STUDIO ONE MEDIA, INC. (Form: 10-K, Received: 10/15/2009 07:58:02)

STUDIO ONE MEDIA, INC.
Consolidated Balance Sheets

	June 30,				June 30,
	2009				2008
					(Restated)
ASSETS
Current Assets
Cash		$	439,474			$	392,450
Prepaid Expenses			57,513				48,153

Total Current Assets			496,987				440,603

Property and Equipment, Net			421,980				240,784
Property and Equipment, yet to be placed in service			631,169				313,565

Other Assets
Notes Receivable			177,228				178,752
Accrued Interest Receivable			73,811				55,701
Deposits			76,400				29,630
Intangible Assets, net			107,314				95,687

Total Other Assets			434,753				359,770

Total Assets		$	1,984,889			$	1,354,722

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
Accounts Payable and Accrued Expenses		$	1,483,797			$	491,560
Capital Equipment Loan			-				7,270
Notes Payable - Related Party			268,788				97,285
Notes Payable			436,897				25,000

Total Current Liabilities			2,189,482				621,115

Long-Term Liabilities			-				-

Total Liabilities			2,189,482				621,115

Stockholders' Equity (Deficit)
Preferred Stock, authorized 10,000,000 shares, par value $0.001;
issued and oustanding are 774,044 and 524,044
June 30, 2009 and 2008, respectively			774				524
Common Stock, authorized 100,000,000 shares, par value $0.001;
issued and outstanding are 16,417,447 and 13,212,398 shares at
June 30, 2009 and 2008, respectively			16,417				13,212
Additional Paid in Capital			15,039,491				9,473,679
Common Shares to be issued			24,000				221,000
Common Stock Issued in Advance of Services			(48,153	)			(337,052	)
Accumulated Deficit			(15,237,122	)			(8,637,756	)

Total Stockholders' Equity (Deficit)			(204,593	)			733,607

Total Liabilities and Stockholders' Equity (Deficit)		$	1,984,889			$	1,354,722



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

F-3

STUDIO ONE MEDIA, INC.
Consolidated Statements of Operations

	For the Year Ended
	June 30, 2009			June 30, 2008
				Restated
Revenues
Kiosk Session Revenues	$	115,989		$	-
Advertising Revenues		25,872			-
Other Revenue		-			839

Total Revenues		141,861			839

Costs and Expenses
Cost of Sales (Exclusive of Depreciation and Amortization)		136,413			-
Cost of Barter Exchanges		104,261			-
Advertising Expenses		389,993			150,724
Depreciation Expense		138,182			40,167
Professional Fees		2,415,070			3,489,323
Research and Development		800,967			778,834
General and Administrative Expenses		2,600,675			1,729,396

Total Costs and Expenses		6,585,561			6,188,444

Loss from Operations		(6,443,700	)		(6,187,605	)

Other Income (Expense)
Interest Expense		(173,776	)		(14,553	)
Interest Income		18,110			23,166

Total Other Income (Expense)		(155,666	)		8,613

Loss before Income Taxes		(6,599,366	)		(6,178,992	)
Income Tax Expense		-			-

NET LOSS	$	(6,599,366	)	$	(6,178,992	)

Basic Loss Per Share of Common Stock	$	(0.46	)	$	(0.51	)

Weighted Average Number of Shares Outstanding		14,420,630			12,179,418

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

F-4

STUDIO ONE MEDIA, INC.
Consolidated Statements of Stockholders' Equity (Deficit) 2007-2008 Restated

											Common				Total
							Additional				Stock Issued				Stockholders'
	Preferred Stock			Common Stock			Paid In		Common Shares		in Advance		Accumulated		Equity
	Shares	Amount		Shares	Amount		Capital		to be Issued		for Services		Deficit		(Deficit)

Balance, June 30, 2007	524,044	$	524	11,362,739	$	11,363	$	2,963,926	$	137,600	$	-	$	(2,458,764)	$	654,649

Common shares issued for services	-		-	684,322		684		2,404,412		-		-		-		2,405,096

Common shares issued for cash	-		-	1,115,830		1,116		3,009,609		-		-		-		3,010,725

Common shares for assets	-		-	5,000		5		24,120		-		-		-		24,125

Warrants exercised for cash	-		-	44,507		44		133,476		-		-		-		133,520

Fair value of warrants granted	-		-	-		-		938,136		-		-		-		938,136

Common shares to be issued	-		-	-		-		-		83,400		-		-		83,400

Common stock issued in advance
for services	-		-	-		-		-		-		(337,052)		-		(337,052)

Net Loss for the Year Ended
June 30, 2008	-		-	-		-		-		-		-		(6,178,992)		(6,178,992)

Balance, June 30, 2008	524,044		524	13,212,398		13,212		9,473,679		221,000		(337,052)		(8,637,756)		733,607

Common shares issued for services	-		-	1,142,935		1,143		1,707,779		(197,000)		-		-		1,511,922

Common shares issued for cash	-		-	1,505,478		1,505		2,059,569		-		-		-		2,061,074

Warrants exercised for cash	-		-	349,335		349		363,068		-		-		-		363,417

Common shares issued in conversion
of preferred shares	(25,000)		(25)	50,000		50		(25)		-		-		-		-

Common shares issued in conversion
of debt	-		-	52,733		53		26,314		-		-		-		26,367

Common shares issued as collateral
for promissory note	-		-	100,000		100		69,900		-		-		-		70,000

Adjustment to account for
fractional shares	-		-	4,568		5		(5)		-		-		-		-

Preferred shares issued for cash	275,000		275	-		-		549,725		-		-		-		550,000

Fair value of warrants granted	-		-	-		-		789,487		-		-		-		789,487

Amortization of stock issued in
advance for servcies	-		-	-		-		-		-		288,899		-		288,899

Net Loss for the Year Ended
June 30, 2009	-		-	-		-		-		-		-		(6,599,366)		(6,599,366)

Balance, June 30, 2009	774,044	$	774	16,417,447	$	16,417	$	15,039,491	$	24,000	$	(48,153)	$	(15,237,122)	$	(204,593)


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

F-5

STUDIO ONE MEDIA, INC.
Consolidated Statements of Cash Flows


	For the Years Ended
	June 30,
	2009			2008 Restated
Cash Flows from Operating Activities

Net Loss	$	(6,599,366	)	$	(6,178,992	)
Adjustments to reconcile to cash from
operating activities:
Depreciation and amortization		138,132			40,167
Common stock issued for services		1,708,922			2,405,096
Fair value of warrants granted		789,487			938,136
Bad debt expense		1,524			-
Common Shares to be issued		(197,000	)		83,400
Amortization of stock issued in advance for services		288,899			(337,052	)
Writeoff of intangible assets		-			112,770
Changes in Operating Assets and Liabilities:
Accrued interest receivable		(18,110	)		(23,166	)
Prepaid expenses		(9,360	)		(23,765	)
Deposits		23,230			(23,230	)
Accounts payable and accrued expenses		992,236			240,013

Net Cash Used in Operating Activities		(2,881,406	)		(2,766,623	)

Cash Flows from Investing Activities

Notes receivable		-			23,412
Purchase of property and equipment		(613,344	)		(375,648	)
Purchase of intangible assets		(35,215	)		(45,687	)

Net Cash Used in Investing Activities		(648,559	)		(397,923	)

Cash Flows from Financing Activities

Issuance of common stock		2,061,074			3,010,725
Issuance of preferred stock		550,000			-
Warrants exercised for cash		363,417			133,520
Proceeds from notes payable-related party		197,871			553
Repayment of notes payable		(7,270	)		(2,489	)
Proceeds from notes payable		411,897			-

Net Cash from Financing Activities		3,576,989			3,142,309

Net Increase (Decrease) in Cash		47,024			(22,237	)

Cash, Beginning of Year		392,450			414,687

Cash, End of Year	$	439,474		$	392,450

Supplemental Cash Flow Disclosure:

Cash Paid For:
Interest	$	1,898		$	-
Income Taxes		-			-

Non Cash Financing Activities:
Common stock issued for assets	$	-		$	24,125
Equipment purchased under capital lease		-			9,759
Common stock issued to extinguish debt		26,367			-
Common stock issued as collateral on debt		70,000			-

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

F-6

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 1: Summary of Significant Accounting Policies

DESCRIPTION OF BUSINESS, FINANCING AND BASIS OF FINANCIAL STATEMENT PRESENTATION

Studio One Media, Inc., (the “Company” or “SOMD”) was originally organized in Delaware on May 12, 1988, as Dimensional Visions Group, Ltd. The name was changed on January 15, 1998 to Dimensional Visions Incorporated. On February 8, 2006, it changed its name to Elevation Media, Inc., and on March 28, 2006 the Company’s name was changed to Studio One Media, Inc., as part of its overall plan to implement its revised business plan.

In April 2006, the Company entered into an agreement to purchase Studio One Entertainment, Inc., a private Scottsdale, Arizona based company that designed and manufactured a proprietary (patents pending), self contained interactive audio/video recording and conferencing studio designed for installation in shopping malls and other high traffic public areas (the “Studio One Entertainment Agreement”). The Studio One™ Kiosk enables the public, for a fee, to record their video and voice images in a portable state-of-the-art recording studio environment and enter their performances in music, modeling and other talent related contests.

On April 17, 2007, the Company announced that it had finalized the reverse merger of Studio One Entertainment, Inc., (SOEI) through an all-stock transaction. The purchase is pursuant to an agreement entered into by the companies dated March 29, 2006. The reverse merger includes the exchange of 7,000,000 restricted common shares of Studio One Media, Inc. for 100% of the issued and outstanding shares of Studio One Entertainment, Inc. The substance of the transaction resulted in a reverse merge wherein SOE became the accounting acquirer of SOMD. Therefore, historical financial data reflects the operations and accumulated deficit of SOE. The transaction essentially is a recapitalization of SOE. The reverse merger includes all right, title and interest to Studio One Entertainment's proprietary interactive recording studios, business plan and intellectual property, including pending patents, foreign patent rights and federal trademark applications. Studio One Entertainment, Inc. continues to operate as a wholly owned subsidiary of Studio One Media, Inc. Accordingly, the financial statements present on a consolidated basis the operations of SOMD and SOEI.

During fiscal year 2009, the Company is no longer considered to be a development stage company, as a result of the commencement of its principle revenue activities.

GOING CONCERN

The Company has incurred losses since inception of $15,237,122 and has just begun collecting revenues which raise substantial doubt about its ability to continue as a going concern. The future of the Company as an operating business will depend on its ability to (1) obtain sufficient capital contributions and/or financing as may be required to sustain its operations and (2) continue to achieve revenues from its personal recording studio kiosk business. Management's plan to address these issues includes, (a) continued exercise of tight cost controls to conserve cash, (b) obtaining additional financing, and (c) place in service additional personal recording kiosks.

INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

F-7

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 1: Summary of Significant Accounting Policies - continued

In July, 2006, the FASB issued FASB Interpretations No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (“FIN 48”), which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a return. FIN 48 provides guidance on the measurement, recognition, classification and disclosure of tax positions, along with accounting for the related interest and penalties. FIN 48 became effective as of January 1, 2007 and had no impact on the Company’s financial statements.

The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

LOSS PER SHARE

Basic and diluted loss per common share is calculated using the weighted average number of common shares outstanding during the period. For the year ended June 30, 2009 and 2008, the Company’s 3,045,671 and 2,473,362 warrants, 14,814 and 136,412 shares to be issued upon the conversion of the preferred stock and 6,000 and -0- shares to be issued upon conversion of debt are excluded from the computation of diluted earnings per share as they are anti-dilutive, respectively.

USE OF ESTIMATES

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

SHARE-BASED COMPENSATION

In December 2004, the FASB issued FAS No. 123R, “Share-Based Payment.” This statement is a revision to FAS No. 123, “Accounting for Stock-Based Compensation,” and it supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends FAS No. 95, “Statement of Cash Flows.” FAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock based compensation.

Equity instruments issued to non-employees for goods or services are accounted for at fair value and are marked to market until service is complete or a performance commitment date is reached, whichever is earlier

IMPAIRMENT OF LONG-LIVED ASSETS

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

CASH AND CASH EQUIVALENTS

For purposes of financial statement presentation, the Company considers all highly liquid investments with a maturity of three months or less, from the date of purchase, to be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with FAS 157, the carrying value of cash and cash equivalents, accounts receivable and accounts payable approximates fair value due to the short-term maturity of these instruments. The carrying value of notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of June 30, 2009 and 2008.

F-8

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 1: Summary of Significant Accounting Policies - continued

CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade receivables. Concentrations of credit risk with respect to trade receivables are limited due to the clients that comprise our customer base and their dispersion across different business and geographic areas. We estimate and maintain an allowance for potentially uncollectible accounts and such estimates have historically been within management's expectations. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. Statement of Financial Accounting Standards No. 105 identifies this as a concentration of credit risk requiring disclosure, regardless of the degree of risk. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had no deposits in excess of federally insured limits at June 30, 2009.

REVENUE RECOGNITION

The Company applies the provisions of SEC Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" ("SAB 104"), which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB 104 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue related to goods and services provided when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

The Company's revenues are generated from sale of video and audio recorded products. Revenues from the sale of products will be collected at the point of sale. The products will be delivered simultaneously with the sale accordingly revenues will be realized and recognized at the time of the transaction.

Barter Transactions - Barter revenue relates to recording session services provided by Studio One to business customers in exchange for products and services that Studio One would otherwise be required to buy for cash. Barter expenses reflect the expense offset to barter revenue. The amount of barter revenue and expense is recorded at the estimated fair value of the services received or the services provided, whichever is more objectively determinable, in the month the services and advertising are exchanged. Studio One applies APB 29, Accounting for Non-Monetary Transactions, the provisions of EITF 93-11, “Accounting for Barter Transactions Involving Barter Credits” and EITF 99-13 “Accounting for Advertising Barter Transactions” and, accordingly, recognizes barter revenues only to the extent that Studio One has similar cash transactions within a period not to exceed six months prior to the date of the barter transaction.

To date, the amount of barter revenue to be recognized has been more objectively determinable based on the value of products or services received rather than based upon the value of advertising provided. For revenue from recording sessions services provided for cash to be considered similar to the recording session services provided in barter transactions, the services rendered must have been in the same media and similar term as the barter transaction.

REVENUE RECOGNITION (CONTINUED)

Studio One had no barter revenues for the fiscal year ended June 30, 2008. Barter revenues for the fiscal year ended June 30, 2009 is broken out by kiosk session income and advertising income. Of the $115,989 of kiosk session income, $78,379 was in barter and $37,610 was in cash. Of the $25,872 of total advertising revenue, $23,872 was in barter and the remaining $2,000 was cash.

F-9

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 1: Summary of Significant Accounting Policies - continued

Studio One had no barter revenues for the fiscal year ended June 30, 2008. Barter revenues totaled $78,379 for the fiscal year ended June 30, 2009.

RESEARCH AND DEVELOPMENT

The Company follows the policy of expensing its research and development costs in the period in which they are incurred in accordance with SFAS No. 2, “Accounting for Research and Development Costs”. The Company incurred research and development expenses of $800,967 and $778,834 during the years ended June 30, 2009 and 2008, respectively.

ADVERTISING AND MARKETING

The Company expenses advertising costs in the period in which they are incurred. Advertising and marketing expense was $444,510 and $150,724 for the years ended June 30, 2009 and 2008, respectively.

GOODWILL AND INTANGIBLE ASSETS

The Company adopted SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets , effective June 2001 and revised in December, 2007. SFAS No. 141 requires the use of the purchase method of accounting for any business combinations initiated after June 30, 2002, and further clarifies the criteria to recognize intangible assets separately from goodwill. Under SFAS No. 142, goodwill and indefinite−life intangible assets are no longer amortized but are reviewed for impairment annually.

PROPERTY AND EQUIPMENT

Property and equipment is located at the Company's headquarters in Scottsdale, Arizona and is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment:

Description		Useful Lives
Computer hardware		3-7 years
Computer software		3-5 years
Furniture and Office Equipment		7 Years
Production Equipment		7 years
Leasehold improvements		10 years

VALUATION OF LONG-LIVED ASSETS

Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their estimated fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests. As of June 30, 2009, management does not believe any of the Company’s assets were impaired.

F-10

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 1: Summary of Significant Accounting Policies - continued

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Studio One Media, Inc. and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. The Company operates on a June 30 fiscal year.

COST OF SALES

The Company’s cost of sales includes kiosk lease expense, kiosk employee costs, and other nominal amounts.

Note 2: Accounts Payable and Accrued Expenses

A summary of Accounts Payable and Accrued Expenses Follows:

		June 30, 2009	June 30, 2008
Accounts Payable	$	1,232,807	$	433,353
Accrued Interest		38,344		35,438
Other Accrued Expenses		212,646		22,769
Total	$	1,483,797	$	491,560

Note 3: Short-Term Borrowings

During July and August of 2001 the Company borrowed $45,000 and issued a 14% convertible debenture for $25,000 due in October 2001 and issued a 12% convertible debenture for $20,000 due in February 2002. Both debentures were in default under the terms of the debenture agreement. The $20,000 debenture, together with all accrued interest thereon, was converted to equity in the year ended June 30, 2007. The Company continues to accrue interest on the remaining $25,000 obligation. The debenture is convertible into 6,000 shares of the Company's common stock at $7.50 per share after given effect for the 1 to 60 share reverse split.

As of June 30, 2009, the Company owes $268,788 for funds borrowed from an entity owned by one of the Company’s officers. The loans are unsecured, accrue interest at 10% per annum and are due upon demand.

The Company has a convertible note payable to Howard Hill which is a convertible note. The terms of the conversion allow the noteholder to convert the debt into equity of the Company in the form of shares of common stock of the Company at the rate of $0.50 per share.

During the year ended June 30, 2009, the noteholder converted the note into 52,733 shares of common stock in exchange for entire outstanding balance of the note, totaling $26,367.

The notes payable due to Sundance Financial Corp., Allan Kaplan, Chad Boeding, Divesh Makan, and Larry Buresh are convertible with the following terms. All or any of the principle amount of the note, together with the accrued interest, may be converted at the option of the investor at any time after four (4) months into fully paid and nonassessable shares of restricted common stock of the company. The number of shares eligible to be converted will equal the note amount to be converted divided by the per share price after applying a 25% discount to the average closing price of the Company’s stock for the previous ten (10) trading days prior to the date such payment is due.

F-11

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 3: Short-Term Borrowings - continued

The Company has analyzed these notes in accordance with EITF 98-5 and has determined that a beneficial conversion feature exists. The value of this conversion feature has been estimated at $133,000 (400,000 shares / $0.25).

The difference between the $400,000 face value and the $533,000 carrying value has been recognized as interest expense, with $133,000 being recognized in fiscal year 2009.

During 2008, the Company purchased equipment under a capital lease. The lease is secured by the equipment and due in monthly payments of $808.

A summary of Short Term Borrowings Follows:

Outstanding Notes Payable at 6-30-09

				Total		Total
				Accrued	Interest	Interest
	Date of	Principal	Interest	Interest	Accrued	Accrued		Total
Note Holder	Note	Amount	Rate	06/30/08	6/30/2009	To Date	Converted	Due

Glenn Crotts	07/13/01	25,000.00	14.00%	24,384.93	3,500.00	27,884.93	-	52,884.93
Sundance Financial Corp.	12/31/08	100,000.00	10.00%	-	4,958.90	4,958.90	-	104,958.90
Sundance Financial Corp.	12/31/08	101,590.52	10.00%	-	5,037.77	5,037.77	-	106,628.29
Acoma, LLC	05/22/09	45,230.49	12.00%	-	446.11	446.11	-	45,676.60
Allan Kaplan	06/29/09	100,000.00	6.00%	-	16.44	16.44	-	100,016.44
Chad Boeding	06/30/09	50,000.00	6.00%	-	-	-	-	50,000.00
Divesh Makan	06/30/09	50,000.00	6.00%	-	-	-	-	50,000.00
Larry/Georgette Buresh	06/30/09	100,000.00	8.00%	-	-	-	-	100,000.00
Beneficial Converstion Feature		133,863.99	0.00%	-	-	-	-	133,863.99

Totals		705,685.00		24,384.93	13,959.22	38,344.15	0.00	744,029

Note 4: Commitments and Contingencies

There are no legal proceedings, which the Company believes will have a material adverse effect on its financial position.

The Company has not declared dividends on Series A or B Convertible Preferred Stock. The cumulative dividends in arrears through June 30, 2009 were approximately $183,057.

Pursuant to a lease originally dated January, 2006, the Company currently occupies approximately 5,400 square feet of office space located at 7650 E. Evans Rd., Suite C, Scottsdale, Arizona 75260. On June 15, 2008, the Company expanded into and also occupies approximately 5,400 square feet adjoining the original premises on a month-by month basis. Under the terms of the extended, expanded lease, the Company occupies the premises on a month-to-month basis. The total lease expense is $6,650 per month, payable in cash, common stock of the Company and on-studio advertising.

In anticipation of implementation of its business plan, the Company also leased an additional 9,400 feet of office space in another building located at 7812 E. Acoma, Scottsdale, Arizona, at a monthly cost of $12,225. The Company have never occupied this space and in May 2009, entered into a termination agreement with the landlord pursuant to which the Company will pay the sum of $50,000 over a period of ten months in exchange for terminating future obligations under the lease.

F-12

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 4: Commitments and Contingencies - continued

The Company leases space at Scottsdale Fashion Square for its MyStudio recording studio pursuant to a two-year lease. The monthly rent for this space is at a market rate commensurate with other kiosk operations. As the Company expands, it will continue to secure space for its recording studios at various venues and locations around the country.

Note 5: Common Stock

During the year ended June 30, 2008, the Company issued 1,160,337 shares for $3,144,245 in cash, 684,322 shares of the Company’s common stock for consulting services rendered to the Company valued at $2,405,096. The Company also issued 5,000 shares for a vehicle valued at $29,125 with $5,000 being paid in cash.

During the year ended June 30, 2008, the Company exchanged 44,507 warrants for 44,507 shares of the Company’s Common Stock for $133,520 in cash.

During the year ended June 30, 2009, the Company issued 1,505,478 common shares for $2,061,074 in cash and 1,142,935 shares of the Company’s common stock for consulting services rendered to the Company valued at $1,511,922. The Company issued an additional 100,000 shares of its common stock as collateral for a promissory note, for $70,000.

During the year ended June 30, 2009, the Company exchanged 349,335 warrants for 349,335 shares of the Company’s Common Stock for $363,417 in cash.

Note 6: Preferred Stock

The Company has authorized 10,000,000 shares of $.001 par value per share Preferred Stock, of which the following were issued outstanding:

	Allocated		Outstanding
Series A Preferred		100,000		15,500
Series A-1 Convertible Preferred		275,000		250,000
Series B Preferred		200,000		3,500
Series C Preferred		1,000,000		13,404
Series D Preferred		375,000		130,000
Series E Preferred		375,000		275,000
Series P Preferred		600,000		86,640
Total Preferred Stock		2,925,000		774,044

The activity surrounding the issuances of the preferred stock is as follows. Prior to the year ended June 30, 2008 the Company issued 524,044 total shares of preferred stock made up of 15,500 Series A, 3,500 Series B, 13,404 Series C, 130,000 Series D, 275,000 Series E, and 86,640 Series P.

During the fiscal year ended June 30, 2009, the Company issued an additional 275,000 Series A-1 shares and converted 25,000 of those shares for 50,000 shares of common stock.

The Company's Series A Convertible 5% Preferred Stock ("Series A Preferred"), 100,000 shares authorized, is convertible into common stock at the rate of .027 share of common stock for each share of the Series A Preferred. Dividends from date of issue, are payable from retained earnings, and have been accumulated on June 30 each year, but have not been declared or paid.

F-13

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 6: Preferred Stock - continued

The Company's Series B Convertible 8% Preferred Stock ("Series B Preferred") is convertible at the rate of .067 share of common stock for each share of Series B Preferred. Dividends from date of issue are payable on June 30 from retained earnings at the rate of 8% per annum and have not been declared or paid.

The Company's Series C Convertible Preferred Stock ("Series C Preferred") is convertible at a rate of .007 share of common stock per share of Series C Preferred.

The Company's Series D Convertible Preferred Stock ("Series D Preferred") is convertible at a rate of .034 share of Common stock per share of Series D Preferred.

The Company's Series E Convertible Preferred Stock ("Series E Preferred") is convertible at a rate of .034 share of Common stock per share of Series E Preferred.

The Company's Series P Convertible Preferred Stock ("Series P Preferred") is convertible at a rate of .007 share of common stock for each share of Series P Preferred.

Note 7: Stock Purchase Options and Warrants

On November 15, 1999, the Board of Directors of the Company adopted the 1999 Stock Option Plan (the "1999 Plan"). This plan was approved by a majority of our stockholders at our January 28, 2000, stockholders' meeting. The purpose of the 1999 Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by its officers and other key individuals. The 1999 Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company. A maximum of 1,500,000 shares of the Company's common stock are available to be issued under the 1999 Plan. The option exercise price will be 100% of the fair market value of the Company's common stock on the date the option is granted and will be exercisable for a period not to exceed 10 years from the date of grant. As of June 30, 2009, no stock options have been granted under this plan.

On May 17, 2004, the Company adopted an employee stock incentive plan setting aside 100,000 shares of the Company’s common stock for issuance to officers, employees, directors and consultants for services rendered or to be rendered. A compensation committee appointed by the Board of Directors who shall have the right to grant awards or stock options administers the plan. On May 24, 2004, the Company filed a Registration on Form S-8 with the Securities Exchange Commission covering the 100,000 shares provided by this plan, at a maximum offering price of $1.00 per share. As of June 30, 2009, the Company has issued all shares covered by the 2004 Stock Incentive Plan.

The Board of Directors on June 10, 2009, approved the 2009 Long-Term Stock Incentive Plan. The purpose of the 2009 Long-term Stock Incentive Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by employees and other key individuals. The 2009 Long-Term Stock Incentive Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company. A maximum of 1,500,000 shares of the Company's common stock is reserved for issuance under stock options to be issued under the 2009 Long-Term Stock Incentive Plan. The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options and Restricted Stock Awards. The 2009 Long-Term Stock Incentive Plan is administered by the Board of Directors or, at its direction, the Compensation Committee comprised of officers of the Company. As of June 30, 2009, the Company had granted such options to two employees to purchase, in the aggregate, 85,000 shares of the Company’s common stock. The Exercise Period for each of the grants is two years from the date of grant and the exercise price in each instance is $0.80.

F-14

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 7: Stock Purchase Options and Warrants - continued

On October 13, 2006 the Company adopted an employee stock incentive plan setting aside 100,000 shares of the Company’s common stock for issuance to officers, employees, directors and consultants for services rendered or to be rendered. The proposed maximum offering price of such shares is $1.00 per share. A compensation committee appointed by the Board of Directors who shall have the right to grant awards or stock options administers the plan. On October 13, 2006, the Company filed a Registration on Form S-8 with the Securities Exchange Commission covering shares provided by this plan. As of June 30, 2007, the Company has issued 47,282 shares covered by the 2006 Stock Incentive Plan and recorded an expense of $282,380. As of June 30, 2008, 52,718 remain unissued under this Plan. The value of shares issued pursuant to this Plan is computed using the Black-Scholes model as prescribed by FAS No. 123R. The assumptions used for the model are the following: the stock price on the date of issuance, the exercise price of each specific warrant ($0.50 to $5.95), the expected life of the warrant (1 to 2 years and as high as 10), the annualized volatility (31% to 237%), and the risk free rate (1.350% to 5.350%).

During the year ended June 30, 2009, the estimated value of the compensatory common stock purchase warrants granted to non-employees in exchange for services and financing expenses was determined using the Black-Scholes pricing model and the following assumptions: expected term of 2 years, a risk free interest rate of 1.35% to 2.35%, a dividend yield of 0% and volatility of 55% to 237%. The amount of the expense charged to operations for compensatory options and warrants granted in exchange for services was $789,487.

During the year ended June 30, 2008, the estimated value of the compensatory common stock purchase warrants granted to non-employees in exchange for services and financing expenses was determined using the Black-Scholes pricing model and the following assumptions: expected term of 2 years, a risk free interest rate of 2.35% to 5.35%, a dividend yield of 0% and volatility of 26% to 70%. The amount of the expense charged to operations for compensatory options and warrants granted in exchange for services was $938,136.

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued to employees and non-employees of the Company. These warrants were granted in lieu of cash compensation for services performed.

	Number of Warrants		Weighted Average Exercise Price
Outstanding as of June 30, 2007		850,163	$	3.18
Granted		1,667,706		0.00
Exercised		(44,507)		3.67
Cancelled		-		0.00
Outstanding as of June 30, 2008		2,473,362		3.50
Granted		1,823,057		2.38
Exercised		(349,335)		1.21
Cancelled		(810,163)		3.17
Outstanding at June 30, 2009		3,136,921	$	3.10

Note 8: Income Taxes

SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is calculated by multiplying a 35% marginal tax rate by the cumulative NOL of $15,237,122. The total valuation allowance is equal to the total deferred tax asset.

F-15

Note 8: Income Taxes - continued

The tax effects of significant items comprising the Company's net deferred taxes as of June 30, 2009 and 2008 were as follows:

	6-30-09			6-30-08
Deferred tax assets:
Net operating loss carry forwards		5,332,993			3,023,215
Valuation allowance		(5,332,993	)		(3,023,215	)
Net deferred tax asset reported	$	--		$	--

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 35% to pretax income from continuing operations for the years ended June 30, 2009 and 2008 due to the following:

		6-30-09			6-30-08

Book loss from operations	$	(2,309,778	)	$	(2,162,647	)
Options and warrants issued for services		276,320			328,348
Common stock issued for services		598,123			841,784
Valuation allowance		1,435,335			992,515
	$	--		$	--

The federal net operating loss carry forwards of approximately $15,237,122 expire in various years through 2029. In addition the Company has state carry forwards of approximately $14,931,000.

The Company has had numerous transactions in its common stock. Such transactions may have resulted in a change in the Company's ownership, as defined in the Internal Revenue Code Section 382. Such change may result in an annual limitation on the amount of the Company's taxable income that may be offset with its net operating loss carry forwards. The Company has not evaluated the impact of Section 382, if any, on its ability to utilize its net operating loss carry forwards in future years.

Note 9. Intangible Assets

Intangible assets consist of computer software, website costs and video backgrounds. Computer software is purchased from third party developers and recorded at cost. Computer software is amortized over the estimated useful life of 3 years. Website costs are costs incurred to develop the Company’s website. The website costs will be amortized over the estimated useful life of the website when placed in service during the year ended June 30, 2009. Video backgrounds are the costs incurred to develop video backgrounds for use in the Company’s recording Kiosks. The video background costs will be amortized over the estimated useful life of the website when placed in service during the year ended June 30, 2009. Technology is the cost of proprietary know how and intellectual property.

F-16

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 9. Intangible Assets - continued

The technology will be amortized over the estimated useful life when placed in service during the year ended June 30, 2009. Patents and trademarks is the cost of patents pending and applied for trademarks. Patents and trademarks will be amortized over the estimated useful life when placed in service during the year ended June 30, 2009. Management assesses the carrying values of long-lived assets for impairment when circumstances warrant such a review. In performing this assessment, management considers current market analysis and appraisal of the technology, along with estimates of future cash flows. The Company recognizes impairment losses when undiscounted cash flows estimated to be generated from long-lived assets are less than the amount of unamortized assets. The Company’s intangible assets are comprised of the following on June 30, 2009:

		2009	2008
Patterns and Molds		18,071	-0-
Website costs		77,699	91,375
Video backgrounds		11,547	4,312
Accumulated amortization		(23,588)	-0-
Net Intangible Assets	$	107,314	95,687

The Company’s estimated amortization for the above intangible assets are as follows:

	2010		2011		2012		2013		2014		Thereafter
Patterns and Molds		6,024		6,024		6,024		-0-		-0-		-0-
Website costs		13,706		13,706		13,706		13,706		13,706		9,138
Video backgrounds		3,858		3,858		3,858		-0-		-0-		-0-

Note 10. Property and Equipment

The Company’s property and equipment are comprised of the following on June 30, 2009:

	2009			2008
Furniture and equipment	$	25,012		$	15,708
Office equipment and computers		209,984			191,794
Kiosks		264,586			-0-
Vehicles		29,125			29,125
Leasehold improvements		5,196			2,260
Computer Software		50,879			46,251
Accumulated depreciation		(162,802	)		(44,354	)
Net Property and Equipment	$	421,980			240,784

The Company also has $631,169 and $313,565 in equipment that is yet to be placed in service as of June 30, 2009 and 2008, respectively.

The equipment is depreciated over its estimated useful life of 5 to 7 years under the straight-line method. Leasehold improvements are depreciated over the lesser of the lease term or the useful life of the asset. Depreciation expense for the years ended June 30, 2009 and 2008 was $138,182 and $40,167, respectively.

Note 11. Recent Accounting Pronouncements

June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). The provisions of SFAS 166, in part, amend the derecognition guidance in FASB Statement No. 140, eliminate the exemption from consolidation for qualifying special-purpose entities and require additional disclosures. SFAS 166 is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009. The Company does not expect the provisions of SFAS 166 to have a material effect on the financial position, results of operations or cash flows of the Company.

F-17

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 11. Recent Accounting Pronouncements - continued

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R) (“SFAS 167”). SFAS 167 amends the consolidation guidance applicable to variable interest entities. The provisions of SFAS 167 significantly affect the overall consolidation analysis under FASB Interpretation No. 46(R). SFAS 167 is effective as of the beginning of the first fiscal year that begins after November 15, 2009. SFAS 167 will be effective for the Company beginning in 2010. The Company does not expect the provisions of SFAS 167 to have a material effect on the financial position, results of operations or cash flows of the Company.

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” (“SFAS No. 168”). Under SFAS No. 168 the “FASB Accounting Standards Codification” (“Codification”) will become the source of authoritative U. S. GAAP to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. On the effective date, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. SFAS No. 168 is effective for the Company’s interim quarterly period beginning July 1, 2009. The Company does not expect the adoption of SFAS No. 168 to have an impact on the financial statements.

In June 2009, the Securities and Exchange Commission’s Office of the Chief Accountant and Division of Corporation Finance announced the release of Staff Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series in order to bring existing guidance into conformity with recent pronouncements by the Financial Accounting Standards Board, namely, Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations, and Statement of Financial Accounting Standards No. 160, Non-controlling Interests in Consolidated Financial Statements. The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP shall be effective for interim reporting periods ending after June 15, 2009. The Company does not have any fair value of financial instruments to disclose.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements.

The FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The FSP shall be effective for interim and annual reporting periods ending after June 15, 2009. The Company currently does not have any financial assets that are other-than-temporarily impaired.

F-18

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 11. Recent Accounting Pronouncements - continued

In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, to address some of the application issues under SFAS 141(R). The FSP deals with the initial recognition and measurement of an asset acquired or a liability assumed in a business combination that arises from a contingency provided the asset or liability’s fair value on the date of acquisition can be determined. When the fair value can-not be determined, the FSP requires using the guidance under SFAS No. 5, Accounting for Contingencies, and FASB Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a Loss. This FSP will be effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after July 1, 2009. The adoption of this FSP is not expected to have a material impact on our financial position, results of operations, or cash flows during the six months ended June 30, 2009.

In April 2009, the FASB issued FSP No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”). FSP FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly. Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP FAS 157-4 will have a material impact on its financial condition or results of operation.

In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active,” (“FSP FAS 157-3”), which clarifies application of SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157-3 had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise’s involvement with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. The Company adopted this FSP effective January 1, 2009. The adoption of the FSP had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 requires additional fair value disclosures about employers’ pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157. Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have a material impact on its financial condition or results of operation.

In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” and FASB Interpretation 46 (revised December 2003), “Consolidation of Variable Interest Entities − an interpretation of ARB No. 51,” as well as other modifications. While the proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company’s financial statements. The changes would be effective March 1, 2010, on a prospective basis.

In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have material effect on our consolidated financial position and results of operations if adopted.

F-19

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 11. Recent Accounting Pronouncements - continued

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133. This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows.

Note 12, Subsequent Events

In accordance with FAS 165, management evaluated the subsequent events as of October 14, 2009. Subsequent to June 30, 2009, the two Convertible Promissory Notes have been converted to common shares according to the terms of the respective notes.

Note 13. Restatement of Financial Statements

On August 27, 2009 the Company was informed that the Public Company Accounting Oversight Board ("PCAOB") revoked the registration of Moore & Associates who was serving as the Company’s independent registered public accounting firm. The revocation was a result of Moore’s violation of PCAOB rules and auditing standards. This revocation of Moore’s registration required the Company to have reaudited the financial statements previously issued for the fiscal years ended June 30, 2007 and 2008.

This reaudit produced material differences from the previously filed versions. Included in this filing are the restated 2008 fiscal year financial statements. For comparative purposes, the table below presents the reaudited balance sheets and income statements compared to the original filing.

F-20

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 12. Restatement of Financial Statements (continued)

Consolidated Balance Sheets

	June 30,				June 30,
	2008				2008
	(Original)				(Restated)
ASSETS
Current Assets
Cash		$	391,109			$	392,450
Prepaid Expenses			48,153				48,153
Total Current Assets			439,262				440,603

Property and Equipment, Net			548,070				554,349

Other Assets
Notes Receivable- Non Current			178,752				178,752
Accrued Interest Receivable			55,701				55,701
Deposits			29,630				29,630
Intangible Assets, net			138,084				95,687
Total Other Assets			402,167				359,770

Total Assets		$	1,389,499			$	1,354,722

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable and Accrued Expenses		$	358,359			$	491,560
Capital Equipment Loan			-				7,270
Notes Payable - Related Party			108,319				97,285
Notes Payable			49,385				25,000
Total Current Liabilities			516,063				621,115

Long-Term Liabilities			-				-

Total Liabilities			516,063				621,115

Stockholders' Equity (Deficit)
Preferred Stock, authorized 10,000,000 shares, par value $0.001;
issued and oustanding are 774,044 and 524,044
June 30, 2009 and 2008, respectively			524				524
Common Stock, authorized 100,000,000 shares, par value $0.001;
issued and outstanding are 16,417,447 and 13,212,398 shares at
June 30, 2009 and 2008, respectively			13,212				13,212
Additional Paid in Capital			14,463,184				9,473,679
Common Shares to be issued			-				221,000
Common Stock Issued in Advance of Services			-				(337,052	)
Accumulated Deficit - Development Stage			(13,603,484	)			-
Accumulated Deficit			-				(8,637,756	)
Total Liabilities and Stockholders' Equity (Deficit)		$	1,389,499			$	1,354,722

F-21

STUDIO ONE MEDIA, INC.

Notes to Consolidated Financial Statements

June 30, 2009 and 2008

Note 12. Restatement of Financial Statements (continued)

Consolidated Statements of Operations

	For the Year Ended
	June 30,			June 30,
	2008			2008
	(Original)			(Restated)
Revenues
Kiosk Advertising Revenues	$	-		$	-
Kiosk Barter Revenue		-			-
Advertising Revenues		-			-
Other Revenue		-			839

Total Revenues		-			839

COST OF SALES
(Exclusive of Depreciation and Ammortization)		-			-

GROSS PROFIT (LOSS)		-			839

Operating Expenses
Advertising Expenses		-			150,724
Depreciation Expense		-			40,167
Professional Fees		-			3,489,323
Research and Development		1,065,168			778,834
General and Administrative Expenses		7,561,257			1,729,396

Total Operating Expenses		8,626,425			6,188,444

Loss from Operations		(8,626,425	)		(6,187,605	)

Other Income (Expense)
Interest Expense		(14,553	)		(14,553	)
Intersest Income		24,005			23,166

Total Other Income (Expense)		9,452			8,613

Loss before Income Taxes		(8,616,973	)		(6,178,992	)
Income Tax Expense		-			-

NET LOSS	$	(8,616,973	)	$	(6,178,992	)

Basic Loss Per Share of Common Stock	$	(0.71	)	$	(0.51	)

Weighted Average Number of Shares Outstanding		12,179,418			12,179,418

F-22

DELAWARE		23-2517953
(State or other jurisdiction of		(IRS Employer
Incorporation or organization)		Identification No.)

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

		Page
PART I
Item 1.	Business	5
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	17
Item 3.	Legal Proceedings	17
Item 4.	Submission of Matters to a Vote of Security Holders	17

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	Selected Financial Data	19
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 8.	Financial Statements and Supplementary Data.	24
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	24
Item 9A(T).	Controls and Procedures	25
Item 9B.	Other Information	26

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	27
Item 11.	Executive Compensation	29
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13.	Certain Relationships and Related Transactions, and Director Independence	33
Item 14.	Principal Accounting Fees and Services	34

PART IV
Item 15.	Exhibits, Financial Statement Schedules	35

	●	Ability to broadly commercialize and expand MyStudio;
	●	Changes in entertainment technology;
	●	Price and availability of alternative entertainment available to the public;
	●	Availability and cost of technology and marketing personnel;
	●	Our ability to establish and maintain key relationships with industry partners;
	●	The amount and timing of operating costs and capital expenditures relating to maintaining our business, operations, and infrastructure; and
	●	General economic conditions and economic conditions specific to the entertainment industry.

	●	Rapidly improve, upgrade and expand its business infrastructures;
	●	Deliver its product and services on a timely basis;
	●	Maintain levels of service expected by clients and customers;
	●	Maintain appropriate levels of staffing;
	●	Maintain adequate levels of liquidity; and
	●	Expand and upgrade its technology, transaction processing systems and network hardware or software or find third parties to provide these services.

DVGL	-	Prior to January 12, 1998
DVUI	-	January 12, 1998 to May 18, 2004
DVSO	-	May 18, 2004 to April 20, 2006
SOMD	-	From April 20, 2006

For the Fiscal Year Ending on June 30, 2009	High	Low
Quarter Ended June 30, 2009	0.99	0.40
Quarter Ended March 31, 2009	1.29	0.50
Quarter Ended December 31, 2008	4.90	0.56
Quarter Ended September 30, 2008	5.50	3.88

For the Fiscal Year Ending on June 30, 2008	High	Low
Quarter Ended June 30, 2008	5.50	3.80
Quarter Ended March 31, 2008	5.80	3.90
Quarter Ended December 31, 2007	6.25	4.05
Quarter Ended September 30, 2007	6.40	3.70

	Twelve Months Ended
	Increase/(Decrease)
	6-30-09		6-30-08		Amount		%

Revenue		141,861		839		141,022	99	%

	·	Paid revenue sessions from customers who utilize the studios to create audio/video recordings.
	·	Advertising revenue from the external monitors located on each MyStudio facility.
	·	Advertising revenue from its website.

Name	Age	Position

Preston J. Shea	61	Director, President, CEO, Secretary
Kenneth R. Pinckard	63	Director, Vice President, CFO, Legal Counsel
Barry M. Goldwater, Jr.	70	Director, Chairman
Shelly Yakus	63	Vice President
Matthew Long	43	Vice President
Anna Madrid	35	Vice President

Name	Age	Position

Lawrence G. Ryckman	49	Director, President, CEO, Secretary

					Long Term Compensation
	Annual Compensation				A wards		Payouts
Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)	Other Annual Compensation ($)	Restricted Stock Award(s) ($)	Securities Underlying Options/ SARs (#)	LTIP Payout ($)	All Other Compensation ($)

Preston J. Shea President,	2009	-0-	-0-	-0-	-0-	-0-	-0-	$33,970
Secretary	2008	-0-	-0-	-0-	-0-	-0-	-0-	$32,670

Kenneth R. Pinckard, Vice	2009	$ -0-	-0-	-0-	-0-	-0-	-0-	$200,000 (2)
President, Treasurer	2008	$61,865	-0-	-0-	-0-	-0-	-0-	$ 5,280

Shelly Yakus, Vice	2009	$51,450	-0-	-0-	-0-	-0-	-0-	$110,000
President	2008	$16,200	-0-	-0-	-0-	-0-	-0-	$ 5,280

Matthew Long, Vice	2009	$107,965	-0-	$12,495	-0-	-0-	-0-	$10,540
President	2008	$ 90,000	-0-	$12,495	-0-	-0-	-0-	$29,020

Anna Madrid, Vice President	2009	$181,790	-0-	-0-	-0-	-0-	-0-	$ -0-
	2008	-0-	-0-	-0-	-0-	-0-	-0-	$ -0-

Lawrence G. Ryckman,	2009	-0-	-0-	-0-	-0-	-0-	-0-	$250,000 (1)
President of Studio One	2008	-0-	-0-	-0-	-0-	-0-	-0-	$29,914
Entertainment, Inc.

Name	OPTION AWARDS					STOCK AWARDS
	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock that have not Vested(#)	Market Value of Shares or Units of Stock that have not Vested($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested ($)
Barry M. Goldwater, Jr.	125,000	-0-	-0-	1.00	08/29/17 (1) 11/18/18 (2)	-0-	-0-	-0-	-0-
Preston J. Shea	125,000	-0-	-0-	1.00	08/29/17 (1) 11/18/18 (2)	-0-	-0-	-0-	-0-
Matthew Long	25,000	-0-	-0-	5.95	03/12/10 (3) 06/12/10 (3)	-0-	-0-	-0-	-0-

Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership	Percent of Class (2)

Preston J. Shea 1 Yonge Street, Suite 1801 Toronto, ON M5E 1W7	158,000 Direct (4)	0.95%

Barry M. Goldwater, Jr. 3104 E. Camelback Rd., #274 Phoenix, AZ 85016	148,000Direct (4)	0.89%

Kenneth R. Pinckard 3104 E. Camelback Rd. #245 Phoenix, AZ 85016	1,000	0.01%

Lawrence G. Ryckman 13470 N. 85 th Place Scottsdale, AZ 85260	5,129,500 Indirect (3)	30.73 %

Shelly Yakus 1778 Lantana Drive Minden, NV 89423	100,000 Indirect	0.60%

Matthew Long 17197 N. 54 th Avenue Glendale, AZ 85308	35,500 Direct (5)	0.21%

Anna Marid 15417 Becker Lane Surprise, AZ 85379	65,101 Indirect	0.39%

Perry D. Logan 420 Saint Andrews Court Las Vegas, NV 89144	1,443,105 Direct	8.65%

Exhibit No.	Description
3.1	Articles of Incorporation, dated May 12, 1988. (a)
3.1	Certificate of Amendment of Articles of Incorporation of Dimensional Visions Incorporated dated January 16, 2006. (f)
3.2	Certificate of Amendment of Articles of Incorporation of Elevation Media, Inc., dated March 24, 2006. (f)
3.2	Bylaws. (a)
3.3	Certificate of Amendment of Certificate of Incorporation of Dimensional Visions Incorporated dated January 22, 2004. (f)

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Non-qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Barry M. Goldwater, Jr.	-0-	$33,970	-0-	-0-	-0-	-0-	$33,970

Fee Category	Fiscal 2009 Fees		Fiscal 2008 Fees
Audit Fees (1)		$ 24,543		$ 30,500
Audit-Related Fees (2)		0		0
Tax Fees (3)		0		0
All Other Fees (4)		0		0
Total Fees		$ 24,543		$ 30,500

4.1	Certificate of Designation of Series A Convertible Preferred Stock, dated December 12, 1992. (a)
4.1	Form of Warrant issued to Participants in 2007 Private Placements (g)
4.2	Certificate of Designation of Series B Convertible Preferred Stock, dated December 22, 1993. (a)
4.3	Certificate of Designation of Series P Convertible Preferred Stock, dated September 11, 1995. (a)
4.4	Certificate of Designation of Series S Convertible Preferred Stock, dated August 28, 1995. (a)
4.5	Certificate of Designation of Series C Convertible Preferred Stock, dated November 2, 1995. (a)
4.6	Certificate of Designation of Series D and Series E Convertible Preferred Stock dated August 25, 1999. (a)
4.7	Form of Warrant Agreement to Debt Holders, dated January 15, 1998. (a)
4.8	Form of Warrant Agreement to Debt Holders, dated April 8, 1998. (a)
4.9	Form of Warrant Agreement to Participants in Private Placement dated April 8, 1998. (a)
4.10	Pledge Agreement dated January 11, 2001 with Dale Riker and Russ Ritchie. (b)
4.11	Investment Agreement dated December 13, 2000, with Swartz Private Equity, LLC. (b)
4.12	Merrill Lynch Portfolio Reserve Loan and Collateral Account Agreement, dated January 12, 2002. (b)
10.1	1996 Equity Incentive Plan. (a)
10.1	Stock Purchase Agreement, dated March 29, 2006, between Studio One Entertainment, Inc., and Dimensional Visions Incorporated. (g)
10.2	1999 Stock Option Plan. (a)
10.2	Exchange Agreement between Studio One Media, Inc., and Studio One Entertainment, Inc., dated April 16, 2007 (g)
10.3	Employment Agreement dated January 1, 2001, with John D. McPhilimy. (c)
10.3	Accord and Satisfaction, dated October 11, 2006, between Dimensional Visions, Inc., and Russell H. Ritchie, Dale E. Riker, Suntine Enterprises, LLC, and Cornerstone Wireless Communications, LLC (g)
10.4	Employment Agreement dated July 1, 2001, with Bruce D. Sandig. (c)
10.5	Settlement Agreement and Release dated April 30, 2003, between the Company and Russell H. Ritchie, Dale E. Riker, Suntine Enterprises, LLC, and Cornerstone Wireless Communications, LLC. (d)
14	Dimensional Visions, Inc. Code of Ethics. (e)
21.1	Subsidiaries of the Registrant (h)


	STUDIO ONE MEDIA, INC.

Date: September 15, 2009	By:	/s/ Preston J. Shea,
		Preston J. Shea,
		Title President

Signature	Title	Date

/s/ Preston J. Shea	President and Director	September 15, 2009
Preston J. Shea	(Principal Executive Officer)

/s/ Kenneth R. Pinckard	Chief Financial Officer, Director	September 15, 2009
Kenneth R. Pinckard	(Principal Financial Officer)

/s/ Kenneth R. Pinckard	Chief Accounting Officer, Director	September 15, 2009
Kenneth R. Pinckard	(Principal Accounting Officer)

/s/ Barry M. Goldwater, Jr/	Director	September 15, 2009
Barry M. Goldwater, Jr.

INDEX TO THE FINANCIAL STATEMENTS	PAGE NUMBER

Independent Auditor's Report	F-2

Financial Statements

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations	F-4

Consolidated Statements of Stockholders' Equity (Deficit)	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Financial Statements	F-7 - F-22


	STUDIO ONE MEDIA, INC.

Date: October 15 , 2009	By:	/s/ Preston J. Shea
		Preston J. Shea
		President