The Movie Studio, Inc. (MVES) 10-K 2008 FY Annual report

SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549

 Form 10-K

[X]      Annual Report under Section 13 or 15(d) of the Securities
  Exchange Act of 1934
 For the fiscal year ended October 31, 2008

or

[  ]      Transitional Report under Section 13 or 15(d) of the
  Securities Exchange Act of 1934

000-29921

Commission file number

DESTINATION TELEVISION, INC.

(Exact name of small business issuer as specified in its charter)

Delaware	65-0494581
(State of incorporation)	(IRS Employer Identification Number)

530 North Federal Highway
  Fort Lauderdale, Florida 33301

(Address of principal executive office)

(954) 332-6600

(Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act: NONE

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

Common Stock

(Title of Class)

Check whether the registrant:

is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.       Yes [   ] No [X]

is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes [   ] No [X]

(1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports)

 Yes [X] No [ ]

and

(2) has been subject to such filing requirements for the past 90 days.

 Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ]

Check whether the registrant: is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Check whether the registrant:  is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company   [X]

Destination Television, Inc.'s revenues were $12,813 for the fiscal year ended October 31, 2008.

The aggregate market value of the stock held by non-affiliates (53,989,217 shares) computed by reference to the closing price of such stock ($0.011), as of February 11, 2009, was $593,881.

As of February 11, 2009, there were 93,358,760 shares of Destination Television, Inc. common stock outstanding.

Documents incorporated by reference: None.

PART I

ITEM 1 - DESCRIPTION OF BUSINESS

            Destination Television, Inc. ("we" or "the Company") is a media production, promotion and advertising company previously focused primarily on the out-of-home (OOH) digital signage industry. Our core business has been providing our universal content platform and premium advertising messages to high traffic out-of-home locations. Our advertising offers benefits to both the locations and advertisers and is intended to create sales lift at both the point of sale (POS) location and at the retail level. We provide remote, custom edited content and advertising delivery platforms to high traffic OOH locations and deliver national, regional, and local advertising and short format entertainment content.

            We plan to expand our scope to include other businesses that are in the entertainment industry and to expand our core advertising business to encompass interactive marketing and out-of-home social networking that provide measurement for advertisers.

            On December 5, 2006, we received our registered trademark status for Destination Television® with the United States Patent and Trademark Office (Registration Number #3,179,292) under Section 038 of narrowcast media/audio in out-of-home locations.

            Our primary business is creating and implementing out-of-home distribution network platforms to reach captive audience viewers, primarily in high traffic OOH leisure destinations. We provide proprietary advertising and marketing concepts and strategies, which we produce, as well as advertising content provided by us or our advertisers. Our flexible digital network platforms allow for content that can be updated and changed remotely and is specific for each targeted demographic group, time of day and monitor and measure frequency and rotation of those ads and messages. We promote our networks as being able to increase exposure and brand recognition and strengthen the influence of consumer purchasing decisions, both at the point-of-purchase as well as at the retail level. Our digital technology and premium locations can provide advertisers with instant delivery and flexibility of content that can be unique to each location, which al lows our clients the ability to change their programming or select a specific location to target-market potential consumers. Our private television networks are not currently regulated by the FCC, which offers distribution opportunities to companies that are unable to advertise their products on conventional networks or cable television.

            We have completed our beta test at a sample of our locations and have concluded that we will now charge our locations a monthly subscription fee. We have advised our locations' managers that media boxes will be available to replace all DVD formats and we intend to expand aggressively into new locations on the subscription-based platform. Our proven digital technology platform will allow for content to be updated remotely as the locations add products and services and marketing campaign changes. We plan to charge a monthly subscription fee of $199 for each location.

           We offer locations a turnkey solution consisting of hardware, software, location programmed content, entertainment and advertiser content and if necessary and economically viable, television monitors to distribute our programming.

            We are also able to use the locations' own televisions to promote their brands, products and services. We plan to offer new profit centers for the location such as participations in anticipated revenues from advertisers, text messaging, sponsors, special promotions and the recurring revenue from data base information created from text messaging.

            On November 1, 2007, we acquired American Broadcast Group LLC, a Florida based advertising sales organization. This transaction did not meet the expectations of the parties and was rescinded on June 18, 2008.

           Our executive offices are located at 530 North Federal Highway, Fort Lauderdale, Florida 33301 and our telephone number is (954) 332-6600. Our website address is www.destinationtelevision.com.

Strategy

            We have revised our business model to sell our locations "electronically" through our new website. The site utilizes only two links "Locations" and "Advertisers" and handles all aspects of a "physical" sale of both the locations and the advertisers. Our new business approach allows for a more accelerated and scalable platform for prospecting and closing location and advertiser sales. All content that is provided to us by the location or the advertiser is delivered electronically to our facility for assembly and is then loaded remotely from our servers onto the location's playlist.  We deliver a media player to the location's place of business for installation into their pre-existing screens. We are concentrating our efforts on signing to our networks high traffic leisure OOH locations.

           Destination Television's digital signage networks broadcast first-run movie trailers and new music videos. The abbreviated short content format is designed for the specific demographic of these high traffic OOH environments.

           According to Forrester Research, movie trailers and music videos are the most popular downloads of today's youth.

           Traditionally, viewing audiences have become highly fragmented and specialized due to the growth of cable television channels, video recorders and the Internet, limiting the ability of advertisements to be seen. Destination Television is able to air high quality local, regional and national digital advertisements or commercial spots to specific high traffic out-of- home captive audiences and specific demographics.

            We intend to solicit national advertisements on our networks at such time as a uniform measurement and metric methodology is implemented for the digital signage industry that can provide proven and quantitative impressions of advertiser viewership. We intend to actively solicit national advertisements through advertising and media placement agencies. We believe that developing or acquiring interactive capability will solve the problem of providing viewer statistics. It will also assist in creating databases for the business to be used for promotions and information and it will also provide entertainment for patrons of our locations.

           We plan to actively solicit advertising agencies, and expand locations aggressively until we have or achieve sufficient locations to draw critical mass for national advertisers. We believe we can acquire certain national commercials via "promo only" while we increase locations leveraging local and regional advertisements, and in the future replace them with paying national advertisements. In addition, we intend to derive a substantial portion of our revenues from strategic alliances and agreements with retail locations, whereby the product or service at the location agrees to pay for co-op advertising. We have begun to obtain agreements from locations that will pay us a monthly subscription fee for the services they receive from us. New locations will pay a monthly fee per location in exchange for custom advertisement of the location's brand, product or service to its customers. Our revised business model is now focuse d on appealing to regional and national chains as a subscription based service in contrast to pursuing individual locations.

           We are retiring, consolidating and implementing new locations as a result of the cancellation of beta test locations or conversion to our subscription based service. We believe that this beta test of anchor locations established our regional footprint in the Southeast Florida corridor and provided us with information to solicit new locations for our subscription based service. We intend to re-solicit these markets on the new subscription based service.       

            We believe that our business model can only be successful if we are able to attract a sufficient number of subscribers and locations to reach critical mass in order to attract advertisers that are interested in reaching the demographics of our advertiser platforms. In order to accomplish this goal, we must place our broadcasts in high traffic OOH locations in entertainment and retail districts throughout the United States. We plan to only solicit multiunit businesses such as chain restaurants. There is no assurance that we will able to enter into agreements with a sufficient number of these businesses to interest the advertisers that we are seeking.

            In order to interest viewers to watch our monitors and see and pay attention to our advertisements, we must provide entertaining content. We believe our "advertainment" platform is a correct mix of short content entertainment and advertisements; however, there can be no assurance that the general public will embrace this format. Just as an "ads-only" channel has not proven to be popular, we believe that to be successful in presenting advertisements, we must provide some form of entertainment, and we have chosen first-run motion picture trailers and new music videos mixed with quality digital advertisements to create our unique brand of "advertainment." We have not taken any surveys as to whether our locations' patrons like being exposed to ads or movie trailers or music videos. Our plan to either acquire or develop an interactive communication model using text messaging and out-of-home social networking should add another entertainment aspect to our offerings as well as providing documentation of viewership to assist us in obtaining advertisers.          

            We utilize as "backbone" or "core" content, movie trailers of first-run motion pictures from the major motion picture studios, including Twentieth Century Fox, Columbia Pictures, MGM, Warner Bros., Paramount Pictures, Dreamworks and Universal, highlighting upcoming releases, and new music videos from the major record labels including Geffen, Universal Atlantic, Capitol, EMI, Epic, Electra, Def Jam, Island, J Records and Maverick. The movie trailers, which are rated as suitable for general audiences, are supplied to us, without charge, by EPK.TV, a division of DBS InteleStream, Fahlgren Entertainment, Inc., and Alliance, an Atlanta based entertainment oriented advertising and public relations agency. 

           Fahlgren Entertainment, Inc. has agreements with the studios to receive print and ad ("P & A") marketing materials, which they provide to third-party entertainment companies, such as our company, to promote upcoming theatrical releases. The music videos, which are promotions for upcoming album releases, are provided to us for promotional purposes, as well.

            We schedule local, regional and national advertisements, before and after the filmed movie trailers.  Because music is generally played in some of our locations by disk jockeys or juke boxes, it is necessary that some of our broadcasts of movie trailers and music videos and ads be graphically intensive and sometimes aired without sound ("MOS").

            We currently do not receive any direct revenues from these trailers and videos, but are free to use them as core content in our broadcasts to the locations that comprise our network. However, a recent industry shift is appearing where the "promo-only" music videos are now being represented to the OOH marketplace as "content," whereas the distributors of this content may in the future expect a monthly fee per location.

            At several of our test locations, in addition to providing the businesses with free advertisements, we entered into agreements to pay the locations, on a pro-rata basis, from 10% to 33% of the gross ad revenue. We are considering the possibility of extending this practice to some or all of our locations, but only as to ads initiated by employees of those locations.

            Industry Background

            The point-of-purchase OOH market, together with the digital signage and out-of-home advertising business, is currently estimated at $6 billion annually. The advertising industry is diverse and includes television, newspapers, magazines, radio, specialty media, the Internet, billboards, direct mail and telephone directories. Approximately $460 billion was spent on worldwide advertising in 2000, including over $240 billion in the United States alone.

           In recent years, non-traditional media, particularly digital technology, has brought in an era of change, providing advertisers new forms and formats by which they can connect with and impact their target audience.  Many industry analysts believe that the relative importance of traditional advertising media will decrease as advertisers look for more creative solutions to reach consumers.

            Through our networks, we have created advertising distribution channels that permit advertisers to effectively reach their audience in an out-of-home environment. We intend to capture an increasing share of the total advertising market. We believe that point-of-purchase advertising networks appeal to out-of-home advertisers who today employ a broad range of advertising mediums.

            Network Program

            Our "networks," which is the term we use to describe our groups of locations that permit their patrons to view our broadcasts, offer advertisers the ability to target specific demographics on a site-by-site basis. Placing monitors in OOH high traffic leisure destinations, such as sports bars, taverns, nightclubs, gyms and health clubs, hotels and most leisure destinations, increases exposure and ad impressions. The monitors are profiled based on specific characteristics of their audience, including age, gender, race and income. This is not accomplished scientifically, but by word-of-mouth and anecdotal observation, which we believe to be reliable. Some examples of the type of information which may be helpful for advertisers are the price of drinks in a bar, which gives information as to patrons' income; the breakdown by sexes, which might indicate the type of drink, which would appeal to a particular gender; the types of cars and truck s in the parking lot, are all items of information that may be useful to advertisers in determining the demographics make-up of the viewing population. This information availability allows us to appeal to both local advertisers targeting a small geographic area within a major city, as well as national advertisers targeting a wide range of demographic groups. Documenting this information will be more accurate once we install interactive applications.

            Our advertising monitors play a repeating or looping sequence of advertising and programming.  As currently configured, a broadcast consists of approximately 60 thirty-second advertising spots per hour. The broadcast in each specific area can support 480 thirty-second daily airing slots, including entertainment spots, on the forward storage media player installed at each location. The "Advertainment" current program wheel consists of an average mix of 20 minutes of movie video per hour, 20 minutes of movie trailers, 15 minutes of local advertising and five minutes of the location's advertisements.  New technology has been announced that may make available to us a high definition broadcast and provide increased storage and broadcast quality. We have researched this technology and elected to convert all current locations to the forward storage media player, and on all new installations, and to deliver content terrestrially via the Internet.

            Installation costs for a new site include the cost of acquiring hardware and the cost of installing equipment.  The fully installed average per site cost for a typical location with a 42" plasma television, digital media player and stand is approximately $2,400. Some sites may contain multiple monitors that would be supported from a single forward storage media player. Alternatively, we plan to make use of the location's existing televisions to reduce our initial cash outlay.

            We secure three to five-year location agreements. We do not permit ads of competing bars, gyms, hotels, video stores or other leisure destinations to be broadcast to the locations on our network.  The location establishment is responsible for supplying electricity to the equipment and keeping the designated monitor on, during normal business hours. As compensation for allowing us to place our monitors in their business facility, the location receives monthly advertising spots. We usually provide the business location with at least four times the advertisements that air, and at least four times per hour. The location may display its monthly event calendar, five-second static ad and photo gallery, or the locations' products or services that are all updated monthly, at a cost of $199 per month per location.  

            Advertising Sales

           Our strategy is to derive a significant portion of our revenue from placed advertisements.  We are attempting to procure national advertisers, primarily through advertising and promotion agencies and public relations firms that have the ability to direct promotion funds. Examples of industries that are constantly having special promotions are the automobile, fashion and entertainment industries. We are also seeking advertisers that are looking for alternate media to promote their products that are limited by law or tradition as to their advertising options. We also look for opportunities for advertisers whose products can be sold immediately on an impulse basis such as beverages in a bar and health foods and supplements in gym locations. Recent surveys have shown that 61% of people leaving gym locations make an immediate purchase, with 55% purchasing goods from a supermarket or drugstore (source: Health Club Panel). We inte nd to target advertisers that relate to this mentality of "leisure destinations driving traffic to retail locations," as we have implemented this tag line in our marketing efforts.

           We believe that advertising and product demonstrations at the point-of-purchase could significantly influence which products consumers purchase.

           Advertising rates are based upon the availability of space for the desired location, the size and demographic make-up of the market served by the screens and the availability of alternative advertising media in the area. Advertising sales are generally made pursuant to contracts with local, regional or national advertisers. Advertising rates currently implemented by us may change when a uniform measurement has been obtained for the digital signage industry creating a relevant cost per thousand ("CPM"). We expect that our future implementation of interactive media applications will facilitate obtaining national advertisers.

           We intend to operate the new locations and network broadcast remotely, utilizing a "forward storage media player" consisting of a terrestrial digital Internet/Ethernet connected hard drive, located at the out-of-home location that uses "pull" not "push" technology, to deliver the content to the location. Utilizing this "real-time" technology, we can update content on-demand, track data from the location, including commercial spot line-up, frequency and rotation, one-time advertisements, play lists and other digital signage data and configurations. If we are unable to operate the new territories remotely, it could have a substantial and adverse impact on our expansion and capital plan.

Competition

           Competition for advertisers is intense. We will be competing with similar and new digital signage networks entering the sector, and also with radio, television and cable companies and other forms of advertising including newspapers, magazines, the Internet, direct mail and billboards. We believe that our strategy of offering advertising in leisure destinations provides particular advertisers with access to a select clientele at attractive rates with favorable brand recall and significant point-of-purchase potential. We expect to compete with these forms of advertising on the basis of price and our ability to reach potential customers at the point-of-purchase. A large number of companies that provide advertising in the point-of-purchase segment of the advertising industry and other sectors have significantly greater financial, marketing, technical and other resources than we have. Potential competitors may be able to devote great er resources to marketing promotional campaigns, adopt more aggressive pricing policies and devote more resources to technology than we can. Increased competition may reduce our market share and may require us to reduce advertising rates and therefore lower our operating margins. We may not be able to compete successfully against current and future competitors. There can be no assurances that we will be able to obtain the desired results from our business strategy or to be profitable.

            Bar TV, Gym TV and Hotel TV           

           We have established as separate networks Bar TV, Gym TV and Hotel TV, but have decided to deactivate these brands at the present time and concentrate on our general brand, Destination Television. We may, in the future, re-establish one or all of these brands.

Government Regulation

            Because we operate private networks at retail locations, we are not currently restricted by licensing program content and related regulations of the Federal Communications Commission.  In addition, the advertising industry is subject to regulation by the Federal Trade Commission, the Food and Drug Administration and other federal and state agencies and is reviewed by various civic groups and trade organizations.  The introduction of new laws, regulations or interpretation of existing regulations governing advertising could have a material adverse effect on our business.

Employees

           We currently have two full-time employees and also employ independent commission representatives. We typically enter into independent contractor agreements or work-for-hire agreements with individuals to provide services on an as-needed basis.

Rescission of Acquisition of American Broadcast Group LLC

           On November 1, 2007, we purchased American Broadcast Group LLC, a privately held advertising sales organization. On June 18, 2008, we executed an agreement that rescinded the transaction because of insufficient operating capital to expand sales operations under ABG's current business model. All sales efforts are now being handled directly by Destination Television utilizing our new "electronic sale" business model to obtain advertisers and locations for our networks.

Mergers and Acquisitions

           In addition to pursuing our revised business model, we are seeking to acquire companies or enter into joint ventures with companies that are in the entertainment, advertising or promotion fields, especially companies that have in-house or affiliated sales departments. We believe that our concept of leisure destinations driving traffic to retail locations is relevant to all forms of advertising, whether in digital or print or sound format. We believe that there are companies, in Florida and elsewhere, that could benefit from our capabilities and industry relationships and that can also complement our existing network structure. In light of our limited cash position and relatively high debt load, there is no assurance that we will be able to complete the acquisition of any company.

ITEM 1A - RISK FACTORS

            Our future results of operations involve a number of risks and uncertainties. The following paragraphs discuss a number of risks that could impact the company's financial condition and results of operations.

Our financial statements have been prepared assuming that we will continue as a going concern and raise substantial doubt as to our ability to continue as a going concern which may discourage investors from investing in us. 

            The auditor's report on our 2008 financial statements, states that Destination Television, Inc. has suffered losses from operations; has a cash deficiency from operations; and is experiencing operating losses that raise substantial doubt about our ability to continue as a going concern.  We continue to explore the possibility of raising funds through available sources which include equity and debt markets.  We are not certain that we will be successful at raising funds through any sources as a result of our efforts.  Our capital requirements in the future will depend on numerous factors, including the rate of acceptance of our networks by multi-unit locations, advertisers, and others.  We cannot assure you that any necessary financing will be available on terms favorable to us, if at all.  If we cannot raise necessary additional capital on acceptable terms, we may not be able to develop or enhance our networks and services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, or even continue as a going concern.

We have a substantial liability for delinquent payroll taxes and if we are unable to settle this debt, we may be required to discontinue operations.

           We owe approximately $237,000 for delinquent payroll taxes, interest and penalties. We submitted an Offer in Compromise to the Internal Revenue Service to substantially reduce our liability. Although the Offer in Compromise has been rejected, we have appealed the initial determination and are continuing negotiations. There is no assurance that an acceptable settlement will be reached and failure to reach such a settlement may have adverse consequences for our business including discontinuing operations.

We have only recently modified our business plan and the limited information about our plan makes an evaluation of us difficult.

            We have conducted limited operations and we have little operating history that permits you to evaluate our business and our prospects based on prior performance.  You must consider your investment in light of the risks, uncertainties, expenses and difficulties that are usually encountered by companies in their early stages of development, particularly those engaged in emerging industries.  There can be no assurance that we will successfully address such risks, and the failure to do so could have a material adverse effect on our business, financial condition and results of operations.

We have experienced historical losses, have an accumulated deficit and may not become profitable.

            For the fiscal years ended October 31, 2007 and October 31, 2008, we experienced net losses of $703,123 and $616,359, respectively. In addition, at October 31, 2008, we had an accumulated deficit since the date of our quasi-reorganization, October 31, 1999, of $7,957,598.  Our operating results for future periods will include significant expenses, including sales and marketing costs, programming and administrative expenses, and will be subject to numerous uncertainties.  As a result, we are unable to predict whether we will achieve profitability in the future.

The success of our new business model is substantially dependent upon our ability to obtain multi-unit locations to subscribe to our service and to sell advertising on our networks, which is unproven.

            Our business model is unproven and may never gain market acceptance among business establishments. Any inability to attract new locations will hinder our growth.  We may not succeed in attracting locations to our networks. Technological advancements, changes in the way consumers make purchasing decisions, the entry of new competitors into our industry or any unforeseen transformation in market conditions could have a material adverse effect on our ability to execute our business plan.

We face competition from different sources, many of which have greater resources than we do; we may be unable to become a competitive force in our marketplace.

            Some of these competitors have a longer operating history than we do and many of them have substantially greater financial and other resources than we do.  As a result, we will likely encounter greater difficulty in implementing our business plans than will our competitors.  The introduction of similar or superior offerings by current or future competitors could have a material adverse effect on our business, financial condition and results of operation.

If we are unable to obtain additional funding our business operations will be harmed. 

            We believe that our available cash will be sufficient to meet our operating expenses and capital expenditures through July 2009. We do not know if additional financing will be available when needed, or if it is available, it will be on acceptable terms. Insufficient funds may prevent us from implementing our business strategy or may require us to delay, scale back or terminate our operations.

Our shareholders may experience significant dilution if we sell additional securities to fund our operations or acquire businesses or technologies. 

            If working capital or future acquisitions are financed through the issuance of equity securities, our shareholders may experience significant dilution. In addition, securities issued in connection with future financing activities or potential acquisitions may have rights and preferences senior to the rights and preferences of our outstanding shares of common stock. The conversion of future debt obligations into equity securities could also have a dilutive effect on our shareholders. Regardless of whether our cash assets prove to be adequate to meet our operational needs, we may elect to compensate providers of services by issuing stock in lieu of cash.

Our business is an emerging enterprise; as a result, the market price for our common stock may be subject to extreme volatility.

            The market for securities of emerging companies, including companies such as ours, has historically been more volatile than the market for stocks in general. As a result, the price of our common stock may be subject to wide fluctuations in response to factors, some of which are beyond our control, including, without limitation, the following:

            · quarter-to-quarter variations in our operating results;
            · our announcement of material events;
            · price fluctuations in sympathy to others engaged in our industry; and
            · the effects of media coverage of our business.

We depend on the continued services of our chief executive officer.

            Our future success depends on the continued services of Gordon Scott Venters, our Chief Executive Officer and President.  While we have entered into an employment agreement with Mr. Venters, the loss of any of his services would be detrimental to us and could have a material adverse effect on our business, financial condition and results of operations.  We do not currently maintain key-man insurance on Mr. Venters' life. 

Penny stock regulation may restrict the marketability of our securities and cause the price of our securities to decline.

            The Securities and Exchange Commission has adopted regulations which generally define a "penny stock" to be any equity security that has a market price of less than $5.00 per share. As a result, our common stock is subject to rules that impose additional sales practice requirements on broker-dealers. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase and a risk disclosure document relating to the penny stock market. The broker-dealer must also disclose the commission payable to both the broker-dealer and the registered representative, current quotations for the securities, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Also, monthly statements must be sen t disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of broker-dealers to sell our securities and may affect the ability of investors to sell our securities in the secondary market and may affect the price at which such purchasers can sell any such securities.

Our common stock is thinly traded and an active and visible trading market for our common stock may not develop.

            · investors may have difficulty buying and selling or obtaining market quotations;
            · market visibility for our common stock may be limited; and
            · a lack of visibility for our common stock may have a depressive effect on the market price for our common stock.

            The price of our common stock has fluctuated during past several years. During the period from November 1, 2006 through October 31, 2008, our stock price has ranged from $0.002 to $0.133 and the spread between the "bid" and "asked" quotations is often substantial.

Our management and internal systems may be inadequate to handle the growth of our business. Inability to manage or fund our growth could have a material adverse effect on the quality of our networks and our business.

            Our growth is expected to continue to place significant demands on our management and other resources. As a result, we will need to obtain additional personnel, equipment and other resources in order to successfully execute new opportunities. We may have difficulty obtaining these additional resources.

            Our future success will depend on our ability to manage our growth effectively, including:

            · training, motivating, managing and retaining our existing employees and attracting and integrating new employees;
            · improving our business development capabilities;
            · developing and improving our operational, financial, accounting and other internal systems and controls, including hiring a chief financial officer; and
            · maintaining quality programming on our networks.

            There is no assurance that we will have sufficient funds to obtain the additional personnel, equipment and other resources necessary to sustain our growth.

            Our systems, procedures and controls are not adequate to support our operations or enable our management to act quickly enough to exploit the market for our products and services. In addition, we will need new systems in order to support the growth of our business and cannot assure you that we will be able to develop these systems on a timely or cost-effective basis. Delays or problems associated with any improvement or expansion of our operational systems and controls could adversely impact our business. Our inability to manage our growth effectively could have a material adverse effect on the quality of our networks, our ability to retain key personnel and our results of operations.

ITEM 1B - UNRESOLVED STAFF COMMENTS

            None

ITEM 2 - PROPERTIES

           We lease, pursuant to an oral agreement, an 8,500 square foot building in Fort Lauderdale, Florida owned by Dr. Harold Terry.  This building houses our administrative offices and computer operations.  The unwritten lease agreement is for $4,500 per month and is on a month-to-month basis.

ITEM 3 - LEGAL PROCEEDINGS           

            We are not party to any legal proceedings nor are we aware of any investigation, claim or demand made on us that may reasonably result in any legal proceedings. 

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           No matters were submitted to a vote of our security holders during fiscal year 2008.

PART II

ITEM 5:  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Stock

           The primary market for our common stock is the OTC Bulletin Board, where it trades under the symbol "DSTV." 

           The following table sets forth the high and low closing prices for the shares of our common stock, for the periods indicated, as provided by the OTC Bulletin Board. The quotations shown reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not represent actual transactions.

Quarter Ending	High	Low
January 31, 2007	$0.133	$0.031
April 30, 2007	0.084	0.031
July 31, 2007	0.098	0.045
October 31, 2007	0.049	0.025
Quarter Ending	High	Low
January 31, 2008	$0.045	$0.015
April 30, 2008	0.06	0.012
July 31, 2008	0.042	0.01
October 31, 2008	0.014	0.002

Price Range of Series B Preferred Stock

           All of the shares of our Series B Preferred Stock are owned by our President, Gordon Scott Venters. There is no public market for our Preferred Stock.

Shareholders

            As of February 11, 2009, we had approximately 400 shareholders of our common stock and as of that date, we had one shareholder of our Series B Preferred Stock.

            The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Holders of our common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.

            The holders of the Series B Preferred Stock have rights identical to the holders of the common stock except that each share of Series B Preferred Stock has the voting rights equivalent to four times the votes of each share of the common stock into which the Preferred shares may be converted.

Dividends

           We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain future earnings, if any, to finance operations and the expansion of our business. Any future determination to pay cash dividends will be at the discretion of the board of directors and will be based upon our financial condition, operating results, capital requirements, plans for expansion, restrictions imposed by any financing arrangements and any other factors that the board of directors deems relevant.

Changes in Securities and Use of Proceeds

Common Stock

            Stock Issuances

           During the fourth quarter ended October 31, 2008, we issued a total of 19,700,000 shares of common stock.

           The newly issued shares consisted of: 4,500,000 shares that were sold to an accredited investor for $45,000 cash, at $0.01 per share; 15,000,000 shares that were issued to our President and Chief Executive Officer, Gordon Scott Venters, as payment of accrued but unpaid salary in the amount of $76,000, based on an average  market value of $0.0051 per share; 50,000 shares in payment of director's fees to our director, Mr. Todd Nugent, valued at $105, or $0.0021 per share; and 150,000 shares to a consultant for services valued at $765, based on the market price of $0.0051 per share. The cash received was used for working capital. The shares issued were restricted as to transferability. The issuances were all made in reliance on Section 4(2) of the Securities Act of 1933 and were made without general solicitation or advertising. The recipients represented to us that the securities were being acquired for investment purposes.

           As of October 31, 2008, we had 75,658,760 shares of common stock outstanding.

           Subsequent to the end of our October 31, 2008 fiscal year, we issued 4,950,000 shares of common stock to three accredited investors for cash consideration of $83,100. The Company also issued 12,500,000 shares for consulting services, of which 10,000,000 shares were issued in connection with a one-year consulting agreement that commenced on December 22, 2008. Pursuant to that agreement, the Company also granted three-year options to acquire 5,000,000 shares of the Company's common stock at $0.02 per share and 5,000,000 shares at $0.05 per share. All of these securities are restricted as to transferability.

           As of February 11, 2009, we had 93,358,760 shares of common stock and 5,750,000 shares of Series B Preferred Stock outstanding. The Series B Preferred Stock is convertible into 5,750,000 shares of common stock.

ITEM 6 - SELECTED FINANCIAL DATA

        Not Applicable

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies

           The following critical accounting policies are important to the portrayal of our company's financial condition and results.

Revenue Recognition:

           Our revenue is derived from (1) subscription fees ("Subscription revenue") paid by network member locations that air our network content and such revenue is recorded ratably over the term of the subscription agreement; and (2) the production and sale of custom advertising that is subsequently aired throughout our TV networks. Our primary obligations are to produce a completed video clip ("Production revenue") and to air that clip on our networks for an initial period ("Air Time revenue"). Production revenue is recognized upon the delivery and acceptance of the produced piece while Air Time revenue is recognized ratably over the term of the advertising contract.  

           We account for revenue under the guidance provided by EITF 00-21 "Revenue Arrangements with Multiple Deliverables." We only recognize production revenue, separately from air time revenue, if we bill the advertising client separately for both elements and if the customer has been so advised as part of its initial arrangement with us. In order to record the production revenue as a separate part of the advertising contract, billing rates, whether by the job or based on time and materials, must be presented to the advertising client for approval as part of the original contract. Video clips produced by our art department have stand alone value and can be used for purposes other than to be aired on our networks. Once completed and delivered to the client, the video clip is non- returnable and hence "not subject to a general right of return." Air time is recognized as revenue over the term of the advertising contract or proportionately by spots delivered, depending on the initial contract terms. We recognize air time revenue as air time is delivered. If the client has not been informed that billing is separate for production and airtime, then all revenue from that contract is treated as air time revenue and is recognized as commercials are aired.  Since, we have always delivered airtime as contracted, management has determined that delivery of the airtime is "probable" and since we have control over our  networks, the delivery of the airtime meets the criterion of "controlled by the Company."

Valuation of Long-Lived Assets:

           We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

           We amortize the costs of other intangibles over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are also tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required.

Results of operations for the Fiscal Years Ending October 31, 2008 and October 31, 2007

            The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and footnotes that appear elsewhere in this report.

Sales and Other Revenues

            In the fiscal years ending October 31, 2008 and 2007, we reported nominal sales of $12,813 and $26,108, respectively.  Sales in both periods were primarily of an experimental nature, wherein we tested and refined different concepts and approaches for potential advertisers. Included in our sales in fiscal 2007 was a sale of one of our Internet domain names for $7,500.

Expenses

            Selling, General and Administrative

           Selling, general and administrative expenses for the fiscal year ended October 31, 2008 decreased $154,512 or 22% to $536,620 from $691,130 in fiscal 2007.  This decrease is primarily attributable to decreases of, $39,000 in cost of production personnel and sales staff, $28,000 in stock compensation for services paid with our common stock, $22,000 for professional fees, and $26,000 for officer's salary, and $16,000 in litigation expenses. As a percent of total expenses, selling and general administrative expenses were 89% and 95% for the fiscal years ended October 31, 2008 and 2007, respectively.

            Interest Expense

           Interest expense in fiscal year 2008 increased by approximately $28,000 to $66,050 from $38,101 in fiscal year 2007. Interest expense for both years consisted of accrued interest on the outstanding Terry notes and loans payable and estimated accrued interest on our payroll tax liabilities.            

            Loss on Discontinued Operations

            Our loss on disposition of discontinued operations was $26,502, which represented our cash investment in American Broadcast Group LLC, which is not recoverable. The loss is reflected separately in the Consolidated Statement of Operations as the results of a Discontinued Operation.  

Income Tax Expense (Benefit)

           We have substantial net operating loss carry-forwards, which may be used to offset operating profits in the future. In the periods covered by this report, there was no income tax expense or benefit reported on our financial statements. We determined that it was more likely than not that our net operating loss carry-forwards would not be utilized; therefore, we have provided a valuation allowance against the related deferred tax asset.

Losses

           Our net loss before taxes was $616,359 in the year ended October 31, 2008, compared to $703,123 for the year ended October 31, 2007. Included in our losses in the 2008 fiscal year was a non-cash charge of $36,020, which we recorded, as expense, for the fair value of consultants' options. In the 2006 fiscal year, we recorded a similar expense of $49,225. Although we have substantial tax carry-forwards, we have not reduced our net loss for the year by any tax benefit, because we determined that it was more likely than not that our net operating loss carry-forwards would not be utilized; therefore, we have provided a valuation allowance against the related deferred tax asset and, consequently, our net loss before taxes and after taxes is the same.

           Although we believe our revised business model may provide an increase in revenue and a reduction in losses for the year ending October 31, 2009, there can be no assurance that we will achieve profitability, generate new revenues, or sustain growth in the future. Without required funding, we will not be able to increase the number of subscribers for our digital signage or enable us to develop new media concepts or acquire existing companies.

Impact of Inflation

            It is management's opinion that inflation has had only a negligible effect on our operations in the past several years.

Liquidity and Capital Resources

           For the period November 1, 1999 through October 31, 2008, we have not generated cash from operations.  Cash used by operating activities was $241,376 and $250,415 for the fiscal years ended October 31, 2008 and 2007, respectively.

           We have been able to continue in business primarily from the receipt of cash from financing activities. During fiscal year 2008, our financing activities provided total funds of $205,020.  Similarly, our financing activities provided total funds of $315,000 for fiscal year 2007.

           Our liabilities, all of which are current liabilities (due within one year), totaled approximately $1,503,000 at October 31, 2008.  Of that amount, $705,000, plus accrued interest of $118,000, was owed to Dr. Terry. The $705,000 of principal consists of: $500,000 in the form of 6% and 8% convertible notes, of which $300,000 is secured by all of our assets, and $205,000 in 6% non-convertible unsecured loans. Additionally, we owed Dr. Terry $315,000 for accrued rent. Our other major liability is for payroll taxes, which is approximately $237,000, including interest and penalties, at October 31, 2008. We recognize the high priority of resolving this debt in an orderly manner. We have retained an accounting firm that is experienced in negotiating with the Internal Revenue Service regarding payroll tax liabilities and we submitted an Offer in Compromise to substantially reduce our liability. Although the Offer in Compromise has been rejected, we have appealed the initial determination and are continuing negotiations. There is no assurance that an acceptable settlement will be reached.  All payroll tax obligations for the calendar years 2007 and 2008 have been paid.

           We have funded our cash needs during the last two fiscal years through the issuance of our common stock and convertible and non-convertible notes. We also used our common stock, in lieu of cash, to obtain professional and employment services. We intend to cover our cash needs over the next 12 months through the sale of additional shares of our common stock and/or convertible securities.

Capital Expenditures

            Assuming we are unable to consummate an acquisition of an existing company with capital expenditure requirements, our equipment needs should not exceed $100,000 for the next 12 months. Even with the limited requirements, there is no assurance that we will be able to obtain financing to acquire the equipment at terms acceptable to us.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

           Our audited financial statements for the fiscal years ended October 31, 2008 and October 31, 2007 follow Item 15, beginning at page F-1, following Part IV.

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

            On January 29, 2009, we accepted the resignation of Patrick Rodgers, CPA, PA as our principal independent registered public accounting firm. Concurrent with the acceptance of the resignation of  Patrick Rodgers, CPA, PA, our Board of Directors engaged Michael F. Cronin, CPA as our independent registered public accounting firm to audit our financial statements for the year ending October 31, 2008. Our Board of Directors approved the decision to change independent registered accounting firms. We did not consult with Michael F. Cronin, CPA on any matters described in Item 304 (a)(2)(i) and Item 304 (a)(2)(ii) of Regulation S-K prior to January 29, 2009.

            During the fiscal year ended October 31, 2008 and through the date of our acceptance of the resignation of Patrick Rodgers, CPA, PA (January 29, 2009), there were no disagreements with Patrick Rodgers, CPA, PA on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Patrick Rodgers, CPA, PA would have caused Patrick Rodgers, CPA, PA to make reference to the disagreements in connection with his reports on our financial statements for such year. Since the engagement of Michael F. Cronin, CPA, we have had no disagreements with that firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

            The reports of Patrick Rodgers, CPA, PA on our financial statements for the fiscal year ending October 31, 2007 contained a statement indicating substantial doubt about our ability to continue as a going concern because of our ongoing losses from operations.  The audit reports of Patrick Rodgers, CPA, PA on our financial statements for the fiscal year ended October 31, 2007 contains no other adverse opinion, disclaimer of opinion or modification as to  uncertainty, audit scope  or accounting principles (as described in Item 304(a)(1)(ii) of Regulation S-K).

ITEM 9A - CONTROLS AND PROCEDURES

             Evaluation of Disclosure Controls and Procedures

             We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of October 31, 2008. This evaluation was accomplished under the supervision and with the participation of our chief executive officer, principal executive officer, chief financial officer/principal accounting officer who concluded that our disclosure controls and procedures are not effective to ensure that all material information required to be filed in the annual report on Form 10-K has been made known to him.

             Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

             Based upon an evaluation conducted for the period ended October 31, 2008, Gordon Scott Venters who served as our Chief Executive Officer and Chief Financial Officer (which duties include that of principal accounting officer) as of October 31, 2008 and as of the date of this Report, has concluded that as of the end of the period covered by this report, we have identified the following material weakness of our internal controls: 

             ·     Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transactions.  
            ·     Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.

             In order to remedy our existing internal control deficiencies, as soon as our finances allow, we will hire a Chief Financial Officer who will be sufficiently versed in public company accounting to implement appropriate procedures for timely and accurate disclosures 

             Report of Management on Internal Control over Financial Reporting

             Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company.

             Our 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 accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those 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 of America, and that receipts and expenditures of the company are being made only in accordance with authorizations of management of the company; and (iii) provi de 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.

             Management conducted an evaluation and assessed the effectiveness of our internal control over financial reporting as of December 31, 2007, based on the criteria set forth by the Committee of Sponsoring Organizations of Treadway Commission in Internal Control – Integrated Framework. Based on that assessment, management concluded that, as of October 31, 2008, our internal control over financial reporting was not effective because of limited staff and the need for a full-time chief financial officer.

             This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.

             Changes in Internal Control over Financial Reporting  

             We have not yet made any changes in our internal control over financial reporting that occurred during the period covered by this report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B - OTHER INFORMATION

            None

PART III

ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

           The following is a list of our directors and executive officers, their respective ages and the positions they hold with us.

Name	Age	Positions
Gordon Scott Venters	47	Director, Chief Executive Officer and President
Todd Nugent	50	Director

           Pursuant to Article II of our bylaws, all directors are elected to a term of one year, and hold such office until the next meeting of the shareholders or until their successors are elected and qualified. The executive officers serve at the pleasure of the Board. The principal occupation and business experience for each executive officer and director for at least the past five years follows:

            Gordon Scott Venters has been President and Chief Executive Officer and a Director of Destination Television since December 1996. He had also served as a member of our Board of Directors from March 1994 to May 1995. Prior to joining Destination Television, Inc., Mr. Venters He was engaged in the entertainment industry, including the financing, management and production of films, videos, and recordings. From May 1996 until December 1996, he served as president and a director of Quantum Entertainment Company in Los Angeles. From 1990 to 1993, Mr. Venters served as the president and chief executive officer of Flash Entertainment, Inc., an independent feature film company and predecessor of our company, during which time he was the executive producer of the feature film "No More Dirty Deals" and five music videos. He had previously been the executive producer of two full-length feature films, "Shakma" and "Shoot." Mr. Venters has al so been a financial advisor and a registered stockbroker with F.D. Roberts Securities and Prudential-Bache Securities, Inc.

            Todd Waddell Nugent, a private real estate investor for more than the past five years has served as a director on our board since 1996. He was our Chief Executive Officer from July 1996 to December 1996 and served as President of our company's Entertainment Film Partners division from December 1996 to February 1997, at which time the division was eliminated. Mr. Nugent had previously been Chief Executive Officer of StraDigi Telecommunications, Inc., a telecommunications group and Multi-Channel Video Programming, Inc., a point-of-purchase television company that he co-founded. Mr. Nugent, a former stockbroker, received his B.A. degree in Business Management from Eckerd College.

Audit Committee

           We do not have an audit committee. Our entire Board of Directors serves as our audit committee. As we add directors to our board, we plan to consider the formation of an audit committee. We have no other committees of the Board of Directors.

Compensation of Directors

           Members of our board of directors receive, on an annual basis, shares of our common stock, as payment for services. In both 2008 and 2007, director Mr. Todd Nugent received 50,000 shares of common stock. In 2007, Mr. Gordon Scott Venters received 50,000 shares of our stock as a director's fee. Our directors are reimbursed for reasonable out-of-pocket expenses in connection with attendance at board meetings. 

Compliance with Section 16(a) of the Securities Exchange Act

           Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than ten percent of our equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission. We believe that our directors, Gordon Scott Venters and Todd Nugent, have filed all requisite forms on a timely basis, and that Dr. Harold Terry has not filed all required Forms 3, 4 and 5. Dr Terry has advised us that he is the process of making the necessary filings. 

Code of Ethics

           We have adopted a Code of Ethics for all of our employees, directors and officers. It is available for viewing at our website, www.destinationtelevision.com.  

ITEM 11 - EXECUTIVE COMPENSATION

Summary Compensation Table

           The following table provides summary information for the fiscal years 2006, 2007 and 2008 concerning cash and non-cash compensation paid or accrued by us to, or on behalf of, Gordon Scott Venters, our president and chief executive officer. No other officer earned more than $100,000 during the period.

Summary Compensation Table
		Annual Compensation					Awards	Payouts
Name and Principal Position	Year		Salary		Bonus	Other Annual Compensation	Restricted Stock Awards	Securities Underlying Options/LTIP SARs Payouts	All Other Compensation
Gordon Scott Venters,  President and  Chief Executive Officer
	2006		139,650		0	0	0	1,300,000 shares	0
	2007		146,632		0	0	0		0
	2008		153,964	(1)	0	0	0		0

                       (1) Includes $86,895 of salary that was unpaid as of October 31, 2008.

Employment Agreements

            Gordon Scott Venters is employed as our President and Chief Executive Officer, pursuant to an employment agreement, effective November 1, 2007. The three-year employment agreement, which extended a previous agreement, provides for an annual salary of $153,964; annual increases of a minimum of 5%; and participation in incentive or bonus plans at the discretion of the Board of Directors. The agreement additionally provides for certain confidentiality and non-competition provisions and a minimum payment of 18 months salary in the event of a change of control or termination "without cause," or if the employee terminates for "good reason." As of October 31, 2008, Mr. Venters was owed $86,895 for accrued unpaid salary.

            In April 2007, Mr. Venters, acquired from us 500,000 shares of our common stock, which were valued at $26,000, or $0.052 per share, as repayment of a $25,000 loan he made to the Company in August 2006 and payment of $1,000 of accrued unpaid salary. Additionally, in October 2007, he acquired 1,000,000 shares of common stock, which were valued at $0.04 per share, in exchange for $40,000 of accrued unpaid salary.

            In November 2007, Mr.Venters acquired from us 2,000,000 shares of our Series B Preferred Stock as payment of $56,000 of accrued unpaid salary. The shares were valued at $56,000, or $0.028 per share, which represented the approximate value, at the date of issuance, of the common stock into which the Series B Preferred Stock may be converted. Also, in September and October 2008, Mr. Venters, acquired a total of 15,000,000 shares of common stock at an average price of approximately $0.0051 as payment for accrued but unpaid salary of $76,000.

            The shares of Series B Preferred Stock and the common shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

           The following table sets forth certain information concerning the ownership of our common stock and Series B Preferred Stock as of February 11, 2009, with respect to: (i) each person known to us to be the beneficial owner of more than five percent of each class of stock, (ii) all of our directors and executive officers, and (iii) all of our directors and executive officers as a group. The notes accompanying the information in the table are necessary for a complete understanding of the information provided below. As of February 11, 2009, there were: 93,358,760 shares of common stock and 5,750,000 shares of Series B Preferred Stock outstanding. Each share of Series B Preferred Stock is convertible into one share of common stock and has the equivalent voting rights of four shares of common stock.            

           We believe that all persons named in the table have sole voting and investment power with respect to all shares shown as being owned by them.

           Under securities laws, a person is considered to be the beneficial owner of securities owned by him, his spouse and others to whom the law attributes ownership, as well as securities that can be acquired by him within 60 days from the date of this report, including shares which may be acquired upon the exercise of options, warrants or convertible securities.  We determine a beneficial owner's percentage ownership by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person, and which are exercisable within 60 days of the date of this report, have been exercised or converted.

Name and Address of Beneficial Owner and Relationship to the Company	Class  Common	Percent		Series B  Pfd. (Percent)		Total common  including shares   which may be acquired  within 60 days		Combined Percent
Gordon Scott Venters 530 N. Federal Highway Fort Lauderdale, FL 33301 President and Director	17,211,020	18.4	%	5,750,000	(100%)	22,961,020	(1)	23.2	%	(1)
Todd Nugent 530 N. Federal Highway Fort Lauderdale, FL 33301 Director	183,050	0.2		0		183,050		0.2
Dr. Gerald Cooper 2165 Bonnevit Ct., NE Atlanta, GA 30345 Beneficial Owner of more than 5% of Class	7,000,000	7.5		0		7,000,000		7.5
Dr. Harold K. Terry 600 NE 55th Terrace Miami, FL 33137 Beneficial Owner of more than 5% of Class	11,975,473	12.8		0		19,975,473	(2)	19.7		(2)
Westport Strategic Partners, Inc. 110 E. Broward Blvd. Fort Lauderdale, FL 33301 Beneficial Owner of more than 5% of Class	9,750,000	10.4		0		19,750,000	(3)	19.1
Directors and Executive Officers   as a group (-2-persons)	17,394,070	18.6	%	5,750,000	(100%)	23,144,070	(1)	23.4	%	(1)

           (1) Includes 5,750,000 common shares that are issuable upon conversion of our Series B preferred stock.

           (2) Includes a total of 8,000,000 additional common shares of which 2,000,000 shares may be issued upon the conversion of $200,000 of 6% convertible promissory notes at a conversion price of $0.10 per share; and 6,000,000 shares that may be issued upon the conversion of $300,000 of 6% and 8% convertible promissory notes, at a conversion price of $0.05 per share, the computation of which $200,000 is based on the average share price of the five days prior to the date of this report, but no lower than $0.05 per share.

            (3) Includes stock options to acquire 10,000,000 shares of common stock before December 22, 2011. Joseph Safina, President of Westport Strategic Partners, Inc. has the power to vote and dispose of the shares.

Changes in Control

           There are currently no arrangements in place that will result in a change in control of our company.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Dr. Harold Terry

On December 21, 2007, the Company issued a one-year 8%, $100,000 secured convertible note to Dr. Harold Terry, a major shareholder of the Company's common stock for $100,000 cash.  The note is convertible into common stock at $0.05 per share and is collateralized by all of the Company's assets, both tangible and intangible, and is restricted as to transferability. The proceeds of the note were used for working capital. As of October 31, 2008, notes payable due Dr. Terry totaled $500,000, comprised of convertible notes of $400,000 and $100,000 at 6% and 8%, respectively. Of these convertible notes payable, $300,000 are secured by all of the assets of the Company and $200,000 of the notes are unsecured.

On May 16, 2008, the Company borrowed $30,000 from Dr. Terry. The loan which is unsecured is payable in one-year with 6% interest. In fiscal year 2007, Dr. Terry made $125,000 of unsecured loans to the Company. As of October 31, 2008, the total of unsecured loans payable to Dr. Terry totaled $205,000.

The Company leases the building that houses its offices from Dr. Terry on a month-to-month basis, at $4,500 per month, which has been accrued by the Company but not paid.

As of October 31, 2008 and October 31, 2007, the Company owed Dr. Terry for accrued interest in the amounts of $117,793 and $76,224, respectively and for accrued rent $315,000 and $261,000, respectively. These amounts are included in the accompanying consolidated balance sheets as accounts and accrued expenses payable.

Directors

In October 2008, the Company issued 50,000 shares of its common stock as a director's fee to Todd Nugent. The shares, which are restricted as to transferability, were valued at $105 or $.0021 per share. 

In August 2007, 100,000 shares of the Company's common stock were issued as directors' fees (50,000 to Mr. Venters and 50,000 to Mr. Nugent) and were valued at $13,000 or $0.04 per share, which was representative of the approximate market value at the date of issuance. In fiscal year 2006, the Company issued 50,000 shares to each of its two directors as payment for service as directors. The shares were valued at $0.25 per share, or a total of $12,500 for each director. The shares are restricted as to transferability.

Gordon Scott Venters

Effective November 2007, Gordon Scott Venters, entered into a three-year employment agreement with the Company, which is described above in Item 11 - Executive Compensation. 

In November 2007, Mr. Venters, acquired from the Company 2,000,000 shares of its Series B Preferred Stock as payment of $56,000 of accrued unpaid salary. The shares were valued at $56,000, or $0.028 per share, which represented the approximate value, at the date of issuance, of the common stock into which the Series B Preferred Stock may be converted. Also, in September and October 2008, Mr. Venters, acquired a total of 15,000,000 shares of common stock from the Company at an average price of approximately $0.0051 as payment for accrued but unpaid salary of $76,000. The shares of Series B Preferred Stock and the common shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

In August 2006 and February 2007, Mr. Venters made non-interest bearing unsecured loans to the Company in the amounts of $25,000 and $5,000, respectively. In April 2007, the Company repaid the $5,000 loan and Mr. Venters acquired from the Company 500,000 shares of its common stock, which were valued at $26,000, or $0.052 per share, in exchange for the $25,000 loan and the balance of $1,000 was applied to accrued unpaid salary. Additionally, in August 2007, he acquired 1,000,000 shares of common stock, which were valued at $0.04 per share, in exchange for $40,000 of accrued unpaid salary. As of October 31, 2008, Mr.Venters was owed $86,895 for accrued unpaid salary. As of October 31, 2007, he was owed $89,791

 ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

            For fiscal year 2007, our principal accountant Patrick Rodgers, CPA, PA, provided audit services and billed us $3,500. The only professional services rendered by Patrick Rodgers, CPA, PA were audit services,

            For fiscal year 2008, Patrick Rodgers, CPA, PA provided audit-related services, for which he billed $2,400. He did not provide audit, tax, or other services during fiscal year 2008.

            For fiscal year 2008, our principal accountant, Michael F. Cronin, CPA, provided audit services and billed us $5,000. The only professional services rendered by Michael F. Cronin, CPA were audit services. He did not provide audit-related services, tax services or other services during the fiscal year.

PART IV

ITEM 15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES

See Exhibit Index attached to this Form 10-K.

SIGNATURES

            In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

February 13, 2009	/s/ Gordon Scott Venters
	Gordon Scott Venters  President and Chief Executive Officer  (principal executive officer) and  Acting Chief Financial Officer  (principal financial officer and  principal accounting officer) and Director
February 13, 2009	/s/ Todd Nugent
	Todd Nugent, Director

DESTINATION TELEVISION, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
	Reports of Independent Registered Public Accounting Firms		F-2
	Consolidated Financial Statements:
		Balance Sheets as of October 31, 2008 and 2007	F-3
		Statements of Operations for the years ended October 31, 2008 and 2007	F-4
		Statements of Changes in Stockholders' Deficiency for the years ended     October 31, 2008 and 2007	F-5
		Statements of Cash Flows for the years ended October 31, 2008 and 2007	F-6
		Notes to Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 MICHAEL F. CRONIN
Certified Public Accountant
 

Board of Directors and Shareholders
Destination Television, Inc.
Fort Lauderdale, Florida 

I have audited the accompanying consolidated balance sheet of Destination Television, Inc. and subsidiaries (the "Company") as of October 31, 2008 and the related consolidated statements of operations, stockholders' deficiency and cash flows for the year then ended. The financial statements are the responsibility of the directors. My responsibility is to express an opinion on these financial statements based on my audit. 

I conducted my audit in accordance with standards established by the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. 

In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Destination Television, Inc. and subsidiaries as of October 31, 2008 and the results of its operations, its cash flows and changes in stockholders' deficiency for the year then ended in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred total operating losses in the last two fiscal years, through October 31, 2008, of approximately $1,300,000. As a result of these continued losses, the Company has been unable to generate sufficient cash flow from its operating activities to support current operations. The Company's ability to generate sufficient future cash flows from its operating activities in order to sustain future operations cannot be determined at this time. Its plan is included in Note 15 of the financial statements. The Company has primarily funded its operations through the sale of its common stock and proceeds of debt borrowings. There can be no assurance that the Company will be able to do so in the future, and, if so, provide it with sufficient capital and on terms favorable to the Company. These uncertainties raise substantial doubt about the Company's ability to continue as a going co ncern. The financial statements do not include any adjustments that might arise from the outcome of these uncertainties.

February 13, 2009

/s/ Michael F. Cronin

Michael F. Cronin

Certified Public Accountant
Orlando, Florida

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

Board of Directors and Shareholders
Destination Television, Inc.
Fort Lauderdale, Florida 

I have audited the accompanying consolidated balance sheet of Destination Television, Inc. and subsidiaries (the "Company") as of October 31, 2007 and the related consolidated statements of operations, stockholders' deficiency and cash flows for the year then ended. The financial statements are the responsibility of the directors. My responsibility is to express an opinion on these financial statements based on my audit. 

I conducted my audit in accordance with standards established by the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. 

In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Destination Television, Inc. and subsidiaries as of October 31, 2007  and the results of its operations, its cash flows and changes in stockholders' deficiency for the year then ended in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred total operating losses in the last two fiscal years, through October 31, 2007, of approximately $2,000,000. As a result of these continued losses, the Company has been unable to generate sufficient cash flow from its operating activities to support current operations. The Company's ability to generate sufficient future cash flows from its operating activities in order to sustain future operations cannot be determined at this time. Its plan is included in Note 15 of the financial statements. The Company has primarily funded its operations through the sale of its common stock and proceeds of debt borrowings. There can be no assurance that the Company will be able to do so in the future, and, if so, provide it with sufficient capital and on terms favorable to the Company. These uncertainties raise substantial doubt about the Company's ability to continue as a going co ncern. The financial statements do not include any adjustments that might arise from the outcome of these uncertainties.

February 13, 2008

/s/ Patrick Rodgers, CPA, PA

Patrick Rodgers, CPA, PA

Altamonte Springs, Florida

F-2

DESTINATION TELEVISION, INC. Consolidated Balance Sheets
	October 31,  2008			October 31,  2007
ASSETS
Current Assets:
Cash and cash equivalents	$	518		$	40,838
Prepaid expenses		1,862			3,650
Total Current Assets		2,380			44,488
Property and equipment - net		73,499			95,535
Due from American Broadcast Group LLC		-			21,091
Acquired amortizable intangible assets		1,780			2,080
Total Assets	$	77,659		$	163,194
LIABILITIES  AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts and accrued expenses payable	$	561,716		$	440,279
Payroll taxes payable		236,694			234,797
Convertible notes payable - related party		500,000			400,000
Loans payable - related party		205,000			175,000
Total Current Liabilities		1,503,410			1,250,076
Stockholders' Deficiency:
Preferred stock, Series B convertible ($0.0001 par value)
5,750,000 shares authorized and issued (3,750,000 in 2007)		206,000			150,000
Common stock ($0.0001 par value)
200,000,000 shares authorized
75,658,760 shares issued (52,258,760 in 2007)		6,325,847			6,104,357
Accumulated deficit		(7,957,598	)		(7,341,239	)
Total Stockholders' Deficiency		(1,425,751	)		(1,086,882	)
Total Liabilities and Stockholders' Deficiency	$	77,659		$	163,194

See accompanying notes to financial statements.

F-3

DESTINATION TELEVISION, INC.

 Consolidated Statements of Operations

			Year Ended
			October 31,  2008		October 31,  2007
Net Sales			$    12,813		$     26,108
Expenses:
Selling, general and administrative			466,095		596,972
Consulting			70,525		94,158
Interest expense			66,050		38,101
Total expenses			602,670		729,231
Loss from continuing operations			(589,857	)	(703,123	)
Discontinued operations:
	Loss from discontinued operations of subsidiary
		returned to former ownership
		pursuant to rescission agreement	(26,502	)	-
Net loss before income taxes			(616,359	)	(703,123	)
Income taxes			-		-
Net loss			$  (616,359	)	$ (703,123	)
Loss per share:
Basic and diluted:
	Loss from continuing operations before
		discontinued operations	$ (0.01	)	$ (0.01	)
	Loss from discontinued operations and
		loss on disposition, net	(0.00	)	-
			$  (0.01	)	$ (0.01	)
Weighted average common share       equivalent outstanding			64,209,669		51,547,522

 See accompanying notes to financial statements.

F-4

DESTINATION TELEVISION, INC.  Statement of Changes in Stockholders' Deficiency
	Common Stock			Preferred Stock				Accumulated Deficit			Deferred Compensation			Total Stockholders' Deficiency
	Shares		Amount	Shares		Amount
Balance October 31, 2006	43,348,427	$	5,656,295	3,750,000		150,000	$	(6,638,116	)		(33,333	)	$	(865,154	)
Issued for cash	5,100,000		215,000											215,000
Issued for services	2,310,333		117,837											117,837
Issued in payment of liability	1,500,000		66,000											66,000
Issuance of stock options			49,225											49,225
Deferred compensation expense											33,333			33,333
Net loss for year ended October 31, 2007								(703,123	)					(703,123	)
Balance October 31, 2007	52,258,760		6,104,357	3,750,000		150,000		(7,341,239	)		0			(1,086,882	)
Issued for cash	5,500,000		75,020											75,020
Issued for services	2,900,000		34,450											34,450
Issued in payment of liability	15,000,000		76,000	2,000,000		56,000								132,000
Issuance of stock options			36,020											36,020
Net loss for year ended October 31, 2008								(616,359	)					(616,359	)
Balance October 31, 2008	75,658,760	$	6,325,847	5,750,000	$	206,000	$	(7,957,598	)	$	0		$	(1,425.751	)

 See accompanying notes to financial statements.

F-5

DESTINATION TELEVISION, INC. Consolidated Statements of Cash Flows
	Year Ended
	October 31,  2008			October 31,  2007
Operating activities:
Net loss	$	(616,359	)	$	(703,123	)
Adjustments to reconcile net loss to cash:
Non-cash expenses included in net loss
Depreciation and amortization		26,300			26,300
Recognition of deferred compensation		-			33,333
Grant of stock options at fair value		36,020			49,225
Stock issued for services		110,450			158,837
Decrease  in restricted cash for payment of payroll taxes		-			100,000
Increase in payables and accrued expenses		179,334			88,663
Decrease of other operating assets – discontinued operations		21,091			-
Decrease (increase) in prepaid expenses		1,788			(3,650	)
Cash used by operating activities		(241,376	)		(250,415	)
Investing activities:
Acquisition of fixed assets		(3,964	)		(14,700	)
Advance to American Broadcast Group LLC		-			(21,091	)
Cash used by investing activities		(3,964	)		(35,791	)
Financing activities:
Proceeds from issuance of common stock		75,020			215,000
Proceeds notes and loans payable - related party		130,000			125,000
Repayment loan payable-other		-			(25,000	)
Cash generated by financing activities		205,020			315,000
Increase (decrease) in cash		(40,320	)		28,794
Cash and cash equivalents - beginning		40,838			12,044
Cash and cash equivalents - ending	$	518		$	40,838
Supplemental disclosure of non-cash financing activity:
Issued 480,679 shares of common stock in	$	-		$	25,000
repayment of loan payable-officer
Issued 2,000,000 shares of Series B Preferred Stock in
repayment of loan payable-officer	$	56,000		$	-

 See accompanying notes to financial statements.

F-6

DESTINATION TELEVISION, INC.

 Summary of Significant Accounting Policies
 Fiscal Years Ended October 31, 2008 and October 31, 2007

Basis of Presentation

The consolidated financial statements include the accounts of Destination Television, Inc., a Delaware corporation, and its wholly owned subsidiaries; Bar TV, Inc., Destination Television, Inc., a Florida corporation, and Hotel TV, Inc. All significant inter-company account balances and transactions between the Company and its subsidiaries have been eliminated in consolidation.

Quasi-Reorganization

As of October 31, 1999, the Company concluded its period of reorganization by reaching a settlement agreement with all of its significant creditors. The Company, as approved by its Board of Directors, elected to state its October 31, 1999 balance sheet as a "quasi-reorganization," pursuant to ARB 43. These rules require the revaluation of all assets and liabilities to their current values through a current charge to earnings and the elimination of any deficit in retained earnings by charging paid-in-capital. From November 1999 forward, the Company has recorded net income (and net losses) to retained earnings and (accumulated deficit).

Use of Estimates

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

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally five years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. Depreciation expense was $26,000 for both 2008 and 2007. A summary of fixed assets and the related accumulated depreciation is as follows:

	2008		2007
Equipment	$         240,282		$     236,318
Accumulated depreciation	(166,783	)	(140,783	)
Net	$           73,499		$       95,535

F-7

DESTINATION TELEVISION, INC.

 Summary of Significant Accounting Policies
Fiscal Years Ended October 31, 2008 and October 31, 2007

Summary of Significant Accounting Policies (Cont'd)

Impairment of Long-lived Assets

The recoverability of our long-lived assets including equipment, goodwill and other intangible assets, is reviewed when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

The costs of other intangibles are amortized over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are also tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required.

Revenue Recognition

The Company's revenue is derived from (1) subscription fees ("Subscription revenue") paid by network member locations that air the Company's network content and such revenue is recognized ratably over the term of the subscription agreement; and (2) the production and sale of custom advertising that is subsequently aired throughout the Company's TV networks. The Company's primary obligations are to produce a completed video clip ("Production revenue") and to air that clip on its networks for an initial 90-day period ("Air Time revenue"). Production revenue is recognized upon the delivery and acceptance of the produced piece while Air Time revenue is recognized ratably over the term of the advertising contract.  

The Company accounts for revenue under the guidance provided by EITF 00-21 "Revenue Arrangements with Multiple Deliverables."   It only recognizes production revenue, separately from air time revenue, if it bills the advertising client separately for both elements, and if the customer has been so advised as part of its initial arrangement with the Company. In order to record the production revenue as a separate part of the advertising contract, billing rates, whether by the job or based on time and materials, must be presented to the advertising client for approval as part of the original contract. Video clips produced by the Company's art department have stand alone value and can be used for purposes other than to be aired on the Company's networks. Once completed and delivered to the client, the video clip is non-returnable and hence "not subject to a general right of return." Air time is recognized as revenue over the term of the advertising contract or proportionately by spots d elivered, depending on the initial contract terms. The Company recognizes air time revenue as air time is delivered. If the client has not been informed that billing is separate for production and airtime, then all revenue from that contract is treated as air time revenue and is recognized as commercials are aired. Since, the Company has always delivered airtime as contracted, management has determined that delivery of the airtime is "probable" and since the Company has control over its networks, the delivery of the airtime meets the criterion of "controlled by the Company."

F-8

DESTINATION TELEVISION, INC.

Summary of Significant Accounting Policies
Fiscal Years Ended October 31, 2008 and October 31, 2007

Summary of Significant Accounting Policies (Cont'd)

Stock Based Compensation

Stock-based awards to non-employees are accounted for using the fair value method in accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," and EITF Issue No. 96-18,  "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services." All transactions in which goods or services are the consideration received for the issuance of equity instruments are to be accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur.

The Company adopted SFAS 123(R) using the "modified prospective" transition method beginning with the first quarter of 2006. Under this method, awards that are granted, modified, or settled after December 15, 2005, are to be measured and accounted for in accordance with SFAS 123(R). In addition, beginning in the first quarter of 2006, expenses were to be recognized in the earnings statement for unvested awards that were granted prior to the adoption of SFAS 123(R). The expense was to be based on the fair value determined at grant date under SFAS 123, "Accounting for Stock-Based Compensation."

There was no impact on the consolidated financial statements for the fiscal years ended October 31, 2008 and 2007, since no employee stock options were granted during those periods.

Fair Value of Financial Instruments

Statements of Financial Accounting Standards No. 107 "Disclosures about Fair Value of Financial Instruments, requires disclosure of fair value information about financial instruments. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of October 31, 2008. The respective carrying value of certain on-balance sheet financial instruments approximated their fair values. These financial instruments include cash and cash equivalents, accounts payable and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company's notes payable is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The carrying v alue approximates the fair value of the notes payable.

F-9

DESTINATION TELEVISION, INC.

Summary of Significant Accounting Policies
Fiscal Years Ended October 31, 2008 and October 31, 2007

Summary of Significant Accounting Policies (Cont'd)

Earnings per Common Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Series B Preferred Shares have been determined to carry the attributes of additional classes of Common Stock, in that the Preferred Shares are identical in all respects to the Common Stock except for voting rights and the Preferred Stock and Common Stock participate in the exact same manner as to dividends and earnings and losses and liquidation rights and, therefore, have been included in the computation of weighted average common shares in the amount that would have been issuable had they been converted to the Company's primary class of  Common Stock.

Diluted net loss per common share is computed using the weighted average number of common and dilutive equivalent shares outstanding during the period. Dilutive common equivalent shares consist of options to purchase common stock (only if those options are exercisable and at prices below the average share price for the period) and shares issuable upon the conversion of the Company's Convertible Debt. Due to the net losses reported, dilutive common equivalent shares were excluded from the computation of diluted loss per share, as inclusion would have been anti-dilutive for the periods presented.

Income Taxes

The Company must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

Deferred income taxes are recorded in accordance with SFAS No. 109, "Accounting for Income Taxes," or SFAS 109. Under SFAS No. 109, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. SFAS 109 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of net deferred tax assets is dependent upon the Company generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carry-forwards.

Management has determined it more likely than not that these timing differences will not materialize and has provided a valuation allowance against substantially all of the net deferred tax asset. Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If the assessment of the deferred tax assets or the corresponding valuation allowance were to change, then the related adjustment to income would be recorded during the period in which the determination was made. The tax rate may also vary based on the Company's results and the mix of income or loss in domestic and foreign tax jurisdictions in which the Company operates.

In addition, the calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and to the extent to which, additional taxes will be due. If it is ultimately determined that payment of these amounts is unnecessary, the liability will be reversed and a tax benefit will be recognized during the period in which it is determined that the liability is no longer necessary. An additional charge will be recorded in the provision for taxes in the period in which it is determined that the recorded tax liability is less than the ultimate assessment is expected to be.

F-10

DESTINATION TELEVISION, INC.

Summary of Significant Accounting Policies
 Fiscal Years Ended October 31, 2008 and October 31, 2007

Summary of Significant Accounting Policies (Cont'd)

Accounting for Obligations and Instruments Potentially to be Settled in the Company's own Stock: The Company accounts for obligations and instruments potentially to be settled in the Company's stock in accordance with EITF Issue No. 00-19, "Accounting for Derivative Financial Instruments Indexed To, and Potentially Settled In a Company's Own Stock." This issue addresses the initial balance sheet classification and measurement of contracts that are indexed to, and potentially settled in, the Company's own stock.

Under EITF Issue No. 00-19 contracts are initially classified as equity or as either assets or liabilities, in the following situations:

                Equity
              · Contracts that require physical settlement or net-share settlement; and
              · Contracts that give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement), assuming that all the criteria for equity classification have been met.

                Assets or Liabilities
              · Contracts that require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company); and
              · Contracts that give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

All contracts are initially measured at fair value and subsequently accounted for based on the current classification. Contracts initially classified as equity do not recognize subsequent changes in fair value as long as the contracts continue to be classified as equity. For contracts classified as assets or liabilities, the Company reports changes in fair value in earnings and discloses these changes in the financial statements as long as the contracts remain classified as assets or liabilities. If contracts classified as assets or liabilities are ultimately settled in shares, any previously reported gains or losses on those contracts continue to be included in earnings. The classification of a contract is reassessed at each balance sheet date.

In accordance with EITF Issue No. 00-19, a transaction which includes a potential for net-cash settlement, including liquidated damages, requires that derivative financial instruments, including warrants and additional investment rights, initially be recorded at fair value as an asset or liability and subsequent changes in fair value be reflected in the statement of operations. The recorded value of the liability for such derivatives can fluctuate significantly based on fluctuations in the market value of the underlying common stock of the issuer of the derivative instruments, as well as in the volatility of the stock price during the term used for observation and the remaining term.

                Warrant Derivative Liabilities

The Company accounts for warrants issued in connection with financing arrangements in accordance with EITF Issue No. 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock." Pursuant to EITF Issue No. 00-19, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as a derivative liability. The fair value of warrants classified as derivative liabilities is adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded in current period earnings.

F-11

DESTINATION TELEVISION, INC.

Summary of Significant Accounting Policies
 Fiscal Years Ended October 31, 2008 and October 31, 2007

Summary of Significant Accounting Policies (Cont'd)

Selected Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board issued FASB Statement No. 141 (Revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R provides additional guidance on improving the relevance, representational faithfulness, and comparability of the financial information that a reporting entity provides in its financial reports about a business combination and its effects. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

In December 2007, the Financial Accounting Standards Board issued FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement is effective for fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is currently evaluating the impact of adopting SFAS 160 on our financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.”  SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States.  SFAS 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.  The Company is currently evaluating the impact of SFAS 162 on its financial statements but does not expect it to have a material effect.

Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.

F-12

DESTINATION TELEVISION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fiscal Years Ended October 31, 2008 and October 31, 2007

1. The Company

Destination Television, Inc. (the "Company") is a Delaware corporation formed in 1961 under the name Magic Fingers, Inc. By amendment of its certificate of incorporation, the Company's name was changed in 1999 to Magicinc.com and in April 2002 to Magic Media Networks, Inc. and in February 2007 to its current title. Through the period ended October 31, 1999, the Company devoted substantially all its efforts to reorganizing its financial affairs and settling its debt obligations. During the fiscal years ended October 31, 2000 and October 31, 2001, the Company was engaged primarily in the planning and development of an interactive network to provide entertainment via the Internet. Subsequent to October 31, 2001, the Company redirected its business focus to the development of a private television network, in high traffic locations such as bars and nightclubs. During the development process, the Company received incidental revenue from the sale of advertising and the production of commercials.

2. Rescission of Acquisition of American Broadcast Group LLC

On November 1, 2007, the Company acquired all of the issued and outstanding member's interests of American Broadcast Group LLC in exchange for 3,520,000 shares of the Company's common stock. The shares were valued at $225,280, or $0.064 per share, which represented the approximate market value on July 6, 2007, the date the agreement was entered into by the parties. On June 18, 2008 the transaction was rescinded and the shares were returned to the Company for cancellation.

The Company's total loss on disposition was $26,502, which represented its cash investment in American Broadcast Group LLC, which is not recoverable. The loss is reflected separately in the Consolidated Statement of Operations as the results of a Discontinued Operation.  

3. Acquired Amortizable Intangible Assets

As of October 31, 2006, the Company invested $3,280 in establishing trademarks associated with its Bar TV concept. The Company amortizes the costs of these intangibles over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are also tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required.

Expected annual amortization expense related to amortizable intangible assets is as follows:

As of October 31,
2009	$	300
2010		300
2011		300
2012		300
Thereafter		580
Total expected annual amortization expense	$	1,780

F-13

DESTINATION TELEVISION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fiscal Years Ended October 31, 2008 and October 31, 2007

(Notes to Financial Statements Cont'd)

4. Income Taxes 

The Company has approximately $10.5 million in net operating loss carryovers available to reduce future income taxes. These carryovers expire at various dates through the year 2029. The Company has adopted SFAS 109 which provides for the recognition of a deferred tax asset based upon the value the loss carry-forwards will have to reduce future income taxes and management's estimate of the probability of the realization of these tax benefits. The Company's management determined that it was more likely than not that the Company's net operating loss carry-forwards would not be utilized; therefore, a valuation allowance against the related deferred tax asset has been established.

A summary of the deferred tax asset presented on the accompanying balance sheets is as follows:

		2008			2007
The provision (benefit) for income   taxes consists of the following:
Currently payable:
Federal	$	0		$	0
State		0			0
Total currently payable	$	0		$	0
Deferred:
Federal	$	191,500		$	237,600
State		26,600			33,500
Total deferred		218,100			271,100
Less increase in allowance		(218,100	)		(271,100	)
Net deferred		0			0
Total income tax provision (benefit)	$	0		$	0
		2008			2007
Individual components of deferred   taxes are as follows:
Deferred tax asset arising from:   Net operating loss carry forwards	$	4,186,400		$	3,947,800
Other		6,000			26,500
Total		4,192,400			3,974,300
Individual components of deferred tax   allowance are as follows:
Deferred tax asset arising from Net operating loss carry forwards		(4,186,400	)		(3,947,800	)
Other		(6,000	)		(26,500	)
Total		(4,192,400	)		(3,974,300	)
Net Deferred Income Taxes	$	0		$	0

F-14

DESTINATION TELEVISION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fiscal Years Ended October 31, 2008 and October 31, 2007

(Notes to Financial Statements Cont'd)

5. Commitments

Facilities

The Company leases from a stockholder, Dr. H. K. Terry, pursuant to an oral agreement on a month-to-month basis, an 8,500 square foot building in Fort Lauderdale, Florida, which serves as its administrative offices and computer operations center. The rent is $4,500 per month and the Company is responsible for utilities. Rent expense was $54,000 for each of the years ended October 31, 2008 and October 31, 2007.

Employment Agreements

Gordon Scott Venters is employed as the Company's President and Chief Executive Officer, pursuant to an employment agreement, effective November 1, 2007. The three-year employment agreement, which extended a previous agreement, provides for an annual salary of $153,964; annual increases of a minimum of 5%; and participation in incentive or bonus plans at the discretion of the Board of Directors. The agreement additionally provides for certain confidentiality and non-competition provisions and a minimum payment of 18 months salary in the event of a change of control or termination "without cause," or if the employee terminates for "good reason." As of October 31, 2008, Mr. Venters was owed $86,895 for accrued unpaid salary. As of October 31, 2007, Mr. Venters was owed $89,791 for accrued unpaid salary.

6. Accounts and Accrued Expenses Payable

At October 31, 2008, Accounts and Accrued Expenses Payable consisted of the following: accounts payable, $42,028; accrued rent, $315,000; accrued interest, $117,793; and accrued officer's salary, $86,895.

7. Payroll Taxes Payable

The Company has been delinquent in its payment of payroll taxes. As of October 31, 2008, the total of payroll taxes payable, including estimated interest and penalties, totaled $236,694. In August, October and November 2007, the Internal Revenue Service filed tax liens against the Company in the total amount of $198,351. In August 2007, the Company made a lump-sum payment of $48,000 and in November 2007, an additional lump sum payment of $18,600. These payments were made in connection with the Company's submission of an Offer in Compromise to settle its payroll tax obligations. Although the Offer in Compromise has been rejected, the Company has appealed the initial determination and is continuing negotiations. There is no assurance that an acceptable settlement will be reached.  All payroll tax obligations for the calendar years 2007 and 2008 have been paid.

8. Notes Payable

Convertible Notes Payable - Dr. Terry

On April 15, 2003, the Company issued to Dr. H. K. Terry a $100,000 unsecured promissory note originally due April 15, 2004, which has been extended to April 15, 2005 and further extended to April 15, 2009. On October 12, 2003, the Company issued an additional one-year promissory note for up to $100,000 of which $60,000 had been advanced as of October 31, 2003 and an additional $40,000 was advanced on November 24, 2003. The maturity date of this note was extended to October 12, 2005 and further extended to October 12, 2009. The notes are unsecured and bear interest at 6%. The notes, including any accrued interest, are convertible, at the holder's option, into common stock at the average closing price of the Company's common stock for the five trading days prior to the date of receipt of election to convert but not less than $0.05 per share.

On March 27, 2006, the Company issued a 6%, one-year, $100,000 secured convertible note to Dr. Terry for $100,000 cash.  The note, which has been extended until March 26, 2009, is convertible into common stock at $0.10 per share. The note is collateralized by all of the Company's assets, both tangible and intangible and is restricted as to transferability.

F-15

DESTINATION TELEVISION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fiscal Years Ended October 31, 2007 and October 31, 2006

(Notes to Financial Statements Cont'd)

On May 10, 2006, the Company issued an additional 6%, one-year $100,000 secured convertible note to Dr. Terry for $100,000 cash. The note, which has been extended to May 10, 2009, is restricted as to transferability.  The proceeds of the note were for used for working capital.

On December 21, 2007, the Company issued a one-year 8%, $100,000 secured convertible note to Dr. Harold Terry for $100,000 cash. The maturity date of the note has been extended to December 21, 2009. The note is convertible into common stock at $0.05 per share and is collateralized by all of the Company's assets, both tangible and intangible, and is restricted as to transferability. The proceeds of the note were used for working capital.

As of October 31, 2008, notes payable due Dr. Terry totaled $500,000, comprised of convertible notes of $400,000 and $100,000 at 6% and 8%, respectively. Of the $500,000 principal balance of convertible notes payable, $300,000 of the notes are secured by all of the assets of the Company and $200,000 of the notes are unsecured.

The convertible notes have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

Loans Payable - Dr. Terry

On May 16, 2008, the Company borrowed $30,000 from Dr. Terry. The loan which is unsecured is payable in one-year with 6% interest. Loans payable to Dr. Terry totaled $205,000 as of October 31, 2008.

9. Stockholders' Deficiency

Common Stock

Stock Issued for Cash

During fiscal year 2008, the Company issued to accredited investors a total of 5,500,000 shares of common stock for $75,000, of which 1,000,000 shares were issued at $0.03 per share and 4,500,000 shares were issued at $0.01 per share.

During fiscal year 2007, the Company issued a total of 5,100,000 shares of common stock for $215,000, of which 750,000 shares were sold to Dr. Terry in November 2006, for $60,000, or $0.08 per share, as described below, Note 12- Related Party Transactions; and 4,350,000 were sold to other accredited investors at between $0.03 and $0.05 per share

None of the above shares have been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

Stock to Acquire American Broadcast Group LLC - Issuance and Rescission

On November 1, 2007, the Company acquired all of the issued and outstanding member's interests of American Broadcast Group LLC in exchange for 3,520,000 shares of the Company's common stock. The shares were valued at $225,280, or $0.064 per share, which represented the approximate market value on July 6, 2007, the date the agreement was entered into by the parties. On June 18, 2008 the transaction was rescinded and the shares were returned to the Company for cancellation. Upon cancellation of the shares, Stockholders' Deficiency - Common Stock was reduced $225,280.

Stock Issued for Services

In fiscal year 2008, the Company issued a total of 2,900,000 shares of common stock as payment for services of which 2,500,000 shares were pursuant to a consulting agreement described below; 200,000 and 150,000 to two separate consultants and 50,000 shares for fees to a director.

On February 20, 2008, the Company entered into a 12-month business consulting agreement with a consultant and, in connection with that agreement, issued, as compensation, 2,500,000 shares of common stock, which were registered pursuant to Form S-8 under the Securities Act of 1933, as amended and stock options. The shares were valued at $30,000, or $0.012 per share, which was representative of the approximate market value at the date of issuance. On May 30, 2008, the Company was notified by the consultant that effective June 29, 2008, he was terminating the agreement. The Company has demanded return of the 2,500,000 shares it issued as a consulting fee. The options, which expired on June 29, 2008, are described below in Note 10 - Common Stock Options.

In February 2008, the Company also issued 200,000 shares for consulting services, which were valued at $3,580, or approximately $0.018 per share, and in September 2008, the Company issued 150,000 shares for consulting services, valued at $765, or $0.0051 per share. In October 2008, a director of the Company (Mr. Nugent) was granted, as a director's fee, 50,000 shares, which were valued at $105 or $.0021 per shares.  The shares, which were issued for services, and valued at the approximate market price at the date of issuance have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

During the fiscal year ended October 31, 2007, the Company issued a total of 2,310,333 shares of common stock for services. Of this total, 200,000 shares were issued in December 2006 for consulting services and were valued at $12,000 or $0.06 per share, which was representative of the approximate market value at the date of issuance. In April 2007, a total of 1,785,333 shares were issued to various employees, independent contractors and consultants and were valued at $92,837, or $0.052 per share, which was representative of the approximate market value at the date of issuance. In August 2007, 225,000 shares were issued to employees; and 100,000 shares were issued as directors' fees (50,000 to Mr. Venters and 50,000 to Mr. Nugent) and were valued at $13,000 or $0.04 per share, which was representative of the approximate market value at the date of issuance.  These shares, except for 633,333, which were registered pursuant to Form S-8, have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

On April 2, 2007, the Company entered into a six-month consulting agreement that provided payment to the consultant as follows: 333,333 shares of the Company's common stock per month during the term of the agreement, and stock options to purchase up to 8,416,667 additional shares at prices ranging from $0.06 to $0.25 per share. The Company issued 333,333 shares and then the agreement was canceled. The options, which are described in Note 10 - Common Stock Options, expired by their terms in October 2007.

Stock Issued in Exchange for Debt

In November 2007, the Company's president, Gordon Scott Venters, acquired from the Company 2,000,000 shares of its Series B Preferred Stock as payment of $56,000 of accrued unpaid salary. The shares were valued at $56,000, or $0.028 per share, which represented the approximate value, at the date of issuance, of the common stock into which the Series B Preferred Stock may be converted. Also, in September and October 2008, Mr. Venters, acquired a total 15,000,000 shares of common stock from the Company at an average price of approximately $0.0051 as payment for accrued but unpaid salary of $76,000. The shares of Series B Preferred Stock and the common shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisi ons set forth therein.

In April 2007, Mr. Venters, acquired from the Company 500,000 shares of its common stock, which were valued at $26,000, or $0.052 per share, as repayment of a $25,000 loan he made to the Company in August 2006 and payment of $1,000 of accrued unpaid salary. Additionally, in October 2007, he acquired 1,000,000 shares of common stock, which were valued at $0.04 per share, in exchange for $40,000 of accrued unpaid salary. These shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

F-16

DESTINATION TELEVISION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fiscal Years Ended October 31, 2008 and October 31, 2007

(Notes to Financial Statements Cont'd)

Preferred Stock

Series B Preferred Stock

The Series B Preferred Stock is identical in all aspects to the Common Stock, including the right to receive dividends, except that each share of Series B Preferred Stock has voting rights equivalent to four times the number of shares of Common Stock into which it could be converted. As of October 31, 2008 there were 5,750,000 shares of Series B Preferred Stock outstanding and on October 31, 2007 there were 3,750,000 shares outstanding. Each share of Series B Preferred Stock is convertible into one share of common stock. 

10. Common Stock Options

On February 20, 2008, the Company granted options, pursuant to a consulting agreement, to purchase 8,000,000 shares of common stock. The options had an initial expiration date of February 20, 2009 and give the right to the grantee to purchase shares of common stock at exercise prices of $0.05 to $0.10, or an average of $0.075 per share. The number of shares of common stock to be received by the grantee was limited so that he would not beneficially own more than 10% of the then outstanding shares of common stock.  At the date of grant, the options were deemed to have a fair value of $36,020, pursuant to the Black-Scholes valuation model, which amount has been reflected as additional Consulting Expense in the Consolidated Statements of Operations for the 2008 fiscal year.

On April 2, 2007, the Company granted options, pursuant to a consulting agreement, to purchase 8,416,667 shares of common stock. The options had an expiration date of October 2, 2007 and give the right to the grantee to purchase shares of common stock at exercise prices of $0.06 to $0.25, or an average of $0.133 per share. The number of shares of common stock to be received by the grantee was limited so that he would not beneficially own more than 10% of the then outstanding shares of common stock.  At the date of grant, the options were deemed to have a fair value of $49,225, pursuant to the Black-Scholes valuation model, which amount has been reflected as additional Consulting Expense in the Consolidated Statement of Operations for the 2007 fiscal year.

The following table summarizes the key assumptions used in determining the fair value of options granted during the fiscal year ended October 31, 2008.

Table of Key Assumptions
	Interest  Rate	Dividend  Yield	Expected  Volatility	Expected  Life
	5.0%	0.0%	200.0%	12 mos.

The following table summarizes the key assumptions used in determining the fair value of options granted during the year ended October 31, 2007.

Table of Key Assumptions
	Interest Rate	Dividend Yield	Expected Volatility	Expected Life
	5.0%	0.0%	70.0%	6 mos.

The following table summarizes the option activity during the fiscal years ended October 31, 2008 and October 31, 2007.

	Weighted Average
	Shares		Exercise  Price	Fair  Value
Balance 11/1/06	0		-	-
Granted during 2007	8,416,667		$     0.133	$         49,225
Exercised during 2007	0		-	-
Lapsed during 2007	(8,416,667	)	-	-
Balance 10/31/07	0		-	-
Granted during 2008	8,000,000		$     0.075	$         36,020
Exercised during 2008	0		-	-
Lapsed during 2008  *	(8,000,000	)	-	-
Balance 10/31/08	0		$              -	$                   -

* On May 30, 2008, the consultant notified the Company that he was terminating the Consulting Agreement effective June 29, 2008, at which time the options expired.  

No options or warrants were outstanding at October 31, 2008 and October 31, 2007.

F-17

DESTINATION TELEVISION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fiscal Years Ended October 31, 2008 and October 31, 2007

(Notes to Financial Statements Cont'd)

11. Litigation

As of October 31, 2008, the Company was not a party to any existing or threatened litigation.

12. Related Party Transactions

Dr. Harold Terry

On December 21, 2007, the Company issued a one-year 8%, $100,000 secured convertible note to Dr. Harold Terry, a major shareholder of the Company's common stock for $100,000 cash.  The note is convertible into common stock at $0.05 per share and is collateralized by all of the Company's assets, both tangible and intangible, and is restricted as to transferability. The proceeds of the note were used for working capital. As of October 31, 2008, notes payable due Dr. Terry totaled $500,000, comprised of convertible notes of $400,000 and $100,000 at 6% and 8%, respectively. Of these convertible notes payable, $300,000 are secured by all of the assets of the Company and $200,000 of the notes are unsecured.

On May 16, 2008, the Company borrowed $30,000 from Dr. Terry. The loan which is unsecured is payable in one-year with 6% interest. In fiscal year 2007, Dr. Terry made $125,000 of unsecured loans to the Company. As of October 31, 2008, the total of unsecured loans payable to Dr. Terry totaled $205,000.

The Company leases the building that houses its offices from Dr. Terry on a month-to-month basis, at $4,500 per month, which has been accrued by the Company but not paid.

As of October 31, 2008 and October 31, 2007, the Company owed Dr. Terry for accrued interest $117,793 and $76,224, respectively; and for accrued rent $315,000 and $261,000, respectively. These amounts are included in the accompanying consolidated balance sheets as accounts and accrued expenses payable.

Directors

In October 2008, the Company issued 50,000 shares of its common stock as a director's fee to Todd Nugent. The shares, which are restricted as to transferability, were valued at $105 or $.0021 per share. 

In August 2007, 100,000 shares of the Company's common stock were issued as directors' fees (50,000 to Mr. Venters and 50,000 to Mr. Nugent) and were valued at $13,000 or $0.04 per share, which was representative of the approximate market value at the date of issuance.

Gordon Scott Venters

Effective November 2007, Gordon Scott Venters, entered into a three-year employment agreement with the Company, which is described above in Note 5- Commitments-Employment Agreements. 

In November 2007, Mr. Venters, acquired from the Company 2,000,000 shares of its Series B Preferred Stock as payment of $56,000 of accrued unpaid salary. The shares were valued at $56,000, or $0.028 per share, which represented the approximate value, at the date of issuance, of the common stock into which the Series B Preferred Stock may be converted. Also, in September and October 2008, Mr. Venters, acquired a total 15,000,000 shares of common stock from the Company at an average price of approximately $0.0051 as payment for accrued but unpaid salary of $76,000. The shares of Series B Preferred Stock and the common shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

In August 2006 and February 2007, Mr. Venters made non-interest bearing unsecured loans to the Company in the amounts of $25,000 and $5,000, respectively. In April 2007, the Company repaid the $5,000 loan and Mr. Venters acquired from the Company 500,000 shares of its common stock, which were valued at $26,000, or $0.052 per share, in exchange for the $25,000 loan and the balance of $1,000 was applied to accrued unpaid salary. Additionally, in August 2007, he acquired 1,000,000 shares of common stock, which were valued at $0.04 per share, in exchange for $40,000 of accrued unpaid salary. As of October 31, 2008, Mr.Venters was owed $86,895 for accrued unpaid salary. As of October 31, 2007, he was owed $89,791

F-18

DESTINATION TELEVISION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fiscal Years Ended October 31, 2008 and October 31, 2007

(Notes to Financial Statements Cont'd)

13. Supplemental Cash Flow Information

Selected non-cash investing and financing activities are summarized as follows:

	2008	2007
Stock issued for services	$   34,050	$  158,837
Stock issued for payment of loan payable-officer	56,000	25,000
Options issued for services	36,020	49,225

14. Subsequent Events

Subsequent to October 31, 2008, the Company issued 4,950,000 shares of common stock to three accredited investors for cash consideration of $83,100. The Company also issued 12,500,000 shares for consulting services, of which 10,000,000 shares were issued in connection with a one-year consulting agreement that commenced on December 22, 2008. Pursuant to that agreement, the Company also granted three-year options to acquire 5,000,000 shares of the Company's common stock at $0.02 per share and 5,000,000 shares at $0.05 per share. All of these securities are restricted as to transferability.

15. Ability to Continue as a Going Concern and Management Plan

The financial statements have been prepared assuming that the Company will continue as a going concern. The Company has had only nominal revenue in the ordinary course of its business. The lack of sales and recurring losses from operations, lack of working capital and shareholders' deficiency and delinquent payroll taxes raise substantial doubt about the Company's ability to continue as a going concern. Management's plan in regards to these matters is to seek further equity or debt funding to allow it to pursue its new business plan, which involves the expansion of its subscription-based model for digital signage; to acquire revenue-producing companies in the new media and entertainment fields; to negotiate a plan of payment of its payroll tax liability; and to reduce its fixed cash operating expenses so that sales exceed the Company's fixed expenses. If the Company is unable to raise additional capital it may be required to curtail its operations, abandon its business plan, or file for reorganizati on or liquidation.

F-19

Exhibits

Exhibit No.
2.1	Stock Purchase Agreement for National Hotel Television Network, Inc. dated December 31, 2004 (*13)
2.2	Agreement and Plan of Reorganization with ALW Communications, Inc. dated December 31, 2004 (*13)
3.1(a)	Articles of Incorporation (*5)
3.1(b)	Articles of Amendment dated October 2, 2001(*3)
3.1(c)	Articles of Amendment dated April 9, 2002 (*1)
3.1(d)	Designation of Series A Convertible Preferred Stock (*3)(*4)
3.1(e)	Designation of Series B Convertible Preferred Stock (*2)
3.1(f)	Articles of Amendment dated February 25, 1992 (*5)
3.1(g)	Articles of Amendment Certificate of Designations, Preferences and Rights of Series B Preferred Stock dated October 29, 2003 (*7)
3.1(h)	Amendment of Certificate of Incorporation effective February 7, 2007 (*17)
3.1(i)	Articles of Amendment Certificate of Designations, Preference and Rights of Series B Preferred Stock dated November 27, 2007 (*20)
3.2	Bylaws (*5)
10.1	Securities Purchase Agreement with La Jolla Cove Investors, Inc. dated September 2002 (*9)
10.2	Registration Rights Agreement with La Jolla Cove Investors, Inc. dated September 2002 (*9)
10.3	7 ¾ % Convertible Note for $300,000 dated September 2002 (*9)
10.4	Warrant to Purchase Common Stock dated September 2002 (*9)
10.5	La Jolla Letter of Addendum dated September 2002 (*9)
10.6	Warrant to Purchase Common Stock dated October 2003 (*7)
10.6(a)	Letter of Clarification of Warrant (*10)
10.6(b)	Agreement of Settlement of La Jolla Cove Litigation dated October 2003 (*11)
10.7	Promissory Note to La Jolla Cove Investors, Inc. dated October 2003 (*7)
10.8	Chincholl Consulting Agreement dated September 2003 (*6)
10.8(a)	Chincholl Stock Option Agreement under Consulting Agreement dated February 2004 (*10)
10.9	Gross Consulting Agreement dated September 2003 (*6)
10.9(a)	Gross Stock Option Agreement under Consulting Agreement dated February 2004 (*10)
10.10	Convertible Promissory Note to Harold K. Terry dated April 2003 (*8)
10.11	Convertible Promissory Note to Harold K. Terry dated October 2003 (*10)
10.12	Strategic Alliance Agreement with UTEK Corporation dated November 2003 (*10)
10.13	Employment Agreement with Gordon Scott Venters dated October 10, 1997 (*5)
10.14	Employment Agreement with Gordon Scott Venters dated November 15, 2004 (*12)
10.15	Employment Agreement for Alec Lindenauer with Hotel TV, Inc. dated December 31, 2004 (*13)
10.16	Employment Agreement for Lou Wolfson with Hotel TV, Inc. dated December 31, 2004 (*13)
10.17	Letter of Intent with Mohammad R. Ahmadi and Integrated Media Systems, Inc. dated June 9, 2005 (*14)
10.18	Membership and Service Agreement between National Hotel Television Network D/B/A Citybuzz.tv and Citybuzz.tv dated September 6, 2005 (*15)
10.19	Membership and Service Agreement between Hotel TV, Inc. D/B/A Citybuzz.tv and Citybuzz.tv, Inc. dated September 6, 2005 (*15)
10.20	Membership and Service Agreement between Citybuzz.tv and National Hotel Television Network dated August 29, 2005 (*15)
10.21	Stock purchase Agreement with Integrated Media Systems, Inc. and Mohammad R. Ahmadi. dated August 8, 2006 (*16)
10.22	Consulting Agreement between Destination Television, Inc. and James Chincholl dated April 2, 2007 (*18 )
10.23	Employment and Fee Agreement between Destination Television, Inc. and David L. Kahn, Esq.datedApril 2, 2007 (*18)
10.24	Purchase Agreement among Destination Television, Inc., Fred Durham and American Broadcast Group LLC dated July 8, 2007 (*19)
10.25	Employment Agreement with Gordon Scott Venters dated November 26, 2007 (*20)
10.26	Consulting Agreement with Steven Goldberg dated February 20, 2008 (*21)
10.27	Rescission Agreement with American Broadcast Group LLC et al  dated June 18, 2008 (*22)
10.28	Consulting Agreement with Westport Strategic Partners, Inc. dated December 22, 2008 (*23)
21.0	Subsidiaries of Registrant
31.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer
(*1)	Incorporated by reference to our report on Form 8-K filed April 16, 2002
(*2)	Incorporated by reference to our report on Form 8-K filed July 15, 2002
(*3)	Incorporated by reference to our report on Form 8-K filed October 1, 2001
(*4)	Incorporated by reference to our report on Form 8-K filed March 23, 2001
(*5)	Incorporated by reference to our filing on Form 10-SB filed July 7, 2000
(*6)	Incorporated by reference to our S-8 filing of September 5, 2003
(*7)	Incorporated by reference to our report on Form 8-K filed October 31, 2003
(*8)	Incorporated by reference to our report on Form 10-QSB filed June 20, 2003
(*9)	Incorporated by reference to our report on Form 10-KSB filed February 13, 2003
(*10)	Incorporated by reference to our report on Form 10-KSB filed February 13, 2004
(*11)	Incorporated by reference to our SB-2/A filing of June 14, 2004
(*12)	Incorporated by reference to our report on Form 8-K filed November 18, 2004
(*13)	Incorporated by reference to our report on Form 8-K filed January 6, 2005
(*14)	Incorporated by reference to our report on Form 8-K filed June 10, 2005
(*15)	Incorporated by reference to our report on Form 10-QSB filed September 20, 2005
(*16)	Incorporated by reference to our report on Form 8-K filed on August 10, 2006
(*17)	Incorporated by reference to our Schedule 14C Definitive Information Statement filed January 16, 2007
(*18)	Incorporated by reference to our S-8 filing dated April 2, 2007
(*19)	Incorporated by reference to our report on Form 8-K filed July 10, 2007
(*20)	Incorporated by reference to our report on Form 8-K filed November 26, 2007
(*21)	Incorporated by reference to our S-8 filing dated February 22, 2008
(*22)	Incorporated by reference to our report on Form 10-QSB filed June 23, 2008
(*23)	Incorporated by reference to our report on Form 8-K filed December 24, 2008