- Amended Annual Report (10-K/A)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

Amendment No. 1

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

For the fiscal year ended December 31, 2008

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

For the transition period from ___________________to ___________________

Commission file number: 001- 33370

SANTA MONICA MEDIA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		59-3810312
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

11845 West Olympic Blvd., Suite 1125W

Los Angeles, CA 90064

(Address of Principal Executive Offices, including ZIP Code)

(310) 526-3222

Registrant’s Telephone Number, including Area Code

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each Class		Name of each Exchange on which Registered
Units, each consisting of one share of Common		NYSE Alternext
Stock, $0.001 par value, and One Warrant

Common Stock, $0.001 par value		NYSE Alternext

Warrants to Purchase Common Stock		NYSE Alternext

Securities Registered Pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No ý

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 ý No ¨

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. ý

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 definitions of “ large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer ý Non-accelerated filer ¨ Smaller reporting company ¨

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

Based on the closing price as reported on NYSE Alternext, the aggregate market value of the Registrant’s common stock held by non-affiliates on June 30, 2008 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $98,750,000. Shares of common stock held by each executive officer and director and by each shareholder affiliated with a director or an executive officer have been excluded from this calculation because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of outstanding shares of the Registrant’s common stock as of March 13, 2009 was 16,038,125.

Documents incorporated by reference: None.

EXPLANATORY NOTE

We are filing Amendment No. 1 (this “Amendment”) to the Santa Monica Media Corporation (“we” or the “Company”) Annual Report on Form 10-K for the year ended December 31, 2008, which was originally filed on April 2, 2009 (the “Original Filing”).

The following revisions to the Original Filing have been made in this Amendment:

1.	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The unsigned Report of Independent Registered Public Accounting Firm has been replaced in its entirety by an updated, signed report expressing an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

The Balance Sheets at December 31, 2008 and 2007 (page 20) have been modified to reflect the following:

The single line item of “Prepaids and other current assets” has been revised to reflect a separate line item for “Refundable income taxes” which was previously included therein as follow:

	December 31, 2008		December 31, 2007
Refundable income taxes	$	180,000	$	--
Prepaids and other current assets		87,770		50,500
Prepaids and other current assets as previously reported	$	267,770	$	50,500

The single line item of “Accounts payable and accrued expenses” has been revised to reflect a separate line item for “Reserve for state franchise tax” which was previously included therein as follows:

	December 31, 2008		December 31, 2007
Accounts payable and accrued expenses	$	302,399	$	69,675
Reserve for state franchise tax		390,844		--
Accounts payable and accrued expenses as previously reported	$	693,243	$	69,675

The Statements of Cash Flows for the years ended December 31, 2008, 2007 and for the period from June 24, 2005 (inception) through December 31, 2008 (page 23) has been modified to reflect the cash flow effect of the separate line item changes in the Balance Sheets identified above.

2.	ITEM 9A. CONTROLS AND PROCEDURES

Replaced in its entirety to revised management’s conclusions that as of December 31, 2008 disclosure controls and procedures were not effective, and that internal control over financial reporting was effective. The Report of Independent Registered Public Accounting Firm has been revised to reflect those changes in management’s assessment.

3.	The following typographical errors in the Original Filing are corrected in this 10-K/A:

The Quarter ended “September 30, 2007” date reflected in both the Units and Common Stock price schedules on page 12 is corrected from “September 31, 2007”,

The third paragraph of the section entitled “Lack of Funds” on page 17 has been corrected to “March 13, 2009” from “March 13, 2008”, and

The page numbers in the Index to Financial Statements under ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA on page 18 have been revised to reflect the correct page references.

For the convenience of the reader, this Amendment restates the Original Filing. This Amendment does not otherwise amend or update any exhibit to or disclosures set forth in the Original Filing. Pursuant to Rule 12b-15, under the Securities and Exchange Act of 1934, as amended, this Amendment contains new certifications pursuant to the Sarbanes-Oxley Act of 2002.

Except as stated herein, this Form 10−K/A does not reflect events occurring after the filing of the 2008 Form 10-K on April 2, 2009 and no attempt has been made in this Annual Report on Form 10-K/A to modify or update other disclosures as presented in the 2008 10-K. Accordingly, this Form 10−K/A should be read in conjunction with our filings with the SEC subsequent to the filing of the Form 10−K.

SANTA MONICA MEDIA CORPORATION

2008 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

SAFE HARBOR STATEMENT		1

PART I		2

ITEM 1.	BUSINESS	2

ITEM 1A.	RISK FACTORS	8

ITEM 1B.	UNRESOLVED STAFF COMMENTS	11

ITEM 2.	PROPERTIES	11

ITEM 3.	LEGAL PROCEEDINGS	11

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	11

PART II		12

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	12

ITEM 6.	SELECTED FINANCIAL DATA	13

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 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	18

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	33

ITEM 9A.	CONTROLS AND PROCEDURES	33

ITEM 9B.	OTHER INFORMATION	36

PART III		37

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	37

ITEM 11.	EXECUTIVE COMPENSATION	41

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	42

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	44

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.	45

PART IV		47

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	47

SIGNATURES		48

INTRODUCTORY COMMENT

Throughout this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “our company,” “Company” and “the Registrant” refer to Santa Monica Media Corporation, a Delaware corporation.

SAFE HARBOR STATEMENT

From time to time, we make oral and written statements that may constitute “forward-looking statements” (rather than historical facts) as defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission (the ”SEC”) in its rules, regulations and releases, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We desire to take advantage of the “safe harbor” provisions in the Private Securities Litigation Reform Act of 1995 for forward-looking statements made from time to time, including the forward-looking statements made in this Annual Report, as well as those made in our other filings with the SEC.

All statements in this Annual Report, including under the captions “Business,” “Risk Factors,” and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations,” other than statements of historical fact are forward-looking statements for purposes of these provisions, including statements of our current views with respect to our business strategy, business plan, our future financial results, and other future events. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential” or “could ” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations or any of the forward-looking statements will prove to be correct, and actual results could differ materially from those projected or assumed in the forward-looking statements.

All forward-looking statements involve inherent risks and uncertainties, and there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, those factors set forth in this Annual Report under the captions “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all of which you should review carefully. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we anticipate. Please consider our forward-looking statements in light of those risks as you read this Annual Report. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

PART I

ITEM 1.

BUSINESS

General development of the business

We are a Delaware blank check company incorporated on June 24, 2005 in order to serve as a vehicle for the acquisition of an operating business in the communications, media, gaming and/or entertainment industries. These industries encompass those companies that create, produce, deliver, distribute and market entertainment and information products, communication services, as well as companies that enable voice, video and data transmission. We focused on opportunities where we could combine management and board member knowledge of these sectors with our operational experience in identifying and applying new technologies, including experience in developing online businesses and products to enhance shareholder value.

On April 2, 2007, we completed: (i) a private placement of 413,125 units at $8.00 per unit for $3,000,000 cash and cancellation of the $305,000 loan made to the Company by Santa Monica Capital Partners, LLC, and (ii) a public offering of 12,500,000 units for net proceeds of $95,119,982 pursuant to a registration statement on Form S-1 declared effective by the Securities and Exchange Commission on March 27, 2007. The proceeds of the private placement and a portion of the proceeds of the public offering together totaling $98,605,000 were placed in a trust account. The amount in the trust account includes $4,000,000 of contingent underwriting compensation that will be paid to the underwriter if a business combination with an operating business that has a fair market value of at least 80% of the balance of the trust account at the time of the business combination (which assets shall include the amount in the trust account other than the deferred underwriting discount, less our liabilities) is consummated by or before April 2, 2009 (or December 15, 2009, if the amendment to extend the business combination deadline is approved, as described in further detail below). The proceeds from the public offering are to be held in the trust account until the earlier of (i) the consummation of a business combination or (ii) liquidation of the Company. The remaining net proceeds not held in the trust account of $100,000 and up to $1,600,000 of interest earned on the Trust Account (net of taxes payable) were used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.

We had identified and reviewed information with respect to over 130 possible target companies, 16 of which were provided with a detailed term sheet and/or preliminary term sheet . Our search for potential target businesses involved making contacts with candidates through members of our management team, board of directors and advisory board; seeking referrals from our professional network of contacts including consultants, investment bankers, and business brokers; and contacting owners of media, digital media and technology businesses.

General

We intended to utilize the cash proceeds of our initial public offering and the concurrent private placement of sponsor units held in trust, our capital stock, debt or a combination of these as consideration to be paid in a business combination. The target business was required to have a fair market value of at least 80% of the balance of the trust account atthe time of the business combination (which assets shall include the amount in the trust account other than the deferred underwriting discount, less our liabilities).

We have and will continue to seek to have all vendors, prospective target businesses or other entities, which we refer to as potential contracted parties or a potential contracted party, that we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account established in connection with our initial public offering for the benefit of our public stockholders. In the event that a potential contracted party were to refuse to execute such a waiver, we will execute an agreement with that entity only if our management first determines that we would be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing to execute such a waiver. Examples of instances where we may engage a third party that refuses to execute a waiver would be the engagement of a third party consultant whose particular expertise or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or a situation in which management does not believe it would be able to find a provider of required services willing to provide the waiver. If a potential contracted party refuses to execute such a waiver, then our Chief Executive Officer, David Marshall, and our other two executive officers, Kurt Brendlinger and Eric Pulier, will be personally liable to cover the potential claims made by such party for services rendered and goods sold, in each case to us, but only if, and to the extent, that the claims would otherwise reduce the trust account proceeds payable to our public stockholders in the event of a liquidation. However, if a potential contracted party executes a waiver, then Messrs. Brendlinger, Marshall and Pulier will have no personal liability as to any claimed amounts owed to a contracted party.

On September 26, 2008, we entered into a preliminary non-binding letter of intent with NUI to continue discussions regarding a potential merger with NUI and NUI’s potential acquisition candidate from all related members and shareholders of all entities. We believed the business combination with NUI was in the best interests of our stockholders. However, because there was no guarantee that we would be able to conclude the business combination with NUI by April 2, 2009, we filed a preliminary proxy statement with the Securities and Exchange Commission to seek stockholder approval to extend the time for closing the business combination beyond April 2, 2009 to December 15, 2009. We did not mail the proxy related to the extension to the shareholders and therefore are now working towards a plan of liquidation. As of the date of this report, we plan to distribute to our stockholders a proxy statement seeking approval (a) for a plan of liquidation to distribute the amount in our trust account to the holders of shares of our common stock acquired in our initial public offering and (b) to amend and restate our certificate of incorporation to permit the Company to continue as a corporation currently specified in our certificate without the limitations relating to our initial public offering.

Sources of target businesses

Target businesses were brought to our attention from various unaffiliated parties such as investment banking firms, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and similar sources. We also identified target businesses through management’s contacts within the private equity industry. Since the completion of our initial public offering, we have searched for potential business combination targets. During the process, we relied on numerous business relationships and contacted investment bankers, private equity funds, consulting firms, and legal and accounting firms. As a result of these efforts, we identified and reviewed information with respect to over 130 possible target companies, 15 of which (not including NUI) were provided with a detailed term sheet and/or a preliminary letter of intent.

The initial discussion between Company and NUI management commenced in August 2008. From September 2008 until the present, Company, while also involved in due diligence activities, engaged in negotiations with NUI and their respective members on the terms of the agreement to govern the business combination.

Selection of a target business and structuring of a business combination

Shortly after our initial public offering in April 2007, our management began an intensive process to seek a target business for a business combination. The focus of this effort was to find a suitable acquisition candidate that was engaged in one or more segments of the communications, media, gaming and/or entertainment industries.

The team had continuous conversations with the Board of Directors regarding their strategy and work plan. This plan provided for contacting a variety of unaffiliated sources to identify potential targets, including investment bankers, venture capital funds, private equity funds, reinsurance brokers and other members of the financial community. Professional firms that specialized in media and entertainment industry acquisitions were engaged on the basis that they would only receive compensation if we completed a business combination identified by them. Among the factors to be considered were the following:

financial condition and results of operations;

growth potential;

brand recognition and potential;

experience and skill of management and availability of additional personnel;

capital requirements;

stage of development of the business and its products or services;

existing distribution arrangements and the potential for expansion;

degree of current or potential market acceptance of the products or services;

proprietary aspects of products and the extent of intellectual property or other protection for products or formulas;

impact of regulation on the business;

seasonal sales fluctuations and the ability to offset these fluctuations through other business combinations, introduction of new products, or product line extensions; and

costs associated with effecting the business combination.

The target company search and evaluation process, which identified, investigated and analyzed companies in North America, Europe, Africa and Asia, included: reviews of industry research, published trade and corporate information, and attendance at industry meetings. Our management was also in frequent contact with representatives from Citigroup, one of the co-underwriters of our public offering.

Messrs. Marshall, Brendlinger and Pulier identified over 130 possible target companies and signed Non-Disclosure Agreements or Confidentiality Agreements with over 60. The search primarily focused on mid-sized communications, media, gaming or entertainment companies who were well positioned within their industry, had strong growth potential and a high quality management team.

Liquidation if no business combination

We were not able to complete a business combination by April 2, 2009 or to extend the business combination deadline to December 15, 2009 as was proposed in our preliminary proxy filed on March 5, 2009. Therefore we will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the amount in the trust account, inclusive of any interest and net of any income taxes due on such interest that will be paid from the trust account and interest income on the trust account balance released to us to fund working capital requirements including the costs of our liquidation, plus any remaining assets, on a per share basis the Liquidation Price. The Liquidation Price includes approximately $4.0 million in deferred underwriting discounts and commissions that would also be distributable to our public stockholders. As of December 31, 2008, the Liquidation Price that the public shareholders would receive is estimated to be approximately $8.05 per share

The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which could be prior to the claims of our public stockholders. Messrs. Brendlinger, Marshall and Pulier have agreed that, if we liquidate prior to the consummation of a business combination, they will be personally liable for ensuring that the proceeds in the trust account are not reduced by the claims of various vendors that are owed money by us for services rendered or contracted for or products sold to us, or claims of other parties with which we have contracted, including the claims of any prospective target with which we have entered into a written letter of intent, confidentiality or non-disclosure agreement with respect to a failed business combination with such prospective target. Messrs. Brendlinger, Marshall and Pulier will have such obligations only if such vendor or contracted party does not execute a waiver of its rights, title, interest or claim of any kind in or to the trust account, but only to the extent any claims made against the trust account and the payment of such debts or obligations actually reduces the amount in the trust account. However, we cannot assure you that Messrs. Brendlinger, Marshall and Pulier will be able to satisfy those obligations.

Messrs. Brendlinger, Marshall and Pulier are not personally liable to pay any of our debts and obligations except as provided above. Accordingly, we cannot assure you that due to claims of creditors the actual Liquidation Price will not be less than the expected Liquidation Price. If such funds are insufficient to cover the costs of our dissolution and liquidation, Messrs. Brendlinger, Marshall and Pulier have agreed to indemnify us for our out-of-pocket costs associated with such dissolution and liquidation, excluding any special, indirect or consequential costs, such as litigation, pertaining to such dissolution and liquidation.

Under our Amended and Restated Certificate of Incorporation, if we have entered into either a letter of intent, an agreement in principle or a definitive agreement to complete a business combination prior to the expiration of 18 months after the consummation of our initial public offering, then we may take up to an additional six months to complete a business combination. As we had successfully entered into letters of intent, the deadline had been extended by an additional six months to April 2, 2009. However, as we were not able to extend the applicable deadline through an amendment to our Amended and Restated Certificate of Incorporation, we will take all necessary actions to liquidate as expeditiously as possibly. As required under Delaware law, we will seek stockholder approval for such plan of liquidation. We will also seek stockholder approval to permit the Company to continue as a corporation without the limitations related to our initial public offering. If we do not receive stockholder approval to continue the corporation then corporate existence will cease by operation of law and, in any event, we will distribute to our public stockholders the amount in our trust account. Upon the approval by our stockholders of our plan of liquidation, we will liquidate our assets, including the trust account, and after reserving amounts from the interest earned on the trust account available to us as working capital requirements to cover the costs of liquidation, distribute those assets solely to our public stockholders. Agreements with the initial stockholders do not permit them to participate in any liquidation distribution occurring upon our failure to consummate a business combination with respect to those shares of common stock acquired by them before our initial public offering. They will participate in any liquidation distribution with respect to any shares of common stock acquired in connection with or following our initial public offering. There will be no distribution from our trust account with respect to our warrants, and, if we do not receive approval for continuing the Company in existence, all rights with respect to our warrants will effectively cease upon our liquidation. Upon notice from us, the trustee of the trust account will commence liquidating the investments constituting the trust account and will turn over the proceeds to our transfer agent for distribution to our public stockholders.

Under Delaware law, creditors of a corporation have a superior right to stockholders in the distribution of assets upon dissolution. Consequently, if the trust account is liquidated and paid out prior to all creditors being paid on their claims, stockholders may be held liable for claims by third parties against us to the extent of distributions received by them in a liquidation.

We have depleted the funds from the interest on the trust account available to us, and do not believe we have sufficient funds for all costs associated with implementing our plan of dissolution and liquidation as well as payments to any creditors. Although we had issued a promissory note of up to $500,000 to Santa Monica Capital Partners II, LLC, a limited liability company owned by Messrs. Brendlinger, Marshall and Pulier, on January 15, 2009, the loan advances are at the sole discretion of the lender.

If such funds are insufficient to cover the costs of our liquidation, Messrs. Brendlinger, Marshall and Pulier have agreed to indemnify us for our out-of-pocket costs associated with such liquidation, excluding any special, indirect or consequential costs, such as litigation, pertaining to such liquidation. We estimate that our total costs and expenses for implementing and completing our stockholder-approved plan of liquidation will be in the range of $50,000 to $75,000. This amount includes all costs and expenses relating to filing of a proxy statement and meeting relating to the approval by our stockholders of our plan of liquidation.

At this point, our public stockholders shall be entitled to receive funds from the trust account only through our liquidation. In no other circumstances shall a stockholder have any right or interest of any kind to or in the trust account. Prior to our liquidating, we are currently permitted only to release from the trust account interest income of up to $1.6 million to fund our working capital requirements, subject to the tax holdback, all of which has been released.

Upon our liquidation we will be required to pay or make reasonable provision to pay all of our claims and obligations, including all contingent, conditional, or unmatured claims. These amounts must be paid or provided for before we make any distributions to our stockholders. As we no longer have any funds from the interest on the trust account available to us for working capital, and have since then issued an unsecured promissory note to Santa Monica Capital Partners II for up to $500,000, we cannot assure you the funds from the promissory note will be sufficient to cover such claims and obligations. Although we have sought and continue to seek to have all vendors, prospective target businesses or other entities we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements, or if executed, that such waivers will be enforceable or otherwise prevent potential contracted parties from making claims against the trust account. Nor is there any guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Accordingly, the proceeds held in trust could be subject to claims which could take priority over the claims of our public stockholders and, as a result, the actual Liquidation Price could be less than the Liquidation Price based upon the proceeds of our initial public offering and the concurrent private placement of the sponsor units placed in the trust account, without taking into account interest earned on the trust account subsequent to our initial public offering, due to claims of such creditors. Messrs. Brendlinger, Marshall and Pulier will be personally liable for ensuring that the proceeds in the trust account are not reduced by the claims of any third party if such third party does not execute a waiver of its rights, title, interest or claim of any kind in or to the trust account, but only to the extent any claims made against the trust account and the payment of such debts or obligations actually reduces the amount in the trust account. However, we cannot assure you that Messrs. Brendlinger, Marshall and Pulier will be able to satisfy those obligations.

Furthermore, creditors may seek to interfere with the distribution of the trust account pursuant to federal or state creditor and bankruptcy laws, which could delay the actual distribution of such funds or reduce the amount ultimately available for distribution to our public stockholders. If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the funds held in our trust account will be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account we cannot assure you we will be able to return to our public stockholders the liquidation amounts due them. Accordingly, the actual per share amount distributed from the trust account to our public stockholders could be significantly less than Liquidation Price based upon the proceeds of our initial public offering and the concurrent private placement of the sponsor units placed in the trust account, without taking into account interest earned on the trust account subsequent to our initial public offering. Any claims by creditors could cause additional delays in the distribution of trust funds to the public stockholders beyond the time periods required to comply with Delaware General Corporation Law procedures and federal securities laws and regulations.

Competition

In identifying, evaluating and selecting a target business for a business combination, we encountered intense competition from other entities having a business objective similar to ours including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Furthermore:

our obligation to seek stockholder approval of our initial business combination or obtain necessary financial information could have delayed the completion of a transaction;

our obligation to convert into cash up to 19.99% of our shares of common stock held by our public stockholders who vote against the extension amendment and exercise their conversion rights could have reduced the resources available to us for a business combination;

our obligation to convert into cash up to 19.99% of our shares of common stock held by our public stockholders who vote against the business combination and exercise their conversion rights could have reduced the resources available to us for a business combination; and

our outstanding warrants, and the future dilution they potentially represent, may not have been viewed favorably by certain target businesses.

We believe that some or all of these factors placed us at a competitive disadvantage in successfully negotiating a business combination.

Administrative Services Agreement

We have agreed to pay Santa Monica Capital Corp., an entity owned and controlled by Mr. Marshall, a total of $7,500 per month for office space, administrative services and secretarial support, not to exceed $180,000 in the aggregate. As of October 1, 2007, this agreement was assigned to Santa Monica Capital Partners, LLC, an entity owned and controlled by Mr. Marshall, Mr. Brendlinger, Mr. Pulier and Mr.Baradaran, all of whom are directors of the Company. Mr. Marshall is our chairman and chief executive officer, Mr. Brendlinger is our Chief Financial Officer and Mr. Pulier is our Chief Technology Officer. This arrangement was agreed to by us and Santa Monica Capital Corp. for our benefit and is not intended to provide Messrs. Brendlinger, Marshall, Pulier or the other directors compensation in lieu of a salary or other remuneration because it is anticipated that the expenses to be paid will approximate the monthly reimbursement. We believe that such fees are at least as favorable as we could have obtained from an unaffiliated person. Upon completion of our liquidation, we will cease paying these monthly fees.

ITEM 1A.

RISK FACTORS

When we liquidate, our public stockholders will receive less than $8.00 per share on distribution of trust account funds and our warrants will expire worthless.

When we liquidate our assets, the Liquidation Price will be less than $8.00 because of the expenses of our initial public offering, our general and administrative expenses and the historical costs of seeking a business combination. Furthermore, our outstanding warrants are not entitled to participate in a liquidating distribution and the warrants will therefore expire worthless when we liquidate if the Company does not continue in existence.

You will not receive protections normally afforded to investors in blank check companies.

Since the net proceeds of our initial public offering are designated for completing a business combination with a target business that had not been identified at the time of the offering, we may be deemed a “blank check” company under the United States securities laws. However, because we had net tangible assets in excess of $98,000,000 and filed a Form 8-K with the SEC that included an audited balance sheet demonstrating this fact, we are exempt from SEC rules such as Rule 419 that are designed to protect investors in blank check companies. Accordingly, our stockholders will not receive the benefits or protections of that rule..

If third parties bring claims against us, the proceeds held in trust could be reduced and the Liquidation Price received by you could be reduced.

Our placing of funds in trust may not protect those funds from third party claims against us. Pursuant to Delaware General Corporation Law Sections 280 and 281, upon our liquidation we will be required to pay or make reasonable provision to pay all of our claims and obligations, including all contingent, conditional, or unmatured claims. These amounts must be paid or provided for before we make any distributions to our stockholders. We have expended all of the interest on the trust account available to us for working capital. Although we have sought and continue to seek to have all vendors, prospective target businesses or other entities we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements, or if executed, that such waivers will be enforceable or otherwise prevent potential contracted parties from making claims against the trust account. Nor is there any guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Accordingly, the proceeds held in trust could be subject to claims which could take priority over the claims of our public stockholders and, as a result, the actual Liquidation Price could be less than the expected Liquidation Price based upon the proceeds of our initial public offering and the concurrent private placement of the sponsor units placed in the trust account, without taking into account interest earned on the trust account subsequent to our initial public offering, due to claims of such creditors. Considering we are forced to liquidate, Messrs. Brendlinger, Marshall and Pulier will be personally liable for ensuring that the proceeds in the trust account are not reduced by the claims of any third party if such third party does not execute a waiver of its rights, title, interest or claim of any kind in or to the trust account, but only to the extent any claims made against the trust account and the payment of such debts or obligations actually reduces the amount in the trust account. However, we cannot assure you that Messrs. Brendlinger, Marshall and Pulier will be able to satisfy those obligations. Based on the information in their director and officer questionnaires provided to us in connection with our initial public offering as well as the representations as to each of their accredited investor status (as such term is defined in Regulation D under the Securities Act), we currently believe that Messrs. Brendlinger, Marshall and Pulier are of substantial means and capable of funding their indemnity obligations, even though we have not asked them to reserve for such an eventuality. However, we cannot assure you Messrs. Brendlinger, Marshall and Pulier will be able to satisfy those obligations. We believe the likelihood of Messrs. Brendlinger, Marshall and Pulier having to indemnify the trust account is limited because we have thus far had all vendors and prospective target businesses as well as other entities execute agreements with us waive any right, title, interest or claims of any kind in or to monies held in the trust account.

We have depleted the funds from the interest on the trust account available to us, and do not believe we have sufficient funds for all costs associated with implementing our plan of liquidation as well as payments to any creditors. Although we had issued a promissory note of up to $500,000 to Santa Monica Capital Partners II, LLC, a limited liability company owned by Messrs. Brendlinger, Marshall and Pulier, on January 15, 2009, the loan advances are at the sole discretion of the lender. If there are insufficient funds, creditors will be unpaid, and to the extent that they have not agreed to waive their rights against the assets held in our trust account, may proceed against the trust assets.

Furthermore, creditors may seek to interfere with the distribution of the trust account pursuant to federal or state creditor and bankruptcy laws, which could delay the actual distribution of such funds or reduce the amount ultimately available for distribution to our public stockholders. If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the funds held in our trust account will be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account we cannot assure you we will be able to return to our public stockholders the liquidation amounts due them. Accordingly, the actual per share amount distributed from the trust account to our public stockholders could be significantly less than the expected Liquidation Price, without taking into account interest earned on the trust account subsequent to our initial public offering (net of taxes payable on interest income on the funds in the trust account and interest income of up to $1.6 million on the trust account balance previously released to us to fund our working capital requirements, including the costs of our liquidation). Any claims by creditors could cause additional delays in the distribution of trust funds to the public stockholders beyond the time periods required to comply with Delaware General Corporation Law procedures and federal securities laws and regulations.

Stockholders may be held liable for claims by third parties against us to the extent of distributions received by them in a liquidation.

We were not able to complete a business combination within 24 months after the consummation of our initial public offering, or to extend the business combination deadline as proposed in our preliminary proxy filed on March 5, 2009, therefore we will distribute to our public stockholders an amount equal to the amount in the trust account, including (i) all accrued interest, net of income taxes payable on such interest, and (ii) all deferred underwriting discounts and commissions plus any remaining assets. Under Delaware law, creditors of a corporation have a superior right to stockholders in the distribution of assets upon liquidation. Consequently, if the trust account is paid out prior to all creditors being paid on their claims, stockholders may be held liable for claims by third parties against us to the extent of distributions received by them in a dissolution.

Under Delaware law, the distribution of the trust requires the approval of the holders of a majority of our outstanding stock, without which we will not be able to liquidate, and distribute our assets to our public stockholders.

We are currently working on adopting a plan of liquidation and initiating procedures for liquidation. However, pursuant to Delaware law, our liquidation requires the affirmative vote of stockholders owning a majority of our then outstanding common stock. Soliciting the vote of our stockholders will require the preparation of preliminary and definitive proxy statements, which will need to be filed with the SEC and could be subject to its review. This process could take a substantial amount of time ranging from 40 days to several months.

As a result, the distribution of our assets to the public stockholders could be subject to a considerable delay. Furthermore, we may need to postpone the stockholders’ meeting, resolicit our stockholders, or amend our plan of liquidation to obtain the required stockholder approval, all of which would further delay the distribution of our assets and result in increased costs. If we are not able to obtain approval from a majority of our stockholders, we will not be able to liquidate and we will not be able to distribute funds from our trust account to holders of our common stock sold in our initial public offering, and these funds will not be available for any other corporate purpose. In the event we seek stockholder approval for a plan of liquidation and do not obtain such approval, we will nonetheless continue to pursue stockholder approval for our liquidation. However, we cannot assure you that our stockholders will approve our liquidation in a timely manner or will ever approve our dissolution. As a result, we cannot provide investors with assurances of a specific timeframe for the distribution.

Our initial stockholders currently control us and may influence certain actions requiring a stockholder vote.

The holders of shares of our common stock issued prior to the consummation of our initial public offering, whom we refer to as our initial stockholders, own approximately 22% of our issued and outstanding shares of common stock. Our initial stockholders and Santa Monica Capital Partners, LLC have agreed that any common stock they acquire in or after our initial public offering will be voted in favor of a business combination that is presented to our public stockholders. Accordingly, shares of common stock acquired by the initial stockholders and Santa Monica Capital Partners, LLC in or after our initial public offering will not have the same voting or conversion rights as our public stockholders with respect to a potential business combination.

We may not have sufficient funds to complete our liquidation. As we had depleted the offering proceeds not in trust or available to us from interest earned on the trust account balance, we issued an unsecured promissory note to Santa Monica Capital Partners II, LLC, a limited liability company owned by Messrs. Marshall, Brendlinger and Pulier on January 15, 2009.

We may not have sufficient funds to complete our liquidation. On January 15, 2009, we issued an unsecured promissory note to Santa Monica Capital Partners II, LLC, for up to $500,000 at a simple rate of interest equal to 10%. Funds advanced are at the sole discretion of the lender. In the event these funds cannot sustain us through the liquidation, we would need to borrow funds from our management team to operate. If we do not have sufficient funds to cover the costs of our liquidation, Messrs. Brendlinger, Marshall and Pulier have agreed to indemnify us for our out-of-pocket costs associated with such liquidation, excluding any special, indirect or consequential costs, such as litigation, pertaining to such liquidation.

Vendors who have not waived their right to funds held in the trust account could seek to recover their expenses from the trust account, which could ultimately deplete the trust account and reduce a public stockholder’s current pro rata portion of the trust account upon liquidation.

We do not have sufficient funds outside of the trust account to pay our obligations and do not believe we have sufficient funds for all costs associated with implementing our plan of liquidation as well as payments to any creditors. Although we had issued a promissory note of up to $500,000 to Santa Monica Capital Partners II, LLC, a limited liability company owned by Messrs. Brendlinger, Marshall and Pulier, on January 15, 2009, the loan advances are at the sole discretion of the lender.

Considering our plan to liquidate, it is possible that vendors that have not waived their right to funds held in the trust account could seek to recover these expenses from the trust account, which could ultimately deplete the trust account and reduce a public stockholder’s current pro rata portion of the trust account upon liquidation. In connection with the IPO, Messrs. Marshall, Brendlinger and Pulier agreed to indemnify us for debts and obligations to vendors that are owed money by us, but only to the extent necessary to ensure that certain liabilities do not reduce funds in the trust account. Therefore, if vendors that have not signed waivers sue the trust account and win their cases, the trust account could be reduced by the amount of the claims and such officers would be required to fulfill his indemnification obligations. To the extent any of such officers fail to fulfill his indemnification obligations, the trust account may be depleted.

If we are deemed to be an investment company, we must meet burdensome compliance requirements and restrictions on our activities may increase the difficulty of completing a business combination.

If we are deemed to be an investment company under the Investment Company Act of 1940, the nature of our investments and the issuance of our securities may be subject to various restrictions. In addition, we may be subject to burdensome compliance requirements and may have to:

adopt a specific form of corporate structure; and

report, maintain records and adhere to voting, proxy, disclosure and other requirements.

We do not believe that our present principal activities will subject us to the Investment Company Act of 1940. In this regard, our agreement with the trustee states that proceeds in the trust account will only be invested in “government securities” (as such term is defined in the Investment Company Act of 1940) and one or more money market funds, selected by us, which invest principally in either short-term securities issued or guaranteed by the United States having a rating in the highest investment category granted thereby by a recognized credit rating agency at the time of acquisition or tax exempt municipal bonds issued by governmental entities located within the United States and otherwise meeting the conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940. This investment restriction is intended to facilitate our not being considered an investment company under the Investment Company Act of 1940. If we are deemed to be subject to that Act, compliance with these additional regulatory burdens would increase our operating expenses.

The NYSE Alternext will delist our securities which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our securities are listed on NYSE Alternext, and we have received a notice from the exchange indicating that we are below certain additional continued listing standards. Additionally, if the stockholders approve the continuation in existence of the Company, the Company’s stock will be delisted, in which case it is expected that the securities will be traded on the OTC Bulletin on the Pink Sheets. In response, we had submitted our plan of compliance to NYSE Alternext on March 9, 2009, which set forth our plan to hold an annual shareholder meeting on or about May 15, 2009. We cannot assure you that our securities will continue to be listed on NYSE Alternext.

If NYSE Alternext delists our securities from trading, we could face significant consequences including:

a limited availability of market quotations for our securities;

reduced liquidity with respect to our securities;

a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock;

limited amount of news and analyst coverage for our company; and

a decreased ability to issue additional securities or obtain additional financing in the future.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

Inapplicable.

ITEM 2.

PROPERTIES

We maintain our executive offices at 12121 Wilshire Blvd., Suite 1001, Los Angeles, California 90025. We consider our current office space adequate for our current operations.

ITEM 3.

LEGAL PROCEEDINGS

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our shareholders during the quarter ended December 31, 2008.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Use of Proceeds from our Initial Public Offering

See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Annual Report on Form 10-K for information regarding the use of proceeds from the Company’s initial public offering as disclosed on the Company’s Registration Statement on Form S-1 (File No. 333-128384) filed with the Securities and Exchange Commission, which was declared effective as of March 27, 2007.

Market Information

Our units, which consist of one share of our common stock, par value $.001 per share, and one warrant, each to purchase an additional share of our common stock, trade on the NYSE Alternext (formerly American Stock Exchange) under the symbol “MEJ-U” Our common stock and warrants have traded separately on the NYSE Alternext (formerly the American Stock Exchange) under the symbols “MEJ” and “MEJ-WT”, respectively, since April 18, 2007. Each warrant entitles the holder to purchase from us one share of our common stock at an exercise price of $6.00 commencing the completion of a business combination. Our warrants will expire at 5:00 p.m., Los Angeles time, on March 27, 2011, or earlier upon redemption.

The following tables set forth, for the calendar quarter indicated, the quarterly high and low sale prices for the Company’s units, common stock and warrants, respectively, as reported on NYSE Alternext (formerly the American Stock Exchange).

Units

Quarter ended	High		Low
December 31, 2008	$	7.75	$	6.91
September 30, 2008	$	8.15	$	7.80
June 30, 2008	$	8.00	$	7.68
March 31, 2008	$	8.08	$	7.74
December 31, 2007	$	8.18	$	7.85
September 30, 2007	$	8.25	$	7.94
June 30, 2007 (1)	$	8.20	$	7.90

(1)	Represents the high and low sale prices for our units from our initial public offering on April 2, 2007 through June 30, 2007.

Common Stock

Quarter ended	High		Low
December 31, 2008	$	7.80	$	7.45
September 30, 2008	$	7.97	$	7.55
June 30, 2008	$	7.75	$	7.55
March 31, 2008	$	7.65	$	7.45
December 31, 2007	$	7.46	$	7.29
September 30, 2007	$	7.70	$	7.41
June 30, 2007 (1)	$	7.62	$	7.42

(1)	Represents the high and low sale prices for our shares of common stock from April 18, 2007, the date that our common stock first became separately tradable, through June 30, 2007.

Warrants

Quarter ended	High		Low
December 31, 2008	$	0.14	$	0.00
September 30, 2008	$	0.15	$	0.05
June 30, 2008	$	0.30	$	0.13
March 31, 2008	$	0.52	$	0.20
December 31, 2007	$	0.80	$	0.64
September 30, 2007	$	0.79	$	0.55
June 30, 2007 (1)	$	0.72	$	0.50

(1)	Represents the high and low sale prices for our warrants from April 18, 2007, the date that our warrants first became separately tradable, through June 30, 2007.

During the years ended December 31, 2008 and 2007, we did not issue any shares of common stock that were not registered under the Securities Act of 1933.

Stockholders

As of March 13, 2009, there were approximately 19 holders of record of our common stock, not including any persons who hold their stock in “street name.”

Dividend Policy

We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.

Issuances of Unregistered Securities; Purchases of Securities

We did not issue any unregistered securities during the three-month period ended December 31, 2008 that were not previously reported in a Current Report on Form 8-K, and we did not repurchase any securities during that period.

ITEM 6.

SELECTED FINANCIAL DATA

Results of Operations

The following table sets forth selected historical financial information derived from our audited financial statements for the period from June 24, 2005 (inception) to December 31, 2005, and for the years ended December 31, 2006, 2007 and 2008. The following data should be read in conjunction with Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and our financial statements including the notes thereto, included elsewhere in this Annual Report on Form 10-K.

Statement of Operations Information:

	Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2006			June 24, 2005 (inception) to December 31, 2005
General and administrative expenses	$	1,494,740		$	507,351		$	37,057		$	53,704
Operating (loss)		(1,494,740	)		(507,351	)		(37,057	)		(53,704	)
Other income:
Interest (expense)		(2,024	)		(12,783	)		(12,293	)		(6,000	)
Interest income		1,677,196			3,424,135			—			—
Net income (loss) attributable to common stockholders		(357,568	)		1,787,701			(50,150	)		(60,504	)
Net income (loss) attributable to common stockholders per share:
Basic	$	(0.02	)	$	0.14		$	(0.01	)	$	(0.01	)
Diluted	$	(0.02	)	$	0.12		$	(0.01	)	$	(0.01	)

Weighted average shares outstanding:
Basic		16,038,125			12,818,688			4,225,171			4,687,500
Diluted		16,038,125			15,345,922			4,225,171			4,687,500

Balance Sheet Information:

	December 31, 2008		December 31, 2007		December 31, 2006			December 31, 2005
Cash	$	15,236	$	41,589	$	6,732		$	129,434
Cash equivalents held in trust - restricted		100,698,690		101,277,107		—			—
Total assets		100,981,696		101,369,196		964,378			442,279
Deferred underwriting liability		4,000,000		4,000,000		—			—
Total liabilities		24,876,235		24,906,167		1,015,032			442,783
Common stock subject to possible conversion		19,720,992		19,720,992		—			—
Stockholders’ equity (deficiency)		76,105,461		76,463,029		(50,654	)		(504	)

Quarterly Results of Operations

The following table sets forth unaudited operating data for each of the quarters of the years ended December 31, 2008 and 2007. This quarterly information has been prepared on the same basis as the annual financial statements of the Company and, in the opinion of management, reflects all significant adjustments (consisting primarily of normal recurring adjustments) necessary for a fair presentation of results of operations for the periods presented.

For the year ended December 31, 2008	First Quarter (unaudited)		Second Quarter (unaudited)			Third Quarter (unaudited)		Fourth Quarter (unaudited)
Net income (loss) attributable to common stockholders	$	68,855	$	(80,260	)	$	54,987	$	(401,150	)
Net income (loss) per share
Basic	$	0.00	$	(0.01	)	$	0.00	$	(0.03	)
Diluted	$	0.00	$	(0.01	)	$	0.00	$	(0.03	)

For the year ended December 31, 2007	First Quarter (unaudited)			Second Quarter (unaudited)		Third Quarter (unaudited)		Fourth Quarter (unaudited)
Net income (loss)	$	(12,064	)	$	708,150	$	641,186	$	450,429
Basic income (loss) per share	$	(0.00	)	$	0.04	$	0.04	$	0.03
Diluted income (loss) per share	$	(0.00	)	$	0.04	$	0.03	$	0.02

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We were formed on June 24, 2005 for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with one or more operating businesses. Our efforts in identifying a prospective target business have been focused on acquiring an operating business in the communications, media, gaming and/or entertainment industry. Our initial business combination must be with a business or businesses whose collective fair market value is at least equal to 80% of our net assets at the time of the acquisition.

On April 2, 2007, we completed: (i) a private placement of 413,125 units at $8.00 per unit for $3,000,000 cash and cancellation of the $305,000 loan made to the Company by Santa Monica Capital Partners, LLC, and (ii) a public offering of 12,500,000 units for net proceeds of $95,119,982 pursuant to a registration statement on Form S-1, which was declared effective by the Securities and Exchange Commission on March 27, 2007. The proceeds of the private placement and a portion of the proceeds of the public offering, together totaling $98,605,000, were placed in a trust account, which are to be held until the earlier of (i) the consummation of a business combination or (ii) liquidation of the company. The amount in the trust account includes $4,000,000 of contingent underwriting compensation that will be paid to the underwriter if a business combination is consummated. The remaining net proceeds not held in the trust account of $100,000, together with up to $1,600,000 of interest earned on the trust account (net of taxes payable), were used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Each unit consists of one share of the Company’s common stock, and one warrant to purchase one share of common stock at an exercise price of $6.00 commencing upon the completion of a business combination with a target business and expiring four years from the effective date of the public offering. In the event that the last sale price of the common stock is at least $11.50 per share (subject to proportionate adjustment of the warrant price pursuant to the warrant agreement) for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given the warrants will be redeemable at a price of $.01 per warrant upon 30 days’ notice after the warrants become exercisable. In addition, we granted the underwriters an option to purchase up to an additional 1,875,000 units at the public offering price less the underwriters’ discount and commission, within 30 days of the date of the prospectus, to cover any over-allotments for public sale. The underwriters did not exercise any portion of this option.

The proceeds deposited in the trust account will not be released from the trust account until the earlier of the completion of a business combination or the expiration of the time period during which we may complete a business combination. The proceeds held in the trust account (other than the contingent underwriting discount) may be used as consideration to pay the sellers of a target business with which we complete a business combination.

While we have identified and reviewed information with respect to over 130 possible target companies, 16 of which were provided with a detailed term sheet and/or preliminary term sheet, there is no guarantee that we will be able to engage in a business combination with a target business on favorable terms by April 2, 2009. Our search for potential target businesses involved making contacts with candidates through members of our management team, board of directors and advisory board; seeking referrals from our professional network of contacts including consultants, investment bankers, and business brokers; and contacting owners of media, digital media and technology businesses.

As discussed in the preliminary proxy statement we filed with the Securities and Exchange Commission on Schedule 14A on March 5, 2009, we entered into a letter of intent with NUI, a “healthy kids lifestyle” company, and were negotiating the terms of the definitive agreement. NUI is controlled indirectly by David Marshall, our Chief Executive Officer, Chairman and director. We believed the business combination with NUI was in the best interests of our stockholders. However, because we did not believe the business combination with NUI would be completed by April 2, 2009, we had filed a proxy statement to seek an extension for closing the business combination beyond April 2, 2009 to December 15, 2009. We did not mail the proxy related to the extension to the shareholders and therefore are now working towards a plan of liquidation. As of the date of this report, we plan to distribute to our stockholders a proxy statement seeking approval (a) for a plan of liquidation to distribute the amount in our trust account to the holders of shares of our common stock acquired in our initial public offering and (b) to amend and restate our certificate of incorporation to permit the Company to continue as a corporation currently specified in our certificate without the limitations relating to our initial public offering.

Results of Operations

As of December 31, 2008, approximately $100,699,000 (including approximately $2,000 in accreted treasury bill interest) was held in trust and we had approximately $15,000 of unrestricted cash. As of December 31, 2008, the Company has withdrawn $1,600,000 in interest earned on the funds held in the trust account, the maximum permitted for our activities in connection with identifying and conducting due diligence of a suitable business combination, and for general corporate matters.

Through December 31, 2008, our efforts have been limited to organizational activities, activities relating to our initial public offering, activities relating to identifying and evaluating prospective acquisition candidates, and activities relating to general corporate matters; we have neither engaged in any operations nor generated any revenues, other than interest income earned on the proceeds of our private placement and initial public offering. For the year ended December 31, 2008, we earned $1,675,172 in interest income, net of interest expense. Consistent with the overall market for U.S. Treasury's, the Company has received markedly lower yields on its Treasury Bill investment in the year ended December 31, 2008 compared to the year ended December 31, 2007, and is currently receiving historically low yields of near zero.

The following table shows the total funds held in the trust account through December 31, 2008:

Net proceeds from our initial public offering and private placement of units placed in trust	$	94,605,000
Deferred underwriters’ discounts and compensation		4,000,000
Total interest received to date		5,099,166
Less total interest disbursed to us for working capital		(1,600,000	)
Less total taxes paid		(1,407,642	)
		100,696,524
Treasury Bill interest accreted		2,166
Total funds held in trust account through December 31, 2008	$	100,698,690

For the year ended December 31, 2008, we paid or incurred an aggregate of $1,494,740 in expenses for the following purposes:

Premiums associated with our directors and officers liability insurance;

expenses for due diligence and investigation of prospective target businesses;

legal and accounting fees relating to potential acquisitions, SEC reporting obligations and general corporate matters; and

miscellaneous operations related expenses including administrative fees and franchise taxes.

For the period following December 31, 2008 through the date of liquidation, if any, we expect to incur expenses for the following purposes:

payment of premiums associated with our directors’ and officers’ insurance;

payment of estimated income taxes incurred as a result of interest income earned on funds currently held in the trust account;

legal and accounting fees relating to our SEC reporting obligations and general corporate matters;

costs related to our liquidation including, filing of a proxy statement and meeting relating to the approval by our stockholders of our plan of liquidation

other miscellaneous operations related expenses including administrative fees and franchise taxes.

Lack of Funds

We may not have sufficient funds to allow us to operate through the date of liquidation. We had depleted all the funds available to us from the trust account. As a result, on January 15, 2009, the Company entered into an unsecured loan facility with Santa Monica Capital Partners II, LLC, an entity owned by Messrs. Marshall, Brendlinger and Pulier (“SMCPII”) to provide up to $500,000 in funds at the discretion of SMCPII. The promissory note provides for interest at the rate of 10% per annum, and that the principal along with all accrued and unpaid interest is due on the earlier of (i) the closing of a business combination, or (ii) the date the Company liquidates its assets. In the event the Company is required to and does liquidate pursuant to its Amended and Restated Certificate of Incorporation, unless counsel to the Company delivers an opinion that the amounts due under the note may be paid from the trust account, no amounts may be paid from such account, it being understood that upon liquidation, SMCPII’s sole recourse shall be against assets of the Company not held in the trust account.

If additional funds are required above this amount, or if SMCPII does not make the discretionary advances contemplated under the promissory note, the Company will need to obtain additional funds from its stockholders or another source. In the event the assets held outside the trust account are insufficient to pay the costs associated with liquidation of the Company, its three principal executive officers David Marshall, Kurt Brendlinger and Eric Pulier are obligated to provide additional funds required to pay the costs associated with the liquidation.

As of March 13, 2009, the Company has received $310,000 in loan advances under this promissory note. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As a result of the foregoing, the Company’s independent registered public accounting firm, in its report on the Company’s 2008 financial statements, expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market driven rates or prices. We are not presently engaged in any substantive commercial business. To date, our efforts have been limited to organizational activities and activities relating to our initial public offering and the identification of a target business; we have neither engaged in any operations nor generated any revenues. Accordingly, the risks associated with foreign exchange rates, commodity prices, and equity prices are not significant. The net proceeds of our IPO held in the trust fund have been invested only in United States "government securities," defined as any Treasury Bill issued by the United States having a maturity of one hundred and eighty days or less. Given our limited risk to principal in our exposure to U.S. Treasury Bills and such money market funds, we do not view the interest rate risk to be significant. Consistent with the overall market for U.S. Treasury's, the Company is receiving historically low yields on its Treasury Bill investments. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements:

	Page

Report of Independent Registered Public Accounting Firm:	19
Balance Sheets	20
Statements of Operations	21
Statement of Stockholders’ Equity	22
Statement of Cash Flows	23
Notes to Audited Financial Statements	24

Schedules have been omitted since they are either not required, are not applicable or the required information is shown in the financial statements or the related notes.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Shareholders of

Santa Monica Media Corporation

We have audited the accompanying balance sheets of Santa Monica Media Corporation (a corporation in the development stage) (the “Company”) as of December 31, 2008 and 2007, the related statements of operations and cash flows for the years ended December 31, 2008 and 2007, and the period from June 24, 2005 (inception) through December 31, 2008, and the statement of stockholders’ equity for the period from June 24, 2005 (inception) through December 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Santa Monica Media Corporation as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years ended December 31, 2008 and 2007, and the period from June 24, 2005 (inception) through December 31, 2008, in conformity with United States generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2 to the financial statements, the Company has incurred a net loss for the year ended December 31, 2008 and does not have sufficient working capital or outside financing available to meet its planned operating activities. The Company has been forced to liquidate because a business combination had not been completed by April 2, 2009. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have also audited, in accordance with the standards of the Public Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008, based on criteria established in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated August 25, 2009 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/S/ Gumbiner Savett Inc.

Gumbiner Savett Inc.

Santa Monica, CA

March 11, 2009, except for Notes 1, 2 and 11 as to which the date is April 2, 2009, and except for our report on the effectiveness of the Company’s internal control over financial reporting as to which the date is August 25, 2009

SANTA MONICA MEDIA CORPORATION

(a corporation in the development stage)

BALANCE SHEETS

December 31, 2008 and 2007

	December 31, 2008		December 31, 2007

ASSETS
CURRENT ASSETS
Cash	$	15,236	$	41,589
Cash and cash equivalents held in trust		100,698,690		101,277,107
Prepaids and other current assets		87,770		50,500
Refundable income taxes		180,000		-
Total current assets		100,981,696		101,369,196

TOTAL ASSETS	$	100,981,696	$	101,369,196

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	302,399	$	69,675
Reserve for state franchise tax		390,844		-
Deferred interest on funds held in trust		462,000		-
Income taxes payable		-		790,500
Deferred tax liability		-		325,000
Deferred underwriting liability		4,000,000		4,000,000
Total current liabilities		5,155,243		5,185,175

NONCURRENT LIABILITIES:
Common stock subject to conversion, 2,499,999 shares at conversion value		19,720,992		19,720,992

TOTAL LIABILITIES		24,876,235		24,906,167

COMMITMENTS

STOCKHOLDERS’ EQUITY:
Preferred Stock, $.001 par value, 25,000,000 shares authorized; none issued or outstanding		-		-
Common stock, $.001 par value, 200,000,000 shares authorized; 16,038,125 issued and outstanding (including 2,499,999 subject to conversion) at December 31, 2008 and 2007		16,038		16,038
Additional paid-in capital		74,769,944		74,769,944
Retained earnings		1,319,479		1,677,047
Total stockholders’ equity		76,105,461		76,463,029

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	100,981,696	$	101,369,196

See accompanying notes to financial statements.

SANTA MONICA MEDIA CORPORATION

(a corporation in the development stage)

STATEMENTS OF INCOME

For the years ended December 31, 2008 and 2007 and for the period from June 24, 2005 (inception) through December 31, 2008

							For the period from June 24, 2005 (inception) through
	December 31, 2008			December 31, 2007			December 31, 2008
Operating expenses
Professional fees	$	417,907		$	119,974		$	551,419
Rent and facilities		90,000			22,500			157,500
Formation and operating costs		986,833			364,877			1,383,933
Total operating expenses		1,494,740			507,351			2,092,852

Other income (expense)
Interest income		1,677,196			3,424,135			5,101,331
Interest expense		(2,024	)		(12,783	)		(33,100	)
Total other income (expense)		1,675,172			3,411,352			5,068,231


Income before provision for income taxes		180,432			2,904,001			2,975,379

Provision for income taxes
Current		437,000			791,300			1,229,900
Deferred		(361,000	)		325,000			(36,000	)
		76,000			1,116,300			1,193,900

Income before allocation of trust fund interest		104,432			1,787,701			1,781,479

Allocation of trust fund intererst relating to common stock subject to possible conversion		462,000			-			462,000
Net income (loss) available to common stockholders	$	(357,568	)	$	1,787,701		$	1,319,479

Weighted average shares outstanding - basic		16,038,125			12,818,688			10,090,346
Weighted average shares outstanding - fully diluted		16,038,125			15,345,922			13,070,298
Net income (loss) per share
Basic	$	(0.02	)	$	0.14		$	0.13
Fully diluted	$	(0.02	)	$	0.12		$	0.10

See accompanying notes to financial statements

SANTA MONICA MEDIA CORPORATION

(a corporation in the development stage)

STATEMENT OF STOCKHOLDERS' EQUITY

For the period from June 24, 2005 (inception) through December 31, 2008

	Common Shares			Amount			Additional Paid in Capital			Retained Earnings (Accumulated Deficit)			Total
Common shares issued June 24, 2005 at $.0128 per share		4,687,500		$	4,688		$	55,312		$	-		$	60,000

Net loss											(60,504	)		(60,504	)

Balance at December 31, 2005		4,687,500			4,688			55,312			(60,504	)		(504	)

Shares reacquired		(1,562,500	)		(1,563	)		1,563			-			-

Net loss											(50,150	)		(50,150	)

Balance at December 31, 2006		3,125,000			3,125			56,875			(110,654	)		(50,654	)

Sale of units in private placement, including conversion of notes payable		413,125			413			3,304,587						3,305,000

Sale of units, net of underwriters' discount and offering costs		12,500,000			12,500			91,107,482						91,119,982

Forgiveness of interest by a related party								21,992						21,992

Proceeds subject to possible conversion of 2,499,999 shares								(19,720,992	)					(19,720,992	)

Net income		-			-			-			1,787,701			1,787,701

Balance at December 31, 2007		16,038,125			16,038			74,769,944			1,677,047			76,463,029

Net loss available to common stockholders		-			-			-			(357,568	)		(357,568	)

Balance at December 31, 2008		16,038,125		$	16,038		$	74,769,944		$	1,319,479		$	76,105,461

See accompanying notes to financial statements

SANTA MONICA MEDIA CORPORATION

(a corporation in the development stage)

STATEMENTS OF CASH FLOWS

							For the period from June 24, 2005 (inception) through
	December 31, 2008			December 31, 2007			December 31, 2008
Cash flow from operating activities:
Net income (loss) available to common shareholders	$	(357,568	)	$	1,787,701		$	1,319,479
Adjustments to reconcile net income to net cash provided by operating activities
(Increase) decrease in accretion in fair market value of Treasury Bills held in trust account		960,691			(962,857	)		(2,166	)
Amortization expense		74,887			59,375			134,262
Increase in other current assets		(48,697	)		(14,250	)		(338,572	)
Increase in refundable income taxes		(180,000	)		-			-
Increase in deferred interest on funds held in trust		462,000			-			462,000
Increase (decrease) in income taxes payable		(790,500	)		790,500			-
Increase (decrease) in deferred income tax		(325,000	)		325,000			-
Increase in reserve for state franchise tax		390,844			-			-
Increase (decrease) in accounts payable and accrued expenses		169,264			(563,355	)		651,775
Net cash provided by operating activities		355,921			1,422,114			2,226,778

Cash flows from investing activities:
Payment to trust account		-			(98,605,000	)		(98,605,000	)
Withdrawals from trust account		2,255,614			752,028			3,007,642
Proceeds into trust account		(2,637,888	)		(2,461,278	)		(5,099,166	)
Net cash used in investing activities:		(382,274	)		(100,314,250	)		(100,696,524	)

Cash flows from financing activities:
Proceeds from notes payable, related party		-			30,000			335,000
Payment on notes payable, related party		-			(30,000	)		(30,000	)
Proceeds from sale of shares of common stock		-			-			60,000
Proceeds from private placement		-			3,000,000			3,000,000
Proceeds from sale of units, net of offering costs		-			95,926,993			95,119,982
Net cash provided by financing activities		-			98,926,993			98,484,982

Net increase (decrease) in cash and cash equivalents at end of period		(26,353	)		34,857			15,236

Cash and cash equivalents at beginning of period		41,589			6,732			-

Cash and cash equivalents at end of period	$	15,236		$	41,589		$	15,236


Supplemental disclosure of cash flow information
Cash paid for -
Income taxes	$	1,407,500		$	-		$	1,409,100
Interest	$	2,024		$	-		$	14,807

Supplemental disclosure of non-cash financing activity:
For the period from inception (June 24, 2005) through December 31, 2008
Accrued deferred underwriting fees	$	-		$	4,000,000		$	4,000,000

Directors' and officers' liability insurance financed	$	63,460		$	95,625		$	63,460

In connection with the public offering, $305,000 of related party debt was converted to units and interest in the amount of $21,992 was forgiven.

Shares subject to conversion in the amount of $19,720,992 were recorded as a liability and reduced the additional paid in capital associated with the public offering.

There was a reduction of the accrual for offering cost in the amount of $150,635.

Deferred offering costs in the amount of $1,380,018 were charged against additional paid in capital at the time of the offering.

See accompanying notes to financial statements

SANTA MONICA MEDIA CORPORATION

(a corporation in its development stage)

NOTES TO FINANCIAL STATEMENTS

December 31, 2008

1.	Organization, Business Operations and Significant Accounting Policies

Organization and Business Operations

Santa Monica Media Corporation (the “Company”) was incorporated in Delaware on June 24, 2005. The Company is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with an unidentified operating business.

As of December 31, 2008, the Company had not commenced any business operations. All activity through April 2, 2007 relates to the Company’s formation and a public offering (“Public Offering”) described below and in Note 3. Subsequent to that date, the Company commenced its research and investigation of suitable business combination opportunities. The Company is considered to be in its development stage and is subject to the risks associated with development stage companies.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a business combination with an operating business (“Business Combination”). Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. If a Business Combination is not completed by April 2, 2009, the Company will be forced to liquidate. On March 5, 2009, the Company filed a preliminary proxy with the Securities and Exchange Commission with respect to a proposed business combination transaction with NUI, LLC requesting among other corporate charter revisions, an extension to December 15, 2009 of the April 2, 2009 deadline to complete the proposed transaction. This proxy, requesting the extension, was not mailed to the shareholders and therefore the Company is now working towards a plan of liquidation. As of the date of this report, the Company plans to distribute to its stockholders a proxy statement seeking approval (a) for a plan of liquidation to distribute the amount in the Company’s trust account to the holders of shares of its common stock acquired in its initial public offering and (b) to amend and restate its certificate of incorporation to permit the Company to continue as a corporation currently specified in its certificate without the limitations relating to its initial public offering.

On April 2, 2007, the Company completed: (i) a private placement of 413,125 units at $8.00 per unit (the “Private Placement”) for $3,000,000 cash and cancellation of a $305,000 loan made to the Company by Santa Monica Capital Partners, LLC, and (ii) the Public Offering of 12,500,000 units for net proceeds of $95,119,982 pursuant to a registration statement declared effective by the Securities and Exchange Commission on March 27, 2007. The proceeds of the Private Placement and a portion of the proceeds of the Public Offering, together totaling $98,605,000, were placed in a trust account (the “Trust Account”). The amount in the Trust Account includes a $4,000,000 contingent underwriting compensation payable to the underwriter if a Business Combination is consummated. The Underwriting Agreement calls for the proceeds to be held in the Trust Account until the earlier of (i) the consummation of a Business Combination or (ii) liquidation of the Company. The remaining net proceeds (not held in the Trust Account) of $100,000 and up to $1,600,000 of interest earned on the Trust Account (net of taxes payable) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. As of December 31, 2008, these amounts have been expended. (See Note 11). The Company had one stockholder as of July 31, 2005, Santa Monica Capital Partners LLC (“Initial Stockholder”). During August 2005 and April 2006, Santa Monica Capital Partners, LLC transferred an aggregate of 458,232 units to various parties including the outside directors and advisory board members (“Transferee Stockholders”). (See Note 6.)

The Company’s Certificate of Incorporation, as amended, provides for mandatory liquidation of the Company if the Company does not consummate a Business Combination within 18 months from the date of the consummation of the Public Offering, or 24 months from the consummation of the Public Offering if certain extension criteria have been satisfied. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per share in the Public Offering (assuming no value is attributed to the Warrants contained in the Units offered in the Public Offering discussed in Note 3). As of December 31, 2008, the Company had satisfied the conditions for extension of time to complete the Business Combination to 24 months (April 2, 2009).

Cash Equivalents and Concentrations

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Such cash and cash equivalents, at times, may exceed federally insured limits. The Company maintains its accounts with financial institutions with high credit ratings. Trust assets are invested principally in U.S. Treasury Bills.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, or SFAS No. 109 “Accounting for Income Taxes.” As such, deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial report amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period, if any, and the change during the period in deferred tax assets and liabilities.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merit. The Company has adopted FIN 48 as of January 1, 2007.

Earnings (loss) per Share

The Company utilizes SFAS No. 128, “Earnings per Share.” Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similarly to basic earnings per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. For the year ended December 31, 2008, 12,913,125 securities were excluded from the computation because they were anti-dilutive. For the period ended December 31, 2007 and for the period from June 24, 2005 (inception) through December 31, 2008, there were no securities excluded from the computation because they were anti-dilutive.

						For the period from June 24, 2005 (inception) through
	2008			2007		December 31, 2008
Numerator:
Net income (loss) attributable to common stockholders	$	(357,568	)	$	1,787,701	$	1,319,479
Denominator:
Denominator for basic net income per share—weighted average shares		16,038,125			12,818,688		10,090,346
Effect of dilutive securities:
Warrants		—			2,527,234		2,979,952

Denominator for diluted income per share—adjusted weighted average shares		16,038,125			15,345,922		13,070,298
Basic earnings (loss) per share	$	(0.02	)	$	0.14	$	0.13
Diluted earnings (loss) per share	$	(0.02	)	$	0.12	$	0.10

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 at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts of cash equivalents, money market funds held in trust, prepaid expenses, accounts payable and accrued expenses, deferred underwriting fees payable, and income taxes payable approximate their respective fair values, due to the short-term nature of these items.

Interest on Funds Held In Trust Subject to Common Stock Conversion

Deferred interest on funds held in trust consists of the 20% less one share portion of the interest earned on the funds held in trust, which is the maximum amount, net of permitted withdrawals by the Company and related income taxes, that the Company would be obligated to pay to stockholders who elect to have their stock redeemed by the Company without resulting in a rejection of a business combination.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS No. 141(R)”), which requires an acquirer to recognize in its financial statements as of the acquisition date (i) the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, measured at their fair values on the acquisition date, and (ii) goodwill as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. SFAS No. 141(R) makes significant amendments to other FASB statements and other authoritative guidance to provide additional guidance or to conform the guidance in that literature to that provided in SFAS No. 141(R). SFAS No. 141(R) also provides guidance as to what information is to be disclosed to enable users of financial statements to evaluate the nature and financial effects of a business combination. SFAS No. 141(R) is effective for financial statements issued for fiscal years beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of SFAS No. 141(R) will affect how the Company accounts for the acquisition of a business after December 31, 2008.

Except for the aforementioned accounting standard, management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

2.	Going Concern

The Company does not have sufficient funds to allow it to operate through the date of consummation of a business combination or date of liquidation. As a result, the Company has entered into an unsecured loan facility with Santa Monica Capital Partners II, LLC, an affiliate (“SMCPII”) to provide up to $500,000 in advances at the sole discretion of SMCPII. (See Note 11). If additional funds are required above this amount, or if SMCPII does not make the discretionary advances contemplated under the promissory note, the Company will need to obtain additional funds from its stockholders or another source. If the Company is unable to obtain additional financing, the Company will be forced to limit its activities or liquidate. None of the Company’s officers, directors or stockholders are required to provide any financing to the Company. In the event the assets held outside the trust account are insufficient to pay the costs associated with dissolution and liquidation of the Company, its three principal executive officers are obligated to provide additional funds required to pay the costs associated with the dissolution and liquidation.

As set forth in Note 11, on March 5, 2009, the Company filed a preliminary proxy with the Securities and Exchange Commission with respect to a proposed business combination transaction requesting among other corporate charter revisions, an extension to December 15, 2009 of the April 2, 2009 transaction deadline. This proxy, requesting the extension, was not mailed to the shareholders and therefore the Company is now working towards a plan of liquidation. As of the date of this report, the Company plans to distribute to its stockholders a proxy statement seeking approval (a) for a plan of liquidation to distribute the amount in the Company’s trust account to the holders of shares of its common stock acquired in its initial public offering and (b) to amend and restate its certificate of incorporation to permit the Company to continue as a corporation currently specified in its certificate without the limitations relating to its initial public offering.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As a result of the foregoing, the Company’s independent registered public accounting firm, in its report on the Company’s 2008 financial statements, expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

3.	Public Offering

In the Public Offering, the Company issued and sold 12,500,000 units (“Units”) at $8.00 per Unit. The underwriters were paid fees equal to 3.5% of the gross proceeds of the Public Offering, or $3,500,000, at the closing of the Public Offering and have agreed to defer an additional $4,000,000 of their underwriting fees until the consummation of a Business Combination. Upon the consummation of a Business Combination, the Company will pay such fees out of the proceeds of the Public Offering held in the Trust Account.

Each Unit consists of one share of the Company’s common stock, and one Redeemable Common Stock Purchase Warrant (“Warrant”). Each Warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $6.00 upon the completion of a business combination with a target business, and will expire four years from the effective date of the Public Offering. The Warrants will be redeemable at a price of $.01 per Warrant upon 30 days’ notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $11.50 per share (subject to proportionate adjustment of the warrant price pursuant to the warrant agreement) for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given.

In addition, the Company granted the underwriters an option to purchase up to an additional 1,875,000 Units at the public offering price less the underwriters’ discount and commission to cover any over-allotments for public sale. The underwriters did not exercise any portion of this option.

4. Note Payable - Related Party

The Company issued an amended and restated $305,000 unsecured promissory note to its Initial Stockholder on February 1, 2007. This note was cancelled and converted into units on April 2, 2007 in connection with the Public Offering. The note was originally issued on June 24, 2005 for the amount of $240,000, and in December 2006, the Initial Stockholder loaned an additional $65,000 to the Company. The note (as amended) bore interest at 5%. In connection with the Public Offering on April 2, 2007, accrued interest in the amount of $21,992 was forgiven and shown as an increase to additional paid-in capital.

5. Commitments - Related Party

The Company utilizes certain administrative, technology and secretarial services, as well as certain limited office space provided by Santa Monica Capital Corp, and subsequently, Santa Monica Capital Partners II, LLC, an affiliate of Santa Monica Capital Corp. Such affiliate has agreed that it will make such services available to the Company, as may be required by the Company from time to time. The Company agreed to pay such affiliate $7,500 per month for such services commencing as of July 1, 2005 through January 5, 2006. Under the agreement as amended, the Company did not pay or accrue additional fees until October 2, 2007, six months after consummation of the Public Offering of the Company’s securities, upon which the Company began to pay $7,500 per month. The Company will continue to pay such fees until the Company has paid aggregate fees of $180,000, or, if earlier, upon the completion of a Business Combination. As of December 31, 2008 and 2007, the Company had incurred an aggregate of $90,000 and $67,500, respectively, for such services. As of December 31, 2008, $7,500 was unpaid and included in accrued expenses.

6. Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.

7. Common Stock and Warrants

In July 2005, the Company issued 4,687,500 Units to Santa Monica Capital Partners, LLC for $60,000 in cash, at a purchase price of approximately $0.01 per unit. Mr. Marshall, the Company’s Chairman of the Board and Chief Executive Officer, Mr. Brendlinger, the Company’s Chief Financial Officer and Director, Mr. Pulier, the Company’s Secretary and Director, and Mr. Baradaran, the Company’s Director, are the beneficial owners of Santa Monica Capital Partners, LLC. Each unit consisted of one share of the Company’s common stock and one warrant to purchase one share of the Company’s common stock at an exercise price of $6.00 per share, exercisable upon the consummation of a Business Combination and expiring four years from the consummation of the Public Offering.

During August 2005 and April 2006, Santa Monica Capital Partners, LLC transferred an aggregate of 458,232 units to the Transferee Stockholders, including 217,848 units to persons who are not directors or members of the Company’s advisory board for an aggregate price of $6,625, or $0.03 per unit, and 240,384 units to members of the Company’s board of directors and advisory board for an aggregate price of $4,500, or $0.02 per unit.

These units were not transferred to settle any obligations of the Company or in exchange for services for the Company. Future services provided by any of the transferees will be compensated pursuant to separate agreements.

All units transferred by Santa Monica Capital Partners, LLC were paid for pursuant to the delivery of promissory notes due August 2009 issued to Santa Monica Capital Partners, LLC with interest of 8% per annum payable upon maturity thereof.

In September 2006, in conjunction with the Company’s public offering, the Company’s Board of Directors authorized the Company to enter into an agreement with its shareholders, other than Santa Monica Capital Partners, LLC, to exchange their units for an equal number of shares of the Company’s common stock, and this exchange subsequently was completed in September 2006. Additionally, Santa Monica Capital Partners, LLC exchanged its 4,229,268 units for 2,666,768 shares of the Company’s common stock. As a result, there are no outstanding warrants relating to the originally issued shares. See Note 8.

In April 2006 and March 2007, the Company and Santa Monica Capital Partners, LLC agreed to a private placement of units in connection with the Public Offering. In connection with this agreement Santa Monica Capital Partners, LLC purchased 413,125 units at $8.00 per unit for $3,305,000, which included the cancellation of the $305,000 loan made to the Company by Santa Monica Capital Partners, LLC, prior to the Public Offering. The proceeds of this Private Placement are held in the Trust Account established for the Public Offering (Note 1).

In connection with the Public Offering described in Note 3 and the private placement of Units described above, the Company issued warrants to purchase an aggregate 12,913,125 shares of its common stock, all of which were outstanding as of December 31, 2008. The warrants have a weighted average exercise price of $6.00 per share, and a weighted average remaining term of 27 months.

8. Registration Rights

The holders of the Company’s 3,538,125 issued and outstanding shares immediately prior to the completion of the offering, including the Initial Shareholder, are entitled to registration rights covering the resale of their shares and the resale of their warrants and shares acquired upon exercise of their warrants. The holders of the majority of these shares are entitled to make up to two demands that the Company register their shares, warrants and shares underlying the warrants any time after the consummation of the initial business combination, subject to transfer restrictions imposed by the lock up agreements. In addition, these stockholders have certain “piggy-back” registration rights on registration statements filed subsequent to the date on which these securities are released from the restrictions imposed by the lock-up agreements. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Pursuant to the registration rights agreement, these stockholders waive any claims to monetary damages for any failure by the Company to comply with the requirements of the registration rights agreement, provided the Company has used its best efforts to do so.

In accordance with the Warrant Agreement related to the warrants, the Company will not be obligated to deliver securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective at the time of exercise. Additionally, in the event that a registration statement is not effective at the time of exercise, the holder of such warrant shall not be entitled to exercise such warrant and in no event will the Company be required to net cash settle the warrant exercise. Consequently, the warrants may expire unexercised.

9. Income Taxes

The following table presents the current and deferred income tax provision for federal and state income taxes:

	2008			2007		For the period from June 24, 2005 (inception) through December 31, 2008
Current tax provision:
Federal	$	335,000		$	627,500	$	962,500
State		102,000			163,800		267,400
	$	437,000		$	791,300	$	1,229,900

Deferred tax provision:
Federal		(276,000	)		241,000		(35,000	)
State		(85,000	)		84,000		(1,000	)
		(361,000	)		325,000		(36,000	)
Total provision for income tax	$	76,000		$	1,116,300	$	1,193,900

Current income taxes are based upon the year’s income taxable for federal and state tax reporting purposes. Deferred income taxes (benefits) are provided for certain income and expenses, which are recognized in different periods for tax and financial reporting purposes.

Deferred tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income.

Significant components of the Company’s net deferred tax asset (liability) at December 31, 2008 and 2007 are as follows:

	2008			2007
Expenses deductible in future periods	$	37,000		$	85,000
Accretion of interest on U.S. Treasury Bills		(1,000	)		(410,000	)
Total deferred tax assets (liabilities)		36,000			(325,000	)
Valuation allowance		—			—
Net deferred tax asset (liability)	$	36,000		$	(325,000	)

In assessing the realizability of deferred tax assets of $36,000 and $85,000 at December 31, 2008 and 2007, respectively, management considered whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these assets become deductible. Management considers the scheduled reversal of deferred tax liabilities, the projected future taxable income and tax planning strategies in making this assessment. Management's analysis of the deferred tax asset at December 31, 2008 and 2007 concluded that the asset can be utilized in future periods. Therefore, there is no valuation allowance against this asset as of December 31, 2008 and 2007.

A reconciliation of the expected tax computed at the U.S. statutory federal income tax rate to the total benefit for income taxes for the year ended December 31, 2008 and 2007, and the period from June 24, 2005 (inception) through December 31, 2008 as follows:

						For the period from June 24, 2005 (inception) through
	2008		2007			December 31, 2008
Expected tax at 34%	$	61,000	$	987,000		$	1,012,000
Change in valuation allowance		-		(43,000	)		-
State income tax, net of federal tax benefit		11,000		169,000			174,000
Other		4,000		3,000			8,000
Provision for income taxes	$	76,000	$	1,116,000		$	1,194,000

On July 13, 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes, and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under FIN 48, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

The Company adopted FIN 48, Accounting for Uncertainty in Income Taxes on January 1, 2007. The Company recognized no cumulative effect adjustment as a result of adopting FIN 48. At December 31, 2008 and 2007, the Company has no unrecognized tax benefits.

The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2008, the Company has no accrued interest and penalties related to uncertain tax positions.

The Company is subject to taxation in the U.S. and California. The tax years 2005 to 2008 remain open to examination by the major taxing jurisdictions to which the Company is subject. The Company currently is not under examination by any tax authority.

10. Summarized Quarterly Data (unaudited)

The following is a summary of the quarterly results of operations for the year ended December 31, 2008.

	December 31, 2008			September 30, 2008		June 30, 2008			March 31, 2008
Net income (loss) attributable to common stockholders	$	(401,150	)	$	54,987	$	(80,260	)	$	68,855
Net income per share
Basic	$	(0.03	)	$	0.00	$	(0.01	)	$	0.00
Diluted	$	(0.03	)	$	0.00	$	(0.01	)	$	0.00

11. Subsequent Events

On January 15, 2009, the Company entered into an unsecured loan facility with Santa Monica Capital Partners II, LLC, an affiliate (“Lender”), to provide up to $500,000 in funds at the discretion of the Lender. The promissory note provides for interest at the rate of 10% per annum, and that the principal along with all accrued and unpaid interest is due on the earlier of (i) the closing of a business combination, as such term is defined in the Company’s prospectus dated March 27, 2007 as filed with the Securities and Exchange Commission on March 28, 2007, or (ii) the date that the Company liquidates its assets. In the event that the Company is required to and does dissolve and liquidate pursuant to its Certificate of Incorporation, the Lender’s sole recourse shall be against the assets of the Company not held in the trust account, unless the Company’s counsel delivers an opinion that the amounts due under the note may be paid from the trust account. As of April 2, 2009, $310,000 had been advanced to the Company pursuant to this promissory note.

On March 5, 2009, the Company filed a preliminary proxy with the Securities and Exchange Commission with respect to a proposed business combination transaction with NUI, LLC (“NUI”) requesting among other corporate charter revisions, an extension to December 15, 2009 of the April 2, 2009 deadline to complete the proposed transaction. This proxy, requesting the extension, was not mailed to the shareholders and therefore the Company is now working towards a plan of liquidation. As of the date of this report, the Company plans to distribute to its stockholders a proxy statement seeking approval (a) for a plan of liquidation to distribute the amount in the Company’s trust account to the holders of shares of its common stock acquired in its initial public offering and (b) to amend and restate its certificate of incorporation to permit the Company to continue as a corporation currently specified in its certificate without the limitations relating to its initial public offering.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

During 2009, management of Santa Monica Media Corporation (the "Company") determined that it had not completed its evaluation, which included certain documentation and testing, of the Company’s disclosure controls and procedures as of December 31, 2008 for the reasons discussed below under the caption “Results of Management’s Assessment”. The incomplete evaluation was made by management, including the Chief Executive and Chief Financial Officers, pursuant to Rule 13a-15(b) of the Securities Exchange Act. Since the evaluation was not completed at December 31, 2008, the Company's Chief Executive and Chief Financial Officers concluded that the Company's disclosure controls and procedures were not effective.

Management’s Report on Internal Control over Financial Reporting

Management Acknowledgment

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system is designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

A Company's internal control over financial reporting includes policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Management Assessment

During 2009, management of the Company determined that it had not completed its evaluation, which included certain documentation and testing, of the Company’s internal control over financial reporting as of December 31, 2008.

As of December 31, 2008, the Company's management was in the process of assessing the effectiveness of the Company's internal control over financial reporting. In making this assessment, the Company was using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. The COSO framework summarizes each of the components of a company's internal control system, including the: (i) control environment, (ii) risk assessment, (iii) information and communication, and (iv) monitoring (collectively, the "entity-level controls"), as well as a company's control activities ("process level controls").

Oversight of the internal control over financial reporting compliance activities is under the direction of the CEO and CFO in coordination with the Company’s outside financial consultant who is responsible for the preparation of the Company’s financial statements. Since the Company is a Blank Check Company with no current business operations, it has no employees, and only three corporate officers, two of which, the CEO and CFO, are responsible for the day-to-day operations. All of the activities of the Company take place in a single office where the executive and financial officers and the consultant work together. There is regular communication among this small group of personnel, and all events that may have an impact on the Company’s internal controls over financial reporting are made known to the CEO and CFO so that action, if required, is implemented.

The CEO, CFO and consultant meet at least on a quarterly basis in connection with the preparation of published financial statements to review activities for the period. The quarterly and annual regulatory filings are then reviewed in detail by the Audit Committee of the Board prior to filing with the Commission. The Audit Committee is comprised of independent board members, and the chairman is a financial expert. The Audit Committee is the forum within the Company to address internal control over financial reporting, and any weaknesses that may be identified during the quarter.

Management believes the above activities are effective controls.

Results of Management’s Assessment

At December 31, 2008, management believed, as discussed above, in so far as it had completed its assessment, that appropriate internal controls were in place to maintain an adequate system of internal control over financial reporting which should result in the fair presentation of published financial statements. However, due to the fact that the Company has limited personnel resources, there was a lack of segregation of duties, which management identified as a material weakness. Such determination was made notwithstanding the fact that management had not completed its documentation and testing of its internal control systems, primarily in the areas of financial reporting systems and processing controls. Therefore, management concluded that there was a reasonable possibility that a material misstatement of the annual or interim financial statements may not be prevented or detected on a timely basis. As a result of this situation, which constituted a material weakness in internal control as of December 31, 2008, the Company's Chief Executive and Chief Financial Officers concluded that the Company’s internal control over financial reporting was not effective. A “material weakness” is defined as a significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected in a timely manner.

Subsequent to December 31, 2008 and filing of Form 10-K, the Company completed the documentation of the financial reporting systems and processing controls and testing of those areas. As a result, management has determined that sufficient compensating controls were in existence such that lack of segregation of duties was not a material weakness at that time, but a significant deficiency. Management believes that such significant deficiency does not constitute a material weakness in the Company’s system of internal control over financial reporting. The Company's Chief Executive and Chief Financial Officers have therefore determined that the Company's internal control over financial reporting was effective as of December 31, 2008.

Changes in Internal Control over Financial Reporting

During the most recently completed fiscal quarter, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to affect, the Company’s internal control over financial reporting.

Our independent registered public accounting firm, Gumbiner Savett Inc., who also audited the financial statements, independently assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008, as stated in their report below.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Santa Monica Media Corporation

We have previously audited and reported on management’s annual assessment of Santa Monica Media Corporation’s (the “Company”) internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our report, dated March 11, 2009, identified the following material weakness in the Company’s internal control over financial reporting: Because the Company has no employees, the Company is unable to segregate the accounting procedures over financial activities to provide adequate internal controls. As of December 31, 2008, management had not completed its assessment of internal control over financial reporting, which included certain documentation and testing, of the Company’s internal control over financial reporting. At that time, management believed, in so far as it had completed its assessment, that appropriate internal controls were in place to maintain an adequate system of internal control over financial reporting which should result in the fair presentation of published financial statements. As a result of completing the assessment, management became aware that there were sufficient compensating controls in the Company’s internal control systems to mitigate the apparent lack of segregation of duties.

Accordingly, the Company’s Chief Executive and Chief Financial Officers were then able to conclude that the Company’s internal control over financial reporting was effective as of December 31, 2008.

We have applied auditing procedures to management’s assertion, included in the accompanying Management’s Report on Internal Control over Financial Reporting, that the weakness in internal control over financial reporting identified above does not constitute a material weakness, but a significant deficiency, due to the compensating controls in the Company’s internal control systems.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

Our engagement was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the engagement to obtain reasonable assurance about whether a previously reported material weakness continues to exist at the Company. Our engagement included examining evidence supporting management’s assertion and performing such other procedures as we considered necessary in the circumstances. We obtained an understanding of the Company’s internal control over financial reporting as part of our previous audit of management’s annual assessment of the Company’s internal control over financial reporting as of December 31, 2008, and updated that understanding as it specifically relates to the Company’s completion of its evaluation, which included certain documentation and testing. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation 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 or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control – Integrated Framework issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the balance sheets and the related statements of operations, stockholders’ equity, and cash flows of Santa Monica Media Corporation, and our report dated March 11, 2009 expressed an unqualified opinion.

/S/ Gumbiner Savett Inc.

Gumbiner Savett Inc.

Santa Monica, CA

August 25, 2009.

ITEM 9B.

OTHER INFORMATION

Not applicable.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The directors and executive officers of the Company are as follows:

Name	Age	Position

David Marshall	45	Chairman of the Board and Chief Executive Officer
Kurt Brendlinger	47	Chief Financial Officer and Director
Eric Pulier	42	Chief Technology Officer, Secretary and Director
Dallas Clement	44	Director
Robert Schultz	78	Director
Sharyar Baradaran	41	Director

David Marshall has served as our Chairman of the Board and Chief Executive Officer since our inception. Mr. Marshall is co-founder of Youbet.com, Inc. (NASDAQ:UBET), the largest legal online gaming company in the U.S. based on total wagers. Since December 1999, Mr. Marshall has been a financial principal and/or consultant to various emerging growth companies providing finance, acquisition and operational expertise including participation in numerous equity and debt fundings of InterMetro Communications Inc, a Voice-Over-Internet-Protocol company beginning in 2006. In September 2005, Mr. Marshall founded NUI, LLC, a food & beverage, media & entertainment company focused solely on encouraging children to be smart, fit and happy. From October 2006 through June 2008, Mr. Marshall served as Chairman of the Board of Pro Elite, Inc. (PELE.PK), a company that conducts a mixed martial arts business both live and on line.

Kurt Brendlinger has served as our Chief Financial Officer and a director since our inception. From January 2002 to June 2004, Mr. Brendlinger was Chief Executive Officer and President of Rainmakers, Inc., an Internet marketing services company for the entertainment industry. Rainmakers has service agreements with Sony Pictures, Revolution Studios, 20th Century Fox, Dreamworks, Walden/AFG, and Initial Entertainment. Since July 2004, Mr. Brendlinger has been the Managing Director of Aaron Fleck & Associates, LLC, a registered investment advisor where he is responsible for deal sourcing, capital raising, venture capital and private equity investments and asset management. From October 2006 to June 2008, Mr. Brendlinger was a director of ProElite, Inc. (PELE.PK), a company that conducts a mixed martial arts business both live and on line. Mr. Brendlinger is also a director of NuRx Pharmaceuticals, Inc. (NURX.OB), a clinical stage biotechnology company focusing on retinoid and rexinoid therapeutics for applications in oncology and other highly prevalent diseases.

Eric Pulier has been our Secretary and a director since our inception and also holds the position of Chief Technology Officer. Mr. Pulier was founder and, since January 2001, has served as the Executive Chairman of SOA Software, Inc., a developer of enterprise software products for SOA governance, security and management. The company’s recent growth has been driven by the addition of some of the largest Fortune 500 companies. SOA Software products now run well over 4 Billion transactions/month around the world. In January 2003, Mr. Pulier was appointed as a board member of the Center for Telecommunications Management (CTM) at the Marshall School of Business at USC, a global organization dedicated to thought leadership for the networked digital economy.

Dallas Clement has served as a director since August 2005. Since August 2000, Mr. Clement has been the Senior Vice President of Strategy and Product Management for Cox Communications, Inc., a multi-service broadband communications company. Mr. Clement oversees development and growth strategies related to the Cox Communications, Inc.’s video, voice, high-speed Internet and wireless services. Mr. Clement is a member of our Audit Committee.

Robert Schultz has served as a director since August 2005. From June 2002 to October 2005, Mr. Schultz served as chairman of Advanced Electron Beams, Inc. a company that utilizes its proprietary electron beam technology to build and market unique electron beam systems for advanced manufacturing processes and environmental control. He resigned from the AEB board in October 2005. He was a member of the board of directors of MCT Corporation, which built and operated cellular phone systems in Russia and Central Asia, from April 2000, until its merger with TeliaSonera in July 2007. He was elected to the National Academy of Engineering in 1992. Mr. Schultz is a member of our Audit Committee.

Sharyar Baradaran has served as a director since April 2006. Since January 2001 Mr. Baradaran has served as Chief Executive Officer and chairman of BaradaranVentures, a privately held investment fund located in Los Angeles, California. Since November 2003, Mr. Baradaran has served on the board of directors of InnerWorkings Inc., (NASDAQ- INWK) a leading provider of print and related procurement services. From August 2006 to the present Mr. Baradaran has been on the advisory board of Echo Global Logistics Inc., a transportation management firm providing superior cost savings technology and services for companies ranging from small enterprises to the Fortune 100. From June 2002 until December 2004 and then from September 2005 until the present Mr. Baradaran served on the board of ISENSIX Inc., a propriety wireless and web-based system providing safety/quality management solutions for vital systems in hospital, blood bank, and clinical laboratories. Mr. Baradaran has been on the board of NuRx Pharmaceuticals since May 2007, an emerging biotech company with focus on the development of retinoid and rexinoid compounds . Mr. Baradaran is a member of our Audit Committee.

Our board of directors consists of only one class of directors with each director elected for a one-year term. These individuals will play a key role in identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating its acquisition.

Advisory Board

We also may consult, from time to time, with certain individuals who have experience in the communications, media, gaming and/or entertainment/industries, which we call our special advisors, each of whom is also a stockholder of our company, who may assist us in our search for and evaluation of our target business and other matters relating to our operations. The members of the advisory board do not owe us any fiduciary duties with respect to the execution of their duties. No compensation of any kind, including finder’s and consulting fees, will be paid by us to any of our advisory board members, or any of their affiliates, for services rendered to us prior to or in connection with the consummation of our initial business combination. These advisors are as follows:

Stan Golden has over 26 years of experience in international television programming co-production, merchandising, distribution, broadcasting and cable/network development. In April 1988, Mr. Golden joined Saban International, a division of Saban Entertainment, as President in charge of launching a global television programming distribution business. In September 1994, during Mr. Golden’s tenure, Saban Entertainment, now BVS Entertainment, an independent television production company, created Saban International Paris, Saban Entertainment’s French animation studio. From October 1999 to June 2002, Mr. Golden also served as President of Program Distribution for Fox Kids Europe (a division of Fox Family Worldwide), supervising all of its program distribution, co-production and acquisitions. Since June 2002, Mr. Golden has been the Managing Partner for Golden Touch Media LLC, a consulting firm in the media and entertainment industries.

Cary Granat is the Chief Executive Officer and Co-founder with Michael Flaherty of Walden Media, a diversified media company which was founded in September 2000. In addition to his duties as Chief Executive Officer of Walden Media, Mr. Granat was appointed as President of Anschutz Film Group, or AFG, a diversified entertainment company, in April 2004. As President, he oversees creative, production and marketing activities for AFG subsidiaries Walden Media and Bristol Bay Productions. Mr. Granat currently serves on the board of directors of the World Information Transfer, a non-governmental organization in general consultative status with the United Nations.

James R. Miller has been the Chairman of Midwood Media & Communications, Inc., a media-consulting firm, since February 2000. Mr. Miller held the following positions at Warner Bros. Entertainment, Inc., a producer of film and television entertainment: he was the President of Worldwide Theatrical business operations from December 1998 to January 2000; from January 1990 to December 1997; he was the Executive Vice President of Business Acquisitions; from January 1987 to December of 1989, he was the Senior Vice President Worldwide Business Affairs; from January 1983 to December 1986 he was Vice President of Business Affairs; and from September 1979 to December 1982, he was the Vice President of Studio Business Affairs.

Director Independence

Our board of directors has determined that Messrs. Clement, Baradaran and Schultz are “independent directors” as defined in Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and as defined by the rules of NYSE Alternext. Scott Sassa, who resigned as director effective January 15, 2009, was also an “independent director.”

Audit Committee

Our audit committee currently consists of Messrs. Clement, Baradaran and Schultz.

The audit committee reviews the professional services and independence of our independent registered public accounting firm and our accounts, procedures and internal controls. The audit committee also selects the firm that will serve as our independent registered public accounting firm, reviews and approves the scope of the annual audit, reviews and evaluates with the independent public accounting firm our annual audit and annual financial statements, reviews with management the status of internal accounting controls, evaluates problem areas having a potential financial impact on us that may be brought to the committee’s attention by management, the independent registered public accounting firm or the board of directors, and evaluates all of our public financial reporting documents.

We have agreed with the underwriters that our audit committee will review and approve all expense reimbursements made to our officers, directors or senior advisors and that any expense reimbursement payable to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.

Financial Experts on Audit Committee

The audit committee will at all times be composed exclusively of “independent directors” who are “financially literate” as defined under NYSE Alternext’s listing standards. The NYSE Alternext listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.

In addition, we must certify to NYSE Alternext that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. The board of directors has determined that Mr. Clement satisfies the NYSE Alternext’s definition of financial sophistication and also qualifies as an “audit committee financial expert,” as defined under rules and regulations of the Securities and Exchange Commission.

Nominating Committee

Our nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. There have been no material changes to our procedures by which stockholders may recommend nominees to our board of directors. The nominating committee and compensation committee each consists of Dallas Clement, as chairman, and Sharyar Baradaran, each of whom is an independent director under the NYSE Alternext listing standards.

Guidelines for Selecting Director Nominees

We have established guidelines for selecting nominees that generally provide that persons to be nominated should be actively engaged in business endeavors, have an understanding of financial statements, corporate budgeting and capital structure, be familiar with the requirements of a publicly traded company, be familiar with industries relevant to our business endeavors, be willing to devote significant time to the oversight duties of the board of directors of a public company, and be able to promote a diversity of views based on the person’s education, experience and professional employment.

Code of Conduct and Ethics; Related Party Transactions

We have adopted a code of conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal securities laws. We have filed the code of conduct and ethics with the SEC. Our board of directors has adopted a general policy that related party transactions, including determination of executive compensation, should be on terms no less favorable to the Company than terms available in bona fide third party transactions. A copy of the code can be obtained free-of-charge upon written request to:

Corporate Secretary

Santa Monica Media Corporation

12121 Wilshire Blvd., Suite 1001

Los Angeles, CA 90025

Conflicts of Interest

Potential investors should be aware of the following potential conflicts of interest:

None of our officers and directors is required to commit his full time to our business and, accordingly, our officers and directors may have conflicts of interest in allocating management time among various business activities.

In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. They may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

Our officers and directors are currently affiliated with, and may in the future become affiliated with, entities, including other blank check companies, engaged in business activities similar to those intended to be conducted by us.

We are currently in discussions to acquire NUI, a business that is affiliated with David Marshall, our Chairman of the Board and Chief Executive Officer, which may create conflicts of interest affecting Mr. Marshall and which may result in a transaction that is not as favorable to our public stockholders as a transaction that lacks such conflicts of interest.

Since our officers and directors own shares of our common stock that will become transferable only if a business combination is completed and certain of our officers and directors will beneficially own warrants purchased in the private placement that will expire worthless if a business combination is not consummated, our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate to effect a business combination. Additionally they may enter into consulting or employment agreements with NUI as part of a business combination.

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

the corporation could financially undertake the opportunity;

the opportunity is within the corporation’s line of business; and

it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.

Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board of directors evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the above-mentioned conflicts will be resolved in our favor.

Each of our officers and directors has certain pre-existing fiduciary obligations to other entities that may cause him to have conflicts of interest in determining to which entity he presents a specific business opportunity. To the extent that one of our officers or directors identifies a business opportunity that may be suitable for an entity that he has a pre-existing fiduciary obligation to, he may honor his pre-existing fiduciary obligation to that entity. Accordingly, he may not present opportunities to us that otherwise may be attractive to such entity unless it has declined to accept such opportunities.

In connection with the vote required for any business combination, all of our existing stockholders (including our officers and directors) have agreed to vote their respective shares of common stock then-owned by them (including shares acquired in this offering and in the aftermarket) in accordance with the vote of the public stockholders owning a majority of the shares of our common stock sold in this offering and voted in connection with our initial business combination. In addition, they have agreed to waive their respective rights to conversion of their shares in connection with the vote on our initial business combination and to participate in any liquidation distribution, but only with respect to those shares of common stock acquired by them prior to this offering including shares underlying the units acquired in the private placement.

To further minimize potential conflicts of interest, we have agreed not to consummate a business combination with an entity that is affiliated with any of our existing stockholders (including our officers, directors or advisory board members) unless we obtain an opinion from an independent investment banking firm that the business combination is fair to our stockholders from a financial point of view. In connection with the possible business combination with NUI, we intend to obtain an opinion from an independent investment banking firm that the business combination is fair to our stockholders from a financial point of view.

Section 16(a) Beneficial Ownership Reporting Compliance

Pursuant to Section 16(a) of the Securities Act of 1934, the Company’s directors and executive officers, and any persons holding 10% or more of its common stock, are required to report their beneficial ownership and any changes therein to the Commission and the Company. Specific due dates for those reports have been established, and the Company is required to report herein any failure to file such reports by those due dates. Based on the Company’s review of Forms 3, 4 and 5 filed by such persons, the Company believes that during the fiscal year ended December 31, 2008 all Section 16(a) filing requirements applicable to such persons were met in a timely manner.

ITEM 11.

EXECUTIVE COMPENSATION

Executive Officer and Director Compensation

Members of our management team, including our directors, have not received any cash or other compensation for services rendered to us to date. Commencing on July 5, 2005 through the acquisition of a target business, we have agreed to pay Santa Monica Capital Corp, an entity owned and controlled by Mr. Marshall, a total of $7,500 per month for office space and administrative services, including secretarial support. On October 1, 2007, this agreement was assigned to Santa Monica Capital Partners II, LLC, and entity owned and controlled by Messrs. Marshall, Brendlinger and Pulier. This arrangement was agreed to by Santa Monica Capital Corp. for our benefit and is not intended to provide Messrs. Marshall, Brendlinger and Pulier compensation in lieu of a salary. We believe that such fees are at least as favorable as we could have obtained from an unaffiliated third party. For the year ended December 31, 2008, we paid an aggregate of $82,500 for such services. For the year ended December 31, 2007, we paid an aggregate of $90,000, including $67,500 for services accrued from July 1, 2005 through January 5, 2006, and $22,500 for services rendered from October 1, 2007 through December 31, 2007 pursuant to the arrangement.

Other than this $7,500 per month fee, no compensation of any kind, including finder’s and consulting fees, will be paid to any members of our management team, or any of their respective affiliates, for services rendered prior to or in connection with a business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. After a business combination, members of our management team, including our directors, who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider a business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation.

Compensation Committee

Our compensation committee is responsible for recommending the compensation of our executive officers. The nominating committee and compensation committee each consists of Dallas Clement, as chairman, and Sharyar Baradaran, each of whom is an independent director under the NYSE Alternext listing standards. Neither Mr. Clement nor Mr. Baradaran have been an officer or employee of the Company.

Compensation Discussion and Analysis; Compensation Committee Report

We have not included a Compensation Discussion and Analysis, as members of our management team, including our directors, have not received any cash or other compensation for services rendered to us during the years ended December 31, 2008 or 2007. As no compensation had been provided to any of our officers or directors, the Compensation Committee has not reviewed a Compensation Discussion and Analysis of the Company.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of our common stock as of March 13, 2009, by:

each person known by us, as a result of such person’s public filings with the SEC and the information contained therein, to be the beneficial owner of more than 5% of our outstanding shares of common stock;

each of our officers and directors; and

all of our officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the sponsor units or our other outstanding warrants, as we do not believe that these warrants will become exercisable within 60 days of March 13, 2009.

Name	Number of Shares		Percentage of Class (1)			Relationship to Us
David Marshall (2) (3) 12121 Wilshire Boulevard Suite 1001 Los Angeles, CA 90025		3,079,893		19.2	%	Chairman of the Board, Chief Executive Officer
Kurt Brendlinger (2) (4) 12121 Wilshire Boulevard Suite 1001 Los Angeles, CA 90025		3,079,893		19.2	%	Director, Chief Financial Officer
Eric Pulier (2) (5) 12121 Wilshire Boulevard Suite 1001 Los Angeles, CA 90025		3,079,893		19.2	%	Director, Chief Technology Officer, Secretary
Dallas Clement 1400 Lake Hearn Drive Atlanta, GA 90319		37,560		*	%	Director
Robert Schultz 1140 Black Birch Drive Aspen, CO 81611		37,560		*	%	Director
Sharyar Baradaran (6) 414 North Camden Drive Beverly Hills, CA 90210		3,117,453		19.4	%	Director
Santa Monica Capital Partners, LLC (7) 12121 Wilshire Boulevard Suite 1001 Los Angeles, CA 90025		3,079,893		19.2	%	Stockholder
All directors and executive officers as a group (6 individuals)		3,192,573		19.9	%

Fir Tree, Inc. (8) 505 5 th Avenue 23 rd Floor New York, New York 10017		1,587,300		9.9	%	Stockholder
QVT Financial LP (9) 1177 Avenue of the Americas 9 th Floor New York, New York 10036		1,388,851		8.7	%	Stockholder
Millenium Management, LLC (10) 666 Fifth Avenue New York, New York 10103		992,800		6.2	%	Stockholder
Aldebaran Investments, LLC (11) 500 Park Avenue 5 th Floor New York, New York 10022		950,900		5.9	%	Stockholder
HBK Investments, LP (12) 2101 Cedar Springs Road Suite 700 Dallas, Texas 75201		860,450		5.4	%	Stockholder

*	Less than 1%.

(1)	Based on a total of 16,038,125 shares of the Company’s common stock issued and outstanding on March 13, 2009.

(2)

These shares are owned of record by Santa Monica Capital Partners, LLC. Messrs. Marshall, Brendlinger, Pulier and Baradaran beneficially own 28.8%, 28.8%, 28.8% and 13.6%, respectively. Each of Messrs. Marshall, Brendlinger, Pulier and Baradaran disclaims beneficial ownership of shares of our common stock in excess of his percentage ownership of Santa Monica Capital Partners, LLC. Santa Monica Capital Partners, LLC does not conduct any business other than serving as a holding company for our securities that are beneficially owned by these four individuals.

(3)	Mr. Marshall’s interest in Santa Monica Capital Partners, LLC is held indirectly by Santa Monica Capital LLC, of which he is the sole member.

(4)	Mr. Brendlinger’s interest in Santa Monica Capital Partners, LLC is held indirectly by E’s Holdings, Inc. of which he is the sole shareholder.

(5)	Mr. Pulier’s interest in Santa Monica Capital Partners, LLC is held indirectly by New Vision Ventures LLC of which he is Manager.

(6)

Mr. Baradaran is the record owner of 37,560 shares of our common stock and the beneficial owner of the shares of Santa Monica Media Corporation that are owned by Santa Monica Capital Partners, LLC, as described in note (2). Mr. Baradaran possesses sole voting and dispositive authority over 550,150 shares of our common stock owned by Santa Monica Capital Partners, LLC.

(7)

Santa Monica Capital Partners, LLC is the record owner of the shares of our common stock listed opposite its name in the above table. As described above in notes (2) and (6), Messrs. Marshall, Brendlinger, Pulier and Baradaran beneficially own shares of our common stock by reason of their ownership of Santa Monica Capital Partners, LLC.

(8)	Based on the Schedule 13G/A filed with the Securities and Exchange Commission by Fir Tree, Inc. on February 10, 2009.

(9)	Based on the Schedule 13G/A filed with the Securities and Exchange Commission by QVT Financial LP on February 2, 2009.

(10)	Based on the Schedule 13G/A filed with the Securities and Exchange Commission by Millenium Management, LLC on February 3, 2009.

(11)	Based on the Schedule 13G filed with the Securities and Exchange Commission by Aldebaran Investments, LLC on February 17, 2009.

(12)	Based on the Schedule 13G/A filed with the Securities and Exchange Commission by HBK Investments, LP on February 3, 2009.

Equity Compensation Plan Information

Company does not currently have an equity compensation plan.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions Between Us and Our Affiliates

We have agreed to pay to Santa Monica Capital Corp., an affiliate of our Chief Executive Officer, David Marshall, a monthly fee of $7,500 for general and administrative services including office space, utilities and secretarial support. We have accrued an aggregate fee of $45,000 for the six-month period from July 5, 2005 to January 5, 2006. We agreed with Santa Monica Capital Corp. that no monthly fee will accrue for the period from January 5, 2006 to October 2, 2007, at which point we paid to Santa Monica Capital Corp. the entire accrued amount of $45,000 for the period prior to January 5, 2006. During each month following October 2, 2007, we paid a fee of $7,500 to Santa Monica Capital Corp. Our obligation to pay such fees will terminate as soon as we have paid aggregate fees of $180,000 to Santa Monica Capital Corp. or, if earlier, upon the completion of our initial business combination. This agreement was assigned to Santa Monica Capital Partners II, LLC, an entity owned and controlled by Messrs. Marshall, Brendlinger and Pulier, on October 1, 2007. As of December 31, 2008, the Company had incurred $157,500 for such services, $7,500 which was accrued but unpaid at December 31, 2008.

The arrangement with Santa Monica Capital Corp. is solely for our benefit and is not intended to provide any of our officers or directors with compensation in lieu of a salary. We believe, based on rents and fees for similar services in the Los Angeles metropolitan area, that the fee charged by Santa Monica Capital Corp. is at least as favorable as we could have obtained from an unaffiliated person.

Santa Monica Capital Partners, LLC had advanced an aggregate of $305,000 to us to cover expenses related to the Public Offering and our operating expenses. The loan bore interest of 5% per annum. The note along with accrued interest of $21,992 was converted into 38,125 units on April 2, 2007 in connection with the Public Offering.

We will reimburse our officers, directors, members of our advisory board and their respective affiliates for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf such as identifying and investigating possible target businesses and business combinations. There is no limit on the amount of such out-of-pocket expenses that are reimbursable by us in the event we consummate a business combination, which will be reviewed only by our audit committee or a court of competent jurisdiction if such reimbursement is challenged.

Other than the $7,500 per-month administrative fee described above and reimbursable out-of-pocket expenses payable to our officers, directors and advisory board members, no compensation or fees of any kind, including finders and consulting fees, has been paid by us to any of our officers, directors or advisory board members, or their affiliated entities since January 1, 2006.

On January 15, 2009, we entered into an unsecured loan facility with Santa Monica Capital Partners II, LLC, an entity owned by Messrs. Marshall, Brendlinger and Pulier, to provide up to $500,000 in funds at the discretion of the lender. The promissory note provides for interest at the rate of 10% per annum. All amounts advanced under the promissory note are due upon the earlier to occur of (i) the closing of a business combination and (ii) the liquidation of our assets. In the event we dissolve and liquidate pursuant to our Amended and Restated Certificate of Incorporation, except as set forth in the promissory note, the lender’s sole recourse will be against our assets not held in the trust account. As of the date of this report, the outstanding principal balance on this promissory note was $310,000.

Review, Approval or Ratification of Transactions with Related Persons

As provided in our audit committee charter, all related party transactions must be reviewed and approved by our audit committee. As such, we conduct a review of all related party transactions for potential conflicts of interest on an ongoing basis. All such transactions relating to executive officers and directors must be approved by our audit committee.

Director Independence

Information regarding our independent directors is set forth above in Item 10 under the caption “Director Independence. ”

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Gumbiner Savett, Inc. (“Gumbiner”) is exclusively responsible for the opinion rendered in connection with its examination.

	Fiscal Year Ended December 31, 2008		Fiscal Year Ended December 31, 2007
Audit fees	$	75,020	$	98,675
Audit-related fees		22,715		—
Tax fees		7,070		—
All other fees		—		—
Total fees	$	104,805	$	98,675

Audit Fees . Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Gumbiner in connection with statutory and regulatory filings.

Audit-Related Fees . Audit-related services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.

Tax Fees . Tax fees consist of fees billed for professional services for tax compliance. These services include assistance regarding federal, state, and local tax compliance.

All Other Fees . All other fees would include fees for products and services other than the services reported above.

Policy on Board Pre-Approval of Audit and Permissible Non-audit Services of Independent Auditors

The audit committee is responsible for appointing, setting compensation, and overseeing the work of the independent auditor. In recognition of this responsibility, the audit committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor.

In addition to retaining Gumbiner to audit our financial statements for the year ended December 31, 2008, we retained Gumbiner to provide tax preparation work to us for our 2008 fiscal year, and audit-related services in connection with financial accounting matters related to proposed business combination transaction. We understand the need for Gumbiner to maintain objectivity and independence in its audit of our financial statements.

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(1) Financial Statements

See Part II, Item 8, Financial Statements and Supplementary Data.

(2) Financial Statement Schedules

All supplemental schedules have been omitted since the required information is not present in amounts sufficient to require submission of the schedule, or because the required information is included in the financial statements or notes thereto.

(3) Exhibits

See Exhibit Index.

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 by the undersigned, thereunto duly authorized. .

Santa Monica Media Corporation

By:	/s/ David M. Marshall
	Name: David M. Marshall
	Title: Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ David M. Marshall	Chief Executive Officer, Chairman and Director (Principal Executive Officer)	August 25, 2009
David M. Marshall

/s/ Kurt Brendlinger	Chief Financial Officer and Director (Principal Accounting and Financial Officer)	August 25, 2009
Kurt Brendlinger
	Chief Technology Officer, Secretary and Director	August 27, 2009
/s/ Eric Pulier	Chief Technology Officer, Secretary and Director	August 27, 2009
Eric Pulier

	Director	August 26, 2009
/s/ Dallas Clement	Director	August 26, 2009
Dallas Clement
	Director	August 25, 2009
/s/ Sharyar Baradaran	Director	August 25, 2009
Sharyar Baradaran
	Director	August 25, 2009
/s/ Robert Schultz	Director	August 25, 2009
Robert Schultz

EXHIBIT INDEX

INDEX TO EXHIBITS

Exhibit Number		Description

10.1		Form of Letter Agreement between Santa Monica Media Corporation and its officers, directors and stockholders. (1)

10.2		Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant. (1)

10.3		Letter Agreement between Santa Monica Capital Corp., and the Registrant regarding administrative support. (3)

10.4		Amended and Restated Promissory Note dated March 8, 2007 issued by the Registrant to Santa Monica Capital Partners, LLC. (1)

10.5		Form of Registration Rights Agreement among the Registrant and its existing stockholders. (2)

10.6		Securities Purchase Agreement dated April 19, 2006 between the Registrant and Santa Monica Capital Partners, LLC. (3)

10.7		Form of Letter Agreement between the Representative and the Registrant’s officers, directors and stockholders. (2)

10.8		Form of Letter Agreement between the Representative and Santa Monica Capital Partners, LLC. (2)

10.9		Amendment to Securities Purchase Agreement dated February 13, 2007 between the Registrant and Santa Monica Capital Partners, LLC. (2)

10.10		Securities Purchase Agreement dated March 8, 2007 between the Registrant and Santa Monica Capital Partners, LLC. (1)

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act

32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act

32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act

(1) Incorporated by reference to Form S-1 filed March 12, 2007.

(2) Incorporated by reference to Form S-1 filed February 16, 2007.

(3) Incorporated by reference to Form S-1 filed April 21, 2006.

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