10-Q/A 1 l10qa033108.txt VALCOM, INC. FORM 10-Q/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C., 20549 FORM 10-Q/A ----------- (Mark one) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE FISCAL QUARTER ENDED MARCH 31, 2008 Commission file Number 0-28416 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 VALCOM, INC. -------------------------------------------------------- (Name of small business issuer specified in its charter) Delaware 58-1700840 -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 2113A Gulf Boulevard, Indian Rocks Beach, Florida 33785 ------------------------------------------------------- (Address of Principal executive offices) (Zip code) (727) 953 - 9778 ------------------------- Issuer's telephone number Securities registered pursuant to 12(b) of the Act: None Securities to be registered pursuant to Section 12(g) of the Act: COMMON STOCK $0.001 PAR VALUE ----------------------------- (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] As of October 16th, 2008 the issuer had 22,774,369 shares of its $0.001 par value common stock outstanding. UNAUDITED INTERIM FINANCIAL STATEMENTS The accompanying financial statements are unaudited and are prepared in accordance with rules and regulations of the Securities and Exchange Commission for interim quarterly reporting. Accordingly, these financial statements do not include all disclosures required under generally accepted accounting principles. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position of ValCom, Inc. and subsidiaries as of March 31, 2008 and the results of their operations and their cash flows for the three months ended March 31, 2008. These consolidated financial statements include the accounts of ValCom, Inc. and its subsidiary companies (together "the Company"). Results for the three months ended March 31, 2007, are not necessarily indicative of the operations, which may occur during the year ending September 30, 2007. Refer to the Company's Annual Report on Form 10- K for the year ended September 30, 2007 for further information. VALCOM, INC. FORM 10-Q Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements 2 Item 2. Management's Discussion and Analysis or Plan of Operation 9 Item 3. Quantitative and Qualitative Market Risk 12 Item 4. Controls and Procedures 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings 13 Item 1A. Risk Factors 15 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15 Item 3. Defaults Upon Senior Securities 15 Item 4. Submission of Matters to a Vote of Security Holders 15 Item 5. Other Information 15 Item 6. Exhibits SIGNATURES 16 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MOORE & ASSOCIATES, CHARTERED ACCOUNTANTS AND ADVISORS PCAOB REGISTERED REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE BOARD OF DIRECTORS VALCOM, INC. We have reviewed the accompanying balance sheet of ValCom, Inc. as of March 31, 2008, and the related statements of operations, stockholders' equity (deficit), and cash flows for the three-month and six-month periods ended March 31, 2008 and March 31, 2007. These interim financial statements are the responsibility of the Corporation's management. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists of principally applying analytical procedures and making inquiries of persons responsible for the financials and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to such financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the balance sheet of ValCom, Inc. as of September 30, 2007, and the related statements of operations, stockholders' equity (deficit) and cash flows for the year then ended (not presented herein); and in our report dated October 8, 2008, we expressed an unqualified opinion with a going concern paragraph on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of September 30, 2007 is fairly stated, in all material respects, in relations to the balance sheet from which it has been derived. /S/ MOORE & ASSOCIATES, CHARTERED --------------------------------- Moore & Associates, Chartered Las Vegas, Nevada October 17, 2008 2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146 (702) 253-7499 FAX: (702)253-7501 2
VALCOM, INC. Balance Sheets ASSETS March 31, September 30, 2008 2007 -------------- -------------- (unaudited) CURRENT ASSETS Cash $ 213,728 $ 5,926 Accounts receivable, net 54,604 173,328 Prepaid expense 31,683 - -------------- -------------- Total Current Assets 300,015 179,254 -------------- -------------- FIXED ASSETS, net 88,690 101,360 -------------- -------------- OTHER ASSETS Deposits 160,850 158,853 Other assets 1,000,000 1,000,000 -------------- -------------- Total Other Assets 1,160,850 1,158,853 -------------- -------------- TOTAL ASSETS $ 1,549,555 $ 1,439,467 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accounts payable and accrued expenses $ 833,359 $ 906,974 Accrued interest payable 194,346 163,790 Deferred income 265,000 - Due to related parties 1,968,388 1,950,288 Notes payable 691,153 641,153 -------------- -------------- Total Current Liabilities 3,952,246 3,662,205 -------------- -------------- LONG-TERM LIABILITIES Notes payable - - Total Long-Term Liabilities - - -------------- -------------- TOTAL LIABILITIES 3,952,246 3,662,205 -------------- -------------- STOCKHOLDERS' EQUITY (DEFICIT) Series B Preferred stock, 1,000,000 shares authorized at par value of $0.001, 38,000 shares issued and outstanding 38 38 Series C Preferred stock, 25,000,000 shares authorized at par value of $0.001, 7,921,666 shares issued and outstanding 7,921 7,921 Common stock, 250,000,000 shares authorized at par value of $0.001, 13,976,099 and 10,376,099 shares issued and outstanding, respectively 13,976 10,376 Treasury stock, 35,000 shares (23,522) (23,522) Additional paid-in capital 15,258,139 15,081,739 Accumulated deficit (17,659,243) (17,299,290) -------------- -------------- Total Stockholders' (2,402,691) (2,222,738) Equity (Deficit) -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 1,549,555 $ 1,439,467 ============== ============== The accompanying notes are an integral part of these financial statements.
3
VALCOM, INC. Statements of Operations (unaudited) For the Three Months Ended For the Six Months Ended March 31, March 31, ---------------------------- ---------------------------- 2008 2007 2008 2007 ------------ ------------ ------------ ------------ REVENUES $ 381,321 $ 722,860 $ 648,957 $ 911,505 COST OF GOODS SOLD 1,223 - 1,223 - ------------ ------------ ------------ ------------ GROSS MARGIN 380,098 722,860 647,734 911,505 OPERATING EXPENSES Advertising and marketing 772 887 1,313 6,739 Depreciation expense 6,335 6,335 12,670 12,670 General and administrative 298,579 1,310,400 963,148 1,798,391 ------------ ------------ ------------ ------------ Total Operating Expenses 305,686 1,317,622 977,131 1,817,800 ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS 74,412 (594,762) (329,397) (906,295) ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSE) Gain (loss) on sale of equipment - - - - Interest expense (15,278) (14,548) (30,556) (80,378) Other income - 225 - 225 ------------ ------------ ------------ ------------ TOTAL OTHER INCOME (EXPENSE) (15,278) (14,323) (30,556) (80,153) ------------ ------------ ------------ ------------ INCOME (LOSS) BEFORE 59,134 (609,085) (359,953) (986,448) INCOME TAXES INCOME TAX EXPENSE - - - - ------------ ------------ ------------ ------------ NET INCOME (LOSS) $ 59,134 $ (609,085)$ (359,953) $ (986,448) ============ ============ ============ ============ BASIC INCOME (LOSS) PER SHARE $ 0.00 $ (0.14)$ (0.03) $ (0.23) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 13,976,099 4,319,417 12,776,099 4,308,781 ============ ============ ============ ============ The accompanying notes are a integral part of these financials statements.
4
VALCOM, INC. Statements of Stockholders' Equity (Deficit) (unaudited) Series B Preferred Stock Series C Preferred Stock Common Stock ------------------------ ------------------------ ---------------------- Shares Amount Shares Amount Shares Amount ------ ------ ---------- ------- ---------- ------- Balance, September 30, 2005 38,000 $ 38 9,267,416 $ 9,267 4,265,603 $ 4,266 Common stock issued for cash - - - - 770,725 771 Common stock issued for services - - - - 2,561,283 2,561 Common stock issued for debt - - - - 2,711,200 2,711 Preferred stock conversion - - (1,345,750) (1,346) 67,288 67 Net loss for the year ended September 30, 2007 - - - - - - ------ ------ ---------- ------- ---------- ------- Balance, September 30, 2007 38,000 38 7,921,666 7,921 10,376,099 10,376 Common stock issued for services - - - - 3,600,000 3,600 Net loss for the six months ended March 31, 2008 - - - - - - ------ ------ ---------- ------- ---------- ------- Balance, March 31, 2008 38,000 $ 38 7,921,666 $ 7,921 13,976,099 $13,976 ====== ====== ========== ======= ========== ======= The accompanying notes are an integral part of these financial statements.
5
VALCOM, INC. Statements of Stockholders' Equity (Deficit) (unaudited) (Continued) Total Additional Stockholders' Treasury Paid-In Accumulated Equity Stock Capital Deficit (Deficit) --------- ------------ ------------- ------------ Balance, September 30, 2005 $ (23,522) $ 14,097,995 $ (15,293,188) $ (1,205,144) Common stock issued for cash - 130,715 - 131,486 Common stock issued for services - 185,447 - 188,008 Common stock issued for debt - 666,303 - 669,014 Preferred stock conversion - 1,279 - - Net loss for the year ended September 30, 2007 - - (2,006,102) (2,006,102) --------- ------------ ------------- ------------ Balance, September 30, 2007 (23,522) 15,081,739 (17,299,290) (2,222,738) Common stock issued for services - 176,400 - 180,000 Net loss for the six months ended March 31, 2008 - - (359,953) (359,953) --------- ------------ ------------- ------------ Balance, March 31, 2008 $ (23,522) $ 15,258,139 $ (17,659,243) $ (2,402,691) ========= ============ ============= ============ The accompanying notes are an integral part of these financial statements.
6
VALCOM, INC. Statements of Cash Flows (unaudited) For the Six Months Ended March 31, ------------------------- 2008 2007 ---------- ---------- OPERATING ACTIVITES Net loss $ (359,953) $ (986,448) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation expense 12,670 12,670 Common stock issued for services 180,000 69,787 Impairment of asset - - Changes in operating assets and liabilities (Increase) decrease in accounts receivable 118,724 (64,354) (Increase) decrease in prepaid expenses (33,680) 1,258 Increase (decrease) in accrued interest payable 30,556 80,379 Increase (decrease) in accounts payable (73,615) 561,508 Increase (decrease) in deferred income 265,000 - ---------- ---------- Net Cash Used in Operating Activities 139,702 (325,200) ---------- ---------- INVESTING ACTIVITIES Proceeds from sale of equipment - - Purchase of property and equipment - - ---------- ---------- Net Cash Used in Investing Activities - - ---------- ---------- FINANCING ACTIVITIES Proceeds from preferred and common stock - 66,486 Proceeds from note payable 68,100 225,000 Repayment of notes payable - - ---------- ---------- Net Cash Provided by Financing Activities 68,100 291,486 ---------- ---------- NET DECREASE IN CASH 207,802 (33,714) CASH AT BEGINNING OF YEAR 5,926 71,612 ---------- ---------- CASH AT END OF YEAR $ 213,728 $ 37,898 ========== ========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION CASH PAID FOR: Interest $ - $ - Income Taxes $ - $ - NON CASH FINANCING ACTIVITIES: Common stock issued for debt $ - $ 482,939 The accompanying notes are an integral part of these financial statements.
7 VALCOM, INC. (A Development Stage Company) Notes to the Financial Statements NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2008 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2007 audited financial statements. The results of operations for the period ended March 31, 2008 are not necessarily indicative of the operating results for the full years. NOTE 2 - GOING CONCERN The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has had no revenues and has generated losses from operations. In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources and to develop a consistent source of revenues. Management's plans include of investing in and developing all types of businesses related to the entertainment industry. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. NOTE 3 - SIGNIFICANT EVENTS On December 11, 2006, the Company completed a 1 for 20 reverse split of its common stock. The reverse stock split is reflected in the financial statements on a retroactive basis. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. References in this section to "ValCom, Inc.," the "Company," "we," "us," and "our" refer to ValCom, Inc. and our direct and indirect subsidiaries on a consolidated basis unless the context indicates otherwise. This quarterly report contains forward looking statements relating to our Company's future economic performance, plans and objectives of management for future operations, projections of revenue mix and other financial items that are based on the beliefs of, as well as assumptions made by and information currently known to, our management. The words "expects, intends, believes, anticipates, may, could, should" and similar expressions and variations thereof are intended to identify forward-looking statements. The cautionary statements set forth in this section are intended to emphasize that actual results may differ materially from those contained in any forward looking statement. OVERVIEW The Company is a diversified entertainment company with the following operating activities: As of March 31, 2008, ValCom, Inc. operations were comprised of five divisions. 1. Studio Division 2. Rental Division 3. Broadcast Television 4. Film and Television Production 5. Live Theater 1. STUDIO RENTAL ValCom's revenue is primarily generated through the lease of the sound stages and production. ValCom's past and present clients include Paramount Pictures, Don Belisarious Productions, Warner Brothers, Universal Studios, MGM, HBO, NBC, 20th Century Fox, Disney, CBS, Sony, Showtime, the USA Network, the Game Show Network, Endemol and BET. In January 2008, ValCom opened its Florida office at 2113A Gulf Blvd., Indian Rock Beach, Florida. 2. RENTAL DIVISION As part of the rental of sound stages and production facilities, Valcom rents productions equipment including cameras, lighting and grip packages both for productions using its studio facilities and for location shoots. 3. BROADCAST TELEVISION Through our joint venture with New Global Communications, Inc., ValCom owns a 45% equity interest in ValCom Broadcasting, LLC, a New York limited liability company, which operates KVPS (Channel 8), an independent television broadcaster in the Palm Springs, California market. Valcom has not realized significant revenues from this joint venture to date. 9 4. FILM AND TELEVISION PRODUCTION In addition to producing our own television and motion picture programming, ValCom also owns a small library of television content, which it distributes through Valencia Entertainment International. It's television series, "A.J.'s Time Travelers', a 40 episode x one hour episode TV series was licensed to Porchlight International for world-wide distribution in November 2007. 5. LIVE THEATER In 2006 ValCom, Inc. launched its Live Theatre Division. The first venture undertaken was `Headlights and Tailpipes' which opened at the Stardust Hotel and Casino, Las Vegas in April 2006 and ran until July 2006. The company is did not produce any further Live Theatre projects in the period to March 2008. THREE MONTHS ENDED MARCH 31, 2008 VS. MARCH 31, 2007 Revenues for the three months March 31, 2008 decreased by $341,539 or47% from $722,860 for the three months ended March 31, 2007 to $381,321for the same period in 2008. The decrease in revenue was principally due to reduced studio rentals. Production costs for the three months ended March 31, 2008 increased by $1,223from $0 for the three months ended March 31, 2007 to $1,223 for the same period in 2008. The increase in production costs was principally due to productions completed during 2008. Depreciation and amortization expense for the three months ended March 31, 2008 was constant at $6,335 compared to $6,335for the three months ended March 31, 2007. General and administrative expenses for the three months ended March 31, 2008 decreased by $1,011,821or 77% from $1,310,400 in the three months ended March 31, 2008 to $298,579 for the same period in 2007. The decrease was due principally to reduced asset impairments in 2008. Interest expense for the three months ended March 31, 2008 increased by $730 or 5% from $14,548 for the three months ended March 31, 2007 to $15,278for the same period in 2008. SIX MONTHS ENDED MARCH 31, 2008 VS. MARCH 31, 2007 Revenues for the six months March 31, 2008 decreased by $262,548 or 29% from $911,505 for the six months ended March 31, 2007 to $648,957for the same period in 2008. The decrease in revenue was principally due to reduced studio rentals. 10 Production costs for the six months ended March 31, 2008 increased by $1,223 from $0 for the six months ended March 31, 2007 to $1,223 for the same period in 2008. The increase in production costs was principally due to productions completed during 2008. Depreciation and amortization expense for the six months ended March 31, 2008 was constant at $12,670 compared to $12,670 for the six months ended March 31, 2007. General and administrative expenses for the six months ended March 31, 2008 decreased by $835,243 or 46% from $1,798,391 for the six months ended March 31, 2007 to $963,148 for the same period in 2008. The decrease was due principally to reduced asset impairments during 2008. Interest expense for the six months ended March 31, 2008 decreased by $49,822 or 62 % from $80,378 for the six months ended March 31, 2007 to $30,556 for the same period in 2008. The decrease was due principally to conversion of debt to equity. Due to the factors described above, the Company's net loss decreased by $626,495 from $986,448 for the six months ended March 31, 2007 to $359,953 for the same period in 2008. FUTURE OUTLOOK During August 2008, the Company emerged from bankruptcy. The Company is seeking new business opportunities and to reestablish itself in the television and film production industry. The WGA Writers Strike had created a major level of uncertainty in film and TV production sector, especially in the Hollywood area and ValCom decided to close its facility there and is now planning to concentrate its studio rental business in Florida following the opening of a new office there and is seeking new business opportunities in the television and film production industry in the Florida area. LIQUIDITY AND CAPITAL RESOURCES The Company's condensed consolidated financial statements have been prepared, assuming that the Company will continue as a going concern. The Company has a net loss of $359,953 and a positive cash flow from operations of $139,702 for the six months ended March 31, 2008, a working capital deficiency of $3,652,231and an accumulated deficit of $17,659,243 at March 31, 2008. These conditions raise substantial doubt about the Company's ability to continue as a going concern. 11 Cash totaled $213,728 on March 31, 2008 compared to $37,898 as at March 30, 2007. During the six months ended March 31, 2008, net cash used by operating activities totaled $139,702 compared to net cash used in operating activities of $325,200 for the comparable six-month period in 2007. A significant portion of operating activities included payments for interest and production development costs. Net cash provided by financing activities for the six months ended March 31, 2008 totaled $68,100 compared to $291,486 for the comparable six-month period in 2007. The above cash flow activities yielded a net cash increase of $207,802 during the six months ended March 31, 2008 compared to a decrease of $33,714 during the comparable prior year period. Net working capital (current assets less current liabilities) was a negative $3,652,231as of March 31, 2008. The Company will need to raise funds through various financings to maintain its operations until such time as cash generated by operations is sufficient to meet its operating and capital requirements. There can be no assurance that the Company will be able to raise such capital on terms acceptable to the Company, if at all. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. N/A ITEM 4. CONTROLS AND PROCEDURES. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company's management, including Vince Vellardita, the Company's Chief Executive Officer and Chief Financial Officer ("CEO/CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the three months ended March 31, 2008. Based upon that evaluation, the Company's CEO/CFO concluded that the Company's disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company 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 SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's CEO/CFO, as appropriate, to allow timely decisions regarding required disclosure. 12 CHANGES IN INTERNAL CONTROLS Our management, with the participation the Principal Executive Officer and Principal Accounting Officer, performed an evaluation as to whether any change in our internal controls over financial reporting occurred during the 2008 Quarter ended March 31, 2008. Based on that evaluation, the Company's CEO/CFO concluded that no change occurred in the Company's internal controls over financial reporting during the 2008 Quarter ended March 31, 2008 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting. PART II--OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS CHAPTER 11 BANKRUPTCY ValCom filed a voluntary chapter 11 bankruptcy petition on July 14st 2007 and obtained the status of Debtor in Possession. Valcom had in initiated suit against Chicago Title and The Laurus Master Fund in October 2005 because it claimed that Laurus and Chicago Title had retained the $500,000 overage arising out of the proceeding in 2003/4. Subsequently, the trial court entered summary judgment in favor of Chicago Title and Laurus. Valcom appealed, contending that there were triable issues as to whether: (1) Valcom suffered damages; (2) Chicago Title and Laurus violated Civil Code sections 2924K, 2924d, and 2924h; and (3) Chicago Title breached its duties as the foreclosure trustee. Additionally, at the time that the trial court granted Summary Judgment against Valcom, the trial court awarded costs and attorney fees of $562,127.30, and Valcom argued in its appeal that Chicago Title was not entitled to attorney fees, and the attorney fees awarded to Laurus were excessive. Prior to the filing of the Chapter 11 bankruptcy, Valcom attempted to obtain a stay against enforcement of the attorney fees and costs judgment awarded to Chicago Title and Laurus pending appeal. Valcom was unable to prove to the trial court's satisfaction that the value of Valcom's assets was sufficient to protect Chicago Title and Laurus' judgment. The Court denied Valcom's attempt to use its property in lieu of a cash bond, and threatened with enforcement of the judgment, Valcom had no choice but to file for the protection of the bankruptcy court. Valcom, through appeals counsel, filed an appeal, and oral argument on the appeal occurred December 17, 2007. 13 On February 13, 2008, subsequent to the Debtor's status conference in bankruptcy court, the Court of Appeals for the Second Appellate District, Division Two, case number B193714, ruled in favor of Valcom, Inc. and the judgment of Laurus Master Fund and Chicago Title for $562,127.30 as an obligation of the Debtor. During August 2008, the Company emerged from bankruptcy. The Company is seeking new business opportunities and to reestablish itself in the television and film production industry POW! ENTERTAINMENT: On August 23, 2007 Debtor filed an Adversary action (AD07-01638-ER) against POW! Entertainment and Stan Lee individually alleging Rescission, Fraud, and Money Had and Received. On September 24, 2007 POW! Entertainment and Stan Lee filed a Counter-complaint (AD07-01638-ER) against Valcom, Inc., Vince Vellardita, and Richard Shintaku alleging Fraud, Negligent Misrepresentation, Trademark Infringement, Common Law Trademark Infringement, Violation of Common Law Right to Publicity, Intentional Interference with Prospective Economic Advantage, Unfair Competition, Declaratory Relief, Breach of Contract and Restitution. On or about October 18, 2007, the Status Conference in the Valcom v. POW! Entertainment et. Al. adversary action came on for hearing. The Court consolidated the Discovery Cut-off, Pre-Trial, and Trial Dates between the Complaint and the Counter-complaint and selected April 30, 2008 for Discovery Cut-Off, Pre-Trial for May 15, 2008 and Trial scheduled for the week of June 23, 2008. The Court also ordered all parties to mediation. As of May 22, 2008 the parties to the Valcom v. POW! Entertainment et. Al. litigation have settled their dispute. VALCOM, INC. V. JEFF KUTASH ET AL., Case number BC372527. This matter was stayed by Debtor filing Chapter 11, and subsequently Defendant Jeff Kutash filed Chapter 7 bankruptcy. VALCOM, INC. V. TTL PRODUCTIONS, INC., TROY LINGER, CHRIS LENTO DBA BRENTWOOD MAGAZINE, Case number SC094099. This matter involves breach of contract and fraud against the Defendants for $380,000. The matter was stayed by Debtor's filing of bankruptcy and ValCom is in discussion and expects to settle this matter by agreement to the company's satisfaction. LLOYD KURTZ Pending or Threatened Litigation, Claims and Assessments by the prior contractor for the renovations, at ValCom Studios in Nevada has been replaced. Mr. Lloyd Kurtz filed suit on October 25, 2004 against ValCom, Inc., A private Nevada Corporation which is 80% owned by ValCom, Inc. a Delaware Corporation, ValCom, Inc. a Delaware Corporation and Vincent Vellardita. The suit alleges a violation of Securities Act of 1933 and states that Mr. Kurtz purchased 600,000 shares of ValCom - Delaware at $0.25 per share and that the shares were not registered. He claims he is owed an additional $303,000. Mr. Kurtz has filed a Mechanic's Lien for $303,000. A motion to dismiss the claim of Mr. Kurtz has been filed. If the corporation does not prevail on its Motions to Dismiss the corporation will file its full defense and counterclaims which exceed the amount claimed by Mr. Kurtz. BONNIE NELSON Ms. Bonnie Nelson, a former ValCom employee and Director filed suit against ValCom, Inc. The suit alleges a breach of oral agreement and employment contract. ValCom, Inc. terminated Ms. Nelson for cause in breach of her employment agreement. ValCom has reached agreement with Ms Nelson with regard to this matter 14 ITEM 1A. RISK FACTORS Not applicable. ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS NONE ITEM 3 - DEFAULTS UPON SENIOR SECURITIES NONE ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS NONE ITEM 5 - OTHER INFORMATION ITEM 6 - EXHIBITS. (A) Exhibits 31.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002. 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350. The Company incorporates by reference all exhibits to its Form 10 for the year ending September 30, 2007. 15 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: October 20, 2008 VALCOM, INC., a Delaware Corporation By:/s/ Vince Vellardita ---------------------- Vince Vellardita Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Accounting and Financial Officer) In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated. SIGNATURE TITLE DATE -------------------------- ------------------------ ---------------- By: /s/ Vince Vellardita Chief Executive Officer, October 20, 2008 ---------------------- Chairman of the Board Vince Vellardita By: /s/ Richard Shintaku Director October 20, 2008 -------------------- Richard Shintaku By: /s/ Frank O Donnell Director October 20, 2008 ------------------- Frank O Donnell 16