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To: David Alon who wrote (4933)	10/28/1998 7:39:00 PM
From: Gary K	Respond to of 6467

SEC Findings sec.gov

To: David Alon who wrote (4933)	10/28/1998 8:38:00 PM
From: dbmedia	Respond to of 6467

David- Emerging Company Report has been on the air for two years. It began with only 10 affiliate stations and the fee then (Fall 1996) was $2,500.00. We are now on 140 cable tv systems, 22+ million homes per week, beginning our 3rd year this weekend with our 105th show and the current program fee is $8,500.00. One company bought two profiles at $8,500.00, thereby a contract for $17,000.00. Regarding the stock issue, I personally received stock from two companies, for advertising services performed; the production of corporate videos, neither of which were ever broadcast on the television program or had anything to do with it. This occurred in the Spring of 1997. Each video was designed to explain the technology of the respective companies, like any corporate video would do. The companies approached me to have these videos written and produced, because of their knowledge of my career background, which includes owning and operating an advertising agency/production company. Each company did appear on the Emerging Company Report program at other times, nearly a year after the corporate videos were produced. Both contracts for the TV program were for cash. While company A did indeed pay cash via a wire transfer, company B sent us 3,000 shares of free-trading stock via DTC transfer. Because this DTC transfer occurred during the Christmas/New Year's week of 1997, we did not find out we had received stock until after the Emerging Company Report program had aired. We complained repeatedly to the company, requesting that the contract be fulfilled in cash as agreed. When it became obvious the company was not going to pay as agreed, we ended up selling the stock through our retail broker over the course of two weeks. We were victimized by Company B. We cancelled the remainder of Company B's contract. The only thing the SEC is concerned about is the fact we did not disclose the actual amount of compensation (section 17b). At that time we did not think that applied to cash payments; we always disclosed quite clearly companies appearing on the program had paid a cash fee. The stock I had received from the companies for the production of corporate videos in Spring 1997 was restricted (#144). During the time I owned that stock, the disclaimer on the television program indicated "the producers may own stock in one or more of the companies featured". All of this was presented to the SEC, along with the supporting documents. The legal fees associated with answering their inquiries can be enormous and when the opportunity arose to accept a "cease and desist" settlement, which in effect, was agreeing to do something we had already been doing for many weeks, we jumped on it. Anyone who has ever undergone an IRS audit, can empathize with what we have been through. I was very upset to learn the news of our settlement was lumped in the same press release as the other companies, some of which have actually been charged with gross wrongdoing. I have not and the Emerging Company Report tv program has not. Our involvement in this matter is over. I asked my attorney to contact the SEC today and request a clarification be released, which he has done. Emerging Company Report does not have any incentive whatsoever, based upon the performance of a company's stock. If you have ever watched the show, you will see we do not recommend the companies or their stock. We simply function as an information and entertainment source, which is exactly what is said at the beginning of each show in our scrolling disclaimer. We actually turn away 2 to 3 out of every 5 companies which approach us for a profile. We endeavor to feature good, interesting companies, whose management has demonstrated a desire to build the company for the future. Again, I invite anyone to call me toll-free at 1-888-259-4449 with any questions you may have. Donald A. Baillargeon Executive Producer

To: David Alon who wrote (4933)	11/17/1998 4:58:00 PM
From: dbmedia	Respond to of 6467

Dear David; On 10/28/98, you sent me an e-mail message asking if I was being "shut down by the SEC". In my effort to explain to you that I had not been "shut down" (Reply # 4930), I may have inadvertently stepped outside the bounds of the settlement I previously reached with the SEC. As a result and in the continued spirit of cooperation with the SEC, I have agreed to post the following retraction: To David Alon, regarding my 10/28/98 Reply # 4930: It was not my intention by that reply to deny any allegation in the Securities and Exchange Commission's October 27, 1998 Order Instituting Public Proceedings Pursuant to Section 8A of the Securities Act of 1933, Making Findings, and Imposing a Cease-and-Desist Order (the "Order") or to create the impression that the Order is without factual basis. I withdraw all statements I made that are inconsistent with the allegations contained in the Order or which suggest that the Order is without factual basis. I understand that the Commission will issue a release that will include the above statement.