Instrument in Issue No. 00-19, and EIFT 05-04 The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument Subject to Issue No. 00-19.



Derivative Financial Instruments



The Company accounts for all derivative financial instruments in accordance with SFAS No. 133. Derivative financial instruments are recorded as liabilities in the consolidated balance sheet, measured at fair value. When available, quoted market prices are used in determining fair value. However, if quoted market prices are not available, management estimates fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques.



The value of the derivative liabilities relating to the Convertible Note in the financial statements are subject to the changes in the trading value of common stock and other assumptions. As a result, our quarterly financial statements may fluctuate from quarter to quarter based on factors, such as the trading value of common stock, the amount of shares converted by Convertible Debt Holders in connection with the Convertible Notes and warrants. Consequently, financial position and results of operations may vary from quarter to quarter based on conditions other than operating revenues and expenses.



Derivative financial instruments that are not designated as hedges or that do not meet the criteria for hedge accounting under SFAS No. 133 are recorded at fair value, with gains or losses reported currently in earnings. All derivative financial instruments held by the Company as of December 31, 2006 and 2005 were not designated as hedges.



Income Taxes



The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts expected to be recovered.





Results of Operations



The Year Ended December 31, 2006 Compared to the Year Ended December 31, 2005



The Company's had no net revenue for the years ended December 31, 2006 and 2005.



Operating expenses consisting primarily of professional fees which increased from $156,839 for the year ended December 31, 2005 to $204,561 for the year ended December 31, 2006.  Interest expense increased from $96,301 for the year ended December 31, 2005 to $137,479 for the same period ended December 31, 2006.  These increases were primarily related to approximately $209,800 of additional debt incurred during 2006.





Liquidity and Capital Resources



The Company remains in the development stage and, since inception, and has experienced  no  significant   change  in  liquidity  or  capital  resources  or stockholder's  equity.  The Company's balance sheet as of December 31, 2006, reflects a current asset value of $1,812, and a total asset value of $2,289.





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The Company cannot predict to what extent its liquidity and capital resources will be diminished prior to the consummation of a business combination or whether its capital  will be  further  depleted  by the  operating  losses  (if  any) of the business entity which the Company may eventually acquire.





Need for Additional Financing



The Company has experienced operating losses since inception as a result of efforts to acquire capital and use that capital to acquire radio stations.  The Company expects that it will achieve profitability and positive cash flows in the future if it can successfully raise capital and acquire an operating business.  The Company's plans in regard to this are to increase revenues by acquiring profitable radio stations and substantially reduce the cost of professional fees and obtain capital through the sale of stock.  There can be no assurance that the Company will ever achieve or sustain profitability or positive cash flow from its operations, reduce expenses or sell common stock.  To date, the Company has funded its activities primarily through private issuances of mandatorily convertible and redeemable debt offerings.





Off-Balance Sheet Arrangements



As of December 31, 2006, the Company had no off-balance sheet arrangements.



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ITEM 7.  FINANCIAL STATEMENTS.







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders

American Radio Empire, Inc.

(formerly Stone Field Management Company, Inc.)

(A Development Stage Company)

Austin, Texas





We have audited the accompanying balance sheet of American Radio Empire, Inc. (a development stage company) as of December 31, 2006 and the related statements of expenses, changes in stockholders deficit and cash flows for the year then ended and for the period from inception (December 9, 1998) through December 31, 2006.  These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the
financial statements referred to above present fairly, in all material respects,
the financial position of the Company as of December 31, 2006 and the results of
its operations and its cash flows for the periods as referred above in conformity with accounting principles generally accepted in the United States of America.



The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred operating losses since inception and has a deficit of stockholders' equity of $1,209,487, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.







MALONE & BAILEY, PC

www.malone-bailey.com

Houston, Texas



January 7, 2008



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







To the Board of Directors and Stockholders

American Radio Empire, Inc.

(formerly Stone Field Management Company, Inc.)

(A Development Stage Company)

Austin, Texas







We have audited the accompanying balance sheet of American Radio Empire, Inc. as of December 31, 2005, and the related statements of expenses, stockholders' deficit and cash flows for the year ended December 31, 2005 and for the period from December 9, 1998 (inception) through December 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above presents fairly, in all material respects, the financial position of the Company as of December 31, 2005 and the results of their operations and their cash flows for the year then ended and for the period from Inception through December 31, 2005 in conformity with generally accepted accounting principles in the United States of America.







PMB HELIN DONOVAN LLP

/s/ PMB Helin Donovan LLP

Austin, Texas



March 31, 2006



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|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |        |  | 
|------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------- | --------------------- | ---------------------- | -------------------- | --------------------- | ------ |  | 
|AMERICAN RADIO EMPIRE, INC.                
|(A Development Stage Company)              
|BALANCE SHEETS                             
|As of December 31, 2006 and 2005           
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|                                            |                                                                                                                                                      |                             |                     |                       |                        | 2006                 |                       | 2005  
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|ASSETS                                      |                                                                                                                                                      |                             |                     |                       |                        |                      |                      
|Current assets                              |                                                                                                                                                      |                             |                     |                       |                        |                     
|                                            | Cash                                                                                                                                                 |                             |                     |                       | $                  312 |                      | $               6,873
|                                            | Prepaid expenses                                                                                                                                     |                             |                     | 1,500                 |                        | 7,990               
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|                                            | Total current assets                                                                                                                                 |                             |                     |                       |                        | 1,812                |                       | 14,863
|                                            |                                                                                                                                                      |                             |                     |                       |                       
|                                            | Property and equipment, net                                                                                                                          |                             | 477                 |                       | -                     
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|TOTAL ASSETS                                |                                                                                                                                                      |                             |                     | $               2,289 |                        | $             14,863
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|LIABILITIES AND STOCKHOLDERS' DEFICIT       |                                                                                                                                                      |                             |                    
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|Liabilities                                 |                                                                                                                                                      |                             |                     |                       |                        |                      |                      
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|Current liabilities                         |                                                                                                                                                      |                             |                     |                       |                        |                     
|                                            | Accounts payable and accrued expenses                                                                                                                | $             79,921        |                     | $            57,246  
|                                            | Accrued interest payable                                                                                                                             |                             |                     | 215,483               |                        | 132,420             
|                                            | Convertible notes payable (net of discounts of $67,699 and $77,373 for the periods ending December 31, 2006 and December 31, 2005, respectively)     |                             |                     |                      
|                                            | 627,601                                                                                                                                              |                             | 476,627            
|                                            | Derivative liabilities, embedded derivatives and beneficial conversion feature                                                                       | 217,554                     |                     | 172,813              
|                                            | Notes payable                                                                                                                                        |                             |                     |                       | 68,500                 |                      | -                    
|                                            | Other liabilities                                                                                                                                    |                             |                     |                       | 5,000                  |                      | 5,000                
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|                                            |                                                                                                                                                      | Total current liabilities   |                     |                       | 1,214,059              |                      | 844,106              
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|Stockholders' deficit                       |                                                                                                                                                      |                             |                     |                       |                        |                     
|                                            | Common stock, $0.001 par value, 100,000,000 shares authorized, 49,976 and 33,530 issued and outstanding at December 31, 2006 and 2005, respectively. | 5,200                       |                     | 5,200                
|                                            | Additional paid-in capital                                                                                                                           |                             |                     | (7,483)               |                        | (7,483)             
|                                            | Deficit accumulated during the development stage                                                                                                     | (1,209,487)                 |                     | (826,960)            
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|                                            |                                                                                                                                                      | Total stockholders' deficit |                     | (1,211,770)           |                        | (829,243)           
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $              2,289                                                                                                                                 |                             | $            14,863
|                                            |                                                                                                                                                      |                             |                     |                       |                        |                      |                       |       



See accompanying summary of accounting policies and notes to financial statements



13

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|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|---------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------- | --------------------- | ------------------ | -------------------- | ----------------- | -------------------- | ----------------- | ----------------- |  | ------------
|AMERICAN RADIO EMPIRE, INC.                                           
|(A Development Stage Company)                                         
|STATEMENTS OF EXPENSES                                                
|For the Years Ended December 31, 2006 and 2005, and                   
|the Period from December 9, 1998 (Inception) Through December 31, 2006
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  | From        
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  | December 9, 
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  | 1998        
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  | (Inception) 
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  | Through     
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  | December 31,
|                                                                       |                                                     |                               |                       |                    |                      |                   | 2006                 |                   | 2005              |  | 2006        
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|OPERATING EXPENSES                                                     |                                                     |                               |                       | $          245,048 |                      | $         169,565 |                      | $         842,156
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|OTHER (INCOME) EXPENSES                                                |                                                     |                               |                       |                    |                      |                   |                     
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|                                                                       | Interest Expense                                    |                               |                       |                    | 137,479              |                   | 96,301               |                   | 387,331          
|                                                                       | Loss (Gain) on fair value of derivative liabilities | -                             |                       | (20,000)           |                      | (20,000)         
|                                                                       |                                                     | Total other (income) expenses |                       |                    | 137,479              |                   | 76,301               |                   | 367,331          
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|NET LOSS                                                               |                                                     |                               |                       |                    | $        (382,527)   |                   | $       (245,866)    |                   | $     (1,209,487)
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|Basic and diluted loss per share:                                      |                                                     |                               | $              (7.65) |                    | $             (7.33) |                   | $            (35.26)
|                                                                       |                                                     |                               |                       |                    |                      |                   |                      |                   |                   |  |             
|Weighted average common shares outstanding:                            |                                                     |                               |                       |                    |                      |                  
|                                                                       |                                                     | Basic and diluted             |                       |                    | 49,976               |                   | 33,530               |                   |                  





See accompanying summary of accounting policies and notes to financial statements





14

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|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |       |  |  |  |  |  |  |  | 
|---------------------------------------------------------------------- | ------------------------- | ----- | --------------- | ------ | ---------------- | -------------- | ------------------------ | ---------------- | ------------------- | ------------------ | ----------- | --------------- | ----- |  |  |  |  |  |  |  | 
|Stone Field Management Company                                        
|(A Development Stage Company)                                         
|STATEMENT OF STOCKHOLDERS' DEFICIT                                    
|For the Years Ended December 31, 2006, 2005 and 2004, and             
|the Period from December 9, 1998 (Inception) Through December 31, 2006
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    | Deficit     |                 |      
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    | Accumulated |                 |      
|                                                                       |                           |       |                 |        |                  |                |                          |                  | Additional          |                    | During      |                 |      
|                                                                       |                           |       |                 |        | Common Stock     |                | Paid-in                  |                  | Development         |                    |            
|                                                                       |                           |       |                 |        | Shares           |                | Amount                   |                  | Capital             |                    | Stage       |                 | Total
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Initial capital contribution (at $0.000215 per share)                  | 29,086                    |       | $            29 |        | $            621 |                | $                      - |                  | $               650
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Capital contributions                                                  |                           |       | -               |        | -                |                | 185                      |                  | -                   |                    | 185        
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Issuance of common stock for service                                   |                           | 8,414 |                 | 9      |                  | 8,741          |                          | -                |                     | 8,750             
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Net loss from December 9, 1998 (inception)                             |                           |       |                 |        |                  |                |                          |                  |                    
|                                                                       | through December 31, 2004 | -     |                 | -      |                  | -              |                          | (581,097)        |                     | (581,097)         
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Balance at                                                             |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                
|                                                                       | December 31, 2004         |       |                 | 37,500 |                  | 38             |                          | 9,547            |                     | (581,097)          |             | (571,512)      
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Return and cancellation of common stock                                | (4,808)                   |       | (5)             |        | 5                |                | -                        |                  | -                  
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Acquisition of Stone Field Management, Inc.                            | 17,284                    |       | 17              |        | (11,885)         |                | -                        |                  | (11,868)           
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Net loss                                                               |                           |       |                 | -      |                  | -              |                          | -                |                     | (245,863)          |             | (245,863)      
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Balance at                                                             |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                
|                                                                       | December 31, 2005         |       |                 | 49,976 |                  | 50             |                          | (2,333)          |                     | (826,960)          |             | (829,243)      
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Net loss                                                               |                           |       |                 | -      |                  | -              |                          | -                |                     | (382,527)          |             | (382,527)      
|                                                                       |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                 |      
|Balance at                                                             |                           |       |                 |        |                  |                |                          |                  |                     |                    |             |                
|                                                                       | December 31, 2006         |       |                 | 49,976 |                  | $           50 |                          | $        (2,333) |                     | $      (1,209,487) |             | $   (1,211,770)







See accompanying summary of accounting policies and notes to financial statements.



15

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|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       |             
|---------------------------------------------------------------------- | ----------------------------------------------------------- | --------------------- | ---------------------------------------------------------- | ------------------ | --------- | ----------------- | - | ------------------ | ----- | ------------
|AMERICAN RADIO EMPIRE, INC.                                           
|(A Development Stage Company)                                         
|STATEMENTS OF CASH FLOWS                                              
|For the Years Ended December 31, 2006 and 2005, and                   
|the Period from December 9, 1998 (Inception) Through December 31, 2006
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       |             
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       | From        
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       | December 9, 
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       | 1998        
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       | (Inception) 
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       | Through     
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       | December 31,
|                                                                       |                                                             |                       |                                                            |                    |           | 2006              |   | 2005               |       | 2006        
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       |             
|CASH FLOWS FROM OPERATING ACTIVITIES                                   |                                                             |                       |                                                            |                    |          
|                                                                       | Net loss                                                    |                       |                                                            | $        (382,527) |           | $       (245,866) |   | $      (1,209,487)
|                                                                       | Adjustments to reconcile net income to net cash provided by |                       |                                                            |                    |           |                  
|                                                                       |                                                             | operating activities: |                                                            |                    |           |                   |   |                   
|                                                                       |                                                             |                       | Consulting fees paid through issuance of note              | -                  |           | -                 |   | 35,000            
|                                                                       |                                                             |                       | Consulting fees paid through issuance of common stock      | -                  |           | -                 |   | 8,750             
|                                                                       |                                                             |                       | Loss (gain) on fair value of derivative liability          | -                  |           | (20,000)          |   | (20,000)          
|                                                                       |                                                             |                       | Non-cash interest expense added to derivative liability    | 7,981              |           | 10,726            |   | 33,994            
|                                                                       |                                                             |                       | Amortization of note discount                              | 46,434             |           | 29,819            |   | 135,861           
|                                                                       |                                                             |                       | Depreciation expense                                       |                    | 53        |                   | - |                    | 53   
|                                                                       |                                                             |                       | Increase in prepaid expenses                               | 6,490              |           | (7,990)           |   | (1,500)           
|                                                                       |                                                             |                       | (Decrease) increase in accounts payable & accrued expenses | 22,675             |           | (8,574)           |   | 68,053            
|                                                                       |                                                             |                       | Increase in accrued interest payable                       | 83,063             |           | 54,166            |   | 215,483           
|                                                                       |                                                             |                       | Increase in other liabilities                              |                    | -         |                   | - |                    | 5,000
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       |             
|NET CASH USED BY OPERATING ACTIVITIES                                  | (215,831)                                                   |                       | (187,719)                                                  |                    | (728,793)
|                                                                       |                                                             |                       |                                                            |                    |           |                   |   |                    |       |             
|CASH FLOWS FROM INVESTING ACTIVITIES                                   |                                                             |                       |                                                            |                    |          



16

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|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|----------------------------------------- | -------------------------------------------------------- | ------------------------ | ------------------------ | ------------------------ | ----------------------- | ----------------------- | ------------------------ | ------------------------ |  | 
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|                                          | Purchases of property & equipment                        | (530)                    |                          | -                        |                         | (530)                  
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|NET CASH PROVIDED BY INVESTING ACTIVITIES | (530)                                                    |                          | -                        |                          | (530)                  
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|CASH FLOWS FROM FINANCING ACTIVITIES      |                                                          |                          |                          |                          |                        
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|                                          | Proceeds from debentures                                 |                          | 103,500                  |                          |                         |                         | 103,500                 
|                                          | Issuance of convertible notes and derivative liabilities | 141,300                  |                          | 189,000                  |                         | 660,300                
|                                          | Payments on convertible and promissory notes             | (35,000)                 |                          |                          |                         | (35,000)               
|                                          | Contributions of capital                                 |                          | -                        |                          | -                       |                         | 835                     
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|NET CASH PROVIDED BY FINANCING ACTIVITIES | 209,800                                                  |                          | 189,000                  |                          | 729,635                
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|                                          | NET INCREASE (DECREASE) IN CASH                          | (6,561)                  |                          | 1,281                    |                         | 312                    
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|CASH AT BEGINNING OF PERIOD               |                                                          | 6,873                    |                          | 5,592                    |                         | -                      
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|CASH AT END OF PERIOD                     |                                                          | $                 312    |                          | $             6,873      |                         | $                  312 
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|SUPPLEMENTAL DISCLOSURE                   |                                                          |                          |                          |                          |                         |                        
|                                          | Income taxes paid                                        |                          | $                      - |                          | $                     - |                         | $                      -
|                                          | Interest paid                                            |                          |                          | $                      - |                         | $                     - |                          | $                      -
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|SUPPLEMENTAL DISCLOSURE OF NON-CASH       |                                                          |                          |                          |                          |                        
|INVESTING AND FINANCING ACTIVITIES        |                                                          |                          |                          |                          |                         |                        
|                                          |                                                          |                          |                          |                          |                         |                         |                          |                          |  | 
|                                          | Accounts payable assumed in exchange for common stock    | $                      - |                          | $
	          11,868      |                         | $             11,868   
|                                          | Discount on notes payable                                |                          | $            28,260      |                          | $           37,800      |                         | $           175,060     
|                                          | Cancellation of common stock to paid in capital          | $                      - |                          | $               500      |                         | $                  500 



See accompanying summary of accounting policies and notes to financial statements



17

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AMERICAN RADIO EMPIRE, INC.

(A Development Stage Company)

Notes to Financial Statements





Note 1  Nature of Business & Significant Accounting Policies



American Radio Empire, Inc. ("the Company"), a Wyoming corporation formerly known as Stone Field Management Company, Inc., has a business plan to acquire and operate small market radio stations in specific geographic regions of the United States of America in conjunction with wireless ISP and Internet related services.  To date, the Company has not begun operations or acquired radio stations. When operations begin, the Company will be regulated by the Federal Communications Commission as well.



Effective December 31, 2005, pursuant to an Agreement and Plan of Merger dated as of December 15, 2005, the American Radio Empire, Inc., a Nevada corporation (ARE), completed a merger with the Company pursuant to which ARE merged with and into the Company.



The Company is a development stage company, as defined in the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 7. The Company is devoting substantially all of its present efforts in securing and establishing a new business, and although planned operations have commenced, no revenue has been realized.



Basis of Accounting



These financial statements are presented on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America whereby revenues are recognized in the period earned and expenses when incurred.



Use of Estimates



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



Reclassification



Certain prior year amounts have been reclassified to conform with the current year presentation.



Cash Equivalents



For purposes of the statements of cash flows, the Company considers short-term investments, which may be withdrawn at any time without penalty, and restricted cash, which will become available within one year from the date of the financial statements, to be cash equivalents.



Property and Equipment



Property and equipment are recorded at cost. Ordinary maintenance and repairs are charged to expense, while expenditures that extend the physical or economic life of the assets are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets.



The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If the undiscounted cash flows are less than the carrying amount of the asset, the asset is considered to be impaired, and the impairment loss recognized is measured by the amount by which the carrying amount of the assets



18

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exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.



Convertible Debt



The convertible debt and the related warrants have been accounted for in accordance with Emerging Issues Task Force No. 98-5, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios", EITF No. 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," EITF 00-27, Application of issue 98-5 to Certain Convertible Instruments, EITF 05-02 Meaning of Conventional Convertible Debt Instrument in Issue No. 00-19, and EIFT 05-04 The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument Subject to Issue No. 00-19.



Derivative Financial Instruments



The Company accounts for all derivative financial instruments in accordance with SFAS No. 133. Derivative financial instruments are recorded as liabilities in the consolidated balance sheet, measured at fair value. When available, quoted market prices are used in determining fair value. However, if quoted market prices are not available, management estimates fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques.



The value of the derivative liabilities relating to the Convertible Note in the financial statements are subject to the changes in the trading value of common stock and other assumptions. As a result, our quarterly financial statements may fluctuate from quarter to quarter based on factors, such as the trading value of common stock, the amount of shares converted by Convertible Debt Holders in connection with the Convertible Notes and warrants. Consequently, financial position and results of operations may vary from quarter to quarter based on conditions other than operating revenues and expenses. See Note 3 regarding valuation methods used for derivative liabilities.



Derivative financial instruments that are not designated as hedges or that do not meet the criteria for hedge accounting under SFAS No. 133 are recorded at fair value, with gains or losses reported currently in earnings. All derivative financial instruments held by the Company as of December 31, 2006 and 2005 were not designated as hedges.



Income Taxes



The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts expected to be recovered.



Financial Instruments and Credit Risk



Financial instruments that potentially subject the Company to credit risk include cash and cash equivalents.  Cash is deposited in demand accounts in federally insured domestic institutions to minimize risk.  Although the balances in theses accounts exceed the federally insured limit from time to time, the Company has not incurred losses related to these deposits. Cash equivalents consist of money market accounts and are typically held in accounts with investment brokers or banks which are secured with high quality short maturity investment securities. The amounts reported for cash and cash equivalents, notes payable, accounts payable and accrued liabilities are considered to approximate their market values based on comparable market information available at the respective balance sheet dates and their short-term nature.



19

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Loss per Common Share



Basic loss per share is based on the weighted effect of common shares issued and outstanding, and is calculated by dividing net loss by the weighted average shares outstanding during the period.  Diluted loss per share is calculated by dividing net loss by the weighted average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding.



Incremental common shares attributable to the exercise of outstanding warrants of 826,760 and 613,243 shares as of December 31, 2006 and December 31, 2005, respectively were excluded from the computation of diluted loss per share because the effect would be anti-dilutive.  As of December 31, 2006 and December 31, 2005, there were outstanding convertible notes to purchase approximately 1,141,035 and 866,263 respectively, shares of common stock that were not included in the computation of diluted loss per share because the effect would have been anti-dilutive.  Incremental shares and warrants have been adjusted to reflect the one for 104 reverse stock split effective on July 16, 2007, and the subsequent board resolution to reinstate the incremental shares and warrants at the original count.



Stock Split



All share and per share amounts in the accompanying financial statements and footnotes have been adjusted to reflect the Companys 1 for 104 reverse stock split that was effective June 16, 2007, and subsequent Board Resolution signed December 20, 2007 retroactively reinstating the original conversion rate for the note and warrant holders.



Recent Accounting Pronouncements



The Company does not expect the adoption of recently issued accounting pronouncement to have a significant impact on the Company's results of operation, financial position or cash flows.

Note 2  Going Concern

The Company has experienced operating losses since inception as a result of efforts to acquire capital and use that capital to acquire radio stations.  The Company expects that it will achieve profitability and positive cash flows in the future if it can successfully raise capital and acquire an operating business.  The Companys plans in regard to this are to increase revenues by acquiring profitable radio stations and substantially reduce the cost of professional fees and obtain capital through the sale of stock.  There can be no assurance that the Company will ever achieve or sustain profitability or positive cash flow from its operations, reduce expenses or sell common stock.  To date, the Company has funded its activities primarily through private issuances of mandatorily convertible and redeemable debt offerings (Note 3).

These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the ultimate outcome of these matters.



Note 3  Debt



Convertible Note Payable



The Company executed a note in 1999 in exchange for services rendered by a consultant.  This $35,000 note bears interest at 18% and is due on demand.  This note has a conversion feature whereby the holder can choose to convert all of the outstanding principal and interest into common stock.  The note holder agreed to accept 50,000 shares of common stock within 60 days of the Company becoming a recognized publicly traded company in full settlement for the principal amount.  Additional shares of common stock will be issued for accrued interest by dividing the interest accrued by the stock price at the date of conversion.  As of December 31, 2006, no shares have been issued.



20

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Mandatorily Convertible Notes



In 2003, the Company executed a series of mandatorily convertible notes (Convertible Notes) totaling $225,000 with individuals.  The terms of these Convertible Notes included fixed interest of 12% per year, principal and interest due between January and December 2004 and a mandatory conversion feature for all unpaid principal and interest, contingent upon the Company becoming a recognized publicly traded company.  The conversion rate for each $104 of Convertible Notes is the lesser of $0.80 per common share or 80% of the average trading value per common share during the first 30 trading days.  Each Convertible Note holder also received a warrant to purchase one share of common stock for every dollar of promissory notes purchased, for a total of 225,000 additional shares, at $1 per share.  The warrants expire four years after the initial registration statement.  Additionally, for any note holder that purchased at least $100,000 of these Notes, the holder acquired the right to convert each $100,000 of notes into 5% of the common shares of the Company outstanding at the time of conversion.  One note purchaser qualified by buying $100,000 of these Convertible Notes.  This resulted in a charge to other expenses of $56,000 for the additional shares which would be required to increase the shareholders ownership percentage to 5%.  In 2005, 4,808 shares of stock were cancelled, reducing the total shares of stock outstanding.  This resulted in a decrease in the conversion liability for the note holder who purchased $100,000 in notes of $20,000 and an increase in other income $20,000.



Interest is to be paid in cash at maturity or upon earlier conversion of the notes, unless the holder of the Convertible Notes elects to convert accrued interest to shares of Common Stock on the same basis as the conversion of principal.  As of December 31, 2006 none of the notes has been converted into shares of the Companys stock.  Their potential dilutive impact on EPS has been included in Note 1 above.



Redeemable Convertible Notes



During 2004, 2005, and 2006, the Company executed a series of redeemable convertible notes (Redeemable Notes) totaling $435,300 with individuals.  The terms of these Redeemable Notes included fixed interest of 12% per year, principal and interest due between April 2005 and December 2007.  If unpaid at maturity, the holders may convert the balance of their Redeemable Notes and accrued interest into common stock.  The conversion rate for each $1 of Redeemable Notes is the lesser of $0.80 per common share or 80% of the average trading value per common share during the first 30 trading days.  As of December 31, 2006 none of the notes has been converted into shares of the Companys stock.  Their potential dilutive impact on EPS has been included in Note 1 above.  Each Note holder also received a warrant to purchase one share of common stock for every dollar of promissory notes purchased, for a total of 435,300 additional shares, at $1 per share.  The warrants expire four years after the initial registration statement.



The Redeemable Notes are hybrid instruments that contain both a freestanding derivative financial instrument and an embedded derivative feature that would individually warrant separate accounting as derivative instruments under SFAS 133. The freestanding derivative financial instruments include the warrants, which were valued individually, and were determined to have only a nominal value as such no value has been assigned for the warrants.  The single compound embedded derivative feature is the conversion feature within the Redeemable Notes.  The value of the conversion feature was bifurcated from the debt host contract and recorded as a derivative liability, which resulted in a reduction of the initial carrying amount (as unamortized discount) of the Redeemable Notes of approximately $87,060. The unamortized discount will be amortized to interest expense using the effective interest method over the life of the Redeemable Notes, or twelve months.  During 2006 and 2005, the Company amortized $46,434 and $29,819, respectively, of these discounts.





21

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Embedded Derivatives



Using the intrinsic value, a 20% discount from market price for the conversion feature, which was determined to be the maximum value, the fair value of the conversion feature embedded derivatives within the Notes was computed at $87,060 and $58,800 as of December 31, 2006 and 2005, respectively.

Convertible Notes Payable at December 31, 2005 and 2006



|                                                           |  |             |  |         
|---------------------------------------------------------- |  | ----------- |  | --------
|                                                           |  | 2005        |  | 2006    
|Convertible Other notes                                    |  | $    35,000 |  | $35,000 
|Notional balances of Mandatorily Convertible Notes Payable |  | 225,000     |  | 225,000 
|Notional balances of Redeemable Notes Payable              |  | 294,000     |  | 435,300 
|Adjustments:                                               |  |             |  |         
|Unamortized discount                                       |  | (77,373)    |  | (67,699)
|Convertible Notes balance, net of unamortized discount     |  | $  476,627  |  | $627,601





22

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Promissory Notes

The Company executed promissory notes (Notes) of $103,500 in 2006.  The terms of these Notes included fixed interest of 12% per year, principal and interest due between December 2006 and March 2007 or when corporate equity funding begins for the Company once it becomes a publicly traded company, whichever event occurs first in time.

The Company made a partial payment of $35,000 on one of the Notes.  As of December 31, 2006 no further payments had been made.  The balance on these Notes at December 31, 2006 was $68,500, of which $61,000 was payable on December 31, 2006.

Common Stock Purchase Warrants



As of December 31, 2005, the Company had attributable to outstanding and exercisable warrants of 613,243 shares of American Empire Radios restricted common stock.  The following are the warrant activities for the year ended December 31, 2006:



·

141,300 warrants were granted to the investors related to debt financing and 72,217 warrants granted relating to accrued interest on debt financing. These warrants have a term of four years and an exercise price of $1.00. The warrants issued were valued at zero using a Black-Scholes valuation model. Variablesused in the Black-Scholes option-pricing model include (1) risk free rate of 4%, (2) warrant life is the contractual term of the warrants (4 years), (3) expected volatility of 60%, and (4) zero expected dividends.  The volatility factor was determined as an average of comparable public companies.

·

189,000 warrants were granted to the investors related to debt financing and 49,456 warrants granted relating to accrued interest on debt financing during 2005. These warrants have a term of four years and an exercise price of $1.00. The warrants issued were valued at zero using a Black-Scholes valuation model. Variables used in the Black-Scholes option-pricing model include (1) risk free rate of 4%, (2) warrant life is the contractual term of the warrants (4 years), (3) expected volatility of 60%, and (4) zero expected dividends.  The volatility factor was determined as an average of comparable public companies.



As of December 31, 2006, there were warrants outstanding and exercisable for 826,760 shares of the Companys restricted common stock.  The following table summarizes stock warrant activities for the years ended December 31, 2006 and 2005:



|                                 |  |          |         |          |  |      | 
|-------------------------------- |  | -------- | ------- | -------- |  | ---- | 
|                                 |  |          |         | Weighted | 
|                                 |  |          |         | Average  | 
|                                 |  |          |         | Exercise | 
|                                 |  | Warrants |         | Price    | 
|Outstanding at December 31, 2004 |  |          | 374,786 |          |  | 1.00 | 
|                                 |  |          |         |          |  |      | 
|Year ended December 31, 2005:    |  |          |         |          |  |      | 
|Granted                          |  |          | 238,457 |          |  | 1.00 | 
|Exercised                        |  |          |         |          |  |      | 
|Forfeited and Cancelled          |  |          |         |          |  |      | 
|                                 |  |          |         |          |  |      | 
|Outstanding at December 31, 2005 |  |          | 613,243 |          |  | 1.00 | 
|                                 |  |          |         |          |  |      | 
|Year ended December 31, 2006:    |  |          |         |          |  |      | 
|Granted                          |  |          | 213,517 |          |  | 1.00 | 
|Exercised                        |  |          | -       |          |  |      | 
|Forfeited and Cancelled          |  |          | -       |          |  |      | 
|                                 |  |          |         |          |  |      | 
|Outstanding at December 31, 2006 |  |          | 826,760 |          |  | 1.00 | 



Note 4  Other Liabilities

The Company received $5,000 from an individual in 1999 as part of an agreed upon investment.  The individual has not fully invested the agreed amount and the Company intends to either repay the amount with interest or issue common stock in settlement of this liability in the future.

Note 5  Income Taxes



The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During fiscal 2006 and 2005, the Company incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $1,209,000 at December 31, 2006, and will expire in the years 2019 and 2023.

At December 31, 2006, deferred tax assets consisted of the following:



Deferred tax assets

$           423,000

Less: valuation allowance

(423,000)

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

Net deferred tax assets

$                       -

============

Note 6  Commitments and Contingencies

The Company will be subjected to various claims and liabilities in the ordinary course of business.  The Company intends to maintain various forms of insurance that the Companys management believes are adequate to reduce the exposure to these risks to an acceptable level.



The Company executed an agreement in 2003 to purchase two radio stations, for $400,000 of common stock (number of shares to be determined on the day of Closing based on market value of common stock on that date) plus $375,000 cash.  An additional $25,000 was to be paid to the sellers in exchange for a non-compete agreement.  This agreement was contingent on the registration of common stock and the Company obtaining the additional cash resources.



In May 2004, the Company filed a petition in a court of competent jurisdiction against the owners of those two radio stations.  The litigation arose out of the Asset Purchase Agreement that the Company executed with the owners in October 2003, for the purchase of those stations. After the execution of the Asset Purchase Agreement, a dispute arose between the Company and the owners. The Company believes that the owners violated the Asset Purchase Agreement by failing to provide necessary information on a timely basis and by failing to cooperate with the Company's efforts to complete the acquisition.  The Companys petition seeks specific performance of the agreement as well as damages for breach of contract and attorneys' fees.



The owners have filed a counterclaim that denies the enforceability of the Asset Purchase Agreement and requested that the court declare it unenforceable or, in the alternative, determine that the Company fraudulently induced them



23

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to sign it. The Company executed a settlement agreement on September 25, 2006 whereby all parties released all claims against the others, all non-suit claims against the others in Cause No.:15466, American Radio Empire v. Witcher, Et al., in the District Court of Lampasas County, Texas, 27th Judicial District; and all parties paid their own costs.

During 2004, the Company entered into two non-binding agreements for the purchase of a total of 5 radio stations. To date, no further agreements have been signed in connection with these acquisitions.

Note 7  Related Party Transactions

An individual who is an officer and a shareholder of the Company provides facilities and other operating costs for the Company without reimbursement.  That individual has an employment agreement with the Company that requires payment of a salary with a set progression of annual raises, medical insurance and a vehicle for business use in exchange for management services.  To date, the Company has not provided this compensation. This individual has forgone claims to this compensation and therefore it has not been accrued as a liability as of December 31, 2006 and 2005. In 2003, the Company executed a consulting agreement with this individual that provides for payment of consulting fees and reimbursement of expenses.  Approximately $146,000 and $165,000 have been paid under this agreement during 2006 and 2005, respectively. In 2006, the Companys Board of Directors authorized payment to this individual for office space rent in the amount of $500 per month.  During 2006, a total of $6,000 was paid and is included in the Statement of Expenses.

In 2006 and 2005, the Company entered into consulting agreement with 11 investors to provide consulting services including software development, marketing, real estate development, engineering and internet in 2007, 2006, and 2005.  The investors agreed to receive compensation in the form of restricted common stock of 280,000 shares which will be issued upon completion of the agreed upon services.

Note 8  Common Stock

During 2005, 4,808 shares were returned to the Company and were cancelled in connection with the termination of a consulting agreement.

During 2005, as part of the acquisition discussed in Note 9, the sole shareholder of Stone Field Management Company, Inc. returned 7,692 shares of common stock and they were cancelled by the Company.

Note 9  Reverse Acquisition

On December 31, 2005, the Company completed a recapitalization in the form of a "reverse merger" transaction with Stone Field Management Company, Inc., a publicly traded Wyoming corporation.  Stone Field exchanged one share of common stock for each of the 32,692 shares of ARE common stock that were issued and outstanding as of the merger date.  In addition, the Company issued 15,384 shares of common stock to a third party as compensation for brokering this transaction and the holder of the pre-merger shares of common stock of Stone Field, returned 7,692 common shares which were cancelled and retained 1,900 shares of common stock.  After the merger, a total of 49,976 shares of common stock were issued and outstanding.  The name of Stone Field was changed to American Radio Empire, Inc. after the merger.

For financial reporting purposes, ARE is deemed to be the acquirer in the reverse merger transaction. Consequently, the assets and liabilities and the historical operations reflected in the consolidated financial statements are those of ARE and are recorded at the historical cost basis of ARE.

In the merger, the Company acquired no assets and liabilities totaling approximately $11,000.  The merger was recorded as an acquisition and the liabilities were recognized with an offset to common stock and additional paid in capital.



24

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Since Stone Field transactions are not material to the financial statements for the periods presented and the amounts in the financials statements reflect the history of American Radio Empire, the pro forma statement of operation and balance sheet are not presented.

Note 10  Subsequent Events

On July 16, 2007, the Companys Board of Directors authorized a 104 to 1 reverse stock split to take effect on this date.  All share information presented in these financial statements has been retroactively adjusted to reflect the reduced number of shares resulting from this action.  The Board subsequently and retroactively on December 20, 2007 passed a resolution reinstating the original number of incremental shares attributable to convertible notes and warrants to their original pre-split figures.  The subsequent retroactive adjustment has been reflected in the incremental shares disclosure in Note 1.



On August 8, 2007, the Company entered into a stock purchase agreement with Wisplinx, LLC and Wisplinxs principle shareholder, providing for the acquisition by the Company of Wisplinx, an Internet Service Provider (ISP) located in the suburbs of northern Oklahoma City, Oklahoma.  The stock purchase was consummated on October 2, 2007, at which time Wisplinx was acquired by the Company for $50,000 and 50,000 shares of the Companys restricted common stock.



25

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ITEM 8A.  CONTROL AND PROCEDURES



(a) Evaluation of disclosure controls and procedures.



We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to our President/CEO/Treasurer and Directors, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of disclosure controls and procedures in Rule 13a-15(e). In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We maintain that the controls and procedures in place do provide reasonable assurance that all necessary disclosures are communicated as required.



At the end of the period covered by this Annual Report on Form 10-KSB, we carried out an evaluation, under the supervision and with the participation of our President/CEO/Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President/CEO/Treasurer concluded that our disclosure controls and procedures were not effective to ensure that all material information required to be disclosed in this Annual Report on Form 10-KSB has been made known to them in a timely fashion. In connection with the completion of its audit of, and the issuance of its report on, our financial statements for the year ended December 31, 2006, Malone & Bailey, PC identified deficiencies that existed in the design or operation of our internal control over financial reporting.



The deficiencies in our disclosure controls related to our ability to timely file our annual report. We are in the process of improving our internal control over financial reporting in an effort to remediate these deficiencies through improved supervision and training of our accounting staff. These deficiencies have been disclosed to our Board of Directors. Additional effort is needed to fully remedy these deficiencies and we are continuing our efforts to improve and strengthen our control processes and procedures. Our management and directors will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.



b) Changes in internal controls



There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



ITEM 8B.  OTHER INFORMATION



None



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PART III





ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS



The following table sets forth the names and ages of the members of our Board of Directors and our executive officers and the positions held by each.

|              |     |                                                 |                    
|------------- | --- | ----------------------------------------------- | -------------------
|              |     |                                                 |                    
|Name          | Age | Current Position/Office                         | Position Held Since
|Dain Schult   | 52  | Chairman, President/CEO, Treasurer, Director    | December 31, 2005  
|Sherry Schult | 54  | Secretary                                       | December 31, 2005  
|Herb Neu      | 64  | Chief Operating Officer - Southeastern Division | December 31, 2005  
|Harry Hedges  | 59  | Chief Operating Officer - Southwestern Division | December 31, 2005  



Dain Schult - Chairman, President/CEO:  Mr. Dain Schult has served as a Director, Chairman, President/Chief Executive Officer and Treasurer of American Radio since 1998. He is a broadcast veteran of over 38 years in the radio industry. He created Radioactivity, Inc. (as Founder and President March 1977 - September 1996), a full-service radio broadcast consultancy and personally consulted over 150 stations around the country.  Mr. Schult participated in the turnaround of numerous radio stations, created turn-key management services for new station owners, conducted station appraisals and market analysis projects for sellers and buyers, assisted as broker, buyer's agent, buyer or seller on over 120 station transactions and developed specific music formats for on-air use by client stations.  He was Chief Operating Officer for Sunbelt Radio Group, Inc., (September 1989-May 1991) a radio station group of up to 15 stations created to acquire and operate radio stations along the Texas-Mexico border.  He was founder and CEO for TexRock Radio, Inc. (March 1995-October 1998), a Texas-based group of 71 stations.  Mr. Schult later created and served as Chairman and CEO of American Communications Enterprises, Inc. (December 1998-September 2000). From September 2000 until the present, Mr. Schult has devoted the bulk of his time to American Radio. During that time, he has occasionally provided broadcast consulting services to third parties. He is a graduate of Georgia State University, Atlanta, GA, and a published author.  His published works include "The Radio Guide", "Nashville, Chattanooga & St. Louis - A History of the Dixie Line," "Grandpa's Road" and "Roll Away The Stone."



Herb Neu - Chief Operating Officer - Southeastern Division:  Mr. Neu serves currently as a Director and as our COO - Southeastern Division.  He has served as a manager of several different radio station groups, as well as VP/Midwest Sales Manager for ABC FM Radio Network Spot Sales (September 1969-January 1971), General Manager of Programming and Marketing Operations of CNN Radio Network (March 1982-November 1986), VP/Sales for Impact Resources Research (1988-1992) and President/Publisher of OTC Publishing (1994-Present).  In his over 40 years in media, he has experience in dealing with national and regional advertising, successfully working with advertising agencies and media buyers across the country.



Harry H. Hedges, III - Chief Operating Officer - Southwestern Division:  As a Director and COO of our Southwestern Division, Mr. Hedges brings over 30 years of experience in the radio broadcasting industry.  Prior to American Radio's formation, Mr. Hedges was Senior Vice-President/Regional Manager for Equicom, Inc. (October 1997-October 1999).  Since October 1999, Mr. Hedges has split his professional time between providing broadcast consulting services and providing contractor services.  Additionally he served as an associate consultant with Radioactivity, Inc. (May 1992-October 1997), and founded Hedges and Associates (February 1990-August 1996), a sales and marketing company to market Western and Southwestern clothing and accessories. Previously, Mr. Hedges held various general manager, sales and promotion manager, account executive, and news reporter/copy writer positions at several stations in Texas.



Sherry Schult - Secretary:  Ms. Schult has served as American Radio's secretary and as a Director since its formation in 1998.  Since 1988, Ms. Schult has owned and operated the TYFG Company, which manufactures and markets motivational dolls.



27

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Employment Agreements



Mr. Schult currently serves at a initial annual salary of $137,500 per annum pursuant to a five-year employment agreement dated December 15, 2000 that has been extended until December 15, 2008. The employment agreement also provides for a monthly vehicle allowance of $550, for reimbursement of business related expenses, and for bonuses as may be determined in the sole discretion of the Board of Directors.  Through the date of this Report, Mr. Schult had accrued approximately $275,000 in unpaid salary for the years 2001 and 2002.  In light of our cash flow shortage, Mr. Schult orally agreed, beginning in 2003, to accept consulting payments of $10,000 per month and reimbursement of expenses in lieu of compensation under his Employment Agreement.  In connection with the merger, Mr. Schult has waived any claim for unpaid compensation for the years 2001, 2002, 2003, 2004 and 2005 under his Employment Agreement.



Mr. Schult currently devotes one-hundred percent (100%) of his professional time to American Radio.



Ms. Sherry Schult currently serves as American Radio's Secretary.  Ms. Schult does not receive any cash remuneration for her services and does not have a written employment agreement.  Ms. Schult currently spends less than five (5) hours per month devoted to American Radio's business.  Ms. Schult and Mr. Schult are married.



We have employed Mr. Neu at an annual salary of $100,000 per annum pursuant to a five-year employment agreement.  The employment agreement provides for a monthly vehicle allowance of $550, for reimbursement of business related expenses, and for bonuses as may be determined in the sole discretion of the Board of Directors.  Mr. Neu has agreed to delay the effectiveness of his Employment Agreement until American Radio, in its sole discretion, determines that it is financially feasible to employ Mr. Neu full time.  Until that time, Mr. Neu has agreed to make himself available to us to serve as divisional COO on a consulting basis.  Currently, Mr. Neu spends less than five (5) hours per month as a consultant on American Radio's business.



We have employed Mr. Hedges at an annual salary of $87,500 per annum pursuant to a five-year employment agreement.  The employment agreement provides for a monthly vehicle allowance of $550, for reimbursement of business related expenses, and for bonuses as may be determined in the sole discretion of the Board of Directors.  Mr. Hedges has agreed to delay the effectiveness of his Employment Agreement until American Radio, in its sole discretion, determines that it is financially feasible to employ Mr. Hedges full time. Until that time, Mr. Hedges has agreed to make himself available to us to serve as divisional COO on a consulting basis.  Currently, Mr. Hedges spends less than five (5) hours per month as a consultant on American Radio's business.



While Messrs. Neu and Hedges are available for consultations on an as-needed basis (without charge), currently there are no written consulting agreements between them and American Radio.  The proposed Employment Agreements between American Radio and Messrs. Neu and Hedges do not go into effect until such time as their services are required by American Radio, and American Radio has the funds to pay for their services.



Messrs. Schult, Hedges and Neu may, as the sole members of our Board of Directors, approve the issuance of shares of common stock and/or other American Radio securities to themselves in consideration of services they have and will provide.  American Radio does not currently compensate its directors for their services.



Audit Committee Financial Expert



The functions of the Audit and Compensation Committee are: (i) to recommend the engagement of the Company's independent auditors and review with them the plan, scope and results of their audit for each year; (ii) to consider and review other matters relating to the financial and accounting affairs of the Company; and (iii) to review and recommend to the Board of Directors all compensation packages, including the number and terms of stock options, offered to officers and executive employees of the Company. The Company's entire board of directors serves as the Company's Audit Committee andas the Company's Compensation Committee.



Code of Ethics



28

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We have adopted a "Code of Ethics for Directors, Officers and Employees", a code of ethics that applies to all employees, including our executive officers.



29

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ITEM 10.  EXECUTIVE COMPENSATION



The following table sets forth the aggregate annual remuneration of Stone Field's Chief Executive Officer and the other executive officers for the fiscal years ending December 31, 2004, 2005 and 2006 (collectively, the "named executive officers"). All amounts are in U.S. dollars unless otherwise noted.

|                                     |      |                     |                        |       |            |         |                        |  |  |  |  |  |  |  | 
|------------------------------------ | ---- | ------------------- | ---------------------- | ----- | ---------- | ------- | ---------------------- |  |  |  |  |  |  |  | 
|                                     |      |                     |                        |       |            |         |                       
|                                     |      | Annual Compensation | Long term compensation
|Name and Principal Position          | Year | Salary              | Bonus                  | Other | Restricted | Options | All Other
Compensation
|                                     |      |                     |                        |       |            |         |                       
|Daniel Hodges,
Former President      | 2006 | 0                   |                        |       |            |         |                       
|2005                                 | 0    |                     |                        |       |            |        
|2004                                 | 0    |                     |                        |       |            |        
|                                     |      |                     |                        |       |            |         |                       
|Dain Schult,
President/CEO/Treasurer | 2006 | N/A                 |                        |       |            |         |                       
|2005                                 | N/A  |                     |                        |       |            |        
|2004                                 | N/A  |                     |                        |       |            |        
|                                     |      |                     |                        |       |            |         |                       
|Sherry Schult,
Secretary             | 2006 | N/A                 |                        |       |            |         |                       
|2005                                 | N/A  |                     |                        |       |            |        
|2004                                 | N/A  |                     |                        |       |            |        
|                                     |      |                     |                        |       |            |         |                       
|Herb Neu,
COO - Southeast            | 2006 | N/A                 |                        |       |            |         |                       
|2005                                 | N/A  |                     |                        |       |            |        
|2004                                 | N/A  |                     |                        |       |            |        
|                                     |      |                     |                        |       |            |         |                       
|Harry Hodges,
COO - Southwest        | 2006 | N/A                 |                        |       |            |         |                       
|2005                                 | N/A  |                     |                        |       |            |        
|2004                                 | N/A  |                     |                        |       |            |        





30

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ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth the beneficial ownership of Common Stock of the Company as of the date of this report for the following: (i) each person or entity who is known to the Company to beneficially own more than 5% of the outstanding shares of the Company's Common Stock; (ii) each of the Company's Directors; (iii) the Company's Chief Executive Officer and each of the officers ("Named Officers") named in the Summary Compensation Table herein; and (iv) all Directors and executive officers of the Company as a group.



The number and percentage of shares beneficially owned is determined under rules of the Securities and Exchange Commission ("SEC"), and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or dispositive power and also any shares that the individual has the right to acquire within sixty days of the Record Date through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes, each person has sole voting and dispositive power (or shares such power) with respect to the shares shown as beneficially owned.



|               |                                                            |                                           |                     
|-------------- | ---------------------------------------------------------- | ----------------------------------------- | --------------------
|               |                                                            |                                           |                     
|TITLE OF CLASS | NAME AND ADDRESS OF BENEFICIAL OWNER                       | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | PERCENT OF CLASS (1)
|Common Stock   | Dain L. Schult
13210 Kerrville Folkway
Austin, Texas 78729 | 29,086 shares                             | 58.2%               
|Common Stock   | Herb Neu
P.O. Box 20518
Tuscaloosa, Alabama 35402          | 1,803 shares                              | 3.6%                
|Common Stock   | Harry H. Hedges
P.O. Box 1626
Mason, Texas 76856           | 1,803 shares                              | 3.6%                
|Common Stock   | Sherry Schult
13210 Kerrville Folkway
Austin, Texas 78729  | 29,086 shares*                            | 58.2%               
|               | All Officers and Directors as a group                      | 32,692 shares                             | 65.4%               
|Total          |                                                            | 49,976 shares                             |                     



*    Represents shares owned by Mr. Dain Schult.  Ms. Schult is deemed to be the beneficial owner of the shares that are owned by her spouse, Mr. Schult.



(1) Based upon 49,976 shares outstanding as of December 31, 2006.



(B) Compliance with Section 16(a) of the Exchange Act



Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's officers and directors, and persons who own more that ten percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and with any exchange on which the Company's securities are traded.  Officers, directors and persons owning more than ten percent of such securities are required by Commission regulation to file with the Commission and furnish the Company with copies of all reports required under Section 16(a) of the Exchange Act.  There was a change in control of the Company which occurred on December 31, 2006.





31

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ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



None.





ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K



(a) Exhibits:



|               |                                                                                                    
|-------------- | ---------------------------------------------------------------------------------------------------
|Exhibit Number | Description                                                                                        
|3              | Articles of Incorporation*                                                                         
|3.1            | Amended Articles of Incorporation*                                                                 
|3.2            | Bylaws*                                                                                            
|10.1           | Agreement of Plan of Merger between Stone Field Management Company and American Radio Empire, Inc.*
|31.1           | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                           
|32.1           | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                           

* Incorporated by reference



(b) Reports on Form 8-K:



On January 17, 2006, the Company filed an 8-K announcing a share exchange transaction with American Radio Empire, Inc.



On April 14, 2006, the Company filed an 8-K announcing the change of its independent accounting firm from Robison, Hill & Co. to Helin, Donovan, Trubee & Wilkinson, LLP.



ITEM 14.  PRINCIPAL ACCOUNTANTS FEES AND SERVICES



Amounts billed by Malone & Bailey, PC, total
$21,000
which is comprised of audit related fees for the year ended December 31, 2006. 
Amounts billed by Helin, Donovan, Trubee & Wilkinson, LLP total $6,000
which is comprised of audit related fees for the year ended December 31, 2005.



32

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SIGNATURES





In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.







AMERICAN RADIO EMPIRE, INC.

Dated: January 7, 2008



/s/Dain Schult



Dain Schult

President, CEO, Treasurer and Director



33

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Exhibit 31.1



CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT



|                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|I, Dain Schult, President, CEO, Treasurer and Director of American Radio Empire, Inc. ("Company"), certify that:
|1.                                                                                                               | I have reviewed this annual report on Form 10-KSB of American Radio Empire, Inc.;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.                                                                                                               | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.                                                                                                               | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this annual report;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.                                                                                                               | The other certifying directors and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))  and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the small business issuer and have:
a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by other within those entities, particularly during the period in which this report is being prepared;
b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles.
c.  Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report on such evaluation; and
d.  Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's fiscal year that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
|5.                                                                                                               | The other certifying directors and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of our board of directors (or persons performing the equivalent functions):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



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|a. | All significant deficiencies and material weaknesses  in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial data; and
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|b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting; and                                                                                     
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/s/Dain Schult



Dain Schult

President, CEO, Treasurer and Director



January 7, 2008



34

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Exhibit 32.1





CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002







In connection with the Annual Report of American Radio Empire, Inc. on Form 10-KSB for the year ending December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dain Schult, President, CEO, Treasurer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.







/s/Dain Schult



Dain Schult

President, CEO, Treasurer and Director



January 7, 2008



35

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