NBG RADIO NETWORK INC, 10SB12G, 1998-04-23

NBG RADIO NETWORK INC
10SB12G, 1998-04-23

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-SB

GENERAL FORM FOR
REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934

NBG RADIO NETWORK INC.
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)

Nevada, USA 88-0362102
---------------------- ---------------------------------
State of Incorporation (IRS Employer Identification No.)

520 S. W. 6th Avenue, Suite 75O, Portland, Oregon 97204
-------------------------------------------------------
(Address of principal executive offices)

Issuer's Telephone Number, (503) 802-4624
--------------

Securities to be registered pursuant to Section 12(b) of the Act:
-----------------------------------------------------------------
None

Securities to be registered pursuant to Section 12(g) of the Act:
-----------------------------------------------------------------
Common Shares, with par value of $0.001
---------------------------------------
(Common Stock)
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Page 1 of 98
Index to Exhibits on Page 35

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NBG RADIO NETWORK INC.

FORM 10-SB
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page

<S> <C> <C>
Item 1. Description of Business........................................ 03

Item 2. Management's Discussion and Analysis or Plan of
Operation...................................................... 14

Item 3. Description of Property........................................ 21

Item 4. Security Ownership of Certain Beneficial Owners
and Management................................................. 21

Item 5. Directors, Executive Officers, Promoters
and Control Persons............................................ 23

Item 6. Executive Compensation......................................... 26

Item 7. Certain Relationships and Related Transactions................. 27

Item 8. Legal Proceedings.............................................. 28

Item 9. Market Price for Common Equity
and Related Stockholder Matters................................ 29

Item 10. Recent Sales of Unregistered Securities........................ 30

Item 11. Description of Securities...................................... 31

Item 12. Indemnification of Directors and officers...................... 32

Item 13. Financial Statements........................................... 33

Item 14. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure......................... 33

Item 15. Financial Statements and Exhibits.............................. 34
</TABLE>

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ITEM 1. DESCRIPTION OF BUSINESS

INTRODUCTION

NBG Radio Network Inc. (hereinafter is also referred to as the "Company" and/or
the "Registrant") is involved in the acquisition, creation and syndication of
national radio programming and music production and distribution. The Company's
approach to radio syndication is to produce and/or acquire specialty audio shows
and enroll radio station affiliates to broadcast these programs.

The Company's head office is located at 520 S.W. 6th Avenue, Suite 750,
Portland, Oregon 97204. The contact person is John A. Holmes III, President,
Chief Executive Officer and Director. The telephone number is (503) 802-4624;
the facsimile number is (503) 802-4626. The e-mail address is:
[email protected].

The Company's authorized capital includes 25,000,000 shares of common stock with
a par value of $0.001; and, as of 4/3/98, 1,981,610 shares of common stock were
outstanding.

The Company's common stock trades on the NASD Electronic Bulletin Board with the
symbol "NSBD-BB".

The information in this Registration Statement is current as of 4/3/98, unless
otherwise indicated.

HISTORICAL CORPORATE DEVELOPMENT

Incorporation

The Company was incorporated in Nevada, USA on 3/4/96.

The Company started business on 3/27/96 with initial shareholder contributions
of $180,000. Effective 5/4/96 the Company acquired ITEX Media Services, Inc.
("Itex") along with its contracts and certain inventories for $775,000. The
Company paid $175,000 down and Itex agreed to carry a note for the balance with
payment terms spread over five years. Included in the sale were the following
three nationally syndicated radio shows: 640 one hour programs entitled "The
Golden Age of Radio," hosted by Victor Ives, 93 two minute programs entitled
"Flashback - Moments in Time," also hosted by Victor Ives, and 62 two minute
programs entitled "Sports Flashback," hosted by Joe DeNiro. In addition, a music
distribution contract for Michael Allen Harrison, and purchase of The Image
Audio Production Library were a part of the sales agreement. The acquisition was
accounted for using the

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purchase method of accounting with the entire purchase price being allocated to
music inventory.

Financings during Fiscal 1996 and 1997

In March 1996, the Company issued 475,000 shares of common stock for total
consideration of $180,000.

In November 1996, the Company completed a private placement in which 600,000
units were sold. Total consideration received by the Company was $300,000. Net
proceeds to the Company, after associated offering expenses, was $292,000. Each
unit consisted of one common share and one share purchase warrant. Each share
purchase warrant entitles the holder to purchase one additional share of common
stock for $1.00 during a six month period after the closing of the offering.
(The offering closed on 11/30/96.) The time frame during which the holders may
purchase an additional share of common stock for consideration of one share
purchase warrant and $1.00 may be extended upon appropriate notice given to
shareholders by the management. The proceeds of this private placement are being
used for the construction of a production studio in Portland, Oregon; to provide
additional capital for the development of new radio syndication products; and,
for the general working capital of the Company.

During March 1998, 600,000 share purchase options were exercised at a price of
$0.60 per option. Each option equaled one share of common stock subject to
restriction under SEC Rule 144. The Company realized $360,000 from the exercise
of these share purchase options.

BUSINESS

DESCRIPTION OF THE RADIO SYNDICATION AND RADIO ADVERTISING SALES INDUSTRY

There are currently approximately 10,000 commercial radio stations in the United
States.

A radio station selects a format to attract a target listening audience and
thereby attract commercial advertising directed at that audience.

The diversity in program formats has intensified competition among stations for
local advertising revenue. A radio station has two principal ways of effectively
competing for these revenues. First, it can differentiate itself in its local
market by selecting and successfully executing a format targeted at a particular
audience thus enabling advertisers to place their

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commercial messages on stations aimed at audiences with certain demographic
characteristics. A station can also broadcast special programming, syndicated
shows, sporting events or national news product, such as supplied by Nostalgia
Broadcasting Corp., not available to its competitors within its format. National
programming broadcast on an exclusive geographic basis can help differentiate a
station within its market, and thereby enable a station to increase its audience
and local advertising revenue.

Radio advertising time can be purchased on a local, regional or national basis.
Local purchases allow an advertiser to select specific radio stations in chosen
geographic markets for the broadcast of commercial messages. However, this
process can be expensive and inefficient. Local and regional purchases are
typically best suited for an advertiser whose business or ad campaign is in a
specific geographic area. Advertising purchased from a radio network is one
method by which an advertiser targets its commercial messages to a specific
demographic audience, achieving national coverage on a cost efficient basis. In
addition, an advertiser can choose to emphasize their message in a certain
market or markets by supplementing a national purchase with local and/or
regional purchases.

In recent years the increase in the number of program formats has led to more
demographically specific listening audiences, making radio an attractive,
alternative medium for national advertisers. In addition, nationally broadcast
news, concerts and special event programming have made radio an effective medium
of reach as well as frequency.

To verify audience delivery and demographic composition, specific measurement
information is available to national advertisers by independent rating services.
These rating services provide demographic information. Thus, national
advertisers can verify that their advertisements are being heard by their target
listening audience.

BUSINESS

Production and Syndication of Radio Programs:

The Company is in the business of producing and syndicating radio programs. The
Company's approach to radio syndication is to produce and/or acquire specialty
audio shows and to enroll radio station affiliates to broadcast these programs.

Nostalgia Broadcasting Corp. provides the programming needs of radio stations by
supplying them with programs that they may not

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be able to produce on their own. The Company offers the stations a selection of
regularly scheduled programming. Each program is offered for broadcast to one
station in a geographic market thus assisting the station in competing for
audience share in its local marketplace.

The Company has a number of people responsible for station relations and
marketing its programs to radio stations.

The Company controls most aspects of production of its programs so that it can
tailor them to respond to both current and changing listening preferences. Most
of the programs are produced at the Company's in-house facilities, located in
Portland, Oregon. The Company determines the content and style of a program
based on the target audience it wishes to reach. It assigns a producer, writer,
host and other personnel to record and produce the programs. Because the Company
controls the production process, it can refine the content of the programs to
respond to the needs of the stations and the advertisers. Also, it can alter
program content in response to current and anticipated audience demand.

Nostalgia Broadcasting Corp. produces both short-form and long-form programs
which fall into one of the following four categories: sports, finance,
nostalgia, and general entertainment.

Talent currently signed as syndicated program hosts include: Peter Jacobsen
(current PGA Tour player), Rick Barry (former player in the National Basketball
Association and a member of the National Basketball Association's Hall of Fame),
Dick Versace (current coach of the Milwaukee Bucks - National Basketball
Association team), Steve Jones (current NBC-TV analyst for the National
Basketball Association), and Mychal Thompson (former member of the Portland
Trail Blazers National Association Basketball team) .

The Company currently produces and syndicates sixteen programs which reach
approximately 1500 radio stations on a weekly basis. These programs include:

1. CELEBRITY TALK, a daily two minute show featuring interviews
with Hollywood celebrities;
2. COLOR OF SUCCESS, a daily two minute program detailing the
success stories of all colors and backgrounds;
3. DOLLARS AND CENTS, A daily two minute vignette offering
information and advice on investment opportunities and other
aspects of the world of finance;

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4. THE FLIP SIDE, A daily two or three minute program highlighting
the "A" and "B" sides of the old rock and roll 45's of the
50's and 60's;
5. MODERN ROCK MINUTE, A daily two minute show giving listeners an
inside look at the bands and musicians on the modern rock and
alternative music scene;
6. TEEN TIPS, A daily two minute show providing insights to teens
on everything from fashion and music to school and
relationships;
7. TRAVEL NOTES, A daily two minute vignette offering tips for all
kinds of travelers such as: where to go, what to see; and, how
to get there;
8. FASTBREAK, A daily two and one half minute show focusing on
what's happening in the world of basketball with an emphasis on
the NBA season;
9. OUTDOOR TIPS, A daily two minute program providing helpful hints
on anything that people might want to explore in the great
outdoors;
10. SPORTS MEMORIES, Basketball Hall of Fame player Rick Barry
personally interviews the world's top former athletes
highlighting some of history's greatest sports memories in this
daily two and one half minute show;
11. TEEIN' IT UP, PGA tour player Peter Jacobsen explores the world
of golf with tips, stories, and interviews with golf celebrities
in this two and one half minute show;
12. DANCE MIX AMERICA, A three hour weekly program that features the
dance music of the 1970's;
13. BIG BAND CLASSICS, This one hour weekly program features the
music of the 1930's, 1940's and 1950's;
14. THE COUNTRY OLDIES SHOW, A two hour weekly country music oldies
show that features music popular from 1965 to 1985.;
15. TRIVIA COAST-TO-COAST, A live three hour Sunday evening call-in
program centered around entertainment. This program has been on
the air on radio station KMOX in St. Louis for the past fifteen
years; and,
16. THE GOLDEN AGE OF RADIO, A daily one hour program featuring old
time radio shows including Fibber McGee and Molly, X Minus One,
Edgar Bergen and Charlie McCarthy.

Radio stations are able to obtain quality programming from Nostalgia
Broadcasting Corp. to meet their objective of attracting larger listening
audiences and increasing local advertising revenue.

The Company does not require the radio stations which utilize its programs to
identify the Company as the supplier of the programs. This provides the stations
with a high degree of customization and flexibility, as each station has the
right to present the

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programs provided by the company as if the station had generated such programs
with its own resources.

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Future Program Plans:

Currently under development is a variety of programming designed to fit various
radio station formats. Projects currently underway include:

1. An additional 124 Flashback programs have been written and are
now ready for recording.
2. An agreement to purchase a radio show series entitled "Big Band
Classics", hosted by Warrent Durham is now in place. Multimedia
Access Company, the producer of this new show, has completed the
first fifty one hour productions and there are 225 additional
one hour shows under development.
3. A new radio Flashback series entitled "Entertainment Flashback"
is under construction and will be hosted by Steve Fisher.
4. Tentative agreements are now in place for a new one hour
nationally syndicated radio show produced with the endorsement
and permission of the USO to be known as "'The USO Hour."
5. Additional radio syndication pilots under consideration are:

a. "Taking It To Heart" hosted by Dr. Mark Tager
b. "Dollars & Senses" hosted by Dave Simons
c. "Great American Hero's" hosted by Robert
Pamplin Jr. and Gary Eisler
d. "Cue Tips", a billiards program for Brunswick,
AMF and the Billiards Congress
e. "Sports Talk" hosted by Joe Namath
f. "Tee Time Golf" to be sponsored by the PGA of
America
g. "Dave on Politics" hosted by David Neal
h. "The Microsoft Minute" hosted by Michael Gruen

Sales of Advertising Radio Time:

The Company's principal source of revenue is selling radio time to advertisers.
In a typical relationship for a one hour show provided by the Company, a radio
station agrees to provide the Company with one 60 second advertising spot each
time a show is broadcast. This spot is not contained within the program and it
is accruable for future use. This advertising spot credit is for broadcast
during requested day part periods, and is subject to availability.

In addition to the accruable credit earned as shows are broadcast, the Company
typically retains one half of the advertising spots within each program aired.
For example, "The

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Golden Age of Radio" (a program syndicated by the Company) is broadcast for one
hour a day on 188 stations, each of which represent a different geographic
market. The actual show is 55 minutes in length allowing for a news broadcast at
the top of the hour. Contained within this 55 minute show are ten 60 second, (or
twenty 30 second) advertising slots. Half of these advertising slots may be sold
by the local station to local advertisers, and the other half are owned by the
Company and are available for sale to national advertisers. The Company may also
sell the additional 60 second accrued spot it has acquired outside the program
for each one hour show. The company enables national advertisers to purchase
advertising time and to have their commercial messages broadcast on radio
stations throughout the United States, reaching demographically defined
listening audiences. The Company delivers both of the major demographic groups
targeted by national advertisers: the 25 to 54-year old adult market and the 12
to 34-year old youth market. The Company currently sells advertising time to
over 100 national advertisers.

Examples of current advertisers are: Johnson & Johnson, Dryers Ice Cream, JC
Penneys, Sears, America West, Holland America, Pet Smart, Sporting News, The
American Association of Retired Persons, TWA Airlines, Princess Cruise Lines,
Rice-A-Roni, Golf Digest, Kraft Salad Dressings, Country Time Lemonade, Cool
Whip, Bain De Solei, Passport Travel Guide, and Coastland Media.

As the Company's business has developed, the Company has sold increasing amounts
of its commercial advertising airtime inventory to regional/national
advertisers. For the fiscal year ended 11/30/96, total revenues from airtime
sales were $120,719 and for the fiscal year ended 11/30/97, total revenues from
airtime sales were $795,655.

COMPETITION

Nostalgia Broadcasting Corp. operates in an extremely competitive environment.
When it attempts to place its programs with radio stations, it competes directly
with radio networks, independent radio syndication organizations, producers and
distributors.

The Company also competes for advertising revenue with network television, cable
television, print and other forms of communications media. Management feels that
the quality of its programming and the strength of its industry relations and
advertising sales force enable it to compete effectively with other forms of
communication media. Nostalgia Broadcasting markets its programs to the radio
stations that it believes have the largest and most desirable listening audience
for each of its programs.

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The increase in the number of program formats has led to increased competition
among local radio stations for audience. As stations attempt to differentiate
themselves in an increasingly competitive environment, their demand for quality
programming available from outside programming sources increases. This demand
has been intensified by high operating and production costs at local radio
stations and increased competition for local advertising revenue.

GOVERNMENT REGULATION

Radio broadcasting and station ownership are regulated by the Federal
Communications Commission (FCC). Nostalgia Broadcasting Corp., as a producer and
distributor of radio programs, is generally not subject to regulation by the
FCC.

RISK FACTORS

1. COMPETITION WITHIN THE INDUSTRY. The success of the Company's business is
largely dependent on its ability to place and maintain contracts with radio
stations for its programs. The Company faces significant competition for these
radio stations from other providers of programming. The Company also faces
competition from individual radio stations and groups of radio stations that
provide their own programs. Some of the Company's current and potential
competitors may offer alternative types of programming and may have
substantially greater financial, technical, marketing and other resources that
the Company. There can be no assurance that the Company's business will not be
adversely affected by current or increased competition for the provision of
programs in the markets in which it operates.

2. DEPENDENCE ON ADVERTISING REVENUES. The success of the Company's business is
closely linked to the performance of the advertising industry. A decline in
national and regional advertising would have a negative effect on the Company's
revenues. There can be no assurance that such a decline will not occur, or that
the Company's business will not be materially adversely affected thereby.

3. COMPETITION FOR ADVERTISING SALES. The business of selling broadcast
advertising time is highly competitive. The Company competes for advertising
dollars with other media such as newspapers and magazines, outdoor advertising,
network radio advertising, yellow page directories and point of sale
advertising. There can be no assurance that the Company will not be adversely
affected by such competition in the future.

4. DEPENDENCE ON KEY PERSONNEL. The Company's continued success is dependent, to
a large degree, upon the efforts of its current

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executive officers. The loss or unavailability of any such person could have an
adverse effect on the Company. At the present time the Company does not maintain
key man life insurance policies for any of these individuals. Also, the
continued success and viability of the Company is dependent upon its ability to
attract and retain qualified personnel in all areas of its business, especially
management positions. In the event the Company is unable to attract and retain
qualified personnel, its business may be adversely affected.

5. LIMITED OPERATING HISTORY. The Company has a limited history of providing
programs to radio stations and selling radio advertising time. The recent
success of increasing advertising sales may not be indicative of the results of
its efforts in the future.

6. MAINTENANCE OF OLD AND ESTABLISHMENT OF NEW RELATIONSHIPS. The Company's
continued growth is dependent, in part, on its ability to maintain and establish
new relations with radio stations to place its programs. There can be no
assurance that the Company will be able to establish new relations or to
maintain existing relations with radio stations in the future.

7. INCREASING CAPITAL REQUIREMENTS. The Company's expansion into new markets
will require significant additional capital expenditures. There can be no
assurance that the Company will be able to secure financing for such
expenditures when needed or on terms acceptable to it. Also, the Company's day
to day operations require the use of sophisticated equipment and technology. The
maintenance and replacement of such equipment requires significant expenditures.
There can be no assurance that the Company will be able to continue to finance
the maintenance and replacement of such equipment.

8. RISKS IN THE RADIO SYNDICATION INDUSTRY. The success of any radio syndication
enterprise is largely dependent on public taste, which is both unpredictable and
susceptible to change without warning or explanation. Accordingly, it is
impossible for anyone to precisely and accurately predict the success of any
entertainment project.

9. FUTURE CLAIMS OF OWNERSHIP OF MUSIC. The material used in the Company's
production of vintage radio shows is generally from the 30's, 40's and 50's.
Various artists, producers, and writers may assert claims of ownership regarding
these materials. And, although the Company has completed extensive research
related to the materials it uses in its new production of old time radio shows,
it is likely that one or more artists, producers, or writers may assert
ownership rights.

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10. OBJECTIONABLE CONTENT OF PROGRAMMING. The Company is careful to screen old
time radio materials that may be overly objectionable to current ethnic,
religious, or political groups. However, there is risk that someone might find
various themes objectionable and may initiate litigation associated with such
matters.

11. CONTINUING USE OF MUSIC CONTAINED IN PRODUCTION LIBRARY. The music contained
in the Company's Image Audio Production Library was written and produced by a
number of musicians who have granted rights to the Company for the use of their
music. There is no guarantee that these musicians will continue to grant rights
for the use of their music.

12. LOSS OF ACCRUED ADVERTISING TIME. The Company typically retains one half of
the advertising spots within each program aired on each radio station. Radio
stations may change ownership, making these agreements with previous management
obsolete.

SIGNIFICANT CUSTOMERS AND/OR SUPPLIERS

The Company customers are located throughout the United States. Seven customers
account for approximately $624,074 or 78% of sales for the year ended November
30, 1997, and $211,714 or 93% of accounts receivable. Three customers account
for approximately $179,000 or 89% of sales for the period March 27 (date of
inception) through November 30, 1996, and $67,000 or 89% of accounts receivable.

EMPLOYEES
At 1/31/98 the Company operated with the services of its Directors, Executive
Officers, and eleven additional employees and consultants. There is no
collective bargaining agreement in place.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

SELECTED FINANCIAL DATA

The selected financial data in Table No. 1 for Fiscal 1997 ended November 30 and
the period 3/27/96 (date of inception) to 11/30/96, was derived from the
financial statements of the Company which were audited by Andersen Andersen &
Strong L.C., independent Certified Public Accountants, as indicated in their
report which is included elsewhere in this Registration Statement.

The selected financial data was extracted from the more detailed financial
statements and related notes included herein and should be read in conjunction
with such financial statements and with the information appearing under the
heading, "Management's Discussion and Analysis of Financial Condition and
Results Of Operations".

Table No. 1
Selected Financial Data
($ in 000, except per share data)

<TABLE>
<CAPTION>
Year Ended The Period
11/30/97 3/27/96
(date of
inception)
to 11/30/96
------- -------
<S> <C> <C>
Revenue $ 803 $ 203
Net Income (Loss) $ (134) $ (77)
(Loss) per Share $ (0.12) $ (0.14)
Dividends per Share

Wtg. Avg. Shares (000) 1,110 563

Working Capital $ 584 $ 876
Long - Term Debt $ 388 $ 553
Shareholders' Equity $ 284 $ 417
Total Assets $1,1861 $ 1,213
</TABLE>

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION

The following discussion of the financial condition, changes in financial
condition and results of operations of the Company for the fiscal year ended
11/30/97 and for the period 3/27/96 (date of inception) to 11/30/96 should be
read in conjunction with the financial statements of the Company and related
notes included therein.

The Company was incorporated in Nevada, USA on 3/4/96.

The Company anticipates having to raise additional funds by equity issuance in
the next several years, as the Company expects to grow at rates that will
require more funds than will be generated by profitable operations which the
Company expects to report during Fiscal 1998 and Fiscal 1999. The Company has
had preliminary discussions with various parties regarding the sale

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of equity capital; however, there are no definitive agreements and there can be
no assurance that additional equity capital sales can be completed.

The Company occasionally engages in barter trading for its own account and has a
blended cash - trade purchasing program in which it spends trade dollars and US
dollars.

The Company currently has agreements in place with ITEX Corporation,
International Barter Corporation and Illinois Trade Association. The terms of
these agreements call for selling radio time to these specific clients in
exchange for barter dollars.

At each balance sheet date, in accordance with generally accepted accounting
principles, any positive trade balance of the Company would he evaluated for net
realizable value. The Company would adjust the carrying value of the trade
dollars if the fair market value of the trade dollars is less than the carrying
value or it is probable that not all trade dollars will be used.

At a meeting of the Board of Directors held on January 15, 1998 it was resolved
that the Company would appoint Neal & Associates, LLC to source and negotiate
barter transactions and contracts and that John A. Holmes must approve all
barter transactions submitted by Neal & Associates, LLC.

Stock-based compensation. The Company adopted FASB Statement No. 123,
"Accounting for Stock-Based Compensation" during fiscal 1997. Through 11/30/97,
the Company had no stock option plan or other compensation program that would
have resulted in any reportable data under Statement 123.

Statement 123 also applies to transactions in which a company issues its own
common stock to acquire goods/services from non-employees. Because the Statement
123 method of accounting has not been applied to common stock issued during
Fiscal 1997 for services, the resulting pro- forma compensation costs may not be
representative of that to be expected in future years. The implementation of
Statement 123 may have a material effect on the Company's financial statements
and the pro forma disclosures in the notes thereto in future periods; however,
the impact on future years is not known or reasonably estimable.

Business Concentration

The Company's customers are located throughout the United States. Seven
customers accounted for approximately $624,074 or 78% of sales for the year
ended November 30, 1997, and $211,714 or 93% of accounts receivable. Three
customers accounted for

<PAGE> 17

approximately $170,000 or 89% of sales for the period March 27 (date of
inception) through November 30, 1996, and $67,000 or 89% of accounts receivable.

Cash Balances

The Company maintains its major cash balances at one financial institution
located in Portland, Oregon. The balances are insured by the Federal Deposit
Insurance Corporation up to $100,000. At 4/1/98, there were no uninsured cash
balances.

Commitments and Contingencies

The Company leases its office facility in Portland, Oregon. The Company entered
into a five year lease in April, 1998. The lease payments for the first year are
$2792.17 per month and in the fifth year of the lease the payments are $3553.67
per month.

The Company has a note payable at $142,438 per year, including interest at 6%
per annum, collateralized by equipment and accounts receivable. The balance of
this note as of 11/30/97 was $480,000.

The Company has a second note payable at $378 per month, including interest at
10.5% per annum, collateralized by equipment. The balance of this note as of
11/30/97 was $5,307.

The Company also has a note payable to a shareholder at $711 per month,
including interest at 8.25% per annum, collateralized by equipment and accounts
receivable. The balance of this note as of 11/30/97 was $16,258.

The Company has a second note payable to a shareholder at $1,060 per month,
including interest at 8.25% per annum, collateralized by equipment and accounts
receivable. The balance of this note as of 11/30/97 was $24,243.

The Company has a third note payable to a shareholder at $588 per month,
including interest at 8.25% per annum, collateralized by equipment and accounts
receivable. The balance of this note as of 11/30/97 was $13,453.

The annual maturities of the above long-term debt is $251,433 for fiscal 1998
and $387,808 for fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES

Fiscal 1997 Ended 11/30/97 and the Period March 27, 1996 (Date of Inception) to
11/30/96

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Cash Used In 1997 Operating Activities totaled ($231,021), including the
($133,503) Net Loss; the primary adjusting items were ($45,823) in payment of
long-term debt and acquisition of inventories for media, $19,161 in
depreciation, $4,413 in deferred tax, ($140,421) in accounts receivable,
($63,580) in inventories, ($14,340) in other current assets, $61,724 in accounts
payable, and $81,348 in accrued expenses. Cash Used in, 1997 Investing
Activities totaled $6,918. Cash provided by 1997 Financing Activities totaled
$75,172.

Cash Used In 1996 Operating Activities totaled ($175,486), including the $77,237
Net Loss; the primary adjusting items were $9,473 of common stock issued for
services, $17,756 in depreciation, $1,200 in bad debt expenses, $5,446 in
deferred tax, ($74,664) in accounts receivable, ($162,788) in inventories,
$82,418 in accounts payable and $22,910 in accrued expenses. Cash provided from
1996 investing Activities totaled $451,536. Cash used by 1996 Financing
Activities totaled ($590).

RESULTS OF OPERATIONS

Fiscal 1997 Ended 11/30/97 and the Period March 27, 1996 (Date of Inception) to
11/30/96

The Company experienced significant revenue growth in fiscal 1997 as compared to
the Period March 27, 1996 (Date of Inception) to 11/30/96. Total revenues
increased by $599,538. ($802,765 as compared to $203,227)

This growth is primarily attributable to a $681,976 growth in advertising income
offset by a decrease of $61,485 in music and radio income and a decrease of
$20,953 in consulting income.

Gross profit margins continue to be high. For fiscal 1997 the gross profit of
$626,115 represented a margin of 78%. For the period 3/27/96 (Date of inception)
to 11/30/96, the gross profit of $165,062 represented a margin of 81%. The cost
of sales as a percentage of total revenues continue to remain in the 18% to 22%
range. For fiscal 1997 the cost of sales was $176,65O or 22% of total revenues
and for the period 3/27/96 (Date of inception) to 11/30/96, the cost of sales
was $38,165 or 18.7% of total revenues.

General and administrative expenses totaled $755,205 for fiscal 1997. These were
broken as follows: advertising expenses of $26,348; wages and employee benefits
of $295,587; rent of $47,206; interest of $26,075; depreciation of $19,161;
consulting and professional fees of $72,854; and, other expenses of $267,974.
General and administrative expenses were 94% of total revenues for

<PAGE> 19

fiscal 1997 as compared to 116.5% for the period 3/27/96 (Date of inception) to
11/30/96.

For fiscal 1997, the Company reported a loss before income taxes of ($129,090)
as compared to ($71,781) for the period 3/27/96 (Date of Inception) to 11/30/96.

The Company reported a net loss for fiscal 1997 of ($133,503) as compared to a
net loss of ($77,237) for the period 3/27/96 (Date of Incorporation) to
11/30/96. Fiscal 1997 loss per share was ($0.12) as compared with ($0.14) for
the period 3/27/96 (Date of Inception) to '11/30/96.

Inflation

The Company's results of operations have not been affected by inflation and
management does not expect inflation to have a material impact on its operations
in the future.

FORWARD-LOOKING STATEMENTS

From time-to-time, the Company or its representatives may have made or may make
forward-looking statements, orally or in writing. Such forward-looking
statements may be included in, but not limited to, press releases, oral
statements made with the approval of an authorized executive officer or in
various filing made by the Company with the Securities and Exchange Commission
or other regulatory agencies. Words or phrases "will likely result", "are
expected to", "will continue", is anticipated", "estimate", "Project or
projected", or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). The Company wishes to ensure that such statements
are accompanied by meaningful cautionary statements, so as to maximize to the
fullest extent possible the protections of the safe harbor established in the
Reform Act. Accordingly, such statements are qualified in their entirety by
reference to and are accompanied by the following discussion of certain
important factors that could cause actual results to differ materially from such
forward-looking statements.

Management is currently unaware of any trends or conditions that could have a
material adverse effect on the Company's financial position, future results of
operations, or liquidity.

However, investors should also be aware of factors that could have a negative
impact on the Company's prospects and the consistency of progress in the areas
of revenue generation, liquidity, and generation of capital resources. These
include: (i) variations in the mix of corporate trade and trade exchange

<PAGE> 20

revenue; (ii) possible inability of the Company to attract investors for its
equity securities or otherwise raise adequate funds from any source, (iii)
increased governmental regulation of the barter business, (iv) a decrease in
the cash fees and commission realized by the Company based on a material
decrease in corporate or retail barter transactions and (v) the inability of the
Company to acquire additional barter exchanges in a timely manner and the
inability to integrate these acquisitions in a profitable manner.

The risks identified here are not inclusive. Furthermore, reference is also made
to other sections of this Registration Statement that include additional factors
that could adversely impact the Company's business and financial performance.
Also, the Company operates in a very competitive and rapidly changing
environment New risk factors emerge from time to time and it is not possible for
management to predict all such risk factors, not can it access the impact of all
such risk factors on the Company's business or the extent to which any factor or
combination of factors may cause actual results to differ significantly from
those contained in any forward-looking statements. Accordingly, forward-looking
statements should not be relied upon as a prediction of actual results.

20
<PAGE> 21
ITEM 3. DESCRIPTION OF PROPERTY

The Company rents approximately 3,046 square feet of space at 520 SW 6th Avenue,
Suite 750, Portland, Oregon 97204 for administrative and sales efforts and for
recording and producing radio programs. The Company considers the facility
adequate for current purposes.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Registrant is a publicly-owned corporation, the shares of which are owned by
United States residents and Canadian residents. The Registrant is not controlled
directly or indirectly by another corporation or any foreign government.

Table No. 2 lists as of 4/3/98 all persons/companies the Registrant is aware of
as being the beneficial owner of more than five percent (5%) of the common stock
of the Registrant.

Table No. 2
5% Shareholders

TOTAL 475,000 24.0%
</TABLE>

# Based on 1,981,610 shares outstanding as of 4/3/98 and currently exercisable
share purchase options.

<PAGE> 22

Table No. 3 lists as of 4/3/98 all Directors and Executive Officers who
beneficially own the Registrant's voting securities and the amount of the
Registrant's voting securities owned by the Directors and Executive Officers as
a group.

Table No. 3
Shareholdings of Directors and Executive Officers

<TABLE>
<CAPTION>
Title Amount and Nature Percent
of of Beneficial of
Class Name of Beneficial Owner Ownership Class #
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Dennis McKay, Director 475,000 24.0%
Common John Holmes, President & Director (1) 75,000 3.8%
Common John J. Brumfield, Vice President (2) 56,235 2.9%
Common Steven A. Sears, Director (3) 56,666 2.9%
Common Peter Jacobsen, Director (4) 29,00.0 1.5%
Common Dick Versace, Director (5) 14,000 0.7%

TOTAL 705,901 35.8%
</TABLE>

# Based on 1,981,610 shares outstanding as of 4/3/98 and currently exercisable
share purchase options.

<PAGE> 23

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Table No. 4 lists as of 4/3/98 the names of the Directors of the Company. The
Directors have served in their respective capacities since their election and/or
appointment and will serve until the next Annual Shareholders' Meeting or until
a successor is duly elected, unless the office is vacated in accordance with the
Articles/By-Laws of the Company. All Directors are residents and citizens of the
United States.

Table No. 4
Directors

<TABLE>
<CAPTION>
Date First
Elected
Name Age or Appointed
- --------------------------------------------------------------------------------
<S> <C> <C>
John A. Holmes (1) 27 1/30/98
Peter Jacobsen 45 1/30/98
Dick Versace 44 1/30/98
Steve Sears 30 1/30/98
Dennis McKay 52 1/30/98
</TABLE>

(1) Member of Audit Committee.

Table No. 5 lists, as of 4/3/98, the names of the Executive Officers of the
Company. The Executive Officers serve at the pleasure of the Board of Directors.
All Executive Officers are residents/citizens of the United States.

Table No. 5
Executive Officers

<TABLE>
<CAPTION>
Name Position Date of Board Approval
- -------------------------------------------------------------------------------
<S> <C> <C>
John Holmes President 1/30/98
John J. Brumfield Vice President/Controller 1/30/98
Lee A. Morgan Secretary 1/30/98
</TABLE>

Business Experience

JOHN HOLMES. Mr. Holmes is President, Chief Executive Officer and a Director of
the Company. His responsibilities include coordinating strategy, planning,
programming, promotions and station clearance. Before joining the Company, he
worked for ITEX Media Services in radio syndication. Previously he worked for
KMOV-CBS TV as a sports producer, and Radio Personalities, Inc., where he was
Executive Producer for the following short form radio programs, "Offsides with
Dan Dierdorf" and "Talking Football with Dick Vitale." Mr. Holmes attended St.
Louis

<PAGE> 24

University where he received a Bachelor of Science Degree and played on the
varsity golf team.

JOHN J. BRUMFIELD. Mr. Brumfield is a Vice President and the Controller for the
Company. He received his Bachelor of Science degree in Accounting from Portland
State University. Prior to joining the Company he was the staff account for ITEX
Corporation. Prior to joining ITEX Corporation he was a professional golfer on
the Canadian PGA Tour and prior to that he worked as a staff accountant for
Bogumil, Halzgang, & Associates of Portland, Oregon.

LEE A. MORGAN. Mr. Morgan is the Corporate Secretary for the Company. He
received his Bachelor of Arts Degree from the University of Utah in 1988. He has
been employed by Neal and Associates, a business consulting firm, for the past
three years as the general manager. Prior to that, he was employed Itex
Corporation as the company's National Recruitment Director.

PETER JACOBSEN. Mr. Jacobsen is a Director of the Company. He is currently the
host of one of the Company's short form features, "Teein' It Up". This show is
heard on over 350 radio stations each day. Jacobsen, a multiple PGA Tour winner
and two time Ryder Cup participant, is also known as the host of the Portland,
Oregon Fred Meyer Challenge, a tournament that brings many of the world's best
golfers to play in the Pacific Northwest. He has had experience on ABC and ESPN
as an on-course commentator, and is a world renowned golf course designer.

DICK VERSACE. Mr. Versace is a Director of the Company. He has coached
basketball all levels and is currently a coach on the staff of the NBA's
Milwaukee Bucks. Before accepting the Bucks job during the 1977 season, he
participated in what had been for him an avocation - television and radio
broadcasting. He is also a popular speaker in the United States and Europe, and
has given numerous motivational talks to major corporations and associations
over the past fifteen years.

STEVE SEARS. Mr. Sears is a Director of the Company. He is originally from Long
Beach, California where he was President of the family owned construction
business - Sears Roofing Service, Incorporated. He also served as Vice President
for Robert Kerr & Associates, a real estate and construction company in
Portland.

DENNIS MCKAY. Mr. McKay is a Director of the Company. He is an independent
investor and general business consultant. He received his Bachelor of Commerce
Degree from the University of Alberta, Canada and his Law Degree from the
University of British Columbia. He was a principal in a law firm for fifteen
years in British Columbia, after which he was admitted to the American

<PAGE> 25

Samoa Law Society where he served as the legal advisor to the government of that
country.

Involvement in Certain Legal Proceedings

There have been no events during the last five years that are material to an
evaluation of the ability or integrity of any director, person nominated to
become a director, executive officer, promoter or control person including:

a) any bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the bankruptcy
or within two years prior to that time;

b) any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);

c) being subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
enjoining, barring, suspending or otherwise limiting his/her involvement in any
type of business, securities or banking activities; and

d) being found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.

Family Relationships

There are no family relationships between any of the officers and/or directors.

Other Relationships/Arrangements

There are no arrangements or understandings between any two or more Directors or
Executive Officers, pursuant to which he/she was selected as a Director or
Executive Officer. There are no material arrangements or understandings between
any two or more Directors or Executive officers.

<PAGE> 26

ITEM 6. EXECUTIVE COMPENSATION

The Company has no formal plan for compensating its Directors for their service
in their capacity as Directors. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors. The Board of Directors may
award special remuneration to any Director undertaking any special services on
behalf of the Company other than services ordinarily required of a Director.
During Fiscal 1997, no Director received and/or accrued any compensation for his
services as a Director, including committee participation and/or special
assignments.

The Company has no material bonus or profit sharing plans pursuant to which cash
or non-cash compensation is or may be paid to the Company's Directors or
Executive Officers. The Company has no stock option or other long-term
compensation programs

During 1997, no funds were set aside or accrued by the Company to provide
pension, retirement or similar benefits for Directors or Executive Officers.

The Company has no plans or arrangements in respect of remuneration received or
that may be received by Executive officers of the Company in Fiscal 1998 to
compensate such officers in the event of termination of employment (as a result
of resignation, retirement, change of control) or a change of responsibilities
following a change of control, where the value of such compensation exceeds
$60,000 per Executive Officer.

The Company has no written employment agreements.

Table No. 6 details compensation paid during Fiscal 1997 to the Chief Executive
Officer and the next four highly paid Executive Officers, to the extent they
were compensated in excess of $60,000. The table also lists compensation paid to
all Executive Officers to the extent they were not compensated in excess of
$60,000 and to all Executive Officers.

<PAGE> 27

Table No. 6
Summary Compensation Table

<TABLE>
<CAPTION>
Name and Annual Compensation
----------------------------------------------------------------
Principal Fiscal Other Annual Other
Position Year Salary Bonus Compensation Compensation
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John A. Holmes, III Pres 1997 $40,320 $00,000 $00,000 $00,000
1996 $40,320 $00,000 $00,000 $00,000

John J. Brumfield V.P 1997 $33,350 $00,000 $00,000 $00,000
1996 $33,350 $00,000 $00,000 $00,000
</TABLE>

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In September of 1996 the company purchased recording studio equipment from
Joseph Mancuso, Salvatore Mancuso and Peter Knobbe. Joseph Mancuso is a current
employee of the Company and a shareholder. Salvatore Mancuso is the brother of
Joseph Mancuso and a shareholder of the Company. Peter Knobbe is a current
shareholder of the Company. The Company paid for the recording studio equipment
by the issuance of a note payable to each of these individuals.

The note payable to Joseph Mancuso is payable at $711 per month, including
interest at 8.25% per annum. It is collateralized by equipment and accounts
receivable. At the end of the period 3/27/96 (Date of Inception) to 11/30/96,
the balance owing on this note was $22,600 and at the end of fiscal 1997 the
balance owing was $16,258.

The note payable to Salvatore Mancuso is payable at $1,060 per month, including
interest at 8.25% per annu. It is collateralized by equipment and accounts
payable. At the end of the period 3/27/96 (Date of Inception) to 11/30/96, the
balance owing on this note was $33,700 and at the end of fiscal 1997 the balance
owing was $24,243.

The note payable to Peter Knobbe is payable at $588 per month, including
interest at 8.25% per annum. It is collateralized by equipment and accounts
payable. At the end of the period 3/27/96 (Date of Inception) to 11/30/96, the
balance owing on this note was $18,700 and at the end of fiscal 1997 the balance
owing was $13,453.

Other than discussed above, there have been no transactions since 3/27/96 (Date
of Inception), or proposed transactions, which have materially affected or will
materially affect the Company in which any Director, Executive Officer, or
beneficial holder of

<PAGE> 28

more that 10% of the outstanding common stock, or any of their respective
relatives, spouses, associates or affiliates has had or will have any direct or
material indirect interest.

ITEM 8. LEGAL PROCEEDINGS

Other than discussed below, the Company knows of no material, active or pending
legal proceedings against them; nor is the Company involved as a plaintiff in
any material proceeding or pending litigation.

Other than discussed below, the Company knows of no active or pending
proceedings against anyone that might materially adversely affect an interest of
the Company.

The Company is currently in arbitration with an employment agency to settle an
amount owed to the agency for supplying it with an employee. The employee was
terminated prior to the end of the full probation period and the Company has
offered the employment agency an amount less than the original agreed upon
amount.

28
<PAGE> 29

ITEM 9. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock trades on the NASD Electronic Bulletin Board in the
United States, having the trading symbol "NSBD-BB" and CUSIP# 669746109. The
common stock commenced public trading on 1/23/98. Trading volume and
high/low/closing prices for the months of January, February, and March 1998 are
disclosed in the following table:

Table No. 7
NASBD Stock Trading Activity

<TABLE>
<CAPTION>
MONTH HIGH LOW CLOSE VOLUME
<S> <C> <C> <C> <C>
January $ 3.00 $ 1.37 $ 2.25 113,800
February $ 2.50 $ 1.50 $ 1.50 50,500
March $ 2.12 $ 1.50 $ 1.62 27,20
</TABLE>

The Company's common stock is issued in registered form. Atlas Stock Transfer
(located in Salt Lake City, Utah) is the registrar and transfer agent for the
common stock.

On 4/6/98, the shareholders' list for the Company's common shares showed
registered shareholders and 1,981,610 shares outstanding, including 94
registered holders in the United States holding 1,132,317 shares and 14
registered holders outside the United States holding 849,293 shares.

The Company has not declared any dividends since incorporation and does not
anticipate that it will do so in the foreseeable future. The present policy of
the Company is to retain future earnings for use in its operations and expansion
of its business.

<PAGE> 30

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES

In March 1996, the Company issued 475,000 shares of common stock for total
consideration of $180,000.

In November 1996, the Company completed pursuant to a private placement in the
United States under Section 504 of Regulation D, in which 600,000 units were
sold. Each unit consisted of one common share and one share purchase warrant.
Each share purchase warrant entitled the holder to purchase one additional share
of common stock for $1.00 during the six month period after the closing of the
offering which was 11/30/96. The time frame during which the holders could
purchase an additional share of common stock for consideration of one share
purchase warrant and $1.00 could be extended upon appropriate notice given to
shareholders by the management.

In January 1998, the Company issued 59,250 common shares, subject to restriction
under SEC Rule 144, as a bonus to individuals and/or corporations affiliated
with the Company. The number of shares allocated to each of the
people/corporations was based on a price of $0.60 per common share.

In January 1998, the Company issued 65,000 common shares, subject to restriction
under SEC Rule 144, to an individual in exchange for printing services in the
amount of $50,000.

In March 1998, certain individuals and employees exercised share purchase
options where each option equaled one common share of stock subject to
restriction under SEC Rule 144. The option strike price was $0.60 per share. A
total of 600, 000 common shares subject to restriction under SEC Rule 144 were
issued.

<PAGE> 31

ITEM 11. DESCRIPTION OF SECURITIES

The authorized capital of the Registrant is 25,000,000 shares of common stock
with par value of $0.001 of which 1,110,000 were issued and outstanding at
11/30/97, the end of the most recent fiscal year. At 4/3/98, there were
1,981,610 shares of common stock outstanding.

All of the authorized common stock of the Registrant are of the same class and,
once issued, rank equally as to dividends, voting powers, and participation in
assets. Holders of common stock are entitled to one vote for each share held of
record on all matters to be acted upon by the shareholders.

Holders of common stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors, in its discretion, out of
funds legally available therefore.

Upon liquidation, dissolution or winding up of the Registrant, holders of common
stock are entitled to receive pro rata the assets of the Registrant, if any,
remaining after payments of all debts and liabilities. No shares have been
issued subject to call or assessment. There are no pre-emptive or conversion
rights and no provisions for redemption or purchase for cancellation, surrender,
or sinking or purchase funds.

There are no restrictions on the repurchase or redemption of shares of the
Registrant while there is any arrearage in the payment of dividends or sinking
fund installments.

Debt Securities to be Registered. Not applicable.
American Depository Receipts. Not applicable.
Other Securities to be Registered. Not applicable.

31
<PAGE> 32

ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's By-Laws address indemnification under Article 12.

No director or officer of the Corporation shall be personally liable to the
Corporation or any of its stockholders for damages for breach of fiduciary duty
as a director or officer involving any act or omission of any such director of
officer; provided however, that the foregoing provision shall not eliminate or
limit the liability of a director of officer (i for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law, or (ii) the
payment of dividends in violation of Section 78.300 of the Nevada Revised
Statues. Any repeal or modification of this Article by the stockholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the Corporation
for acts or omissions prior to such repeal or modification.

<PAGE> 33

ITEM 13. FINANCIAL STATEMENTS

The financial statements and notes thereto as required under ITEM #13 are
attached hereto and found immediately following the text of this Registration
Statement. The audit report of Andersen Andersen & Strong LC, independent
Certified Public Accountants, is included herein immediately preceding the
financial statements.

Audited Financial Statements for Fiscal 1997 and the period 3/27/96 (Date of
Inception) to 11/30/96.

ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not Applicable

<PAGE> 34

ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS

(A) FINANCIAL STATEMENTS
The financial statements and notes thereto as required under ITEM #13 are
attached hereto and found immediately following the text of this Registration
Statement. The audit report of Andersen Andersen & Strong LC, independent
Certified Public Accountants, for the audited financial statements and notes
thereto is included herein immediately preceding the audited financial
statements.

(A-1) Audited Financial Statements: Fiscal 1997 and the period 3/27/96 (date of
inception) to 11/30/96

Auditor's Report, dated 3/26/98

Consolidated Balance Sheets at 11/30/97 and 11/30/96

Consolidated Statements of Operations for the fiscal year ended 11/30/97 and the
Period 3/27/96 (Date of Inception) to 11/30/96

Consolidated Statements of Stockholders' Equity for the Period 3/27/96 (Date of
Inception) to 11/30/97

Consolidated Statements of Cash Flows for the Year ended 11/30/97 and the Period
3/27/96 (Date of Inception) to 11/30/96

Notes to Financial Statements

<PAGE> 35

(B) INDEX TO EXHIBITS:

3. Articles of Incorporation/By-Laws of the Company............... 49

4. Instruments Defining Rights of Security Holders. - Refer to Exhibit
No. 3.

6. Opinion re: Discount on Capital Shares. Not Applicable
7. Opinion re: Liquidation Preference. Not Applicable
9. Voting Trust Agreements. Not Applicable
10. Material Contracts:

a. Letter Outlining Terms of Itex Media Services Purchase and
Promissory Note Copy....................................... 58

11. Statement re: Computation of EPS. Not Applicable
12. Statement re: Computation of Ratios. Not Applicable
14. Material Foreign Patents. Not Applicable
16. Letter re: Change of Accountant. Not Applicable
21. Subsidiaries of the Registrant. Not Applicable
24. Power of Attorney. Not Applicable
27. Financial Data Schedule. Not Applicable
28. Information from Reports Furnished to State Insurance Regulatory
Authorities. Not Applicable

99. Other Material Documents:
a. Information Statement regarding 600,000 unit private placement,
dated 9/10/96.............................................. 65
b. Final Form D regarding 600,000 unit private placement, dated
9/6/96..................................................... 79
C. Final NY Form M-11 regarding 600,000 unit private placement,
dated...................................................... 84

d. Notice/Agenda/Minutes regarding Annual Meeting of Shareholders
held 1/30/98 .............................................. 87

e. Minutes of Board of Directors Meeting held on
1/15/98.................................................... 90

f. Certificate of Name Change................................. 95
g. Certificate of Existence................................... 97

SIGNATURE PAGE................................................. 98

<PAGE> 36

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

November 30, 1997 and 1996

<PAGE> 37

[ANDERSEN ANDERSEN & STRONG, L.C. LETTERHEAD]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of
Nostalgia Broadcasting Corporation
Portland, Oregon

We have audited the accompanying consolidated balance sheets of Nostalgia
Broadcasting Corporation and subsidiary as of November 30, 1997 and 1996, and
the related consolidated statements of operations, stockholders' equity and cash
flows for the year ended November 30, 1997 and the period March 27, 1996 (date
of inception) to November 30, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Nostalgia
Broadcasting Corporation and subsidiary as of November 30, 1997 and 1996, and
the results of their operations and cash flows for the year ended November 30,
1997 and the period March 27, 1996 (date of inception) to November 30, 1996, in
conformity with generally accepted accounting principles.

/s/ ANDERSEN ANDERSEN & STRONG, L.C.
March 26, 1998
Salt Lake City, Utah

<PAGE> 38

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
November 30, 1997 and 1996

================================================================================

<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
ASSETS

CURRENT ASSETS
Cash and cash equivalents (Note 2) $ 112,693 $ 275,460
Accounts receivable, net of allowance
for doubtful accounts of $1,200 in 1997
and 1996 (Note 2) 213,885 73,464
Inventories (Note 2) 752,191 762,788
Other current assets 14,340 --
Deferred tax asset (Note 9) 468 468
----------- -----------

Total Current Assets 1,093,577 1,112,180
----------- -----------

PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation (Notes 2 and 3) 92,278 100,367
----------- -----------

$ 1,185,855 $ 1,212,547
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 144,142 $ 82,418
Other current liabilities 108,412 22,910
Current portion of long-term debt (Note 4) 251,433 131,246
----------- -----------

Total Current Liabilities 503,987 236,574
----------- -----------

OTHER LIABILITIES
Long-term debt (Note 4) 387,808 552,823
Deferred income tax (Notes 2 and 9) 10,327 5,914
----------- -----------

Total Other Liabilities 398,135 558,737
----------- -----------

STOCKHOLDERS' EQUITY
Common stock, $.001 par value; authorized
20,000,000 shares; issued and outstanding
500,000 shares (Note 5) 500 500
Additional paid-in capital (Note 5) 188,973 188,973
Subscribed stock, 610,000 shares (Note 5) 305,000 305,000
Retained deficit (210,740) (77,237)
----------- -----------

Total Stockholders' Equity 283,733 417,236
----------- -----------

$ 1,185,855 $ 1,212,547
=========== ===========
</TABLE>

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

<PAGE> 39

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1997 AND THE PERIOD MARCH 27, 1996
(DATE OF INCEPTION) TO NOVEMBER 30, 1996

================================================================================

<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
Advertising income $ 802,695 $ 120,719
Consulting income 70 21,023
Music and radio income -- 61,485
----------- -----------

Total Revenues 802,765 203,227

COST OF SALES 176,650 38,165
----------- -----------

GROSS PROFIT 626,115 165,062
----------- -----------

GENERAL AND ADMINISTRATIVE EXPENSES
Advertising 26,348 25,820
Wages and employee benefits 295,587 68,856
Rent 47,206 13,184
Interest 26,075 25,264
Depreciation 19,161 17,756
Consulting and professional 72,854 35,693
Other 267,974 50,270
----------- -----------

Total General and Administrative Expenses 755,205 236,843
----------- -----------

Net Loss Before Income Taxes (129,090) (71,781)

Income tax expense (Note 9) 4,413 5,456
----------- -----------

Net Loss $ (133,502) $ (77,237)
-========== ===========

Net Loss Per Share (Note 2) $ (0.12) $ (0.14)
-========== ===========

Weighted average number of shares outstanding 1,110,000 563,125
-========== ===========
</TABLE>

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

<PAGE> 40

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD MARCH 27, 1996 (DATE OF INCEPTION) TO NOVEMBER 30, 1997

================================================================================

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
------------------- PAID-IN SUBSCRIBED RETAINED
SHARES AMOUNT CAPITAL STOCK DEFICIT TOTAL
------ ------ ------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Issuance of common shares
($0.38 per share) 475,000 $ 475 $ 179,525 $ -- $ -- $ 180,000
Issuance of common shares
for services ($0.38 per share) 25,000 25 9,448 -- -- 9,473
Subscription of common shares
for inventory ($0.50 per share) -- -- -- 5,000 -- 5,000
Private placement of subscribed
shares ($0.50 per share) -- -- -- 300,000 -- 300,000
Net loss for the period March 27,
1996 (date of inception) to
November 30, 1996 -- -- -- -- (77,237) (77,237)
------- --------- --------- ------- --------- ---------

BALANCE AT NOVEMBER 30, 1996 500,000 500 188,973 305,000 (77,237) 417,236

Net loss for the year ended
November 30, 1997 -- -- -- -- (133,503) (133,503)
------- --------- --------- ------- --------- ---------

BALANCE AT NOVEMBER 30, 1997 500,000 500 $ 188,973 305,000 $ 210,740) $283,733
======= ========= ========= ======= ========= =========
</TABLE>

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

<PAGE> 41
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended November 30, 1997 and the Period March 27, 1996
(Date of Inception) to November 30, 1996

================================================================================

<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(133,503) $ (77,237)
Adjustments to reconcile net loss to cash provided
by operating activities:
Shares issued for services 9,473
Payment of long-term debt and acquisition of
inventories for media (45,823) --
Depreciation 19,161 17,756
Bad debt expense -- 1,200
Deferred tax 4,413 5,446
Changes in operating assets and liabilities:
Accounts receivable (140,421) (74,664)
Inventories (63,580) (162,788)
Other current assets (14,340) --
Accounts payable 61,724 82,418
Accrued expenses 81,348 22,910
--------- ---------

Net Cash Used by Operating Activities (231,021) (175,486)
--------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Issuance of common stock -- 480,000
Acquisition of property and equipment - net (6,918) (28,464)
--------- ---------
Net Cash Provided (Used) by Investing Activities (6,918) 451,536

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 99,980 --
Payments on long-term debt (24,808) (590)
--------- ---------
Net Cash Provided (Used) in Financing Activities 75,172 (590)
--------- ---------
Net increase (decrease) in cash and cash equivalents (162,767) 275,460
Cash and cash equivalents at beginning of period 275,460 --
--------- ---------
Cash and Cash Equivalents at End of Period $ 112,693 $275,460
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 5,819 $ 2,663
========= =========
Cash paid for income taxes $ -- $ --
========= =========
</TABLE>

<PAGE> 42

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED NOVEMBER 30, 1997 AND THE PERIOD MARCH 27, 1996
(DATE OF INCEPTION) TO NOVEMBER 30, 1996

================================================================================

<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Acquisition of fixed assets in exchange for 10,000 shares
of subscribed common stock and notes payable $ -- $ 89,659
Payment of long-term debt and acquisition of
inventories for media 194,177 --
Acquisition of inventory in exchange for notes
payable (See Note 8) -- 750,000
Acquisition of fixed assets for Trade Dollars 4,154 --
</TABLE>

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

<PAGE> 43

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 1997 AND 1996

================================================================================

1. ORGANIZATION AND BUSINESS ACTIVITY

Nostalgia Broadcasting Corporation (the Company) was organized under the laws of
the State of Nevada on March 27, 1996. The Company is involved in the
acquisition, creation and syndication of national radio programming and music
production and distribution.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. Intercompany transactions have been eliminated.

Revenue Recognition

The Company recognizes revenue from the sale of advertising, music and radio
programs when the buyer has made an unconditional commitment to secure air time
on the network and the Company has completed the act of fulfilling the
advertising during the secured time.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with original
maturities of less than three months to be cash equivalents.

Inventories

Inventories consist of music and radio programs and are stated at the lower of
cost (first-in first-out basis) or market.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the bases of certain assets and
liabilities for financial and tax reporting. The deferred taxes represent the
future tax return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or settled.

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the assets ranging from 7
to 31 years. Maintenance and repairs are charged to operations when incurred.
Betterments and renewals are capitalized.

<PAGE> 44

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 1997 AND 1996

================================================================================

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)-

Dividend Policy

The Company anticipates that for the foreseeable future, its earnings will be
retained for use in its business and no cash dividends will be paid. Declaration
and payment of dividends will remain within the discretion of the Company's
board of directors and will depend upon the Company's growth, profitability,
financial condition and other factors which the board of directors may deem
appropriate.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing the financial statements.

Loss Per Share

The computation of loss per common share is based on the weighted average number
of shares outstanding during the period.

Allowance for Doubtful Accounts

The Company provides an allowance for uncollectible accounts which are doubtful
of collection. The allowance is based upon management's periodic analysis of
receivables, evaluation of current economic conditions and other pertinent
factors. Ultimate losses may vary from current estimates and, as additions to
the allowance become necessary, they are charged against earnings in the period
they become known. Losses are charged and recoveries are credited to the
allowance.

Impairment of Long-Lived Assets

In the event that facts and circumstances indicate that the cost of long-lived
assets may be impaired, an evaluation of recoverability would be performed. If
an evaluation is required, the estimated future undiscounted cash flows
associated with the asset are compared to the asset's carrying amount to
determine if a write-down to market value is required. The Company intends to
annually assess the carrying value of its long-lived assets using the analysis
described above.

Marketing and Advertising Costs

All costs relating to marketing and advertising are expensed in the year
incurred. Amounts expensed for the years ended November 30, 1997 and 1996 were
approximately $26,000 and $26,000, respectively.

<PAGE> 45

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
November 30, 1997 AND 1996

================================================================================

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at November 30, 1997 and 1996:

<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Office equipment $ 15,017 $ 7,936
Studio equipment 93,036 90,618
Office furniture 11,499 13,129
Leasehold improvements 8,866 6,440
--------- ---------

128,418 118,123
Less accumulated depreciation (36,140) (17,756)
--------- ---------

Total $ 92,278 $ 100,367
========= =========
</TABLE>

Depreciation expense for the year ended November 30, 1997, and the period March
27, 1996 (date of inception) to November 30, 1996, was $19,161 and $17,756,
respectively.

4. LONG-TERM DEBT

At November 30, 1997 and 1996, long-term debt consisted of the following:

<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Note payable, due January 14, 1998,
including interest at 9% per annum,
convertible to common stock upon mutual
agreement, collateralized by
accounts receivable $ 49,980 $ --

Note payable, due January 14, 1998,
including interest at 9% per annum,
convertible to common stock upon mutual
agreement, collateralized by
accounts receivable 50,000 --

Note payable at $142,438 per year, including
interest at 6% per annum, collateralized by
equipment and accounts receivable 480,000 600,000

Note payable at $378 per month, including
interest at 10.5% per annum, collateralized
by equipment 5,307 9,069

Note payable to shareholder at $711 per
month, including interest at 8.25% per
annum, collateralized by equipment and
accounts receivable 16,258 22,600
</TABLE>

<PAGE> 46

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
November 30, 1997 and 1996

================================================================================

4. LONG-TERM DEBT (continued)-

<TABLE>
<S> <C> <C>
Note payable to shareholder at $1,060 per
month, including interest at 8.25% per
annum, collateralized by equipment and
accounts receivable $ 24,243 $ 33,700

Note payable to shareholder at $588 per
month, including interest at 8.25% per
annum, collateralized by equipment and
accounts receivable 13,453 18,700
--------- ---------
639,241 684,069
Less current portion (251,433) (131,246)
--------- ---------

Total $ 387,808 $ 552,823
-======== =========
</TABLE>

The annual maturities of long-term debt for the next five years are as follows:

<TABLE>
<CAPTION>
Year ending
November 30, Amount
------------ ------
<S> <C>
1998 $251,433
1999 387,808
2000 --
2001 --
2002 --
--------

Total $639,241
========
</TABLE>

5. COMMON STOCK

In March of 1996, 475,000 shares of common stock were issued for $180,000. In
September of 1996, 25,000 common shares were transferred to an officer of the
Company in exchange for services rendered valued at $9,473. Also, in September
of 1996, inventory was acquired in exchange for 10,000 subscribed common shares
at a value of $5,000. (See Note 8.)

In November of 1996, the Company completed a private placement in which 600,000
units were subscribed for $300,000. Each unit consists of one common share and
one warrant. The warrants were immediately exercisable and tradeable after the
closing of the offering. Each warrant entitled the holder to purchase one
additional share at a price of $1.00 per share during a 6 month period after the
closing of the offering. The warrants were extended to expire on June 30, 1998.

<PAGE> 47

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 1997 AND 1996

================================================================================

6. LEASES

The Company currently leases office space on a month-to-month basis. The rental
payment is $2,678 per month and covers base rent plus a share of the operating
costs. The rent amount is a fixed rate through December 31, 1999. The Company
also rents a warehouse storage unit on a month-to-month basis for $168 per
month.

7. SARSEP SAVINGS PLAN

The Company maintains a SARSEP savings plan whereby, the employees may elect to
make contributions pursuant to a salary reduction agreement upon meeting age and
length of service requirements. The Company currently has no matching
contributions policy.

8. ACQUISITION

On May 4, 1996, the Company acquired ITEX Media Services, Inc. along with its
contracts and certain inventories for $775,000. The Company paid $150,000 down
and signed a promissory for $600,000 to be repaid over a 5-year period. (See
Note 4). The acquisition was accounted for using the purchase method of
accounting with the entire purchase price being allocated to music inventory.

9. INCOME TAXES

The provision for income taxes consisted of the following at November 30, 1997
and 1996:

<TABLE>
<CAPTION>
1997 1996
----- -----
<S> <C> <C>
Federal
Current $ -- $ --
Deferred 4,413 5,446
State -- 10
------ ------

Total income tax expense $4,413 $5,456
====== ======
</TABLE>

Deferred tax liabilities (assets) are comprised of the following at November 30,
1997 and 1996:

<TABLE>
<S> <C> <C>
Noncurrent deferred tax liabilities $ 10,327 $ 5,914
Current deferred tax assets (468) (468)
Valuation allowance -- --
-------- --------
Net deferred tax liability $ 9,859 $ 5,446
======== ========
</TABLE>

<PAGE> 48

NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
November 30, 1997 and 1996

================================================================================

9. INCOME TAXES (continued)-

A reconciliation of the consolidated income tax expense on income tax expense on
income per the U.S. Federal Statutory rate to the reported income tax follows:

<TABLE>
<S> <C> <C>
Taxes at U.S. Federal Statutory rate $4,413 $5,446
State income taxes -- 10
Other -- --
------ ------

$4,413 $5,456
====== ======
</TABLE>

10. BUSINESS AND CREDIT CONCENTRATIONS

The Company's customers are located throughout the United States. Seven
customers account for approximately $624,074 or 78% of sales for the year ended
November 30, 1997, and $211,714 or 93% of accounts receivable. Three customers
account for approximately $179,000 or 89% of sales for the period March 27 (date
of inception) through November 30, 1996, and $67,000 or 89% of accounts
receivable.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reflected in the consolidated balance sheets for cash,
accounts receivable, accounts payable and notes payable approximate the
respective values. The estimated fair values have been determined by the Company
using appropriate valuation methodologies and available market information.
Considerable judgment is necessarily required in interpreting market data to
develop the estimates of fair value, and, accordingly, the estimates are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange, a comparison of the carrying value of those financial
instruments, none of which are held for trading purposes, is as follows:

<TABLE>
<CAPTION>
Carrying Fair
Amount Value
-------- -------
<S> <C> <C>
Assets:
Cash $112,693 112,693
Accounts receivable 213,885 213,885

Liabilities:
Accounts payable and liabilities 188,288 188,288
Long-term debt 639,241 639,241
</TABLE>

Cash, accounts receivable and accounts payable. The carrying value of such items
approximates their fair value at December 31, 1997.

Long-term debt. Fair value of such debt is based on rates currently available to
the Company for debt of similar terms and remaining maturities. There are no
quoted prices for the debt or similar debt.

<PAGE> 49
ARTICLES OF INCORPORATION

NOSTALGIA BROADCASTING CORP.

FIRST. The name of the corporation is:

NOSTALGIA BROADCASTING CORP.

SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.

THIRD. The objects for which this Corporation is formed are: To engage
in any lawful activity, including, but not limited to the following:

(A) Shall have such rights, privileges and powers as may be conferred
upon corporations by any existing law.

(B) May at any time exercise such rights, privileges and powers, when not
inconsistent with the purposes and objects for which this corporation is
organized.

<PAGE> 50
(C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period is limited, perpetually, or until dissolved and its affairs wound up
according to law.

(D) Shall have power to sue and be sued in any court of law or equity.

(E) Shall have power to make contracts.

(F) Shall have power to hold, purchase and convey real and personal
estate and to mortgage or lease any such real and personal estate with its
franchises. The power to hold real and personal estate shall include the power
to take the same by devise or bequest in the State of Nevada, or in any other
state, territory or country.

(G) Shall have power to appoint such officers and agents as the affairs
of the corporation shall require, and to allow them suitable compensation.

(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the transfer
of its stock, the transaction of its business, and the calling and holding of
meetings of its stockholders.

(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.

(J) Shall have power to adopt and use a common seal or stamp, and alter
the same at pleasure. The use of a seal or stamp by the corporation on any
corporate documents is not necessary. The corporation may use a seal or stamp,
if it desires, but such use or nonuse shall not in any way affect the legality
of the document.

(K) Shall have power to borrow money and contract debts when necessary
for the

<PAGE> 51
transaction of its business, or for the exercise of its corporate rights,
privileges or franchises, or for any other lawful purpose of its incorporation;
to issue bonds, promissory notes, bills of exchange, debentures, and other
obligations and evidences of indebtedness, payable at a specified time or
times, or payable upon the happening of a specified event or events, whether
secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or
in payment for property purchased, or acquired, or for any other lawful object.

(L) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of, or any bonds, securities or evidences of the indebtedness created by,
any other corporation or corporations of the State of Nevada, or any other
state or government, and, while owners of such stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and privileges of
ownership, including the right to vote, if any.

(M) Shall have power to purchase, hold, sell and transfer shares of its
own capital stock, and use therefor its capital, capital surplus, surplus, or
other property or fund.

(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.

(O) Shall have power to do all and everything necessary and proper for
the accomplishments of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation and, in general, to carry on any
lawful business necessary or incidental to the attainment of the

3
<PAGE> 52
objects of the corporation, whether or not such business is similar in nature
to the objects set forth in the certificate or articles of incorporation of the
corporation, or any amendment thereof.

(P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.

(Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities, as may be allowed by
law.

FOURTH. That the total number of common stock authorized that may be
issued by the Corporation is TWENTY-FIVE THOUSAND (25,000) shares of stock
without nominal or par value and no other class of stock shall be authorized.
Said shares may be issued by the corporation from time to time for such
considerations as may be fixed by the Board of Directors.

FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the By-Laws of this
Corporation, providing that the number of directors shall not be reduced to
fewer than one (1).

The name and post office address of the first Board of Directors shall be
one (1) in number and listed as follows:

<TABLE>
<CAPTION>
NAME POST OFFICE ADDRESS
---- -------------------
<S> <C>
Patrick McMullen 2533 North Carson Street
Carson City, Nevada 89706
</TABLE>

SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the
debits of the corporation.

<PAGE> 53
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:

<TABLE>
<CAPTION>
NAME POST OFFICE ADDRESS
---- -------------------
<S> <C>
Patrick McMullen 2533 North Carson Street
Carson City, Nevada 89706
</TABLE>

EIGHTH. The resident agent for this corporation shall be:

LAUGHLIN ASSOCIATES, INC.

The address of said agent, and the registered or statutory address of this
corporation in the state of Nevada, shall be:

2533 North Carson Street
Carson City, Nevada 89706

NINTH. The corporation is to have perpetual existence.

TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:

Subject to the By-Laws, if any, adopted by the Stockholders, to make,
alter or amend the By-Laws of the Corporation.

To fix the amount to be reserved as working capital over and above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.

By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have

<PAGE> 54
and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation. Such committee, or committees, shall
have such name, or names, as may be stated in the By-Laws of the Corporation, or
as may be determined from time to time by resolution adopted by the Board of
Directors.

When and as authorized by the affirmative vote of the Stockholders
holding stock entitling them to exercise at least a majority of the voting power
given at a Stockholders meeting called for that purpose, or when authorized by
the written consent of the holders of at least a majority of the voting stock
issued and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of Directors deems expedient and for the best
interests of the Corporation.

ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.

TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing

<PAGE> 55
violation of law, or (ii) the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes. Any repeal or modification of this
Article by the stockholders of the Corporation shall be prospective only, and
shall not adversely affect any limitation on the personal liability of a
director or officer of the Corporation for acts or omissions prior to such
repeal or modification.

THIRTEENTH. This Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Articles of Incorporation, in
the manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon Stockholders herein are granted
subject to this reservation.

7
<PAGE> 56
I. THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 27th day of March, 1996.

/s/ PATRICK McMULLEN
--------------------------------
Patrick McMullen

STATE OF NEVADA )
) SS:
CARSON CITY )

On this 27th day of March, 1996, in Carson City, Nevada,
before me, the undersigned, a Notary Public in and for Carson City, State of
Nevada, personally appeared:

Patrick McMullen

Known to me to be the person whose name is subscribed to the foregoing
document and acknowledged to me that he executed the same.

/s/ DANIEL KRAMER [NOTARY SEAL]
-------------------------------
Notary Public

I, Laughlin Associates, Inc. hereby accept as Resident Agent for the previously

named Corporation.

3/27/96 /s/ PATRICK McMULLEN
- -------------------------------------------
Date Service Coordinator

8
<PAGE> 57

CERTIFICATE OF AMENDING ARTICLES OF INCORPORATION

NOSTALGIA BROADCASTING CORP.

The undersigned being the President and Secretary of Nostalgia
Broadcasting Corp., a Nevada corporation, hereby certifies that by majority
vote of the board of directors and majority vote of the stockholders at a
meeting on August 30, 1996, it was agreed that this Certificate Amending
Articles of Incorporation.

The undersigned further certifies that the original Articles of
Incorporation of Nostalgia Broadcasting Corp. was filed with the Secretary of
State of Nevada on the 27th day of March, 1996. The undersigned further
certified that Article Fourth shall be amended to read as follows:

Article Fourth:

"Fourth: That the total number of shares of common stock authorized that
may be issued by the Corporation is TWENTY MILLION (20,000,000) shares of stock
with a par value of $.001 per share, and no other class of stock shall be
authorized. Said shares may be issued by the corporation from time to time for
such consideration as may be fixed by the Board of Directors."

The undersigned hereby certifies that he has on this 5th day of September,
1996, executed this Certificate Amending the original Articles of Incorporation
heretofore filed with the Secretary of State of Nevada.

/s/ STEVEN F. STUCKER
-----------------------------------
President

/s/ STEVEN F. STUCKER
-----------------------------------
Secretary

STATE OF NEVADA )
) SS:
COUNTY OF CARSON )

On this 5th day of September, 1996, before me, the undersigned, a Notary
Public in and for the County of Carson, State of Nevada, personally appeared
Steven F. Stucker, known to me to be the person whose name is subscribed to
the foregoing Certificate Amending Articles of Incorporation and acknowledged
to me that he executed the same.

/s/ CHERYL HILL
-----------------------------------
Notary Public

[NOTARY SEAL]
<PAGE> 58
[ITEX CORPORATION LETTERHEAD]

May 23, 1996

Steven F. Strucker
President and Chairman of the Board
Nostalgia Broadcasting Corporation
2533 North Carson Street
Carson City, NV 89706

Dear Mr. Strucker:

This Letter of Intent outlines the material terms of a proposed
transaction in which ITEX Corporation ("Seller"), would sell to Nostalgia
Broadcasting Corporation ("NBC") the following:

a. All of the Seller's right, title and interest in certain cassettes,
records and masters of radio programs and broadcasts (the "Programs") which are
more particularly described on Exhibit A hereto, all of which make up the
contents of a radio program marketed by Seller known as The Golden Age of Radio
("GAR").

b. All of the Seller's right, title and interest in certain compact discs
and the music rights associated with those discs of original music selections
(the "Music") which are more particularly described on Exhibit B hereto, all of
which make up the contents of a music program marketed by Seller known as Image
Audio ("Image").

C. All of the issued and outstanding shares of ITEX Media Services, Inc.,
a Nevada corporation ("IMS") which are owned by Seller.

These acquisitions would be consummated pursuant to one or more definitive,
mutually acceptable acquisition agreements encompassing substantially the
following terms and conditions as well as other material terms deemed reasonably
necessary by either party.

1. Purchase of GAR. NBC would purchase all of Seller's rights to the GAR
Programs listed on Exhibit A for the sum of Four Hundred Thousand Dollars
($400,000.00) payable One Hundred Thousand Dollars ($100,000.00) at closing and
the balance through a note bearing interest at 6% per annum and payable in five
(5) equal annual installments of principal and accrued interest.

2. Purchase of Image. NBC would purchase all of Seller's rights to the
Image Music listed on Exhibit B for the sum of Three Hundred Fifty Thousand
Dollars ($350,000.00) payable Fifty Thousand Dollars ($50,000.00) at closing and
the balance through a note bearing interest at 6% per annum and payable in five
(5) equal annual installments of principal and accrued interest.
<PAGE> 59
Mr. Steven F. Strucker
May 23, 1996
Page 2

3. Acquisition of Issued and Outstanding Shares of IMS. NBC would
purchase all of the issued and outstanding shares of IMS which are owned by
Seller for the sum of Twenty-Five Thousand Dollars ($25,000.00) payable at
closing.

4. Status of Existing Due Bills. All due bills, media credits and
station credit inventories earned by Seller prior to the effective date would
remain the property of ITEX Corporation. NBC would be credited with all revenues
earned on and after the effective date. In addition, NBC would guarantee
fulfillment on any due bills which may be outstanding and which were sold by
Seller prior to the effective date, that is, there would be no liability on the
part of ITEX Corporation on any due bills that may be outstanding on or before
the effective date.

5. Right of First Refusal. Over several years Seller has developed a
market and techniques for selling media time in trade transactions, that is,
transactions not involving cash. The price of the assets proposed to be sold by
Seller does not reflect the value of the expertise and market development for
this kind of trade. Therefore, the acquisition agreement(s) or a separate
agreement would provide for NBC to grant Seller a right of first refusal on any
trade transactions proposed to be entered into by NBC for media time acquired
through GAR, Image or the assets of IMS. This right of first refusal would
permit Seller, upon its election to participate, to purchase the media time
earned by NBC from NBC at 90% of the value of the trade transaction. The
transaction would then proceed with Seller as the provider of the media credits
for the transaction.

6. The Closing. The Closing of the transaction contemplated hereby
would take place as soon as practicable, but in no event later than June 30,
1996, unless extended by mutual agreement of the parties. If possible the
effective date of the acquisition agreement(s) will be May 4, 1996.

7. Conditions. This Letter and agreement(s) are and would be subject
to the following conditions:

a. The reasonable satisfaction of NBC and Seller with the
other's operations and financial condition as of the Closing.
This includes all information and documentation necessary to
satisfy NBC as to Seller's bona fide rights to the Program
and the Music. Without limiting the generality of the
foregoing, Sellers shall have obtained and documented to ITEX
all consents, approvals and assignments necessary to assign
to ITEX the rights, including distribution agreements for all
of the Programs listed on Exhibit A and the Music listed on
Exhibit B.

b. Approval of the form and substance of the Agreement by the
Board of Directors of NBC and Seller.
<PAGE> 60
Mr. Steven F. Strucker
May 23, 1996
Page 3

c. The consummation of the transaction contemplated by the Agreement
does not violate any law, regulation, order, writ, injunction, or
decree of any court or governmental body or result in the creation or
imposition of any mortgage, lien, charge, or encumbrance of any
nature upon any of the properties of either party, pursuant to any
mortgage, resolution, agreement, or instrument to which either NBC or
the Seller is a party.

d. Such other conditions as are usual and reasonable in acquisition
agreement(s) of the type contemplated hereby.

e. As an additional inducement to NBC, Seller would provide a zero
fee ITEX account to NBC for a period of five (5) years after closing.

8. Disclosure and Confidentiality. Each party agrees to treat as
confidential all information furnished or to be furnished by or on behalf of the
other party in accordance with the provisions of this Letter, excluding (a)
information already known by the party receiving the information (the
"Recipient") or generally known to the public; (b) information that has entered
or does enter the public domain through no fault of the recipient; or (c)
information made available to third parties upon the written authorization of a
duly authorized officer, employee or representative of the party providing such
information (collectively the "Information"). The Information will be used
solely for the purpose of evaluating the transaction contemplated hereby, and
will be kept confidential by the recipient and its representatives, agents and
advisors, provided that (i) any of such Information may be disclosed to the
recipient's representatives, agents and advisors who need to know such
Information for the purpose of evaluating the transactions described above; (ii)
any disclosure of such Information may be made if the party supplying the
information consents in writing; and (iii) such Information may be disclosed if
so required by law and upon the advice of counsel. If the transaction
contemplated hereby is not consummated, the recipient will return to the
disclosing party all material containing or reflecting the Information and will
not retain any copies, extracts or other reproductions thereof. The provisions
of this paragraph shall survive the termination of this Letter of Intent. Except
as required by law, neither party shall make any public announcements of public
disclosures with respect to the matters contemplated hereby without the written
consent of the other party, which consent shall not be unreasonably withheld.

9. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.

10. Non-binding Effect. This Letter is not binding upon any party hereto
and, until the agreement(s) are signed, no party will have any legal obligation
to any other party.
<PAGE> 61
Mr. Steven F. Strucker
May 23, 1996
Page 4

This Letter outlines only certain of the major business terms of our
understanding. These terms, as well as customary and appropriate
representations, covenants, conditions, indemnities, and other provisions
remain to be negotiated with resolutions mutually satisfactory to all parties
in the agreement(s) to be prepared by ITEX. The parties agree to proceed
diligently with negotiations toward such agreement(s).

If you are in agreement with the terms of this Letter, please acknowledge
same by signing below and returning one copy of this Letter to me as promptly
as possible.

Yours truly,

ITEX Corporation

By /s/ MICHAEL NEAL
------------------------------------------------------
Michael Neal, Vice-President

AGREED AND ACCEPTED

Nostalgia Broadcasting Corporation

By /s/ STEVEN S. STUCKER
------------------------------------------------------
Steven F. Stucker, President and Chairman of the Board Date 5/24/96
---------
<PAGE> 62

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED the undersigned does hereby sell, assign and transfer,
to ITEX Corporation, a Nevada corporation whose address is 10300 S.W. Greenburg
Road, Suite 370, P.O. Box 2309, Portland, OR 97208-2309, two thousand five
hundred (2,500) shares of the Common Stock of ITEX Media Services, Inc., a
Nevada corporation, represented by Certificate No. _____ standing in the name of
the undersigned, who does hereby irrevocable constitute and appoint the said
ITEX Corporation, by its designated representative, as Attorney to transfer the
said stock on the books of the said ITEX Media Services, Inc., with full power
of substitution in the premises.

NOTE: The signature(s) to this assignment must correspond with the name(s) as
written upon the face of the certificate(s), in every particular, without
alteration or enlargement, or any change whatever.

/s/ STEVEN F. STUCKER
-------------------------------------------
NOSTALGIA BROADCASTING CORPORATION
By Steven F. Stucker, its President

SIGNATURE GUARANTEE STAMP:

-------------------------------------------
Name of Guarantor

-------------------------------------------
Authorized Signature

Date:
-----------------------

<PAGE> 63
[ITEX CORPORATION LETTERHEAD]

July 18, 1996

VIA FEDERAL EXPRESS

Steven F. Stucker, President
Nostalgia Broadcasting Corporation
400 West King Street, Suite 301
Carson City, NV 89703

Dear Mr. Stucker:

Michael Baer, President of ITEX Corporation, has directed me to send you
the enclosed duplicate originals of the Acquisition Agreement and Stock
Acquisition Agreement notwithstanding that it will be some short time before we
receive the documents requested in my letter of July 8. Specifically, we are
still waiting for basic documents which indicate the financial position of NBC
(such as an unaudited balance sheet) and the ability of NBC to service the debt
represented by the $600,000 promissory note to make up part of the purchase
price for the assets being bought.

In addition to the Agreements, I enclose a copy of a promissory note for
the $600,000 balance owing and a security agreement covering the collateral
pledged to secure the note. Please execute and return BOTH originals of each
Agreement and the Secured Promissory Note. I will then return a signed original
of the Agreements for your files.

Thank you for your attention to this matter.

Sincerely,

/s/ Donovan C. Snyder
- ----------------------------------
DONOVAN C. SNYDER
Corporate Counsel

enclosures

cc: Michael Baer

<PAGE> 64
SECURED PROMISSORY NOTE

$600,000.00 July 19, 1996

FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to
ITEX Corporation, a Nevada corporation, or order, at 10300 S.W. Greenburg Road,
Suite 370, P.O. Box 2309, Portland, OR 97208-2309, the principal sum of Six
Hundred Thousand Dollars ($600,000.00), together with interest from May 5, 1996
at the rate of six percent (6%), per annum, payable in five (5) equal annual
payments, the first such payment due May 4, 1997 quarterly and each subsequent
payment due of the 4th day of May of each month thereafter until the entire
balance of principal and unpaid interest is paid in full.

Maker may prepay this Promissory Note at any time in full or in part
without any penalty.

Maker hereby agrees that in the event it fails to pay, when due, any
amount payable hereunder and such default continues for a period of 30 days
("Default"), all unpaid amounts hereunder may, at holder's discretion, be
declared due and payable, and interest shall accrue on all such amounts at the
highest legal rate per annum.

Should this Note be placed in the hands of an attorney for collection,
Maker agrees to pay, in addition to the unpaid balance of principal and all
accrued interest, all costs of collection including a reasonable attorney's fee.

To secure payment of this Note, Maker hereby grants to ITEX Corporation
a security interest in and to those assets described in a Security Agreement of
even date herewith and according to the terms and conditions of such Security
Agreement.

This Note may be assigned by the holder hereof at any time, and the
assignee hereof shall have all right, title and interest herein.

Maker hereby waives presentment, demand, notice of dishonor, protest and,
to the fullest extent permitted by applicable law, any and all notices,
advertisements, hearings or process of law in connection with the exercise by
the holder hereof of its rights and remedies upon Default. This Note shall be
governed by and construed in accordance with the laws of the State of Utah
without giving effect to the choice of law provisions thereof.

IN WITNESS WHEREOF, the Maker has executed this Promissory Note on the
date first above written.

NOSTALGIA BROADCASTING CORPORATION
a Nevada corporation

By /s/ STEVEN F. STUCKER
-------------------------------------
Steven F. Stucker, President
Attest:

- ----------------------------
Secretary
<PAGE> 65

INFORMATION STATEMENT

NOSTALGIA BROADCASTING CORP.
(A Nevada Corp.)
600,000 units

Offering price - $.50 PER UNIT

EACH UNIT CONSISTS OF 1 SHARE OF COMMON STOCK, PAR VALUE ($.001) OF NOSTALGIA
BROADCASTING CORP. (the "Company") AND ONE CLASS A WARRANT. ("Warrant") EACH
CLASS A WARRANT ENTITLES THE HOLDER TO PURCHASE AN ADDITIONAL SHARE OF COMMON
STOCK AT A PRICE OF $1.00 PER SHARE DURING A 6 MONTH PERIOD AFTER THE CLOSE OF
THE OFFERING.

THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE DILUTION, AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS" FOR SPECIAL
FACTORS CONCERNING THE COMPANY.

THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FORGOING AUTHORITIES PASSED UPON THE ADEQUACY OF
THE DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------

PAYMENT FOR THE UNITS SHOULD BE MADE BY CHECK OR MONEY ORDER PAYABLE TO
"Nostalgia Broadcasting, Corp".

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Underwriter's
Price to Commissions Proceeds to the
Investors and Discounts Company(2)
--------- ------------- ----------
<S> <C> <C> <C>
Per unit................. $ 0.50 $-O- $ 0.50
Maximum (600,000 units) $300,000.00 $-O- $ 300,000.00
</TABLE>

(see notes on following page)

Nostalgia Broadcasting Corp.
10300 S.W. Greenburg Road, Suite 390
Portland, Oregon 97223
(503)293-2601

The date of this Information Statement is September 10, 1996

<PAGE> 66

(FOOTNOTES FROM COVER PAGE)

(1) The Units are being offered on behalf of the Company by the Management
of the company (who will not be paid for such services), on a "best
efforts only" basis with respect to all 600,000 units. There can be no
assurance that any or all of the Units being offered will be sold.
Because this is a "best efforts only" offering, with no minimum required
to be sold, the proceeds may be released to the Company upon receipt
thereof, while the offering continues for the remaining unsold Units.
The offering expires November 10, 1996. Management can elect to extend
the offering to January 10, 1997.

(2) The proceeds to the Company set forth in the table to the cover page of
the Offering Document have been computed before deduction of expenses
that will be incurred in connection with this offering including filing,
printing, legal, accounting, transfer agent and other fees. It is
estimated that the expenses to be incurred by the company in connection
with this offering will be approximately $7,500. It is estimated that
the net proceeds to the Company after deducting all expenses in
connection with the offering will be approximately $292,500. (This
figure does not include any proceeds which would be realized upon the
exercise of any warrants.)

Prior to this offering there has been no market for the Units, the Common Stock
(the shares") or the Warrants of Nostalgia Broadcasting Corp. (the "Company").
There can be no assurance that any trading market in these securities will
develop hereafter, or that any trading if developed, will continue. The Company
is not subject to reporting requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange" Act), meaning that it is not
required to file annual or quarterly reports with the Securities and Exchange
Commission. The Company is conducting this offering pursuant to Rule 504 of
Regulation D promulgated under the Securities Act of 1933 (the "Act), which
exempts from registration with the Securities and Exchange Commission offerings
of up to $1,000,000 which comply with the requirements of the Rule.

(ii)

<PAGE> 67

BLUE SKY NOTICE

IT IS ANTICIPATED THAT THE UNITS DESCRIBED HEREIN WILL BE OFFERED FOR SALE ONLY
IN THE STATE OF NEW YORK. A DESCRIPTION OF THE RELEVANT CONDITIONS AND
RESTRICTIONS REQUIRED BY THE STATE OF NEW YORK IS SET FORTH BELOW.

NOTICE TO NEW YORK RESIDENTS.

THIS DOCUMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL

THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS INFORMATION
STATEMENT SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE THEREOF.

THE UNITS ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE, ACCEPTANCE OF AN
OFFER TO PURCHASE, WITHDRAWAL OR CANCELLATION OF ANY OFFERING WITHOUT NOTICE.
THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR PART, FOR THE
PURCHASE OF ANY OF THE UNITS OFFERED HEREBY.

(iii)

<PAGE> 68

TABLE OF CONTENTS

Page

SUMMARY...............................................................1

THE RADIO SYNDICATION INDUSTRY........................................1

MUSIC PRODUCTION LIBRARIES............................................1

BUSINESS OF THE COMPANY...............................................2

HIGH RISK FACTORS.....................................................4

USE OF PROCEEDS.......................................................6

LEGAL PROCEEDINGS.....................................................6

MANAGEMENT............................................................6

PRINCIPAL SHAREHOLDERS................................................8

CERTAIN TRANSACTIONS..................................................8

DESCRIPTION OF SECURITIES.............................................9

SUBSCRIPTION OFFER....................................................9

(iv)

<PAGE> 69

SUMMARY

The following is a summary of certain information contained in this Information
Statement and is qualified in its entirety by the more detailed information
appearing elsewhere in the Information Statement.

THE COMPANY

Nostalgia Broadcasting Corp. (the "company" or "NBC") was incorporated in the
State of Nevada on March 4, 1996. NBC is involved in the acquisition, creation
and syndication of national radio programming and music production and
distribution.

DESCRIPTION OF THE RADIO SYNDICATION INDUSTRY

Radio syndication is one of America's high growth industries. With the
deregulation Act of 1996, radio stations and radio syndicators are enjoying a
business boom. Recent public offerings by radio syndicators have done well. With
almost 10,000 radio stations licensed in America alone, there is a growing need
for radio programming. Although there are approximately 100 various radio
syndicators, perhaps only six produce and distribute more than five shows.

There are five public companies that specialize in radio syndication. These
include: Premiere Radio Network of Los Angeles, CA; Westwood One of New York;
Children's Radio AAHS of Los Angeles, CA; Metro Networks of Houston, Texas; and
SFX of Dallas, Texas.

The company's approach to radio syndication is to produce and/or acquire
specialty audio shows and enroll radio station affiliates to broadcast these
programs. In a typical relationship for a one hour show, a radio station agrees
to provide Nostalgia with one 60 second advertising spot each time a show is
broadcast. This spot is not contained within the program, and it is accruable
for future use. This advertising spot credit is for broadcast during requested
daypart periods, and subject to availability.

In addition to the accruable credit earned as shows are broadcast, the Company
typically retains one half of the advertising spots within each program aired.
For example, at the time of this writing, "The Golden Age of Radio" is broadcast
for one hour a day on 188 stations, each of which represent a different
geographic market. The actual show is 55 minutes in length allowing for a NEWS
broadcast at the top of the hour. Contained within this 55 minute show are ten
60 second, (or twenty 30 second) advertising slots. Half of these ad slots may
be sold by the local station to local advertisers; the other half are owned by
Nostalgia and are available for sale to national advertisers. Nostalgia may also
sell the additional 60 second accrued station spot it has acquired outside the
program for each one hour show.

MUSIC PRODUCTION LIBRARIES

Radio and television stations have, over the years, purchased music to use for
their clients and for station introductions and themes. Many of the currently
available music libraries are out-of-date and not produced according to today's
standards. There is a substantial market for music libraries that have been
produced using high technology. There are a number of production libraries that
allow a station to use music contained within their library on a royalty basis.

-1-

<PAGE> 70

In the mid 1980's a joint venture led by Corky Coreson formed a business to
produce a music library that would consist of 30 and 60 second music beds
designed for commercial ad production and as intros for television and radio
programming. A talented group of Portland area musicians was assembled to
produce the musical compositions. The initial library consisted of three compact
discs with approximately 244 separate music beds. In 1992 Jim Haydon, an expert
in the field of commercial music production, completed an additional three
hundred tracks to bring the library up to six volumes. A seventh CD was produced
in 1995 which includes longer themes and various sound effects. Music tracks are
varied and represent many different styles ranging from classical to rock,
country, jazz, etc. The music has been created and mastered digitally to make
the production library a state-of-the-art collection. Image Audio is a
significant asset to any television or radio production team.

The company acquired the Image Audio Production Library from ITEX Corporation as
part of the purchase of ITEX Media Services, Inc. in May, 1996. The sale of the
Image Audio Production Library to radio stations is done on a 100% barter basis.
Television and cable marketing has not yet begun. In payment for unlimited use
of the music contained within the Image Audio Library, radio stations provide
accruable advertising credit to NBC. Station credit is inventoried by station
call letters for future use and this time may be sold by Nostalgia in either
cash or barter sales; to national advertising clients. Local marketing of
station credit is also permitted, but may not be sold to existing clients of the
station or marketed in such a way as to undermine their normally advertised
station rates.

BUSINESS OF THE COMPANY

NBC started business in March, 1996 with initial shareholder contributions of
$180,000. Effective May 4,1996 the company acquired ITEX Media Services, Inc.
along with its contracts and certain inventories, from ITEX Corporation for
$775,000. The Company paid $175,000 down; ITEX Corp. agreed to carry a note for
the balance with payment terms spread over five years. Included in the sale were
three nationally syndicated radio shows as follows: 640 one hour programs
entitled "The Golden Age of Radio," hosted by Victor Ives, 93 two minute
programs entitled "Flashback -- Moments in Time," also hosted by Mr. Ives, and
62 two minute programs entitled "Sports Flashback," hosted by Joe DeNiro. In
addition, a music distribution contract for Michael Allen Harrison, and purchase
of The Image Audio Production Library were a part of the sales agreement.

CURRENT DEVELOPMENTS

The company is positioning itself to become a dominant force in radio
syndication. Currently under development is a wide variety of programming to fit
various radio station formats. Projects now under way include:

1 - An additional 124 Flashback programs have been written and are now ready for
recording.

2 - An agreement to purchase a radio show series entitled "Big Band Classics",
hosted by Warren Durham is now in place. Multimedia Access Company, the producer
of this new show has completed the first fifty one hour productions and there
are 225 additional one hour shows under development.

-2-
<PAGE> 71

3 - The Image Audio Music Production Library is being expanded by seven
additional CD's of commercial music and sound effects. Target date for
completion: December 30. 1996.

4 - A new radio Flashback series entitled "Entertainment Flashback" is under
construction and will be hosted by Steve Fisher.

5 - Tentative agreements are now in place for a new one hour nationally
syndicated radio show produced with the endorsement and permission of the USO to
be known as "The USO Hour." Committed advertisers include JC Penney's, British
Airways.

6 - Additional radio syndication pilots under consideration are:

"Taking It To Heart" hosted by Dr. Mark Tager

"Dollars & Senses" by Dave Simons

"Great American Heros" by Robert Pamplin Jr. and Gary Eisler

"Cue tips" (a billiards program for Brunswick, AMF, and the Billiards
Congress)

"Sports Talk with Joe Namath"

"Tee Time Golf" to be sponsored by the PGA of America

"Dave on Politics" hosted by David Neal

"The Microsoft Minute" hosted by Michael Gruen

7 - Construction of a new recording studio in Portland, Oregon is targeted for
completion by mid 1997 predicated on the successful completion of this offering.

Proposals are now working through the management of Cadillac, Sears, Norwegian
Cruise Lines, Microsoft, and the PGA. Proposals are pending with the American
Heart Association and several other nationally recognized institutions. Current
clients are JC Penney's, British Airways, Princess Cruise Lines, Johnson &
Johnson, and Pepcid AC. The company also has pending barter business.

NBC's new product development is market driven. Niche radio programming
important to specific national advertisers is target one. Although seeking
nationally recognized cash advertisers is the company's priority, the
development of accrued prepaid station credit to fund future barter marketing
projects is also a major focus of the company.

Negotiations are in progress for the Company to acquire additional product for
use in radio syndication. For example, a library consisting of 3,884 - 7 1/2"
IPS Full Track audio reel tapes containing old time radio shows is currently
available for purchase. Assuming this contemplated transaction takes place,
and/or any other plan of similar construction, the purchase price will be based
on a third party independent appraisal of the materials

-3-

<PAGE> 72

and new shares will be issued predicated on some formula related to the "then"
trading price of the company's common stock. New shares issued in this manner
would be restricted as to resale in accordance with the Securities Act of 1933
and as modified in 1934, Regulation D, Rule 144. However, any new issue of
shares would have the net effect of diluting the percentage of existing
shareholders and this plan on the part of management should be carefully
considered as a part of any investment decision.

HIGH RISK FACTORS

The Securities offered hereby involve a high degree of risk. Prospective
investors, prior to making an investment decision, should carefully consider,
along with matters referred to herein, the following risk factors:

1. ABSENCE OF SUBSTANTIAL OPERATING HISTORY. The operation of NBC are subject to
all the risks inherent in the establishment of a new business enterprise,
including the absence of a substantial operating history. As of August 30, 1996
NBC had working capital of $35,000. While NBC has generated revenues since
inception, the likelihood of success of NBC must be considered in light of the
problems, expenses, complications, and delays frequently encountered in
connection with the development of a new business and the competitive
environment in which NBC will operate.

2. RISKS IN THE RADIO SYNDICATION INDUSTRY. The success of any radio syndication
enterprise is largely dependent on public taste, which is both unpredictable and
susceptible to change without warning or explanation. Accordingly, it is
impossible for anyone to precisely and accurately predict the success of any
entertainment project.

3. FUTURE CLAIMS OF OWNERSHIP OF MUSIC. The material used in the company's
production of vintage radio shows is generally from the 30's, 40's, and 50's.
Various artists, producers, and writers may assert claims of ownership regarding
these materials. And, although the company has completed extensive research
related to the materials it uses in its new production of old time radio shows,
it is likely that one or more artists, producers, or writers may assert
ownership rights.

4. OBJECTIONABLE CONTENT OF PROGRAMMING. The company is careful to screen old
time radio materials that may be overly objectionable to current ethnic,
religious, or political groups. However, there is risk that someone might find
various themes objectionable and may initiate litigation associated with such
matters.

5. CONTINUING USE OF MUSIC CONTAINED IN PRODUCTION LIBRARY. The music contained
in the company's Image Audio Production Library was written and produced by a
number of musicians who have granted rights to the company for the use of their
music. There is no guarantee that these musicians will continue to grant rights
for the use of their music.

6. LOSS OF ACCRUED ADVERTISING TIME. NBC typically retains one half of the
advertising spots within each program aired on each radio station. Radio
stations may change ownership, making these agreements with previous management
obsolete.

7. DEPENDENCE UPON OFFERING; NO ALLOCATION OF USE OF WARRANTS IF EXERCISED. The
purpose of this offering is to permit the construction of a new recording studio
in Portland, Oregon. If any warrants are exercised the management has no
specific plan for the application of a majority of the proceeds from the
warrants. Accordingly, investors will rely on the judgment of management as to
the use of these funds.

-4-
<PAGE> 73

8. COMPETITION. NBC will attempt, without assurance, to find a niche in the
radio syndication industry. However, there are established entities in this
industry which have greater financial resources and experience than NBC.
Accordingly, NBC will encounter intense competition in its efforts to expand its
radio syndication business.

9. INEXPERIENCE OF MANAGEMENT. The management of NBC have limited experience
managing a company in the radio syndication business.

10. DILUTION. An investor who acquires Units pursuant to this offering will
incur immediate and substantial dilution.

11. LACK OF MARKET FOR SECURITIES. There is no established public trading market
for NBC's securities, and there is no assurance that a public market for the
Securities will ever develop or, if it develops, that it will continue.
Purchasers of the units in this offering, therefore, may incur substantial
difficulty in selling their Securities should they desire to do so.

12. ARBITRARY OFFERING PRICE AND EXERCISE PRICE. The offering price of the Units
and the per share exercise price of the warrants were established arbitrarily by
NBC. There is no direct relationship between the offering price and the net
tangible book value, shareholder's equity or net worth of the Company or any
other recognized criterion of value.

13. STOCK SALE RULE. Possible inability to sell the securities in the Secondary
Market. The securities offered hereby are not exempt from Rule 15(g)-9 under the
Securities Exchange Act of 1934 (the "34 Act"). Rule 15(g)-9 imposes additional
sales practice requirements on the brokers who sell non-exempt securities to
persons other than established customers. For transactions covered by the rule,
broker-dealers must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, this may affect the ability of purchasers in this offering
to sell their securities in the secondary market.

14. PENNY STOCK REFORM ACT; POSSIBLE INABILITY TO SELL IN THE SECONDARY MARKET.
In October 1990, Congress enacted the "Penny Stock Reform Act of 1990" (the "90
Act") to counter fraudulent practices common in penny stock transactions. Rule
3a51-1 of the Exchange Act defines a "penny stock" as an equity that is not,
among other things: a) a reported security; b) a security registered or approved
for registration and traded on a national securities exchange that meets certain
guidelines, where the trade is effected through the facilities of that national
exchange; c) a security listed on NASDAQ; d) a security of an issuer that meets
certain minimum financial requirements ("net tangible assets" in excess of
$2,000,000 or $5,000,000, respectively, depending upon whether the issuer has
been continuously operating for more or less than three years, or "average
revenue" of at least $6,000,000 for the last year); or e) a security with a
price of at least $5.00 per share in the transaction in question or that has a
bid quotation (as defined in the Rule) of at least $5.00 per Share. The Units
offered herein do fall within the definition of "Penny Stock" under Rule 3a5l-l.
Pursuant to the '90 Act, brokers and/or dealers, prior to effecting a
transaction in a penny stock, will be required to provide investors with written
disclosure documents containing information concerning various aspects involved
in the market for penny stocks as well as specific information about the penny
stock and the transaction involving the purchase and sale of that stock (e.g.,
price quotes and broker-dealer and associated person compensation). Subsequent

-5-
<PAGE> 74

to the transaction, the broker will be required to deliver monthly or quarterly
statements containing specific information about the penny stock. These added
disclosure requirements will most likely negatively affect the ability of the
purchasers herein to sell their securities in the secondary market.

USE OF PROCEEDS

If the entire offering is sold the net proceeds to be received by the Company,
after deducting the expenses of the offering, would total $292,500 if the
maximum is sold. Such proceeds are anticipated to be used for the construction
of a production studio in Portland, Oregon, to provide additional capital for
the development of new radio syndication products, and for the general working
capital of the company.

LEGAL PROCEEDINGS

NBC is not a party to any material legal proceedings. Management is aware of an
exchange of letters between ITEX Media and a Chicago-based firm regarding the
specific rights to one or more radio shows that could result in legal conflict.
Currently there is no action threatened or pending.

MANAGEMENT

STEVEN STUCKER. Mr. Stucker is President and the sole Director of Nostalgia
Broadcasting Corp. He earned his B.S. in accounting from UNLV, his law degree
from SMU, and has been an attorney in Nevada for 20 years. His experience
includes serving as Deputy Clerk of the 8th Judicial District Court, Las Vegas;
Chief Deputy City Attorney for N. Las Vegas; Deputy DA of Kootenai County,
Idaho; Deputy City Attorney in Sparks, Nevada; and Nevada Deputy Attorney
General. These experiences give Mr. Stucker a special insight into the world of
legal entanglements and potential pitfalls. Mr. Stucker also has extensive
corporate and accounting background.

JOHN HOLMES. Mr. Holmes is General Manager and Secretary for NBC and coordinates
strategy, planning, programming, promotions, and station clearance. Before
joining NBC, Mr. Holmes worked for ITEX Media Services in radio syndications.
Previously he worked for KMOV-CBS TV as a Sports Producer, and Radio
Personalities, Inc., where he was Executive Producer for the successful short
form radio programs, "Offsides with Dan Dierdorf" and "Talkin Roundball with
Dick Vitale." Mr. Holmes attended St. Louis University where he received a BS in
Marketing and played on the golf team.

DR. DEAN GAVONI Dr. Gavoni is in charge of affiliate relations for NBC and is
responsible for servicing the needs of station affiliates. He previously worked
for ITEX Media Services Inc. dealing with station accounts. Prior to that, Dr.
Gavoni worked for the State of Illinois Senate and House of Representatives as a
policy analyst and Media Relations Specialist. He was also employed in marketing
and sales for Anheuser-Busch. Dr. Gavoni earned his Doctorate in Public
Administration - Leadership and Management Theories from the University of
Illinois - Chicago.

JIM HAYDON. Mr. Haydon has provided approximately half of the music contained on
the Image Audio Production Library and is the Creative Director for NBC. Mr.
Haydon is well known for his work in national advertising campaigns with clients
such as United Airlines, Sunkist, State Farm, McDonald's, Michelob, Keebler,
Lowenbrau, and many other widely known advertisers. Mr. Haydon received his
Master's degree in History from the University of Chicago.

-6-
<PAGE> 75

BOARD OF ADVISORS

DR. GENE V. KELLENBERGER. Dr. Kellenberger earned his Ph.D. from Iowa State
University, his J.D. from the State University of Iowa. He was the President of
Nostalgia Broadcasting Corporation based in Iowa from 1974 through 1990. The
primary business of the company was vintage radio syndication. In 1990 he became
President of Radio Recorders, Inc., a world-wide radio program syndicator. Dr.
Kellenberger is currently a special consultant for broadcasting and syndication
of vintage radio and a professor at Iowa State University. From 1960 to 1985 he
practiced law.

J. WILLIAM SCHROEDER. Mr. Schroeder earned his degree from Washington State
University in Business before embarking on a career with The White House
communication team under Presidents Johnson and Nixon. For the past five years
he has held the position of President for both Tele Management Services and
Mediabanc Inc. which markets services for companies that are involved with
national media campaigns.

BERYL J. WOLK. Mr. Wolk is a graduate of the University of Pennsylvania Wharton
School of Business and a retired Commander of the Naval Reserve. Mr. Wolk has
spent his entire civilian life working in a family-founded business which is
presently comprised of 21 autonomous companies employing 1,250 per people in
four states. He currently provides clients, including 175 major national
corporations, with complete marketing programs. Mr. Wolk has also been a leader
in the cable industry, being a co-founder and co-owner of cable television's
largest circulation magazine with 6 million copies distributed monthly. He has
extensive background in radio, television, magazine, and newspaper advertising.

TALENT

VICTOR IVES. Mr. Ives is a 34 year veteran of the radio, television, and
advertising profession. He has worked in upper level management for two Fortune
500 Companies and consulted for a third. Mr. Ives has managed radio stations
from Detroit to San Francisco, and was a fourteen year employee and Vice
President of Gene Autry's Golden West Broadcasters. Mr. Ives is currently the
General Manager of Warner Brothers TV-32 in Portland, Oregon and host of NBC's
nationally syndicated radio program, "The Golden Acre of Radio," a one hour
program broadcast on 188 stations daily. In addition, Mr. Ives is host to NBC's
national short form radio show "Flashback.... Moments in Time," which is carried
by another 100+ stations daily.

JOE DENIRO. Mr. DeNiro has a vast background in radio and television and is
currently the afternoon drive air personality on WKBQ-FM in St. Louis, MO. Joe
is also the morning traffic director of KMOV-TV, the CBS affiliate in St. Louis.
Joe provides his vast insight on sports as he hosts "Sports Flashback.....
Moments in Time," a nationally syndicated short form radio program heard on over
100 station everyday.

STEVE FISHER. Recognized as one of the best young disc jockeys in America, Steve
graduated from Southern Illinois University Carbondale with a degree in Mass
Communications and made stops in St. Louis and San Antonio on the radio circuit
before landing back in his hometown of Chicago in 1993. Steve is also a member
of Second City's Improvisation Training Center, the same comedy school where
John Belushi, Dan Ackroyd, Chris Farley, and Bill Murray got their start. Steve
is developing a new short form radio show for Nostalaia known as "Entertainment
Flashback.......Moments in Time." This program is planned for national
distribution beginning January

-7-

<PAGE> 76

1997.

WARREN DURHAM. A native of Spokane, Washington, Warren started his radio career
in 1939 as a high school student announcer at three radio stations. Since that
time Warren has worked with CBS, ABC, NBC and other networks doing Big Band
remotes at the Palladium, Avalon, Biltmore, and many other national ballrooms.
Warren has recorded the first 50 one hour shows for Nostalgia Broadcasting
Corp.'s new program entitled "Big Band Classics" in preparation for national
distribution. National sponsors are already committed for this show, however,
prior to its release the company requires a minimum of 150 one hour shows to be
completed. Target release date is January, 1997.

DAVE SIMONS. Mr. Simons has wide ranging experience in media and finance in
addition to his work as a business consultant He received his BA in
Communications from the highly acclaimed journalism school at The University of
Missouri and quickly landed a job as Sports Anchor for CBS-TV in St. Louis, MO.
Mr. Simons was voted the "Most Popular" Sports Anchor in the St. Louis market
during 1992. He has published a book and now works as a financial consultant for
The Prudential Company and hosts a popular talk radio program on investment
opportunities which is carried by KSD-AM. NBC is now seeking one or more
national sponsors before launching Dave's investment talk show across the
country.

PRINCIPAL SHAREHOLDERS

The following table sets for the information, as to the date of this Prospectus,
with respect to the beneficial ownership of the outstanding NBC common stock by
each person known by NBC to be the beneficial owner of five percent or more of
the outstanding Common stock.

<TABLE>
<CAPTION>
Shares owned Percent of Class
Name and address of beneficially and Before after offering
beneficial owner of record Offering Half Maximum
- ---------------- --------- -------- ---- -------
<S> <C> <C> <C> <C>
Dennis McKay
256 Stevens Road 475,000 95% 59.4% 43.2%
Rural Route 7
Victoria, B.C. Canada
V8X 3X3

John Holmes 25,000 5% 3.1% 2.2%
17548 NW Springville Road
Portland, OR 97229
</TABLE>

CERTAIN TRANSACTIONS

The company was incorporated in the State of Nevada on March 4, 1996. Dennis
McKay contributed $180,000 in cash to the company. For consideration, the
company has issued 475,000 shares of stock to Mr. McKay. As of September 6, 1996
the company is issuing 25,000 shares of stock to John Holmes as an inducement to
join the company as general manager.

-8-

<PAGE> 77

DESCRIPTION OF SECURITIES

UNITS

Each unit consists of one Common Share and 1 Warrant. The terms of the Warrants
are described below under the caption "Warrants."

COMMON STOCK

The company is authorized to issue 20 million shares of Common Stock, $.001 par
value per share, of which 500,000 shares are issued and outstanding, excluding
Units to be issued in this offering. Each outstanding share of Common Stock is
entitled to one vote, either in person or by proxy, on all matters that may be
voted by the owners thereof at meetings of the shareholders.

The holders of Common Stock (i) have equal ratable rights to dividends from
funds legally available therefore, when, and if declared by the Board of
Directors of the Company; (ii) are entitled to share ratably in all of the
assets of the Company available For Distribution to holders of Common Stock upon
liquidation, dissolution or winding up of the affairs of the company; (iii) do
not have preemptive subscription or conversion rights, or redemption or sinking
fund provisions applicable thereto; and (iv) are entitled to one non-cumulative
vote per share on all matters on which stockholders may vote at all meetings of
stockholders.

All shares of Common stock which are the subject of this offering, when issued,
will be fully paid for and non-assessable, with no personal liability attaching
to the ownership thereof. The holders of shares of Common Stock of the company
do not have cumulative voting rights, which means that the holders of more than
50% of such outstanding shares, voting for the election of directors, can elect
all directors of the Company if they so choose and, in such event, the holders
of the remaining shares will not be able to elect any of the Company's
directors.

WARRANTS

The warrants are immediately exercisable and tradeable after the closing of the
offering. Each warrant entitles the holder to purchase one additional share at a
price of $1.00 per share during a 6 month period after the closing of the
offering. The warrants may be extended upon appropriate notice given to
shareholders by the management.

DIVIDEND POLICY

The payment by the Company of dividends, if any, in the future, rests within the
discretion of the Board of Directors. NBC has not paid any cash dividends and
management does not anticipate that cash dividends will be declared or paid on
its Common Stock in the foreseeable future.

SUBSCRIPTION OFFER

The Company hereby offers the right to subscribe at $.50 per Unit (each unit
consisting of 1 common share and 1 purchase warrant). The Company proposes to
offer the units directly. The offering will be conducted on behalf of the
Company under the direction

-9-

<PAGE> 78

of its officers and directors. No compensation is to be paid to the officers or
directors or any "associated person" of the Company (as that term is defined in
the Act) in connection with the offer and sale of the Units.

The Company's officers, directors and stockholders and their associates may
provide the company with the names of persons whom they believe may be
interested in purchasing the units. The Company may sell the Units to such
persons if they reside in a state in which the Company is permitted to sell the
Units.

METHOD OF SUBSCRIBING

Persons may subscribe by filling in and signing the subscription agreement and
delivering it, prior to the Expiration Date (as defined below), to the Company.
The subscription price of $.50 per Unit must be paid in cash or by check, bank
draft or postal express money order payable in United States dollars to the
order of Nostalgia Broadcasting Corp. Certificates for the shares and warrants
subscribed for will be issued as soon as practicable after subscriptions have
been accepted. Subscription may not be withdrawn once made.

EXPIRATION DATE

The subscription offer will expire at 5:00 P.M. New York time on November 10,
1996 (the "Expiration Date") unless extended by management to January 10, 1997.

RIGHT TO REJECT

The company reserves the right to reject any subscription in its sole discretion
for any reason whatsoever and to withdraw this offering at any time prior to
acceptance by the Company of the subscription received.

TRANSFER AGENT

The Transfer Agent for the units, the Common Stock and the Warrants of the
Company is Atlas Stock Transfer Company.

-10-

<PAGE> 79
FORM D --------------------------
UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION --------------------------
Washington, D.C. 20549 OMB Number: 3235-0076
Expires: December 31, 1996
FORM D Estimated average burden
hours per response...16.00
NOTICE OF SALE OF SECURITIES --------------------------
PURSUANT TO REGULATION D, --------------------------
SECTION 4(6), AND/OR SEC USE ONLY
UNIFORM LIMITED OFFERING EXEMPTION --------------------------
Prefix Serial

--------------------------
DATE RECEIVED

--------------------------
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Name of Offering ([ ] check if this is an amendment and name has changed, and indicate change.)
Nostalgia Broadcasting Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
Filing Under (Check box(es) that apply): [X] Rule 504 [ ] Rule 505 [ ] Rule 506 [ ] Section 4(6) [ ] ULOE
Type of Filing: [X] New Filing [ ] Amendment
- -----------------------------------------------------------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Enter the information requested about the issuer
- -----------------------------------------------------------------------------------------------------------------------------------
Name of Issuer ([ ] check if this is an amendment and name has changed, and indicate change.)
Nostalgia Broadcasting Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
Address of Executive Offices (Number and Street, City, State, Zip Code) Telephone Number (Including Area Code)
10300 SW Greenburg Road #390, Portland, OR 97223 (503) 293-2601
- -----------------------------------------------------------------------------------------------------------------------------------
Address of Principal Business Operations (Number and Street, City, State, Zip Code) Telephone Number (Including Area Code)
(if different from Executive Offices)
- -----------------------------------------------------------------------------------------------------------------------------------
Brief Description of Business
Acquisition, creation and syndication of national radio programming and music production and distribution
- -----------------------------------------------------------------------------------------------------------------------------------
Type of Business Organization
[X] corporation [ ] limited partnership, already formed [ ] other (please specify):
[ ] business trust [ ] limited partnership, to be formed
- -----------------------------------------------------------------------------------------------------------------------------------
Month Year
-------- --------
Actual or Estimated Date of Incorporation or Organization: 03 96 [X] Actual [ ] Estimated
-------- --------
Jurisdiction of Incorporation or Organization: (Enter two-letter U.S. Postal Service abbreviation for State; --
CN for Canada; FN for other foreign jurisdiction) OR
--
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

GENERAL INSTRUCTIONS

FEDERAL:

Who Must File: All issuers making an offering of securities in reliance on an
exemption under Regulation D or Section 4(6), 17 CFR 230, 501 et seq. or 15
U.S.C. 77d(6).

When To File: A notice must be filed no later than 15 days after the first sale
of securities in the offering. A notice is deemed filed with the U.S. Securities
and Exchange Commission (SEC) on the earlier of the date it is received by the
SEC at the address given below or, if received at that address after the date on
which it is due, on the date it was mailed by United States registered or
certified mail to that address.

Where To File: U.S. Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549.

Copies Required: Five (5) copies of this notice must be filed with the SEC, one
of which must be manually signed. Any copies not manually signed must be
photocopies of the manually signed copy or bear typed or printed signatures.

Information Required: A new filing must contain all information requested.
Amendments need only report the name of the issuer and offering, any changes
thereto, the information requested in Part C, and any material changes from the
information previously supplied in Parts A and B. Part E and the Appendix need
not be filed with the SEC.

Filing Fee: There is no federal filing fee.

STATE:
This notice shall be used to indicate reliance on the Uniform Limited Offering
Exemption (ULOE) for sales of securities in those states that have adopted ULOE
and that have adopted this form. Issuers relying on ULOE must file a separate
notice with the Securities Administrator in each state where sales are to be,
or have been made. If a state requires the payment of a fee as a precondition
to the claim for the exemption, a fee in the proper amount shall accompany
this form. This notice shall be filed in the appropriate states in accordance
with state law. The Appendix to the notice constitutes a part of this notice
and must be completed.

- -------------------------------- ATTENTION ------------------------------------
FAILURE TO FILE NOTICE IN THE APPROPRIATE STATES WILL NOT RESULT IN A LOSS OF
THE FEDERAL EXEMPTION. CONVERSELY, FAILURE TO FILE THE APPROPRIATE FEDERAL
NOTICE WILL NOT RESULT IN A LOSS OF AN AVAILABLE STATE EXEMPTION UNLESS SUCH
EXEMPTION IS PREDICATED ON THE FILING OF A FEDERAL NOTICE.
- -------------------------------------------------------------------------------
<PAGE> 80

- --------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------
Enter the information requested for the following:

o Each promoter of the issuer, if the issuer has been organized within the past
five years:

o Each beneficial owner having the power to vote or dispose, or direct the vote
or disposition of, 10% or more of a class of equity securities of the issuer;

o Each executive officer and director of corporate issuers and of corporate
general and managing partners of partnership issuers; and

o Each general and managing partner of partnership issuers.
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [X] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
McKay, Dennis
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
56 Stevens Road, Rural Route 7, Victoria BC V8X 3X3 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [X] Beneficial Owner
[X] Executive Officer [ ] Director [X] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
Holmes, John
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
7548 NW Springville Road, Portland, OR 97229
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [ ] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)

- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)

- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [ ] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)

- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)

- --------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as necessary)

<PAGE> 81
- -------------------------------------------------------------------------------
B. INFORMATION ABOUT OFFERING
- -------------------------------------------------------------------------------
1. Has the issuer sold, or does the issuer intend to sell, to Yes No
non-accredited investors in this offering?...................... [X] [ ]

Answer also in Appendix, Column 2, if filing under ULOE.

2. What is the minimum investment that will be accepted form any
individual?..................................................... $ 100
---------
Yes No
3. Does the offering permit joint ownership of a single unit?...... [ ] [X]

4. Enter the information requested for each person who has been or
will be paid or given, directly or indirectly, any commission or
similar remuneration for solicitation of purchasers in
connection with sales of securities in the offering. If a person
to be listed is an associated person or agent of a broker or
dealer registered with the SEC and/or with a state or states,
list the name of the broker of dealer. If more than five (5)
persons to be listed are associated persons of such a broker or
dealer, you may set forth the information for that broker or
dealer only.
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
None
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)

- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer

- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers

- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)

- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer

- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers

- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)

- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer

- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers

(Check "All States" or check individual States)................. [ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as necessary)
<PAGE> 82
- --------------------------------------------------------------------------------
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
- --------------------------------------------------------------------------------

Enter the aggregate offering price of securities included in this offering and
the total amount already sold. Enter "0" if answer is "none" or "zero." If the
transaction is an exchange offering, check this box [ ] and indicate in the
columns below the amounts of the securities offered for exchange and already
exchanged.

Aggregate Amount Already
Offering Price Sold
-------------- --------------
<S> <C> <C>

Type of Security
Debt ...................................................................................... $ $
-------- --------
Equity .................................................................................... $300,000 $ 0
-------- --------
X Common Preferred
--- ---
Convertible Securities (including warrants) ............................................... $ $
-------- --------
Partnership Interests ..................................................................... $ $
-------- --------
Other (Specify ________________________________) .......................................... $ $
-------- --------
Total ................................................................................ $300,000 $ 0
-------- --------
</TABLE>
Answer also in Appendix, Column 3, if filing under ULOE.

Enter the number of accredited and non-accredited investors who have purchased
securities in this offering and the aggregate dollar amounts of their purchases.
For offerings under Rule 504, indicate the number of persons who have purchased
securities and the aggregate dollar amount of their purchases on the total
lines. Enter "0" if the answer is "none" or "zero."

Aggregate
Number Dollar Amount
Investors of Purchases
-------------- --------------
<S> <C> <C>
Accredited Investors ...................................................................... 0 $
-------- --------
Non-accredited Investors .................................................................. 0 $
-------- --------
Total (for filings under Rule 504 only) .............................................. 0 $
-------- --------
</TABLE>
Answer also in Appendix, Column 4, if filing under ULOE.

If this filing is for an offering under Rule 504 or 505, enter the information
requested for all securities sold by the issuer, to date, in offerings of the
types indicated, in the twelve (12) months prior to the first sale of securities
in this offering. Classify securities by type listed in Part C - Question 1.

Type of Dollar Amount
Security Sold
-------- -------------
<S> <C> <C>
Type of offering
Rule 505 ................................................................................ NA $ 0
-------- --------
Regulation A............................................................................. NA $ 0
-------- --------
Rule 504 ................................................................................ NA $ 0
-------- --------
Total ..............................................................................
-------- --------
</TABLE>

a. Furnish a statement of all expenses in connection with the issuance and
distribution of the securities in this offering. Exclude amounts relating solely
to organization expenses of the issuer. The information may be given as subject
to future contingencies. If the amount of an expenditure is not known, furnish
an estimate and check the box to the left of the estimate.

<TABLE>
<S> <C> <C>
Transfer Agent's Fees......................................................................................... [ ] $ 0
--------
Printing and Engraving Costs.................................................................................. [ ] $ 1,500
--------
Legal Fees ................................................................................................... [ ] $ 4,000
--------
Accounting Fees .............................................................................................. [ ] $ 1,000
--------
Engineering Fees ............................................................................................. [ ] $ 0
--------
Sales Commissions (specify finders' fees separately).......................................................... [ ] $ 0
--------
Other Expenses (identify) Miscellaneous ..................................................................... [ ] $ 1,000
--------------- --------
Total ................................................................................................... [ ] $ 7,500
--------
</TABLE>
<PAGE> 83

- --------------------------------------------------------------------------------
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
b. Enter the difference between the aggregate offering price given in
response to Part C - Question 1 and total expenses furnished in response to
Part C - Question 4.a. This difference is the "adjusted gross proceeds to $292,500
the issuer." --------

5. Indicate below the amount of the adjusted gross proceeds to the issuer used
or proposed to be used for each of the purposes shown. If the amount for any
purpose is not known, furnish an estimate and check the box to the left of the
estimate. The total of the payments listed must equal the adjusted gross
proceeds to the issuer set forth in response to Part C - Question 4.b above.
Payments to
Officers,
Directors, & Payments to
Affiliates Others

Salaries and fees ................................................................ [ ] $ [ ] $
-------- --------
Purchase of real estate .......................................................... [ ] $ [ ] $
-------- --------
Purchase, rental or leasing and installation of machinery and equipment .......... [ ] $ [ ] $
-------- --------
Construction or leasing of plant buildings and facilities ........................ [ ] $ [X] $200,000
-------- --------
Acquisition of other businesses (including the value of securities involved in
this offering that may be used in exchange for the assets or securities of
another issuer pursuant to a merger) ............................................. [ ] $ [ ] $
-------- --------
Repayment of indebtedness ........................................................ [ ] $ [ ] $
-------- --------
Working capital .................................................................. [ ] $ [X] $ 92,500
-------- --------
Other (specify):
------------------------------------------------------------------ [ ] $ [ ] $
-------- --------
- ----------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------- [ ] $ [ ] $
-------- --------
Column Totals .................................................................... [ ] $ [X] $292,500
-------- --------
Total Payments Listed (column totals added) ...................................... [X] $292,500
--------
</TABLE>
- --------------------------------------------------------------------------------
D. FEDERAL SIGNATURE
- --------------------------------------------------------------------------------

The issuer has duly caused this notice to be signed by the undesigned duly
authorized person. If this notice is filed under Rule 505, the following
signature constitutes an undertaking by the issuer to furnish to the U.S.
Securities and Exchange Commission, upon written request of its staff, the
information furnished by the issuer to any non-accredited investor pursuant to
paragraph (b)(2) of Rule 502.

- --------------------------------------------------------------------------------
Issuer (Print or Type) Signature Date
Nostalgia Broadcasting Corp. /s/ JOHN HOLMES 9/6/96
- --------------------------------------------------------------------------------
Name of Signer (Print or Type) Title of Signer (Print or Type)
John Holmes General Manager and Secretary
- --------------------------------------------------------------------------------

- ---------------------------------- ATTENTION -----------------------------------
Intentional misstatements or omissions of fact constitute
federal criminal violations. (See 18 U.S.C. 1001.)
- --------------------------------------------------------------------------------

<PAGE> 84
N.Y. Form M-11 ** File No.______
(Rev. 5/90) (for renewals only)

STATE OF NEW YORK
DEPARTMENT OF LAW
ISSUER STATEMENT
(Section 359-e Gen. Bus. Law)

Name of Principal
Issuer Nostalgia Broadcasting Corp. Office 10300 S.W. Greenburg Road,
Suite 390
Portland, OR 97223
-------------------------------
Street Address City State Zip
Telephone Number 503-293-2601

This form is not to be used by issuers engaged in any aspect of real estate or
mortgage financing unless they also obtain a letter upon written application
pursuant to Section 352e or g. Theatrical Syndication must comply with Article
23 of the Arts and Cultural Affairs Law.

1. Issuer is [X] an existing; [ ] a proposed; [X] corporation;
[ ] general partnership; [ ] limited partnership; [ ] other (specify)
_____________________organized under the laws of Nevada on 3/4/96.
The entire offering is [X] intrastate, [ ] interstate
2. The business of the issuer is (described briefly) Acquisition, Creation and
Syndication of national radio programming, music production and distribution
3. Issuer proposes to offer [X] stock; [ ] bonds; [ ] notes; [ ] partnership
interests; [ ] other (specify)____________________________
4. The securities will be sold [X] by the officers and directors of the issuer;
[ ] N.Y. registered broker [ ] by an underwriter; [ ] by salesmen employed
by issuer. The securities will be sold on a [X] best efforts basis; [ ] firm
commitment. If by an underwriter or broker, indicate the names of
underwriters or syndicate manager____________________________________.
5. Total amount of offering $300,000 Anticipated offering expenses total $7,500
consisting of: Selling: $0 Other: $7,500.
6. State use of the net proceeds to be obtained: Construction of a production
studio in Portland, Oregon; additional capital for development of radio
syndication products and working capital.
** Found on the fee receipt you received for your original filing.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Filing is incomplete without a copy of offering literature. If not available,
please explain. Indicate to whom you wish the fee receipt sent.
( ) Attorney ( ) Issuer

Personal checks not accepted. Attorney's check, certified check, bank check,
money order only, payable to the N.Y.S. Department of Law

Filing Fee Enclosed as Follows:
Total amount of offering under $500,000..........................$200
over $500,000..........................$800

Send remittance to:
Bureau of Investor Protection and Securities
N.Y. Department of Law
120 Broadway
New York, NY 10271

<PAGE> 85

7. If the securities are being offered partly or entirely for the account
of selling holders, please check [ ]. Indicate the details of the
secondary offering below for each seller.

<TABLE>
<CAPTION>
Anticipated
Name of Seller Address Dollar Amount Offered
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
8. Has registrant, any officer, director or principal or partner ever

A. been suspended or expelled from membership in any securities or
commodities exchange, association of securities or commodities
dealers or Investment advisors?...................................... yes [ ] No [X]

B. had a license or registration as a dealer, broker, investment
advisor or salesman, futures commission merchant, associated
person, commodity pool operator, or commodity trading advisor
denied, suspended or revoked?........................................ Yes [ ] No [X]

C. been enjoined or restrained by any court or government agency
from:

1. the issuance, sale or offer for sale of securities or
commodities?................................................. Yes [ ] No [X]

2. rendering securities or commodities advice?.................. Yes [ ] No [X]

3. handling or managing trading accounts?....................... Yes [ ] No [X]

4. continuing any practices in connection with securities
or commodities?............................................... Yes [ ] No [X]

D. been convicted of any crime (other than minor traffic)?............... Yes [ ] No [X]

E. used or been known by any other name?................................. Yes [ ] No [X]

F. been the subject of any professional disciplinary proceeding?......... Yes [ ] No [X]

G. been adjudged a bankrupt or made a general assignment for
benefit of creditors; or been an officer, director or principal
of any entity which was reorganized in bankruptcy, adjudged a
bankrupt or made a general assignment for benefit of creditors?....... Yes [ ] No [X]

H. had an offering of securities within the last three years or
been an officer, director, principal or partner of any entity
which had an offering of securities within the last three years....... Yes [ ] No [X]

I. If the answer to any of the above is "YES", attach a statement
of full particulars.

9. Are there any outstanding judgments (not including judgments involving
domestic relations) against the issuer or any officer, director,
principal or partner thereof? If yes, attach statement of full particulars.... Yes [ ] No [X]
</TABLE>

10. List names and residence addresses of all employees (officers and
directors not included) of Issuer who are selling in N.Y.S., N.Y. Form
M-2 must be filed for each person listed.

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11. Limited Partnerships are required to submit a list of all limited
partners as soon as the offering is completed. This may be done in
letter form.

12. If the Issuer is a limited partnership list all of the general partners:

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<PAGE> 86
13. The information set forth below should be provided for each officer,
director, principal or partner. In the case of a corporate general partner
information must be provided for all officers. If not enough space is
provided use continuation sheets. Do not refer to prospectus or offering
literature. SEC biographies can be substituted for employment history only.

a. Name: Steve Stucker Title: President and Director and Treasurer
------------------ ------------------------------------
Home Address: Phone: (702) 884-1979
------------------------ ---------------------
Place of Birth: Falls City, Nebraska Date of Birth: 3/23/45
---------------------- -------------
Social Security #: ###-##-####
-------------------
Prior home addresses for past five years: 4142 Quinn, Carson City,
--------------------------
Nevada 89701
--------------------------------------------------------------------

--------------------------------------------------------------------

Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>

9/94 Present Self employed - Full time legal practice President
- ------------------------------------------------------------------------------------------------------
1989 9/94 Laughlin & Associates, Carson City, Nevada General Counsel
- ------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------
</TABLE>

b. Name: John Holmes Title: Secretary and General Manager
------------------ ------------------------------------
Home Address: 17618 NW Springville, Portland 97229 Phone:
------------------------------------
Place of Birth: Granite City, IL Date of Birth: 12/23/70
---------------------- -------------
Social Security #: ###-##-####
-------------------
Prior home addresses for past five years: 19000 NW Evergreen
--------------------------
Parkway, Hillsboro OR 97138
--------------------------------------------------------------------
711 West Barr, Jerseyville, IL 62052
--------------------------------------------------------------------

5/96 Present Nostalgia Broadcasting Corp. Portland, OR General Manager & Secretary
- ------------------------------------------------------------------------------------------------------
8/93 5/96 ITEX Media Services Inc. St. Louis, MO Media Services Director
- ------------------------------------------------------------------------------------------------------
8/92 8/93 ITEX St. Louis St. Louis, MO Trade Broker
- ------------------------------------------------------------------------------------------------------
1/90 8/92 KMOV-TV St. Louis, MO Assistant Sports Producer
- ------------------------------------------------------------------------------------------------------
1/90 8/92 Radio Personalities St. Louis, MO VP of Operations
- ------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE> 87
MINUTES OF ANNUAL SHAREHOLDERS' MEETING
OF
NOSTALGIA BROADCASTING CORP.
A Nevada Corporation

The annual meeting of shareholders of Nostalgia Broadcasting Corp. for the
year ending 1997-98 was held on:

DATE: January 30, 1998

TIME: 1:00 PM

PLACE: Nostalgia Broadcasting Corp.
One Lincoln Center
Portland, Oregon

John A. Holmes III, Acting President and Chairman of the Board of
Director, assumed control of the meeting, and appointed Lee E. Morgan,
Secretary for the Shareholders Meeting. Mr. Holmes called the Meeting to order
and made a formal roll call and request for proxies.

Mr. John J. Brumfield, Vice President, Director and Controller of the
company, tallied the number of shares present, in person or by proxy, and
certified that there were 778,230 shares present. Mr. Brumfield further
reported that the total shares issued and outstanding of the Company were
1,110,000 shares. The Secretary reported that a quorum was present and that 71%
of the stock entitled to vote was present, in person or by proxy.

Page 1
<PAGE> 88
The Secretary then presented an Affidavit of Mailing to verify that
adequate notice had been given, consistent with the Bylaws of the Corporation
regarding the Shareholder's Meeting (see attached). The Secretary read the
Minutes from the previous Shareholder's Meeting of 28 March, 1997 (see
attached). A proposal was presented and seconded to accept the Minutes as read,
upon motion duly made and seconded the following resolution was unanimously
adopted:

RESOLVED THAT, the 28 March, 1997 minutes be accepted as presented.
The Vote was unanimous.

The Shareholder Meeting Agenda was reviewed in its entirety and a call for
additions to the Agenda were made. None were submitted.

The following items were submitted to a vote of the Shareholders:

1. The selection of Andersen, Andersen & Strong as independent auditors for
the current fiscal year.

The voting was 776,230 for, 2000 against and 0 abstentions. The motion passed.

2. To amend the Articles of Incorporation to change the name of Nostalgia
Broadcasting Corp. to NBG Radio Network, Inc.

The voting was 778,230 for, 0 against and 0 abstentions. The motion passed.

3. To elect the following as directors of the corporation:

For Against Abstain
--- ------- -------
John A. Holmes III 778,230 0 0

Peter Jacobsen 776,230 0 2,000

Dick Versace 766,230 10,000 2,000

Steve R. Sears 776,230 0 2,000

Dennis McKay 776,230 0 2,000

Page 2
<PAGE> 89
4. To elect the following as officers:

For Against Abstain
------- ------- -------
<S> <C> <C> <C>

John A. Holmes III, President 778,230 0 0

John J. Brumfield, Vice President/Controller 778,230 0 0

Lee E. Morgan, Corporate Secretary 778,230 0 0

</TABLE>

All motions were passed and approved by the shareholders.

Controller, John J. Brumfield provided an overview of the companies
financial statement. Mr. Brumfield indicated the company was growing at a
better than expected pace. Mr. Brumfield answered questions from the floor
pertaining to the company's financial health. All shareholders seemed to be
pleased with the company's proposed direction and current performance.

John A. Holmes III then presented an in-depth overview of the company's
business plan for the upcoming year. Mr. Holmes handled questions from the
floor, with virtually all shareholders present participating in the general
discussion. Shareholders seemed excited and upbeat about the companies proposed
business plans.

Mr. Holmes then made announcements about the companies proposed relocation
of the Corporate Office and the commencement of trading of the companies stock
on the NASD Bulletin Board.
<PAGE> 90

MINUTES OF BOARD OF DIRECTORS' MEETING

NOSTALGIA BROADCASTING CORP.

A NEVADA CORPORATION

A meeting of the Board of Directors of Nostalgia Broadcasting Corp.
was held on January 15, 1998, at the offices of Nostalgia Broadcasting Corp.,
10300 SW Greenburg Road, Suite 390, Portland, Oregon at 1:00pm PST.

The following participated in the meeting:

John A. Holmes III - Director
Steven R. Sears - Director
Lee E. Morgan - Corporate Secretary
* Director, Steve Stucker was unavailable for the meeting.

First order of business was to appoint as Chairman of the meeting,
John Holmes, General Manager of the Corporation.

The Chairman announced that a quorum of the Directors was present, and
that the meeting, having been convened, was ready to proceed with its business.

It was pointed out that the Board has informally been in contact with
Officers of the Company through weekly and sometimes daily reports written
through the Internet. Minutes were not kept on these reports, as they were
informal meetings of the Board.

The minutes of the regular meeting of the Directors held on March 27,
1996, were read and approved. Upon motion duly made, seconded, and unanimously
carried, the following resolutions were adopted:

<PAGE> 91

RESOLVED, that the Corporation accept the resignation of Steve Stucker
as President of the Corporation and Director and appointed John A. Holmes as
acting President.

RESOLVED, John Holmes, General Manager of the Corporation, shall
conduct the upcoming Annual Shareholder's Meeting to be held January 30, 1998.

RESOLVED, all Board meeting minutes and discussions are to be kept
confidential.

After a discussion of the merits of issuing options to employees,
board members, and other parties instrumental in the development of the Company
it was unanimously agreed:

RESOLVED, that the following individuals receive stock options where
each option equals 1 common share subject to restriction under SEC Rule 144. The
option strike price is $.60 per common share and expire on March 15, 1998. Stock
options issued equal 600,000 common shares.

<TABLE>
<CAPTION>
NAME OPTIONS
---- -------
<S> <C>
Nevada Financial Resources, Inc. 83,333
Allied Hansard Capital, LTD 83,333
Entertainment & Media Resources, Inc. 83,333
John J. Brumfield 56,235
John A. Holmes 50,000
Steven. R. Sears 46,666
Joe Mancuso 30,684
Peter Jacobsen 25,000
Mark Eklund 21,666
Larry Kotan 20,000
Michael Palmer 19,750
Barbara Oshiro 18,333
Ollie Holmes 16,667
Dean Gavoni 16,667
Dick Versace 10,000
Julie Fitterer 10,000
Lee Morgan 8,333
</TABLE>

<PAGE> 92

RESOLVED, that the following people will receive a bonus paid in
common shares subject to restriction under SEC Rule 144. The number of shares
allocated to each of the following people/corporations was based on a price of
$.60 per common share.

<TABLE>
<CAPTION>
NAME SHARES
---- ------
<S> <C>
James Haydon 15,000
Steve Sears 10,000
Keri Strug 5,000
Rick Barry 4,000
Dick Versace 4,000
Peter Jacobsen 4,000
Steve Jones 2,500
Angeline Holmes 2,000
Steven Allen 2,000
Danny Chambers 1,000
Daryl Summers 1,000
Mychal Thompson 1,000
Julie McKeehan 1,000
Harry Hamm 1,000
Troy Roberts 1,000
Fred Woods 750
Kevin Covington 500
MOR Media 500
Al Dardis & Associates 500
Joe Mancuso 500
Ollie Holmes 500
Mark Eklund 500
Joesph Ridgway 500
Darren Emile 500
</TABLE>

RESOLVED, the Company shall exchange 65,000 common shares, Restriction
under SEC Rule 144, to Gary Henin in exchange for printing services in the
amount of $50,000.

RESOLVED, the appointment of A.B. Korelin and Associates for
preparation of Form 10, which is to be submitted to the Securities and Exchange
Commission so the Corporation can qualify as a fully reporting company. Terms of
the contract are as follows:

A non-refundable fee of $13,500.00. $7500.00 is payable in cash, and
$6000.00 is payable in common shares of the Corporation. The cash
portion shall be payable as follows: $3750.00 upon execution of an
agreement, $2000.00 payable before 3/31/98 or upon filing of the
Registration Statement with the SEC whichever comes first; and the

<PAGE> 93
final payment of $1750.00 upon effectiveness of the Registration
Statement. The stock portion shall be payable as follows: Common
shares subject to restriction under SEC Rule 144 with price of each
share being set at the average trading price of the Corporation's
stock during the 30 day period of April 1998. If for any reason the
trading ceases during that time period, then the price will be set on
the first continuous 30 day period thereafter. The Rule 144
restriction date begins with the signing of the agreement with A.B.
Korelin and Associates.

RESOLVED, the appointment of West Coast Consulting and Hamilton Martin
Group to handle investor relations for the Corporation on a 90-day contract.
Terms of the contract are as follows:

4500 common shares to West Coast Consulting and 4500 common shares to
Hamilton Martin Group. Common shares subject to restriction under SEC Rule 144.

RESOLVED, John Holmes is empowered to sign a new office space lease on
behalf of the Company.

RESOLVED, that the Corporation will put to a vote of the shareholders
the amendment of Article I. of the Companies Articles of Incorporation to change
the Corporations name to NBG Radio Network, Inc. at the upcoming Annual
Shareholder's Meeting.

RESOLVED, that the next meeting of the Directors is scheduled for
Tuesday, March 24, 1998 at 1:00pm PST. Location: One Lincoln Center - Portland,
Oregon.

RESOLVED, that the Corporation will appoint Neal & Associates, LLC to
source and negotiate barter transactions and contracts. John A. Holmes must
approve all barter transactions submitted by Neal & Associates, LLC.

Upon motion duly made, seconded, and carried, all of the Resolutions
adopted by the Directors in the previous year were ordered to be filed with the
Secretary and attached to these minutes and are thereby made a part thereof.

<PAGE> 94

There being no other business to be transacted, upon motion duly made,
seconded, and unanimously carried, the meeting was adjourned.

- ---------------------------------------------
Secretary

ATTEST:

/s/ JOHN A. HOLMES III
- ---------------------------------------------
Director

- ---------------------------------------------
Director

<PAGE> 95

CERTIFICATE OF AMENDMENT OF INCORPORATION
(After Issuance of Stock)

NOSTALGIA BROADCASTING CORP,

We the undersigned, John A. Holmes III, President, and Lee E. Morgan,
Corporate Secretary, of NOSTALGIA BROADCASTING CORP. do hereby certify:

That the Board of Directors of said corporation at a meeting duly
convened, held on the 15th day of January, 1998, adopted a resolution to amend
the original articles as follows:

Article I is hereby amended to read as follows:

1. The name of the corporation is:

NBG RADIO NETWORK, INC

The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 1,110,000; that the said change(s)
and amendment have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.

/s/ JOHN A. HOLMES III
-----------------------------
President

/s/ LEE E. MORGAN
-----------------------------
Secretary

State of Oregon )
)ss.
County of Washington )

On February 4, 1998, personally appeared before me, a Notary Public,
John A Holmes III, and Lee E. Morgan who acknowledged that they executed the
above instrument.

/s/ JOHN J. BRUMFIELD
-----------------------------
Signature of Notary

[NOTARY SEAL]
<PAGE> 96

RECEIPT NO. FY800045306
NOSTALGIA BROADCASTING CORP
02/12/1998 75.00
REC'D By SSH

RECEIPT NO. FY9800045307
NOSTALGIA BROADCASTING CORP
02/12/1998 50.00
REC'D BY SSH

CERTIFICATE OF AMENDMENT OF INCORPORATION
(After Issuance of Stock)

NOSTALGIA BROADCASTING CORP.

We the undersigned, John A. Holmes III, President, and Lee E. Morgan,
Corporate Secretary, of NOSTALGIA BROADCASTING CORP. do hereby certify:

That the Board of Directors of said corporation at a meeting duly
convened, held on the 15th day of January, 1998, adopted a resolution to amend
the original articles as follows:

Article I is hereby amended to read as follows:

1. The name of the corporation is:

NBG RADIO NETWORK, INC.

The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 1,110,000; that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.

/s/ JOHN A. HOLMES III
-----------------------------
President

/s/ LEE E. MORGAN
-----------------------------
Secretary

State of Oregon )
) ss.
County of Washington )

On February 4, 1998, personally appeared before me, a Notary Public,
John A Holmes III, and Lee E. Morgan who acknowledged that they executed the
above instrument.

/s/ JOHN J. BRUMFIELD
-----------------------------
Signature of Notary
[NOTARY SEAL]

<PAGE> 97

SECRETARY OF STATE

[STATE SEAL]

CERTIFICATE OF EXISTENCE
WITH STATUS IN GOOD STANDING

1, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that I am, by the laws of said State, the custodian of the
records relating to filings by corporations, limited-liability companies,
limited partnerships, and limited-liability partnerships pursuant to Title 7 of
the Nevada Revised Statutes which are either presently in a status of good
standing or were in good standing for a time period subsequent of 1976 and am
the proper officer to execute this certificate,

I further certify that the records of the Nevada Secretary of State, at the date
of this certificate, evidence, NBG RADIO NETWORK, INC., as a corporation duly
organized under the laws of Nevada and existing under and by virtue of the laws
of the State of Nevada since March 27, 1996, and is in good standing in this
state.

IN WITNESS WHEREOF, I have hereunto set my hand
and affixed the Great Seal of State, at my office,
in Carson City, Nevada, on February 23, 1998.

/s/ DEAN HELLER
Secretary of State

By [SIG]
Certification Clerk

[STATE SEAL]
<PAGE> 98

SIGNATURE PAGE

Pursuant to the requirements of Section 12g of the Securities Exchange Act of
1934, the Registrant certifies that it meets all of the requirements for filing
of Form 10 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized.

NBG Radio Network, Inc.
Registrant

April 4, 1998 By: /s/ John A. Holmes III
- ----------------- ----------------------------
Date John A. Holmes III
President/CEO/Director