**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**




**FORM
      10-KSB**





**(Mark
      One)**





**T**
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**





**For
      the fiscal year ended June 30, 2003**





**OR**





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





**For
      the transition period
      fromto**





**Commission
      file number: 000-30805**





**DUTCH
      GOLD RESOURCES, INC.**


**(formerly
      Small Town Radio, Inc.)**


(Name
      of
      Small Business Issuer in Its Charter)





**Nevada**
            
            **84-1125214**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification Number)





**1800
                Century Boulevard, Suite 1200, Atlanta, Georgia**
            
            **30345**(Address
                of Principal Executive Offices)
            
            (Zip
                Code)





**(404)
      327-4520**


(Issuer's
      Telephone Number, Including Area Code)





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





**None**


(Title
      of
      Class)





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





**Common
      Stock, par value $0.001 per share**


(Title
      of
      Class)





Check
      whether the issuer:
      (1) filed all reports required to be filed by Section 13 or 15(d) of
      the Securities Exchange Act of 1934 during the preceding12 months (or for
      such shorter period that the Company was required to file such reports), and
      (2) has been subject to such filing requirements for the
      past90 days.





Yes
oNo
T





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 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. T





The
      issuer's revenues for the most
      recent fiscal year were $54,158.





The
      aggregate market value of the
      voting and non-voting common equity held by non-affiliates of the Company as
      of
      September 25, 2003, was $235,094 (based on the average bid and ask price of
      $0.20).





The
      number of shares outstanding of the
      issuer's stock, $0.001 par value per share, as of September 25, 2003 was
      13,109,000.





Transitional
      Small Business Disclosure Format (check one):




Yes  oNo  T










**TABLE
      OF CONTENTS**





**PART
                I**ITEM
                1.
            Description
                of BusinessITEM
                2.
            Description
                of PropertiesITEM
                3.
            Legal
                ProceedingsITEM
                4.
            Submission
                of Matters to a Vote of Security
                Holders**PART
                II**ITEM
                5.
            Market
                for the Company’s Common Equity and Related
                Stockholder MattersITEM
                6.
            Management’s
                Discussion and Analysis of Financial Conditionand
                Results of OperationITEM
                7.
            Financial
                Statements and Supplementary
                DataITEM
                8.
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial DisclosureITEM
                8A.
            Controls
                and Procedures**PART
                III**ITEM  9.
            Directors
                and Executive Officers of the
                CompanyITEM
                10.
            Executive
                CompensationITEM
                11.
            Security
                Ownership of Certain Beneficial Owners and
                ManagementITEM
                12.
            Certain
                Relationships and Related
                TransactionsITEM
                13
            Principal
                Accounting Fees and
                Services**PART
                IV**ITEM
                14.
            Exhibits,
                Financial Statement Schedules and Reports on Form
                8-K**SIGNATURES****CERTIFICATIONS**




2





**FORWARD-LOOKING
      STATEMENTS**





This
      Annual Report on Form 10-KSB and the information incorporated by reference
      may include "forward-looking statements" within the meaning of Section 27A
      of the Securities Act of 1933, as amended, and Section 21E of the
      Securities and Exchange Act of 1934, as amended. Various statements, estimates,
      predictions, and projections stated under "Risk Factors," "Management's
      Discussion and Analysis of Financial Condition and Results of Operations" and
      "Business," and elsewhere in this Annual Report are "forward-looking statements"
      within the meaning of Section 27A of the Securities Act and
      Section 21E of the Exchange Act. These statements appear in a number of
      places in this Annual Report and include statements regarding the intent, belief
      or current expectations of Dutch Gold Resources, Inc.. or our officers with
      respect to, among other things, the ability to successfully implement our
      operating and acquisition strategies, including trends affecting our business,
      financial condition and results of operations. While these forward-looking
      statements and the related assumptions are made in good faith and reflect our
      current judgment regarding the direction of the related business, actual results
      will almost always vary, sometimes materially, from any estimates, predictions,
      projections, assumptions, or other future performance suggested herein. These
      statements are based upon a number of assumptions and estimates, which are
      inherently subject to significant uncertainties and contingencies, many of
      which
      are beyond our control and reflect future business decisions which are subject
      to change. Some of these assumptions inevitably will not materialize, and
      unanticipated events will occur which will affect our results. Some important
      factors (but not necessarily all factors) that could affect our revenues, growth
      strategies, future profitability and operating results, or that otherwise could
      cause actual results to differ materially from those expressed in or implied
      by
      any forward-looking statement, include the following:





·
            our
                ability to successfully implement our operating
                strategies;





·
            changes
                in the availability of debt or equity capital and increases in borrowing
                costs or interest rates;





·
            changes
                in regional and national business and economic conditions, including
                the
                rate of inflation;





·
            changing
                demographics;





·
            changes
                in the laws and government regulations applicable to us;
                and





·
            increased
                competition.





Stockholders
      and other users of this Annual Report on Form 10-KSB are urged to carefully
      consider these factors in connection with the forward-looking statements. We
      do
      not intend to publicly release any revisions to any forward-looking statements
      contained herein to reflect events or circumstances occurring after the date
      hereof or to reflect the occurrence of unanticipated events.








**PART I**








**Item
      1.         Description of
      Business.**








**HISTORY**





The
      Company was incorporated in Colorado on October 13, 1989 as Ogden, McDonald
      & Company for the purpose of seeking out acquisitions of properties,
      businesses, or merger candidates, without limitation as to the nature of the
      business operations or geographic location of the acquisition candidate. On
      July
      22, 1996, Ogden, McDonald & Company completed a transaction pursuant to
      which the shareholders of Worldwide PetroMoly Corporation, a Texas corporation,
      acquired approximately 90.6% of the shares outstanding in Ogden, McDonald &
Company, and Worldwide PetroMoly Corporation became a wholly owned subsidiary
      of
      Ogden, McDonald & Company. On October 11, 1996, Ogden, McDonald &
Company changed its name to Worldwide PetroMoly, Inc.





3





The
      Company was incorporated in Colorado on October 13, 1989 as Ogden, McDonald
      & Company for the purpose of seeking out acquisitions of properties,
      businesses, or merger candidates, without limitation as to the nature of the
      business operations or geographic location of the acquisition candidate. On
      July
      22, 1996, Ogden, McDonald & Company completed a transaction pursuant to
      which the shareholders of Worldwide PetroMoly Corporation, a Texas corporation,
      acquired approximately 90.6% of the shares outstanding in Ogden, McDonald &
Company, and Worldwide PetroMoly Corporation became a wholly owned subsidiary
      of
      Ogden, McDonald & Company. On October 11, 1996, Ogden, McDonald &
Company changed its name to Worldwide PetroMoly, Inc.




From
      July
      22, 1996, until June 1, 2001, through Worldwide PetroMoly we engaged in the
      business of manufacturing, marketing and distributing a line of
      molybdenum-fortified lubricant products called PetroMolyTM, an engine oil
      additive designed to enhance and maintain engines. Our lubricant business was
      operated entirely out of Worldwide PetroMoly. However, we were unable to create
      a sustained commercial market for our lubricant products, and Worldwide
      PetroMoly incurred significant and on-going losses.





On
      June
      1, 2001, we consummated a transaction in which Small Town Radio, Inc., a Georgia
      corporation ("Small Town Georgia"), was merged into a subsidiary of our company
      created for the purpose of this merger. Pursuant to this transaction, all of
      the
      outstanding shares of Small Town Georgia were exchanged for shares of our common
      stock. In connection with our acquisition of Small Town Georgia, on June 7,
      2001 we sold all of the share capital of Worldwide PetroMoly to Mr. Gilbert
      Gertner, our former Chairman of the Board.





On
      May
      23, 2002, Small Town Georgia was renamed "Small Town Radio of Georgia" in
      preparation for our reincorporation as a Nevada corporation. On May 28, 2002,
      Worldwide PetroMoly, Inc. was merged with and into Small Town Radio, Inc.,
      a newly created Nevada corporation, in are incorporation merger. Under our
      new
      name, "Small Town Radio, Inc.," the focus of our business is now the
      acquisition and operation of radio stations, generally located in small,
      non-rated markets.




On
      May
      18, 2003, Small Town Radio, Inc. (the “Company”) and its wholly owned
      subsidiary, Small Town Radio of Georgia, Inc., filed voluntary petitions under
      Chapter 11 of title 11, United States Code (the “Bankruptcy Code”) in the United
      States Bankruptcy Court for the Northern District of Georgia (the “Bankruptcy
      Court”) (Case Nos. 03-67044 and 03-67043, respectively).  The Company
      subsequently refocused to become a natural resources company, changing its
      name
      to Tombstone Western Resources, Inc. on May 1, 2006. On December 7, 2007 the
      Company changed its name to Dutch Gold Resources, Inc. in anticipation of its’
acquisition of Dutch Mining, LLC which occurred January 7, 2007.








**DESCRIPTION
      OF BUSINESS**





***Overview***





Our
      business strategy is to complete the sale of the Company’s assets, seek
      additional financing to recapitalize the business and become a natural resources
      company.





Currently,
      we own WDGR AM licensed to Dahlonega, Georgia and operate WSBI AM licensed
      to
      Static, Tennessee, pursuant to a Local Programming and Marketing Agreement
      ("*LMA*").





We
      terminated a previously announced purchase and sale agreement dated March 8,
      2002, with Renegade Broadcasting, LLC ("Renegade"), pursuant to which we agreed
      to purchase from Renegade radio station WRVX-FM, licensed to Eufaula, Alabama.
      Upon final due diligence, we determined that there had been a material adverse
      change in Renegade's operating results and were unable to reach agreement on
      other terms.





We
      terminated a previously announced letter of intent dated June 3, 2002, with
      Hellinger Broadcasting ("Hellinger"), pursuant to which we agreed to engage
      in
      further discussions regarding a purchase of radio station WULA-AM, licensed
      to
      Eufaula, Alabama. Upon further due diligence, we determined that the station's
      market potential was insufficient to justify a purchase.





4





***Operating
      Strategy***





Our
      business strategy is to complete the sale of the Company’s assets, seek
      additional financing to recapitalize the business and become a natural resources
      company. To achieve these goals, we intend to:





·
            secure
                and maintain a buyer for the assets retained by the
                Company;





·
            coordinate
                the search for and the attainment of additional debt
                financing;





·
            coordinate
                the search for and the attainment of additional investments from
                private
                investors;





·
            maintain
                the operations of the Company to facilitate the plan of becoming
                a natural
                resources company;








***Sales***





We
      derived our revenue primarily from advertising revenue from local, national
      and
      network advertisers. Our per-spot costs are developed by modeling listener
      profiles, with drive time and local special events pricing being highest and
      political advertising being lowest.





***Source
      of Revenues***





Virtually
      all of our broadcast revenues have been generated from the sale of local and
      regional advertising for broadcast on our radio stations. Our local advertisers
      are generally small businesses located in the communities in which our radio
      stations are located. Potential advertisers include telephone companies,
      restaurants, fast food chains, automobile and farm equipment dealers, grocery
      stores, and other businesses.




***Employees.***    The
      Company employed one person as of June 20, 2003.








**Item
      2.         Description of
      Property.**








We
      currently lease approximately 750 square feet of space in Atlanta, Georgia
      for our corporate office and operations on a month-to-month basis. Our monthly
      rental charge for these offices is approximately $1,000 per month. We
      believe that these offices generally are adequate for our current needs and
      our
      needs in the immediate future.





The
      types
      of properties required to support radio stations include offices, studios,
      transmitter sites and antenna sites. The transmitter and antenna sites are
      generally located to provide maximum market coverage. Most of our station
      acquisitions will include real estate at the transmitter site, as well as
      facilities that have historically been used for local studio space and offices.
      While we expect to maintain a small office in each market for Community
      Coordinators and sales staff, these are expected to be modest facilities that
      can be maintained at nominal expense. Accordingly, we will likely sell, or
      lease
      the studio space that we acquire. With regard to the transmitter facilities,
      which are generally located at the tower location for each station, we intend
      to
      install the minimum studio equipment necessary to perform local broadcasting,
      on
      an emergency basis. This will give us significant flexibility while gaining
      operational cost advantages of consolidating studio operations at a centralized
      studio facility to be located in the Atlanta metropolitan area. We will own
      or
      lease substantially all of our operating equipment, consisting principally
      of
      transmitting antennae, transmitters, studio equipment and general office
      equipment.





WDGR
      AM
      1210, licensed to Dahlonega, Georgia and operating at 10,000 watts, covers
      the
      North Georgia region, including the northern suburbs of Atlanta, to the
      Tennessee state line. The tower and transmitter facilities of WDGR AM are
      located on real estate that we lease with an option to purchase. The lease
      has a
      term of 3 years at a monthly payment of $200.





5





**Item
      3.         Legal
      Proceedings.**








From
      time to time, we are party to litigation or other legal proceedings that we
      consider to be a part of the ordinary course of our business. At present, we
      are
      not involved in any legal proceedings nor are we party to any pending or
      threatening claims that could reasonably be expected to have a material adverse
      effect on our business, financial condition, or results of operations. We are
      involved in a dispute with a former executive officer. We believe that this
      matter can be settled by a settlement payment of $350,000 to the former
      executive officer including forfeiture of accounts payable to the former
      executive in the amount of $90,000. We have accrued for this potential expense
      in the amount of $260,000 as of June 30, 2003.





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


None.








**PART II**








**Item
      5.         Market for Common Equity
      and Related Stockholder Matters.**








***Market
      Information and Holders***





(a)
      Market Information.





Quotations
      for our common stock are reported on the OTC Bulletin Board under the symbol
      "DGRI." The following table sets forth the range of high and low bid information
      for the periods indicated since July 1, 2001:





**2001**
            
            **High**
            
            
            **Low**First
                Quarter, Fiscal Year 2002 (July 1 to September 30)
            
            $
            3.80
            
            
            $
            1.00Second
                Quarter, Fiscal Year 2002 (October 1 to December 31)
            
            $
            3.80
            
            
            $
            0.80





**2002**Third
                Quarter, Fiscal Year 2002 (January 1 to March 31)
            
            $
            1.80
            
            
            $
            0.40Fourth
                Quarter, Fiscal Year 2002 (April 1 to June 30)
            
            $
            3.00
            
            
            $
            0.50First
                Quarter, Fiscal Year 2003 (July 1 to September 30)
            
            $
            0.01
            
            
            $
            0.01Second
                Quarter, Fiscal Year 2003 (October 1 to December 31)
            
            $
            0.01
            
            
            $
            0.01





**2003**Third
                Quarter, Fiscal Year 2003 (January 1 to March 31)
            
            $
            0.01
            
            
            $
            0.01Fourth
                Quarter, Fiscal Year 2003 (April 1 to June 30)
            
            $
            0.01
            
            
            $
            0.01





High
      and
      low quotation information was obtained from data provided by Morgan
      Stanley & Co. Quotations reflect inter-dealer prices, without retail
      mark-up, mark-down or commission, and may not reflect actual
      transactions.





Since
      the
      Company's shares began trading in the over-the-counter market on the OTCBB,
      the
      prices for its shares have fluctuated widely. There may be many factors that
      may
      explain these variations. The Company believes that such factors include (a)
      the
      demand for its common stock, (b) the number of shares of the Company's common
      stock available for sale, (c) developments in the PEO industry, and (d) changes
      in the performance of the stock market in general, among others.





6





In
      recent
      years, the stock market has experienced extreme price and volume fluctuations
      that have had a substantial effect on the market prices for many small and
      emerging growth companies such as the Company, which may be unrelated to the
      operating performances of the specific companies. Some companies that have
      experienced volatility in the market place of their stock have been the objects
      of securities class action litigation.  If the Company became the
      object of securities class action litigation, it could result in substantial
      costs and a diversion of its management’s attention and resources and have an
      adverse effect on the Company's ability to implement its business plan. In
      addition, holders of shares of the Company's common stock could suffer
      substantial losses as a result of fluctuations and declines in the market price
      of the Company's common stock.





The
      trading of shares of the Company's common stock is subject to limitations set
      forth in Rule 1 Sg-9 of the Securities Exchange Act. This rule imposes sales
      practice requirements on broker-dealers who sell so-called “penny stocks” to
      persons other than established customers, accredited investors or institutional
      investors. For any transaction involving a penny stock, unless exempt, the
      rules
      require that a broker or dealer: (i) approve a person's account for transactions
      in penny stocks; and (ii) receive from the investor a written agreement to
      the
      transaction, setting forth the identity and quantity of the penny stock to
      be
      purchased. In order to approve a person's account for transactions in penny
      stocks, the broker or dealer must: (i) obtain financial information and
      investment experience and objectives of the person; and (ii) make a reasonable
      determination that the transactions in penny stocks are suitable for that person
      and that person has sufficient knowledge and experience in financial matters
      to
      be capable of evaluating the risks of transactions in penny stocks. The broker
      or dealer must also deliver, prior to any transaction in a penny stock, a
      disclosure schedule relating to the penny stock market, which, in highlight
      form, (i) sets forth the basis on which the broker or dealer made the
      suitability determination; and (ii) that the broker or dealer received a signed,
      written agreement from the investor prior to the transaction. Disclosure also
      has to be made about the risks of investing in penny stocks in both public
      offerings and in secondary trading, and about commissions payable to both the
      broker-dealer and the registered representative, current quotations for the
      securities and the rights and remedies available to an investor in cases of
      fraud in penny stock transactions. Finally, monthly statements have to be sent
      disclosing recent price information for the penny stock held in the account
      and
      information on the limited market in penny stocks.





(b)
      Holders





As
      of
      June 30, 2003, we had 189 stockholders of record of our common
      stock.








***Dividend
      Policy***





We
      have
      never declared or paid any cash dividends on our capital stock. We currently
      plan to retain future earnings, if any, to finance the growth and development
      of
      our business and do not anticipate paying any cash dividends in the foreseeable
      future. We may incur indebtedness in the future which may prohibit or
      effectively restrict the payment of dividends, although we have no current
      plans
      to do so. Any future determination to pay cash dividends will be at the
      discretion of our board of directors.





***Recent
      Sales of Unregistered Securities***





During
      the year ended June 30, 2003, no securities of the Company which were not
      registered under the Securities Act of 1933, as amended (the "Securities Act")
      were sold by the Company except as follows:





1.
      On
      December 15, 2002, the Company issued 1,600,000 shares its common stock to
      nine
      individuals as payment of services rendered to the Company valued at
      $155,500.





2.
      On
      December 15, 2002, 1,146,939 shares of our common stock were issued to the
      Company's Chief Executive Officer as salary and compensation valued at
      $224,251.





3.
      On
      December 21, 2002, the Company issued 450,000 shares of its common stock were
      issued to four individuals as payment of services rendered to the Company valued
      at $53,500.





7





**Item
      6.         Management's Discussion
      and Analysis of Plan of Operation.**








*The
      following discussion is intended to assist in the understanding and assessment
      of significant changes and trends related to our results of operations and
      our
      financial condition together with our consolidated subsidiaries. This discussion
      and analysis should be read in conjunction with the consolidated financial
      statements and notes thereto included elsewhere in this Annual Report on
      Form 10-KSB. Historical results and percentage relationships set forth in
      the statement of operations, including trends which might appear, are not
      necessarily indicative of future operations.*





**GOING
      CONCERN**





In
      connection with their audit report on our consolidated financial statements
      as
      of June 30, 2003, Ronald Chadwick, PC, our independent certified public
      accountants, expressed substantial doubt about our ability to continue as a
      going concern because such continuance is dependent upon our ability to raise
      capital.





We
      have
      explored, and continue to explore, all avenues possible to raise the funds
      required. We have minimal revenue-producing activity. We also need capital
      to
      fund overhead and administrative costs as well as transaction expenses. At
      June 30, 2003, accounts payable to vendors totaled $616,217. At
      June 30, 2003, our current monthly cash requirement was approximately
      $35,000 per month. We have met our operating costs to date through loans from
      our shareholders; however, there can be no assurance that our shareholders
      will
      be able or willing to make additional loans to us in the future to fund
      continued operations. We estimate that the minimum level of funding that we
      will
      require to meet our operating requirements through June 30, 2004 is
      approximately $400,000.





Ultimately,
      we must achieve profitable operations if we are to be a viable entity. We intend
      to purchase existing operations that are currently operating at breakeven or
      are
      individually profitable. Although we believe that there is a reasonable basis
      to
      believe that we will successfully raise the needed funds, we cannot assure
      you
      that we will be able to raise sufficient capital to sustain operations or that
      we will be able to achieve, or maintain, a level of profitability sufficient
      to
      meet the operating expenses of the corporate office.





***Cash
      Flow***





We
      have a
      working capital deficit of $1,867,572 at June 30, 2003 compared to a deficit
      of
      $1,283,212 at June 30, 2002. This increase in working capital deficit
      resulted from the loss for the year.





For
      the
      fiscal year ended June 30, 2003, operations used $147,127 of cash.
      Financing activities generated $142,610 during the period and consisted solely
      of stockholder loans. We expect to continue to have operating cash flow
      deficiencies for the near term, and for the remainder of the 2004 fiscal
      year.





***Capital
      Resources***





We
      currently have limited sources of capital, including the public and private
      placement of equity securities and the possibility of debt. With virtually
      no
      assets, the availability of funds from traditional sources of debt will be
      limited, and will almost certainly involve pledges of assets or guarantees
      by
      officers, directors and stockholders. Stockholders and directors have advanced
      funds to us in the past, but we cannot assure you that they will be a source
      of
      funds in the future.





As
      of
      June 30, 2003, we had minimal cash. We estimate that, based upon our
      current business plan for acquisitions, operations and capital expenditures,
      we
      will require up to $800,000 over the next two years. The estimated funding
      required for the first year of our business plan is $400,000. We believe that
      the funding generated by the sale of assets and the equity placement, will
      be
      sufficient to fund cash requirements for the next year of
      operations.





8




***Operations
        Outlook***
 
 As
        a
        result of the Company's seeking protection under the Bankruptcy Code, the
        Company has little operations at June 30, 2003.  Our principal source
        of revenue had been the sale of broadcasting time for advertising. We do
        not
        currently have funds sufficient to carry out any of our operations, or to
        execute our plan of becoming a natural resources company.  In order to act
        upon our operating plan discussed herein, we must be able to raise sufficient
        funds from (i) debt financing; or, (ii) new investments from private investors.
        There can be no assurance that we will be able to obtain debt or equity
        financing or generate sufficient revenue to produce positive cash flow from
        operations.




9





**RESULTS
      OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2003 AND JUNE 30,
      2002**





The
      acquisition of Small Town Radio, Inc. by Worldwide PetroMoly, Inc
      constituted a reverse acquisition for financial reporting purposes. The purchase
      method of accounting, used to record the transaction, requires that operations
      of the acquired entity may only be reflected in the statement of operations
      subsequent to the date of the acquisition. As a result of this, the historical
      statement of operations for Worldwide PetroMoly, Inc. d/b/a Small Town
      Radio, Inc. only reflects Small Town Radio Inc.'s operations for the
      year ended June 30, 2001. During the entire year ended June 30, 2001,
      we focused our efforts on researching the industry, identifying stations within
      a selected geographical market that might be available for purchase, and trying
      to secure financing for the operation.





The
      operating loss for the year ended June 30, 2003 was $1,439,032, an increase
      of $308,054 over the year ended June 30, 2002. Revenue for the year ended
      June 30, 2003 was $38,307, a decrease of $15,851 over the year ended
      June 30, 2002. The loss in 2003 included a charge of $198,1610 for the
      write off of assets as well as a charge of $136,816 for compensatory option
      issues. Interest expense and financing costs for the year ended June 30, 2003
      were $75,805, consistent with the prior year. The total loss for the year was
      $1,514,837.





The
      operating loss for the year ended June 30, 2002 was $1,130,978, an increase
      of $209,423 over the year ended June 30, 2001. Revenue for the year ended
      June 30, 2003 was $54,158, an increase of $54,158 over the year ended
      June 30, 2001. The loss in 2002 included a charge of $260,000 for the
      anticipated settlement of a dispute with a former executive and shareholder
      as
      well as organizational and start-up expenses prior to the date the Company
      commenced operating activities. Interest expense and financing costs for the
      year ended June 30, 2002 were $81,885, which included expense associated with
      a
      warrant issued to a shareholder in conjunction with a demand promissory note
      for
      $216,000. The total loss for the year was $1,212,863


**Item
        7. Financial Statements.**
 
 The
        consolidated financial statements of the Company, together with the reports
        thereon of both Ronald Chadwick PC and Bridges & Dunn-Rankin, LLP,
        independent accountants, are set forth on the pages of this Annual Report
        on
        Form 10-KSB indicated below.
 
 **Page**Report
                  of Independent Accountants
              
              F-2Small
                  Town Radio, Inc. Consolidated Financial StatementsConsolidated
                  Balance Sheet at June 30, 2003
              
              F-3Consolidated
                  Statement of Operations for the year ended June 30, 2003
              
              F-4Consolidated
                  Statement of Cash Flows for the year ended June 30, 2003
              
              F-5Consolidated
                  Statement of Stockholders' Deficit for the period from June 30,
                  2002 to
                  June 30, 2003
              
              F-6Notes
                  to Consolidated Financial Statements
              
              F-7
 
 **Page**Report
                  of Independent Accountants
              
              F-2Small
                  Town Radio, Inc. Consolidated Financial StatementsConsolidated
                  Balance Sheets at June 30, 2002 and 2001
              
              F-3Consolidated
                  Statements of Operations for the years ended June 30, 2002 and
                  2001
              
              F-4Consolidated
                  Statements of Cash Flows for the years ended June 30, 2002, and
                  2001
              
              F-5Consolidated
                  Statements of Stockholders' Deficit for the period from June 30,
                  2000 to
                  June 30, 2002 June 30, 2002
              
              F-6Notes
                  to Consolidated Financial Statements
              
              F-7
 
 This
        Form 10-KSB contains certain forward-looking statements regarding, among
        other things, the anticipated financial and operating results of the Company.
        Investors are cautioned not to place undue reliance on these forward-looking
        statements, which speak only as of the date hereof. We do not undertake any
        obligation to publicly release any modifications or revisions to these
        forward-looking statements to reflect events or circumstances occurring after
        the date hereof or to reflect the occurrence of unanticipated events. In
        connection with the "safe harbor" provisions of the Private Securities
        Litigation Reform Act of 1995, we caution investors that future financial
        and
        operating results may differ materially from those projected in forward-looking
        statements made by, or on behalf of, us. Such forward-looking statements
        involve
        known and unknown risks, uncertainties and other factors that may cause our
        actual results, performance, or achievements to be materially different form
        any
        future results, performance, or achievements expressed or implied by such
        forward-looking statements.




10





**RISK
      FACTORS**





***Our
      independent auditors have expressed doubt about our ability to continue as
      a
      going concern.***





Our
      independent public accountants have expressed doubt about our ability to
      continue as a going concern in their report on our June 30, 2003 and 2002
      financial statements. Our independent public accountants have advised us that
      our continuance as a going concern is dependent upon our ability to raise
      capital. There is no assurance that we will be able to raise sufficient capital
      or generate sufficient cash from operations to continue as a going
      concern.





***Because
      of our limited operations and the fact that we are currently generating no
      revenue, we are unable to service our debt
      obligations.***





We
      currently have approximately $655,300 in debt pursuant to promissory notes
      issued by us. We are presently unable to meet our interest obligations in the
      amount of $91,776 under these notes. We are also trying to secure additional
      debt financing by borrowing money from a bank, but have not yet succeeded in
      doing so. Our ability to satisfy our current debt service obligations, and
      any
      additional obligations we might incur will depend upon our future financial
      and
      operating performance, which, in turn, are subject to prevailing economic
      conditions and financial, business, competitive, legislative and regulatory
      factors, many of which are beyond our control. If our cash flow and capital
      resources continue to be insufficient to fund our debt service obligations,
      we
      may be forced to reduce or delay planned acquisitions, expansion and capital
      expenditures, sell assets, obtain additional equity capital or restructure
      our
      debt. We cannot assure you that our operating results, cash flow and capital
      resources will be sufficient for payment of our debt service and other
      obligations in the future.





***The
      business of operating radio stations is subject to many different variables
      outside of our control, any of which could have an adverse impact on our ability
      to successfully operate our business.***





As
      an
      owner and operator of radio stations, our operations are subject to numerous
      variables outside of our control, many of which could have a material adverse
      effect upon our financial performance. These variables include economic
      conditions, both generally and specific to the radio broadcasting industry,
      shifts in population and other demographics, shifts in audience tastes, the
      level of competition for advertising dollars with other radio stations,
      television stations and other entertainment and communications media,
      fluctuations in operating costs, technological changes and innovations, changes
      in labor conditions; and changes in laws and governmental regulations and
      policies and actions of federal regulatory bodies, including the Department
      of
      Justice, the Federal Trade Commission and the Federal Communications Commission.
      Although we believe that if we are able to complete the acquisition of the
      radio
      stations contemplated by our business plan, we will be positioned to compete
      effectively in those respective markets, but we cannot assure you that any
      individual station will be able to maintain or increase its current audience
      ratings and advertising revenues, and all of the factors above could potentially
      adversely impact our operations.





11





***Competition
      in the radio broadcasting business is intense, and we may be unable to succeed
      if our competitors have more funding or better
      marketing.***





Radio
      broadcasting is a highly competitive business. The radio stations that we intend
      to acquire if we are able to successfully execute our business plan will compete
      for audiences and advertising revenues within their respective markets directly
      with other radio stations, as well as with other media such as newspapers,
      magazines, cable and broadcast television, outdoor advertising and direct mail.
      Market share is subject to change, and any adverse change in a particular market
      could have a material adverse effect on the revenue of stations located in
      that
      market. If another radio station in one of our markets were to convert its
      programming format to a format similar to one of our stations, or if a new
      station were to adopt a format competitive with our stations, or if an existing
      competitor were to strengthen its operations, our stations could suffer a
      reduction in our listening audience and/or advertising revenue and could require
      increased promotional and other expenses. Additionally, our business could
      be
      adversely affected if a large player in the radio industry were to decide to
      adopt an acquisition plan similar to ours. A large competitor could purchase
      a
      number of stations in the markets in which we wish to compete and, as a result,
      drive up the prices that we must pay for stations as well as force us to
      allocate significantly more of our resources to promotional activities than
      we
      have currently planned.





***Because
      most of our revenues will come from the sale of advertising time on our
      stations, our business is susceptible to downturns in the
      economy.***





We
      expect
      that substantially all of our revenue will initially come from the sale of
      advertising time on our radio stations. Our broadcasting revenue would likely
      be
      adversely affected by a national recession. In addition, because a substantial
      portion of our revenue will be derived from local advertisers, our ability
      to
      generate advertising revenue in specific markets could be adversely affected
      by
      local or regional economic downturns. For example, in some of the markets in
      which we plan to operate there is a single dominant employer (such as a military
      base, a college, university or large manufacturing  plant). If a
      downturn in the economy results in a dominant employer in one of our markets
      initiating layoffs, or if the U.S. Congress decides to close a military base
      in
      one of our markets, this could result in local businesses in that market
      reducing their advertising budgets, which, in turn, would impact our broadcast
      cash flow and profitability.





***If
      we lose either of our two key personnel, we may be unable to successfully
      execute our business plan; because we currently only have two employees, they
      may be unable to successfully manage the business.***





Our
      business is presently managed by two key employees, the Chief Executive Officer,
      Daniel W. Hollis, and the President, Donald Boyd. If we lose either of
      Messrs. Hollis or Boyd, it could have a material adverse effect on our
      operations, and our ability to execute our business plan might be negatively
      impacted. We have entered into employment agreements with both of
      Messrs. Hollis or Boyd, which include provisions restricting their ability
      to use our confidential information should they leave the company. However,
      Messrs. Hollis or Boyd may leave the company if they choose to do so, and
      we cannot guarantee that they will not choose to do so, or that we would be
      able
      to hire similarly qualified executives if either of them should choose to leave.
      Additionally, the acquisition of radio stations is critical to our success
      and
      management will need to devote the majority of its time to negotiating, closing
      and then operating these acquisitions. This will result in the diversion of
      management's attention from other business concerns and could affect our ability
      to manage other aspects of our business. We cannot assure you that our
      management will be able to manage effectively the resulting business or that
      such acquisitions will benefit the company.





***It
      is our policy not to pay dividends.***





We
      have
      never declared or paid cash dividends on our common stock. We currently intend
      to retain all of our future earnings, if any, for use in our business and
      therefore do not anticipate paying any cash dividends on our common stock in
      the
      foreseeable future.





***Existing
      shareholders may face dilution from our financing
      efforts***





12





We
      are
      dependent on raising capital from external sources to execute our business
      plan.
      We plan to issue debt securities, capital stock, or a combination of these
      securities. We may not be able to sell these securities, particularly under
      the
      current market conditions. Even if we are successful in finding buyers for
      our
      securities, the buyers could demand high interest rates or require us to agree
      to onerous operating covenants, which could in turn harm our ability to operate
      our business by reducing our cash flow and restricting our operating activities.
      If we were to sell our capital stock, we might be forced to sell shares at
      a
      depressed market price, which could result in substantial dilution to our
      existing shareholders. In addition, any shares of capital stock we may issue
      may
      have rights, privileges, and preferences superior to those of our common
      shareholders.





***Our
      future earnings may be adversely affected because of charges resulting from
      acquisitions, or an acquisition could reduce shareholder
      value.***





Our
      strategy is based on the acquisition of a sufficient number of radio stations
      to
      create a viable radio network. In accounting for a newly acquired business,
      in
      many cases, we may be required to amortize, over a period of years, certain
      identifiable intangible assets. The resulting amortization expense, could reduce
      our overall net income and earnings per share. Changes in future markets or
      technologies may require us to amortize intangible assets faster and in such
      a
      way that our overall financial condition or results of operations are harmed.
      If
      changes in economic and/or business conditions cause impairment of goodwill
      and
      other intangibles acquired by acquisition, it is likely that a significant
      charge against our earnings would result. If economic and/or business conditions
      did not improve, we could incur additional impairment charges against any
      earnings we might have in the future. An acquired business could reduce
      shareholder value if it should generate a net loss or require invested
      capital.





***Our
      common stock price can be volatile because of several factors, including a
      limited public float.***





During
      fiscal years 2002 and 2003 (July 1, 2001 to June 30, 2003), the sale price
      of our common stock has fluctuated from $3.80 to $.40 per share. We believe
      that
      our common stock is subject to wide price fluctuations because of several
      factors, including:





·
            absence
                meaningful earnings and external
                financing,


·
            a
                relatively thin trading market for our common stock, which causes
                trades
                of small blocks of stock to


·
            have
                a significant impact on our stock
                price,


·
            general
                volatility of the stock markets and the market prices of other publicly
                traded companies,


·
            economic
                disruptions due to terrorist activity,
                and


·
            investor
                sentiment regarding equity markets generally, including public perception
                of corporate ethics and


·
            governance
                and the accuracy and transparency of financial
                reporting.







**Item
      8.         Changes in and
      Disagreements with Accountants on Accounting and Financial
      Disclosure.**




During
      the two fiscal years ended June 30, 2003, there have been no changes in or
      disagreements with the Registrant's independent accountants on any matter of
      accounting or financial statement disclosure.





13





**PART III**








**Item 9.         Directors,
      Executive Officers, Promoters and Control Persons; Compliance with
      Section 16(a) of the Exchange Act.**








**DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS**





The
      following table sets forth: (1) names and ages of all persons who presently
      are
      and who have been selected as directors of the Registrant; (2) all positions
      and
      offices with the Registrant held by each such person; (3) the term or office
      of
      each person named as a director; and 4) any period during which he or she has
      served a such:








**Name**
            
            **Age**
            
            **Title**Daniel W.
                Hollis
            
            52
            
            Chairman
                of the Board and Chief Executive OfficerDonald
                Boyd
            
            36
            
            PresidentWilliam
                Fleming
            
            57
            
            DirectorEric
                J. Froistad
            
            46
            
            DirectorJohn
                McMullan, CPA
            
            67
            
            DirectorLance J.
                Rosmarin
            
            41
            
            Director





**Daniel W.
      Hollis,**52,*Chairman of the Board and Chief Executive Officer*.
      Mr. Hollis has served as our Chairman and Chief Executive Officer since
      February 11, 2002. Mr. Hollis is an experienced entrepreneur who
      combines both operational experience and financial acumen. He has been a
      Registered Principal of an NASD brokerage, and participated in both private
      and
      public financings. He has led numerous start-ups, primarily in healthcare and
      technology. In addition to his role at the Company and since 2001,
      Mr. Hollis serves as Chairman of Segue Solutions, LLC, a privately held
      technology company. Prior thereto and from 1997, he served as consultant to
      numerous privately held companies through Bagswell Capital, LLC, a privately
      held management consultancy. From 1995 to 1999, Mr. Hollis was Chairman and
      CEO of Alignis, Inc., a privately held, venture capital-funded, specialty
      managed healthcare company.





**Donald
      Boyd,**36,*President*. Mr. Boyd is a radio station executive
      with 15 years' experience in the radio broadcast industry. Prior to joining
      the Company on July 30, 2001 and from 1999, he was Regional General Manager
      for Root Communication, where he had profit and operations responsibility for
      seven stations in three markets similar to the markets we target. From
      June 1998 to December 1999, Mr. Boyd was a manager with Dickey
      Brothers Broadcasting, Inc. From June 1995 to June 1998, he owned
      and operated a profitable radio station in Gainesville, Florida.





**William
      Fleming,**57,*Director*. Mr. Fleming has been a member of
      our Board of Directors since June 2001. Prior thereto and since 1985, he
      has been the principal of William Fleming & Associates, which provides
      financial consulting services to radio stations, including emerging companies.
      Mr. Fleming has focused his work on smaller, emerging companies, radio
      entrepreneurs, and first-time owners. He also is a co-owner of four radio
      stations in Indiana.





**Eric J.
      Froistad,**46,*Director*. Mr. Froistad has been a member of
      our Board of Directors since April 4, 2002. He presently is the Chief
      Financial Officer of Enhancement Services Corporation, a loyalty program
      management company in Roswell, Georgia. He has over twenty-two years of
      financial management experience, with an extensive background in financing
      transactions, mergers and acquisitions, and financial management systems for
      entrepreneurial companies in diverse industries. Prior to joining Enhancement
      Services in 1995 and until 1999, Mr. Froistad was Chief Financial Officer for
      Alignis, Inc., a specialty healthcare company in Atlanta, Georgia. Prior
      thereto and from 1991 until 1995, he served in various senior
      financial management positions for New World Communications Group, an integrated
      media company. Mr. Froistad started his career with the public accounting
      firm of Arthur Andersen & Co. in Denver, Colorado, leaving the firm as
      a senior manager in audit services. He received a BS in Accounting from the
      University of Colorado.





14





**John
      McMullan, CPA, 67**,*Director*. Mr. McMullan has been a
      member of our Board of Directors since June 7, 2001. Since 1990, he has
      been the Chief Executive Officer of Camden Real Estate Company, a family-owned
      real estate investment company. In addition, Mr. McMullan acts as a
      consultant to the long-term health care industry, and is licensed as a Certified
      Public Accountant in the State of Georgia.





**Lance J.
      Rosmarin,**41,*Director*. Mr. Rosmarin has been a member of
      our Board of Directors since June 1, 2001. From 1993 to June 1, 2001,
      he was Secretary, Treasurer and a Director of Worldwide PetroMoly Corporation,
      which became our operating subsidiary in July 1996. Following our
      acquisition of Worldwide PetroMoly, Mr. Rosmarin served as our Chief
      Financial and Accounting Officer from July 1996 to June 1, 2001, and
      as our President from January 1998 to June 1, 2001. From 1993 to 1996,
      in addition to his position with Worldwide PetroMoly, he served as Vice
      President and Secretary and was a Director of Citadel Computer
      Systems, Inc., as well as serving as an officer and director of several
      private companies. From 1990 to1993, Mr. Rosmarin was employed by Gertner,
      Aron, Ledet and Lewis Investments.





Directors
      are elected to serve one year terms and until their earlier resignation or
      removal.







**Item 10.       Executive
        Compensation.**


**SUMMARY
          COMPENSATION TABLE**
 
 The
          table below shows the annual, long-term and other compensation for services
          in
          all capacities to the Company and its subsidiaries paid during the year
          ended
          June 30, 2003 to the Chief Executive Officer and the other four most highly
          compensated executive officers of the Company during the year ended
          June 30, 2003 (our "*named executive
          officers*"):


**Annual
                    Compensation**
                
                
                **Long
                    Term Compensation****Name
                    and Position**
                **Year**
                
                **Salary
                    ($)**
                
                
                **Bonus
                    ($)**
                
                
                **Other
                    Annual Compensation ($)**
                
                
                **Restricted
                    Stock Awards($)**
                
                
                **Securities
                    Underlying Options/SARS (#)**
                
                
                **All
                    Other Compensation ($)**Daniel W.
                    Hollis
                2003
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                500,000
                
                
                
                224,251Chairman
                    and Chief
                2002
                
                
                93,750Executive
                    Officer(1)Donald
                    Boyd
                2003
                
                $
                139,804
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                111,111
                
                
                
                -President
                    and Secretary(2)
                2002Dr. Michael G.
                    Cobb
                2003
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                83,334
                
                
                
                -Chief
                    Financial Officer (3)
                2002
                
                
                -William
                    Fleming
                2003
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -2002
                
                
                -Eric
                    J. Froistad
                2003
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -2002
                
                
                -John
                    McMullan
                2003
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -2002
                
                
                -Lance J.
                    Rosmarin
                2003
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -2002
                
                
                -


15





(1)
      Mr. Hollis became our Chairman and Chief Executive Officer on
      February 11, 2002, pursuant to a consulting agreement.


(2)
      Mr. Boyd became our President and Secretary on July 30,
      2001.


(3)
      Dr. Cobb became our Chief Financial Officer on February 22, 2002,
      pursuant to a consulting agreement.








**OPTION/SAR
      GRANTS IN LAST FISCAL YEAR**





The
      table
      below shows the number of options to purchase shares of our common stock that
      were granted to each of our named executive officers during fiscal
      2003:





**Name**
            
            **Number
                of Securities Underlying Options/SARs Granted(#)**
            
            **Percent
                of Total Options/SARs Granted to Employees in Fiscal
                Year**
            
            **Exercise
                or Base Price ($/share)**
            
            **Expiration
                Date**Daniel W.
                Hollis
            
            0








**AGGREGATED
      OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR
      VALUES**





The
      table
      below shows the number of stock options held at the end of or exercised during
      fiscal 2003 for each of our named executive officers:


**Number
                  of Securities Underlying Unexercised Options/SARs at Fiscal Year-End
                  (#)**
              
              **Value
                  of Unexercised In-The-Money Options/SARs at Fiscal Year-End
                  ($)(1)****Name**
              
              **Shares
                  Acquired on Exercise (#)**
              
              **Value
                  Realized**
              
              **Exercisable**
              
              **Unexercisable**
              
              **Exercisable**
              
              **Unexercisable**Daniel W.
                  Hollis
              
              46,296
              $
              0
              
              0
              
              46,296
              $
              0
              $
              25,926







*(1)*Based on $1.10 per share, the closing price of our common stock as quoted
      on the Over-the-Counter Bulletin Board on June 30, 2002.








**Item 11.       Security
      Ownership of Certain Beneficial Owners and Management and Related Stockholder
      Matters.**








The
      table below shows the amount of common stock of the Company beneficially owned
      as of October 9, 2002 by each of the following:





*1.*Each of our directors and named executive officers (the "named executive
      officers" are described in the Summary Compensation Table set forth on page
      22
      of this Annual Report on Form 10-KSB);





*2.*Each person whom we believe beneficially owns more than 5% of our
      outstanding voting stock; and





*3.*All executive officers and directors as a group.





16





In
      accordance with the rules of the Securities and Exchange Commission, beneficial
      ownership as disclosed in the table below includes shares currently owned as
      well as shares which the named person has the right to acquire beneficial
      ownership of within 60 days, through the exercise of options, warrants or
      other rights. Except as otherwise indicated, each stockholder listed below
      has
      sole voting and investment power as to the shares owned by that
      person.





**Name
                and Address(1)**
            
            **Amount
                and Nature of Beneficial Ownership(2)**
            
            **Percentage
                of Class(3)**Daniel W.
                Hollis (4)
            
            1,646,939
            
            12.6%Donald
                Boyd (4)(5)
            
            124,457
            
            .09%William
                Fleming
            
            216,636
            
            1.7%Eric J.
                Froistad
            
            37,037
            
            0.03John
                McMullan (5)
            
            244,414
            
            1.9%Lance
                Rosmarin (5)
            
            316,666
            
            2.4%Gilbert
                Gertner
              1300
                Post Oak Blvd, Suite 1985
              Houston,
                TX 77056
            
            833,342
            
            6.4%Wayne
                Shortridge (6)
              600
                Peachtree Street, NE, Suite 2400
              Atlanta,
                GA 30308-2222
            
            1,363,581
            
            10.4%All
                directors and executive officers as a
                group(7 persons)
            
            2,586,149
            
            19.7%





***Less than one percent of our common stock.





*(1)*If no address is given, the named individual is an executive officer or
      director of Small Town Radio, Inc., whose business address is 1800Century
      Boulevard, Suite 1200, Atlanta, Georgia 30045.





*(2)*Shares of common stock that a person has the right to acquire within
      60 days of October 9, 2003 are deemed outstanding for computing the
      percentage ownership of the person having the right to acquire such shares,
      but
      are not deemed outstanding for computing the percentage ownership of any other
      person.





*(3)*As of October 9, 2003, there were 13,109,000 shares of common stock
      issued and outstanding.





*(4)*Includes the following numbers of shares of common stock that may be
      acquired within 60 days of October 9, 2003 through the exercise of
      stock options: all directors and executive officers as a group,
      46,296 shares.





*(5)*Mr. Rosmarin's beneficial ownership consists of 205,556 shares of
      common stock held by Mr. Rosmarin directly and 111,111 shares held by
      a trust of which Mr. Rosmarin is the sole trustee.





*(6)*Mr. Shortridge's beneficial ownership consists of
      1,305,336 shares of common stock held by Bolling Investments, LLC, an
      entity of which Mr. Shortridge is the sole owner, and 58,245 shares of
      common stock issuable upon exercise of warrants issued to Mr. Shortridge in
      fiscal year2002 in conjunction with the issuance of a note by the Company in
      the
      amount of $216,000.





***Equity
      Compensation Plan Information***





The
      following table provides certain information about our equity compensation
      plans:





17








**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 forfeiture issuance under equity
                compensation plans**Equity
                compensation plans approved by stockholders
            
            
            0
            
            
            
            0
            
            
            
            0Equity
                compensation plans not approved by stockholders
            
            
            807,668
            
            
            $
            0.77
            
            
            
            303,443Total
            
            
            807,668
            
            
            $
            0.77
            
            
            
            303,443






**Item 12.       Certain
        Relationships and Related Transactions.**







*Notes
      Payable to Bolling Investments, LLC.*    Bolling
      Investments, LLC, one of our founding stockholders, has made two separate
      loans to Small Town Radio, Inc. in a total principal amount equal to
      $17,500. The loans are evidenced by demand notes and bear interest at 12% per
      annum. We believe that the terms of these loans are at least as favorable to
      us
      as any loan we could obtain through arms-length bargaining with an unrelated
      party.





*Note
      Payable to Wayne Shortridge.*    Wayne Shortridge, the
      only member of our stockholder Bolling Investments, LLC, loaned us $216,000
      to acquire the assets of WDGR AM. Mr. Shortridge purchased our promissory
      note in the stated principal amount of $216,000 pursuant to a Note Purchase
      Agreement dated as of June 17, 2002. The Note is secured by the assets of
      WDGR AM pursuant to a Security Agreement dated as of June 17, 2002.Pursuant
      to the Note Purchase Agreement, we also issued Mr. Shortridge a warrant to
      purchase 58,245 shares of our common stock at a price of $2.82 per share.
      Without this loan we could not have acquired WDGR AM, and we believe the
      terms of the loan are at least as favorable to us as any terms we could have
      obtained through arms-length bargaining with an unrelated party.





*Note
      Payable to Wayne Shortridge.*    Wayne Shortridge, the
      only member of our stockholder Bolling Investments, LLC, one of our
      founding stockholders, has made numerous additional loans in 2003 to Small
      Town
      Radio, Inc. in a total principal amount equal to $102,300. The loans are
      evidenced by demand notes and bear interest at 12% per annum. We believe that
      the terms of these loans are at least as favorable to us as any loan we could
      obtain through arms-length bargaining with an unrelated party.








**Item 13.       Exhibits,
      List and Reports on Form 8-K.**





*(a)
      Exhibits*. Exhibits required by Item 601 of Regulation S-B are
      incorporated herein by reference and are listed on the attached Exhibit Index,
      which begins on page X-1 of this Annual Report on
      Form 10-KSB.




*(b)
      Reports on Form 8-K*. During the fiscal quarter ended June 30,
      2003, we filed the following Current Reports on Form 8-K:





1.
      On May
      21, 2003, the Company filed a Current Report on Form 8-K reporting that on
      May
      18, 2003, the Company and its wholly owned subsidiary, Small Town Radio of
      Georgia, Inc., filed voluntary petitions under Chapter 11 of Title 11, United
      States Code in the United States Bankruptcy Court for the Northern District
      of
      Georgia (the “Bankruptcy Court”) (Case Nos. 03-67044 and 03-67043,
      respectively).  The Company filed a copy of its press release
      regarding such event to its report.**








**Item
      14.       Controls and
      Procedures**








(a)
      Evaluation of Disclosure Controls and Procedures





18





The
      Company maintains controls and procedures designed to ensure that information
      required to be disclosed in the reports that the Company files or submits under
      the Exchange Act is recorded, processed, summarized and reported within the
      time
      periods specified in the rules and forms of the Securities and Exchange
      Commission. Based upon their evaluation of those controls and procedures
      performed within 90 days of the filing date of this report, the Chief Executive
      and Financial Officers of the Company concluded that the Company's disclosure
      controls and procedures were adequate.





(b)
      Changes in Internal Controls





The
      Company made no significant changes in its internal controls or in other factors
      that could significantly affect these controls subsequent to the date of the
      evaluation of those controls by the Chief Executive Financial
      Officer.







**SIGNATURES**








In
      accordance with Section 13 or 15(d) of the Exchange Act, the Company caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.


**SIGNATURES**










In
      accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




DUTCH
                  GOLD RESOURCES, INC.By:
              /s/Daniel
                  W. HollisDaniel
                  W. Hollis, Chief Executive OfficerBy:
              /s/Daniel
                  W. HollisDaniel
                  W. Hollis, Chief Financial Officer




Date: November
      12, 2007


19
 
 **DUTCH
        GOLD RESOURCES, INC.**
 **(Formerly
        Small Town Radio, Inc.)**
 
 
 ***FINANCIAL
        STATEMENTS***
 ***As
        of June 30, 2003***
 ***and
        for the year then ended***
 
 
 ***with***
 
 
 ***REPORT
        OF INDEPENDENT ACCOUNTANT***
  F-1
  RONALD
        R.
        CHADWICK, P.C.
 Certified
        Public Accountant
 2851
        South Parker Road, Suite 720
 Aurora,
        Colorado  80014
 Telephone
        (303)306-1967
 Fax
        (303)306-1944
  **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 Board
        of
        Directors
 Dutch
        Gold Resources, Inc.
 Atlanta,
        Georgia
 
 I
        have
        audited the accompanying consolidated balance sheet of Dutch Gold Resources,
        Inc. (formerly Small Town Radio, Inc.) as of June 30, 2003, and the related
        consolidated statements of operations, stockholders' deficit and cash flows
        for
        the year then ended. These financial statements are the responsibility of
        the
        Company's management. My responsibility is to express an opinion on these
        financial statements based on my audit.
 
 I
        conducted my audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        I 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.  I believe that my audit provides a
        reasonable basis for my opinion.
 
 In
        my
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the consolidated financial position of Dutch Gold
        Resources, Inc. as of June 30, 2003, and the related consolidated statements
        of
        operations, stockholders' deficit and cash flows for the year then ended
        in
        conformity with accounting principles generally accepted in the United States
        of
        America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        that
        the Company will continue as a going concern. As discussed in Note 5 to the
        financial statements the Company has suffered losses from operations and
        has a
        working capital deficit that raise substantial doubt about its ability to
        continue as a going concern. Management's plans in regard to these matters
        are
        also described in Note 5. The financial statements do not include any
        adjustments that might result from the outcome of this uncertainty.
 
 Aurora,
                  Colorado
              
              /s/Ronald
                  R. Chadwick, P.C.October
                  25, 2007
              
              RONALD
                  R. CHADWICK, P.C.
  F-2
 
 **DUTCH
        GOLD RESOURCES, INC.**
 **(Formerly
        Small Town Radio, Inc.)**
 **CONSOLIDATED
        BALANCE SHEET**
 **JUNE
        30, 2003**
 
 June 30,
                  2003**Assets**Current
                  AssetsCash
              
              $
              531Total
                  current assets
              
              
              531TOTAL
                  ASSETS
              
              $
              531**Liabilities
                  and Stockholders' Deficit**Current
                  LiabilitiesNotes
                  payable-stockholders
              
              $
              655,300Accounts
                  payable
              
              
              616,217Accounts
                  payable-related party
              
              
              225,000Accrued
                  interest
              
              
              91,776Accrued
                  settlement costs
              
              
              260,000Loans
                  from shareholders
              
              
              19,810Total
                  current liabilities
              
              
              1,868,103Stockholders’
                  DeficitPreferred
                  stock, $.001 par value 100,000,000 authorized, no shares issued
                  and
                  outstandingCommon
                  stock, $.001 par value 100,000,000 authorized, 13,109,000 issued
                  and
                  outstanding
              
              
              13,109Additional
                  paid-in-capital
              
              
              1,819,814Accumulated
                  deficit
              
              
              (3,700,495
              )Total
                  stockholders’ deficit
              
              
              (1,867,572
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              531
  *See
        notes to consolidated financial statements*
  F-3
 
 **DUTCH
        GOLD RESOURCES, INC.**
 **(Formerly
        Small Town Radio, Inc.)**
 **CONSOLIDATED
        STATEMENT OF OPERATIONS**
 **FOR
        THE YEAR ENDED JUNE 30, 2003**
 
 June 30,
                  2003Net
                  sales
              
              $
              38,307Operational
                  expensesOrganizational,
                  selling, general and administrative expenses
              
              
              34,217Programming
                  and production
              
              
              1,734Professional
                  fees
              
              
              307,292Stock
                  options expense
              
              
              136,816Write
                  off expense
              
              
              198,160Rent
                  and repairs and maintenance
              
              
              24,452Salaries,
                  wages and benefits
              
              
              601,501Depreciation
              
              
              16,865Other
              
              
              156,3021,477,339Operating
                  loss
              
              
              (1,439,032
              )Other
                  income (expenses)Interest
                  expense
              
              
              (75,805
              )Loss
                  before income taxes
              
              
              (1,514,837
              )Income
                  tax provision
              
              
              -Net
                  loss
              
              
              (1,514,837
              )Basic
                  and fully diluted earnings per share
              
              $
              (0.14
              )Weighted
                  average shares outstanding
              
              
              11,160,531
  *See
        notes to consolidated financial statements*
  F-4
 
 **DUTCH
        GOLD RESOURCES, INC.**
 **(Formerly
        Small Town Radio, Inc.)**
 **CONSOLIDATED
        STATEMENT OF CASH FLOWS**
 **FOR
        THE YEAR ENDED JUNE 30, 2003**
  June
                  30, 2003Operating
                  activitiesNet
                  loss
              
              $
              (1,514,837
              )Adjustments
                  to reconcile net loss to cash used by operating activitiesDepreciation
              
              
              16,865Impairment
                  of fixed assets
              
              
              91,785Impairment
                  of broadcast license
              
              
              106,375Stock
                  subscription receivable
              
              
              152,250Stock
                  issued for services
              
              
              433,251Stock
                  option expense
              
              
              136,816Changes
                  in assets and liabilitiesAccounts
                  receivable
              
              
              8,335Accounts
                  payable
              
              
              128,345Accounts
                  payable-related party
              
              
              225,000Accrued
                  interest
              
              
              73,688Net
                  cash used by operating activities
              
              
              (142,127
              )Investing
                  activitiesNet
                  cash used by investing activities
              
              
              -Financing
                  activitiesIncrease
                  in notes payable-stockholders
              
              
              122,800Loans
                  from shareholders
              
              
              19,810Net
                  cash provided by investing activities
              
              
              142,610Net
                  increase (decrease) in cash
              
              
              483Cash,
                  beginning of period
              
              
              48Cash,
                  end of period
              
              $
              531Non-cash
                  investing and financing activities
              
              $
              -Cash
                  paid for interest
              
              $
              -Cash
                  paid for income taxes
              
              $
              -
  *See
        notes to consolidated financial statements*
  F-5
 
 **DUTCH
        GOLD RESOURCES, INC.**
 **(Formerly
        Small Town Radio, Inc.)**
 **CONSOLIDATED
        STATEMENT OF STOCKHOLDERS’ DEFICIT**
 **FOR
        THE YEAR ENDED JUNE 30, 2003**
 
 Common
                  StockShares
              
              
              Dollars
                  at Par ($.001)
              
              
              Paid
                  in Cap.Dollars $
              
              
              Stock
                  Subscription Receivable
              
              
              Accum
                  Deficit
              
              
              Stockholder’s
                  DeficitBalances
                  6/30/02
              
              
              9,912,061
              
              
              $
              9,912
              
              
              $
              1,252,944
              
              
              $
              (152,250
              )
              
              $
              (2,185,658
              )
              
              $
              (1,075,052
              )Payment
                  of stock subscription receivable
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              152,250
              
              
              
              
              
              
              
              152,250Compensatory
                  stock issuances
              
              
              3,196,939
              
              
              
              3,197
              
              
              
              430,054
              
              
              
              
              
              
              
              
              
              
              
              433,251Compensatory
                  option issuances,
              
              
              
              
              
              
              
              
              
              
              136,816
              
              
              
              
              
              
              
              
              
              
              
              136,816Gain
                  (loss) for year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,514,837
              )
              
              
              (1,514,837
              )Balances
                  6/30/2003
              
              
              13,109,000
              
              
              $
              13,109
              
              
              $
              1,819,814
              
              
              $
              -
              
              
              $
              (3,700,495
              )
              
              $
              (1,867,572
              )
 
 
 *See
        notes to consolidated financial statements*
  F-6
  **DUTCH
        GOLD RESOURCES, INC. (formerly SMALL TOWN RADIO, INC.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE 1—NATURE
        OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES**
 
 **NATURE
        OF OPERATIONS**
 
 The
        Company was incorporated in Colorado on October 13, 1989 as Ogden, McDonald
        & Company for the purpose of seeking out acquisitions of properties,
        businesses, or merger candidates, without limitation as to the nature of
        the
        business operations or geographic location of the acquisition candidate.
        On July
        22, 1996, Ogden, McDonald & Company completed a transaction pursuant to
        which the shareholders of Worldwide PetroMoly Corporation, a Texas corporation,
        acquired approximately 90.6% of the shares outstanding in Ogden, McDonald
&
Company, and Worldwide PetroMoly Corporation became a wholly owned subsidiary
        of
        Ogden, McDonald & Company. On October 11, 1996, Ogden, McDonald &
Company changed its name to Worldwide PetroMoly, Inc.
 
 From
        July
        22, 1996, until June 1, 2001, the Company through Worldwide PetroMoly
        Corporation, engaged in the business of manufacturing, marketing and
        distributing a line of molybdenum fortified lubricant products called
        PetroMoly(TM), an engine oil additive designed to enhance and maintain
        engines.  On June 1, 2001, the Company consummated a transaction
        pursuant to which Small Town Radio, Inc., a Georgia corporation, was merged
        into
        our subsidiary created for the purpose of this merger. Pursuant to this
        transaction, all of the outstanding shares of Small Town Radio, Inc. were
        exchanged for shares of common stock. As a result, the former shareholders
        of
        Small Town Radio, Inc. now beneficially own an aggregate of 118,467,860 shares,
        approximately 75% of the Company's outstanding common stock as of the effective
        date of the merger. Also, and in connection with the acquisition of Small
        Town
        Radio, Inc. by the Company, on June 7, 2001 all of the capital stock of
        Worldwide PetroMoly Corporation was sold to Mr. Gilbert Gertner, the former
        Chairman of the Board.
 
 On
        May
        18, 2003, Small Town Radio, Inc. and its wholly owned subsidiary, Small Town
        Radio of Georgia, Inc., filed voluntary petitions under chapter 11 of title
        11,
        United States Code in the United States Bankruptcy Court for the Northern
        District of Georgia (Case Nos. 03-67044 and 03-67043,
        respectively).  The Company refocused to become a natural resources
        company, changing its name to Tombstone Western Resources, Inc. on May 1,
        2006.
        On December 7, 2007 the Company changed its name to Dutch Gold Resources,
        Inc.
        in anticipation of its’ acquisition of Dutch Mining, LLC which occurred January
        7, 2007.
 
 **BANKRUPTCY
        FILING**
 
 On
        May
        18, 2003, Small Town Radio, Inc. (the “Company”) and its wholly owned
        subsidiary, Small Town Radio of Georgia, Inc., filed voluntary petitions
        under
        chapter 11 of title 11, United States Code (the “Bankruptcy Code”) in the United
        States Bankruptcy Court for the Northern District of Georgia (the “Bankruptcy
        Court”) (Case Nos. 03-67044 and 03-67043, respectively). The Bankruptcy was
        dismissed by the court in May 2004.
 
 **PRINCIPLES
        OF CONSOLIDATION**
 
 The
        consolidated financial statements include the operations of Small Town
        Radio, Inc. and its wholly owned subsidiary. All intercompany accounts and
        transactions have been eliminated.
 
 **ORGANIZATIONAL
        AND START-UP EXPENSES**
 
 The
        Company has expensed all organizational and start-up expenses for financial
        reporting purposes.
 
 **PROPERTY
        AND EQUIPMENT**
 
 Property
        and equipment are carried at cost. Depreciation is computed using the
        straight-line method. There was no property and equipment at June 30,
        2003.
 
 **ACQUIRED
        BROADCAST LICENSE**
  The
        value
        assigned to this acquired asset, $106,375, has been written of as the Company
        filed for bankruptcy in May of 2003.
 
 **EARNINGS
        PER SHARE**
 
 Earnings
        per share have been computed based upon the weighted-average common shares
        outstanding during each year. Diluted earnings per share have not been presented
        due to the Company incurring a loss from continuing operations.
 
 **USE
        OF ESTIMATES**
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the consolidated financials
        statements and the reported amounts of revenues and expenses during the
        reporting period. Actual results could differ from those estimates.
 
  F-7
  **DUTCH
        GOLD RESOURCES, INC. (formerly SMALL TOWN RADIO, INC.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 
 **ADVERTISING
        REVENUES AND COSTS**
 
 The
        Company has incurred no advertising costs. Advertising revenues are recognized
        monthly based on the advertising that has been provided versus the total
        amount
        of advertising required under the terms of the advertising agreement. At
        June 30, 2003 the Company had deferred no advertising revenue.
 
 **CASH
        AND CASH EQUIVALENTS**
 
 The
        Company considers all highly liquid investments with an original maturity
        of
        three months or less as cash equivalents.
  ACCOUNTS
        RECEIVABLE
 
 The
        Company reviews accounts receivable periodically for collectability and
        establishes an allowance for doubtful accounts and records bad debt expense
        when
        deemed necessary. At June 30, 2003 the Company had no balance in its allowance
        for doubtful accounts.
  REVENUE
        RECOGNITION
 
 Revenue
        is recognized on an accrual basis as earned under contract terms.
 
 **INCOME
        TAX**
 
 The
        Company accounts for income taxes under Statement of Financial Accounting
        Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a
        liability method whereby deferred tax assets are recognized for deductible
        temporary differences and operating loss carryforwards and deferred tax
        liabilities are recognized for taxable temporary differences. Temporary
        differences are the differences between the reported amounts of assets and
        liabilities and their tax bases. Deferred tax assets are reduced by a valuation
        allowance when, in the opinion of management, it is more likely than not
        that
        some portion or all of the deferred tax assets will not be realized. Deferred
        tax assets and liabilities are adjusted for the effects of changes in tax
        laws
        and rates on the date of enactment.
 
  FINANCIAL
        INSTRUMENTS
 
 The
        carrying value of the Company’s financial instruments, as reported in the
        accompanying financial statements, approximates fair value.
 
 **FISCAL
        YEAR**
 
 The
        Company employs a fiscal year ending June 30.
  F-8
  **DUTCH
        GOLD RESOURCES, INC. (formerly SMALL TOWN RADIO, INC.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE 2—INCOME
        TAX**
  A
        reconciliation of tax at the combined federal and state income tax rates
        and
        actual tax expense is provided below:
  **June 30, 2003**Federal
                    and state income tax at the applicable rates
                
                $
                (302,967
                )Change
                    in valuation allowance
                
                
                302,967Actual
                    tax expense
                
                
                —
 
 The
          components of the deferred tax asset are as follows:
  **June 30,
                    2003**Net
                    operating losses and start-up costs
                
                $
                1,113,573Valuation
                    allowance
                
                
                (1,113,573
                )Net
                    deferred tax asset
                
                
                —
  The
          valuation allowance at June 30, 2003 is $1,113,573 and was increased by
          $302,967 during 2003. During the current year, the increase in the valuation
          allowance was due to additional losses incurred by the Company. We consider
          the
          valuation allowance necessary and appropriate in light of the Company's
          history
          of recurring losses.
 
 **NOTE 3—STOCK
          OPTIONS**
 
 The
          Company maintains an incentive stock option plan which is accounted for
          in
          accordance with Accounting Principles Board Opinion (APB) No. 25,*Accounting for Stock Issued to Employees*.
 
 The
          following is a summary of the status of the Company's stock option
          plan.
  **Number
                    of Options**
                
                
                **Weighted
                    Average Exercise Price**Outstanding,
                    June 30, 2002
                
                
                270,570
                
                
                
                1.38Options
                    issued in the year ended June 30, 2003
                
                
                0Options
                    exercised during the year
                
                
                0Options
                    lapsing during the year
                
                
                (224,334
                )
                
                
                1.67Balance,
                    June 30, 2003
                
                
                46,236
                
                
                $
                0.54
 
 The
          following summarizes the outstanding options at June 30, 2003.
  **Number
                    of Options**
                
                **Exercise
                    Price**
                
                **Expiration
                    Date**46,236
                
                $0.54
                
                2/1/2012
  F-9
  **DUTCH
          GOLD RESOURCES, INC. (formerly SMALL TOWN RADIO, INC.)**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 
 Under
          Statement of Financial Accounting Standards No. 123 *Accounting for
          Employee Stock Options*, companies can elect to either record the fair value
          of options issued as an expense in the statement of operations or provide
          the
          information on a pro forma basis in the notes to the financial statements.
          We
          have elected to provide the expense information on a pro forma basis in
          the
          notes to the financial statements. That information is presented
          below:
  **Year
                    Ended June 30, 2003**Net
                    loss per financial statements
                
                $
                (1,514,837
                )Pro
                    forma compensation expense for employee stock options
                
                
                (175,458
                )Assumed
                    income tax benefit
                
                
                —Pro
                    forma net loss
                
                $
                (1,690,295
                )Pro
                    forma net loss per share
                
                $
                (.17
                )
  For
        the
        purpose of determining the pro forma compensation expense charge, we have
        used
        the following assumptions:
 
 *•*Annual
        volatility is assumed to be 170% per year.
 *•*Risk
        free rate of return of 3%.
 *•*Expected
        lives of the options are assumed to be equal to the period from date of issuance
        to expiration.
 *•*We
        assume that no dividends will be paid.
 *•*Because
        of the Company's history of operating losses, we assume no income tax benefit
        from issuance and exercise of the options.
 
 
 **NOTE 4—RELATED
        PARTY TRANSACTIONS**
 
 The
        Company had outstanding notes payable to certain stockholders of $655,300
        at
        June 30, 2003. These notes are unsecured, save for a $216,000 notes secured
        by all assets. The notes are payable upon demand, and bear interest at primarily
        12% with certain late penalties.
 
 In
        connection with the issuance of a note payable to a stockholder in the amount
        of
        $216,000 on June 17, 2002, the Company issued the stockholder a warrant to
        purchase 58,245 shares of the Company's common stock at a price per share
        of
        $2.82. The warrant expires on June 17, 2012.
 
 There
        is
        one note for $10,000 that is convertible into common stock at $0.36 per
        share.
 
 
 **NOTE 5—FINANCIAL
        CONDITION AND GOING CONCERN**
 
 The
        Company's continuance is dependent on raising capital and generating revenues
        sufficient to sustain operations. The Company believes that the necessary
        capital will be raised and has entered into discussions to do so with certain
        individuals and companies. However, as of the date of these consolidated
        financial statements, no formal agreement exists.
 
 The
        accompanying consolidated financial statements do not include any adjustments
        that might be necessary should the Company be unable to secure the necessary
        capital and continue as a going concern.
  F-10
  **DUTCH
        GOLD RESOURCES, INC. (formerly SMALL TOWN RADIO, INC.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE 6—COMMITMENTS
        AND CONTINGENCIES**
 
 The
        Company leases land where the WDGR AM tower is located under a 3-year lease,
        expiring in June 2005. The monthly payments under the lease are
        $200.
 
 The
        Company also leases office space in Atlanta Georgia under a 5-year lease.
        The
        rates escalate over the term.
 
 Future
        minimum lease payments under these leases are as follows: 2004-$14,400,
        2005-$15,255, 2006-15,255, 2007-$22990 and $67,888 in total.
 
 The
        Company is currently involved in a dispute with a former executive officer.
        We
        believe this matter can be settled by a payment of $350,000 to the former
        executive officer. Upon such payment,
 the
        shares held by the former executive officer may be forfeited in connection
        with
        the settlement and he will waive his rights to amounts due from the Company
        of
        $90,000. Accordingly, the net cost of the settlement if it occurs will be
        $260,000 and that amount is accrued for on June 30, 2003.
 
 
 **NOTE 7—ISSUANCE
        OF SHARES IN EXCHANGE FOR SERVICES**
 
 During
        the fiscal year ended June 30, 2003, the Company issued 3,196,939 shares in
        exchange for services valued at $433,251. Substantially all of these shares
        were
        issued to either directors or employees of the Company or entities affiliated
        with directors or employees of the Company.
  
  **SMALL
        TOWN RADIO, INC.**
 
 
 ***FINANCIAL
        STATEMENTS***
 ***As
        of June 30, 2002 and 2001***
 ***and
        for the years then ended***
 
 
 ***with***
 
 
 ***REPORT
        OF INDEPENDENT ACCOUNTANTS***
  F-1
 
 **Report
        of Independent Accountants**
 
 
 The
        Board
        of Directors
 Small
        Town Radio, Inc.
 Alpharetta,
        Georgia
 
 We
        have
        audited the accompanying consolidated balance sheets of Small Town
        Radio, Inc. as of June 30, 2002 and 2001, and the related statements
        of operations, stockholders' deficit, and cash flows for the years ended
        June 30, 2002 and 2001. These consolidated financial statements are the
        responsibility of the Company's management. Our responsibility is to express
        an
        opinion on these consolidated financial statements based on our
        audits.
 
 We
        conducted our audits in accordance with auditing standards generally accepted
        in
        the United States of America. Those standards require that we plan and perform
        the audit to obtain reasonable assurance about whether the consolidated
        financial statements are free of material misstatement. An audit includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the consolidated 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 consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of Small Town Radio, Inc.
        as of June 30, 2002 and 2001, and the results of their operations and their
        cash flows for the years then ended in conformity with accounting principles
        generally accepted in the United States of America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        that
        the Company will continue as a going concern. As discussed in Note 6 to the
        consolidated financial statements, the Company's continuance is dependent
        on its
        ability to raise capital. The consolidated financial statements do not include
        any adjustments that might result from the outcome of this
        uncertainty.
 
 
 Atlanta,
        Georgia
 October
        14, 2002
  F-2
  **SMALL
        TOWN RADIO, INC.**
 ***CONSOLIDATED
        BALANCE SHEETS***
 ***JUNE 30,
        2002 AND 2001***
  **June
                  30, 2002**
              
              
              **June
                  30, 2001****Assets**Current
                  AssetsCash
              
              $
              48
              
              
              $
              3,396Accounts
                  receivable
              
              
              8,335
              
              
              
              —Deposits
              
              
              —
              
              
              
              2,076Total
                  current assets
              
              
              8,383
              
              
              
              5,472Fixed
                  assetsEquipment
              
              
              109,282
              
              
              
              1,896Accumulated
                  depreciation
              
              
              (632
              )
              
              
              (105
              )Fixed
                  assets, net
              
              
              108,650
              
              
              
              1,791Acquired
                  broadcast license
              
              
              106,375
              
              
              
              —Other
                  assets
              
              
              —
              
              
              
              10,000TOTAL
                  ASSETS
              
              $
              223,408
              
              
              $
              17,263**Liabilities
                  and Stockholders' Deficit**Current
                  LiabilitiesNotes
                  payable — stockholders
              
              $
              532,500
              
              
              $
              67,500Accounts
                  payable
              
              
              484,766
              
              
              
              575,802Accrued
                  payroll taxes payable
              
              
              3,106
              
              
              
              —Accrued
                  interest
              
              
              18,088
              
              
              
              —Accounts
                  payable — stockholders
              
              
              —
              
              
              
              330,000Accrued
                  settlement costs
              
              
              260,000
              
              
              
              —Accrued
                  expenses
              
              
              —
              
              
              
              1,269Total
                  current liabilities
              
              
              1,298,460
              
              
              
              974,571Commitments
                  and contingenciesStockholders'
                  DeficitStockholder
                  note receivable
              
              
              (152,250
              )Preferred
                  stock, no stated value 100,000,000 shares authorized, no shares
                  issued and
                  outstanding
              
              
              —
              
              
              
              —Common
                  stock, $.001 par value 44,444,444 shares authorized, 9,912,061
                  and
                  8,732,038 shares issued and outstanding in 2002 and 2001,
                  respectively
              
              
              9,912
              
              
              
              8,732Additional
                  paid-in-capital (See Note 9)
              
              
              1,252,944
              
              
              
              6,755Accumulated
                  deficit
              
              
              (2,185,658
              )
              
              
              (972,795
              )Total
                  Stockholders' Deficit
              
              
              (1,075,052
              )
              
              
              (957,308
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              223,408
              
              
              $
              17,263
  See
        notes
        to consolidated financial statements.
  F-3
 
 **SMALL
        TOWN RADIO, INC.**
 ***CONSOLIDATED
        STATEMENTS OF OPERATIONS***
 ***FOR
        THE YEARS ENDED JUNE 30, 2002 AND 2001***
  **Year
                  Ended June 30, 2002**
              
              
              **Year
                  Ended June 30, 2001**Net
                  Sales
              
              $
              54,158Operating
                  ExpensesOrganizational,
                  selling, general and administrative expenses
              
              
              93,119
              
              
              $
              899,415Programming
                  and production
              
              
              15,156Professional
                  fees
              
              
              453,433
              
              
              
              10,000Rent
                  and repairs and maintenance
              
              
              38,354
              
              
              
              3,369Salaries,
                  wages and benefits
              
              
              324,546
              
              
              
              6,193Depreciation
              
              
              528
              
              
              
              105Anticipated
                  settlement of dispute
              
              
              260,000
              
              
              
              —Other
              
              
              —
              
              
              
              2,4731,185,136
              
              
              
              921,555Operating
                  Loss
              
              
              (1,130,978
              )
              
              
              (921,555
              )Other
                  Expenses — interest and debt financing costs
              
              
              (81,885
              
              
              
              (1,269
              )Loss
                  Before Income Taxes
              
              
              (1,212,863
              )
              
              
              (922,824
              )Income
                  Tax Benefit
              
              
              —
              
              
              
              —Net
                  Loss
              
              $
              (1,212,863
              )
              
              $
              (922,824
              )Basic
                  Earnings Per Share
              
              $
              (0.14
              )
              
              $
              (0.24
              )Weighted-Average
                  shares Outstanding
              
              
              8,932,094
              
              
              
              3,880,247
 
 See
        notes
        to consolidated financial statements.
  F-4
  **SMALL
        TOWN RADIO, INC.**
 ***CONSOLIDATED
        STATEMENT OF CASH FLOWS***
 ***FOR
        THE YEARS ENDED JUNE 30, 2002 AND 2001***
  **Year
                  Ended June 30, 2002**
              
              
              **Year
                  Ended June 30, 2001**Operating
                  Activities
              
              $
              (1,212,863
              )
              
              $
              (922,824
              )Net
                  lossAdjustments
                  to reconcile net loss to cash used by operating activitiesDepreciation
              
              
              527
              
              
              
              105Stock
                  issued for director and professional fees
              
              
              1,185,570
              
              
              
              6,787Note
                  received in exchange for executive stock issued
              
              
              (152,250
              )
              
              
              —Warrant
                  costs associated with note payable
              
              
              28,800
              
              
              
              —Changes
                  in assets and liabilitiesAccounts
                  receivables
              
              
              (8,335
              )
              
              
              —Deposit
              
              
              2,076
              
              
              
              (2,076
              )Other
                  asset
              
              
              10,000
              
              
              
              (10,000
              )Accounts
                  payable
              
              
              (91,036
              )
              
              
              525,831Accrued
                  payroll taxes payable
              
              
              3,106
              
              
              
              —Accrued
                  interest
              
              
              18,087
              
              
              
              —Accounts
                  payable — stockholders
              
              
              (330,000
              )
              
              
              330,000Accrued
                  litigation settlement
              
              
              260,000
              
              
              
              —Accrued
                  expenses
              
              
              (1,269
              )
              
              
              1,269Net
                  cash used by operating activities
              
              
              (254,587
              )
              
              
              (70,908
              )Investing
                  Activity — purchase of property and equipmentBusiness
                  acquisition
              
              
              (203,000
              )
              
              
              —Purchases
                  of fixed assets
              
              
              (10,761
              )
              
              
              (1,896
              )Net
                  cash used by investing activities
              
              
              (213,761
              )
              
              
              (1,896
              )Financing
                  ActivitiesNet
                  increase in notes payable — stockholders
              
              
              465,000
              
              
              
              67,500Stockholder
                  contribution
              
              
              —
              
              
              
              8,700Net
                  cash provided by financing activities
              
              
              465,000
              
              
              
              76,200Net
                  (Decrease)/Increase in Cash
              
              
              (3,348
              )
              
              
              3,396Cash,
                  Beginning of Period
              
              
              3,396
              
              
              
              —Cash,
                  End of Period
              
              $
              48
              
              
              $
              3,396
 
 See
        notes
        to consolidated financial statements.
  F-5
 
 **SMALL
        TOWN RADIO, INC.**
 ***CONSOLIDATED
        STATEMENT OF STOCKHOLDERS' DEFICIT***
 ***FOR
        THE YEARS ENDED JUNE 30, 2002 AND 2001***
  **Number
                  of Shares**
              
              
              **Common
                  Stock**
              
              
              **Additional
                  Paid in Capital**
              
              
              **Net
                  Loss**
              
              
              **Total**Balances,
                  June 30, 2000
              
              
              2,874,108
              
              
              
              
              
              
              
              
              $
              (49,971
              )
              
              $
              (49,971
              )Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              
              (922,824
              )
              
              
              (922,824
              )Issuance
                  of common stock
              
              
              4,724,721
              
              
              $
              6,787
              
              
              
              
              
              
              —
              
              
              
              6,787Issuance
                  of common stock no cash consideration
              
              
              1,133,209
              
              
              
              —
              
              
              
              
              
              
              —
              
              
              
              —Stockholder
                  contribution-
              
              
              
              
              
              
              1,945
              
              
              $
              6,755
              
              
              
              
              
              
              
              8,700Balances,
                  June 30, 2001
              
              
              8,732,038
              
              
              $
              8,732
              
              
              $
              6,755
              
              
              $
              (972,795
              )
              
              $
              (957,308
              )Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,212,863
              )
              
              
              (1,212,863
              )Issuance
                  of warrant in connection with a note payable to stockholder for
                  the
                  Dahlonega acquisition
              
              
              
              
              
              
              
              
              
              
              28,800
              
              
              
              
              
              
              
              28,800Record
                  value of options issued and vested for consulting services
              
              
              
              
              
              
              
              
              
              
              24,831
              
              
              
              
              
              
              
              24,831Issuance
                  of shares in connection with issuance of a note
              
              
              27,778
              
              
              
              28
              
              
              
              32,972
              
              
              
              
              
              
              
              33,000Issuance
                  of shares in exchange for services (See Note 9)
              
              
              1,152,245
              
              
              
              1,152
              
              
              
              1,159,586
              
              
              
              
              
              
              
              1,160,738Balances,
                  June 30, 2002
              
              
              9,912,061
              
              
              $
              9,912
              
              
              $
              1,252,944
              
              
              $
              (2,185,658
              )
              
              $
              (922,802
              )
 
 See
        notes
        to consolidated financial statements.
  F-6
  **NOTE 1—NATURE
        OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES**
 
 **NATURE
        OF OPERATIONS**
 
 Small
        Town Radio, Inc. ("the Company") is an owner of a radio station in North
        Georgia and operates one other station under the terms of a Local Programming
        and Marketing Agreement ("LMA"). We are currently focused on securing financing
        to allow us to expand our stations into a contiguous regional
        network.
 
 Our
        target markets are generally smaller, less populated areas near, but not
        in,
        mid-sized and larger markets. The Company acquired one station in North Georgia
        on June 25, 2002 and currently operates a station under an LMA. Further
        acquisitions of stations will be dependent upon approval of the Federal
        Communications Commission ("FCC").
 
 **Reverse
        Acquisition and Disposition**
 
 On
        June 1, 2001, Worldwide PetroMoly, Inc. ("PetroMoly") acquired Small
        Town Radio, Inc., an early-stage enterprise, through the issuance
        of6,581,547 unregistered shares of PetroMoly common stock to Small Town Radio,
        Inc's  stockholders. For financial reporting purposes, the transaction
        constitutes a reverse acquisition because the former Small Town Radio
        stockholders owned in excess of 75% of the outstanding stock of the combined
        entity immediately following the transaction. The purchase method of accounting
        was utilized to record the transaction resulting in marking the assets and
        liabilities of PetroMoly, the acquired entity for reporting purposes, to
        their
        fair values through an allocation of the purchase price. Any excess of purchase
        price remaining after the allocation of the purchase price to the assets
        and
        liabilities was recorded as goodwill.
 
 On
        June 7, 2001, the combined Company sold its interest in Worldwide PetroMoly
        Corporation, a wholly owned subsidiary, to Gilbert Gertner, a stockholder
        and
        previous chairman of the board of PetroMoly. Prior to its disposition, Worldwide
        PetroMoly Corporation was the only operating subsidiary of the combined Company
        and represented 100% of the assets, liabilities and operations of the
        consolidated entity. No gain or loss resulted from the sale of the subsidiary,
        because we used the sale price at June 7, 2001 to determine the value of
        the assets acquired and liabilities assumed at the date of the reverse
        acquisition and activity between June 1, 2001 and June 7, 2001 was
        negligible.
 
 Operating
        results of PetroMoly are only required to be included in the consolidated
        results of operations for the six-day period from June 1, 2001 to
        June 7, 2001. Revenues and costs during that period were
        negligible.
 
 A
        provision in the sale agreement entitles PetroMoly to a portion of any operating
        profits and net proceeds from sale of Worldwide PetroMoly Corporation if
        either
        transpires prior to December 7, 2002.
 
 **PRINCIPLES
        OF CONSOLIDATION**
 
 The
        consolidated financial statements include the operations of Small Town
        Radio, Inc. They also include the accounts of Worldwide PetroMoly
        Corporation for the period from June 1, 2001 to June 7,
        2001.
 
 **ORGANIZATIONAL
        AND START-UP EXPENSES**
 
 The
        Company has expensed all organizational and start-up expenses for financial
        reporting purposes.
 
 **PROPERTY
        AND EQUIPMENT**
 
 Property
        and equipment are carried at cost. Depreciation is computed using the
        straight-line method. Property and equipment at June 30, 2002consisted of
        equipment acquired in the acquisition of the assets WDGR-AM and computer
        equipment. The assets are being depreciated over their estimated useful life
        which is generally three to five years.
  F-7
 
 **Acquired
        Broadcast License**
 
 Among
        the
        assets of WDGR-AM acquired from Greenwood Communications, Corp. was the
        broadcast license for WDGR-AM. The value assigned to this acquired asset,
        $106,375, has been capitalized. Because it has a perpetual life, it will
        not be
        amortized but will be reviewed at each financial statement date to determine
        if
        an impairment has occurred. Losses arising from impairment, when and if they
        occur, will be recognized in the period in which it is identified.
 
 **EARNINGS
        PER SHARE**
 
 Earnings
        per share have been computed based upon the weighted-average common shares
        outstanding during each year. Diluted earnings per share have not been presented
        due to the Company incurring a loss from continuing operations.
 
 **Use
        of Estimates**
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the consolidated financials
        statements and the reported amounts of revenues and expenses during the
        reporting period. Actual results could differ from those estimates.
 
 **Advertising
        Revenues and Costs**
 
 The
        Company has incurred no advertising costs. Advertising revenues are recognized
        monthly based on the advertising that has been provided versus the total
        amount
        of advertising required under the terms of the advertising agreement. At
        June 30, 2002 and 2001, the Company had deferred no advertising
        revenue.
 
 **NON-CASH
        CONSIDERATION**
 
 The
        Company issued 529,706 and 1,133,209 shares of common stock to directors
        and
        third parties for services in 2002 and 2001, respectively. The dollar amounts
        assigned to these transactions and recorded as common stock in the accounts
        of
        the Company were based on the fair value of the services rendered.
 
 **Reverse
        Stock Split**
 
 In
        the
        fourth quarter of the year ended June 30, 2002 the Company completed an 18
        for 1 reverse stock split. All share, option, share price, option price and
        per
        share amounts in these financial statements have been adjusted to reflect
        the
        reverse stock split.
  F-8
 
 **NOTE 2—FIXED
        ASSETS**
 
 Fixed
        assets consist of the following:
 **June 30,
                  2002**
              
              
              **June 30,
                  2001**Computer
                  equipment
              
              $
              13,289
              
              
              $
              1,896Radio
                  station equipment
              
              
              96,625Less:
                  Accumulated depreciation
              
              
              (632
              )
              
              
              (105
              )Fixed
                  assets, net
              
              $
              109,282
              
              
              $
              1,791
 
 **NOTE 3—INCOME
        TAX**
 
 A
        reconciliation of tax at the combined federal and state income tax rates
        and
        actual tax expense is provided below:
 **June 30,
                  2002**
              
              
              **June 30,
                  2001**Federal
                  and state income tax at the applicable rates
              
              $
              (460,402
              )
              
              $
              (350,304
              )Change
                  in valuation allowance
              
              
              460,402
              
              
              
              350,204Actual
                  tax expense
              
              
              —
              
              
              
              —
 
 The
        components of the deferred tax asset are as follows:
 **June 30,
                  2002**
              
              
              **June 30,
                  2001**Net
                  operating losses and start-up costs
              
              $
              810,606
              
              
              $
              350,204Valuation
                  allowance
              
              
              (810,606
              )
              
              
              (350,204
              )Net
                  deferred tax asset
              
              
              —
              
              
              
              —
 
 The
        valuation allowance at June 30, 2002 is $810,606 and was increased by
        $460,402 during 2002. During the current year, the increase in the valuation
        allowance was due to additional losses incurred by the Company. We consider
        the
        valuation allowance necessary and appropriate in light of the Company's history
        of recurring losses.
 
 **NOTE 4—STOCK
        OPTIONS**
 
 The
        Company maintains an incentive stock option plan which is accounted for in
        accordance with Accounting Principles Board Opinion
        (APB)No. 25,*Accounting for Stock Issued to
        Employees*.
  F-9
  The
        following is a summary of the status of the Company's stock option
        plan.
  **Number
                  of Options**
              
              
              **Weighted
                  Average Exercise Price**Outstanding,
                  June 30, 2000
              
              
              —Options
                  issued in the year ended June 30, 2001
              
              
              40,722
              
              
              $
              6.66Outstanding,
                  June 30, 2001
              
              
              40,722
              
              
              
              6.66Options
                  issued in the year ended June 30, 2002
              
              
              694,445
              
              
              
              .56Options
                  exercised during the year
              
              
              (453,764
              )
              
              
              .54Options
                  lapsing during the year
              
              
              (10,833
              )
              
              
              8.89Balance,
                  June 30, 2002
              
              
              270,570
              
              
              $
              1.38
 
 The
        following summarizes the outstanding options at June 30, 2002.
 **Number
                    of Options**
                
                **Exercise
                    Price**
                
                **Expiration
                    Date**5,555
                $
                18.00
                
                9/15/20021,111
                $
                2.34
                
                1/1/20038,888
                $
                4.50
                
                1/1/2003277
                $
                9.00
                
                1/1/2003722
                $
                18.00
                
                1/1/20032,777
                $
                1.62
                
                12/6/20038,333
                $
                1.08
                
                1/1/20031,944
                $
                1.62
                
                1/1/2003277
                $
                2.34
                
                1/1/2003111,111
                $
                0.54
                
                2/1/201246,236
                $
                0.54
                
                2/1/2012
 Under
          Statement of Financial Accounting Standards No. 123*Accounting for
          Employee Stock Options*, companies can elect to either record the fair value
          of options issued as an expense in the statement of operations or provide
          the
          information on a pro forma basis in the notes to the financial statements.
          We
          have elected to provide the expense information on a pro forma basis in
          the
          notes to the financial statements. That information is presented
          below:
 **Year
                  Ended June 30, 2002**
              
              
              **Year
                  Ended June 30, 2001**Net
                  loss per financial statements
              
              $
              (1,212,863
              )
              
              $
              (922,824
              )Pro
                  forma compensation expense for employee stock options
              
              
              (333,596
              
              
              
              (7,673
              )Assumed
                  income tax benefit
              
              
              —
              
              
              
              —Pro
                  forma net loss
              
              $
              (1,546,459
              )
              
              $
              (930,497
              )Pro
                  forma net loss per share
              
              $
              (.17
              )
              
              $
              (.24
              )
 
 For
        the
        purpose of determining the pro forma compensation expense charge, we have
        used
        the following assumptions:
 
 *•*Annual
        volatility is assumed to be 170% per year.
  F-10
 
 *•*Risk
        free rate of return of 3%.
 *•*Expected
        lives of the options are assumed to be equal to the period from date of issuance
        to expiration.
 *•*We
        assume that no dividends will be paid.
 *•*Because
        of the Company's history of operating losses, we assume no income tax benefit
        from issuance and exercise of the options.
 
 In
        addition to the employee stock options referred to above, the Company issued
        83,334 options to the Company's chief financial officer in lieu of consulting
        fees. Because the individual is a consultant rather than an employee, a charge
        was recorded for the portion of the options that were issued and vested during
        the year. The amount of the charge was $24,831. An additional charge of $24,831
        will be recorded in the Company's first quarter of fiscal2003. The assumptions
        used in calculating the amount of the charge are identical to those set forth
        above.
 
 **NOTE 5—RELATED
        PARTY TRANSACTIONS**
 
 The
        Company had outstanding notes payable to certain stockholders of $532,500
        and
        $67,500 at June 30, 2002 and 2001, respectively. These notes are unsecured,
        payable upon demand, and bear interest at 12%.
 
 In
        connection with the issuance of a note payable to a stockholder in the amount
        of
        $216,000 on June 17, 2002, the Company issued the stockholder a warrant to
        purchase 58,245 shares of the Company's common stock at a price per share
        of
        $2.82. The warrant expires on June 17, 2012. We have determined the value
        of the warrant using the Black-Scholes Option pricing model using the following
        assumptions:
 
 *•*10-year
        life
 *•*3.0%
        risk free rate of return
 *•*170%
        volatility
 *•*Stock
        price at date of grant of $.50
 
 Under
        these assumptions we determined the value of the warrant to be $28,800. Because
        the notes are demand notes this amount was recorded as an expense on the
        date of
        issuance.
 
 At
        June 30, 2001, the Company had outstanding accounts payable to stockholders
        of $330,000 for consulting services provided. The amount was settled through
        the
        issuance of common stock to shareholders of the Company who are affiliated
        with
        the consulting firm in 2002.
 
 **NOTE 6—FINANCIAL
        CONDITION AND GOING CONCERN**
 
 The
        Company's continuance is dependent on raising capital and generating revenues
        sufficient to sustain operations. The Company believes that the necessary
        capital will be raised and has entered into discussions to do so with certain
        individuals and companies. However, as of the date of these consolidated
        financial statements, no formal agreement exists.
 
 The
        accompanying consolidated financial statements do not include any adjustments
        that might be necessary should the Company be unable to secure the necessary
        capital and continue as a going concern.
 
 **NOTE 7—COMMITMENTS
        AND CONTINGENCIES**
 
 The
        Company leases land where the WDGR AM tower is located under a 3-year lease.
        The
        monthly payments under the lease are $200. At the conclusion of the lease,
        the
        Company has the option to purchase the land.
 
 The
        Company is currently involved in a dispute with a former executive officer.
        We
        believe this matter can be settled by a payment of $350,000 to the former
        executive officer. Upon such payment, the shares held by the former executive
        officer may be forfeited in connection with the settlement and he will waive
        his
        rights to amounts due from the Company of $90,000. Accordingly, the net cost
        of
        the settlement if it occurs will be $260,000. We have accrued $260,000 for
        the
        settlement in the fourth quarter of the year ended June 30,
        2002.
  F-11
 
 **NOTE 8—FOURTH
        QUARTER ADJUSTMENTS**
 
 The
        Company recorded certain significant adjustments in the fourth quarter of
        fiscal
        2002. A summary of those adjustments is provided below:
 **Description**
              
              **(Addition
                  to)/ Deduction from Net Loss**Eliminate
                  payable associated with insurance policy that was never purchasedand
                  related insurance expense
              
              $
              90,000Write-off
                  expenses associated with a secondary offering that were incurredand
                  capitalized in the Company's first quarter
              
              
              (24,305
              )Record
                  an accrual for an anticipated settlement with a former
                  executiveofficer.
              
              
              (260,000
              )Write-off
                  accounts payable for professional services that will not be paidunder
                  an
                  agreement with the service provider
              
              
              25,000Increase
                  in net loss
              
              $
              (169,305
              )
 
 **NOTE 9—ISSUANCE
        OF SHARES IN EXCHANGE FOR SERVICES**
 
 During
        the fiscal year ended June 30, 2002, the Company issued 529,706 shares in
        exchange for services valued at $737,696. Substantially all of these shares
        were
        issued to either directors or employees of the Company or entities affiliated
        with directors or employees of the Company. In some cases the services were
        performed during fiscal year 2002. In other cases the work was performed
        in a
        prior year and the shares were issued in exchange for cancellation of invoices
        outstanding. A summary of these transactions is provided below:
  F-12
 
 **Date
                  of Issuance**
              
              **Share
                  Recipient**
              
              **Number
                  of Shares**
              
              
              **Value
                  of Services**July,
                  2001
              
              Shares
                  issued to an investment advisory firm in exchange for
                  servicesrendered
              
              
              66,667
              
              
              $
              99,000July,
                  2001
              
              Shares
                  issued to a marketing consultant
              
              
              4,334
              
              
              $
              11,000August,
                  2001
              
              Shares
                  issued to a director
              
              
              27,778
              
              
              $
              33,000August,
                  2001
              
              Shares
                  issued to principals of an investment banking firm affiliated with
                  a
                  significant shareholder of the Company
              
              
              93,897
              
              
              $
              240,000August
                  through October 2001
              
              Shares
                  issued to executive employees in lieu of salaries.
              
              
              37,030
              
              
              $
              54,696June,
                  2002
              
              Shares
                  issued to a law firm of which a significant shareholder of the
                  Company is
                  a partner.
              
              
              300,000
              
              
              $
              300,000June,
                  2002
              
              Shares
                  issued to various consultants
              
              
              163,834
              
              
              $
              211,043June,
                  2002
              
              Shares
                  issued to the chief executive upon exercise of employee stock
                  options
              
              
              171,759
              
              
              $
              92,750June,
                  2002
              
              Shares
                  issued to the chief executive in exchange for a vote from the
                  executive
              
              
              281,946
              
              
              $
              152,250
  F-13
 
 **EXHIBIT
        INDEX**
 
 **Exhibit
                  No.**
              
              **Description**2.1
              
              Agreement
                  and Plan of Merger dated April 30, 2001 among Small Town Radio,
                  Inc.,
                  Worldwide PetroMoly, Inc., Petro Merger, Inc., Gilbert Gertner
                  and certain
                  individual shareholders of Small Town Radio, Inc., as amended and
                  restated, incorporated herein byreference to Exhibit 2.2 to the
                  Company's Current Report on Form 8-K dated May 7,
                  2001.2.2*
              
              Agreement
                  and Plan of Merger dated as of May 3, 2002 among Worldwide PetroMoly,
                  Inc., a Colorado corporation, and Small Town Radio, Inc., a Nevada
                  corporation.2.3
              
              Warranty
                  Bill of Sale and Assignment dated June 25, 2002 among Greenwood
                  Communications Corp., Ann B. Greenwood and the Company, incorporated
                  herein by reference to Exhibit 2.1 to the Company's Current Report on
                  Form 8-K dated June 17, 2002.3i.1*
              
              Articles
                  of Incorporation of Small Town Radio, Inc.3ii.1*
              
              Bylaws
                  of Small Town Radio, Inc.4.1
              
              $5,000
                  Demand Note of the Company dated February 3, 2001, issued to Bolling
                  Investments, LLC, incorporated herein by reference to Exhibit 10.12
                  to the Company's Registration Statement on Form SB-2 (File
                  No. 333-70176).4.2
              
              $25,000
                  Demand Note of the Company dated March 26, 2001, issued to Wayne
                  Shortridge, incorporated herein by reference to Exhibit 10.13 to the
                  Company's Registration Statement on Form SB-2 (File
                  No. 333-70176).4.3
              
              $25,000
                  Demand Note dated June 4, 2001, issued to Wayne Shortridge, incorporated
                  herein by reference to Exhibit 10.14 to the Company's Registration
                  Statement on Form SB-2 (File No. 333-70176).4.4
              
              $12,500
                  Demand Note dated June 29, 2001, issued to Bolling Investments,
                  LLC,
                  incorporated herein by reference to Exhibit 10.15 to the Company's
                  Registration Statement on Form SB-2 (File No.
                  333-70176).4.5
              
              $50,000
                  Demand Note of the Company dated August 3, 2001, issued to John
                  F.
                  McMullan, incorporated herein by reference to Exhibit10.16 to the
                  Company's Registration Statement on Form SB-2 (File No.
                  333-70176).4.6
              
              $216,000
                  Secured Note of the Company dated June 17, 2002, issued to Wayne
                  Shortridge, incorporated herein by reference to Exhibit4.1 to the
                  Company's Current Report on Form 8-K dated June 17,
                  2002.4.7
              
              Note
                  Purchase Agreement dated as of June 17, 2002 between the Company
                  and Wayne
                  Shortridge, incorporated herein by reference to Exhibit 4.2 to
                  the
                  Company's Current Report on Form 8-K dated June 17,
                  2002.4.8
              
              Security
                  Agreement dated as of June 17, 2002 between the Company and Wayne
                  Shortridge, incorporated herein by reference to Exhibit4.3 to the
                  Company's Current Report on Form 8-K dated June 17,
                  2002.4.9
              
              Warrant
                  to Purchase Common Stock of the Company, dated June 17, 2002, issued
                  to
                  Wayne Shortridge, incorporated herein by reference to Exhibit 4.4
                  to the
                  Company's Current Report on Form 8-K dated June 17,
                  2002.10.1†
              
              Worldwide
                  PetroMoly, Inc. Stock Incentive Plan, incorporated herein by reference
                  to
                  Exhibit 4.1 to the Company's Registration Statement on Form S-8
                  (File No.
                  333-67404).
 10.2†
              
              Employment
                  Agreement dated as of July 30, 2001 between the Company and Donald
                  L.
                  Boyd, incorporated herein by reference to Exhibit 10.20 to the
                  Company's
                  Registration Statement on Form SB-2 (File No.
                  333-70176).10.3
              
              Consulting
                  Agreement dated as of September 10, 2001 between the Company and
                  Richard
                  P. Smyth, incorporated herein by reference to Exhibit 10.11 to
                  the
                  Company's Registration Statement on Form SB-2 (File No.
                  333-70176).
  
  10.4
              
              Commercial
                  Lease Agreement dated June 25, 2002 between Greenwood Communications
                  Corp.
                  and the Company, incorporated herein by reference to Exhibit 10.1
                  to the
                  Company's Current Report on Form 8-K dated June 17,
                  2002.16.1
              
              Letter
                  of BKD, LLP dated September 10, 2002, pursuant to Item 304(a)(3)
                  of
                  Regulation S-B, regarding change of certifying accountant, incorporated
                  herein by reference to Exhibit 16.1 to the Company's Current Report
                  on
                  Form 8-K dated September 3, 2002.21.1*
              
              List
                  of Subsidiaries.31.1*
              
              Certification
                  Pursuant to 18 U.S.C. § 1350 (enacted by
                  Section 906 of the Sarbanes-Oxley Act of 2002, Public Law 107-204),dated
                  November 12, 2007, executed by Daniel W. Hollis, Chairman of the
                  Board and
                  Chief Executive and Financial Officer of the Company.32.1*
              
              Certification
                  Pursuant to 18 U.S.C. § 1350 (enacted by Section 906 of the Sarbanes-Oxley
                  Act of 2002, Public Law 107-204),dated November 12, 2007, executed
                  by
                  Daniel W. Hollis, Chairman of the Board and Chief Executive and
                  Financial
                  Officer of the Company.
 
 ***Filed
        herewith.
 
 *†*Management
        contract or compensatory plan
  X-2