UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended September 30, 2009
or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________

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

		For the fiscal year ended September 30, 2010
or

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

		For the transition period from ____________ to ____________

Commission file number: 0000-51107

VIBE RECORDS, INC. NEVADA

(Exact name of registrant as specified in its charter)

Nevada		71-0928242
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
824 Old Country Road, PO Box 8 Westbury, New York		11590
61 Watchogue Avenue East Moriches, NY		11940
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (516) 333-2400

Securities registered pursuant to Section 12(b) of the Act:	None
Securities registered pursuant to Section 12(g) of the Act:	Common Stock, $0.~~0001~~001 par value
	(Title of Class)

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

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

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 o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x o No ¨ x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨o Accelerated filer ¨o Non-accelerated filer ¨o Smaller Reporting Company x

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

~~Yes~~The ~~o No x~~aggregate market value of the registrant’s common stock held by non-affiliates of the registrant, computed by reference to the last reported price at which the stock was sold on December 30, 2011 was $33,424.

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant, computed by reference to the last reported ask price at which the stock was sold on December 28, 2009 was $1,390,032.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at December 2830, ~~2009~~2011
Common Stock, $.0001 par value per share		20,814,257 shares
Common Stock, $0.001 par value per share		33,424,027 shares

DOCUMENTS INCORPORATED BY REFERENCE

We have not incorporated any documents by reference.

SUMMARIES OF REFERENCED DOCUMENTS

This annual report on Form 10-K contains references to, summaries of and selected information from agreements and other documents. These agreements and documents are not incorporated by reference; but, they are filed as exhibits to this annual report or to other reports we have filed with the U.S. Securities and Exchange Commission. The summaries of and selected information from those agreements and other documents are not necessarily complete and are qualified in their entirety by the full text of the agreements and documents, which you may obtain from the Public Reference Section of or online from the Commission. See “Where You Can Find Additional Information About Us And Exhibits” for instructions as to how to access and obtain this information.

FORWARD-LOOKING STATEMENTS

This annual report on Form 10–K and the information incorporated by reference, if any, includes “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. We intend the forward–looking statements to be covered by the safe harbor provisions for forward–looking statements in these sections.

This annual report contains forward-looking statements that involve risks and uncertainties. We use words such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” or “may,” or other such words, verbs in the future tense and words and phrases that convey similar meaning and uncertainty of future events or outcomes to identify these forward-looking statements. There are a number of important factors beyond our control that could cause actual results to differ materially from the results anticipated by these forward-looking statements. While we make these forward–looking statements based on various factors and derived using numerous assumptions, we have no assurance the factors and assumptions will prove to be materially accurate when the events they anticipate actually occur in the future.

These important factors include those that we discuss in this annual report under the caption “Risk Factors”, as well as elsewhere in this annual report. You should read these factors and the other cautionary statements made in this annual report as being applicable to all related forward-looking statements wherever they appear in this annual report. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

WHERE YOU CAN FIND AGREEMENTS AND OTHER DOCUMENTS REFERRED TO IN THIS ANNUAL REPORT

We file reports with the U.S. Securities and Exchange Commission pursuant to Section 13 of the Securities Exchange Act of 1934. You may read and copy any reports and other materials we have filed with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site at which you may obtain all reports, proxy and information statements, and other information that we file with the Commission. The address of that web site is http://www.sec.gov.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	3
Item 1	Business	3
Item 1A.	Risk Factors	8
Item 1A	Risk Factors	8
Item 2.	Properties	13
Item 1B	Unresolved Staff Comments
Item 3.	Legal Proceedings	13
Item 2	Properties	13
Item 4.	Submission of Matter to a Vote of Security Holders	13
Item 3	Legal Proceedings	13
PART II
Item 5.	Market for the Registrant’s Common Stock and Related Stockholder Matters	13
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	13
Item 6.	Selected Financial Data	16
Item 6	Selected Financial Data	15
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	17
Item 8.	Financial Statements and Supplementary Data	18
Item 8	Financial Statements and Supplementary Data	17
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	18
Item 9	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	17
Item 9A.	Controls and Procedures	18
Item 9A	Controls and Procedures	18
Item 9A(T)
Item 9B	Other Information
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	19
Item 10	Directors, Executive Officers and Corporate Governance	19
Item 11.	Executive Compensation	21
Item 11	Executive Compensation	21
Item 12.	Security Ownership of Certain Beneficial Owners and Management	23
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	22
Item 13.	Certain Relationships and Related Transactions, and Director Independence	23
Item 13	Certain Relationships and Related Transactions, and Director Independence	22
Item 14.	Principal Accountant Fees and Services	23
Item 14	Principal Accounting Fees and Services	23
PART IV
Item 15.	Exhibits and Financial Statements Schedules	24
Item 15	Exhibits, Financial Statements Schedules	23

PART I.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about our:

· business strategy;

· reserves;

· financial strategy; · production;

· uncertainty regarding our future operating results;

· plans, objectives, expectations and intentions contained in this report that are not historical.

All statements, other than statements of historical fact included in this report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of this report. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under “Risk Factors” and elsewhere in this report. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

Item 1. Business

Historical Background

~~Vibe Records,~~We ~~Inc.~~were ~~Nevada, (“we” “us” or the “Company”) was~~ incorporated ~~on January~~in ~~17, 2003 under the laws of the State of~~ Nevada ~~under~~in ~~the~~2003 ~~name “Benacquista Galleries, Inc.” On May 30, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”)~~ with ~~Vibe Records, Inc., a privately held Delaware corporation. Pursuant to~~ the ~~terms of the closing of the Merger Agreement, Vibe Records, Inc. was merged with and into the Company. In connection with the closing of the Merger Agreement, our~~ name ~~was~~ ~~changed from~~ “Benacquista Galleries, Inc. ~~to Vibe Records, Inc. Nevada. This transaction was accounted for as a reverse merger.~~”

In 2008, Vibe Records, Inc., a privately held Delaware corporation merged into us in a transaction accounted for as a “reverse merger” in which Vibe Records, Inc.’s business and financial statements replace the business and financial statements of Benacquista Galleries, Inc.

In connection with the reverse merger, we changed our name to Vibe Records, Inc. Nevada. “We”, “us” and the “Company” refer to Vibe Records, Inc. Nevada. The address of our executive offices is 61 Watchogue Avenue, East Moriches, NY 11940 and our telephone number at that address is (516) 333-2400.

The address of our web site is www.viberecords.com. We maintain two additional web sites at http://offthehookrecords.com and http://offthehookmodels.com.

General

~~The Company~~We ~~conducts~~conduct business as an artist and repertoire company (A&R) as well as an independent record label in the music industry. We intend to distribute recordings made by our artists on a national basis, as well as ~~operate~~ a strategic alliance with a state- of-the-art recording studio and ~~production~~a ~~facilities~~renowned audio engineer.

~~After identifying~~We ~~qualified~~endeavor ~~and~~to ~~talented~~discover new recording artists, ~~our~~based ~~long~~on ~~term~~our ~~role~~understanding ~~includes nurturing~~of the ~~artist’s~~current ~~career~~tastes ~~through~~of ~~teaching,~~the ~~encouragement~~market and ~~supervision~~, ~~while~~ ~~concurrently~~based ~~searching~~on ~~for~~our ~~and~~experience ~~selecting~~in ~~suitable~~music ~~material~~culture, ~~accompanists, side-men,~~our ~~producers~~assessment ~~and~~that ~~other~~the ~~professionals~~artists towill ~~enhance~~be ~~the~~commercially ~~artist’s chances for success~~successful. We ~~intend~~attempt to ~~attempt to~~ secure exclusive standard industry recording contracts ~~for~~with ~~between~~these ~~three~~artists. ~~(3)~~Our objective is to ~~five~~contract ~~(5)~~three to five new artists per year. Upon ~~The experience~~contracting with a new artist, we oversee identification of ~~our~~an ~~President~~appropriate record producer and ~~Chief~~oversee ~~Executive~~the ~~Officer~~recording process, ~~Timothy~~often ~~Olphie~~conducted via our strategic alliance with a state of-the-art recording studio and a renowned audio engineer or we schedule time in other studios, ~~will~~advising bethe artist on all aspects of ~~extensively~~making ~~relied~~a ~~upon~~high inquality recording. We work with the artist ~~selection~~to ~~process~~choose the best songs (i. Mre. ~~Olphie received~~repertoire) ~~several~~to ~~Gold~~record. For artists who do not write their own music, we will assist in finding songs and ~~Platinum~~songwriters. ~~awards~~We ~~during~~assist ~~his~~in ~~tenure~~selection atof ~~SOUL/MCA~~accompanists, ~~Records due~~side-men and other professionals to enhance the artist’s chances for success. ofWe ~~several~~maintain ~~recording~~contacts ~~artists~~with ~~and~~our ~~products~~counterparts ~~including,~~at ~~Public Enemy~~music ~~and~~publishing ~~the~~companies ~~acclaimed~~to ~~film~~get ~~“Juice”~~new songs and ~~its~~material ~~related~~from ~~soundtrack.~~songwriters Toand ~~date, Mr~~producers. ~~Olphie,~~ asAs ~~Producer~~the ~~and/or~~record ~~Executive~~nears ~~Producer~~completion, ~~has~~we ~~concluded~~work ~~approximately twenty~~closely ~~(20)~~with the artist~~-recording~~ ~~contracts~~to ~~for~~determine ~~both~~if ~~major~~the record will be artistically and ~~independent~~commercially acceptable. Once the record ~~labels~~ is completed, we provide marketing, promotion and distribution.

The experience of our President and Chief Executive Officer, Timothy Olphie, will be extensively relied upon in the artist selection process. Mr. Olphie received several Gold and Platinum awards during his tenure at SOUL/MCA Records due to the success of several recording artists and products including, Public Enemy and the acclaimed film “Juice” and its related soundtrack. To date, Mr. Olphie, as Producer and/or Executive Producer, has concluded approximately twenty artist-recording contracts for both major and independent record labels.

We employ a focused artist selection and development process. The artist’s value will be significantly increased through the support of management, modest recording budgets supported by the utilization of a strategic alliance with a state of-the-art recording studio and a renowned audio engineer with the use of a major manufacturing and worldwide distributing firm. Furthermore, we will utilize these economic efficiencies to seek out and enter into agreements with established artists. Arrangements with established artists will allow us to offer profit sharing ventures with established artists in which the artists submit their master recordings (while retaining their own ownership rights) and license the master recordings to us for manufacture, distribution and promotion.

WeWhile ~~employ a~~developing ~~focused artist selection and development process. The artist’s value will be significantly increased through the support of~~ our ~~specialized and well seasoned management team~~artists, ~~modest recording budgets supported by a state of-the-art recording studio, strategic alliances with a renowned audio engineer and the use of a major manufacturing and distributing firm. Furthermore,~~ we ~~will utilize~~intend ~~these economic efficiencies~~ to ~~seek~~manufacture ~~out~~ and ~~enter~~distribute ~~into agreements with pre-established artists. Arrangements with established artists will allow us to offer profit sharing ventures with established artists in which the artists submit~~ their ~~master~~ recordings ~~(while~~through ~~retaining~~TuneCore, ~~their~~a ~~own~~public ~~ownership~~online ~~rights)~~music ~~and license~~distribution ~~the~~website ~~master~~available ~~recordings~~at ~~to us for manufacture, distribution and promotion~~www.tunecore.com.

~~We anticipate,~~Through ~~but~~these ~~have not committed to, soliciting participation in the further development of one or more of our artists in the R&B, rap, pop, country~~ and~~/or~~ ~~Latin~~other ~~genres through the assignment of a significant portion of our contractual rights to one of the major manufacturing and distributing firms such as: Sony/BMG Music Group~~endeavors, RCA Records, a division of BMG Distribution (BMG) Bertelsman Music Group; Warner/Elektra/Atlantic (WEA), a division of Warner Music, Inc.; Universal Music Group; MCA Records, Inc.; Polygram Holdings, Inc. (PGD); or Def Jam Music, a division of Universal Music Distribution (UNI) and EMI Music, Inc. Collectively, these companies supply retailers with approximately 80% of the music recordings purchased. If we ~~determine~~ ~~it is prudent to assign these rights, we~~ intend to ~~obtain~~simultaneously ~~and/or retain~~promote ~~for our own benefit, royalty overrides as well as publishing~~ and ~~merchandising~~ ~~interests.~~brand ~~In order to assure that we have sufficient latitude to discover and develop an artist to~~ the ~~level~~Vibe weRecords ~~deem~~label ~~appropriate,~~utilizing ~~if any of~~ the ~~above~~ ~~options~~new of“hybrid” ~~participation~~digital ~~outside~~distribution ofmodel ~~the~~via ~~Company~~TuneCore ~~are~~a ~~not~~worldwide ~~pursued,~~distribution wecapacity. ~~have the~~We ~~ability~~believe tothat ~~continue~~operating ~~to manufacture and distribute the recordings of our new artists through our alliance with Lightyear Entertainment, which~~ in ~~turn distributes~~this ~~through~~fashion ~~Caroline~~will ~~Distribution,~~reduce ~~the independent distribution arm of EMI Music~~overhead.

We also house and operate state of the art recording and production facilities. These facilities are utilized not only by our internal artist roster, but also are available for outside contracting. In May 2009, we acquired and installed a SSL 4048 mixing and recording console in our recording and production studio that will allow us to record, mix and do mastering. We believe that the addition of this consol to our studio will give us competitive advantage over our recording studio competition and will greatly enhance the quality and marketability of the singles and albums created by our internal artist roster.

Through these and other endeavors, we intend to simultaneously promote and brand the Vibe Records label utilizing the distribution capacity of Lightyear/Caroline/EMI. We believe that operating in this fashion will reduce overhead, and concerns about collection from accounts.

Music Industry

Recorded music is one of the primary ~~mediums~~media of entertainment for consumers worldwide and in calendar ~~2008~~2009, according to the International Federation of the Phonograph Industry (“IFPI”), generated $~~18.4~~17 billion in retail value of sales. IFPI ~~stands for “International Federation of the Phonographic Industry,” and it~~ is the organization that represents the interests of the recording industry worldwide. ~~Its secretariat~~with isa ~~based in London, UK, and its membership comprises some 1450 record companies in 73 countries and affiliated industry associations in 48 countries. IFPI's~~ mission is to promote the value of recorded music, safeguard the rights of record producers and expand the commercial uses of recorded music in all markets where its members operate.

The Recording Industry Association of America (RIAA) is the trade group that represents the U.S. recording industry. Its ~~mission is to foster a business and legal climate that supports and promotes our~~ members' ~~creative and financial vitality. Its members~~ are the record companies that comprise the most vibrant national music industry in the world. RIAA members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.

4There has been a major shift in the distribution of recorded music away from specialty shops towards mass-market and online retailers. Over the course of the last decade, the share of music sales through U.S. stores first grew from 32% of the market in 1997 to 54% in 2004, however, with the subsequent growth of sales via online channels since 2004, the share of music sales through U.S. stores has contracted significantly since 2004, to 33% of the market in 2006. In recent years, online sales of music, as well as the digital downloading of singles and albums, have grown to represent an increasing share of U.S. music sales. According to RIAA, the physical medium’s (actual CDs and DVDs) share of U.S. music sales declined by 24.9% from 2007 to 2008 with sales decreasing from $7.5 billion to $5.8 billion. During this same period, the sale of music through digital downloads and online purchases increased by 28.1%. The dollar value of online and digital sales increased from $1.26 billion in 2007 to $1.64 billion in 2008. Overall shipments of recorded music in the United States did however fall 12% to $7.7 billion in 2009.

There has been a major shift in the distribution of recorded music away from specialty shops towards mass-market and online retailers. Over the course of the last decade, the share of music sales through U.S. stores first grew from 32% of the market in 1997 to 54% in 2004, however, with the subsequent growth of sales via online channels since 2004, the share of music sales through U.S. stores has contracted significantly since 2004, to 33% of the market in 2006. In recent years, online sales of music, as well as the digital downloading of singles and albums, have grown to represent an increasing share of U.S. music sales. According to RIAA, the physical medium’s (actual CDs and DVDs) share of U.S. music sales declined by 24.9% from 2007 to 2008 with sales decreasing from $7.5 billion to $5.8 billion. During this same period, the sale of music through digital downloads and online purchases increased by 28.1%. The dollar value of online and digital sales increased from $1.26 billion in 2007 to $1.64 billion in 2008. In terms of genre, rock remains the most popular style of music, representing 34% of 2006 U.S. unit sales, although genres such as rap/hip-hop, R&B, Country and Latin music have become increasingly popular.

Historical Music Sales

According to RIAA, from 1990 to 1999, the U.S. music recording industry grew at a compound annual growth rate of 7.6%, twice the rate of total entertainment spending. This growth was driven by demand for music, the replacement of LPs and cassettes with CDs, price increases and strong economic growth and was largely paralleled around the world.

The industry began experiencing negative growth rates in 1999, on a global basis, primarily driven by an increase in digital piracy. Other drivers of this decline were and are the overall recessionary economic environment, bankruptcies of record retailers and wholesalers, growing competition for consumer discretionary spending and retail shelf space, and the maturation of the CD format, which has slowed the historical growth pattern of recorded music sales.

Since that time, annual dollar sales of records in the U.S. are estimated to have declined at a compound annual growth rate of 6% (although there was a 2.5% year-over-year increase recorded in 2004). In 2008 the physical business experienced a 15.4% year-over-year decline on a value basis.

Current Factors

InThe ~~our opinion, the~~ music industry is shifting away from record stores and towards digital downloads. According to the IFPI, single-track downloads totaled nearly $3.8 billion in 2008, up 24.1% on online singles sold in 2007. The domestic market accounts for the bulk of those sales, with $1.8 billion in single tracks sold in the U.S. in 2008, up 16.5% from 2007.

AsAccording ~~the Major~~to ~~Labels~~more ~~stumble,~~recent ~~independent~~statistics ~~labels~~from ~~have~~the ~~gained~~RIAA, ~~significant~~a ~~amounts~~total of ~~market~~ ~~share~~1.13 -billion ~~accounting~~music ~~for~~singles awere ~~record~~downloaded ~~eighteen~~in ~~percent~~2009 ~~(18%)~~along ofwith ~~record~~292.9 ~~sales~~million ~~in 2005,~~CDs ~~according~~reaching to$2 ~~the~~billion ~~RIAA~~in sales. ~~Industry~~ ~~experts~~In ~~suggest~~2009, ~~that~~digital ~~mobile music~~formats ~~sales~~as ~~can~~a bewhole comprised a ~~major~~record ~~area~~41% ~~for~~of ~~growth~~total music shipments in the ~~forthcoming~~United ~~years~~States ~~with~~(an ~~the recent~~increase ~~launch~~ of ~~Apple’s~~34% ~~iPhone~~from as2008) ~~well~~with as the ~~development~~total ofdigital music ~~phones~~market ~~by other~~reaching ~~manufactures~~$3.1 billion in revenue.

~~We believe~~As the major labels stumble, independent labels ~~are~~have ~~better~~gained ~~equipped~~significant atamounts ~~Internet~~of ~~marketing~~market ~~via websites~~share ~~and~~- ~~outlets~~accounting ~~like~~for ~~MySpace,~~a ~~Facebook~~record ~~and~~eighteen ~~iTunes~~percent ~~and~~of werecord ~~plan~~sales in 2005, according to ~~take advantage~~the RIAA. Digital music sales have become a major area for growth with the continuing development of ~~this~~digital ~~trend~~music devices including MP3 players and cellular phones.

We believe independent labels are better equipped for Internet marketing via websites and outlets like MySpace, Facebook and iTunes and we plan to take advantage of this trend.

Marketing

We believe that we have structured and ~~will~~implemented ~~implement~~ a highly efficient program to enhance the marketing potential of our new talent. Prior to ~~the~~ our anticipated assignment ~~by the Company~~ of any of its rights under comprehensive artist recording contracts, we ~~will~~ prepare a master/demo recording package. We intend to establish a master/demo recording fund of $50,000 per artist for this purpose. The package will consist of a professionally produced and engineered 3 three to 4four song ~~compilation~~compilations, which will be utilized in conjunction with the solicitation, or if deemed appropriate, possible retention of the artist’s property rights.

In no event shall more than $35,000 of this fund be expended to sign any one artist without the consent of the majority of our board of directors. This fund may, however, be increased by a maximum of 20% with the unanimous consent of the Board. In no event shall the aggregate of the Master/Demo Recording fund expenditures for the 5three to five new artists each year ~~undertaken~~we byundertake ~~the Company~~ (exclusive of our joint ventures) exceed $~~350~~150,000. Currently, we do not have the funds available and there is no assurance that we will be able to raise the necessary capital. We intend to adhere to the above-mentioned master/demo recording fund strategy regardless of whether we ~~subsequently~~ subsequently assign one or more artists’ contracts, in whole or in part. This process as a whole will be facilitated by the efficiencies we intend to utilize pertaining to the critical area of the artist recording budgets (use of instrategic alliance with a state of-~~house~~ the-art recording studio, ~~strategic~~and ~~alliance~~a ~~with~~ renowned ~~studio~~audio engineer, et. al.).

5Distribution

We utilize the online distribution services of Republic Digital Distribution (powered by TuneCore). As a paid member of TuneCore, we and the artist retain all of the rights and royalties associated with the submitted masters (subject to our respective agreement with one another). This arrangement provides us with unlimited visibility to Republic’s top A&R executives who closely monitor trends developing through these channels which can lead to exclusive distribution agreements with third party marketing and promotional financing.

Intellectual Property

We ~~own the~~have ~~website~~a ~~and~~Trademark ~~domain~~License ~~VibeRecords.com~~Agreement ~~via~~with ~~Network~~Vibe ~~Solutions~~Media, ~~Registration~~LLC ~~# 25962560~~to ~~(IP~~use ~~Address~~“Vibe ~~206~~Records” in the specific stylized form appearing in Reg.28 No.~~67.2~~ 1,819,799 (“Trademark”). Our ~~http:~~use is limited to the stylized logo as the name of the “record label” for “record distribution” meaning wholesale distribution of music by a record company We believe the mark is of significant value in identifying our products on CD’s, records, tapes and/~~/www~~or other media existing now or in the future.~~viberecords~~ In addition, we believe this affords us brand name marketing capability within the fields of recorded music distribution and merchandising.~~com/~~ On September 2, 2004, the mark holder was granted an extension of this trademark under Serial Number # 74389095.

We have registered “Vibe Records” as a trademark in the specific stylized form appearing in Reg. No. 1,819,799 (“Trademark”). We believe that such protection is of significant value in identifying our products on CD’s, records, tapes and/or other media existing now or in the future. In addition, we believe this affords us brand name marketing capability within the fields of recorded music distribution and merchandising. On September 2, 2004, we were granted an extension of this Trademark under Serial Number # 74389095.5

~~Our rights~~We inhave ~~this~~pledged ~~mark~~our ~~are~~trademark ~~subject~~license ~~and limited~~ to ~~our~~Robert ~~rights set forth in the negotiated dispositions of the two legal actions entitled National Record Mart, Inc~~S. ~~v. Vibe Records~~McCoy, ~~Inc.~~one ~~and Vibe Ventures v. Vibe Records, Inc. Under the dispositions~~ of ~~these~~our ~~actions~~directors, ~~Vibe~~pursuant ~~Ventures, LLC (“Vibe Ventures”) the original trademark owner of “Vibe Records”, agreed~~ to ~~give~~a anSecurity ~~irrevocable,~~Lien ~~royalty~~Agreement ~~free license~~whereby inMr. ~~perpetuity~~McCoy toholds usa ~~allowing~~superior ~~the~~lien ~~Company~~against ~~to use~~ the ~~word~~Trademark ~~“Vibe”~~License ~~in conjunction~~Agreement with ~~the~~Intermedia ~~word “Records” in the stylized logo as a “record label” (the “Trademark License Agreement”)~~Vibe. This ~~Our~~lien ~~use~~will isbe ~~limited~~subject to the ~~stylized~~satisfaction ~~logo as the name~~ of the ~~“record~~loan ~~label”~~due ~~for~~to ~~“record~~Mr. ~~distribution”~~McCoy ~~meaning~~as ~~wholesale distribution~~ of ~~music~~September by30, a2010 ~~record~~in ~~company. Vibe Ventures was subsequently acquired by Vibe Media Group (“Vibe Media”) and~~ the ~~Trademark~~aggregate ~~License~~principal ~~Agreement was~~amount ~~assumed~~of ~~by Vibe Media~~$1,189,118. We ~~Vibe~~accrue ~~Media~~interest ~~and~~at ~~the~~a ~~Company~~rate ~~continue to operate under the terms~~ of ~~the~~10 ~~Trademark~~percent ~~License~~per ~~Agreement~~annum.

We ~~have pledged~~own ~~our~~the ~~intellectual~~Internet ~~property~~domain ~~rights in the~~ name: ~~“Vibe Records” to Robert S~~www. ~~McCoy, a member of our board of directors, pursuant to a Security Lien Agreement whereby Mr~~viberecords. ~~McCoy holds a superior lien against any monies received under the Trademark License Agreement with Vibe Media~~com. ~~This lien will be removed upon the satisfaction of the loans due to Mr. Robert S. McCoy in the aggregate principal amount of $600,000.~~

Other Trade names and activities

We also conduct business under the trade name “Off the Hook Records”, a registered trademark, and maintain a website at www.offthehookrecords.com, a domain name which we own. We offer a variety of music and video DVDs at the website with fulfillment through Amazon.com. No revenues have been realized through the activities of Off the Hook Records.

We also conduct business under the trade name “Off the Hook Models”, a registered trademark, (“OTH Models”) and maintain a website at www.offthehookmodels.com, a domain name which we own. The OTH Models website is a development center unlike a traditional modeling agency. We scout for potential models and talent primarily in person at talent events, venues, etc. Applications can also be submitted online. No revenues have been realized through the activities of OTH Models.

OTH Models intends to hone the marketing tools of its models while promoting their services to industry professionals such as model and talent agencies, casting companies and photographers. OTH Models prides itself on its provision of high quality talent development services including, without limitation, the provision of fashion photo shoots, fashion/styling consultations, professional advice and guidance from a seasoned “New Faces” staff, composite cards and headshots. Through the provision of these services, OTH Models endeavors to bridge the gap between aspiring models and industry professionals which require such services.

In order to maintain high industry standards, all potential models and talent are evaluated by OTH Models Development Director for (1) attitude and personality; (2) ambitions, goals and expectations as well as (3) appearance and marketability. Once evaluated, if selected to be a part of OTH Models, the Development Director suggests appropriate marketing tools to facilitate that individual’s exposure within the model and talent industry.

Upon completion of development services OTH Models markets their models and talent at no additional cost to the models themselves. Marketing services provided by OTH Models can include composite card distribution and mailings, go-sees and audition notification, interview opportunities with industry professionals and e-mail promotions for models/talent registered with Gigacomps™ - an internet venue where the photographs, resumes and profiles of aspiring models and talent are on display for registered industry professionals.

Competition

The heightened ability to sell or assign one’s rights in potentially successful recording products to the four ~~(4)~~ major manufacturing and distribution firms within the music industry, as well as the expanding opportunities to promote and produce one’s talent independently, lead us to believe we have positioned ourselves to compete successfully within the ~~R&B, rap, country, Latin and pop~~ genres of the music industry we intend to focus upon. We further believe that we have focused on a demographic target audience which is experiencing, and will continue to experience, substantial growth and that the Master/Demo Recording marketing model is a highly effective manner in which to market our artists and products.

Nevertheless, our record products are marketed and sold to a segment of the entertainment market that is highly competitive. The principal competitive factors affecting the market for or products include product quality, packaging, brand recognition, brand and artist acceptance, price and distribution capabilities. There can be no assurance that we will be able to compete successfully against current and future competitors based on these and other factors. We also compete with a variety of domestic and international producers and distributors many of whom have substantially greater financial, production, distribution and marketing resources and have achieved a higher level of brand recognition than the Company. In the event we become successful in our marketing, promotion and distribution of products bearing our name, it is likely we will experience additional competition in the industry from major labels, each of which is capable of marketing products designed to compete directly in the R&B, rap, country, Latin and pop segments. We compete with other music producers and distributors not only for market share, brand acceptance and loyalty, but also for display space in retail establishments and, more importantly, for marketing focus by our distributors and retailers, all of which distribute and sell other manufacturers products. Future competition could result in price reductions, reduced margins and loss of market share, all of which could have a material adverse effect on our business, financial condition and results of operations.

~~Independent labels~~Nevertheless, ~~such~~our asrecord usproducts are marketed and sold in a segment of the entertainment market that is highly competitive. The principal competitive factors affecting the market for products include product quality, ~~have~~packaging, ~~however~~brand ~~demonstrated~~recognition, ~~themselves~~brand ~~especially~~and ~~adept~~artist ~~at Internet~~acceptance, ~~marketing~~and ~~via~~price ~~websites~~and distribution capabilities. There can be no assurance that we will be able to compete successfully against current and ~~outlets~~future ~~like~~competitors ~~MySpace~~based on these and ~~iTunes~~other factors. ~~Endeavors such~~We asalso ~~this~~compete bywith ~~independent~~a ~~labels~~variety of domestic and international producers and distributors many of whom have ~~significantly~~substantially ~~increased~~greater ~~their~~financial, ~~market~~production, distribution and marketing resources and have achieved a higher level of brand recognition than ~~share~~we have. In the event we become successful in our marketing, promotion and distribution of ~~annual~~products ~~sales~~bearing asour name, it is likely we will experience additional competition in the industry from major labels, ~~struggle~~each toof ~~adapt~~which is capable of marketing products designed to ~~the~~compete ~~age~~directly with ours. We compete with other music producers and distributors not only for market share, brand acceptance and loyalty, but also for display space in retail establishments and, more importantly, for marketing focus by our distributors and retailers, all of ~~the IPod~~which distribute and ~~the~~sell ~~Internet~~other manufacturers products. Future competition could result in price reductions, reduced margins and loss of market share, all of which could have a material adverse effect on our business, financial condition and results of operations.

Our website at www.offthehookmodels.com competes with internet based modeling agencies such as Model Mayhem, One Model Place and New Faces.

Employees

AsOur ~~of December~~only ~~28,~~full ~~2009,~~time ~~we employed a total of (1)~~ employee, ~~and~~is ~~engaged a total of (5) independent contractors~~Mr. ~~We believe that we have a good working relationship with our employees~~Olphie. We ~~are~~also ~~not a party to any collective bargaining agreements, no employees are represented by a labor union and we believe we~~ have ~~good~~ ~~relations~~three ~~with~~independent ~~our employees~~contractors.

Business Opportunities

We will rely on the experience of our President and Chief Executive Officer, Timothy J. Olphie. Mr. Olphie received several Gold and Platinum awards during his tenure at SOUL/MCA Records for the success of several recording artists and products. To date, Mr. Olphie, as Producer and/or Executive Producer, has concluded approximately twenty-five artist-recording contracts for both major and independent record labels.

The following are business opportunities, potential joint ventures and contractual relationships arranged or being negotiated by Mr. Olphie.

Artist Recording Agreements

~~The~~Tony ~~Baker Girls~~Sunshine:

On July 28 9, ~~2005~~2010 we secured ana ~~exclusive~~production ~~recording artist~~ agreement with ~~the~~Tony ~~Country music~~Sunshine ~~mother/daughter~~for ~~duo~~two ~~The~~(2) ~~Baker~~singles ~~Girls~~ready for distribution. ~~Pursuant~~ toThe ~~the~~first, ~~terms~~“Say ~~of this~~Hey”, ~~agreement~~was Produced by Swizz Beatz and mixed by President and CEO, Tim Olphie and Terrance Pender. The ~~Baker~~second ~~Girls~~single, ~~licensed~~#1 toBaby, uswas ~~the~~shipped ~~excusive~~in ~~right~~February to2011. ~~disseminate their~~Tony ~~recordings~~Sunshine ~~for~~has been performing since age thirteen and subsequently became a ~~period~~member of ~~thirty-six~~the ~~(36)~~rap ~~months. This~~group ~~license agreement~~“Terror ~~was~~Squad” ~~subsequently~~with ~~extended~~Tony, Sunshine and ~~now~~Fat ~~runs~~Joe ~~through~~recording ~~May~~together ~~2012~~in earnest. Tony Sunshine has also collaborated with R. Kelly, Ginuwine, Fabolous and Capone-N-Noreaga.

InAfter ~~March 2010,~~only ~~The~~a ~~Baker~~few ~~Girls~~weeks ~~will~~of ~~release~~his ~~their~~September ~~1st~~2010 ~~single from~~release ~~the~~on ~~album~~Vibe Records, “~~Don’t~~Say ~~Let~~Hey” ~~the~~had ~~Make~~been up-Upstreamed ~~Fool~~from ~~You”~~Republic onDigital ~~the~~Distribution's ~~Vibe~~new digital website "Tunecore" into an exclusive distribution deal with Divine Records/Universal ~~label~~Music ~~in which~~Group. ~~the~~Members ~~company~~of ~~has~~Tunecore's ~~been~~audience ~~herald~~of byover ~~significant~~seven ~~taste~~million ~~makers~~voters inpropelled ~~the~~"Say ~~country music~~Hey" ~~industry. In~~into ~~fact,~~one ~~they~~of ~~are~~the ~~already~~top ~~calling~~songs ~~their first release~~on ~~with~~a ~~critical~~weekly ~~acclaim~~- monthly basis. InTony ~~February~~Sunshine's ~~2010~~first single, ~~they~~"Say ~~are~~Hey", ~~soon~~was torecorded ~~be working~~and onmixed ~~additional~~at ~~tracks~~Vibe toRecords ~~add~~Studio toand ~~their~~featured ~~album~~music ~~consisting~~created ofby ~~new~~mega-producer ~~material~~Swizz ~~to be~~Beatz. ~~recorded~~The atincredible response to the ~~renowned~~"Say ~~Sound~~Hey" ~~Stage~~has ~~Studios~~resulted in ~~Nashville,~~the ~~Tennessee.~~execution ~~We expect~~of ~~the~~a ~~release~~Letter of ~~the~~Intent ~~“new”~~between ~~The~~Vibe ~~Baker~~Records ~~Girls~~and Divine ~~completed~~Records for exclusive distribution through Universal Music's Distribution. Tony Sunshine is presently preparing his first full length album towith beadditional ~~available for~~contributions ~~sale~~from onSwizz ~~the~~Beats. ~~Vibe~~No ~~Records~~revenues ~~label~~were inrealized ~~May,~~pursuant ~~2010~~to the agreement.

Kristen Capolino:

~~During fiscal 2009, we secured an exclusive recording artist agreement with the singer, guitarist and songwriter Kristen Capolino. Pursuant to the terms of this agreement,~~ Ms. Capolino ~~licensed to us the excusive right to disseminate her recordings through December, 2011. Ms. Capolino~~ is a ~~19-~~20 year-old the singer, guitarist and ~~singer~~songwriter from Wappingers Falls, NNew York.Y. ~~who~~She has been performing and recording since the age of 14.

InOn ~~May~~July 1, 2010, we ~~intend~~fulfilled toour ~~release~~recording ~~Ms.~~artist ~~Capolino’s~~agreement ~~debut~~obligation ~~album~~by releasing, “~~All~~Kristen ~~That~~Blues” Ivia ~~Am”~~TuneCore. Pursuant onto the ~~Vibe~~ ~~Records~~terms ~~label~~of ~~and~~this ~~thereafter~~agreement, ~~promote~~ Ms. Capolino ~~through~~licensed ~~appearances~~to ~~at various~~us ~~music~~the ~~festivals~~exclusive ~~and~~right ~~live~~to ~~performances.~~distribute ~~The~~her ~~album,~~recordings ~~All~~through ~~that~~December I2011. No amrevenues ~~was produced~~were byrealized ~~the~~pursuant ~~company’s~~to ~~President~~the ~~& CEO, Timothy “T~~agreement.~~K.” Olphie.~~

Studio Production

In May 2009, we acquired and installed a SSL 4048 mixing and recording consol in our recording and production studio that will allow us to record, mix and mastering. We believe that the addition of this consol to our studio will greatly enhance the quality and marketability of the singles and albums created by our internal artist roster and will allow us to differentiate our product from that of other independent labels.

~~In addition~~Studio to the installation of the consol, we have engaged the services of Terrance Pender as our First Audio Engineer and A&R representative. Mr. Pender has over ten years experience as a First Audio Engineer and his responsibilities will include supervising and organizing recording sessions, hiring studio musicians and overseeing all aspects of master recordings. During his career, Mr. Pender has produced recordings for Motown Records, J Records, PO Boy Records, FUBU Entertainment, Rockafella Records, and numerous other labels. Mr. Pender has worked with such artists as The Temptations, Old Dirty Bastard, Remy Martin, Ice Cube, RZA, Memphis, Bleek, Fabulous, Nas, Young Guns and many others. We believe that Mr. Pender’s engineering talent and understanding of various music markets will greatly enhance the quality and marketability of our recorded product.Production

~~Promotional Alliances~~In May 2009, we acquired and installed a SSL 4048 mixing and recording console in our recording and production studio which was our corporate headquarters. The studio allowed us to record, mix and mastering. We believe that the addition of this console to our studio will greatly enhance the quality and marketability of the singles and albums created by our internal artist roster and will allow us to differentiate our product from that of other independent labels. As of December 30, 2011 we sold this equipment.

~~Distribution Agreement~~In ~~with~~addition ~~Lightyear~~to the installation of the console we engaged the services of Terrance Pender as our First Audio Engineer and A&R representative. Mr. Pender has over ten years experience as a First Audio Engineer and his responsibilities included supervising and organizing recording sessions, hiring studio musicians and overseeing all aspects of master recordings. During his career, Mr. Pender has produced recordings for Motown Records, J Records, PO Boy Records, FUBU Entertainment, LRockafella Records, and numerous other labels.P Mr. Pender has worked with such artists as The Temptations, Old Dirty Bastard, Remy Martin, Ice Cube, RZA, Memphis, Bleek, Fabulous, Nas, Young Guns and many others. We believe that Mr. Pender’s engineering talent and understanding of various music markets will greatly enhance the quality and marketability of our recorded product.

We executed a Distribution Agreement, dated April 23, 2004 (“Lightyear Agreement”), directly for worldwide distribution through Lightyear Entertainment, L.P. ("Lightyear"), which is in turn distributed by Caroline Distribution, the independent distribution arm of EMI Music. Lightyear music product is also distributed by JVC in Japan, by in-akustik in Germany, and by a network of independent distributors elsewhere around the world. Lightyear's DVD, Digital, and Video On Demand distribution for independent films are through Warner Home Video in the U.S. and Canada. In connection with this Agreement, Lightyear retains a (30%) Distribution Fee (which it shares with Caroline/EMI), and the remaining 70% of all wholesale revenue is credited to us, less costs incurred by Lightyear on our behalf, such as manufacturing costs and retail placement costs. The company has since have signed and executed extension of the Lightyear Agreement.

Joint Venture Agreements:

Off the Hook Records, Inc:

On January 15, 2004 the Company and Off the Hook Records, Inc. executed a Joint Venture Agreement whereby they will sign new talent to production deals and subsequently finance, produce, promote, market and distribute their master recordings on an 18 % retail sharing basis with Republic Distribution, Inc., a division of Universal Distribution. Both genres of urban entertainment and media will actively co-promote our artists through their East Coast based promotional resource base. We believe that these aggressive grass roots promotional efforts will facilitate the entry of our artists into the urban marketplace.

Item 1A. Risk Factors

THIS REPORT CONTAINS CERTAIN STATEMENTS RELATING TO FUTURE EVENTS AND THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. PROSPECTIVE INVESTORS ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS, INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS, PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS REPORT, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

RISKS RELATED TO OUR BUSINESS

The music industry has been declining and may continue to decline, which may adversely affect our prospects and our results of operations.

8Illegal downloading of music from the Internet, piracy, economic recession, and growing competition for consumer discretionary spending and retail shelf space may all be contributing to declines in the recorded music industry. Additionally, the period of growth in recorded music sales driven by the introduction and penetration of the CD format has ended. While CD sales still generate most of the recorded music revenues, CD sales continue to decline industry-wide and we expect that trend to continue. New formats for selling recorded music product have been created, including the legal downloading of digital music using the Internet, physical format product innovations and the distribution of music on mobile devices, and revenue streams from these new channels are beginning to emerge.

Illegal downloading of music from the Internet, piracy, economic recession, and growing competition for consumer discretionary spending and retail shelf space may all be contributing to declines in the recorded music industry. Additionally, the period of growth in recorded music sales driven by the introduction and penetration of the CD format has ended. While CD sales still generate most of the recorded music revenues, CD sales continue to decline industry-wide and we expect that trend to continue. New formats for selling recorded music product have been created, including the legal downloading of digital music using the Internet, physical format product innovations and the distribution of music on mobile devices, and revenue streams from these new channels are beginning to emerge. These new digital revenue streams are important to offset declines in physical sales and represent the fastest growing area of our ~~business~~industry. While it is believed within the recorded music industry that growth in digital sales will re-establish a growth pattern for all recorded sales, the timing of the recovery cannot be established with accuracy nor can we determine the impact of how these changes will affect individual markets. There can be no assurance that ~~the~~we ~~Company~~ will ever achieve any revenues or profitable operations through these new digital revenue streams.

We have incurred operating losses since inception in 2008 and there is no certainty that we will ever achieve profitability.

We have incurred operating losses since our inception in 2008. We expect to incur significant increasing operating losses for the foreseeable future, primarily due to the expansion of our operations. The negative cash flow from operations is expected to continue and to accelerate in the foreseeable future. Our ability to achieve profitability depends upon our ability to discover new talent and develop existing talent, commercial acceptance for our talent, and our ability to enter into agreements for distribution and manufacturing. There can be no assurance that we will ever achieve any revenues or profitable operations.

We may be unable to manage our growth or implement our expansion strategy.

We may not be able to expand our product and service offerings, our client base and markets, or implement the other features of our business strategy at the rate or to the extent presently planned. Our projected growth will place a significant strain on our administrative, operational and financial resources. If we are unable to successfully manage our future growth, establish and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel or effectively manage unexpected expansion difficulties, our financial condition and results of operations could be materially and adversely affected. Furthermore, our growth depends upon our ability to attract new talent and commercially develop existing talent. There can be no assurance that our efforts to attract and develop talent can be accomplished on a profitable basis, if at all. Our expansion of our record distribution and promotions will depend on a number of factors, most notably the timely and successful promotion and sale of our products ~~by the Company~~ and our regional distributors. Our inability to expand sales in a timely manner would have a material adverse effect on our business, operating results and financial condition.

Our prospects and financial results may be adversely affected if we fail to identify, sign and retain artists that have consumer appeal

We are dependent on identifying, signing and retaining artists with long-term potential, whose debut albums are well received on release, whose subsequent albums are anticipated by consumers and whose music will continue to generate sales as part of our catalog for years to come. The competition among record companies for such talent is intense. Competition among record companies to sell records is also intense and the marketing expenditures necessary to compete are significant and have increased as well. Our competitive position is dependent on our continuing ability to attract and develop talent whose work can achieve a high degree of public acceptance. Our financial results may be ~~adversely~~ adversely affected if we are unable to identify, sign and retain such artists under terms that are economically attractive to us. ~~There~~You ~~can~~have be no assurance ~~that~~ ~~the~~we ~~Company~~ will be able to successfully and profitably obtain and market such talent in the near term or in the future.

The ~~R&B,~~ ~~rap, pop, country and latin~~ genres of the music industry, where we intend to focus, are highly competitive and characterized by changing consumer preferences and continuous introduction of new artists. Our goal is to maintain and improve the recording artists currently under ~~contract with the Company~~ and to seek out and recruit additional talent that will appeal to various consumer preferences. We believe that our future growth will depend, in part, on our ability to anticipate changes in consumer preferences and develop and introduce, in a timely manner, artists and products which adequately address such changes. There can be no assurances that we will be successful in recruiting, developing, and marketing such artists and products on a timely and regular basis. Our failure to successfully introduce such artists or products, or the failure of the retail markets to accept them, would have a materially adverse effect on our ability to operate profitably.

9No assurance can be given that consumer demand for the genres of the music industry in which we intend to focus will continue in the future or, if such demand does continue, that we will be able to satisfy consumer preferences. Changes in consumer spending can affect both the quantity sold and the price of our products and may therefore affect our operating results.

No assurance can be given that consumer demand for the R&B, rap, pop, country and latin genres of the music industry, such as those products intended to be produced by the Company, will continue in the future or, if such demand does continue, that we will be able to satisfy consumer preferences. Changes in consumer spending can affect both the quantity sold and the price of our products and may therefore affect our operating results.

If we fail to obtain necessary funds for our operations, we will be unable to maintain and develop and commercialize our products.

Our present and future capital requirements depend on many factors, including:

· our ability and willingness to enter into new agreements with strategic partners, and the terms of these agreements; our ability to enter into new agreements to expand the distribution of our talents records, and the terms of such agreements;

·the ~~our~~costs ~~ability~~of torecruiting ~~enter~~and ~~into~~retaining ~~new~~qualified ~~agreements~~personnel; toand ~~expand~~ the ~~distribution~~time ofand ~~our~~costs ~~talents~~involved ~~records,~~in finding and ~~the~~maintaining ~~terms of such agreements;~~talent.

~~· the costs of recruiting and retaining qualified personnel; and~~9

· the time and costs involved in finding and maintaining talent.

Our ability to continue as a going concern ultimately depends on our ability to increase sales and reduce expenses to a level that will allow us to operate profitably and sustain positive operating cash flows.

Additional financing may be necessary for the implementation of our growth strategy.

We ~~may~~ expect to require additional debt and/or equity financing to pursue our growth strategy. Given our operating history and existing losses, there can be no assurance that we will be successful in obtaining additional financing. Lack of additional funding could force us to curtail substantially our growth plans. Furthermore, the issuance by us of any additional securities pursuant to any future fundraising activities undertaken by us would dilute the ownership of existing shareholders and may reduce the price of our common stock.

Furthermore, debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility. Our failure to successfully obtain additional future funding may jeopardize its ability to continue its business and operations.

We are dependent upon key personnel and consultants.

Our success is heavily dependent on the continued active participation of our current executive officers listed under “Management.” Loss of the services of one or more of these officers could have a material adverse effect upon ~~the Company’s~~our business, financial condition or results of operations. Further, our success and achievement of our growth plans depend on our ability to recruit, hire, train and retain other highly qualified technical and managerial personnel. Competition for qualified employees among companies in the music industry is intense, and the loss of any of such persons, or an inability to attract, retain and motivate any additional highly skilled employees required for the expansion of our activities, could have a materially adverse effect on ~~the~~ ~~Company~~us. Our inability to attract and retain the necessary personnel and consultants and advisors could have a material adverse effect on our business, financial condition or results of operations. We do not carry “key person” insurance covering any members of our senior management.

We are controlled by current officers, directors and principal stockholders.

Our directors and executive officers beneficially own approximately 46% of the outstanding shares of our common stock. Accordingly, our executive officers, directors, and principal stockholders will have the ability to control the election of our Board of Directors and the outcome of issues submitted to our common stockholders for a vote.

We face significant competition.

Our recorded products will be marketed and sold to a segment of the market that is highly competitive. The principal competitive factors affecting the market for our products include product quality, packaging, brand recognition, brand and artist acceptance, price and distribution capabilities. There can be no assurance that we will be able to compete successfully against current and future competitors based on these and other factors. We also compete with a variety of domestic and international producers and distributors, many of whom have substantially greater financial, production, distribution and marketing resources and have achieved a higher level of brand recognition than ~~the Company~~we do. In the event we become successful in our marketing, promotion and distribution of products bearing our name, it is likely we will experience additional competition in the industry from major labels, each of which is capable of marketing products designed to compete directly in the ~~R&B,~~genres ~~rap,~~where ~~pop,~~we ~~country~~are ~~and latin segments~~focused. We compete with other music producers and distributors not only for market share, brand acceptance and loyalty, but also for display space in retail establishments and, more importantly, for marketing focus by our distributors and retailers, all of which distribute and sell other manufacturers products. Future competition could result in price reductions, reduced margins and loss of market share, all of which could have a material adverse effect on our business, financial condition and results of operations.

~~Any Inability to adequately protect our intellectual property could harm our ability to compete.~~10

Any inability to adequately protect our intellectual property could harm our ability to compete.

Our future success and ability to compete depends in part upon our intellectual property, which we attempt to protect with a combination of copyright and trademark laws, as well as with contractual provisions. These legal protections afford only limited protection and are time-consuming and expensive to obtain and/or maintain. Further, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.

We have registered one trademark with the United States Patent and Trademark Office. Any trademarks that are issued to us could be invalidated, circumvented or challenged. While we diligently intend to protect our intellectual property rights, the monitoring of any infringement and/or misappropriation of our intellectual property can be difficult, and there is no guarantee that we would detect any infringement or misappropriation of our intellectual property rights. Even if we detect infringement or misappropriation of our intellectual property rights, litigation to enforce these rights could cause us to divert financial and other resources away from our business operations.

Our involvement in intellectual property litigation could adversely affect our business.

Our business and recognition in the music industry is highly dependent upon intellectual property, a field that has encountered increasing litigation in recent years. If we are alleged to infringe the intellectual property rights of a third party, any litigation to defend the claim could be costly and would divert the time and resources of management, regardless of the merits of the claim. There can be no assurance that we would prevail in any such litigation. If we were to lose a litigation relating to intellectual property, we could, among other things, be forced to pay monetary damages and/or to cease the sale or use of certain products. Any of the foregoing may adversely affect our business.

RISKS RELATED TO OUR COMMON STOCK

There is not now, and there may not ever be, an active market for our shares of common stock.

~~There~~You ~~can be~~have no assurance that an active market for our common stock will develop. If an active public market for our common stock does not develop, shareholders may not be able to re-sell the shares of our common stock that they own and may lose all of their investment.

Our Common Stock price and volume may be volatile.

We expect the trading price and volume of our Common Stock to fluctuate substantially in the event our trading market becomes active. The price of our Common Stock may be higher or lower than the price you pay for it, depending on many factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include, but are not limited to, the following:

·	price and volume fluctuations in the overall stock market from time to time;

·	significant volatility in the market price and trading volume of securities of companies in our industry;

·	volatility resulting from trading in derivative securities related to our Common Stock including puts, calls, long-term equity anticipation securities, or short trading positions;

·	actual or anticipated changes in our earnings or fluctuations in our operating results or changes in the expectations of securities analysts;

·	general economic conditions and trends;

·	loss of a major funding source; or

·	departures of key personnel.

We plan on seeking to reinstate the OTCBB listing of our common stock so that the our stockholders will have the benefit of that trading market, but will likely be traded only in the over-the-counter market for the foreseeable future.

Sales of a substantial number of shares of our common stock may cause the price of our common stock to decline.

Should an active public market develop and our stockholders sell substantial amounts of our common stock in the public market, shares sold at a price below the current market price at which the common stock is trading will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

Additional stock offerings may dilute current stockholders.

Given our plans and our expectation that we may need additional capital and personnel, we may need to issue additional shares of capital stock or securities convertible or exercisable for shares of capital stock, including preferred stock, options or warrants. The issuance of additional capital stock may dilute the ownership of our current stockholders.

Our Common Stock ~~will~~is be subject to the "Penny Stock" rules of the SEC.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

· that a broker or dealer approve a person's account for transactions in penny stocks; and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

· the broker or dealer 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:

· obtain financial information and investment experience objectives of the person; and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

· make a reasonable determination that the transactions in penny stocks are suitable for that person and the 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 prescribed by the Commission relating to the penny stock market, which, in highlight form:

· sets forth the basis on which the broker or dealer made the suitability determination; and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

· that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the 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.

We have not paid dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

12Item 2. Property

~~Item~~ Our principal executive offices are located in East Moriches, New York which we rent for $2,400 per month. ~~Property:~~ Our lease terminates on September 30, 2012. We believe that our principal executive office space is sufficient for our needs for the foreseeable future.

Our principal executive offices are located at: # 824 Old Country Road, Westbury, New York 11590. This office consists of approximately 1800 square feet, which we rent for 3,500.00 per month. Our lease terminates in 2012 and we have not as yet determined whether we will renew the lease for the existing space or seek new space. We believe that our principal executive office space is sufficient for our needs for the foreseeable future. In addition, the company has additional office space in Oyster Bay, New York which it is renting on a month to month basis.

Item 3. Legal Proceedings

WeOn ~~are not~~August ~~presently~~25, 2009, a ~~party~~former consultant filed an action against us in Supreme Court Kings County (Index No: 21581-09). The action, which alleges that we failed to ~~any~~pay certain fees and failed to timely deliver certain securities due the former consultant, seeks $900,000 plus attorney fees and costs. On or about January 15, 2010, we filed an answer and counterclaim. While the outcome of this proceeding cannot be predicted at this time we believe that we have meritorious defenses to the action and that the final outcome will not have a material ~~legal~~adverse ~~proceedings~~effect on our financial condition.

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

None.

PART II

Item 5. Market for the Registrant’s Common Stock, Convertible Preferred Stock and Related Stockholder Matters

~~Our~~ Quotations for our common stock isare ~~quoted~~available on the OTC Bulletin Board. OTCMarkets, aYahoo ~~service~~Finance, ~~provided~~Google byFinance ~~the Nasdaq~~and ~~Stock~~similar ~~Market Inc.~~services, under the symbol “VBRE”. The following table sets forth the high and low bid prices, for our common stock as reported each quarterly period within the last two fiscal years onended ~~the~~September ~~OTC Bulletin Board~~30, as2010as reported by the National Quotation Bureau. The high and low prices reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions (1).

Fiscal year ended September 30, 2009	High		Low
Quarter ended
December 31, 2008	$	0.30	$	0.25
March 31, 2009	$	0.0525	$	0.2505
June 30, 2009	$	0.60	$	0.03
September 30, 2009	$	0.50	$	0.14
Interim Period ended December 28, 2009	$	0.35	$	0.12

Fiscal year ended September 30, 2008	High		Low
Fiscal year ended September 30, 2010	High		Low
Quarter ended
December 31, 2007	$	0.87	$	0.26
December 31, 2009	$	0.32	$	0.10
March 31, 2008	$	7.85	$	0.15
March 31, 2010	$	0.12	$	0.04
June 30, 2008	$	4.95	$	0.60
June 30, 2010	$	0.04	$	0.01
September 30, 2008	$	1.01	$	0.66
September 30, 2010	$	0.08	$	0.02

On December 28, 2009, the National Quotation Bureau, Inc. reported that the closing ask price on our common stock was $0.13 per share.

On December 30, 2011, the National Quotation Bureau, Inc. reported that the closing ask price on our common stock was $0.001 per share.

Record Holders

As of December 2831, ~~2009~~2010, there were approximately ~~385~~400 ~~holders of~~ record ofholders ~~our~~and ~~common stock.~~300 ~~The~~street ~~Board~~name ~~of Directors believe that the number of beneficial owners is substantially greater than the number of record~~ holders ~~because a portion~~ of our ~~outstanding~~ common stock ~~is held of record in broker "street names" for the benefit of individual investors~~. ~~The beneficial owners of such shares are not known to us.~~

As of December 28, 2009, the shareholders list from our transfer agent shows that there were 20,814,257 shares of common stock outstanding. Of those shares, 9,630,000 shares, or 46.3% percent of our outstanding common stock, were owned by our officers and directors.

Dividend Policy

Our Board of Directors determines any payment of dividends to our common stockholders. We have ~~not~~never paid any dividends on our common stock ~~during the last three years~~, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors and will depend upon various factors, including our results of operations, financial condition, capital requirements and investment opportunities.

Recent Sales of Unregistered Securities

During the ~~fourth~~ quarter ofended ~~2009,~~September ~~we issued 100~~30,~~000~~ ~~restricted shares of our common stock as payment for past consulting services rendered by Prosperity Systems~~2010, ~~Inc.~~ Wewe ~~recorded~~issued ~~non-cash~~a ~~compensation~~total ~~charges~~ of ~~$30~~2,750,000 ~~related~~ ~~to this~~shares ~~issuance,~~of ~~reflecting~~our ~~the~~common ~~fair~~stock ~~market~~in ~~value~~conversion of ~~the shares when issued~~notes. No ~~The transaction referred to above did not involve an underwriter or placement agent and there were no underwriter’s discounts or~~ commissions, or ~~placement~~other ~~agent fees~~compensation orwas ~~commissions,~~ paid in connection with the ~~transaction~~issue of these shares. The ~~consultant~~ ~~who received the~~ shares ofwere ~~our~~issued ~~common~~to ~~stock~~existing innote ~~the~~holders ~~above referenced transaction is an accredited investor, as defined by Rule 501 of Regulation D,~~ and ~~has~~their ~~the business and financial knowledge to analyze the risks associated with ownership of our common stock~~assignees. We ~~The~~have ~~transaction~~relied ~~referred~~on ~~to above was an exempt transaction in accordance with the provisions of~~ Section 4(2) of the Securities Act of 1933, asfor ~~amended,~~an asexemption afrom ~~transaction~~registration, byin anthat ~~issuer~~the ~~not~~issue ~~involving any~~of ~~public~~the ~~offering. We~~shares did not ~~engage~~involve ina ~~any~~ public ~~solicitations in connection with the above transaction~~offering.

During the fourth quarter of 2009, we issued 50,000 restricted shares of our common stock as payment for past consulting services rendered by Patrick O’Connell. We recorded non-cash compensation charges of $15,000 related to this issuance, reflecting the fair market value of the shares when issued. The transaction referred to above did not involve an underwriter or placement agent and there were no underwriter’s discounts or commissions, or placement agent fees or commissions, paid in connection with the transaction. Mr. O’Connell is an accredited investor, as defined by Rule 501 of Regulation D, and has the business and financial knowledge to analyze the risks associated with ownership of our common stock. The transaction referred to above was an exempt transaction in accordance with the provisions of Section 4(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving any public offering. We did not engage in any public solicitations in connection with the above transaction.

Capitalization

Common Stock

WeThe ~~have one~~following ~~class~~description of ~~$.0001~~our ~~par~~common ~~value~~stock ~~per~~is ~~share~~qualified ~~common~~in ~~stock.~~our ~~Holders~~entirety by reference to our Articles of Incorporation, as amended, our ~~common stock~~bylaws and Nevada corporation law. We are ~~entitled~~authorized to ~~one~~issue ~~vote~~five ~~per~~hundred ~~share~~million shares of common stock, ~~held~~$0.001 ~~Holders~~par ofvalue ~~shares~~per ofshare. ~~our common~~At ~~stock~~December do30, ~~not~~2011, ~~have~~we ~~cumulative~~had ~~voting~~33,424,027 ~~rights~~shares issued and outstanding. Holders of our common stock:

14o · have one vote per share on election of each director and other matters submitted to a vote of stockholders; o · have equal rights with all holders of issued and outstanding common stock to receive dividends from funds legally available therefore, if any, when, as and if declared from time to time by the board of directors; o · are entitled to share equally with all holders of issued and outstanding common stock in all of our assets remaining after payment of liabilities, upon liquidation, dissolution or winding up of our affairs; o · do not have preemptive, subscription or conversion rights; and o · do not have cumulative voting rights.

Preferred Stock

On January 19, 2009, our board of directors approved and authorized two series of preferred stock. On or about January 23, 2009, we filed a Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and a Certificate of Designation, Preferences and Rights of Series B Convertible Preferred Stock (“the Series B Preferred Stock”) (together the “Certificates of Designation”) with the Secretary of State of Nevada. Pursuant to the Certificates of Designation, we authorized 200,000 shares of our preferred stock to be designated the Series A Preferred Stock and 200,000 shares of our preferred stock to be designated the Series B Preferred Stock.

Series A Preferred Stock

The holders of the Series A Preferred Stock may, in their sole discretion, convert each share of Series A Preferred Stock into 4,000 shares of our common stock at any time following the date of issuance of the Series A Preferred Stock. Adjustments in the conversion ratio will be made in the event of a stock dividend, stock split, reclassification, reorganization, consolidation or merger in a manner which will provide the preferred holders, upon full conversion into common stock, with the same percentage ownership of ~~the~~ ~~Company~~us that existed immediately prior to such action. The Series A Preferred Stock has the same voting rights as our common stock, on an as converted basis, with the Series A preferred holders having one vote for each share of common stock into which their Series A Preferred Stock is convertible. The holders of the Series A preferred stock have a liquidation preference over our common stock of up to ~~one hundred dollars (~~$100) per Series A share held. ~~The~~We ~~Company~~ will not pay a dividend on the shares of Series A Preferred Stock.

As of December 2830, ~~2009~~2011, there were no shares of the Series A Preferred Stock issued and outstanding.

Series B Preferred Stock

The holders of the Series B Preferred Stock may, in their discretion, convert each share of Series B Preferred stock into 4,000 shares of our common stock at any time following the date of issuance of the Series B Preferred Stock. Adjustments in the conversion ratio will be made in the event of a stock dividend, stock split, reclassification, reorganization, consolidation or merger in a manner which will provide the preferred holders, upon full conversion into common stock, with the same percentage ownership of ~~the~~ ~~Company~~us that existed immediately prior to such action. The Series B Preferred Stock does not have voting rights on matters presented to our common stockholders, for a vote. The Series B Preferred Stock and has an equal liquidation right with any shares of our Series A Preferred Stock then outstanding. We will not pay a dividend on the shares of Series B Preferred Stock.

As of December 2830, ~~2009~~2011, there were no shares of the Series B Preferred Stock issued and outstanding.

Section 15(g) of the Securities Exchange Act of 1934

Our shares are currently covered by Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional sales practice requirements on broker/dealers who sell our securities to persons other than established customers and accredited investors. Rule 15g-2 declares unlawful any broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document. Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer the current quotation prices or similar market information concerning the penny stock in question. Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction. Rule 15g-5 requires that a broker dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.

Our common stock may remain subject to the foregoing rules for the foreseeable future. The application of the penny stock rules may affect our stockholder’s ability to sell their shares because some broker/dealers may not be willing to make a market in our common stock because of the burdens imposed upon them by the penny stock rules.

Item 6. Selected Financial Data;

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” and "Risk Factors" for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

The following discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.

Overview

We are ~~an early~~a development stage company led by an experienced management ~~team~~ and focused on identifying qualified and talented artists. Our long term role includes nurturing the artist’s career through teaching, encouragement and supervision, while concurrently searching for and selecting suitable material, accompanists, side-men, producers and other professionals to enhance the artist’s chances for success.

Plan of Operations

We intend to attempt to secure exclusive standard industry recording contracts for between three (3) to five (5) new artists per year~~. We~~ ~~intend~~through ~~to utilize~~ a highly focused artist selection process. ~~The~~We have thus far been unable to fully implement this strategy due to insufficient financial resources. Upon successfully undertaking same, the artist’s value will be significantly increased through the support of our specialized and well seasoned management team, modest recording budgets supported by a strategic alliance with a state of-the-art recording studio, ~~strategic~~and ~~alliances with~~ a renowned audio engineer, and the use of a major manufacturing and distributing firm. Furthermore, we will utilize these economic efficiencies to seek out and enter into agreements with pre-established artists. Arrangements with established artists will allow us to offer profit sharing ventures with established artists in which the artists submit their master recordings (while retaining their own ownership rights) and license the master recordings to us for manufacture, distribution and promotion.

WeThrough ~~house~~ these and ~~operate~~other ~~state~~endeavors, ofwe ~~the~~intend ~~art~~to ~~recording~~simultaneously promote and ~~production~~brand ~~facilities.~~the ~~The~~Vibe ~~facilities are~~Records ~~utilized~~label. We ~~not~~believe ~~only~~that byoperating ~~our~~in ~~internal~~this ~~artist~~fashion ~~roster~~will ~~but~~reduce ~~also are available for outside contracting~~overhead.

Through these and other endeavors, we intend to simultaneously promote and brand the Vibe Records label. We believe that operating in this fashion will reduce overhead, and concerns about collection from accounts.

Critical Accounting Policies

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” discusses our consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to revenue recognition, valuation allowances for inventory and accounts receivable, and impairment of long-lived assets. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The result of these estimates and judgments form the basis for making conclusions about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The SEC suggests that all registrants list their most “critical accounting policies” in Management’s Discussion and Analysis.

Critical accounting policies are those that are most important to the portrayal of our financial condition and our results of operations, and require management’s most difficult, subjective and complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our most critical accounting policies include, but are not limited to, revenue recognition, our ability to collect accounts receivable, the carrying value of inventories and fixed assets, the useful lives of our fixed assets and long-lived assets, the impairment of goodwill, the valuation of common stock related to compensation and other services and the recoverability of deferred tax assets. In applying these policies, management must use its informed judgments and best estimates. Estimates, by their nature, are based on judgments and available information such as the estimated life of fixed assets for depreciation purposes, the market valuation of inventory in reporting inventory at the lower of cost or market, and the determination of the market value of stock when issued as compensation or as repayment for loans. The estimates that we make are based upon historical factors, current circumstances and the experience and judgment of our management. We evaluate our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluations. Changes in such estimates, based on more accurate future information, may affect amounts reported in future periods.

Results of Operations.

Years Ended September 30, ~~2009~~2010 and ~~2008~~2009

The Company had no revenue producing activities in either of the years ended September 30, 2009 or 2008. For the years ending September 30, 2009 and September 30, 2008, the Company experienced a net loss of $(1,283,289) and $(651,197), respectively.16

~~General and~~We ~~administrative~~had ~~expenses~~no ~~increased~~revenue toproducing ~~$464,301~~activities ~~from~~in ~~$65,147~~either ~~for~~of the years ended September 30, ~~2009~~2010 ~~and~~or ~~2008, principally due to new stock-based compensation to officers and directors in~~ 2009. ~~Professional~~For ~~fees and expenses increased to $374,259 for~~ the ~~year~~years ended September 30, ~~2009~~2010 asand ~~compared to $197,539 for the year ended~~ September 30, ~~2008~~2009 ~~due~~we toexperienced ~~increased consulting, accounting and legal expenses as~~ a ~~result~~net loss of ~~being a public company. Research and artist development expenses increased to~~ $~~192~~1,~~818 for the year ended September 30~~263,428 ~~2009~~and ~~as compared to~~ $~~177~~1,~~385 for the year ended September 30~~598,300 ~~2008 due to production efforts on various projects as previously discussed~~respectively. Interest expense increased to $251,911 for Fiscal 2009 as compared to $211,126 for Fiscal 2008. This expenditure has remained relatively consistent and is expected to stay at or above current levels based on the Company’s need for capital and the lack of revenue producing activities.

Other general and administrative expenses increased to $156,685 from $109,243 for the years ended September 30, 2010 and 2009, principally due to increased compensation expense. Professional and consulting fees decreased to $334,974 for the year ended September 30, 2010 as compared to $953,658 for the year ended September 30, 2009 due to decreased stock-based compensation in 2010. Research and artist development expenses increased to $215,696 for the year ended September 30, 2010 as compared to $181,788 for the year September 30, 2009 due to production efforts on various projects as previously discussed.

Other expenses net increased to $466,133 from $238,911 for the year ended September 30, 2010 and 2009, principally due to higher interest expense, debt settlements, debt discounts and loss from revaluation of derivative liability. Interest expense increased to $307,505 for fiscal 2010 as compared to $238,911 for Fiscal 2009. This expenditure has increased steadily and is expected to stay at or above current levels based on our need for capital and the lack of revenue producing activities.

Liquidity and Capital Resources

As of September 30, ~~2009~~2010, ~~the~~we ~~Company~~ had a working capital deficit of $(34,~~480~~157,~~700)~~577. If ~~the~~we ~~Company~~are is not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to it, this could have a material adverse effect on its business, results of operations liquidity and financial condition.

We have historically incurred recurring losses from operations. Our continuation is dependent upon a successful program of acquisitions and achieving a profitable level of operations. We ~~will~~may need ~~$1.0 million of~~ additional financing for ongoing operations ~~and~~of securing (3) – (5) recording artists per year as well as other joint ventures as well as acquisitions. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming those loans would be available, would increase our liabilities and future cash commitments. We cannot assure that we will be able to obtain further funds we desire for our continuing operations or, if available, that funds can be obtained on commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we would cease our operations.

As shown in the consolidated financial statements, at September 30, ~~2009~~2010 and September 30, ~~2008~~2009, we had cash on hand of $~~23,809~~370 and $~~-0-~~23,809. Net cash used in operating activities for each of the years ended September 30, ~~2009~~2010 and ~~2008~~2009 was $~~(331~~396,~~281)~~098 and $~~(302~~331,~~022)~~881 as a direct result of our net operating loss and the absence onof any revenue producing activities. Cash flows used in investing activities for each of the years ended September 30, ~~2009~~2010 and ~~2008~~2009 was $~~(37,893)~~0 and $(462,~~460)~~383 which was used in the acquisition of property, plant and equipment and advances to related entities. Cash flows provided by financing activities were $~~393~~372,~~083~~ 659 during the year ended September 30, ~~2009~~2010 and $~~379~~418,~~380~~073 for the year ended September 30, ~~2008~~2009. The ~~which~~decrease ~~was~~resulted ~~principally~~from alower ~~result in a net increase in our~~ borrowings from various sources to provide working capital.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data

~~The~~ Our consolidated financial statements ~~of the Company~~, together with the Reports of Independent Registered Public Accounting Firm thereon of S.Michael WT. ~~Hatfield,~~Studer CPA P.C., ~~appear~~ ~~herein~~are provided at the end of this annual report. See Index to Consolidated Financial Statements, appearing on page F-1.

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

~~None~~This information has been reported on Form 8-K.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures. Our management, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), ~~Timothy~~both being Mr. Olphie, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report. Based on such evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures are effective. Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act.

Internal control over financial reporting is defined under the Exchange Act as a process designed by, or under the supervision of, our CEO and CFO and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

—Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

—Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

—Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitation, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. Accordingly, even an effective system of internal control over financial reporting will provide only reasonable assurance with respect to financial statement preparation.

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our internal control over financial reporting as of September 30, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework. Based on this evaluation and those criteria, our management, with the participation of our CEO and CFO, concluded that, as of September 30, 2010, our internal control over financial reporting was not effective, primarily because we have only one employee and are accordingly unable to implement the checks and balances required for effective controls over financial reporting. On the other hand, the one employee is aware of all matters which would require financial reporting.

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of the Company’s internal control over financial reporting as of September 30, 2009. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework. Based on this evaluation and those criteria, our management, with the participation of our CEO and CFO, concluded that, as of September 30, 2009, our internal control over financial reporting was effective.

This Annual Report does not include an attestation report of our registered public accounting firm regarding our internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) that occurred during the quarter ended September 30, ~~2009~~2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following table sets forth certain information with respect to our directors and executive officers as of December 28, ~~2009~~2010.

Name	Age	Position	Director Since
Timothy J. Olphie	5557	Chairman of the Board, President and Chief Executive Officer and Chief Financial Officer	2008
Robert S. McCoy, Jr.	7173	Director	2008
Michael L. Tyler	5155	~~Vice~~Director, ~~President~~Corporation & Secretary~~, Director~~	2008

Timothy J. Olphie, CEO, President and Director

From January 1993 to the present, Mr. Olphie has been employed as an independent record producer. Since May 2008, he has been our CEO, CFO, President and a member of our board of directors. Mr. Olphie received a Bachelor’s Degree in Marketing and Management from the State University of New York at Brockport.

Mr. Olphie has been actively involved in the music industry for twenty five ~~(25)~~ years, entering as an Account Representative with the New York City branch office of the American Society of Composers, Authors and Publishers (ASCAP) in 1979. In 1982 Mr. Olphie was offered, and accepted, a position with Record World, a regionally based record franchise. He was promoted to the role of Public Relations Director shortly thereafter and remained with ~~the~~that company until 1989, at which time he accepted a position with CBS Records as an Account Service Representative.

In 1991, Mr. Olphie accepted a position as General Manager of SOUL/MCA Records, a joint venture between Sound of Urban Listeners (SOUL) and MCA Records, Inc. of New York City. His responsibilities included the day-to-day activities of an independent record company distributed by major label and the marketing and management of several SOUL/MCA recording acts. At SOUL/MCA, Mr. Olphie received several Gold and Platinum awards for his role in the success of several recording acts including Public Enemy, the Young Black Teenagers, and the movie “Juice” and its related soundtrack. In addition, Mr. Olphie was responsible for negotiating the terms and promotional success for the “Bomb Squad”; ~~renowned~~ renowned producers, Hank and Keith Shocklee. The likes of Vanessa Williams, “The Right Stuff”, Bobby Brown, Bell, Biv, Devoe,” I Thought it was Me”, Madonna, “Like a Prayer”, Ice Cube, Son of Bazerk, Jody Watley, etc. to name a few. To date, Mr. Olphie has concluded approximately twenty five (25) artist recording contracts for both major and independent record labels as producer and/or executive producer including Danny Gatton on Elektra Entertainment, a division of Warner Communications, Inc. (nominated for “Best Rock Instrumental – 1992 Grammy Awards”); Spectrum City (currently known as Public Enemy) on Hollywood Records, a division of the Walt Disney Company specifically the movie “South Central:, Produced by Oliver Stone; Jammy on Vibe Records, Inc. (distributed nationally by Landmark Distributors, Inc.); Ricca on Epic Records, a division of SONY and Producer of former Vibe Records recording artist Chantele Doucette winner of the 2003 Adult Singer award for CBS Television’s Star Search show. In addition, Ms. Doucette was awarded a Sony Music recording contract. In 1993 Mr. Olphie joined Independent National Distribution Inc. (INDI) and became their New York City Sales Representative.

Jammy on Vibe Records, Inc. (distributed nationally by Landmark Distributors, Inc.); Ricca on Epic Records, a division of SONY and Producer of former Vibe Records recording artist Chantele Doucette winner of the 2003 Adult Singer award for CBS Television’s Star Search show. In addition, Ms. Doucette was awarded a Sony Music recording contract. In 1993 Mr. Olphie joined Independent National Distribution Inc. (INDI) and became their New York City Sales Representative.

Robert S. McCoy, Jr., Director

Since May 2008, Robert S. McCoy, Jr. has been a member of our board of directors. Mr. McCoy retired in 2003 after 19 years with Wachovia Corporation and its successor companies. Mr. McCoy had been Vice Chairman and Chief Financial Officer of Wachovia. Prior to joining the banking industry Mr. McCoy was with Price Waterhouse & Co. for 23 years. Mr. McCoy currently serves on the Board of Directors of ~~three~~ other public companies; ~~Krispy Kreme Doughnuts, Inc,~~ (MedCath Corporation, and ~~Website Pros, Inc~~Web.com) ~~Mr.~~as ~~McCoy~~well ~~also~~as ~~serves~~ on the board of additional private companies in which he is an investor.

Dr. Michael L. Tyler, Director, ~~Vice President and~~ Secretary

~~Since May 2008,~~ Dr. Michael L. Tyler ~~has~~is ~~been~~our aCorporation ~~member~~Secretary ofon ~~our~~a ~~board~~part oftime ~~directors,~~basis. He adevotes ~~Vice President~~very ~~and~~limited ~~the~~time ~~Secretary~~to ofour ~~the~~business ~~Company~~and affairs. Dr. Tyler graduated magna cum laude from Columbia State Community College in Columbia, Tennessee, in 1977 with Associate of Science degrees in chemistry and biology. He continued his education at Memphis State University in Memphis, TN., graduating magna cum laude in 1979 with Bachelor of Science degrees in chemistry and biology. His doctorate degree in dentistry was earned from the University of Tennessee Center for the Health Sciences in Memphis, TN., in 1983. Dr. Tyler has been practicing general and family dentistry for the last 21 years. He is a member of the American Dental Association, Tennessee Dental Association, and Maury County Dental Association. He is on staff at Maury Regional Hospital. He is a member of Rotary International, serving his local club as president, and has been honored with a Paul Harris Fellowship.

Thomas G. Kober, C.P.A., Director

Between May 2008 and August 1, 2009, Thomas G. Kober was a member of our board of directors. Mr. Kober served as our Vice President and Treasurer from May 2008 until May 2009. In May 2009, Mr. Kober resigned as our Vice President and Treasurer to pursue other business interests. Mr. Kober’s academic and professional credentials consist of the following: Bachelor of Science, Accounting, Manhattan College, 1979; Certified Public Accountant, 1985. Mr. Kober has been a Partner in Blanchfield, Meyer, Kober and Rizzo LLP, since 1986 and specializes in the construction industry, Sarbanes-Oxley compliance requirements, SEC filing requirements, computer hardware and software consulting with extensive experience in consulting on mergers and acquisitions as well as negotiating with financial institutions. Mr. Kober’s Professional Affiliations include: American Institute of Certified Public Accountants, Member Information Technology Division, Member Taxation Committee, New York State Society of Certified Public Accountants, Member Real Estate Contractors Committee, Long Island Chapter of the Construction Financial Management Association, Former Treasurer and member of Board of Directors, Long Island Association - Tax Policy Committee, Board member of various charitable endeavors.

On August 1, 2009, Mr. Kober resigned from his position as a member of our board of directors. The Company and Mr. Kober did not have any disagreements regarding the Company’s operations, policies or practices.

General

Our executive officers are elected by, and serve at the pleasure of, our board of directors. Our directors serve terms of one year each, with the current directors serving until the next annual meeting of stockholders, and in each case until their respective successors are duly elected and qualified. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders, including the election of directors. Holders of our Series A Preferred Stock are entitled to one vote for each share of common stock into which their preferred shares are convertible on all matters submitted to a vote of the common stockholders, including the election of directors. Cumulative voting with respect to the election of Directors is not permitted by our Articles of Incorporation. Our Board of Directors is elected at the annual meeting of the stockholders or at a special meeting called for that purpose. Each director holds office until the next annual meeting of the stockholders and until the director’s successor is elected and qualified. If a vacancy occurs on the Board of Directors, including a vacancy resulting from an increase in the number of directors, the vacancy may be filled by the Board of Directors or by the stockholders at the next annual stockholders’ meeting or at a special meeting of the stockholders called for that purpose.

Board Meeting Attendance

During our 2010 fiscal year, our board did not hold any meetings. Our directors approved all necessary actions by unanimous written consent meetings, both regular and special.

Committees of the Board and Independent Directors

We do not have an audit committee, a nominating committee or a compensation committee. The board believes that we should have each of these board committees, but we do not have independent directors to functionally implement these committees. The functions that would otherwise be discharged by the committees are considered by the full board of directors, including executive compensation. We do not have a policy for considering candidates for directors nominated by our stockholders. Our board will consider candidates nominated by our stockholders on a case by case basis.

~~None~~We ~~of our~~do directors, executive officers, promoters or control persons has, within the last five years: (i) had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) been convicted in a criminal proceeding or is currently subject to a pending criminal proceeding (excluding traffic violations or similar misdemeanors); (iii) been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (iv) been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission (the "SEC") or the Commodity Futures Trading Commission to have ~~violated~~ ~~a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. There are no family relationships among~~ any ofindependent ~~our~~ directors ~~and executive officers~~.

~~Election~~ Our stockholders are welcome to send any communications to our full board of ~~Directors~~directors ~~and~~or ~~Officers~~to individual directors.

Holders of our common stock are entitled to one (1) vote for each share held on all matters submitted to a vote of the stockholders, including the election of directors. Holders of our Series A Preferred Stock are entitled to one (1) vote for each share of common stock into which their preferred shares are convertible on all matters submitted to a vote of the common stockholders, including the election of directors. Cumulative voting with respect to the election of Directors is not permitted by our Articles of Incorporation. Our Board of Directors is elected at the annual meeting of the stockholders or at a special meeting called for that purpose. Each director holds office until the next annual meeting of the stockholders and until the director’s successor is elected and qualified. If a vacancy occurs on the Board of Directors, including a vacancy resulting from an increase in the number of directors, the vacancy may be filled by the Board of Directors or by the stockholders at the next annual stockholders’ meeting or at a special meeting of the stockholders called for that purpose.

Item 11. Executive Compensation

The following table sets forth the annual and long-term compensation paid to our executive officers. No other executive officers earned more than $100,000 per year at the end of the last completed fiscal year.

Summary Compensation Table

Name & Principal Position	Year	~~Year~~Salary ($)		~~Salary~~Total ($)		~~Bonus ($)~~		~~Stock Awards($)~~		~~Option Awards ($)~~		~~Non-Equity Incentive Plan Compensation ($)~~		~~Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)~~		~~All Other Compensation ($)~~		~~Total ($)~~
Timothy J. Olphie, President and CEO		2009		$	75,000		-		-		-		-		-	$	-	$	-
Timothy J. Olphie	2010	83,333	(A)	83,333
		2008		$	-		-		-		-		-		-	$	-	$	-
President and CEO	2009	56,250	(A)	56,250

(A) satisfied by issuances of common stock.

Outstanding Option Awards at Fiscal Year-End Table.

None.

Employee Benefit Plans

In 2008, our board of directors adopted an incentive stock plan that was subsequently approved by our shareholders. The stock plan is intended to promote continuity of management and to provide increased incentive and personal interest in our welfare by those employees and consultants who are primarily responsible for shaping and carrying out our long-range plans and securing our continued growth and financial success. The plan is administered by our board of directors, and they have the authority to select the employees, consultants and non-employee directors who participate in the plan, to determine the awards to be granted to participants, to set the terms and conditions of such awards and to establish, amend or waive rules for the administration of the plan.

21The plan provides that up to a total of 5,000,000 shares of common stock, subject to adjustment to reflect stock dividends and other capital changes, are available for issuance under the stock plan. No options to acquire shares are currently outstanding and no options to acquire shares were granted under the plan in 2010.

~~The~~During ~~plan is~~2010, ~~administered by~~ our ~~board~~Board of ~~directors,~~Directors ~~and~~approved ~~they~~the ~~have~~issuance ~~the~~of ~~authority~~an toaggregate ~~select the~~of ~~employees~~3,333,333 ~~consultants~~shares ~~and~~of ~~non-employee~~our ~~directors~~common ~~who~~stock ~~participate~~ in ~~the plan,~~lieu toof ~~determine~~employment ~~the~~compensation ~~awards~~ to beMr. ~~granted~~Tim toOlphie ~~participants,~~pursuant to ~~set~~his ~~the~~employment ~~terms~~ and ~~conditions~~compensation ofagreement. ~~such~~That ~~awards~~plan ~~and~~was toexecuted ~~establish,~~by ~~amend~~the orunanimous ~~waive~~consent ~~rules~~of ~~for~~ the ~~administration~~ Board of ~~the~~Directors ~~plan~~on January 26, 2009.

The plan provides that up to a total of 5,000,000 shares of common stock, subject to adjustment to reflect stock dividends and other capital changes, are available for issuance under the stock plan. No options to acquire shares are currently outstanding and no options to acquire shares were granted under the plan in 2009.

During 2009, our Board of Directors approved the issuance of an aggregate of 1,655,000 shares of our common stock to employees, directors, and consultants under the terms of the stock plan.

Employment Agreements

On January 16, 2009, we entered into an employment agreement with Mr. Timothy Olphie (the “Olphie Employment Agreement”) that has an initial term of three ~~(3)~~ years. Under the Olphie Employment Agreement, Mr. Olphie will continue to serve as our CEO, President and a member of our ~~board~~Board of ~~directors~~Directors. Mr. Olphie will receive a base salary of $75,000 per year, and will be entitled to an annual discretionary bonus. The amount of Mr. Olphie’s bonus will be determined by our ~~board~~ Board of ~~directors~~Directors, and will be based upon the achievement of certain milestones as determined by the ~~board~~Board of ~~directors~~ Directors. ~~Mr.~~As ~~Olphie’s~~additional ~~employment agreement~~consideration ~~would~~for bepast ~~terminated~~services, ~~under the terms of that agreement upon the death or disability of Mr. Olphie. If~~ we ~~terminate~~granted Mr. ~~Olphies’s employment for “Cause” (as defined in the agreement) or if Mr.~~ Olphie ~~terminates his  employment voluntarily for any reason before~~ the ~~end~~irrevocable ofright ~~the~~to ~~term, Mr. Olphie will~~ be ~~entitled~~issued, toupon ~~receive~~61 ~~his~~days ~~base~~written ~~salary~~notice, ~~through~~a ~~the~~total ~~date~~of ~~his employment terminates~~7,500 ~~plus~~shares ~~any pro-rata bonus owed as~~ of ~~that~~Series ~~date.~~A IfPreferred ~~Mr.~~Stock ~~Olphie’s employment is terminated by us without “Cause” then he will be entitled to receive:~~ (i)which ~~base~~are ~~salary~~convertible ~~through~~into ~~the termination date; (ii)~~ a ~~single~~total ~~sum~~of ~~payment equal to $75~~30,000;,000 ~~and~~shares ~~(iii) reimbursement for the cost~~ of upcommon ~~to the first twelve months of continuing group health plan coverage which Mr~~stock). ~~Olphie and his covered dependents receive pursuant to COBRA.~~ AsThe ~~compensation~~power ~~for past services~~ to ~~the~~direct ~~Company, our board of directors granted to Mr. Olphie~~ the ~~right to~~issuance ~~receive 1,100 shares~~ of ~~our Series A Preferred Stock, with~~ such ~~shares~~series ~~being issuable at Mr. Olphie’s discretion upon 61 days written notice. The shares~~ of Series A Preferred Stock ~~to be issued to Mr. Olphie~~ shall be ~~restricted~~ ~~shares~~at ~~on issuance and as such any future sales by~~ Mr. Olphie’s ~~must~~sole ~~be pursuant to a then effective registration statement under the Securities Act of 1933~~discretion, orsubject ~~be pursuant~~ to athe ~~valid~~61 ~~exemption~~day ~~from~~waiting ~~such registration~~period.

~~Board of Directors~~21

On August 2, 2010, we entered into a First Amendment to Employment Agreement with Mr. Olphie which increased his base salary from $75,000 to $125,000.

During the year ended September 30, 2010, Officers’ and Directors Compensation includes $83,333 incurred to Mr. Olphie under the original employment agreement, and its amendment in August 2010, of which $83,333 arose out of common stock issued in payment of accrued base salary of $72,728. At September 30, 2010, Accounts Payable and Accrued Expenses include $0 representing base compensation still owing under the agreements to Mr. Olphie.

During the year ended September 30, 2009, Officers’ and Directors Compensation includes $56,250 incurred to Mr. Olphie under the original employment agreement, of which $66,000 arose out of common stock issued in payment of accrued base salary of $56,250. At September 30, 2009, Accounts Payable and Accrued Expenses include $32,312 representing base compensation still owing under the original agreement to Mr. Olphie.

Officers’ and Directors’ Compensation for the year ended September 30, 2009 includes $38,000 incurred to other Officers/Directors consisting of Company common stock issuances (See Note K to the Consolidated Financial Statements).

Directors Compensation

We pay compensation of $5,000 per annum to each of our directors for service on our Board.

Indemnification

Under our Articles of Incorporation and Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada. Regarding indemnification for liabilities arising under the Securities Act, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table indicates beneficial ownership of our common stock as of December 2830, ~~2009~~2011 by:

	·	Each person or entity known by us to beneficially own more than 5% of the outstanding shares of the our common stock;
	·	Each of our executive officers and directors; and
	·	All of our executive officers and directors as a group.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Percentage of beneficial ownership is based on 20,814,257 shares of common stock outstanding as of December 28, 2009. Unless otherwise indicated, the address of each beneficial owner listed below is ~~c/o~~our ~~the Company, 824 Old Country Road, P~~address.~~O. Box 8, Westbury, New York, 11590~~

Name and Address	Number of Shares		Percentage of Shares Owned	~~Percentage of Shares Owned~~
Timothy J. Olphie	8,358,333	~~5,325,000~~	25.01%	~~25.6~~
Robert S. McCoy, Jr.	2,650,000	~~2,670,000~~	7.93%	~~12.8~~
Michael L. Tyler	1,500,000	~~1,635,000~~	4.49%	~~7.9~~
All Officers and Directors as a group (3 persons)	12,508,333	~~9,630,000~~	37.42%	~~46.3~~

Item 13. Certain Relationships and Related Transactions, and Director Independence

~~Other than~~We ~~as disclosed below, there~~ have ~~been~~not nohad transactions, or ~~proposed transactions,~~nor ~~which~~do ~~have~~we ~~materially~~proposed ~~affected~~transactions, oroutside ~~will~~of ~~materially~~normal ~~affect~~employment ustransactions, ~~in which~~with any director, executive officer or beneficial holder of more than 10% of the outstanding common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest. We have no policy regarding entering into transactions with affiliated parties.

On May 30, 2008, we entered into convertible promissory notes with James Price for $200,000 and with Robert S. McCoy for $225,000. Interest on the promissory notes shall accrue at the rate of 5% per annum. The promissory notes are convertible into Common Stock at the price of $0.25 per share. The Maturity Date of the promissory notes is the earlier of August 28, 2008 or five days after the closing of any equity financing equal to or greater than $500,000.22

Blanchfield, Meyer, Kober and Rizzo LLP

For the periods ended September 30, 2008 and 2009 the firm Blanchfield, Meyer, Kober and Rizzo (BMKR) has accrued Fees totaling $75,000 for accounting and bookkeeping services. Thomas Kober, a member of our board of directors from May 2008 until August 1, 2009, is a 20 % partner in this BMKR. No payment has been made by us and no demand has been made for payment.

Item 14. Principal Accountant Fees and Services

Fees ~~paid to~~charged ~~the~~by ~~Company’s~~our ~~current~~ principal accountant, S. W. Hatfield, CPA, for the year ended September 30, 2009 and principal accountant, Michael T. Studer CPA P.C., for the years ended September 30, 2010 and 2009 (re-audit) were as follows:

			Year ended			Year ended
		Year Ended			Year Ended
			September 30,			September 30,
		September 30, 2010			September 30, 2009
			2009			2008
1. Audit Fees
1.	Audit fees		$	23,388		$	17,350
a. S.W. Hatfield, CPA		$	-		$	23,388
2.	Audit-related fees			-			-
b. Michael T. Studer CPA P.C.			15,000			12,500
3.	Tax fees			-			-
2. Audit Related Fees			-			-
4.	All other fees			-			-
3. Tax Fees			-			-
	Totals		$	23,388		$	17,350
4. All Other Fees			-			-
Totals		$	15,000		$	35,388

1. Audit fees consist of amounts billed for professional services rendered for the audits of our financial statements, reviews of our interim consolidated financial statements included in quarterly reports, services performed in connection with filings with the Securities & Exchange Commission and related comfort letters and other services that are normally provided by S. W. Hatfield, CPA in connection with statutory and regulatory filings or engagements.

2. Audit Related fees consist of fees billed for assurance and related services by our principal accountant that are related to the performance of the audit or review of our financial statements and are not reported under Audit Fees.

3. Tax fees consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions.

The Company has not designated a formal audit committee. However, as defined in Sarbanes-Oxley Act of 2002, the entire Board of Directors (Board), in the absence of a formally appointed committee, is, by definition, the Company’s audit committee.

In discharging its oversight responsibility as to the audit process, commencing with the engagement of S. W. Hatfield, CPA, the Board obtained from the independent auditors a formal written statement describing all relationships between the auditors and the Company that might bear on the auditors’ independence as required by applicable accounting standards. The Board discussed with the auditors any relationships that may impact their objectivity and independence, including fees for non-audit services, and satisfied itself as to the auditors’ independence.

The Board discussed and reviewed with the independent auditors all matters required to be discussed by auditing standards generally accepted in the United States of America, including those described in the appropriate Statement(s) on Auditing Standards.

The Board reviewed the audited financial statements of the Company as of and for the years ended September 30, 2009 and 2008 with management and the independent auditors. Management has the sole ultimate responsibility for the preparation of the Company’s financial statements and the independent auditors have the responsibility for their examination of those statements.

Based on the above-mentioned review and discussions with the independent auditors and management, the Board of Directors approved the Company’s audited financial statements and recommended that they be included in its Annual Report on Form 10-K for the year ended September 30, 2009 for filing with the U. S. Securities and Exchange Commission.

The Company’s principal accountant, S. W. Hatfield, CPA did not engage any other persons or firms other than the principal accountant’s full-time, permanent employees.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Exhibits and Financial Statements Financial Statements. See Item 8. Index to Financial Statements

2423

Financial Statements. See Item 8. Index to Financial Statements

(b)

Exhibits

Exhibit Number	Description
3.1 #	Articles of Incorporation of Benacquista Galleries Inc., dated January 13, 2003 (incorporated by reference to Exhibit 3.1 on Form SB-2 filed March 31, 2003).
3.1 A	Articles of Incorporation of Benacquista Galleries Inc., dated January 13, 2003 (incorporated by reference to Exhibit 3.1 on Form SB-2 filed March 31, 2003).
3.2 #	By-laws of Benacquista Galleries Inc., dated January 17, 2003 (incorporated by reference to Exhibit 3.2 on Form SB-2 filed March 31, 2003).
3.2	By-laws of Benacquista Galleries Inc., dated January 17, 2003 (incorporated by reference to Exhibit 3.2 on Form SB-2 filed March 31, 2003).
4.1 #	Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock of Vibe Records, Inc. Nevada (incorporated by reference to Exhibit 4.1 to the Form 8-K filed on January 26, 2009).
4.1	Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock of Vibe Records, Inc. Nevada (incorporated by reference to Exhibit 4.1 to the Form 8-K filed on January 26, 2009).
4.2 #	Certificate of Designation, Preferences and Rights of the Series B Convertible Preferred Stock of Vibe Records, Inc. Nevada (incorporated by reference to Exhibit 4.2 to the Form 8-K filed on January 26, 2009).
4.2	Certificate of Designation, Preferences and Rights of the Series B Convertible Preferred Stock of Vibe Records, Inc. Nevada (incorporated by reference to Exhibit 4.2 to the Form 8-K filed on January 26, 2009).
10.1 #@	Employment Agreement by and between Mr. Tim Olphie and Vibe Records, Inc. Nevada, dated as of January 26, 2009 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 26, 2009).
10.1	Employment Agreement by and between Mr. Tim Olphie and Vibe Records, Inc. Nevada, dated as of January 26, 2009 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 26, 2009).
10.2 #	Agreement and Plan of Merger by and among the Company, Benacquista Acquisition Corp. and Vibe Records, Inc., dated May 30, 2008 (incorporated by reference and previously filed on Form 8-K on June 6, 2008).
10.1	Amended Employment Agreement by and between Mr. Tim Olphie and Vibe Records, Inc. Nevada, dated as of August 2, 2010 (incorporated by reference to Exhibit 10.1 to the Form 10-Q filed on August 18, 2010)
10.2	Incentive Stock Plan
31.1*	Certificate of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certificate of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certificate of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certificate of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~# Incorporated by reference. @ Management contract or compensatory plan.~~ * Filed herewith.

2524

VIBE RECORDS INC. NEVADA

Contents

		Page
Report of Registered Independent Certified Public Accounting Firm		F-2
Financial Statements
Consolidated Financial Statements
Balance Sheets
Consolidated Balance Sheets at September 30, 2010 and 2009		F-3
as of September 30, 2009 and 2008		F-3
Consolidated Statements of Operations and Comprehensive Loss for the years ended September 30, 2010 and 2009 and period from March 8, 2004 (date of inception) to September 30, 2010		F-4
Statements of Operations and Comprehensive Loss
Consolidated Statements of Changes in Stockholders’ Deficit for the period from March 8, 2004 (date of inception) to September 30, 2010		F-5
for the years ended September 30, 2009 and 2008
Consolidated Statements of Cash Flows for the years ended September 30, 2010 and 2009 and period from March 8, 2004 (date of inception) to September 30, 2010		F-6
and period from January 13, 2003 (date of inception)
Notes to Consolidated Financial Statements		F-7
through September 30, 2009		F-4
Statement of Changes in Stockholders’ Equity
for the years ended September 30, 2009 and 2008		F-5
Statements of Cash Flows
for the years ended September 30, 2009 and 2008
and period from January 13, 2003 (date of inception)
through September 30, 2009		F-6
Notes to Financial Statements		F-7

F-1

~~LETTERHEAD~~REPORT OF S.INDEPENDENT ~~W. HATFIELD,~~REGISTERED ~~CPA~~PUBLIC ACCOUNTING FIRM

~~REPORT~~To OFthe ~~REGISTERED INDEPENDENT~~Board ~~CERTIFIED~~of ~~PUBLIC~~Directors ~~ACCOUNTING~~and ~~FIRM~~Stockholders of Vibe Records, Inc. Nevada

~~Board~~I have audited the accompanying consolidated balance sheets of ~~Directors~~ Vibe Records, Inc. Nevada (the Company), a development stage company, as of September 30, 2010 and ~~Stockholders~~2009 and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended and for the period March 8, 2004 (inception) to September 30, 2010. 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 audits.

~~Vibe Records~~I conducted my audits in accordance with 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, ~~Inc~~on a test basis, evidence supporting the amounts and disclosures in the financial statements. ~~Nevada~~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 audits provide a reasonable basis for my opinion.

WeIn ~~have audited~~my opinion, the ~~accompanying~~consolidated ~~balance~~financial ~~sheets~~statements referred to above present fairly, in all material respects, the financial position of Vibe Records, Inc. Nevada, ~~(Company) (~~a ~~Nevada corporation and a~~ development stage company), as of September 30, ~~2009~~ 2010 and ~~2008~~ 2009 and the ~~related~~results ~~combined statements~~ of its operations and ~~comprehensive loss,~~its ~~changes in stockholders' deficit and~~ cash flows for ~~each of~~ the years ~~ended~~ ~~September~~then ~~30,~~ended ~~2009~~ and ~~2008,~~for ~~respectively. These financial statements are~~ the ~~sole~~period ~~responsibility~~March of8, ~~the~~2004 ~~Company's management. Our~~(inception) ~~responsibility~~to isSeptember to30, ~~express~~2010 in anconformity ~~opinion~~with onaccounting ~~these financial~~principles ~~statements~~generally ~~based~~accepted onin ~~our~~the ~~audit~~United States.

~~We conducted~~The ~~our~~accompanying ~~audit~~financial instatements ~~accordance~~referred ~~with~~to ~~the~~above ~~standards~~have ofbeen ~~the~~prepared ~~Public~~assuming ~~Company Accounting Oversight Board (United States). Those standards require~~ that ~~we plan and perform~~ the ~~audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The~~ Company iswill ~~not~~continue ~~required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting~~ as a ~~basis~~going ~~for designing~~concern. ~~audit~~As ~~procedures~~discussed ~~that are appropriate~~ in ~~the~~Note ~~circumstances,~~B ~~but~~to ~~not for~~ the ~~purpose~~consolidated offinancial ~~expressing~~statements, ~~an opinion on~~ the ~~effectiveness of the~~ Company’s ~~internal~~ ~~control~~present ~~over~~ financial ~~reporting. Accordingly,~~situation weraises ~~express~~substantial ~~no such~~doubt ~~opinion. An~~about ~~audit~~its ~~also~~ability ~~includes~~to ~~examining,~~continue onas a ~~test~~going ~~basis, evidence~~concern. ~~supporting~~Management’s ~~the~~plans ~~amounts~~in ~~and~~regard ~~disclosures~~to inthis ~~the~~matter ~~financial statements. An~~are ~~audit~~ also ~~includes~~described ~~assessing~~in ~~the~~Note ~~accounting principles~~B. ~~used~~The ~~and~~financial ~~significant~~statements ~~estimates~~do ~~made~~not byinclude ~~management,~~any asadjustments ~~well as evaluating the overall financial statement presentation. We believe~~ that ~~our~~might ~~audits~~result ~~provide~~from athe ~~reasonable~~outcome ~~basis~~of ~~for~~this ~~our opinion~~uncertainty.

InAs ~~our opinion,~~discussed ~~the~~in ~~financial~~Note ~~statements~~N ~~referred~~ to ~~above present fairly, in all material respects,~~ the consolidated financial ~~position of Vibe Records~~statements, ~~Inc. Nevada as of September 30, 2009 and 2008 and~~ the ~~results~~Company ofrestated its ~~operations~~consolidated ~~and~~financial ~~cash~~statements ~~flows~~ for ~~each~~ of the ~~years~~year ended September 30, 2009 ~~and 2008, respectively, in conformity with generally accepted accounting principles generally accepted in the United States of America~~.

~~The accompanying~~/s/ ~~financial~~Michael ~~statements have been prepared assuming that the Company will continue as a going concern~~T. As ~~discussed~~Studer inCPA ~~Note~~ P.C to the financial statements, the Company has no viable operations or significant assets and is dependent upon capital provided from current stockholders or issuances of new equity or new debt to provide sufficient working capital to maintain the integrity of the corporate entity. ~~These~~ ~~circumstances~~Michael ~~create substantial doubt about the Company's ability to continue as a going concern and are discussed in Note C~~T. ~~The~~ ~~financial~~Studer ~~statements~~CPA ~~do not contain any adjustments that might result from the outcome of these uncertainties~~P.C.

~~S. W. HATFIELD~~Freeport, ~~CPA~~New York

~~Dallas~~December 30, ~~Texas~~ 2011

January 13, 2010

F-2

VIBE RECORDS, INC. NEVADA

(a development stage company)

Consolidated Balance Sheets

~~(a development~~ September ~~stage~~30, ~~company)~~2010 and September 30, 2009

Balance Sheets

	September 30, 2010			September 30, 2009
				(As Restated - Note N)
ASSETS
CURRENT ASSETS
Cash on hand and in bank	$	370		$	23,809
TOTAL CURRENT ASSETS		370			23,809

PROPERTY AND EQUIPMENT - AT COST		96,937			96,937
Less accumulated depreciation		(61,636	)		(43,845	)
NET PROPERTY AND EQUIPMENT		35,301			53,092


TOTAL ASSETS	$	35,671		$	76,901

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Notes and loans payable to bank	$	509,779		$	630,381
Unsecured convertible promissory and other notes payable		731,017			180,000
Accounts payable and other accrued liabilities		143,122			345,031
Accrued interest payable		996,159			769,051
Notes and advances payable to related parties		1,608,603			1,686,577
Derivative liability for convertible notes		169,267			-

TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES		4,157,947			3,611,040

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
Preferred stock - $0.001 par value, 50,000,000 shares authorized:
Series A - 200,000 shares designated
Series B - 200,000 shares designated
None issued and outstanding		-			-
Common stock - $0.001 par value, 500,000,000 shares authorized:33,424,027 and 21,234,267 shares issued and outstanding and to be issued respectively (including 1,280,000 shares issuable to two directors from conversion of notes in the year ended September 30, 2007)		33,424			21,234
Additional paid in capital		3,157,203			2,494,102
Deficit accumulated during the development stage		(7,312,903	)		(6,049,475	)

TOTAL STOCKHOLDERS' DEFICIT		(4,122,276	)		(3,534,139	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	35,671		$	76,901

~~September 30,~~The ~~2009~~accompanying ~~and~~notes ~~2008~~are an integral part of these consolidated financial statements.

	September 30,			September 30,
	2009			2008
ASSETS
Current Assets
Cash on hand and in bank	$	23,809		$	-
Total Current Assets		23,809			-
Property and Equipment - at cost		96,937			59,044
less accumulated depreciation		(43,845	)		(27,624	)
Net Property and Equipment		53,092			31,420
Other Assets
Due from affiliated entities		-			182,709
Master recordings, net of reserve for impairment		-			-
Total Other Assets		-			182,709
TOTAL ASSETS	$	76,901		$	214,129
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Bank overdraft	$	-		$	417
Notes payable to bank and individuals		730,381			853,289
Accounts payable and other accrued liabilities		368,970			180,145
Accrued interest payable		719,081			633,562
Notes and advances payable to officers and stockholders		1,686,077			1,562,378
Total Liabilities		3,504,509			3,229,791
Commitments and Contingencies
Stockholders' Deficit
Preferred stock - $0.001 par value
50,000,000 shares authorized
Series A - 4,000 shares designated
Series B - 4,000 shares designated
None issued and outstanding		-			-
Common stock - $0.001 par value
100,000,000 shares authorized
21,249,267 and 14,564,267 shares
issued and outstanding, respectively		2,125			1,456
Additional paid-in capital		2,998,921			2,128,247
Accumulated deficit		(5,693,787	)		(4,410,498	)
		(2,692,741	)		(2,280,795	)
Less: Treasury Stock		(734,867	)		(734,867	)
Total Stockholders' Deficit		(3,427,608	)		(3,015,662	)
TOTAL LIABILITIES AND
STOCKHOLDERS’ DEFICIT	$	76,901		$	214,129

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

F-3

VIBE RECORDS, INC. NEVADA

(a development stage company)

Consolidated Statements of Operations and Comprehensive Loss

Years Ended September 30, 2010 and 2009 and

Period from March 8, 2004 (date of inception) through September 30, 2010

Statements of Operations and Comprehensive Loss

	Year Ended September 30,						March 8, 2004 (Inception) Through September 30,
	2010			2009			2010
	(As Restated - Note N)


REVENUES	$	-		$	-		$	-

OPERATING EXPENSES
Research and artist development costs		215,696			181,788			930,862
Officers and directors compensation		89,940			114,700			479,140
Professional and consulting fees		334,974			953,658			1,817,447
Other general and administrative expenses		156,685			109,243			2,053,349
Provision for impairment loss on write-down of Vibe Records, Inc. "Master Recordings Library" assets		-			-			624,000
TOTAL OPERATING EXPENSES		797,295			1,359,389			5,904,798

LOSS FROM OPERATIONS		(797,295	)		(1,359,389	)		(5,904,798	)

OTHER INCOME (EXPENSE)
Gains from write-off of debt no longer payable due to statute of limitations		91,359			-			91,359
Interest expense		(307,505	)		(238,911	)		(1,243,547	)
Excess of fair value of common stock issued over the amount of debt retired		(26,259	)		-			(26,259	)
Accretion of debt discounts expense (relating to beneficial conversion features)		(130,370	)		-			(130,370	)
Loss from revaluation of derivative liability for convertible notes		(55,858	)		-			(55,858	)
Finance fees		(37,500	)		-			(37,500	)

TOTAL OTHER INCOME (EXPENSE) - NET		(466,133	)		(238,911	)		(1,402,175	)

LOSS BEFORE PROVISION FOR INCOME TAXES		(1,263,428	)		(1,598,300	)		(7,306,973	)

PROVISION FOR INCOME TAXES		-			-			(5,930	)

NET LOSS AND COMPREHENSIVE LOSS	$	(1,263,428	)	$	(1,598,300	)	$	(7,312,903	)

Loss per weighted-average share of common stock outstanding, basic and diluted	$	(0.05	)	$	(0.09	)	$	(0.48	)

Weighted-average number of shares of common stock outstanding, basic and diluted		23,617,921			18,286,322			15,129,364

~~Years ended~~The ~~September~~accompanying ~~30,~~notes ~~2009~~are ~~and~~an ~~2008~~integral ~~and~~part of these consolidated financial statements.

Period from January 13, 2003 (date of inception) through September 30, 2009

							(Unaudited)
							Period from
							January 13, 2003
							(date of inception)
	Year ended			Year ended			through
	September 30,			September 30,			September 30,
	2009			2008			2009
Revenues	$	-		$	-		$	-
Operating Expenses
Research and Artist Development costs		192,818			177,385			726,196
General and Administrative expenses		464,301			65,147			3,100,721
Professional fees		374,259			197,539			843,074
Total Operating Expenses		1,031,378			440,071			4,669,991
Loss from Operations		(1,031,378	)		(440,071	)		(4,669,991	)
Other (Expense)
Interest expense		(251,911	)		(211,126	)		(1,017,866	)
Loss before Provision
for Income Taxes		(1,283,289	)		(651,197	)		(5,687,857	)
Provision for Income Taxes		-			-			(5,930	)
Net Loss		(1,283,289	)		(651,197	)		(5,693,787	)
Other Comprehensive Income		-			-			-
Comprehensive Loss	$	(1,283,289	)	$	(651,197	)	$	(5,693,787	)
Loss per weighted-average share
of common stock outstanding,
computed on net loss - basic
and fully diluted	$	(0.07	)	$	(0.04	)
Weighted-average number of shares
of common stock outstanding -
basic and fully diluted		17,994,829			13,817,542

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

F-4

VIBE RECORDS, INC. NEVADA

(a development stage company)

Consolidated Statements of Changes in Stockholders' Deficit

March 8, 2004 (Inception) to September 30, 2010

(~~a development~~As ~~stage~~Restated ~~company~~- Note N)

Statement of Changes in Stockholders’ Deficit

	Common Stock, $0.001 Par						Additional			Deficit Accumulated during the Development
	Shares			Amount			capital			Stage			Total

Balance at March 8, 2004 (date of inception)		-		$	-		$	-		$	-		$	-
Shares issued for contribution of Vibe Records, Inc. "Master Recordings Library" assets		5,025,000			5,025			618,975			-			624,000
Shares issued in settlement of debt (as restated - Note N)		7,184,201			7,184			157,816			-			165,000
Net loss for the period (as restated - Note N)		-			-			-			(1,661,265	)		(1,661,265	)

Balance at September 30, 2004 (as restated - Note N)		12,209,201			12,209			776,791			(1,661,265	)		(872,265	)
Net loss for the year (as restated - Note N)		-			-			-			(673,551	)		(673,551	)

Balance at September 30, 2005 (as restated - Note N)		12,209,201			12,209			776,791			(2,334,816	)		(1,545,816	)
Net loss for the year (as restated - Note N)		-			-			-			(753,977	)		(753,977	)

Balance at September 30, 2006 (as restated - Note N)		12,209,201			12,209			776,791			(3,088,793	)		(2,299,793	)
Conversion of notes to common stock (as restated - Note N)		1,280,000			1,280			1,598,720			-			1,600,000
Net loss for the year (as restated - Note N)		-			-			-			(620,115	)		(620,115	)

Balance at September 30, 2007 (as restated - Note N)		13,489,201			13,489			2,375,511			(3,708,908	)		(1,319,908	)
Effect of reverse acquisition and purchase of treasury stock		1,075,066			1,075			(865,239	)		-			(864,164	)
Issuance of common stock for:
Professional and consulting fees (as restated - Note N)		400,000			400			59,600			-			60,000
Officers and directors compensation (as restated - Note N)		330,000			330			49,170						49,500
Net loss for the year (as restated - Note N)		-			-			-			(742,267	)		(742,267	)

Balances at September 30, 2008 (as restated - Note N)		15,294,267			15,294			1,619,042			(4,451,175	)	$	(2,816,839	)
Issuance of common stock for:
Retirement of debt due consultant, including $580,000 excess of fair value of common stock over the amount of debt retired (charged to professional and consulting fees in the statement of operations) (as restated - Note N)		5,000,000			5,000			620,000			-			625,000
Professional and consulting fees (as restated - Note N)		780,000			780			212,720			-			213,500
Officers and directors compensation (as restated - Note N)		295,000			295			102,955			-			103,250
Cancellation of common stock (credited to professional and consulting fees in the statement of operations) (as restated - Note N)		(135,000	)		(135	)		(60,615	)					(60,750	)
Net loss for the year (as restated - Note N)		-			-			-			(1,598,300	)		(1,598,300	)

Balances at September 30, 2009 (as restated - Note N)		21,234,267			21,234			2,494,102			(6,049,475	)		(3,534,139	)
Issuance of common stock for:
Retirement of debt, including $26,259 excess of fair value of common stock over the amount of debt retired (charged to other expense in the statement of operations)		1,111,971			1,112			46,147			-			47,259
Professional and consulting fees		7,884,456			7,885			456,114			-			463,999
Officers and directors compensation		3,643,333			3,643			141,690			-			145,333
Finance fees		750,000			750			36,750			-			37,500
Cancellation of common stock (credited to professional and consulting fees in the statement of operations)		(1,200,000	)		(1,200	)		(72,600	)		-			(73,800	)
Beneficial conversion features of convertible notes		-			-			55,000			-			55,000
Net loss for the year		-			-			-			(1,263,428	)		(1,263,428	)

Balances at September 30, 2010		33,424,027		$	33,424		$	3,157,203		$	(7,312,903	)	$	(4,122,276	)

~~Years ended~~The ~~September~~accompanying ~~30,~~notes ~~2009~~are ~~and~~an ~~2008~~integral part of these consolidated financial statements.

					Additional			Treasury
	Common Stock				paid-in			stock			Accumulated
	Shares		Amount		capital			at cost			deficit			Total
Balances at
October 1, 2007		13,489,201	$	1,348	$	2,257,652		$	-		$	(3,759,301	)	$	(1,500,301	)
Effect of reverse merger
transaction		1,075,066		108		(129,405	)		(9,867	)		-			(139,164	)
		14,564,267		1,456		2,128,247			(9,867	)		(3,759,301	)		(1,639,465	)
Purchase of treasury stock		-		-		-			(725,000	)		-			(725,000	)
Net loss for the year		-		-		-			-			(651,197	)		(651,197	)
Balances at
September 30, 2008		14,564,267		1,456		2,128,247			(734,867	)		(4,410,498	)		(3,015,662	)
Issuance of common
stock for:
Retirement of debt		5,000,000		500		44,500			-			-			45,000
Legal, consulting and
other services		910,000		91		273,059			-			-			273,150
Executive, director and
other compensation		745,000		75		211,326			-			-			211,400
Cost of raising capital		30,000		3		8,997			-			-			9,000
less cost of raising
capital		-		-		(9,000	)		-			-			(9,000	)
Capital contributed through
officer payment of debt		-		-		341,792			-			-			341,792
Net loss for the year		-		-		-			-			(1,283,289	)		(1,283,289	)
Balances at
September 30, 2009		21,249,267	$	2,125	$	2,998,921		$	(734,867	)	$	(5,693,787	)	$	(3,427,608	)

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

F-5

VIBE RECORDS, INC. NEVADA

(a development stage company)

Consolidated Statements of Cash Flows

Years ~~ended~~ Ended September 30 , ~~2009~~2010 and ~~2008~~2009 and

Period from ~~January~~March 138, ~~2003~~2004 (date of inception) through September 30, ~~2009~~ 2010

							(Unaudited)
							March 8, 2004
							Period from
							(Inception)
							January 13, 2003
	Year Ended September 30,						Through
							(date of inception)
	2010			2009			September 30, 2010
	Year ended			Year ended			through
	(As Restated - Note N)
	September 30,			September 30,			September 30,
CASH FLOWS FROM OPERATING ACTIVITIES:
	2009			2008			2009
Net loss	$	(1,263,428	)	$	(1,598,300	)	$	(7,312,903	)
Cash Flows from Operating Activities
Adjustments to reconcile net loss to net cash (used in) operating activities:
Net loss for the year	$	(1,283,289	)	$	(651,197	)	$	(5,693,787	)
Depreciation		17,791			16,221			61,636
Adjustments to reconcile net loss
Provision for impairment loss on write-down of Vibe Records, Inc. "Master Recordings Library" assets		-			-			624,000
to net cash provided by
Gains from write-off of debt no longer payable due to statute of limitations		(91,359	)		-			(91,359	)
operating activities
Amortization of original issue discounts on notes payable to investors		5,218			-			5,218
Depreciation		16,221			11,730			43,845
Accretion of debt discounts expense (relating to beneficial conversion features)		130,370			-			130,370
Expenses paid with common stock		529,550			-			529,550
Loss from revaluation of derivative liability for convertible notes		55,858			-			55,858
Increase (Decrease) in
Expenses paid by issuance of common stock:
Accounts payable and
Officers and directors compensation		145,333			103,250			298,083
other accrued expenses		188,825			180,558			368,970
Professional and consulting fees		390,199			732,750			1,182,949
Accrued interest payable		217,312			156,887			850,874
Excess of fair value of common stock issued over the amount of debt retired		26,259			-			26,259
Net cash used in operating activities		(331,381	)		(302,022	)		(586,050	)
Finance fees		37,500			-			37,500
Cash Flows from Investing Activities
Increase (Decrease) in:
Cash advanced to affiliated parties		-			(86,366	)		(182,709	)
Accounts payable and other accrued expenses		(113,306	)		209,886			276,724
Cash paid to acquire property and equipment		(37,893	)		(4,460	)		(96,937	)
Accrued interest payable		263,467			204,312			1,032,519
Net cash used in investing activities		(37,893	)		(88,826	)		(279,646	)
NET CASH (USED) IN OPERATING ACTIVITIES		(396,098	)		(331,881	)		(3,673,146	)
Cash Flows from Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase (decrease) in bank overdraft		(417	)		417			-
Cash advanced to affiliated entity		-			(24,490	)		(207,199	)
Cash received on notes payable
Cash paid to acquire property and equipment		-			(37,893	)		(96,937	)
to banks and individuals		190,000			5,185			1,177,952
NET CASH (USED) IN INVESTING ACTIVITIES		-			(62,383	)		(304,136	)
Cash paid on notes payable to
CASH FLOWS FROM FINANCING ACTIVITIES:
banks and individuals		(102,908	)		(5,608	)		(114,898	)
Increase (decrease) in bank overdraft		-			(417	)		-
Cash received on notes and advances
Cash proceeds received on notes and loans payable to bank		-			-			772,952
from officers, directors and other
Principal payments made in cash on notes and loans payable to bank		(120,602	)		(7,908	)		(140,500	)
related parties		364,739			879,386			3,709,147
Cash proceeds received from issuance of unsecured convertible promissory note and other notes payable		185,000			190,000			590,000
Cash paid on notes and advances from
Principal payments made in cash on unsecured convertible promissory and other notes payable		-			(95,000	)		(95,000	)
officers, directors and other related
Cash proceeds received on notes and advances from officers, directors, and other related parties		323,261			389,229			3,432,898
parties		(58,331	)		-			(58,331	)
Principal payments made in cash on notes and advances from officers, directors, and other related parties		(15,000	)		(57,831	)		(72,831	)
Purchase of treasury stock		-			~~(500,000~~-	)		(509,867	)
Net cash provided by financing activities		393,083			379,380			4,204,003
NET CASH PROVIDED BY FINANCING ACTIVITIES		372,659			418,073			3,977,652
Increase in Cash		23,809			(11,468	)		23,809
INCREASE (DECREASE) IN CASH		(23,439	)		23,809			370
Cash at beginning of period		-			11,468			-
CASH AT BEGINNING OF PERIOD		23,809			-			-
Cash at end of period	$	23,809		$	-		$	23,809
CASH AT END OF PERIOD	$	370		$	23,809		$	370
Supplemental Disclosure of Interest and Income Taxes Paid
SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID
Interest paid during the period	$	3444,~~599~~037		$	5434,~~239~~599		$	~~166~~211,~~992~~029
Income taxes paid during the period	$	-		$	-		$	-5,930
Supplemental Disclosure of Non-Cash Investing and Financing Activities
SUPPLEMENTAL DISCLOSURES OF NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES
Advances to affiliated entities assigned to
Acquisition of automobile with note payable to bank	$	-		$	-		$	30,253
repay certain notes and advances from
Advances to affiliated entities assigned to repay certain notes and advances from shareholder, officer and director	$	-		$	207,199		$	207,199
shareholder, officer and director	$	182,709		$	-		$	-
Acquisition of treasury stock with note payable	$	-		$	-		$	225,000
Notes payable and accrued interest payable
Common stock issued to settle notes payable and accrued expenses:
to individuals repaid by shareholder,
Notes payable and accrued expenses settled	$	21,000		$	45,000		$	1,796,000
officer and director	$	341,792		$	-		$	-
Excess of the fair value of the common stock issued over the amount of debt settled (charged to operations)		26,259			-			26,259
Acquisition of treasury stock with note payable	$	-		$	225,000		$	-
Professional and consulting fees (charged to operations)		-			580,000			580,000
Common stock issued to settle notes payable	$	-		$	-		$	1,600,000
Fair value of common stock issued	$	47,259		$	625,000		$	2,402,259

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

F-6

VIBE RECORDS, INC. NEVADA

(a development stage company)

Notes to Consolidated Financial Statements

September 30, ~~2009~~2010 and ~~2008~~2009

NOTE A - Organization and Description of Business

Vibe Records, Inc. Nevada, (“we” “us” or the “Company”) was incorporated on January 17, 2003 under the laws of the State of Nevada as ~~Benacquista~~ Benaquista Galleries, Inc. On May 30, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Vibe Records, Inc., a privately held Delaware corporation incorporated on March 8, 2004. Pursuant to the terms of the closing of the Merger Agreement, Vibe Records, Inc. was merged with and into the Company. In connection with the closing of the Merger Agreement, our name was changed from ~~Benacquista~~ Benaquista Galleries, Inc. to Vibe Records, Inc. Nevada. This transaction was accounted for as a reverse merger.

The acquisition of Vibe Records, Inc. (Vibe) by Benaquista Galleries, Inc. (Benaquista) effected a change in control of Benaquista and is accounted for as a “reverse acquisition” whereby Vibe is the accounting acquiror for financial statement purposes. Accordingly, for all periods subsequent to the reverse merger transaction, the financial statements of the Company will reflect the historical financial statements of Vibe from its inception and the operations of Benaquista for all periods subsequent to the May 30, 2008 transaction date. Vibe financial statements include the operations of Vibe Records Holdings, Inc. (Holdings) from March 8, 2004 (date of Vibe’s incorporation in Delaware) to September 10, 2007 (date of merger of Vibe and Holdings).

The Company conducts business as an artist and repertoire company as well as an independent record label in the music industry. We intend to distribute recordings made by our artists on a national basis, as well as operate state-of-the-art recording and production facilities. We also maintain websites under the trademarked names “Vibe Records” and “Off the Hook Records.” To March 31, 2009, Off the Hook Records, Inc. operated independently of the Company, but has since been dissolved and the trademark “Off the Hook Records” has been transferred to the Company at no cost.

~~NOTE B~~On -December ~~Preparation~~30, 2009, we incorporated a wholly owned subsidiary named Vibe Records, Inc. under the laws of ~~Financial~~the ~~Statements~~State of New York, for the purpose of name protection. Since its incorporation, this entity has had no operations.

~~The acquisition~~On ofOctober ~~Vibe~~5, ~~Records~~2011, ~~Inc.~~Off onthe ~~May~~Hook 30Models, ~~2008,~~Inc. by(“Models”) ~~the~~was ~~Company~~incorporated ~~effected a change~~ in ~~control~~New ~~and~~York ~~was accounted for~~ as a ~~”reverse~~wholly ~~acquisition”~~owned ~~whereby~~subsidiary ~~Vibe Records,~~of ~~Inc. was~~ the ~~accounting acquiror for financial statement purposes~~Company. ~~Accordingly,~~Models ~~the~~has ~~historical~~had ~~financial~~no ~~statements~~significant ofoperations ~~the Company~~to ~~are those of Vibe Records, Inc~~date. ~~from its inception.~~

~~The Company~~NOTE ~~follows~~B ~~the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has adopted a year~~-~~end~~ ofGoing ~~September~~Concern ~~30.~~Uncertainty

~~The preparation~~As of ~~financial~~September ~~statements~~30, in2010, ~~conformity~~the ~~with~~Company ~~accounting~~has ~~principles generally~~no ~~accepted~~revenue inproducing ~~the~~activities, ~~United~~limited ~~States~~cash ofon ~~America~~hand, ~~requires~~and ~~management~~significant debt related to ~~make estimates~~the ~~and~~financing ~~assumptions~~of ~~that~~its ~~affect~~operations. The ~~the~~Company ~~reported~~has ~~amounts~~incurred a net loss of ~~assets~~$1,263,428 and ~~liabilities~~ ~~and~~$1,598,300 ~~disclosure~~for ofthe ~~contingent~~years ~~assets~~ended September 30, 2010 and ~~liabilities~~2009, respectively, and $7,312,903 for the period March 8, 2004 (inception) through September 30, 2010 while it has remained in the “development stage.” As a result, at September 30, 2010, the ~~date~~Company has a Stockholders’ Deficit of $4,122,276. Because of these factors, the ~~financial~~Company’s ~~statements~~auditor ~~and~~has issued an audit report on the ~~reported~~Company’s ~~amounts~~financial ofstatements ~~revenues~~which ~~and~~includes ~~expenses~~a paragraph ~~during~~describing ~~the~~our ~~reporting~~going ~~period~~concern status. ~~Actual~~This ~~results~~means, ~~could~~in ~~differ~~the ~~from~~auditor’s ~~those estimates~~opinion, substantial doubt about our ability to continue as a going concern exists at the date of its opinion.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

For segment reporting purposes, the Company operated in only one industry segment during the periods represented in the accompanying financial statements and makes all operating decisions and allocates resources based on the best benefit to the Company as a whole.

NOTE C - Going Concern Uncertainty

As of September 30, 2009, the Company has no revenue producing activities, limited cash on hand, and significant debt related to the financing of its operations. Because of these factors, the Company’s auditors have issued an audit opinion on the Company’s financial statements which includes a statement describing our going concern status. This means, in the auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.

F-7

VIBE RECORDS, INC. NEVADA

(a development stage company)

Notes to Financial Statements - Continued

September 30, 2009 and 2008

NOTE C - Going Concern Uncertainty - Continued

The Company operates as an independent record label and a highly selective Artist and Repertoire company that intends to distribute nationally recordings made by its artists as well as operate state-of-the-art recording and production facilities.

F-7

After selecting an artist, the Company intends to nurture each artist’s career through teaching, encouraging and supervising the artist, while simultaneously searching for and selecting suitable material, accompanists, side-men, producers and other professionals to enhance that individual’s chances for success. The Company intends to attempt to secure exclusive standard industry recording contracts for between three (3) to five (5) new artists per year. The ultimate success of this business plan will extensively rely upon the past history and experience of the Company’s President and Chief Executive Officer in the music industry.

The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis. Further, the Company faces considerable risk in ~~it’s~~ its business plan. If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and additional funds loaned by management and/or significant stockholders.

The Company remains dependent upon additional external sources of financing; including being dependent upon its management and/or significant stockholders to provide sufficient working capital in excess of the Company’s initial capitalization to preserve the integrity of the corporate entity.

The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding.

In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities. Without necessary cash flow, the Company may become dormant ~~during the next twelve months, or~~ until such time as necessary funds ~~could~~ can be raised in the equity securities market.

While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.

NOTE D C - Summary of Significant Accounting Policies

1. ~~Cash~~Preparation ~~and~~of ~~cash~~Financial ~~equivalents~~Statements

~~For Statement~~a. ofBasis ~~Cash Flows purposes, the Company considers all cash on hand and in banks, certificates~~ of ~~deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.~~Accounting

~~Cash overdraft~~The ~~positions~~Company ~~may~~follows ~~occur~~the ~~from~~accrual ~~time~~basis toof ~~time~~accounting ~~due~~in toaccordance ~~the~~with ~~timing~~accounting ofprinciples ~~making~~generally ~~bank deposits~~accepted ~~and~~in ~~releasing~~the ~~checks,~~United inStates ~~accordance~~of ~~with~~America ~~the~~and ~~Company's~~has ~~cash~~adopted ~~management policies~~a year-end of September 30.

Principles of Consolidation

The accompanying consolidated financial statements include the financial statements of Vibe Records, Inc. Nevada and its 100% owned subsidiary, Vibe Records, Inc. (a New York State corporation). All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates

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

F-8

~~VIBE RECORDS, INC~~2. ~~NEVADA~~Cash and Cash Equivalents

~~(a development~~For ~~stage~~Statement ~~company)~~of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

~~Notes to~~3. ~~Financial~~Property ~~Statements~~and ~~- Continued~~Equipment

September 30, 2009 and 2008

NOTE D - Summary of Significant Accounting Policies - Continued

2. Property and Equipment

Property and equipment were recorded at cost. Depreciation was calculated on a straight-line basis over the estimated useful lives of five years. Maintenance and repairs are charged to operations as incurred.

The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. The amount of impairment loss recognized is the amount by which the carrying amounts of the assets exceed the estimated fair values.

34. ~~Research~~Stock-based ~~and Development~~Compensation

~~Research~~ The Company does not have a formal stock option plan. However, we offered to some of our employees and ~~development~~consultants ~~costs~~stock-based ~~are~~compensation ~~expensed~~in asthe ~~incurred~~form of shares of our common stock. We account for these issuances of common stock to employees and consultants in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). Under this method, stock compensation expense includes: (1) compensation cost for all share-based payments granted based on the grant date fair value estimated in accordance with ASC 718 and amortized on a straight-line basis over the share-based payments’ remaining vesting period.

4References to the issuances of restricted stock refer to stock of a public company issued in private placement transactions to individuals who are eligible to sell all or some of their shares of restricted Common Stock pursuant to Rule 144, promulgated under the Securities Act of 1933 (“Rule 144”), subject to certain limitations. ~~Advertising~~In ~~costs~~general, pursuant to Rule 144, a stockholder who is not an affiliate and has satisfied a six-month holding period may sell all of his restricted stock without restriction, provided that the Company has current information publicly available. Rule 144 also permits, under certain circumstances, the sale of restricted stock, without any limitations, by a non-affiliate of the Company that has satisfied a one-year holding period.

~~Advertising costs are expensed in the period incurred~~5. ~~The~~ ~~Company~~Fair ~~had~~Value ~~no advertising~~of ~~expenses~~Financial ~~for the period ended September 30, 2009 and 2008.~~Instruments

5.The ~~Income~~carrying ~~taxes~~amount of cash, accounts payable and accrued liabilities and notes and advances payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.

The Company files income tax returns in the United States of America and various states, as appropriate and applicable. As a result of the Company’s bankruptcy action, the Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to September 30, 2006. The Company does not anticipate any examinations of returns filed for periods ending after September 30, 2006.

The Company uses the asset and liability method of accounting for income taxes. At September 30, 2009 and 2008, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.

The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification. The Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination by a respective taxing authority. As a result of the implementation of Codification’s Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits.

6. Income (Loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

F-9

VIBE RECORDS, INC. NEVADA

(a development stage company)

Notes to Financial Statements - Continued

September 30, 2009 and 2008

NOTE D - Summary of Significant Accounting Policies - Continued

6. Income (Loss) per share - continued

As of September 30, 2009 and 2008, respectively, the Company does not have any outstanding items which could be deemed to be dilutive.

7. New and Pending Accounting Pronouncements

The Company is of the opinion that any and all pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company's financial position or results of operations.

NOTE E - Fair Value of Financial Instruments

The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.

Interest rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates. The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.

Financial risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates. The Company does not use derivative instruments to moderate its exposure to financial risk, if any.

~~NOTE F~~6. - Concentrations of Credit Risk

Financial instruments, which potentially subject us to a concentration of risk, include cash and accounts receivable. All of our potential customers are based in the United States at this time and we are not subject to exchange risk for accounts receivable.

The Company maintains its cash in domestic financial institutions subject to insurance coverage issued by the Federal Deposit Insurance Corporation (FDIC). Under FDIC rules, the Company is entitled to aggregate coverage as defined by Federal regulation per account type per separate legal entity per financial institution. During the years ended September 30, 2009 and 2008, and subsequent thereto, respectively, the Company, from timeF-to-time, had deposits in a financial institution with credit risk exposures in excess of statutory FDIC coverage. The Company has incurred no losses as a result of any unsecured credit risk exposures.9

~~NOTE G~~The -Company ~~Property~~maintains ~~and~~its ~~Equipment~~cash in domestic financial institutions subject to insurance coverage issued by the Federal Deposit Insurance Corporation (FDIC). Under FDIC rules, the Company is entitled to aggregate coverage as defined by Federal regulation per account type per separate legal entity per financial institution. The Company has incurred no losses as a result of any unsecured credit risk exposures.

~~Property and~~7. ~~equipment~~Income ~~consists of the following at September 30, 2009 and 2008, respectively:~~Taxes

	September 30,			September 30,			Estimated
	2009			2008			useful life
Recording and computer equipment	$	54,523		$	20,523		5 years
Furniture and fixtures		12,161			8,268		5 years
Automobile		30,253			30,253		5 years
		96,937			59,044
Less: Accumulated Depreciation		(43,845	)		(27,624	)
Net property and equipment	$	53,092		$	31,420

The Company files income tax returns in the United States of America and various states, as appropriate and applicable. The Company is subject to examinations by taxing authorities for the years ended after September 30, 2007.

The Company uses the asset and liability method of accounting for income taxes. At September 30, 2010 and 2009, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.

8.	Income (Loss) per share

Common stock equivalents represent the dilutive effect of the assumed exercise of stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

For the years ended September 30, 2010 and 2009, diluted common shares excluded 18,426,459 shares and 1,508,940 shares, respectively, from the assumed conversion of outstanding convertible debt (See Note G) as the effect of their inclusion is anti-dilutive.

9.	Segment Information

F-10

~~VIBE RECORDS, INC~~10. ~~NEVADA~~Reclassifications

~~(a development~~Certain ~~stage~~reclassifications ~~company)~~to prior year financial statements have been made to conform to current year presentation. These reclassifications had no effect on net loss for the periods presented.

~~Notes to~~11. ~~Financial~~New ~~Statements~~and -Pending ~~Continued~~Accounting Pronouncements

~~September 30,~~The ~~2009~~Company is of the opinion that any and ~~2008~~all pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company's financial position or results of operations.

NOTE G D - Property and Equipment ~~- Continued~~

~~Depreciation expense~~Property ~~for~~and ~~each~~equipment consists of the ~~years~~following ~~ended~~at September 30, ~~2009~~2010 and ~~2008 was approximately $16~~2009,~~281~~ ~~and $11,730~~ respectively.:

NOTE H - Master Recordings

	September 30, 2010			September 30, 2009			Estimated useful life
Recording and computer equipment	$	54,523		$	54,523		5 years
Furniture and fixtures		12,161			12,161		5 years
Automobile		30,253			30,253		5 years
		96,937			96,937
Less: Accumulated depreciation		(61,636	)		(43,845	)
Net property and equipment	$	35,301		$	53,092

~~In previous~~Depreciation ~~years,~~expense ~~the~~for ~~Company acquired~~ the ~~rights~~years toended ~~use~~September ~~the Vibe Records~~30, ~~Inc. trademark~~2010 ~~license, master recordings~~ and ~~its~~2009 ~~name. The~~was ~~Company purchased these rights by issuing stock effect the initial capitalization of the privately-owned company~~$17,791 ~~Vibe~~and ~~Records~~$16,221, ~~Inc~~respectively. ~~Management has provided a 100% valuation allowance in regard to this asset.~~

NOTE I E - ~~Loans~~Master ~~Payable~~Recordings ~~to a Bank and Individuals~~Library

~~The Company~~In ~~maintains~~previous ayears, ~~working~~the ~~capital~~Company ~~line~~acquired ofthe ~~credit~~rights ~~for~~to ~~$600,000~~use ~~with~~the ~~Wachovia Bank~~Vibe Records, Inc. ~~Interest~~ istrademark ~~paid~~license, ~~monthly~~master atrecordings ~~the~~and ~~bank’s~~its ~~prime rate~~name. The ~~note~~Company ispurchased ~~100%~~these ~~secured~~rights by ~~marketable~~issuing ~~securities~~stock to effect the initial capitalization of ~~a shareholder~~the privately-owned company, Vibe Records, Inc. The ~~balance~~Consolidated ~~outstanding~~Statement atof Operations and Comprehensive Loss for the period March 8, 2004 (date of inception) through September 30, ~~2009~~2010 ~~and~~reflects ~~2008 were~~a ~~approximately~~management ~~$599,847~~provision ~~and~~for an impairment loss on the write-down of the “Master Recordings Library” of $~~599~~624,~~921~~000, ~~respectively~~representing a 100% valuation allowance in regard to these assets.

~~The Company~~NOTE ~~has~~F a– ~~$20,000~~Notes ~~bank overdraft line of credit with Wachovia Bank. Interest is payable monthly at approximately 11.24%. The balance outstanding at September 30, 2009~~ and ~~2008~~Loans ~~was approximately~~Payable ~~$17,929~~to ~~and $20,105, respectively. This note is unsecured.~~Bank

The Company has a $30,253 term note payable secured by an automobile. Principal and interest is payable monthly in installments of approximately $694 and the note matures in March 2011. The balance outstanding at September 30, 2009 and 2008, respectively was approximately $12,605 and $18,263.

Notes and loans payable to bank consist of:
	September 30,
	2010		2009

Wachovia Bank Division of Wells Fargo Bank “working capital” line of credit, under a “renewed” Promissory Note dated December 17, 2009 providing for advances up to $750,000 ($600,000 plus $150,000 under a Line of Credit (“Line”) pursuant to September 22, 2008 predecessor agreements to Robert S. McCoy Jr. (Company Director and 8% Stockholder) for which the Company is jointly obligated as borrower pursuant to a Security Agreement also dated December 17, 2009 in which deposit accounts and security investments of the Robert S. McCoy, Jr. Living Trust (“the Trust”) serve as collateral for the bank, as well as an Unconditional Guaranty on that date by the Trust. The Promissory Note currently bears interest at LIBOR plus 4.7% (plus an additional 3% in the event of default); LIBOR plus 2.9% previously (plus 3% in the event of default). The Company’s allocated share of principal due under the Line requires quarterly installments of $37,500 commencing on March 27, 2010.	$	487,500	$	599,847

Wells Fargo Bank $20,000 overdraft line of credit, interest at variable rate (25.99% and 11.24%, respectively), payable monthly and secured by the personal guaranty of Robert McCoy		15,632		17,929

Wachovia Bank Division of Wells Fargo Bank automobile loan, principal and interest due in monthly installments of $694 to March 2011, secured by the vehicle		6,647		12,605

Total	$	509,779	$	630,381

For the years ended September 30, 2010 and 2009, interest expense incurred on notes and loans payable to bank was $25,216 and $28,464, respectively. At September 30, 2010 and 2009, accrued interest payable on notes and loans payable to bank was $ -0- and $ -0-, respectively.

The Company has notes payable to various individuals (3 at September 30, 2009 and 7 at September 30, 2008) aggregating approximately $100,000 and $210,000 at September 30, 2009 and 2008, respectively. These notes are convertible into shares of the Company’s common stock at an agreed-upon price of $1.25 per share for a for a period of thirty (30) business days following effectiveness of any registration statement filed by the Company. In addition, the notes were collateralized by a Pledge Agreement issued by the Company’s President for shares of Company common stock owned by the Company’s President. On September 30, 2009, 7 separate noteholders agreed to accept stock owned by the Company’s President in satisfaction of an aggregate $210,000 in debt and approximately $131,793 in accrued interest in settlement of the debt outstanding. The remaining 3 notes, which originated during Fiscal 2009, bear interest at 10% per annum and mature in one year.

NOTE J - Notes and Advances Payable to Officers and Stockholders

The Company has been advanced various sums by various corporate officers and other Company stockholders, including members of the Company’s Board of Directors aggregating approximately $1,686,077 and $1,562,378. These notes are secured in part by 30% of the issued and outstanding stock of the Company owned by the Company’s President. They bear interest at 10% and are due upon demand.

(Remainder of this page left blank intentionally)

F-11

~~VIBE RECORDS,~~NOTE ~~INC.~~G ~~NEVADA~~– Unsecured Convertible Promissory and Other Notes Payable

(a development stage company)

Convertible promissory and other notes payable consist of:

Unsecured subordinated convertible promissory notes issued by Holdings in 2003 and 2004 to 1 and 3 parties, respectively, interest at 10% (default interest at 18%), past due and in default, convertible into shares of common stock at a conversion price of $1.25 per share (see Notes N and O)	$	25,000	$	80,000

Adjusted unsecured convertible promissory note dated May 30, 2008 due Donald Shaw, as an investor (which were assigned by James Price, the pre-merger entity’s former Chief Executive Officer, pursuant to a Release Agreement dated February 1, 2010), interest at 5%, due August 28, 2008, convertible into shares of common stock at a conversion price of $0.25 per share, past due and in default. The original convertible promissory note and related accrued interest arose out of Treasury Stock acquired coincident to the “reverse merger” transaction.		361,235		-

Promissory note due Donald Shaw, as an investor (which was assigned by James Price, the pre-merger entity’s former Chief Executive Officer), interest at 10%, due on demand		25,000		-

Two unsecured convertible Promissory Notes due Asher Enterprises, Inc. as an investor, issued for proceeds obtained by the Company in a private placement offering, providing for interest at 8% (default rate of 22%), dated March 1, 2010 in the original amount of $50,000 and due December 1, 2010 (for $44,000 face value after conversion of $6,000 to common stock in September 2010 – See Note K) and now past due and in default, and dated July 16, 2010 and due April 20, 2011 (for $30,000 face value), convertible into shares of common stock at a Variable Conversion Price equal to Market Price, as defined, multiplied by 55% (for $44,000 face value) and 45% (for $30,000 face value), less unamortized debt discounts of $35,542. Both Promissory Notes provide the holder with price protection as to the conversion ratio in the event of transactions in which there is a dilutive effect caused by merger, consolidation or asset distribution, or change in control of the Company.		38,458		-

Two unsecured convertible promissory notes due Paul Ferandell as an investor, issued for proceeds obtained by the Company in a private placement offering, providing for interest at 10%, dated October 28, 2009 and due April 30, 2010 (for $40,000 face value) and dated December 1, 2009 and due May 1, 2010 (for $30,000 face value), convertible into shares of common stock at conversion prices of $0.07 per share (for $40,000 face value) and $0.03 per share (for $30,000 face value) and past due and in default. The October 2009 promissory note provides the holder with price protection as to the conversion ratio in the event of transactions involving combinations, reverse mergers or otherwise.		70,000		-

Two unsecured convertible Promissory Notes due two other investors, issued for proceeds obtained by the Company in a private placement offering, providing for interest at 10% payable in kind, both dated December 20, 2009 and due June 20, 2010, convertible into shares of common stock at a conversion price of $0.03 per share, now past due and in default. Both promissory notes provide the holder with price protection as to the conversion ratio in the event of transactions involving issue, sale or distribution of shares.		30,000		-

Convertible promissory note due Sean Kiernan as an investor, dated July 15, 2010 and due January 15, 2011, issued for proceeds obtained by the Company in a private placement offering, providing for interest at 10%, convertible into shares of common stock at a conversion price of $0.03 per share, now past due and in default, less unamortized debt discounts of $8,676. The promissory note provides the holder with price protection as to the conversion ratio in the event of transactions involving issue, sale or distribution of shares.		6,324		-

Unsecured convertible promissory notes due two investors derived from a promissory note assigned by the Company’s then bookkeeping service on August 15, 2010. The original unsecured note dated August 1, 2009 and due February 1, 2010 provided for interest at 10%, convertible into shares of common stock at a conversion price of $0.20 per share including accrued interest, now past due and in default. An aggregate of $25,000 of face value was converted by the assignees on September 21, 2010 (See Note K).		75,000		-

Unsecured promissory notes due investors (3 and 3, respectively), issued for proceeds obtained principally in August 2009 by the Company in private placement offerings, providing for interest at 10%, now past due and in default		100,000		100,000

Total	$	731,017	$	180,000

Notes to Financial Statements - Continued

September 30, 2009 and 2008

NOTE K - Income Taxes

The components of income tax (benefit) expense for each of the years ended September 30, 2009 and 2008, respectively, are as follows:

	Year ended		Year ended
	September 30,		September 30,
	2009		2008
Federal:
Current	$	-	$	-
Deferred		-		-
		-		-
State:
Current		-		-
Deferred		-		-
		-		-
Total	$	-	$	-

The Company has a cumulative net operating loss carryforward of approximately $4,200,000 as of September 30, 2009 to offset future taxable income. Subject to current regulations, components of this cumulative carryforward will begin to expire at the end of each fiscal year starting in 2023. The amount and availability of the net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.

The Company's income tax expense (benefit) for the years ended September 30, 2009 and 2008, respectively, differed from the statutory federal rate of 34 percent as follows:

	Year ended			Year ended
	September 30,			September 30,
	2009			2008
Statutory rate applied to loss before income taxes	$	(436,000	)	$	(221,000	)
Increase (decrease) in income taxes resulting from:
State income taxes		-			-
Other, including reserve for deferred tax asset		436,000			221,000
Income tax expense	$	-		$	-

Temporary differences due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, generally including such items as organizational costs, accumulated depreciation and amortization, allowance for doubtful accounts, organizational and start-up costs and vacation accruals. These differences give rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of September 30, 2009 and 2008, respectively:

	September 30,			September 30,
	2009			2008
Deferred tax assets
Net operating loss carryforwards	$	1,428,000		$	992,000
Less valuation allowance		(1,428,000	)		(992,000	)
Net Deferred Tax Asset	$	-		$	-

During the years ended September 30, 2009 and 2008, respectively, the valuation allowance for the deferred tax asset increased by approximately $436,000 and $221,000.

F-12

~~VIBE RECORDS~~On December 31, ~~INC~~2009 and March 31, 2010, two Holdings notes payable in the amounts of $25,000 and $30,000, respectively, became outstanding six years from their maturity dates without any action brought by either of the note holders. Accordingly, ~~NEVADA~~based on opinion of counsel that the statute of limitations should bar any payment on the notes, the Company recognized gains totaling $91,359 from the write-off of these notes ($55,000 total) and related accrued interest ($36,359 total) in the statement of operations for the year ended September 30, 2010.

Five of the convertible notes issued in the year ended September 30, 2010 (with a total face value of $125,000) contain a provision that the conversion price is to be reduced in the event that we are deemed to have sold or issued any shares of common stock for a consideration price per share less than the conversion price. Accordingly, in accordance with EITF Issue No. 07-05, “Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock”, we charged the option value of these convertible notes at the respective dates of issuance (totaling $347,184) to debt discounts ($113,409), which are expensed over the terms of the respective ~~development~~notes ~~stage~~to ~~company~~increase the carrying values to face values, and to “income (loss) from revaluation of derivative liability for convertible notes” ($233,775) and credited $347,184 to “derivative liability for convertible notes payable”. Each quarter, the option value of these convertible notes is remeasured and changes are reflected within the “Statement of Operations” as “income (loss) from revaluation of derivative liability for convertible notes”. Option values were calculated using the Black-Scholes option pricing model and the following assumptions: Stock prices ranging from $0.024 to $0.16 per share, strike prices ranging from $0.0108 to $0.044 per share; risk-free interest rates of 0.27%, minimum terms of one year, and expected volatility ranging from 317% to 346%.

~~Notes to~~Below ~~Financial~~is ~~Statements~~a -reconciliation ~~Continued~~of the change in option values from December 20, 2009 to September 30, 2010:

September 30, 2009 and 2008

	Common Shares Equivalent			Option Value
Issuances of unsecured convertible notes with EITF 07-05 provision:
December 20, 2009		1,000,000		$	152,900
March 1, 2010		1,136,364			83,637
July 15, 2010		500,000			47,700
July 16, 2010		701,754			62,947
		3,338,118			347,184
Conversion of $6,000 face value of Asher Enterprises Inc. unsecured $50,000 convertible note into 540,541 shares of common stock on September 15, 2010 (See Note K concerning charge to operations of $6,973 for excess of fair value of common stock recorded on beneficial conversion of this debt)		(136,364	)		(10,036	)
Revaluation credited to operations		4,409,357			(167,881	)
Balance, September 30, 2010		7,611,111		$	169,267

~~NOTE L~~Two other convertible notes issued in the year ended September 30, 2010 (with a total face value of $70,000) had conversion prices less than the market price at the respective dates of issuance (as was the case for the above convertible notes with EITF 07-05 ~~Preferred~~provisions). We ~~Stock~~recognized the intrinsic value of the embedded beneficial conversion features (limited to the face value less other discounts) in these notes totaling $55,000 as debt discounts (which were expensed as “accretion” over the terms of the respective notes to increase the carrying value to the face value of the notes) and added $55,000 to additional paid-in capital.

For the year ended September 30, 2010, accretion of debt discounts expense (relating to beneficial conversion features) charged in the “Statement of Operations” was $130,370, which includes the $55,000 described in the preceding paragraph.

For the year ended September 30, 2010 and 2009, interest expense incurred on unsecured convertible promissory and other notes payable was $54,243 (including original issue discount of $18,820) and $9,138, respectively. At September 30, 2010 and 2009, accrued interest payable on unsecured convertible promissory and other notes payable was $50,171 and $51,108, respectively.

F-13

NOTE H – Notes and Advances Payable to Related Parties

Notes and advances payable to related parties consist of :
	September 30,
	2010		2009

Due to Robert McCoy (Director and 8% Stockholder of the Company), informally agreed interest at 10% (including accruing interest at 10% on unpaid accrued interest), due on demand, secured in part by common stock owned by Timothy Olphie (Chief Executive Officer, Director and 26% Stockholder of the Company) whom is the designated escrow agent for shares	$	1,189,118	$	907,703

Due to Michael Tyler (Director and 5% Stockholder of the Company), interest at 10%, due on demand, secured in part by common stock owned by Timothy Olphie whom is the designated escrow agent for the shares		356,200		338,700

Due to James Price (former Chief Executive Officer of the pre-merger entity), interest at 5%, due August 28, 2008 (assigned to Donald Shaw as an investor pursuant to a Release Agreement dated February 1, 2010 - See Note G)		-		361,235

Due to James Price (former Chief Executive Officer of the pre-merger entity), interest at 10%, due on demand (assigned to Donald Shaw as an investor pursuant to a Release Agreement dated February 1, 2010 - See Note G)		-		25,000

Due to Timothy Olphie (Chief Executive Officer, Director and 26% stockholder of the Company), non-interest bearing and due on demand)		63,285		38,939

Due to Profit Planners Inc. (former external financial advisor/contract internal accounting services provider of the Company until March 31 2010), non-interest bearing and due on demand – arising out of performance of those services (See Note K)		-		15,000
Total	$	1,608,603	$	1,686,577

For the year ended September 30, 2010 and 2009, interest expense incurred on notes and advances payable to related parties was $228,046 and $201,309, respectively. At September 30, 2010 and 2009, accrued interest payable relating to notes and advances payable to related parties was $945,988 and $717,943, respectively.

On December 31, 2008 and March 31, 2009, Mr. McCoy agreed to the Company assigning receivables from an affiliated entity Off the Hook Records, Inc. totaling $207,199 solely to him for advances made to this affiliate by the Company. Of the $207,199 total, $8,066 arose in year ended September 30, 2005, $47,366 arose in year ended September 30, 2006, $42,911 arose in year ended September 30, 2007, $84,366 arose in year ended September 30, 2008 and $24,490 arose in the six months ended March 31, 2009. As a result of this assignment, the Company’s loan payable to Mr. McCoy was reduced by $207,199 during the year ended September 30, 2009 and responsibility for collection of those receivables was transferred from the Company to him personally. Off the Hook Records, Inc. was jointly owned by Mr. McCoy and Mr.Olphie.

F-14

NOTE I – Income Taxes

The components of income tax (benefit) expense for each of the years ended September 30, 2010 and 2009, respectively, are as follows:

	Year ended		Year ended
	September 30,		September 30,
	2010		2009
Federal:
Current	$	-	$	-
Deferred		-		-
Total Federal		-		-
State:
Current		-		-
Deferred		-		-
Total State		-		-
Total	$	-	$	-

The Company files its income tax returns on a calendar year basis and has a cumulative net operating loss carry forward of approximately $4,000,000 as of September 30, 2010 to offset future taxable income. Subject to current regulations, components of this cumulative carryforward will begin to expire at the end of each fiscal year starting in 2024. The amount and availability of the net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.

The Company's income tax expense (benefit) for the years ended September 30, 2010 and 2009, respectively, differed from the statutory federal rate of 34 percent as follows:

	Year Ended September 30, 2010			Year Ended September 30, 2009
Statutory rate applied to loss before income taxes	$	(430,000	)	$	(543,000	)
Increase (decrease) in income taxes resulting from:
Nondeductible stock-based compensation		204,000			284,000
Nondeductible accretion of debt discounts expense		44,000			-
Nondeductible loss from revaluation of derivative liability for convertible notes		19,000			-
Other, including reserve for deferred tax asset		163,000			259,000
Income tax expense	$	-		$	-

Temporary differences due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, generally include such items as organizational costs, accumulated depreciation and amortization, allowance for doubtful accounts, organizational and start-up costs and vacation accruals. These differences give rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of September 30, 2010 and 2009, respectively:

	September 30, 2010			September 30, 2009
Deferred tax assets
Net operating carryforwards	$	1,360,000		$	1,197,000
Less valuation allowance		(1,360,000	)		(1,197,000	)
Net Deferred Tax Asset	$	-		$	-

F-15

During the years ended September 30, 2010 and 2009, respectively, the valuation allowance for the deferred tax asset increased by approximately $163,000 and $259,000.

NOTE J - Preferred Stock

On January 19, 2009, our Board of Directors approved the issuance of up to 50,000,000 shares of $0.001 par value Preferred Stock and authorized the issuance of two separate series.

On or about January 23, 2009, we filed a Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and a Certificate of Designation, Preferences and Rights of Series B Convertible Preferred Stock (“the Series B Preferred Stock”) (together the “Certificates of Designation”) with the Secretary of State of Nevada. Pursuant to the Certificates of Designation, we authorized 200,000 shares of our preferred stock to be designated the Series A Preferred Stock and 200,000 shares of our preferred stock to be designated the Series B Preferred Stock.

Series A Preferred Stock

The holders of the Series A Preferred Stock may, in their sole discretion, convert each share of Series A Preferred Stock into 4,000 shares of our common stock at any time following the date of issuance of the Series A Preferred Stock. Adjustments in the conversion ratio will be made in the event of a stock dividend, stock split, reclassification, reorganization, consolidation or merger in a manner which will provide the preferred holders, upon full conversion into common stock, with the same percentage ownership of the Company that existed immediately prior to such action. The Series A Preferred Stock has the same voting rights as our common stock, on an as-converted basis, with the Series A preferred holders having one vote for each share of common stock into which their Series A Preferred Stock is convertible. The holders of the Series A preferred stock have a liquidation preference over our common stock of up to ~~one hundred dollars (~~$100) per Series A share held. The Company will not pay a dividend on the shares of Series A Preferred Stock.

As of ~~September~~ December 30, ~~2009~~2011, there ~~are~~were no shares of the Series A Preferred Stock issued and outstanding.

Series B Preferred Stock

The holders of the Series B Preferred Stock may, in their discretion, convert each share of Series B Preferred stock into 4,000 shares of our common stock at any time following the date of issuance of the Series B Preferred Stock. Adjustments in the conversion ratio will be made in the event of a stock dividend, stock split, reclassification, reorganization, consolidation or merger in a manner which will provide the preferred holders, upon full conversion into common stock, with the same percentage ownership of the Company that existed immediately prior to such action. The Series B Preferred Stock does not have voting rights on matters presented to our common stockholders, for a vote. The Series B Preferred Stock has a liquidation preference over our common stock of up to $100 per Series B share held and has an equal liquidation right with any shares of our Series A Preferred Stock then outstanding. We will not pay a dividend on the shares of Series B Preferred Stock.

As of ~~September~~ December 30, ~~2009~~2011, there were no shares of the Series B Preferred Stock issued and outstanding.

NOTE M K - Common Stock Transactions

OnEffective ~~May~~ September 30, ~~2008~~2007, in ~~connection~~anticipation ~~with~~of ~~the~~a ~~Vibe-Benaquista~~“reverse merger” ~~100%~~transaction ofwith ~~the~~a ~~outstanding shares~~publicly traded entity, two directors of Vibe Records, Inc. ~~were~~agreed ~~exchanged~~to ~~for~~exchange 13nonconvertible debt totaling $1,~~489~~600,~~201~~000 (Robert McCoy - $1,000,000; Michael Tyler - $600,000) into a total of 1,280,000 shares of ~~Benaquista~~ common stock (Robert McCoy – 800,000 shares; Michael Tyler – 480,000 shares).

~~On May 30, 2008, the Company purchased 396,940 of its common stock from James Price for a price of $725,000.~~F-16

On ~~February~~ 27May 30, ~~2009~~2008, ~~the~~in ~~Company~~connection ~~issued~~with 4the Vibe-Benaquista merger,~~000,000~~ ~~shares~~100% toof anthe ~~individual~~outstanding ~~in settlement~~shares of ~~$40~~Vibe Records,~~000~~ ~~out~~Inc. ofwere aexchanged ~~$45~~for 13,~~000~~489,201 ~~note~~shares ~~payable. As~~ of ~~April~~Benaquista 1common stock, ~~2009,~~ increasing the ~~Company~~ issued anand ~~additional~~outstanding ~~1,000,000~~ shares of ~~its~~Benaquista common stock ~~to settle~~from ~~the remaining $5~~1,~~000~~075,066 ofshares ~~the~~to ~~$45~~14,~~000~~564,267 ~~note payable~~shares.

InAlso ~~June 2009~~on May 30, 2008, the Company ~~issued~~agreed ~~605~~to purchase 396,~~000~~910 shares of its common stock tofrom ~~its~~James ~~officer~~Price ~~and directors. The~~for ~~Company~~a ~~charged~~price ~~approximately~~of $~~169~~725,~~400~~000. These toshares ~~operations related~~were not delivered to ~~this~~the ~~issuance~~Company.

~~F-13~~On September 8, 2008, the Company issued a total of 730,000 shares of common stock, 330,000 shares to its three directors, 250,000 shares to three consultants and 150,000 shares to an attorney. The Company reported the $109,500 total fair value of the common stock as Officers and Directors Compensation ($49,500) and Professional and Consulting Fees ($60,000).

~~VIBE RECORDS~~In January and February 2009, ~~INC~~the Company issued 4,000,000 shares to nine assignees of a note payable to Profit Planners Inc. ~~NEVADA~~(former external financial advisor/contract internal accounting services provider of the Company until March 31, 2010), non-interest bearing and due on demand – arising out of performance of those services in settlement of $40,000 out of a $45,000 note payable. In June and July 2009, the Company issued an additional 1,000,000 shares of its common stock to two assignees to settle the remaining $5,000 of the $45,000 note payable. The Company reported the $580,000 excess of the fair value, based on the publicly traded stock price) of the common stock issued ($625,000 total at the respective dates of issuance) over the amount of debt settled ($45,000) as”Professional and Consulting Fees.”

(In June 2009, the Company issued a ~~development~~ ~~stage~~total ~~company~~of 645,000 shares of common stock, 295,000 shares to its three directors and 350,000 shares to four consultants for services, which included 120,000 shares to Profit Planners, Inc. and 100,000 shares (fair value of $40,000) to the former consultant who brought an action against the Company on August 25, 2009 (see Note L). The Company reported the $230,750 total fair value of the common stock at the respective dates of issuance as “Officers and Directors Compensation” ($103,250) and “Professional and Consulting Fees“($127,500, including $42,000 to Profit Planners, Inc.).

~~Notes~~ In June 2009, the Company cancelled 135,000 shares of common stock which was returned by the entity that provided bookkeeping services to ~~Financial~~the ~~Statements~~Company. The -$60,750 ~~Continued~~fair value was reported as a reduction of Professional and Consulting Fees (based on the publicly traded share price of Company common stock).

~~September 30~~On July 21, 2009, the Company issued a total of 430,000 shares of common stock, 200,000 shares to an attorney and ~~2008~~a total of 230,000 shares to four consultants for services. The Company reported the $86,000 total fair value of the common stock as Professional and Consulting Fees (based on the publicly traded share price of Company common stock).

~~NOTE~~ On November 23, 2009, the Company issued a total of 860,000 shares of common stock, 310,000 shares to the Company Chief Executive Officer (See Note M -under ~~Common~~Employment ~~Stock~~Agreement”), ~~Transactions~~100,000 -shares ~~Continued~~to an attorney, and 450,000 shares to two consultants for services of which 300,000 shares were issued to Profit Planners, Inc. The Company reported the $172,000 total fair value of the common stock (based on the publicly traded share price) as Officers and Directors Compensation ($62,000) and Professional and Consulting Fees ($110,000, including $60,000 to Profit Planners).

InOn ~~June 2009~~January 12, 2010, the Company issued ~~460~~571,~~000~~430 shares of ~~its~~ common stock to ~~various consultants~~Paul Ferandell in settlement of a $15,000 note payable. The Company ~~charged~~reported ~~approximately~~the $~~141~~19,~~150~~286 toexcess ~~operations related~~of tothe ~~these~~fair ~~issuances~~value of the common stock issued ($34,286) over the amount of debt settled ($15,000) within “Other Expenses” (based on the publicly traded share price of Company common stock).

InOn ~~June 2009~~February 10, 2010, the Company ~~issued~~cancelled ~~150~~a total of 1,200,000 shares of ~~its~~ common stock ~~for~~which ~~legal services~~were returned by three assignees of Profit Planners, Inc. The ~~Company~~$73,800 ~~charged~~fair ~~approximately~~value ~~$42,000~~was toreported ~~operations related~~as toa ~~this~~reduction ~~issuance~~of Professional and Consulting Fees.

~~In July 2009, the Company issued 90,000 shares of its common stock to its officer and directors. The Company charged approximately $27,000 to operations related to this issuance.~~F-17

InOn ~~July 2009~~February 16, 2010, the Company issued ~~150~~2,~~000~~027,500 shares of ~~its~~ common stock to ~~various consultants~~Profit Planners, Inc. as additional compensation for services provided to the Company by it. The Company ~~charged~~reported ~~approximately~~the $45121,~~000~~650 tofair ~~operations related~~value toof ~~these~~the ~~issuances~~common stock as Professional and Consulting Fees (based on the publicly traded share price of Company common stock).

InOn July ~~2009~~ 8, 2010, the Company issued ~~200~~1,000,000 shares of ~~its~~ common stock ~~for~~to ~~legal~~ an entity associated with an entity that formerly provided bookkeeping services to the Company. The Company ~~charged~~reported ~~approximately~~the $6079,~~000~~500 tofair ~~operations related~~value toof ~~this~~the ~~issuance~~common stock as Professional and Consulting Fees (based on the publicly traded share price of Company common stock).

InOn ~~July 2009~~August 12, 2010, the Company issued 30750,000 shares of ~~its~~ common stock asto ~~compensation~~Dutchess ~~for raising~~Opportunity ~~capital. The~~Fund ~~Company~~II, ~~charged~~LP ~~approximately~~pursuant to the Investment Agreement discussed in Note M and reported the $937,~~000~~500 asfair ~~a reduction~~value of ~~additional~~the ~~paid-in~~common ~~capital~~stock ~~related~~as toFinance ~~this~~Fees ~~issuance~~within Other Expenses (based on the publicly traded share price of Company common stock.).

~~NOTE N~~On -August ~~Legal~~13, ~~Proceedings~~2010, the Company issued a total of 1,806,966 shares of common stock, 1,656,966 shares to the five partners of a firm currently providing bookkeeping services to the Company and 150,000 shares to a consultant for services. The Company reported the $90,348 total fair value of the common stock as Professional and Consulting Fees (based on the publicly traded share price of Company common stock).

AsOn of September 3015, ~~2009~~2010, ~~all~~the ~~previously~~Company ~~disclosed~~issued ~~legal~~540,541 ~~matters~~shares ~~have~~to ~~been~~Asher ~~settled with~~Enterprises, noInc. ~~material~~in ~~impact~~settlement onof $6,000 of a $50,000 convertible promissory note. The Company reported the ~~financial~~$6,973 ~~position~~excess orof ~~cash~~the ~~position~~fair value of the common stock issued ($12,973) over the amount of debt settled ($6,000) within Other Expenses (based on the publicly traded share price of Company common stock.

~~NOTE O~~On -September ~~Commitments~~21, 2010, the Company issued a total of 2,500,000 shares of common stock to two assignees of a note payable to a firm currently providing bookkeeping services to the Company in settlement of $25,000 of the $100,000 note. The Company reported the $37,500 excess of the fair value of the common stock issued ($62,500) over the amount of debt settled ($25,000) as Professional and ~~Contingencies~~Consulting Fees (based on the publicly traded share price of Company common stock).

On September 23, 2010, the Company issued 3,333,333 shares of common stock to the Company’s Chief Executive Officer for services (See Note M under “Employment Agreement”) and reported the $83,333 fair value of the common stock as Officers and Directors Compensation (based on the publicly traded share price of Company common stock).

NOTE L - Legal Proceedings

On August 25, 2009, a former consultant filed an action against the Company. The action, which alleges that the Company failed to pay certain fees and failed to timely deliver certain securities due the former consultant, seeks $900,000 plus attorneys fees and costs. On or about January 15, 2010, the Company filed an answer and counterclaim. While the outcome of this proceeding cannot be predicted at this time, the Company believes that it has meritorious defenses to the action and that the final outcome will not have a material adverse effect on the Company’s financial condition.

On September 2, 2009, the former consultant referred to in the preceding paragraph filed another action naming the Company as a nominal defendant, together with the Company’s three directors and one former director. The action, which sought relief of $282,709 plus attorneys fees and costs, was dismissed by a stipulation of discontinuance with prejudice filed on or about December 1, 2010.

NOTE M - Commitments and Contingencies

Leases

~~The Company~~During ~~entered~~the ~~into~~years ~~both~~ended ~~month-to-month~~September 30, 2010 and ~~long-term~~2009, ~~lease~~the ~~agreements~~Company ~~for office~~had ~~space~~two locations from which it operated. The ~~long-term~~first location was subject to a lease ~~agreement~~which ~~expires~~commenced inAugust ~~Fiscal 2012. The~~1, ~~leases~~2008 ~~require~~and ~~aggregate~~expired July 31, 2011 at a monthly ~~payments~~rental of ~~approximately~~ $73,~~000~~500 plus taxes, utilities and other expenses. ~~Future~~These ~~minimum~~premises, located in Westbury, New York were occupied by the Company until the July 31, 2011 lease ~~payments~~expiration ondate, and the ~~long-term~~Company currently has no remaining unpaid rent due under the lease, nor has it incurred any costs associated with exiting the leased premises. The second location, located in Oyster Bay, New York, was subject to a lease which commenced October 1, 2008, expired ~~agreement~~September ~~are~~30, as2009 ~~follows:~~and was continued on a month to month basis to June 2010 at a monthly rental of $3,500 plus utilities.

Year ending
September 30,	Amounts
2012	$	42,000
2013		42,000
2014		42,000
Totals	$	126,000

F-18

Rent expense (included in “Research and Artist Development Costs” in the “Statement of Operations”) for the years ended September 30, 2010 and 2009 was $70,980 and $97,148, respectively.

Employment Agreement

On January 16, 2009, we entered into an employment agreement with Mr. Timothy Olphie (the “Olphie Employment Agreement”) that has an initial term of three (3) years. Under the Olphie Employment Agreement, Mr. Olphie will continue to serve as our CEO, President and a member of our Board of Directors. Mr. Olphie will receive a base salary of $75,000 per year, and will be entitled to an annual discretionary bonus. The amount of Mr. Olphie’s bonus will be determined by our Board of Directors, and will be based upon the achievement of certain milestones as determined by the Board of Directors. As additional consideration for past services, the Company granted Mr. Olphie the irrevocable right to be issued, upon 61 days written notice, a total of ~~September~~7,500 shares of Series A Preferred Stock of the Company (which are convertible into a total of 30, ~~2009~~000,000 shares of common stock of the Company). The ~~has~~power ~~accrued approximately~~to ~~$56~~direct the issuance of such series of Series A Preferred Stock shall be at Mr. Olphie’s sole discretion,~~250~~ ~~payable~~subject ~~under~~to ~~this~~the ~~employment~~61 ~~agreement~~day waiting period.

~~F-14~~On August 2, 2010, we entered into a First Amendment to Employment Agreement with Mr. Olphie which increased his base salary from $75,000 to $125,000.

~~VIBE RECORDS~~During the year ended September 30, ~~INC~~2010, Officers’ and Directors Compensation includes $83,333 incurred to Mr. ~~NEVADA~~Olphie under the original employment agreement, and its amendment in August 2010, of which $83,333 arose out of common stock issued in payment of accrued base salary of $72,728. At September 30, 2010, Accounts Payable and Accrued Expenses include $0 representing base compensation still owing under the agreements to Mr. Olphie.

~~(a development~~During ~~stage~~the ~~company)~~year ended September 30, 2009, Officers’ and Directors Compensation includes $56,250 incurred to Mr. Olphie under the original employment agreement, of which $66,000 arose out of common stock issued in payment of accrued base salary of $56,250. At September 30, 2009, Accounts Payable and Accrued Expenses include $32,312 representing base compensation still owing under the original agreement to Mr. Olphie.

~~Notes~~ Officers’ and Directors’ Compensation for the year ended September 30, 2009 includes $38,000 incurred to ~~Financial~~other ~~Statements~~Officers/Directors -consisting ~~Continued~~of Company common stock issuances (See Note K above).

~~September 30,~~Investment ~~2009 and 2008~~Agreement

~~NOTE P~~On September 24, 2010, we entered into an Investment Agreement with Dutchess Opportunity Fund, II, LP (the “Investor”). Pursuant to this Agreement, the Investor shall commit to purchase up to $5,000,000 of our common stock over the course of thirty-six ~~Subsequent~~(36) ~~Events~~months. The amount that we shall be entitled to request from each purchase (“Puts”) shall be equal to, at our election, either (i) up to $100,000 or (ii) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading days prior to the applicable Put Notice Date, multiplied by the average of the three (3) daily closing prices immediately preceding the Put Date. The Put Notice Date shall be the Trading Day immediately following the day on which the Investor receives a Put Notice. The purchase price shall be set at 94% of the lowest daily volume weighted average price (“VWAP”) of the common stock during the Pricing Period. The Pricing Period shall be the five (5) consecutive trading days beginning on the Put Notice Date. We are not entitled to submit a Put Notice until the Pricing Period for the prior Put has been completed. The Investor is not obligated to purchase any shares at a Closing unless a Registration Statement has been declared effective and remains effective and available for the resale of all the Registrable Securities.

Management has evaluated all activity of the Company through January 13, 2010 (the issue date of the financial statements) and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to financial statements.F-19

~~F-15~~In connection with the Agreement, we entered into a Registration Rights Agreement with the Investor (“Registration Agreement”). Pursuant to the Registration Agreement, we were obligated to file a Registration Statement with the Securities and Exchange Commission (“SEC”) covering 7,260,000 shares of the common stock underlying the Investment Agreement within 21 days of the date of the Agreement. In addition, we are obligated to use all commercially reasonable efforts to have the Registration Statement declared effective by the SEC within 90 days after the date that the Registration Statement is filed.

To date, the Company has not filed a Registration Statement and thus has not exercised any Puts under this agreement. While the Registration Statement was neither filed within 21 days or declared effective within 90 days, the Registration Agreement provides for no penalties for such failures. The Investment Agreement with the Investor expires on September 24, 2013.

Note N – Restatement of Previously Issued Financial Information

The Company has restated in this Form 10-K its consolidated financial statements at September 30, 2009 and for the year then ended (which was previously included in the Company’s Form 10-K filed with the SEC on January 13, 2010) in order to correct errors relating to the accounting for (1) certain issuances of common stock in the years ended September 30, 2008 and 2009, (2) certain personal expenses of the Company’s chief executive officer in the year ended September 30, 2009, and (2) the recorded reduction of certain notes payable and accrued interest payable at September 30, 2009.

As previously reported, the Company did not report the September 8, 2008 issuance of a total of 730,000 shares (see Note K). The restatement reflects this issuance.

As previously reported, the Company reported total issuances of 6,685,000 shares of common stock for the year ended September 30, 2009. The restatement reflects the correct total issuances of 6,075,000 shares of common stock.

As previously reported, the Company reported the issuance of 5,000,000 shares of common stock for the retirement of $45,000 in debt in the year ended September 30, 2009 at the $45,000 debt amount. The restatement reflects the transaction at the $625,000 fair value of the 5,000,000 shares of common stock and recognizes the $580,000 excess of fair value of common stock issued over the amount of debt retired as Professional and Consulting Fees in the Statement of Operations for the year ended September 30, 2009 because the debt arose, as discussed in Note K, out of then currently provided external financial advisor/contract internal accounting services by Profit Planners, Inc.

As previously reported, the Company reported the issuance of an aggregate of 1,655,000 shares of common stock (Officers and Directors – 695,000 shares; Lawyers and Consultants – 960,000 shares) valued at $484,550 in the financial statements for the year ended September 30, 2009 (Officers and Directors - $181,400; Lawyers and Consultants – $303,150). The restatement reflects an aggregate of only 940,000 shares of common stock issued (Officers and Directors - 295,000; Lawyers and Consultants – 645,000 shares) valued at $256,000 in the financial statements for the year ended September 30, 2009 (Officers and Directors - $103,250; Lawyers and Consultants - $152,750).

As a result of the stock issuance corrections described in the preceding two paragraphs, the Company’s Net Loss for the year ended September 30, 2009 increased by $351,449 as follows:

Officers and Directors Compensation	$	(78,150	)
Professional and Consulting Fees		429,599

Net increase in net loss	$	351,449

F-20

As previously reported, the Company included in Other General and Administrative Expenses in the Statement of Operations for the year ended September 30, 2009 a total of $23,438 in personal expenses of the Company’s chief executive officer paid by the Company. The restatement reflects theses expenses as a reduction of the accrued compensation liability to Timothy Olphie at September 30, 2009.

As previously reported, the Company recorded at September 30, 2009 the reduction of Holdings notes payable totaling $210,000 and accrued interest payable totaling $131,792 as a $341,792 capital contribution by the Company’s chief executive officer relating to the purported acceptance by 6 Holdings note holders of common stock owned by the Company’s chief executive officer in satisfaction of the debt and accrued interest payable. In fact, 3 of the 6 note holders ($130,000 total) had effectively received common stock from the Company in satisfaction of their notes in the period ended September 30, 2004 and the other 3 note holders ($80,000 total) did not receive any common stock from the Company. The restatement reflects the reversal of the recorded transaction, a $130,000 increase in additional paid-in capital in the year ended September 30, 2004, and reductions to interest expense for all periods.

The effect of the restatement adjustments on the consolidated balance sheet at September 30, 2009 follows:

	As Previously Reported			Adjustments			As restated

Total Assets	$	76,901			-		$	76,901

Current Liabilities
Notes and loans payable to bank	$	630,381		$	-		$	630,381
Unsecured convertible promissory notes and other notes payable		100,000			80,000			180,000
Accounts payable and other accrued liabilities		368,970			(23,939	)		345,031
Accrued interest payable		719,081			49,970			769,051
Notes and advances payable to related parties		1,686,077			500			1,686,577
Total current liabilities and total liabilities		3,504,509			106,531			3,611,040

Stockholders’ Deficit
Preferred Stock		-			-			-
Common Stock		2,125			19,109			21,234
Additional Paid-In Capital		2,998,921			(504,819	)		2,494,102
Deficit Accumulated during the Development Stage		(5,693,787	)		(355,688	)		(6,049,475	)
		(2,692,741	)		(841,398	)		(3,534,139	)
Less: Treasury Stock		(734,867	)		734,867			-
Total Stockholders’ Deficit		(3,427,608	)		(106,531	)		(3,534,139	)
Total Liabilities and Stockholders’ Deficit	$	76,901		$	-		$	76,901

The effect of the restatement adjustments on the consolidated statement of operations for the year ended September 30, 2009 follows:

	As Previously Reported			Adjustments			As Restated

Revenues	$	-		$	-		$	-

Operating Expenses:
Research and Artist Development		192,818			(11,030	)		181,788
Officers and Directors Compensation		192,850			(78,150	)		114,700
Professional and Consulting Fees		524,059			429,599			953,658
Other General and Administrative Expenses		121,651			(12,408	)		109,243
Total Operating Expenses		1,031,378			328,011			1,359,389
Loss from Operations		(1,031,378	)		(328,011	)		(1,359,389	)
Other (Expense):
Interest Expense		(251,911	)		13,000			(238,911	)
Total Other Expenses		(251,911	)		13,000			(238,911	)
Loss before Provision for Income Taxes		(1,283,289	)		(315,011	)		(1,598,300	)
Provision for Income Taxes		-			-			-
Net Loss	$	(1,283,289	)	$	(315,011	)	$	(1,598,300	)
Loss per weighted-average share of common stock outstanding, basic and diluted	$	(0.07	)	$	(0.02	)	$	(0.09	)

F-21

NOTE O - Subsequent Events

On November 5, 2010, the Company received $20,000 cash from Asher Enterprises, Inc. as an investor in exchange for a $20,000 unsecured convertible promissory note. The note bears interest at 8% (default rate of 22%), was due August 8, 2011, and is convertible into shares of common stock at a Variable Conversion Price equal to Market Price, as defined, multiplied by 45%.

On December 29, 2011, the Company entered into an Agreement to Clarify Previously Executed Conflicting Agreements between the Company and Donald D. Shaw (”Shaw”), whereby an Amendment to Debenture Agreement, dated March 17, 2011, between these parties reset the conversion price into common stock of the $361,235 promissory note payable by the Company held by Shaw was re-affirmed as “equal to the closing price of the common stock on the date of conversion.” This promissory note is described in Notes G and H, and it had been assigned by James Price (“Price”) pursuant to a Release Agreement dated February 1, 2010 and a Debt Assignment dated February 5, 2010 signed by Price. The clarifying agreement, which was approved by the Company’s Board of Directors, also affirmed that Mr. Shaw had rescinded a Notice of Conversion, dated April 7, 2011, for a portion of the note into common stock of the Company.

On March 31, 2011, a Holdings note payable in the amount of $25,000 became outstanding six years from its March 31, 2005 maturity date without any action brought by the note holder. Accordingly, based on opinion of counsel that the statute of limitations should bar any payment on the note, the Company will recognize a $44,485 gain from the write-off of this note ($25,000) and related accrued interest ($19,485) in the statement of operations for the three months ended March 31, 2011.

On June 4, 2011, the Company sold certain recording and computer equipment to a third party for a total of $20,000. In the three months ended June 30, 2011, the Company expects to report a gain of $811 from this sale, as follows:

Sales proceeds	$	20,000
Cost of equipment sold		34,000
Accumulated depreciation at June 4, 2011		(14,811	)
Net book value of equipment at June 4, 2011		19,189
Gain on sale	$	811

On December 29, 2011, the Company entered into an Agreement to Clarify Previously Executed Conflicting Agreements between the Company and DC Consulting International, LLC (“DC”), whereby a Purchase and Assignment Agreement, dated July 15, 2011, between Shaw and DC, and acknowledged by the Company, for which DC paid Shaw $25,000, these parties reset the conversion price into common stock for the $361,235 promissory note payable by the Company and now held by DC, was re-affirmed as “equal to the closing price of common stock on the date of conversion.” The clarifying agreement, which was approved by the Company’s Board of Directors, also affirmed that DC had rescinded a Notice of Conversion, dated September 5, 2011, for a portion of the note into common stock of the Company. To date, DC has not converted any portion of the $361,235 promissory note. Based on the $0.0015 closing trading price of the Company’s common stock on November 30, 2011, the pro forma number of common shares issuable to DC had it converted the entire $361,235 promissory note on November 30, 2011 would be 240,823,333 shares. DC has agreed at no time to exercise conversion of a portion of the debt for a number of shares of the Company’s common stock which when added to the number of shares it owns will exceed 5% or more of the issued and outstanding shares disclosed on the cover page of the Company’s most recent 10K or 10Q Form, whichever is more recent.

F-22

On September 14, 2011, the Company executed a Business and Marketing Consulting Agreement (the “Consulting Agreement”) with DC. The Consulting Agreement provides for DC to perform certain specified “public relations” oriented functions for the Company for compensation payable in cash or freely tradable Company common stock of $10,000 per month, with the first payment due October 1, 2011. If the Company elects to compensate Consultant in common stock, the stock is due each month based upon the previous ten day average closing bid price. 2,500,000 freely tradable common shares were due to be issued on signing of this agreement. The term of the agreement is one year commencing September 14, 2011 and is automatically renewed for 6 month terms unless sooner terminated in writing by us no later than 30 days prior to the expiration of the initial term of any renewal period. Under the agreement, the Company has the right to terminate this agreement with 30 days written notice. The Agreement includes an underlying 3% interest bearing convertible promissory note in the amount of $120,000, with conversion at the lower of (a) the trading price on the date of conversion less 50% or (b) $0.0001 per share. The promissory note also contains holder “price protection” provisions in the event of stock splits, dividends, Company mergers and other transactions affecting Company common stock outstanding. To date, the Company has not paid any money to DC nor has it delivered any shares to DC. As the Company’s transfer agent has frozen our privileges due to nonpayment, the agreement has effectively been postponed to such time as we can issue freely tradable common stock.

In the year ended September 30, 2011, our director Robert McCoy made additional advances (see Note H) to the Company totaling $357,609. Of the $357,609, $171,559 was used to pay principal ($150,000) and interest ($21,559) on the Wells Fargo Bank working capital line of credit (see Note F).

On October 1, 2011, the Company issued a Convertible Promissory Note to DC in the amount of $5,000 in exchange for a $5,000 cash loan. The Note bears interest at 10%, is due April 1, 2012, and is convertible at DC’s option into Company common stock at a conversion price equal to the closing bid price on the date DC gives the Company notice of its conversion.

On October 5, 2011, our subsidiary Vibe Records, Inc. (New York) executed a lease agreement to rent premises located in East Moriches, New York at a monthly rental of $2,400 plus utilities and other expenses for a term expiring September 30, 2012.

F-23

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf on January 1311, ~~2010~~2012 by the undersigned, thereunto authorized.

	VIBE RECORDS, INC. NEVADA

	By:	/s/ Timothy J. Olphie
		Timothy J. Olphie Chief Executive Officer, President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities on the date(s) indicated.

Name	Title	Date
/s/ Timothy J. Olphie	Chief Executive Officer,	January 1311, ~~2010~~2012
	President, Chairman of the Board, Director, Secretary and Chief Financial Officer
/s/ Michael L. Tyler	Director	January 1311, ~~2010~~2012
/s/ Robert S. McCoy, Jr.	Director	January 1311, ~~2010~~2012

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