S-1/A

As filed with the Securities and Exchange Commission on June 26, 2006

Registration No. 333-131508

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No 3. to Form S-1

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

NGTV

(Exact Name of Registrant as Specified in Its Charter)

California	4841	95-4809307
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

9944 Santa Monica Boulevard
Beverly Hills, California 90212
Telephone: (310) 556-8600 Facsimile: (310) 556-9024
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Principal Executive Offices) Jay Vir, Co-President
9944 Santa Monica Boulevard
Beverly Hills, California 90212
Telephone: (310) 556-8600 Facsimile: (310) 556-9024
(Name, Address, Including Zip Code and Telephone Number,
Including Area Code, of Agent for Service)

As Soon as Practicable After the Effective Date of this Registration Statement.

(Approximate Date of Commencement of Proposed Sale to the Public)

Copies of communications to:

Jennifer A. Post, Esq.
Richardson & Patel LLP
10900 Wilshire Boulevard, Suite 500
Los Angeles, California 90024
Telephone: (310) 208-1182 Facsimile (310) 208-1154 Steven Weinberger, Esq.
Schneider Weinberger & Beilly LLP
2200 Corporate Boulevard, N.W., Suite 210
Boca Raton, Florida 33431
Telephone: (561) 362-9595 Facsimile: (561) 362-9612

       If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.   þ

       If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

       If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

       If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

       If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.   o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum	Amount of
Title of Each Class of	Amount to be	Offering Price	Aggregate Offering	Registration
Securities to be Registered	Registered	Per Unit(1)	Price	Fee(5)
Units, consisting of one share of common stock, no par value per share and one warrant to purchase one half of one share of common stock(2)	6,896,750	$6.00(1)	$41,380,500(1)	$4,428
Common stock included in the units(3)	6,896,750	—	—	—
Warrants to purchase common stock included in the units(3)	6,896,750	—	—	—
Common stock underlying public warrants	3,448,375	$6.00(1)	$20,690,250(1)	$2,214
Common stock included in the underwriters warrant	416,667	$7.20(4)	$ 3,000,002(4)	$ 321
Common stock issuable upon exercise of the purchase warrants issuable to the underwriters upon exercise of the underwriters warrant	208,334	$7.20(4)	$ 1,500,005(4)	$ 161
Total	24,763,627		$66,570,757	$7,124

    In accordance with Rule 416 under the Securities Act of 1933, as amended, in order to prevent dilution, a presently indeterminable number of shares of common stock are registered hereunder which may be issued in the event of a stock split, stock dividend or similar transaction involving the common stock of the Registrant. No additional registration fee has been paid for these shares of common stock.

(1)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act. Assumes an offering price of $6.00 per unit, and $6.00 per share of common stock.
(2)	Includes 4,166,667 units to be issued and offered for sale by the Registrant, and 1,830,507 units to be offered for sale by the selling security holders. Also includes 899,576 units the underwriters have the option to purchase from us to cover over-allotments, if any.
(3)	Includes the common stock and warrants underlying each of the units registered hereby including the units issuable upon the exercise by the underwriters of the over-allotment option. Warrants may only be exercised for whole shares.
(4)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act. Warrants may only be exercised for whole shares, accordingly warrants must be exercised in even numbers at the whole share price. The warrants issuable to the underwriters are exercisable at $7.20, assuming an offering price of $6.00 per unit.
(5)	All totals are rounded up to the nearest whole dollar amount.
(6)	$6,967 paid on February 3, 2006 in connection with the initial filing and registration.

    The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE  , 2006

PRELIMINARY PROSPECTUS

5,997,174 Units

NGTV

     This prospectus covers our initial public offering of units consisting of one share of our common stock and one warrant to purchase one half of one share of our common stock. Of the 5,997,174 units offered hereby, 4,166,667 units are being offered by NGTV and 1,830,507 units are being offered by certain selling security holders. This prospectus also covers 899,576 units that may be offered by NGTV in the event the over-allotment option granted to the underwriters is exercised. We will not receive any of the proceeds from the sale of units by the selling security holders. The warrants may only be exercised in even numbers for whole shares, at the whole share price of $6.00, assuming an initial offering price of the units of $6.00 per unit. The warrants are subject to redemption by NGTV beginning four months after the date of this prospectus. The warrants may only be exercised after the detachment of the units into common stock and warrants. Prior to this offering no public market has existed for the units, our common stock or warrants. The estimated initial public offering price is between $5.75 and $6.25 per unit.

     We have applied to have the units offered hereby approved for trading on the American Stock Exchange under the symbol “NGI.U”. The common stock and warrants will initially trade as a unit, until detached. The units will detach upon 30 days prior written notice from the representative of the underwriters, which shall be determined in its sole and absolute discretion. In no event will the units detach less than 60 days following the date of this prospectus or the exercise of the over-allotment option, whichever occurs first. We cannot predict when or under what circumstances the representative may determine to detach the units. We have applied to have the common stock and warrants listed on the American Stock Exchange under the symbols “NGI” and “NGI.W”, respectively.

     An investment in our securities involves a high degree of risk. You should purchase our securities only if you can afford a complete loss of your investment. See “Risk Factors” beginning at page 7.

     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Unit	Total
Public Offering Price	$	$
Underwriting Discounts with respect to the Units Sold by NGTV(1)	$	$
Proceeds to NGTV, before expenses	$	$
Underwriting Discounts with respect to the Units Sold by the Selling Security Holders(2)	$	$
Proceeds to the Selling Security Holders	$	$

(1)	The underwriting discount with respect to the units sold by NGTV will be 10% of the offering price, or $0.      per unit.
(2)	The underwriting discount with respect to the units sold by the selling security holders will be 5% of the offering price, or $          per unit. No portion of the expense allowance will be allocated to the selling security holders.

     NGTV has granted the underwriters a 45-day option to purchase up to an additional 899,576 units from us to cover over-allotments. The underwriters are offering the units on a firm commitment basis. The underwriters expect to deliver the units to purchasers on or about                   , 2006.

Capital Growth Financial, LLC

The date of this prospectus is                     2006.

INSIDE OF FRONT COVER GRAPHIC:

ONE, CONTINUOUS PICTURE OF A PILE OF OLD, BROKEN TELEVISION SETS; SOME WITH THE WORDS “UNCENSORED” “RAW” AND “REAL” WRITTEN ON THEIR SCREENS

INSERTED AT TOP OF PILE IS A FLAG CONTAINING THE “NGTV” LOGO.

GRAPHIC ALSO SHOWS STREAKS OF LIGHT; FIRE TORCHES AND OTHER EFFECTS GIVING THE APPEARANCE OF A DARK, BOMBED OUT ENVIRONMENT AKIN TO A WAR ZONE.

ACROSS THE TOP IS WRITTEN: “THE END OF TELEVISION AS YOU KNOW IT”
ACROSS THE BOTTOM IS WRITTEN: “LET THE REVOLUTION BEGIN”

TABLE OF CONTENTS

	Page No.
Prospectus Summary		1
Summary Financial Information		6
Risk Factors		7
Cautionary Statement Regarding Forward-Looking Statements		19
Use of Proceeds		20
Capitalization		22
Dilution		22
Market for Common Equity		23
Selected Financial Data		25
Management’s Discussion and Analysis of Financial Condition and Results of Operation		27
Business		43
Management		57
Certain Relationships and Related Party Transactions		65
Recent Bridge Financings		67
Security Ownership of Certain Beneficial Owners and Management		69
Selling Security Holders		72
Description of Our Securities		77
Shares Eligible For Future Sale		80
Indemnification, Limitation on Liability and Disclosure of Commission Position on Indemnification for Securities Act Liabilities		84
Underwriting		86
Experts		90
Legal Matters		90
Where You Can Find Further Information About Us		91
Transfer Agent and Warrant Agent		91
Index to Financial Statements		F-1
Exhibit 1.1
EXHIBIT 1.2
EXHIBIT 1.3
EXHIBIT 1.4
EXHIBIT 1.5
Exhibit 4.1
Exhibit 4.14
Exhibit 4.16
Exhibit 4.20
Exhibit 4.23
Exhibit 5
Exhibit 10.26
Exhibit 10.27
Exhibit 23.1
Exhibit 23.3

PROSPECTUS SUMMARY

      This summary highlights information from this prospectus and may not contain all of the information that is important to you. For a more complete understanding of this offering, we encourage you to read this entire prospectus, including our financial statements and the notes to those statements. All references in this prospectus to “NGTV”, “we”, “us”, the “company”, or “our” refer to NGTV unless the context otherwise indicates.

NGTV

      We develop uncensored music and celebrity television programs intended to provide celebrities, including actors and musical artists, an opportunity to express themselves publicly in an environment free of customary television editing. Our television programming is intended to show today’s hottest celebrities in a fun and candid light without censorship. Some of our programming contains profanity and limited nudity which are elements of celebrity news and lifestyle programming generally not seen and not broadcast on network television. Our programs allow musical artists an outlet to express themselves creatively and artistically by airing their music videos and live performances without deleting content that would be inappropriate for general audiences. To this end we have accumulated an extensive library of such footage in preparation for the initial airing and “launch” of our programming scheduled for the fourth quarter of 2006.

      We require the proceeds of this offering to complete our launch. We anticipate that our launch activities will require approximately four months to complete, and as such, we have targeted third quarter 2006 as our time frame to launch our programming. In order to launch the NGTV programming, we will need to complete the editing and production of our programming to make it broadcast ready, and undertake a pervasive advertising and public relations campaign to generate subscriber interest. Therefore, we intend to use a portion of the proceeds of this offering to add to our operations a comprehensive marketing and promotions effort, both internally and through consultants, and to finalize preparation of our initial programming for broadcast.

      Our broadcast distribution will begin as a pay television service available on cable television through iN DEMAND, a multiple system operator providing pay-per-view movies and other programming to consumers through numerous local and regional cable operators throughout the United States. Consumers will initially have the opportunity to purchase our pay television service through iN DEMAND on a pay-per-day or pay-per-view basis, or as part of a Video-On-Demand or Subscription Video-On-Demand basis. We intend to expand distribution of our pay television service through additional cable and satellite operators and other multiple system operators at our earliest opportunity to increase the availability of our programming throughout the United States and in foreign markets. Assuming our programming and branding are successful, we may expand our programming hours up to an all day premium channel.

      Our agreement with iN DEMAND provides that iN DEMAND is entitled to certain minimum distribution fees per quarter. In the event the minimum distribution fee is not collected by iN DEMAND based on subscription dollars received for our content, iN DEMAND will be entitled to draw upon a letter of credit, which we must post, to satisfy any shortfall. We will not receive any revenues under the iN DEMAND agreement until the minimum distribution fee per quarter is received by iN DEMAND. Thereafter, we will be entitled to our agreed share of revenues under the Agreement.

      Our content has a fast paced tempo, showcasing popular celebrities and musicians in interviews and candid situations with an edgy feel. We promote a youth oriented, high energy, feel throughout all of our programming by actively seeking racy interviews and situations with artists and celebrities. Our programming will focus on top celebrities and musical artists who have broad public recognition and appeal. We are branding our programming as “No Good Television” and also make use of related brand concepts including “No Good TV” and “NGTV” which we believe will appeal to a youth market and which are consistent with providing an uncensored and non-mainstream view of celebrities and musical artists.

      We have created over 10,000 hours of video footage including over one thousand interviews with prominent celebrities in the television and movie industries. This represents raw, uncut and full-length footage of celebrity interviews and situations that we will edit and combine with newly acquired footage to comprise

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our finished programs. All of this footage is owned by us and was developed with the consent of the celebrities involved. We believe that this library and the notoriety of the prominent celebrities we have already captured on film will be a major draw for subscribers to our programming. We have covered and will continue to cover live entertainment events, music concerts, sporting and popular culture events as well as celebrity parties as part of our programming. An important draw to our subscribers will be the contemporary nature of our programming, and accordingly we are continuously accumulating new raw video footage for inclusion in our programming.

      We also have over 5,000 uncut and uncensored music videos, known as “director’s cut” versions, that we have the rights to broadcast. We do not own these videos and they were not developed for us, but we have a license to broadcast them as part of our programming. Artists and record labels have limited opportunities to broadcast uncensored versions of these director’s cut videos, as many would require a TV-MA rating and therefore are not shown on other music networks. However, our pay television service is intended to be rated TV-MA and that will permit broadcast of these uncut videos. We intend to include director’s cut videos in our programming.

      We have created and developed original programs based on various themes derived from our library of video content. All of our original programs relate in some way to providing fans access to celebrities and musical artists in “real” situations, whether it’s backstage at a concert, on the set of a movie or show, or just hanging out with us — in each case without the censorship fans have come to expect on programming available for general broadcast.

      Following the launch of our service, we expect to expand into complementary areas including the sale and distribution of our content via the Internet. We have entered into a standard distribution arrangement with Google; however we are negotiating customized terms that will enhance the availability and distribution of our content through Google. We believe that the distribution of NGTV programming on the Internet will quickly expose a mass consumer audience to our content. We envision that such Internet distribution will be made to consumers who can access high quality video images on broadband high speed Internet connections. We also plan the development and sale of branded merchandise, and sale of our programs and programming on DVDs. We intend to develop a complementary web site presence promoting our pay television service and offering such ancillary consumer merchandise. We expect to receive revenue from pay television subscriptions, sponsorship and product placement advertising, and DVD and branded merchandise sales.

      We believe the uncensored and celebrity nature of the programming has the potential to attract a widespread demographic. Initially our marketing will be targeted to the 18-34 male demographic. We believe the NGTV brand and demographics will evolve after the initial launch and may attract a wider demographic of both male and female audiences and an expanded age bracket.

      We are not obligated to censor our programming to the same extent as channels that broadcast programming over public airwaves, such as traditional network stations which are subject to regular FCC enforcement. Our programming could become the subject of FCC review, however, if complaints against our programming are filed with the FCC alleging our programming is obscene. We are voluntarily adopting the TV-MA rating guideline and we have no intention to create any content which may be deemed obscene under current law or that would trigger FCC review or interference with our content. For example, we will not permit what we determine to be pornography or “x-rated” programming. Our content will not exceed the guidelines for programming rated as TV-MA, which is programming intended for Mature Audiences only and which may contain limited nudity, adult language and graphic violence (however we have no intention to include violence in our programming). We expect to label all of our programming as TV-MA in order to facilitate our broadcast of director’s cut music videos and celebrity interviews and related content without censorship but within the parameters of the TV-MA rating and without the inclusion of any obscene materials.

      This is our initial public offering of securities. We have applied to have our units, common stock, and warrants listed on the American Stock Exchange. We do not know if a public market will develop for any of our securities, or if developed, whether it will be sustained. Prior to this offering, we have never been subject to the reporting requirements of the Securities and Exchange Act of 1934 and we have never operated as a public company.

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“Going Concern” Status

      Our financial statements as of March 31, 2006 reflect that we have been in the development stage since inception, we have incurred substantial operating expenses and we have not generated any revenues from our principal operations. As of March 31, 2006, we have an accumulated deficit of approximately $21.6 million and a working capital deficit of approximately $12.7 million. As a result of these and other factors, the report of our independent registered public accountants on our 2005 financial statements contains an explanatory paragraph raising substantial doubt about our ability to continue as a going concern. Management believes that until the generation of revenues is realized through the proposed distribution arrangements of our product, operations can be funded though additional sources of capital. However, we have never been profitable and there can be no assurances that the company will ever generate revenues or achieve operating profits in the future.

Corporate Information

      We maintain our principal offices and production studios, consisting of approximately 20,000 square feet, at 9944 Santa Monica Boulevard, Beverly Hills, California 90212. Our telephone number at that address is (310) 556-8600 and our facsimile number is (310) 556-9024. Our web site address is www.ngtv.com, however the web site and its contents are not part of this prospectus. Our web site is currently under construction.

Presentation Information

Information Related to Reverse Stock Split; Over-allotment Option; Public Warrant Exercises; and Recent Debt Financing

•  On December 16, 2005, we effected a 23.23-for-1 reverse split of our common stock. Unless otherwise indicated, all discussions included in this prospectus relating to the outstanding shares of our common stock, including common stock to be issued upon the exercise of warrants and options, as well as per share dollar amounts, refer to post-split shares.

•  We (but not the selling security holders) have granted the underwriters an option to purchase an additional 899,576 units to cover over-allotments, if any. Unless otherwise indicated, all discussion included in this prospectus relating to the outstanding units, shares of common stock and warrants immediately following this offering does not reflect the exercise of the over-allotment option.

•  Unless otherwise indicated, all discussion in this prospectus relating to proceeds of the offering and use of such proceeds does not include the proceeds from the exercise of the public warrants. If all of the public warrants are exercised and assuming no exercise of the over-allotment option, we would receive $17,991,525 in gross proceeds for working capital and general corporate purposes, assuming an exercise price of $6.00 per whole share for the warrants. There is no obligation on the part of the holders to exercise any warrants now or in the future.

•  As of June 26, 2006, we received and accepted subscriptions for the purchase and sale of $3,500,000 of 10% Senior Secured Promissory Notes and Warrants to purchase up to 875,000 shares of common stock (assuming the unit offering is completed on or before August 13, 2006 and assuming the initial price per unit is $6.00). The terms of the Notes and Warrants are described elsewhere in this prospectus. All documentation concerning the Notes and Warrants has been fully executed by the Company and the purchasers. The offering of the 10% Senior Secured Promissory Notes and Warrants will be terminated prior to the closing of this unit offering.

•  We have assumed, solely for the purposes of calculating various capitalization and dilution items, that the initial offering price of the units to the public will be $6.00. However, such price is subject to discussion between the underwriters and the company and may vary substantially from our assumed price.

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THE OFFERING

Securities offered	Units, consisting of one share of common stock, no par value per share, and one warrant to purchase one half of one share of common stock. The common stock and public warrants will detach not less than 60 days following the date of this prospectus or the exercise of the over-allotment option, as determined by the representative of the underwriters, and, will thereafter trade separately, as common stock and warrants on the American Stock Exchange. We cannot predict when or under what circumstances the representative may determine to detach the units. Of the 5,997,174 units offered hereby, 4,166,667 are offered by NGTV and 1,830,507 are offered by the selling security holders. This prospectus also covers an additional 899,576 units that may be offered by NGTV in the event the over-allotment option granted to the underwriters is exercised. This prospectus also covers 625,001 shares of common stock underlying options to purchase 416,667 units to be issued to the underwriters. NGTV will not receive the proceeds of the units sold by the selling security holders.
Warrant attributes	Each warrant entitles the holder to purchase one half of one share of common stock. Warrants may only be exercised for whole shares; no fractional shares of common stock will be issued upon exercise of the warrants. Two warrants may be exercised at the price of $6.00 per whole share. The warrants will become exercisable upon the separation of the units into their component common stock and warrants. The warrants are exercisable for a period of five years after issuance.
Redemption right on the warrants	Commencing four months following the date of this prospectus, NGTV shall have the right, but not the obligation, at its discretion upon 30 days prior notice to the public, to redeem all of the then outstanding public warrants at a price per warrant of $0.25 in the event that the average closing price of the common stock exceeds $8.40 during any consecutive ten day period. To the extent not then exercised all the outstanding public warrants will be redeemed.
Over-allotment option	899,576 units at the sole discretion of the representative of the underwriters for the purpose of covering over-allotments, if any. The units included in the over-allotment option are to be offered by NGTV and not the selling security holders.
Underwriters options	We shall issue to the underwriters options to purchase 416,667 units identical to the units offered by this prospectus, exercisable at a price per unit equal to 120% of the initial offering price of the units included in this prospectus (the “underwriters options”). The warrants issuable upon exercise of the underwriters options are exercisable at a price per share equal to 120% of the offering price of the units. The underwriters options will be issued by the company at the closing of this offering but will not be exercisable for 180 days thereafter. The underwriters options will be issued and sold to the underwriters for nominal consideration.
Common stock to be outstanding before the offering	5,000,152 shares which does not include common shares underlying unexercised warrants, options or other convertible securities.

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Common stock to be outstanding after the offering	12,526,344 shares including 5,997,174 shares which form a part of the units offered hereby. If the underwriter’s over-allotment option is exercised in full, an additional 899,576 shares will be outstanding after the offering. The number of shares of common stock to be outstanding after the offering (12,526,344) does not include the following: 4,114,463 shares underlying outstanding but unexercised warrants including the public warrants; 493,892 shares underlying outstanding but unexercised options; 625,001 shares of common stock issuable upon exercise of options to purchase 416,667 units to be issued to the underwriters and; 625,310 shares reserved for issuance under our 2000 Equity Incentive Plan.
Intended use of the net proceeds of this offering	The proceeds will be used for general working capital and the other purposes described under “Use of Proceeds,” including the production and launch of our television programming and the repayment of certain indebtedness.
Risk factors	The offering involves a high degree of risk; see “Risk Factors” beginning on page 7 of this prospectus for a discussion of the risks and uncertainties in connection with investing in this offering.
Proposed American Stock Exchange symbols	The units — “NGI.U”, the common stock — “NGI” and the warrants — “NGI.W”.

      Until the units are detached, only the units will trade on the American Stock Exchange. Each unit will be detached and separated into its separate component of one share of common stock and one warrant to purchase one-half of one share of common stock upon 30 days prior written notice from the representative of the underwriters, determined in its sole and absolute discretion, but in no event prior to the sooner to occur of 60 days immediately following the date of this prospectus or the exercise by the underwriters of the over-allotment option. Following the separation of the units, the shares of common stock will trade on the American Stock Exchange, and the warrants will trade separately from the common stock on that exchange. The units will cease to exist at that time.

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SUMMARY FINANCIAL INFORMATION

      In the table below, we provide you with historical selected financial data for the three years ended December 31, 2005, 2004 and 2003 derived from our audited financial statements included elsewhere in this prospectus. We also provide you with financial data for and as of the end of the first quarter of 2006 and 2005 derived from our unaudited financial statements included elsewhere in this prospectus. Historical results are not necessarily indicative of the results that may be expected for any future period. When you read this historical selected financial data, it is important that you read along with it the audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus. The following information as of March 31, 2006 does not give effect to the receipt of approximately $3.5 million from a private secured debt financing completed subsequent to March 31, 2006:

Summary Financial Information

	(Unaudited)
	Three Months Ended						Year Ended
	3/31/06			3/31/05			12/31/05*			12/31/04			12/31/03
Statements of Operations Data
Revenues	$	—		$	—		$	—		$	—		$	—
Costs and Expenses		1,268,136			925,521			4,148,340			5,201,641			1,718,159
Operating Loss		(1,268,136	)		(925,521	)		(4,148,340	)		(5,201,641	)		(1,718,159	)
Other Expense		(1,009,194	)		(657	)		(2,098,446	)		(1,587,692	)		(2,254,106	)
Net Loss		(2,277,330	)		(926,178	)		(6,246,786	)		(6,789,333	)		(3,972,265	)
Excess Repurchase Price Over Original Price of Preferred Stock		—			—			—			(627,000	)(a)		—
Net Loss Attributable to Common Shareholders	$	(2,277,330	)	$	(926,178	)	$	(6,246,786	)	$	(7,416,333	)	$	(3,972,265	)
Per Common Share Data
Net Loss Per Share — Basic & Diluted	$	(0.46	)	$	(0.24	)	$	(1.45	)	$	(2.27	)	$	(4.27	)
Weighted Average Number of Common Shares — Basic & Diluted		5,000,152			3,799,737			4,301,000			3,274,000			930,000

(a)  Excess purchase price paid to retire our series A-1 preferred stock in February 2004.

	3/31/06			12/31/05*			12/31/04
Balance Sheet Data
Current Assets	$	1,084,127		$	3,884,810		$	48,618
Total Assets		7,397,162			9,134,359			2,394,629
Current Liabilities		13,851,556			13,317,943			3,199,221
Total Liabilities		14,933,704			14,450,632			4,161,215
Total Shareholders’ Deficit		(7,536,542	)		(5,316,273	)		(1,766,586	)
Accumulated Deficit		(21,628,932	)		(19,351,602	)		(13,104,816	)

*  As restated — See Note 2 to the annual financial statements included elsewhere herein for additional information.

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RISK FACTORS

      This offering involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus, including our financial statements and the notes to those statements, before you purchase our securities. The risks and uncertainties described below are those that we currently believe may materially affect our company. Additional risks and uncertainties not presently known to us may also impair our business operations. If the following risks actually occur, our business, financial condition and results of operations could be seriously harmed, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Related to our Business

We have incurred losses in the past and losses may continue, which could result in a decline in the value of our securities and a loss of your investment.

      We are a developmental stage company and we have not generated revenues to date with respect to our principal operations and we have not yet launched our pay television programming. For each of the three years ended December 31, 2005, 2004 and 2003, we incurred net losses of approximately $6.2 million, $7.4 million, $4.0 million and as of March 31, 2006, we had an accumulated deficit of $21.6 million. Our failure to successfully launch our programming, generate revenues, and generate profits would adversely affect our ability to fully introduce our programming content onto the market and compete in the television industry. In addition, such failures could force us to suspend our operations, and possibly even liquidate our assets and wind-up and dissolve our company. We do not know how long it will take for us to generate revenues and profits and we may never generate revenues or profits. We anticipate that we will continue to incur substantial operating losses for the foreseeable future, despite any revenues we may receive in the short-term, due to the significant costs associated with operating expenses and the development and marketing of our programming content. If such losses continue, the value of your investment would be harmed.

We have not generated any revenues and may never have revenues; our lack of revenues could harm the value of our securities.

      NGTV’s operations to date have been limited to developing our business plan, establishing offices, and developing video content. We have no revenues to date and we may never have revenues. If we cannot develop a source of revenue by entering into a distribution agreement, we will never be profitable, or we may be forced to suspend all operations and as a result you could lose the entire value of your investment in our securities.

Our distribution agreement with iN DEMAND L.L.C. requires certain distribution fee minimums be met before we may realize revenue from that agreement; failure to meet those minimums could diminish or prevent us from generating revenues.

      Under the terms of our distribution agreement with iN DEMAND L.L.C. we may not obtain revenues unless certain substantial thresholds of subscribers and subscription dollars are generated. Under the terms of our distribution agreement we may receive the subscription dollars (license fees) based upon the total number of subscriptions but only after the distribution company obtains certain minimum receipts. If such minimums are not met, we will be required to pay over such minimum amounts to iN DEMAND L.L.C. through a letter of credit or direct payment. Even if we enter into additional distribution agreements and launch our programming as anticipated, if the subscriptions do not meet and exceed the license fee thresholds in such agreements, we may not generate any revenues under the agreements. In addition, under our executive employment contracts with Mr. Vir and Mr. Taj, up to 4% of the revenues received under the iN DEMAND agreement are payable to them. If we cannot develop revenues under our distribution agreements, or if we do not generate sufficient revenues, we may be forced to suspend all operations and as a result you could lose the entire value of your investment in our securities.

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We have not yet completed the development of our finished programming for our launch and if we fail to do so we will be unable to launch our programming; a failure to launch our programming would mean that we may not generate revenues.

      We have not yet launched our programming and our programming is not yet completely ready to launch. We have not yet created brand recognition for our planned programming. We face certain challenges in completing our broadcast content including the continued retention of talent in the areas of post production, graphic arts, editing, sound and music mixing. We must also continue to acquire new footage showing the entertainment and music industry’s hottest celebrities. In all aspects of our production and post-production, we must assure that our content adheres to our style of presentation and standards of artistry. Also, we must produce finished content within our contemplated budget and available capital. Finally we must complete finished content in accordance with our time lines for delivery of content to iN DEMAND as well as other distributors we may work with in the future. Our failure to successfully develop television content that adheres to our vision and artistic standards would adversely affect our ability to introduce our programming content into the market and to compete with other producers of television programs. Any inability to produce finished content for broadcast or sale on television, DVDs, or via the Internet as contemplated by us would prevent us from generating revenues and could cause you to lose the entire value of your investment in our securities. Any inability to produce finished programs may mean that we may have no source of revenue. Our activities to date have been limited to developing our business plan, establishing offices and facilities, developing content for our programming, and developing limited amounts of finished broadcast content. We have no revenues from our primary operations to date and we may never have revenues. If we cannot develop a source of revenue by producing finished programs for broadcast we may be forced to suspend all operations and you could lose the entire value of your investment in our securities.

We will require additional capital to fully implement our business plans and objectives, but capital may not be available on terms acceptable to us, if at all; new capital could be dilutive to your proportionate interests and voting rights in our company.

      We cannot give you any assurance that we will be able to secure any additional capital that we may require to continue our operations at all, or on terms which will not be objectionable to us, including substantial dilution to our shareholders. We will require additional capital to sustain our broadcasting and continue our operations. If we are unable to obtain such capital we may be unable to operate and as a result, you could lose the entire value of your investment in our securities. Until we generate sufficient revenue from a distribution arrangement we will require working capital from investment sources to continue our operations. The proceeds of this offering will enable us to operate at least 12 months. Thereafter we must either generate revenues and/or be forced to raise new capital to continue our operations. Our failure to generate sufficient revenues to operate, or to obtain capital on terms acceptable to us could force us to suspend operations which would cause you to lose the entire value of your investment in our securities. Even if we are able to raise capital, such capital may require us to issue common stock or other securities that would be dilutive to your proportionate interest in our company, may dilute your voting rights in our company, or may be issued at a price per share less than that at which our securities are offered hereby.

Our business activities are capital intensive; we may require additional working capital and substantial revenues before we sustain our operations from revenues alone.

      The nature of our business plan requires us to sustain significant lease obligations for production equipment, studio and production facilities, pay competitive compensation for our executives and employees and in connection with our launch activities, undertake a comprehensive marketing and branding campaign. We cannot sustain such assets and continue such activities without working capital to supplement our revenues, assuming we generate revenues. Even if we achieve revenues, such revenues must be substantial to support our growing operations, assuming our programming is a success. We will require substantial revenues to sustain our operations in the absence of outside working capital or investment. We may never achieve revenues, and if we do, such revenues may never be sufficient to sustain our operations absent additional working capital from third parties and investors. If we cannot grow our revenues such that our operations are not self-sustaining, we will require working capital, which would be dilutive to your investment, and which

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may not be available on terms acceptable to us, if at all. If such working capital is not available and our revenues are insufficient to sustain our operations, we will cease operating and you will lose the entire value of your investment in our securities.

Our auditor has noted in its audit report that we may be unable to continue as a going concern.

      Our independent registered public accountants have noted in their report concerning our financial statements as of December 31, 2005 that we have incurred substantial losses and have an accumulated deficit of $19.3 million at that date, which raises substantial doubt about our ability to continue as a going concern. Our accumulated deficit increased to $21.6 million through March 31, 2006. In the event we are not able to continue operations you will likely suffer a complete loss of your investment in our securities. Our financial statements do not include any adjustments that may be necessary in the event we are unable to continue as a going concern.

We currently have limited internal sales and marketing capabilities; our inability to develop our sales and marketing capabilities either internally or through third party companies will adversely affect our ability to launch our programming, expand distribution and generate revenues.

      Upon the launch of our programming we will need to retain new employees to develop and oversee a comprehensive marketing and public relations campaign. Initially, we will also need to rely extensively on third-party marketing companies. Our failure to successfully develop sales and marketing capabilities either internally or on an outsourced basis would adversely affect our ability to introduce our programming into the television market and compete with other television programming. We cannot determine if we will be able to attract and or contract with qualified personnel or consultants to oversee our marketing and public relations needs. We will need to use a substantial portion of the proceeds of this offering to fund our marketing activities. If we cannot timely develop a competent marketing and public relations department, or if we are unable to retain the services of outside marketing providers to support our launch, our launch may not be successful and we may not develop subscriptions to our programming and we will not generate revenues. Any failure to attract and retain qualified marketing and public relations staff, and to contract with third-party marketing support resources, could delay or impede our launch and in turn prevent us from generating revenues which would harm the value of your investment in our securities.

Loss of celebrity support or revocation of legal releases to broadcast celebrity footage would impede our ability to create programming.

      Our programming and the success of our company is highly dependent upon the continued interest and support of celebrities in the film, television and music entertainment industries. Without the interest and cooperation of celebrities willing to be shown in uncensored interviews and candid situations, we could not develop our planned content. While we have obtained written releases to use footage of celebrity interviews and candid situations that are uncensored that we intend to use in our programming, we cannot be assured that we will continue to appeal to celebrities, or that celebrities will repeatedly allow us to film them or that they will not attempt to revoke their releases and consents. Our programming relies on our ability to continuously obtain new content with high profile celebrity guests. If we are unable to obtain new, uncensored, footage of celebrities, or broadcast such footage, we would be unable to create new content or complete our planned programming. If we are unable to create new programming or broadcast our programming in the future, our ability to generate revenues would be harmed and you could lose the entire value of your investment.

We may be the subject of lawsuits if we do not obtain all required releases, licenses and rights to use 100% of our broadcast programs.

      We have obtained written releases in connection with the creation of our video library of celebrity interviews. However, as we produce finished materials for broadcast, we must be certain to obtain any additional releases, consents, and licenses of rights to use all video, audio and images we use or create in the broadcast content that we do not own outright. Any material which we intend to use in our broadcast content that is not owned by us, must be licensed from the owner. Such materials include music videos, audio clips,

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images that we do not own, movie and television clips and similar items. Any failure to obtain all required licenses and rights could subject us to litigation over the use of such content. If we are the subject of such lawsuits, we will need to incur the costs of defending such suits, or paying damages if our defense is not successful. If we are the subject of such lawsuits and we incur losses as a result, our profits (if ever achieved) would be diminished, or the burden of such damages may prevent us from continuing operations, which would harm the value of your investment in our securities.

We are dependent for our success on a few officers, key employees and consultants; our inability to retain those individuals will adversely affect our business and the value of your investment.

      Our success depends to a significant extent on the continued efforts and services of certain officers, key employees and consultants. Our ability to continue production of additional content and prepare it for broadcast depends to a significant on the continued efforts of Mr. Kourosh Taj and Jay Vir pursuant to their employment agreements. Our ability to maintain our relationships and contacts in the industry and the investment community, and to raise further financing, if necessary, depends to a significant extent on the continued efforts and services of Mr. Kourosh Taj, Mr. Richard Abramson, Mr. Jay Vir and Mr. Gene Simmons pursuant to their consulting and/or employment agreements. Our ability to manage the significant growth of our programming and marketing operations depends to a significant extent on the continued efforts of Mr. Jay Vir and Mr. Kourosh Taj. Our ability to manage our marketing and brand development depends to a significant extent on the continued efforts of Mr. Jay Vir, Mr. Kourosh Taj, Mr. Richard Abramson and Mr. Gene Simmons. Our ability to expand our distribution to additional carriers depends to a significant extent on the continued efforts of Mr. Kourosh Taj, Mr. Jay Vir and Mr. Gene Simmons. Each of these individuals is under contract with our company, which expire as follows: (i) Mr. Taj’s agreement expires July 1, 2009; (ii) Mr. Vir’s agreement expires July 1, 2009; (iii) Mr. Simmons’ agreement expired but is being negotiated for renewal; and (iv) Mr. Abramson’s agreement expired but is being negotiated for renewal. The loss of any of these personnel could adversely affect our ability to launch our programming onto the market and to compete, which would result in delays in our ability to generate revenues and profits and to raise additional working capital. In addition, the loss of any of these persons may force us to suspend or delay our operations if they cannot be replaced on terms acceptable to us, if at all. Although all of the above referenced persons are subject to employment or consulting agreements, we cannot give you any assurance that one or more of these employees or consultants will not leave our company. If one or more of these employees were to leave the company, we may be unable to continue to develop content, operate, raise capital, market and brand our products or generate revenues and the value of your investment may be harmed.

The market for our programming niche is at an early stage and if market demand does not develop or later declines, we may not achieve or sustain revenues; we cannot determine if our programming will appeal to consumers or if consumers will pay for it.

      The market for our intended programming niche of uncensored celebrity content, uncensored music videos and related original programming is at an early stage. No other channels are currently offering this type of specific programming. Our programming will include profanity and nudity within the parameters of the “TV-MA” rating. If we are unable to develop demand for this programming, separate and apart from the mainstream, censored versions of similar programming that is currently available, we may not achieve or sustain revenue growth. We cannot accurately predict the growth of the markets for this type of programming, the timing of market acceptance, or the timing of commercial acceptance by sponsors and advertisers. We have not performed any formal marketing studies to confirm the viability of our proposed operations or the demand for our planned programming. We cannot determine and cannot assure that consumers will find our programming appealing, or that even if they do, they will be willing to pay for it. Even assuming they would pay for it, our anticipated price per view is $4.95 and we cannot determine if consumers will pay that price repeatedly, if at all. Even if a market for our programming develops, consumer taste is subject to change and influence and our programming may not attract or retain a paying audience. If our content is not acceptable to viewers for any reason, or if our content does not continue to be acceptable for any reason, the rate of subscriptions for our programming on pay cable services would decline and our revenues, if ever achieved,

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would diminish. If subscriptions for our programming do not develop, or decline over time, our revenues would be diminished and as a result the value of your investment in our securities would be harmed.

Our inability to attract the qualified creative production, programming, and managerial personnel required to execute on our business plans would adversely affect our business and the value of your investment.

      Our ability to implement our business plans will be dependent upon our continuing ability to attract and retain highly qualified creative production technicians, programming personnel, and managerial and administrative personnel. Our inability to attract and retain the necessary personnel would impede our growth and the performance of our business plans to develop broadcast quality programming and market and sell such programming in order to generate revenues. Competition for the type of personnel we require in terms of creative talent and contractual commitment is intense in the entertainment industry and we cannot give you any assurance that we will be able to retain our key managerial and technical employees, or that we will be able to attract and retain additional highly qualified managerial and creative personnel in the future. If we cannot attract and retain required talent, we may be unable to produce high quality programming, which could result in a loss of revenues, if ever achieved, which would harm the value of your investment in our securities.

Our inability to effectively manage our growth will adversely affect our business and the value of your investment.

      Our success will depend upon the rapid expansion of our business and the production of increasing quantities of broadcast quality programming. Our inability to effectively manage our growth, or the failure of new personnel to achieve anticipated performance levels, would adversely affect our ability to introduce our programming into the market and to compete with established entertainment companies, which would cause delays in our ability to generate revenues and profits and to raise additional working capital. The expansion of our staff and operations required to launch our programming and produce new broadcast quality programming after launch, and to produce content for DVDs, will place a significant strain on our financial management, personnel management and other resources. Our anticipated expansion will require us, among other things: to change, expand and improve our operating, managerial, and financial systems and controls; improve the coordination between our various corporate functions; and hire additional technical, creative personnel, and sales and marketing and managerial personnel and supervise all such new hires. We must also be able to assure that all programming we produce conforms to our brand of NGTV programming and we may not be successful in doing so while supervising a large staff of producers and creative talent. We cannot give you any assurance that our efforts to hire or retain new personnel will be successful, or that we will be able to manage the expansion of our business effectively. Any failure to effectively manage growth could harm our ability to achieve or sustain revenues, which would harm the value of your investment in our securities.

We will experience significant competition in the entertainment industry from competitors with greater resources than us that may prevent us from creating content that is appealing to consumers.

      The market for cable television programming is intensely competitive and constantly changing. Most of our existing competitors have greater financial, technical, marketing, and other resources than we do and can pay significant sums of money to attract movie, television and musical celebrities to projects they are developing. As such, competitors may influence celebrities to not work with us in the future, which would impede our ability to develop appealing content. The entertainment industry is populated with large, multinational entities with substantial experience in creating new entertainment products in television, whereas we are a newer company with limited experience in television production, and with less managerial experience. These competitors may also be able to respond more quickly to new or emerging technologies and changes in programming trends than we are presently able to since they can afford to retain persons trained on such new technologies and can afford to acquire new technologies as soon as they are developed. Competitors’ experience and ability to avail themselves of resources put them at an advantage over our operating circumstances. Our ability to compete will ultimately be a function of many variables, including: our ability to develop appealing programming featuring popular celebrities; the effectiveness of our marketing and sales and

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distribution efforts concerning our content; and our ability to meet programming schedules that we commit to. We cannot give any assurance that we will be able to compete successfully with other television entertainment companies, or that competitive factors we face will not have a material adverse effect on our business, operating results, and financial condition. If we are unable to compete in the television programming market place we will not be able to achieve or sustain revenues and the value of your investment in our securities would be harmed.

If we fail to protect and enforce our intellectual property rights, our ability to generate revenues would be impaired.

      Our business depends on generating brand recognition for the NGTV name and related trademarks in order to drive increased subscriptions to our programming on pay cable service providers as well as ancillary DVD sales, and in protecting our copyrights in our programming content. Our ability to generate revenue could be substantially impaired if competitors were to launch similar programming under a similar name, or, successfully copied and rebroadcast our content without permission. We have no registered copyrights. Our ability to protect against the unauthorized use of our content could harm our business and the value of your investment. With respect to our consumer products, if developed, marketed and sold, we cannot protect against “pirated” versions of our DVDs or clothing, toys and accessories. Pirated DVDs are readily available in the U.S. and foreign markets, including the Internet. Attempting protection against such illegal practices, or bringing claims if such practices are discovered, would be costly and may not prevent or remedy the problem. Any such pirated goods, or counterfeit goods, being sold in the market place to consumers could damage our brand or cause us to lose revenues if consumers buy unauthorized goods. If we lose revenues due to the failure to protect our intellectual property rights, the value of your investment in our securities could be harmed.

We may become involved in litigation over intellectual property, broadcast and/or DVD distribution rights; litigation costs and distractions could harm our business and the value of your investment.

      We attempt to avoid infringing known proprietary and privacy rights of third parties in connection with our programming content. However, any of these third parties might make a claim of right of publicity, invasion of privacy, false light, or other alleged contractual or tortious breach with respect to our programming. Although we are unaware of any potential claims, we could receive threats in the future that could lead to litigation. We might also elect to enforce our intellectual property rights against third parties, which could result in litigation.

      Any intellectual property litigation, whether brought by us or by others, could result in the expenditure of significant financial resources and the diversion of management’s time and efforts. In addition, litigation in which we are accused of infringement or other wrongdoing in connection with our programming may cause delays, recalls of DVD products, or suspension of programming even before the issue of infringement or wrongdoing has been decided on the merits. If any litigation were not resolved in our favor, we could become subject to substantial damage claims from third parties. We could be enjoined from the continued use of our programming. If a successful claim of infringement or wrongdoing were made against us and we could not resolve it in a timely and cost-effective basis, our expenses would increase and our revenues could decrease. If we experience increased costs or loss of revenues the value of your investment in our securities could be harmed.

Competition from similar programming and larger competitors’ offerings could limit our revenues or cause our revenues to decline.

      Viacom currently owns the predominant channels in music television and music entertainment programming, including MTV, VH1, CMT and BET. If Viacom or others were to successfully copy our strategy for uncensored music entertainment programming, this could have a significant impact on our ability to attract and retain a recurring subscriber base for our pay television programs and related DVD offerings. If competitors such as Viacom introduce content that competes directly with our planned programming, our business could be harmed since we could lose subscriptions or distribution rights which would cause a loss of

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revenues. If we lose subscriptions or distribution rights, our business may be harmed and the value of your investment in our securities would be harmed.

Success of television programming is increasingly hits driven; the market for such programming is highly unpredictable and development of new content is inherently risky.

      New television shows and programming content is increasingly “hits” driven. Additional marketing and advertising funds are required to drive and support “hit” programs, particularly television advertising. There can be no assurance that our programming will be a “hit” or will include “hit” shows, or that advertising for the programming or any related DVD or merchandising products will increase sales sufficiently to recoup those advertising expenses. We cannot assure that our programming will be developed on time, in a cost effective manner, or that we will be commercially successful. If our programming is not a “hit” or if we can not support its success over time, we will be unable to achieve or sustain revenues and the value of your investment in our securities would be harmed.

The television entertainment industry is cyclical, and we may fail to anticipate changing consumer preferences.

      A substantial portion of our business will depend on our success in the television entertainment industry, which is cyclical, and our ability to anticipate changing consumer preferences. Reality television shows, censorship, and celebrity tabloids have been popular items recently in television entertainment. However, television entertainment is subject to changing consumer tastes and preferences. Our success will depend on numerous factors beyond our control, including:

•  the popularity, price and timing of pay television services;

•  international, national and regional economic conditions, particularly economic conditions adversely affecting discretionary consumer spending;

•  changes in consumer demographics;

•  the availability of other forms of entertainment; and

•  critical reviews and public tastes and preferences, all of which change rapidly and cannot be predicted.

      In order to plan for promotional activities, we will be required to anticipate and respond to rapid changes in consumer tastes and preferences. A decline in the popularity of the type of programming we intend to offer could cause sales to be very low or non-existent.

Legislative actions and potential new accounting pronouncements could impact our future financial position and results of operations.

      There have been regulatory changes, including the Sarbanes-Oxley Act of 2002, and there may potentially be new accounting pronouncements or additional regulatory rulings that will have an impact on our future financial position and results of operations. While these regulatory and accounting initiatives apply predominantly to publicly-held companies, following the successful completion of this offering, we will become publicly-held and subject to some or all of these regulations. The Sarbanes-Oxley Act of 2002 requires the development of internal accounting controls and procedures that can be costly. Other rule changes proposed following the Enron bankruptcy are also likely to increase general and administrative costs. The costs of complying with section 404 of the Sarbanes-Oxley Act of 2002 such that our independent registered public accountants do not express concerns regarding our internal controls and procedures could be very costly and the development and implementation of adequate controls and procedures may never be achieved. We expect that compliance with the Sarbanes-Oxley Act of 2002, along with the costs associated with being a public company could add as much as $100,000 per month to our operating costs. We may be required to comply with the internal accounting controls and procedures under the Securities Act beginning with our fiscal year 2006. In addition, insurers are likely to increase premiums as a result of high claims rates over the past year, which we expect will increase our premiums for insurance policies. Further, proposed initiatives are expected

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to result in changes in certain accounting rules, including legislative and other proposals to account for employee stock options as a compensation expense. These and other potential changes could materially increase the expenses we report under generally accepted accounting principles, and adversely affect our operating results.

We have never operated a public company and we are not experienced in public reporting requirements or American Stock Exchange Listing maintenance.

      We have never operated a public company. As such, we are not experienced in preparing periodic reports and taking other actions required of companies subject to the compliance requirements of the Securities and Exchange Act of 1934 and the listing requirements of the American Stock Exchange or any other exchange where our securities may be listed. Accordingly, we may not be able to stay in compliance with applicable securities regulations or listing requirements and our public market for our securities, assuming one develops, could be harmed. If we fail to comply with the public reporting requirements there may not be adequate public information about our company widely available and as such you may be unable to monitor your investment in our securities. Also, if we are unable to file periodic reports trading in our securities may be suspended by regulatory authorities, or may cease on its own. If our securities are not continuously listed on the American Stock Exchange or any other exchange where our securities may be listed, there will be no public market for our securities and you may have no ability to sell our securities, should you choose to do so. Also, a lack of a public market for our securities would deflate the price of our securities, which would harm the value of your investment.

Changes in regulations concerning broadcast and DVD distribution could negatively affect our business.

      Legislative action affecting or restricting cable and satellite television providers from distributing content rated TV-MA, and TV-MA-R could have a negative impact on revenues since the majority of our programming content will be rated as TV-MA. Legislative action affecting or restricting DVD distributors from distributing content rated TV-MA, and TV-MA-R could have a negative impact on revenues since the majority of our DVD content will be rated as TV-MA. If the parameters of TV-MA content are changed in a way that is too restrictive for our proposed content, we may be unable to continue with our programming.

      Any failure to comply with regulatory requirements, or any substantial changes in the regulations concerning the broadcast or distribution of our content would harm our ability to continue operating, generate or maintain revenues, inhibit your liquidity, and potentially harm the value of your investment in our securities.

To date we have operated as a private company with a majority of interested directors; we may continue to be subject to agreements that were not approved by a majority of disinterested directors.

      Prior to this offering we operated our company privately and a majority of our directors were interested in various transactions and agreements we entered into. While we took all steps required to comply with state law concerning corporate governance, we may be subject to contracts that benefit certain of our directors and officers and their affiliates. Such contracts may contain terms and conditions that might not have been negotiated or agreed to in an arms length transaction. Any contractual obligations that are burdensome to our company that cause our company unnecessary costs may harm the value of your investment in our securities by diminishing our cash available for working capital or by diminishing profits, if achieved.

Management has discretion as to use of proceeds; failure to use the proceeds to successfully implement our business plans could harm the value of your investment.

      We reserve the right to use the funds obtained from this offering for other purposes not presently contemplated which we deem to be in the best interests of the company and our shareholders in order to address changed circumstances and opportunities. As a result of the foregoing, our success will be substantially dependent upon the discretion and judgment of management with respect to the application and allocation of the net proceeds of the offering. Investors in the units offered hereby will be entrusting their funds to our

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management, upon whose judgment and discretion the investors must depend, with only limited information concerning management’s specific intentions and uses. The failure to adequately and appropriate allocate the proceeds of this offering, or the failure to implement our business plan with the offering proceeds, would harm the value of your investment in our securities.

We are in a dispute with our former Chief Executive Officer concerning his separation from the company; if litigation arises, and we do not prevail, we may be forced to pay damages.

      We entered into an Employment Agreement with Mr. John Burns on April 10, 2006 under which he served as our Chief Executive Officer. On May 16, 2006, we advised Mr. Burns of our intention to terminate his employment and to evaluate a termination for “cause” under the terms of his Employment Agreement. Two days later, Mr. Burns presented a written threat of litigation against us and tendered his resignation for “good reason” under his Employment Agreement. Mr. Burns’ written threats include claims that he was fraudulently induced into signing his employment agreement with the company as CEO, that the company breached the Employment Agreement thereby giving him the right to resign under the Agreement and be paid his full severance package, and that any termination would allegedly be unlawful. Notwithstanding the foregoing threats, we terminated Mr. Burns’ employment for “cause” as defined under his Employment Agreement effective May 23, 2006. The company cannot determine what losses, if any, may arise as a result of this dispute other than the possible severance benefits provided under the Employment Agreement for a termination “without cause”. A termination “without cause” or a resignation for “good reason” provide for the same contractual severance benefits, including, among other things, payment of a severance amount equal to his base salary through the full term of the Agreement (which we estimate to be $690,000), continuation of health insurance benefits, and the accelerated vesting of all unvested options granted to Mr. Burns. No litigation has yet been filed against the company by Mr. Burns. In the event of litigation, the company would vigorously defend any actions commenced by Mr. Burns although we cannot control the outcome of such litigation. In the event litigation is commenced, and the company must pay substantial damages, the operations of the company could be negatively affected and the value of your investment could be harmed as a result.

Risks Related to an Investment in our Securities

Our right to issue additional securities at any time could have an adverse effect on your proportionate ownership and voting rights.

      Our board may generally issue securities, or options or warrants to purchase those securities, without further approval by our shareholders based upon such factors as our board of directors may deem relevant at that time. We may issue additional securities to raise capital to further our launch, development and marketing plans and to produce greater quantities of content. It is also likely that we will be required to issue additional securities to directors, officers, employees and consultants as compensatory grants in connection with their services, both in the form of stand-alone grants or under our stock plan. The issuances may be very significant. If you are a shareholder, your proportionate ownership and voting rights could be adversely effected by the issuance of additional securities, or options or warrants to purchase those securities, including a significant dilution in your proportionate ownership and voting rights.

Prior to this offering there has been no public market for our securities.

      This is our initial public offering of securities and there is no public market for our securities. We cannot be certain a public market for our securities will develop, or if developed, that it will be sustained. Our securities may be thinly traded compared to larger more widely known companies. Thinly traded securities can be more volatile than securities trading in an active public market. We cannot predict the extent to which an active public market for our securities will develop or be sustained at any time in the future. If we are unable to develop or sustain a market for our securities, you may be unable to sell the securities you own, or you may lose the entire value of your investment in our securities.

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We cannot control when the units will detach into common stock and warrants; detachment may have an adverse effect on the market prices of our securities.

      The Representative of the underwriters will determine, in its sole discretion, when the units detach into common stock and public warrants. We have no control and cannot influence the decision by the Representative as to the timing for detachment of the units. The detachment will not occur less than sixty days from the date hereof, or less than sixty days following the exercise of the over-allotment option. Upon detachment, the common stock and public warrants will trade separately and the units will cease to exist. Detachment, and an inability to anticipate when such detachment will occur, may cause confusion in the market as to which securities are trading or for how long the units will continue to trade. In addition, such confusion could depress the price of the units, common stock or public warrants, or cause the average volume of trading in our securities to fluctuate. Any confusion or uncertainty concerning the timing of the detachment may adversely affect the trading prices of our securities, which would in turn harm the value of your investment.

We cannot be certain that our securities will qualify or will continue to qualify for listing on the American Stock Exchange.

      We have submitted an application to the American Stock Exchange to list our securities, however there is no assurance that our application will be approved, or if our application is approved, that the listing can be maintained. In order to be listed on the American Stock Exchange we must meet certain minimum criteria relating to our market capitalization, value of publicly held shares, value of stockholders’ equity and stock price. We must also have a minimum number of public shareholders. Assuming that we are able to meet these minimum requirements, we will also be required to have a board composed of a majority of independent directors, each of whom satisfies the independence standards set forth in Rule 10A-3 promulgated under the Securities Exchange Act of 1934 and an audit committee made up of three financially sophisticated independent directors. We cannot assure you that we will be able to meet or maintain these listing requirements. The units we sell in this offering may not be sold at a price that will allow us to meet the minimum criteria imposed by the American Stock Exchange.

      While we believe we will meet the initial listing standards for the American Stock Exchange, we may be unable to attract or retain enough independent directors to our board to be fully compliant with the corporate governance requirements of the American Stock Exchange company rules within one year of the date hereof. We plan to have one independent director on our audit committee as of the date of this prospectus, two within 90 days hereof and three within one year. If we are unable to meet those requirements, our securities could be de-listed from the American Stock Exchange. Given the increased regulatory scrutiny since the Enron collapse, coupled with the potential for liability associated with serving on public boards of directors, we may not be able to attract and retain persons who are both independent, and willing to serve on our audit committee. In addition, any persons who agree to act as members of our audit committee must be financially sophisticated and we can make no assurances that we can attract or retain persons who fit all of these criteria in light of the regulatory scrutiny and liability risks associated with service on a public company audit committee.

      If we cannot meet the requirements imposed by the American Stock Exchange, our stock may be quoted on the OTC Bulletin Board. In order to have our securities quoted on the OTC Bulletin Board, a market maker must submit an application on our behalf to the NASD. The OTC Bulletin Board is a regulated quotation service, not an issuer listing service, market or exchange. Although there are no listing requirements, in order to be eligible for quotation on the OTC Bulletin Board, we must be subject to the filing requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934 and remain current in those filings.

      Shareholders may find greater percentage spreads between bid and asked prices on the OTC Bulletin Board, more difficulty in completing transactions and higher transaction costs when buying or selling our securities than they would if our securities are listed on the American Stock Exchange. Furthermore, if our securities traded on the OTC Bulletin Board rather than the American Stock Exchange, we would not be able

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to take advantage of certain state “blue sky” trading and registration exemptions, which would restrict the liquidity of our securities.

      If we are unable to maintain our listing on the American Stock Exchange, the value of your investment in our securities would be harmed.

If we fail to keep our registration statement effective you may be unable to exercise the public warrants.

      This prospectus is part of a registration statement which registers the shares of common stock underlying the public warrants. After the units detach into common stock and public warrants, the public warrants will become exercisable. However, if the registration statement is not effective at the time you determine to exercise your warrants, we cannot issue the underlying common shares to you. We can make no assurances that the registration statement will be effective at all times while the warrants are outstanding. We have undertaken, as part of the requirements of the federal securities laws and in our agreements with the underwriters to keep the registration statement effective while the warrants are outstanding, however, we cannot make any assurances that we will be able to do that. Maintaining the effectiveness requires, among other things, that we periodically update the financial statements and disclosures in the registration statement and that the Securities and Exchange Commission not suspend the effectiveness of the registration statement. We will use our best efforts to keep the registration statement effective, however if we cannot, you may be unable to exercise your warrants which could be harmful to your investment in our securities.

The application of the “penny stock” rules could adversely affect the market price of our securities and increase your transaction costs to sell those securities.

      Even if our securities are listed on the American Stock Exchange, the “penny stock” rules may apply to our securities. In the event the trading price of our common stock is below $5 per share, or we do not otherwise meet the requirements for exemption from the “penny stock” rules under the federal securities laws, the open-market trading of our common stock will be subject to the “penny stock” rules. The “penny stock” rules impose additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of securities and have received the purchaser’s written consent to the transaction before the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the broker-dealer must deliver, before the transaction, a disclosure schedule prescribed by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. These additional burdens imposed on broker-dealers may restrict the ability or decrease the willingness of broker-dealers to sell the securities, and may result in decreased liquidity for our securities and increased transaction costs for sales and purchases of our securities as compared to other securities.

The market for penny stocks has suffered in recent years from patterns of fraud and abuse.

      Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (a) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (b) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (c) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (d) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (e) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical

17

limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

Assuming a market for our securities develops, it may be particularly volatile given our status as a relatively unknown company with a limited operating history and lack of revenues or profits to date for our newly introduced products, which could lead to wide fluctuations in our share price. We may have only a small and thinly traded public float.

      This is our initial public offering of securities and assuming a market for our securities develops, that market may be characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price may be attributable to a number of factors. First, we may have relatively few common shares outstanding in the “public float” as compared to our overall capitalization. In addition, there is currently no market for our securities, and if one develops, the common stock may be sporadically or thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our securities are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, lack of capital to execute our business plan, and uncertainty of future market acceptance for our products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

      The following factors may add to the volatility in the price of our securities: actual or anticipated variations in our quarterly or annual operating results;

•  acceptance of our products; announcements of changes in our operations, distribution or development programs;

•  our capital commitments; and

•  additions or departures of our key personnel.

      Many of these factors are beyond our control and may decrease the market price of our securities, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our securities will be at any time, including as to whether our securities will sustain the price you may purchase our securities, or as to what effect that the sale of shares or the availability of securities for sale at any time will have on the prevailing market price.

      Further, in the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

To date, we have not paid any cash dividends and no cash dividends will be paid in the foreseeable future; we may be restricted from redeeming the warrants under California law.

      We do not anticipate paying cash dividends on our securities in the foreseeable future, and we cannot assure an investor that funds will be legally available to pay dividends, or that even if the funds are legally available, that the dividends will be paid. In addition, our ability to pay dividends on our securities may be limited by law. Under California law, we may only pay the dividends on the securities from certain lawful sources of accounts, including shareholders’ equity, or if none, out of net profits for the fiscal year in which the dividend is declared or the preceding fiscal year. We cannot assure you that at such time, if ever, as a dividend on the common stock is declared, that we will lawfully be able to pay the dividends when due or at any time

18

thereafter. In addition, we cannot lawfully redeem the public warrants if we do not have net profits or other surplus available for that purpose. We can make no assurance that we will ever redeem the warrants.

We have indemnified our officers and directors against liabilities arising as a result of their services to us. In addition, limitations on director liability may discourage shareholders from bringing suit against a director.

      Our articles of incorporation and bylaws provide, as permitted by governing California law, for indemnification of directors such that a director shall not be personally liable to us or our shareholders for monetary damages for breach of fiduciary duty as a director with certain exceptions. These provisions may discourage shareholders from bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by shareholders on our behalf against a director. In addition, our articles of incorporation and bylaws provide for mandatory indemnification of directors and officers to the fullest extent permitted by California law. In the opinion of the Securities and Exchange Commission, indemnification of officers or directors against their violation of federal securities laws is void as being against public policy.

A large number of our shares of common stock may be sold in the market following this offering that could cause the prices of our securities to decline.

      Sales of a substantial number of shares of our common stock in the public markets, or the perception that these sales may occur, could cause the market price of our common stock to decline. After this offering, we will have 5,837,927 shares of our unregistered, restricted common stock outstanding. We anticipate 4,100,098 of such shares will be eligible for public trading within 90 days of the date of this prospectus under Rule 144 of the Securities Act of 1933 subject to certain restrictions; provided, however, that we expect that certain of these shares will be subject to a lock up agreement for 12 months following the date of this prospectus. In addition, we will have 5,997,174 shares of common stock registered as part of the units being sold in this offering, and 2,998,588 registered shares that are underlying the public warrants (in each case without giving effect to the over-allotment option). These shares will be freely tradable without restriction or further registration under the federal securities laws unless sold by our affiliates. The public warrants may not be exercised until the units detach. We will also have registered 625,001 shares of common stock for issuance in the event of exercise of the options to be issued to the underwriters. The options issued to the underwriters cannot be exercised for, and the shares issuable upon exercise of the options issued to the underwriters may not be sold or transferred (except under limited circumstances), until at least 180 days after the date of this prospectus.

CAUTIONARY STATEMENT REGARDING

FORWARD-LOOKING STATEMENTS

      This prospectus contains forward-looking statements. These statements are not historical facts, but rather are based on our current expectations, estimates and projections about our industry, our beliefs and assumptions. Words including “may,” “could,” “would,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which remain beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These risks and uncertainties are described in “Risk Factors” and elsewhere in this prospectus. We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this prospectus. We are not obligated to update these statements or publicly release the results of any revisions to them to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

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USE OF PROCEEDS

      Assuming an offering price per unit of $6.00, the gross proceeds to NGTV of this offering will be approximately $25,000,000, or $30,397,456 in the event that the over-allotment is exercised in full. After deducting the estimated underwriting discount of $2,500,000, a non-accountable expense allowance of $500,000 and other estimated offering expenses payable by us of $650,000, the net proceeds of this offering will be approximately $21,350,000. If the underwriters exercise the over-allotment option in full, we estimate the net proceeds to us will increase by $4,749,761.

      We intend to use the net proceeds of this offering, as follows:

				Percentage of
				Proceeds
				from this
	$ in 000’s			Offering
Proceeds of this offering, 4,166,667 units at an assumed offering price of $6.00 per unit	$	25,000			100	%
Costs related to this offering, including professional fees and distribution costs		(3,650	)		15	%
Net proceeds from this offering		21,350			85	%
Repayment of Bridge Notes		(3,550	)		14	%
Production and programming		(6,000	)		24	%
Sales and marketing		(6,000	)		24	%
Capital expenditures		(2,000	)		8	%
Salaries to executive officers		(900	)		3	%
Repayment of debt		(450	)		2	%
Repayment of amounts due to directors(1)		(350	)		1	%
Repayment of other debt		(800	)		3	%
Letter of Credit required for distribution agreement		(250	)		1	%
Cash available for general corporate purposes	$	1,850			8	%

(1)  Represents accrued but unpaid fees due to certain directors who are also consultants to the company.

      We intend to repay $3,500,000 of financing obtained in the second quarter of 2006. The offering consisted of $3,500,000 in short term, 10% secured promissory notes, which mature on April 17, 2007. Such financing was used to fund our working capital needs.

      We intend to spend approximately $6,000,000 in production and programming costs through December 2006, for the launch of our Pay TV service. These are necessary internal and external charges pertaining to the creation and delivery of our content, such as production and programming labor, as well as other costs relating to the distribution of our content.

      We intend to spend approximately $6,000,000 through December 2006, on consumer marketing, affiliate marketing and the development of sponsorships and ancillary revenues. This includes internal sales and marketing related labor, the retention of a public relations firm and marketing agency, as well as advertising and media placement, launch incentives and promotional efforts.

      We anticipate that over the next three quarters, we will acquire approximately $2,000,000 in capital assets to augment our production and programming infrastructure. These assets include production, post-production and general computer equipment, as well as various software, rendering and storage systems.

      Salaries to executive officers consist of salaries payable over the three quarters subsequent to the date of this prospectus to our executive officers in accordance with the terms of the employment agreements described elsewhere in this prospectus. Additionally, we intend to pay off an outstanding debt to a director of approximately $100,000.

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      Out of the proceeds of this offering, we intend to repay certain debt and outstanding obligations totaling about $450,000, including two Demand Notes with principal amounts of $150,000 and $75,000, plus accrued interest at 10% per annum.

      As part of our distribution agreement with iN DEMAND, we are required to furnish a $250,000 letter of credit in their favor to cover certain distribution minimums. We expect that this letter of credit will need to be 100% cash collateralized.

      We intend to use the balance of the proceeds of this offering, estimated to be $1,850,000 ($6,599,761 if the underwriters’ over-allotment is exercised in full) along with cash generated from operations, for general corporate purposes, including corporate salaries, general office expenses such as rent, telecommunications, insurance and other overhead costs, as well as legal and accounting fees associated with being a public entity and being in compliance with the Sarbanes Oxley Act of 2002.

      We anticipate that our existing cash and the net proceeds of this offering will be sufficient to fund our operations and capital requirements for approximately 12 months following this offering, based on cash generated from operations as well as the exercise of the over-allotment option. We cannot assure you, however, that such funds will not be expended earlier due to circumstances that we cannot foresee. In the event that our plans change or our assumptions change or prove to be inaccurate, we could be required to seek additional financing sooner than currently anticipated.

      The above information represents our best estimate of the use of proceeds from this offering, based upon the current plans for our business. We cannot specify with certainty all of the particular uses for the net proceeds that we may receive upon the completion of this offering, as the actual allocation will depend upon business opportunities that arise, the amount of our future revenues, any change or inaccuracy in our assumptions about our business or future operations and other factors, many of which are outside of our control, some of which are described in the section of this prospectus titled “Risk Factors”. Given these constraints, management retains the right to use the net proceeds of this offering differently than as set forth herein.

      Pending final use, we may invest the net proceeds of this offering in short-term, investment grade, interest-bearing securities or guaranteed obligations of the United States or its agencies.

      If all of the public warrants offered hereby are exercised, we would receive an additional $17,991,525 in gross proceeds which we would use for general working capital purposes at the discretion of management.

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CAPITALIZATION

      The following table sets forth our capitalization (a) as of March 31, 2006, (b) as of March 31, 2006, as adjusted to reflect the conversion of (1) $1.2 million of indebtedness sold in a debt private placement into units at a 50% discount to the offering price of the units offered hereby (resulting in the issuance of 400,007 shares of common stock and warrants to purchase an aggregate of 260,424 shares of common stock) and (2) $5.785 million of new notes sold in a private debt placement as well as the conversion of $3.288 million in existing notes of the company and the new notes into units at a 33¹/3 % discount to the offering price of the units offered hereby (resulting in the issuance of 2,268,276 shares of common stock and warrants to purchase an aggregate of 1,474,903 shares of common stock), and (c) as of March 31, 2006, as adjusted to give effect to the conversion of debt described in (b) and the sale of the units offered hereby (without including the units issuable upon exercise of the over-allotment option) and the company’s receipt of the net proceeds of sale:

	(Unaudited)
				(b)
				March 31, 2006			(c)
	(a)			Adjusted For			March 31, 2006
	March 31, 2006			Debt Conversion			Post Offering
	(Unadjusted)
Long-term debt	$	1,082,148		$	1,082,148		$	1,082,148
Common stock		9,452,588			9,452,588			9,452,588
Common stock units(1)		—			8,820,526			27,647,526
Additional paid-in capital (net)(2)		4,639,802			6,784,573			6,784,573
Accumulated Deficit		(21,628,932	)		(21,628,932	)		(21,628,932	)
Total Shareholders Equity (Deficit)		(7,536,542	)		3,428,755			22,255,755
Total Capitalization(3)	$	(6,454,394	)	$	4,510,903		$	23,337,903

(1)

The estimated value of the common stock units has been bifurcated between equity and short-term liabilities, based on a 90%/10% split between common stock value and warrant value. Common stock units include 90% of the unit value, less costs associated with their issuance. The warrants are deemed as short-term derivative liabilities pursuant to EITF No. 00-19 and SFAS No. 133 and are expected to convert to equity within 12 months.

(2)

Upon conversion into common stock units, our derivative liabilities associated with our Bridge Financings notes and other convertible notes have been reclassified to additional paid-in capital.

(3)  Excludes effect of receipt of $3,080,000 in net proceeds from our April 2006 bridge financing which matures within 12 months and has been classified as short-term liabilities.

DILUTION

      If you invest in our common shares in this offering, your ownership interest in us will be diluted to the extent of the difference between the initial public offering price per share and pro forma net tangible book value per share after this offering. Our net tangible book value as of March 31, 2006 is presented on a pro forma basis, adjusted for the consummation of debt private placements through May 31, 2006 and the conversion of such debt into shares of our common stock at a discount to the initial public offering price. Our pro forma net tangible book value as of March 31, 2006 is presented based on the aforementioned conversion of debt to equity, along with the consummation of this offering of $25 million, without giving effect to a 15% over-allotment. Our pro forma net tangible book value as of March 31, 2006 is determined by subtracting the total amount of our liabilities as of March 31, 2006 from the total amount of our tangible assets as of March 31, 2006. Our net tangible book value per share as of March 31, 2006 is determined by dividing our net tangible book value as of March 31, 2006 by the number of common shares outstanding as of March 31, 2006, after giving effect to the debt private placements and related conversions. Our net tangible book value as of March 31, 2006 pre-offering is $(7,536,542) or ($0.98) per share.

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      After giving effect to our sale in this offering of 4,166,667 common shares (without giving effect to the over-allotment option) at an assumed initial price to the public of $6.00 per share and after deducting underwriting discounts and commissions and our estimated offering expenses, our pro forma net tangible book value as of March 31, 2006 would be an aggregate of approximately $22,255,755, or $1.88 per common share. This amount represents an immediate increase of $2.86 per share to our existing shareholders and an immediate dilution of $4.12 per share from the assumed initial price to the public of $6.00 per share to new investors purchasing shares in this offering. The table below illustrates this per share dilution:

Assumed initial price to the public per share				$	6.00
Net tangible book value per share as of March 31, 2006	$	(0.98	)
Increase in pro forma net tangible book value per share attributable to this offering		2.86
Pro forma net tangible book value per share after this offering					(1.88	)
Dilution per share to new investors				$	4.12

      The table below sets forth, as of March 31, 2006, the number of our common shares issued and the total consideration paid to date by our existing shareholders, as well as the shares to be issued in this offering, at an assumed initial price to the public of $6.00 per share.

		Shares Issued					Total Consideration
												Average Price
		Number		Percent			Amount		Percent			Per Share
Existing shareholders(1)(2)			7,668,437		64.8	%	$	20,167,756		44.7	%	$	2.63
New investors(2)			4,166,667		35.2	%		25,000,000		55.3	%		6.00
	Total(3)		11,835,104		100.0	%	$	45,167,756		100.0	%	$	3.82

(1)	Includes debt which converts to equity on the closing of this offering.
(2)	Excludes unexercised warrants and those warrants to be issued in conjunction with this offering.

(3)  Excludes 416,667 options to be issued to underwriters.

MARKET FOR COMMON EQUITY

Application for American Stock Exchange Listing

      We have applied to have the units, our common stock and the public warrants approved for listing on the American Stock Exchange as follows: (a) the units under the symbol “NGI.U”, (b) our common stock under the symbol “NGI”, and (c) the public warrants under the symbol “NGI.W”, each subject to official notice of issuance. Until the units are divided into their separate components of one share of common stock and one warrant to purchase one half of one share of common stock, only the units will trade on the American Stock Exchange. The units will trade until detached. The units will be detached upon 30 days prior written notice from the representative of the underwriters, which shall be determined in its sole and absolute discretion. However, we will not allow separation of the units until the earlier to occur of 60 days immediately following the date of this prospectus or the exercise by the underwriters of the entire over-allotment option. Following the separation of the units, the shares of common stock will trade on the American Stock Exchange, and the warrants will trade separately from the common stock on such exchange. The units will cease to exist at such time.

      Prior to this offering and the listing on the American Stock Exchange of the units, common stock and public warrants, there has been no public market for our securities.

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Dividend Policy

      We have not declared or paid any dividends and do not intend to pay any dividends in the foreseeable future to the holders of our common stock. We intend to retain future earnings, if any, for use in the operation and expansion of our business. Any future decision to pay dividends on common stock will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors our board of directors may deem relevant.

      We will have the right to redeem the public warrants at any time after 120 days following the sooner of the date of this prospectus of the exercise by the underwriters of the over-allotment option. However, California law may prohibit the redemption of securities under certain circumstances where the company has insufficient capital or the redemption would cause the company to become insolvent. Accordingly, we may be limited under California law as to the timing or exercise of our redemption right with respect to the public warrants.

Equity Incentive Plan

      The following table outlines our equity compensation plan as well as our outstanding warrants to purchase common shares of stock, as of May 31, 2006.

		Number of
		Securities to be		Weighted
		Issued upon		Average
		Exercise of		Exercise Price		Number of
		Outstanding		of Outstanding		Securities
		Options,		Options,		Remaining
		Warrants and		Warrants and		Available for
		Rights		Rights		Future Issuance
NGTV 2000 Option Plan(1)			493,892	$	2.63		625,310
NGTV outstanding warrants(2)			69,766	$	7.33		n/a
	Total		563,658	$	3.26		625,310

(1)	As amended.
(2)	Issued to consultants and suppliers.

      Our 2000 Equity Incentive Plan provides for the issuance of 1,169,784 awards of shares and options. There are currently 493,892 options outstanding, of which 454,782 are currently exercisable. 625,310 additional shares remain available for grant under the 2000 Equity Incentive Plan. Under the terms of the Plan we may grant stock or options to eligible participants including employees, officers, directors and consultants. The remaining shares available under the Plan may be granted by our board of directors without the necessity of shareholder approval.

Stand-Alone Grants

      In the future our board of directors may grant common share purchase options or warrants to selected directors, officers, employees, consultants and advisors in payment of goods or services provided by such persons on a stand-alone basis outside of any of our 2000 Equity Incentive Plan. The terms of these grants may be individually negotiated.

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SELECTED FINANCIAL DATA

      The following information has been prepared assuming that the Company will continue as a going concern. The Company has been in the development stage since inception and has not generated any revenues from its principal operations, and there is no assurance of any future revenue.

      The following selected financial data have been derived from our financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Our statements of operations for 2005, 2004 and 2003 and our balance sheets as of December 31, 2005 and 2004 have been audited by Squar, Milner, Reehl & Williamson LLP, an independent registered public accounting firm. The report of Squar, Milner, Reehl & Williamson LLP on those financial statements is included elsewhere in this prospectus.

      Our selected financial data for the years ended December 31, 2002 and 2001 and our balance sheet data as of December 31, 2002 and 2001 have been derived from our unaudited financial statements, which are not included in this prospectus. Our selected financial data for the three months ended March 31, 2006 and 2005 and balance sheet data as of March 31, 2006 have been derived from our unaudited financial statements included elsewhere in this prospectus. We have prepared the unaudited financial data on the same basis as the audited financial statements, and in management’s opinion have included all adjustments (consisting only of normal recurring adjustments) that we consider necessary for a fair presentation of the financial information set forth in those statements. Our historical results for any prior or interim period are not necessarily indicative of results to be expected for a full fiscal year or for any future period.

      The selected financial information for the periods and as of the dates indicated should be read in conjunction with our financial statements and the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following information as of March 31, 2006 does not give effect to the receipt of approximately $3.5 million from a private secured debt financing completed subsequent to March 31, 2006:

	Three Months			Three Months
	Ended			Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	March 31,			March 31,			December 31,			December 31,			December 31,			December 31,			December 31,
OPERATING DATA	2006			2005			2005(7)			2004			2003			2002			2001
Revenues(1)	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Operating Expenses
Compensation and Related Benefits (net of amounts capitalized)		367,041			489,410			1,392,513			2,008,135			1,394,706			109,213			42,735
Professional Fees		409,984			163,686			1,530,410			1,476,849			231,722			431,572			96,120
Selling, General and Administrative Expenses		491,111			272,425			1,225,417			1,716,657			91,731			171,582			315,438
		1,268,136			925,521			4,148,340			5,201,641			1,718,159			712,367			454,293
Net Operating Loss		(1,268,136	)		(925,521	)		(4,148,340	)		(5,201,641	)		(1,718,159	)		(712,367	)		(454,293	)
Other Income (Expense)		(1,009,194	)		(657	)		(2,098,446	)		(1,587,692	)		(2,041,317	)		155,759			(25,449	)
Excess Repurchase Price Over Original Price of Preferred Stock		—			—			—			(627,000	)		—			—			—
Cumulative Effect of Change in Accounting Principle		—			—			—			—			(212,789	)		—			—
Net Loss Attributable to Common Shareholders	$	(2,277,330	)	$	(926,178	)	$	(6,246,786	)	$	(7,416,333	)	$	(3,972,265	)	$	(556,608	)	$	(479,742	)
Loss Per Common Share(2)	$	(0.46	)	$	(0.24	)	$	(1.45	)	$	(2.27	)	$	(4.27	)	$	(0.84	)	$	(0.72	)
Weighted Average Common Shares Outstanding		5,000,152			3,799,737			4,301,000			3,274,000			930,000			663,000			663,000

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	March 31,			December 31,			December 31,			December 31,			December 31,			December 31,
BALANCE SHEET DATA	2006			2005(7)			2004			2003			2002			2001
Capitalized Production Costs(3)	$	4,295,290		$	3,366,065		$	1,005,344		$	45,852		$	—		$	—
Total Assets		7,397,162			9,134,359			2,394,629			55,869			4,832			73,265
Current Liabilities(4)		13,851,556			13,317,943			3,199,221			2,066,586			653,874			252,862
Long Term Liabilities, net		1,082,148			1,132,689			961,994			—			—			—
Common Stock Subject to Redemption(5)		612,835			612,835			935,137			2,211,541			—			—
Convertible Preferred Stock(6)		—			—			—			973,000			973,000			—
Shareholders’ Deficit		(7,536,542	)		(5,316,273	)		(1,766,586	)		(4,222,258	)		(649,042	)		(179,597	)
Total Liabilities and Shareholders’ Deficit		7,397,162			9,134,359			2,394,629			55,869			4,832			73,265

(1)	The company is classified as a development stage enterprise under U.S. GAAP and has not generated revenues from its principal operations to date.
(2)	Reflects the effect on outstanding common shares of a 23.23 to 1 reverse stock split approved by the company’s board of directors for shareholders of record as of December 5, 2005 and completed on December 16, 2005.
(3)	Capitalized production costs consist of direct costs associated with the production of programming. At March 31, 2006, the company has accumulated over 10,000 hours of programming.
(4)	Through January 17, 2006, the company completed two convertible debt financing transactions. The first convertible debt financing aggregated to $1.2 million gross proceeds, with borrowings thereunder bearing interest at 12% per annum and maturing June 30, 2006. Holders had a mandatory election prior to the filing of our registration statement whereby they could (a) elect to convert into registered common units in this offering at 50% of the initial public offering price and have their units purchased by the underwriters or (b) elect to keep their units unregistered for one year and receive a five year warrant for one half share or (c) not convert and be repaid from proceeds. The second convertible debt financing aggregated to $5.785 million in gross proceeds ($5,635 million through December 31, 2005), with borrowings thereunder bearing interest at 10% per annum and maturing July 31, 2006. The convertible notes issued in the second convertible debt financing automatically convert into registered or unregistered units at the closing of this offering at a conversion price equal to 662/3 % of the public offering price of the units offered hereby. In the event the initial public offering is not completed prior to the maturity dates, the holders are entitled to additional warrants, the number of which will be determinable based on the outstanding principal balance.
(5)	Effective in 2003, we adopted Statement of Financial Accounting Standards No. 150, “Accounting for Financial Instruments with Characteristics of both Liabilities and Equity,” pursuant to which certain common stock held by two of our officers (pursuant to employment agreements) is considered mandatorily redeemable at the estimated fair value of such stock (1,319,600 shares). Upon the adoption of this pronouncement, the estimated fair value of such common stock exceeded its book value and the difference has been reflected as “cumulative effect of change in accounting principle” totaling $212,789 in 2003. Pursuant to Statement No. 150, the liability arising from this obligation to redeem such common stock is carried at its initial fair value (or redemption amount) upon adoption, with changes in redemption amounts reflected in results of operations at each reporting date. Had Statement No 150 been applied retroactively for periods prior to 2003, our pro forma net loss would be as follows:

	Year Ended
	December 31,			December 31,
	2002			2001
Net Loss Attributable to Common Shareholders, as Reported	$	(556,608	)	$	(467,742	)
Pro Forma Effect: Interest On Common Stock Subject to Redemption		(108,050	)		(108,050	)
Pro Forma Net Loss	$	(664,658	)	$	(575,792	)
Pro Forma Loss Per Common Share	$	(1.00	)	$	(0.89	)

(6)

The company has authorized the issuance of up to 12,480,952 shares of preferred stock. The company designated 4,456,423 shares as the Series A-1 convertible preferred stock (“Series A-1”). At December 31, 2003, 4,415,992 shares of Series A-1 preferred shares were outstanding which had been issued at an original price of $0.2226 per share. On February 12, 2004, the 4,415,992 Series A-1 preferred shares were retired for $1,600,000, using the proceeds from a private placement of common stock units. Such preferred shares were originally issued for net proceeds of $973,000. The company charged the $627,000 excess retirement price directly to accumulated deficit.

(7)

As restated — See Note 2 to the annual financial statements included elsewhere herein for additional information.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

      We are developing an uncensored pay television service branded as “No Good Television” for distribution on cable and satellite television. No Good Television (or “No Good TV”) is an uncensored entertainment news and lifestyle service, which is TV-MA rated (television for mature audiences). TV-MA will enable us to feature programming which is uncensored, candid and uncut. No Good TV provides a platform to producers and artists to create and air programs that foster artistic freedom and free speech, facilitated by the TV-MA rating, which permits profanity and limited nudity, but does not permit x-rated programming.

      We will launch our programming through distribution in the US market through our distribution agreement with iN DEMAND L.L.C. for the distribution of our programming on cable television in the US. That distribution will be on a pay-per-view and subscription basis. In addition to creating other distribution agreements for the US and foreign markets, in the future, we plan to develop other sources of revenue including the sale of “NGTV merchandise” for consumers, such as premiums, clothing, hats and other items. We also intend to produce our content for sale on DVDs, which will constitute an additional source of revenue when such DVDs are produced, marketed and sold. To date, we have not (a) aired any No Good Television branded programs, (b) designed or developed any merchandise or (c) produced or distributed any DVDs. We are a development stage company, and we have not yet generated any revenues.

      For the three months ended March 31, 2006, we incurred losses attributable to our common shares of $2,277,330. For the fiscal years ended December 31, 2005, 2004 and 2003, we incurred losses attributable to our common shares of $6,246,786, $7,416,233 and $3,972,265, respectively. As of March 31, 2006 we had an accumulated deficit of $21,628,932.

      In December 2005, the company’s board of directors approved a 23.23 to 1 reverse stock split for common shareholders of record as of December 5, 2005. Common shares outstanding prior to and after the reverse stock split totaled 116,152,273 and 5,000,152 respectively. As of March 31, 2006, we had a total of 5,000,152 outstanding common shares. Unless otherwise indicated, all discussions included in this prospectus related to our outstanding common shares, including common shares to be issued upon the exercise of warrants and options, as well as dollar amounts per share, refer to post-split shares.

GOING CONCERN BASIS OF PRESENTATION

      The accompanying notes and financial statements have been prepared assuming that the company will continue as a going concern. The company has been in the development stage since its inception and has not generated significant revenues from its principal operations, and there is no assurance of future revenues. Our financial statements as of March 31, 2006 reflect that we have been in the development stage since inception, we have incurred substantial operating expenses and we have not generated any revenues from our principal operations. As of March 31, 2006, the company had an accumulated deficit of approximately $21.6 million and a working capital deficit of approximately $12.7 million. As a result of these and other factors, the report of our independent registered public accountants on our 2005 financial statements contains an explanatory paragraph raising substantial doubt about our ability to continue as a going concern. Management believes that until the generation of revenues is realized through the proposed distribution arrangements of our product, operations can be funded through additional sources of capital. The company is in negotiations with cable and satellite programming providers and currently anticipates, subject to the consummation of contracts and other conditions including obtaining sufficient capital for production and normal operations, that programming will be launched in the third quarter of 2006.

      Throughout much of 2005, our monthly operating expenses totaled approximately $300,000, about half of which is made up of salaries and benefits (in accordance with generally accepted accounting principles, production related salaries and other costs are capitalized and do not appear within our Statement of Operations). The other half of these expenses pertains to professional fees, overhead expenses and equipment related charges. This level of expense has allowed us to continue our operations and execute on our business

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plan; however, in order to make our television launch date in the fourth quarter of 2006, our efforts will need to scale-up considerably.

      In December 2005, we increased our monthly expenditures to a level of about $650,000. In the months of January through March 2006, expenses continued to increase to approximately $1.2 million per month. This scale-up allowed us to hire critical personnel, including, 3 to 4 marketing staff members, as well as 5 mid-level post-production staff. Additional costs related to being a public entity, and in conforming to the Sarbanes-Oxley Act of 2002, will impact our legal and accounting costs.

      During 2006, we intend to continue to scale-up operations, in anticipation of our launch date. This will amount to a substantial increase in our capabilities, and will require additional staff members throughout the organization, however, mostly concentrated within marketing and post-production. During this time, our marketing efforts will dramatically increase and, at full capacity, we anticipate our total operating costs to be approximately $2.2 million per month. We believe that this will be the level of our operating expenses at least through the end of 2006.

      We anticipate launching the NGTV pay TV service with US domestic cable and satellite operators in the fourth quarter of 2006. Per our projections, we will continue to have operating losses during the initial three quarters after the launch. The targeted distribution for our Pay TV service at launch is 50 million homes in the US market. After the NGTV service has been sampled by most of our demographics and the brand has been developed, we project a monthly aggregated buy rate in the US market of 2% (“buy rate” being the percentage rate of the total available households purchasing the pay-per-view programming). Based on limited marketing and brand development efforts, we are projecting the monthly buy rate to grow from 0.25% in the initial quarter after launch to 1% in the fourth quarter after launch. We expect revenues from the purchase of our programming to contribute less than half of our total revenues over the first three months of operation, with ancillary revenues from sponsorships, product placements, merchandising and licensing making up the difference. Once up and running, we expect the purchase of our programming to reach about 65% of our total revenues.

      Our marketing plan anticipates a pervasive advertising and public relations campaign. We intend to add to our operations an internal marketing and promotions department as well as the retention of consultants. Combined efforts in attracting subscribers will include print, radio and television broadcast “appearances” (such as appearances on television and radio talk shows) street level recognition (such as posters and fliers distributed at targeted events) and cross channel marketing, including cable distributors placing trailers and similar advertising “previews” on various pay channels to promote our programming. As customers are required to pay approximately $4.95 for a four-hour block (or an “all day” ticket) of NGTV programming, there is no assurance that these efforts will be successful.

      We have entered into a distribution agreement with iN DEMAND L.L.C., whereby our programming will be distributed for viewing on cable television in the US, and available to about 18 million households. iN DEMAND is a “multi system operator” (MSO) that distributes content to local and regional cable television carriers for broadcast on local and regional cable stations. Literally, cable television programming content is delivered via cable wire to consumers by local cable companies. The iN DEMAND Agreement is in the form of a license to broadcast or “exhibit” our finished content according to the outlined terms. The Agreement with iN DEMAND is not exclusive and we are negotiating with other cable and satellite distribution companies for additional distribution of our content in the United States and in foreign markets via cable and satellite television access. The term of the iN DEMAND Agreement is one year, provided that after six months, either party may terminate the Agreement upon sixty days prior written notice.

      Under the Agreement, our programs will broadcast weekly, in four-hour blocks, on cable television stations on a “Pay Per View” basis, including a VOD basis. Broadcast on a VOD basis means that a subscriber elects to view our programs on an “on demand basis”, i.e. at the time or times of such individual’s choosing, which are not regularly scheduled times. The suggested retail price of each pay-per-view showing is $4.95. NGTV will receive license fees computed as a percent of gross subscriber fees for VOD and non-VOD basis. Under the iN DEMAND Agreement, we must provide iN DEMAND with four hours per week of newly developed content. However, iN DEMAND may also broadcast previously aired content at varying times, or

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as part of a bundled SVOD presentation, or as part of a VOD purchase. In all cases, we would receive a fee each time our content is broadcast – whether or not the broadcast is of previously aired content.

      The Agreement also provides that iN DEMAND is entitled to certain minimum distribution fees per quarter in the amount of $250,000. Any fees in excess of $250,000 collected by iN DEMAND in any single quarter will be prospectively applied to future quarters and applied to the minimum fee. In the event the minimum distribution fee is not collected by iN DEMAND based on total subscription dollars received for our content, iN DEMAND will be entitled to draw upon a letter of credit, which we must post, to satisfy any shortfall. We will not receive any revenues under the iN DEMAND Agreement until the minimum distribution fee per quarter is received by iN DEMAND. Thereafter, we will be entitled to our agreed share of revenues under the Agreement.

      Under this Agreement, we will begin to recognize revenues 30 to 60 days after the launch of our programming. While we expect a limited response during the initial months of our programming, we believe that we will exceed the 101,000 purchases of our programming needed in the first quarter in order to fulfill the minimum commitment to iN DEMAND of $250,000. Although we have entered into this Agreement, there can be no assurances, that we will ever generate revenues or obtain additional financing on terms favorable to us, or at all. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED MARCH 31, 2006 TO THREE MONTHS ENDED MARCH 31, 2005

      REVENUES: We are a development stage company and we have not generated any revenues through March 31, 2006.

      COMPENSATION AND RELATED BENEFITS: Compensation and related benefits consists of salaries, payroll benefits, taxes and related costs, and includes compensation expense associated with the granting of “in the money” options. For the three months ended March 31, 2006, we recorded expenses of $367,041, compared with $489,410 in compensation and related benefits recorded for the three months ended March 31, 2005. In accordance with U.S. GAAP, for the three months ended March 31, 2006, we capitalized $929,225 in film costs consisting of production and post-production salaries and wages attributable to content not yet aired. For the three month period ended March 31, 2005, we capitalized approximately $454,141 in film costs; these figures reduce the amount compensation and related benefits that were expensed within the identified period. Accordingly, adding back for these capitalized costs, the total compensation and benefits for the three months ended March 31, 2006 amounted to $1,296,266, as compared to a total compensation and benefits of $943,551 for the period ended March 31, 2005. This 37% increase is largely due to our increase in headcount during the past 12 months, from 37 to 53 full-time employees.

      PROFESSIONAL FEES: Professional fees consist of expenditures for legal, accounting, marketing and financial services, as well as industry consultants. Professional fees for the three months ended March 31, 2006 totaled $409,984 compared with $163,686 in professional fees recorded over the comparable three month period in 2005. For the period ended March 31, 2006, we capitalized professional fees related to this offering, in the amount of $289,988 consisting primarily of legal and accounting services; accordingly, these costs do not appear in professional fee expenses reflected above and there were no comparable costs in the prior quarter a year ago. For the three months ended March 31, 2006, we expensed approximately $57,000 related to options issued to third parties for services; $130,000 in general legal fees and audit services and $62,000 for marketing services. During the comparable three month period ended March 31, 2005, we expensed approximately $142,000 in legal fees. The balance of the cost incurred for the three month period ended March 31, 2006 related to general business consulting fees.

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and administrative expenses consist of facility expenses, depreciation, general travel costs as well as other expenses. Selling,

29

general and administrative expenses for the three months ended March 31, 2006 totaled $491,111 compared to $272,425 for the three months ended March 31, 2005. During the three months ended March 31, 2006, we incurred $93,000 in registration fees related to this offering which were capitalized and do not appear within the amount expensed. Other increased costs for 2006 are attributed to the expansion of our business operations and our increased headcount. In conjunction with the acquisition of additional equipment and improvements, depreciation and other related costs increased over the comparable prior period, by about $103,000. General office expenses, including insurance, utilities, equipment purchase and rental, parking, supplies and recruitment increased by about $90,000 over the comparable period in 2005.

      NET OPERATING LOSS: Net operating loss for the three months ended March 31, 2006 amounted to $1,268,136 as compared to a net operating loss for the three month period ended March 31, 2005 of $925,521. The increases in professional fees as well as selling, general and administrative expenses, all of which relate to the expansion of our business operations, account for this increase over the same period last year.

      OTHER INCOME/(EXPENSE): Other Income/(Expense) for the three month period ended March 31, 2006 amounted to $1,009,194, while the same expenses for the three month period ended March 31, 2005 were negligible. A primary component of other income (expense) is interest expense. During the three months ended March 31, 2006, we recorded interest expense associated with bridge financing, in the amount of $251,103. Along with interest on bridge financing, for the three month period ended March 31, 2006, we expensed $318,946 related to the amortization of debt issuance costs associated with our bridge financings which mature in June and July 2006 and $348,389 from the amortization of other debt discounts. Another component of other income (expense) is interest on common stock subject to redemption. In accordance with U.S. GAAP, we maintain a liability related to a provision within certain executives’ employment agreements which allows them to have the company purchase their common stock holdings at fair market value in the event of their termination. Changes in the liability result from changes in the fair value of the stock and are reflected in earnings. This liability is adjusted at each reporting date and for the three month period ended March 31, 2006, in order to reflect the fair market value of the stock. As this amount did not change for the three months ended March 31, 2006, no expense was recorded for the period. We also booked costs of $83,073 in conjunction with the change in the fair value of a derivative liability booked based on certain debt holders’ ability to convert their notes at a discount to the offering price, at the close of this offering. The amount of this charge is based on a number of factors, as described in the notes to our financial statements. There was no similar charge booked for the three months ended March 31, 2005.

      TOTAL NET LOSS: Total Net Loss attributable to our common stockholders totaled $2,277,330 for the three month period ended March 31, 2006, compared with $926,178 for the three month period ended March 31, 2005. This increase is mostly attributed to an increase in other income/(expense) in the amount of about $1 million, including interest charges, amortization of debt issuance costs and debt discount and changes in fair value of derivative liabilities. The balance of the difference relates to increased professional fees and selling, general and administrative costs related to our increased operations.

COMPARISON OF YEAR ENDED DECEMBER 31, 2005 TO YEAR ENDED DECEMBER 31, 2004

      REVENUES: We are a development stage company and we have not generated any revenues for the years ended December 31, 2005 and 2004.

      COMPENSATION AND RELATED BENEFITS: Compensation and related benefits consists of salaries, payroll benefits, taxes and related costs, and includes compensation expense associated with the granting of “in the money” options. For the year ended December 31, 2005, we recorded compensation and related benefits costs of $1,392,513, compared to $2,008,135 for the year ended December 31, 2004. In accordance with U.S. GAAP, we capitalize film costs consisting of certain production and post-production labor associated with the development of content not yet aired, and due to expanding operations, we capitalized a considerably larger amount of costs in 2005 than we did in 2004. These costs have been inventoried based on the nature of the content produced and will be expensed upon the airing of the associated content. In 2005, we capitalized approximately $1.89 million in labor costs compared with about $0.8 million in capitalized labor for 2004, resulting in a smaller amount of labor expensed in 2005. Taking capitalized labor into consideration, total labor cost for the period ended December 31, 2005 would have been $2.9 million,

30

compared to about $2.8 million for the same 12 months in the previous year. Between December 31, 2004 and December 31, 2005, our staff level grew from 32 to 39 employees, yielding the slight increase in total labor cost over the prior year. Also, stock based compensation associated with “in the money” options for the year ended December 31, 2005 totaled $453,157; this amount for 2004 was $415,660.

      PROFESSIONAL FEES: Professional fees consist of expenditures for legal, accounting, marketing and financial services, as well as industry consultants. Professional fees for the year ended December 31, 2005 were $1,530,410 compared to $1,476,849 for the year ended December 31, 2004. In 2004, we incurred $310,000 related to a retainer paid to a related consulting firm, which we did not incur in 2005; however, this amount was offset by additional legal, financial and consulting costs incurred in 2005 related to our financing activities.

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses consist of facility expenses, depreciation, general travel costs as well as other expenses. General and administrative expenses for the year ended December 31, 2005 were $1,225,417 as compared to general and administrative expenses of $1,716,657 for the year ended December 31, 2004. In 2005, we capitalized approximately $472,000 in non-labor production costs, thereby reducing the general and administrative costs booked in 2005 by that same amount; this increase is consistent with our expanding operations and increased development of content for 2005. This adjustment for 2004 was negligible. Adjusting back for these figures, for the year ended December 31, 2005 we would have had total general and administrative costs of about $1.7 million, compared to total general and administrative costs for the year ended December 31, 2004 of about the same amount.

      NET OPERATING LOSS: Net operating loss for the year ended December 31, 2005 was $4,148,340 as compared to the net operating loss of $5,201,641 for the year ended December 31, 2004. The majority of this difference is attributed to the fact that in 2005, we capitalized about $1,889,000 and $472,000 more labor costs and non-labor production costs, respectively, in 2005 than we did over the same period in 2004, effectively decreasing our operating expenses in 2005 by that same amount.

      OTHER INCOME/ (EXPENSE): Other Income/(Expense) for the year ended December 31, 2005 totaled a net expense of $2,098,446, as compared to an expense of $1,587,692 for the year ended December 31, 2004. A primary component of other income (expense) is interest expense. Interest expense for the year ended December 31, 2004 was about $143,000, compared to interest expense for the year ended December 31, 2005 of about $1,212,783 (which included the amortization of debt issuance costs and debt discount related to our bridge financings). Another component of other income (expense) is interest on common stock subject to redemption. In accordance with U.S. GAAP, we maintain a liability related to a provision within certain executives’ employment agreements which allows them to have the company purchase their common stock holdings at fair market value in the event of their termination. Changes in the liability result from changes in the fair value of the stock and are reflected in earnings. This liability is adjusted at each reporting date and for the period ended December 31, 2005, the liability was reduced to reflect the fair market value of the stock, for which we booked an expense of $322,302. At December 31, 2004, the liability was decreased by $1,276,404 over the previous year, and the related adjustment amounted to an expense of the same amount. As part of other income (expense) for the year ended December 31, 2005, we booked costs of $536,823 in conjunction with changes in the fair value of a derivative liability related to registration rights and liquidated damages granted to certain debt holders that have the ability to convert their notes at a discount to the offering price, at the close of this offering. There was no similar charge booked for the year ended December 31, 2004. Additionally, for the year ended December 31, 2004, we booked a one-time charge of $2,359,951 for the exchange of debt for common stock; there was no similar charge in 2005. Of the remaining expenses, we paid $141,000 in settlement costs related to a commission claim related to financing that we obtained in 2005. Also, for the year ended December 31, 2005, we capitalized debt issuance costs consisting primarily of the underwriters’ charges related to the issuance of bridge financing, in the amount of about $726,000 and expensed an additional $112,000. These remaining capitalized costs will be expensed using the effective interest method, until the loans mature in June and July, 2006. Lastly, during the twelve months ended December 31, 2005, we settled and modified certain debt through the issuance of new notes and warrants to purchase common stock. In connection with the modifications, we provided the holders of certain notes with the right to convert at 67% of the initial offering price. As a result, the modifications were deemed

31

extinguishments for accounting purposes under EITF 96-19 and EITF 05-7. Consequently, for the year ended December 31, 2005, we booked a net loss of $675,251 related to the extinguishment of debt. There was no similar expense recorded for 2004.

      TOTAL NET LOSS: Total Net Loss attributable to our common stockholders totaled $6,246,786 for the year ended December 31, 2005, compared with $7,416,333 for the year ended December 31, 2004 (after the effect of $627,000 paid in excess repurchase price over the carrying amount of preferred stock in 2004). In 2004, we incurred a non-recurring charge of $2,359,951 resulting from the conversion of $400,001 of debt into common stock, concurrent with the February 2004 private placement of common stock units. There is no similar charge for 2005. In 2005, we incurred $536,823 in costs associated with changes in the fair value of a derivative related to debt which is convertible to common stock, for which there is no similar charge booked in 2004. In 2005, we incurred a net loss of $675,251 related to the extinguishment of debt, for which there was no associated cost in 2004. Additionally, in 2005 we incurred $1,212,783 of interest and other charges, compared with $143,163 for the prior year.

COMPARISON OF YEAR ENDED DECEMBER 31, 2004 TO YEAR ENDED DECEMBER 31, 2003

      CHANGES IN THE GENERAL BUSINESS CONDITIONS IN 2004 VERSUS 2003: In February 2004, we raised approximately $6 million in net capital, through the issuance of approximately 987,982 common stock units, including 987,982 common shares and 493,991 warrants. This allowed us to move in to a much larger (20,000 square-foot) facility, in order to scale-up our operations. The current annual lease cost of the building is $372,000; the lease expires in March 2009 and is renewable for five additional years. In connection with this move, we hired additional employees and acquired additional capital equipment, allowing us to expand our operations to include more robust production and post-production activity, expanded graphics capabilities, more sophisticated archiving systems and general technology advancements. During 2003, headcount was minimal and operations were more limited and often based on available funds. In early 2004, we began to increase staffing from a handful of employees, to eventually reach 32 full-time staff members by year-end.

      REVENUES: We are a development stage company and we have not generated any revenues for the years ended December 31, 2004 and 2003.

      COMPENSATION AND RELATED BENEFITS: Compensation and related benefits consists of salaries, payroll benefits, taxes and related costs, and includes compensation expense associated with the granting of “in the money” options. For the year ended December 31, 2004, we recorded compensation and related benefits costs of $2,008,135, compared to $1,394,706 for the year ended December 31, 2003. Also, in accordance with U.S. GAAP, during 2004, we capitalized approximately $800,000 in film costs consisting of production and post-production labor related to content not yet aired. In 2003, capitalized labor was negligible. These costs have been inventoried based on the nature of the content produced and will be expensed upon the airing of the associated content. During and prior to 2003, we operated on a smaller scale than we did after the equity funding of February 2004, and much of the amount recorded as compensation and benefits during 2003 related to executive salaries, a portion of which remained unpaid at December 31, 2003. During 2004, staffing grew from a minimal headcount in the beginning of the year, to about 32 employees by year-end 2004. Stock-based compensation expense associated with “in the money” options totaled $415,660 during the year ended December 31, 2004, as compared to $228,770 in option expense for the corresponding period in the prior year.

      PROFESSIONAL FEES: Professional fees consist of expenditures for legal, accounting, marketing and financial services, as well as industry consultants. Professional fees for the year ended December 31, 2004 were $1,476,849. This substantial increase over the 2003 figure of $231,722 was due to costs associated with the expanded operations. This included consulting contracts awarded to a related marketing firm, as well as several other consulting arrangements with industry professionals. Legal and accounting costs increased with the scaling-up of the business over the prior year.

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses consist of facility expenses, depreciation, general travel costs as well as other expenses. General and administrative expenses were $1,716,657 for the year ended December 31, 2004 as compared to $91,731 for

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the year ended December 31, 2003. This increase in administrative expenses is the result of our move to a larger facility and the scale-up of operations over the prior year. Increased expenses in 2004 included, among others, rent totaling $329,085, depreciation totaling $252,217, travel costs totaling $208,470, insurance totaling $192,955 and other expenses totaling $733,930.

      NET OPERATING LOSS: Net operating loss for the year ended December 30, 2004 was $5,201,641 as compared to a net operating loss of $1,718,159 for the year ended December 31, 2003. The higher loss in 2004 is related to the additional costs associated with the scaling up of operations subsequent to the February 2004 equity funding.

      OTHER INCOME (EXPENSE): Total Other Income (Expense) totaled a net expense of $1,587,692 during the year ended December 31, 2004 compared to expense of $2,041,317 for the year ended December 31, 2003. A primary component of other income (expense) is interest expense. Interest expense for the year ended December 31, 2004 was $143,163, compared to $45,876 for the prior year. This increase in interest expense is attributable to the service of additional debt related to our expanded operations, including the acquisition of production and post production equipment, some of which we acquired under capital lease. Another component of other income (expense) includes gains (losses) we incurred on debt extinguishments. We incurred a non-cash loss of $2,359,951 from the exchange of debt into common stock in February 2004. There was no comparable loss for the corresponding period in 2003. In accordance with U.S. GAAP, we maintain a liability related to a provision within certain executives’ employment agreements which allows them to have the company purchase their common stock holdings at fair market value in the event of their termination. Changes in the liability result from changes in the fair value of the stock and are reflected in earnings. This liability is adjusted at each reporting date and for the period ended December 31, 2004, the liability was reduced to reflect the fair market value of the stock, for which we booked a negative expense of $1,276,404. At December 31, 2003, the liability was increased by $1,995,441, and the related adjustment amounted to an expense of the same amount. Finally, during 2004, we incurred additional costs related primarily to expensing the estimated value of warrants (totaling $367,000) issued as liquidated damages to brokers/investors associated with our February 2004 private placement of common stock units.

      TOTAL NET LOSS: Total Net Loss attributable to our common stockholders totaled $7,416,333 for the year ended December 31, 2004 (after the effect of $627,000 paid in excess repurchase price over the carrying amount of preferred stock) compared with $3,972,265 for the prior period ended December 31, 2003. The majority of the increase in total net loss accumulated during the development stage and net operating loss for the year ended December 31, 2004 relates to a non-recurring charge of $2,359,951 that was the result of the conversion of $400,001 in debt into common stock, concurrent with the February 2004 private placement of common stock units. the aforementioned increase in compensation expense and related benefits, and in professional services, together with the scaling-up of operations subsequent to the February 2004 equity financing.

LIQUIDITY AND CAPITAL RESOURCES

      From our inception through March 31, 2006, we have raised a total of approximately $9.9 million from the sale of common stock. As of March 31, 2006 we had cash of approximately $0.25 million and a working capital deficiency of approximately $12.8 million. Our accumulated deficit as of March 31, 2006 was approximately $21.7 million.

      Cumulative cash used in operating activities was approximately $13,541,000 from the company’s inception (June 23, 2000) through March 31, 2006. The primary non-cash expenses comprising the difference

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between the accumulated deficit and cumulative cash used in operations and the approximate amounts are as follows:

(rounded to thousands)
Cumulative cash used in activities of continuing operations	$	13,541,000
Depreciation and amortization		581,000
Expense recorded at estimated fair value of common stock, options and warrants granted for services and “in the money” investments		2,395,000
Excess of fair value of common stock exchanged over carrying amount of converted debt		2,360,000
Excess repurchase price over carrying amount of preferred stock		627,000
Warrants issued as liquidated damages		367,000
Loss on extinguishment of debt		675,000
Interest on common stock subject to redemption		397,000
Carryover deficit of predecessor entity		239,000
Cumulative of change in accounting principle		213,000
Amortization of debt issuance costs and debt discount		1,040,000
Change in fair value of derivative liability		620,000
Changes in operating assets and liabilities		(1,426,000	)
Accumulated Deficit at March 31, 2006	$	21,629,000

      As of March 31, 2006, all of our debt, not including our capital lease obligations, was due within 12 months. During the year ended December 31, 2005, we received cash totaling $599,950 and $710,000 under various related party and non-related party debt issuances, respectively. We made repayments on such related party and non-related party debt instruments totaling $214,950 and $280,000, respectively during 2005. On October 12, 2005, the holders of approximately $3.3 million of various notes payable and any unpaid and accrued interest thereon converted these notes into new notes with a mandatory conversion obligation into units identical to the units offered hereby at the closing of this offering, at a 33¹/3 % discount to the offering price. In addition to these notes, we have approximately $465,000 in existing related party notes that will be repaid prior to July 2006.

      In September 2005, through Capital Growth Financial, LLC, we commenced an offering seeking bridge funding of up to $1.2 million, through the issuance of 12% unsecured convertible promissory notes, maturing June 30, 2006. These notes carry a mandatory election clause, whereby prior to the filing of our registration statement, the note holder was required to make an election whereby they could (a) elect to convert into registered common units in this offering at 50% of the initial public offering price and have their units purchased by the underwriters or (b) elect to keep their units unregistered for one year and receive a five year warrant for one half share or (c) not convert and be repaid from proceeds. In the event that the offering does not close prior to the maturity of the notes, a five-year warrant will be issued to the holder entitling the holder to purchase the number of common shares equal to the principal of the note, divided by the fair market value of the shares at the maturity date of the note. By the end of November 2005, this offering was fully subscribed and we realized a total of approximately $1,037,000, which is the full amount of the offering, net of investment banker’s fees and commissions. All holders of the 12% unsecured convertible promissory notes have elected to convert their notes into units (either registered or unregistered) at the closing of this offering.

      In November 2005, through Capital Growth Financial, LLC, we commenced an offering seeking bridge funding of up to $6 million, through the issuance of 10% unsecured convertible promissory notes, maturing July 31, 2006. Holder of the notes automatically convert into (a) registered common units in this offering at 66.67% of the initial public offering price and have their units purchased by the underwriters or (b) common stock units which will remain unregistered for one year and receive a five year warrant for one half share. If not converted for any reason, the notes are to be repaid the principal and any accrued interest together with a five-year purchase warrant, identical in terms to warrants included in the units offered hereby. In the event that the

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offering does not close prior to the maturity of the notes, a five-year warrant will be issued to the holder entitling the holder to purchase the number of common shares equal to the principal of the note, divided by the fair market value of the shares at the maturity date of the note. As of January 17, 2006, the offering was closed with gross subscriptions of $5.785 million, and we realized a total of approximately $5,090,000, net of broker’s fees and commissions. All of the holders of the 10% unsecured convertible promissory notes have elected to convert their notes into units (either registered or unregistered).

      As part of their employment agreements, two executives are each eligible for bonuses equaling 2% of certain gross revenues, plus $0.02 for each new subscriber added to any channel distributing NGTV programming, plus $0.10 for each video cassette or DVD sold. The impact of these bonuses on operating results will be to reduce gross profits by approximately 2% for initial subscribers to our programming on a one-time basis, along with an ongoing reduction to our gross profits of 4%. Gross profits related to DVD sales will be reduced by a total of 10 %. Liquidity and cash flow will be affected by a factor slightly greater than these percentages. All of these costs have been factored into our discussions related to profitability.

EQUITY TRANSACTIONS

      Subsequent to March 31, 2006, the company granted stock options to acquire 325,000 common shares to an executive officer in connection with the execution of an employment agreement.

      During the twelve months ended December 31, 2005, warrants to acquire 1,039,891 shares of common stock were exercised at prices between $0.002 and $8.479 per share for total consideration of $1,536,829. During the twelve months ended December 31, 2005, options to acquire 234,659 shares of common stock were exercised at prices between $0.0023 and $0.0232 per share for total consideration of $4,394.

      On August 31, 2005, the company issued 25,631 shares of common stock plus warrants in connection with the refinancing of certain payable obligations totaling $556,399 into notes payable. Additionally, warrants were granted to acquire: (a) 44,814 common shares at $.0232 per share, (b) 12,815 common shares at $7.5962 per share, and (c) 12,815 common shares at $13.9264 per share. We recorded a gain on extinguishment in connection with this exchange, in accordance with EITF 96-19, as the total value of the note and equity instruments was less than the carrying amount of the obligation.

      On September 23, 2005, the company issued 17,084 shares of common stock to an employee for services performed. Such shares were valued at $10,804 based on the most recent prices for equity issuances. During the twelve months ended December 31, 2005, the company granted warrants to employees to acquire 397,789 common shares in connection with the conversion of accrued executive compensation into notes payable. This transaction was accounted for as an extinguishment in accordance with EITF 96-19.

      During the twelve months ended December 31, 2005, the company granted warrants to acquire 247,210 shares of common stock into note payable holders in connection with modifications to the terms of those notes. Certain debt modifications under this transaction were accounted for as an extinguishment in accordance with EITF 96-19.

      In August 2005, the company granted warrants to acquire 22,600 shares of common stock in connection with borrowings totaling $525,000 under several two-year notes payable. A portion of the proceeds was allocated to the warrants, based on the relative fair value of such warrants, and recorded to debt discount, which will be amortized over the term of the notes.

CAPITAL EXPENDITURES

      We currently have approximately $1.5 million in capital equipment, about one-third of which is under capital lease. Throughout the remainder of 2006, we expect to acquire approximately $2.5 million of additional capital equipment, through purchase and/or lease.

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INFLATION

      Our management believes that inflation has not had a material effect on our results of operations.

OFF-BALANCE SHEET ARRANGEMENTS

      We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

CONTRACTUAL OBLIGATIONS

      As of April 30, 2006, we have contractual obligations of approximately $15.8 million as indicated below.

			Less than 1
Contractual Obligations	Total		Year		1-3 Years		3-5 Years
Short Term Debt	$	13,248,101	$	13,248,101	$	—	$	—
Capital Lease Obligations(1)		816,272		194,982		569,759		51,531
Operating Lease Obligation(2)		1,116,834		286,443		830,391		—
Other Long-Term Obligations(3)		612,835		—		—		612,835
Total	$	15,794,042	$	13,729,526	$	1,400,150	$	664,366

(1)	Includes interest.
(2)	Existing obligation under our building lease, excludes optional renewal period.
(3)	Obligation for common stock subject to redemption. Period is indeterminable.

CRITICAL ACCOUNTING POLICIES

      The preparation of the accompanying financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions and estimates that affect the amounts reported in the accompanying financial statements and the accompanying notes. The amount of assets and liabilities reported on our balance sheet and the amount of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions, which are used for, but not limited to, the accounting for capitalized production costs, the valuation of various equity instruments issued in conjunction with debt or equity transactions, and our valuation allowance against deferred tax assets. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements:

CAPITALIZED PRODUCTION COSTS

      The company capitalizes direct film production costs in accordance with American Institute of Certified Public Accountants Statement of Position (“SOP”) 00-2, “Accounting by Producers or Distributors of Films.” Film production costs include costs to acquire, develop, and adapt raw content, edit, package programming and television specials for distribution on premium channels. Acquisition costs are minimal as the company produces its own content at minimal cost or receives raw content at no cost (which approximates fair value) from movie or recording studios, artists or other sources seeking enhanced promotion and visibility. Accordingly, film production costs consist primarily of salaries, equipment and production overhead. Production overhead, a component of film costs, includes allocable costs of individuals or departments with exclusive or significant responsibility for the production of programming. Substantially all of the company’s resources are dedicated to the production of programming. Capitalized production overhead does not include administrative, general and research and development expenses. Marketing, exploitation, and internal costs to promote the NGTV brand are expensed as incurred.

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      Capitalized production costs consist solely of direct-to-television product not released and was comprised of the following:

			December 31,
	March 31,
	2006		2005		2004
Pre-production costs and library	$	3,227,701	$	2,529,423	$	783,103
In development programming		1,067,589		836,642		222,241
	$	4,295,290	$	3,366,065	$	1,005,344

      During the years ended December 31, 2005, 2004, and 2003, the company capitalized film production costs approximating $2,361,000, $960,000, and $46,000, respectively. For the three months ended March 31, 2006, we capitalized approximately $928,000. Once programming is released, capitalized production costs will be amortized in the proportion that the revenue during the period for each film bears to the estimated revenue to be received from all sources under the individual-film-forecast-computation method as defined in SOP 00-2.

      Pre-production and library costs include expenditures to acquire and develop raw content, to adapt videos or other properties and to categorize such content (by artist, genre) for inclusion in the company’s library. The company draws upon its content library in the production of shows/programs. Consequently, at December 31, 2005, management believes the company’s library has future economic benefits in excess of capitalized costs. Programs in development are set in production, utilizing the library and/or developing new content. The company has complete discretion in the development of programs under its distribution agreements. Management regularly evaluates its programs under development to determine if they will be ultimately utilized and delivered. In the event a program is not set in production within three years from the first capitalized transaction, all such costs will be expensed and loss recognized in earnings. Other factors evaluated by management include among others, (1) adverse changes in expected performance prior to release, (2) actual costs in excess of budgeted costs, (3) substantial delays, (4) changes in release plans, and (5) insufficient funding or resources to complete production. Whenever any of these factors is present, an assessment is carried out to determine whether fair value is less than the carrying amounts. Fair value is determined based on discounted cash flows methodology. Management carried out an evaluation at December 31, 2005, and based on such evaluation, it determined that capitalized production costs are not impaired at the balance sheet date.

STOCK-BASED COMPENSATION

      Effective January 1, 2006, we adopted SFAS No. 123(R). See Note 4 of our March 2006 financial statements. Prior to January 1, 2006, we had accounted for stock-based payments under the recognition and measurement provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations as permitted by SFAS No. 123, “Accounting for Stock- Based Compensation.” In accordance with APB Opinion No. 25, no compensation expense was required to be recognized for options granted that had an exercise price equal to or greater than the market value of the underlying common stock on the date of grant. Per the provisions of SFAS No. 123(R), a nonpublic entity that used the minimum value method for pro forma disclosure purposes under the original provisions of SFAS No. 123 shall not continue to provide those pro forma disclosures for outstanding awards accounted for under the intrinsic value method of APB Opinion No. 25. The adoption of SFAS No. 123(R) had no material effect on our results of operations and/or basic and diluted loss per share.

      We estimate the value of our option grants based on a Black-Scholes option pricing model which considers among other factors, the estimated value of our stock (as discussed below).

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  Significant factors, assumptions and methodologies used in determining fair value;

      As a private company, the fair value of our common stock is determined by the Board of Directors. In determining the fair value of our common stock, from time to time our Board of Directors considers a number of factors, including:

•  recent transactions in our common stock with third parties, if any;

•  contemporaneous or retrospective valuations performed by valuation specialists. With respect to determining the value of our stock, we obtained contemporaneous valuations during 2005 performed by an independent valuation specialist in contemplation of our proposed initial public offering;

•  key milestones in our business, including our progress towards realizing our business plan, including assembling our management team, developing our library and programs, obtaining distribution for our content , expanding our marketing capabilities, achieving financial stability and gaining market acceptance;

•  other economic and business factors.

      Determining the fair value of our stock requires making complex and subjective judgment and estimates. There is inherent uncertainty in making these estimates.

  Option grants in 2005 and significant factors contributing to the difference between the fair value as of the date of each grant and the estimated IPO price

      We did not grant any options to employees or third parties during the first three quarters of 2005. During the fourth quarter, we granted the following options to purchase shares of our common stock:

•  November 2005- 25,829 options were granted to a director at an exercise price of $2.59 per share.

•  December 2005- 223,848 options were granted to employees and consultants at an exercise price of $2.59 per share.

•  December 2005- 30, 134 options were granted to a consultant at an exercise price of $3.60 per share.

      We obtained contemporaneous valuations by a third party valuation specialist at September 30, 2005 and at December 31, 2005. Based on such valuations of our stock, we considered the above mentioned option grants to be “out of the money.”

      Whereas our Board of Directors considers the fair value of our stock when granting options, the options’ exercise price of $2.59 was established in 2000 and has seldom changed over time. This is largely attributed to the fact that such exercise price has been used more as a target level for our stock, than as an indicator of its current fair value. The company’s intent in so pricing the options has been to attempt to motivate key employees to enhance shareholder value (in excess of the current stock value). Consequently, in our history, it has not been our practice to grant options with an exercise price at or equal to the estimated fair value of our stock.

      We expect the following significant factors to contribute to the difference between the current value of our stock, as estimated by the third party valuation specialist (as of December 31, 2005) and the estimated value at our initial public offering date. Specifically, the following milestones are expected to be in place in anticipation of our initial public offering, among others:

•  further development of our library,

•  completion of our programming,

•  formalizing distribution agreements for our content,

•  expanding our marketing capabilities,

•  obtaining bridge financing and

•  launching of our product

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      Consequently, we expect such future valuation at the date of the offering to exceed our current 2005 stock value.

  Significant Factors, Assumptions, and Methodologies Used in Determining Fair Value When a Contemporaneous Valuation By a Valuation Specialist Was Not Obtained.

      We did not obtain third party valuations prior to 2005. To value our common stock, the Board of Directors relied primarily on recent transactions on our common stock with third parties. We chose not to obtain such third party valuations due to the lack of industry comparables, the absence of transactions involving companies such as ours and the cost involved with obtaining such valuations in light of our liquidity issues. We believe transactions in our common stock with third parties were a reliable estimate of the value of our common stock.

DEBT AND EQUITY TRANSACTIONS

      The company issues debt with warrants and equity instruments to third parties and non-employees. These issuances are recorded based on the fair value of these instruments. Warrants and equity instruments require valuation using the Black Scholes model and other techniques, as applicable, and consideration of various assumptions including but not limited to the volatility of our stock, risk free rates and the expected lives of these equity instruments.

COMMON STOCK SUBJECT TO REDEMPTION

      Pursuant to provisions in certain employment agreements (see Note 14 to our annual 2005 financial statements), the company may be required to purchase shares held by two executives/founders for an amount in cash equal to their fair market value in the event of termination or death. Under SFAS No. 150, which was adopted in 2003, these shares are considered mandatorily redeemable upon an event certain to occur and therefore, outside of the company’s control. Accordingly, vested shares held by the executives have been classified as liabilities at March 31, 2006, and at December 31, 2005 and 2004. The liability is carried at the estimated redemption amount (or fair value) at each reporting date, with changes in such amount reflected in our statements of operations for the periods then ended.

      As a private company, the fair value of our common stock is determined by the Board of Directors. In estimating the fair value of our common stock, the Board of Directors considers a number of factors, including:

•  recent transactions in our common stock with third parties;

•  contemporaneous or retrospective valuations performed by valuation specialists.

•  key milestones in our business, including progress toward executing our business plan, assembling our management team, developing our library and programs, obtaining distribution for our content , expanding our marketing capabilities, achieving financial stability and gaining market acceptance; and

•  other economic and business factors.

      Determining the fair value of our common stock requires complex and subjective judgment and estimates. There is inherent uncertainty in making these estimates. Changes in these assumptions significantly affect the carrying amount of our liability related to common stock subject to redemption. A $.25 change per share in the estimated fair value of our common stock would increase such liability by approximately $330,000.

      With respect to estimating the fair value of our common stock at December 31, 2005, we obtained contemporaneous valuations during 2005 from an independent valuation specialist. These valuations focused upon determining the value of our stock using the following methods: 1) liquidation value, 2) comparable public company analysis, 3) comparable private transactions and 4) contemporaneous stock sales. It is not uncommon for companies in early stages of development, such as ours, to be evaluated on a liquidation basis. Key assumptions underlying the 2005 valuations by the independent valuation specialist include: the

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probability of completion of our initial public offering; the status of negotiations with cable and satellite providers for the distribution of our content; the amount of convertible and other debt on our balance sheet (particularly the debt which upon conversion could cause significant dilution to existing shareholders), and our continued losses and negative working capital.

      Because only a small number of initial public offerings are ultimately consummated, in the opinion of our independent valuation specialist, the company’s fundamentals (i.e. no revenues, no profits, no tangible assets other than the video and music in-process library, and our level of debt and negative working capital) were weighed more heavily in valuing our common stock at December 31, 2005 and March 31, 2006 than our future prospects.

      We had 1,319,600 common shares carried at a redemption amount of $612,835 at December 31, 2005. Common stock subject to mandatory redemption upon termination or death of holders did not change from December 31, 2005 to March 31, 2006. Because there were no significant changes in the assumptions used to estimate the fair value of our common stock or in the number of common shares subject to redemption, our liability did not change during the last quarter. Consequently, there was no effect on our statement of operations for the three months ended March 31, 2006.

      We expect the following significant factors to contribute to the difference between the estimated fair value of our common stock as of December 31, 2005 (the date of our latest valuation) and the estimated fair value at the initial public offering (IPO)date. Specifically, the following milestones are expected to be in place in anticipation of our IPO:

•  further development of our video and music library,

•  completion of our programming,

•  obtaining distribution for our content,

•  expanding our marketing capabilities,

•  obtaining bridge financing, and

•  launching our product.

      Consequently, we expect such valuation at the IPO date to exceed our most recent estimate of the fair value of the Company’s common stock.

DERIVATIVE FINANCIAL INSTRUMENTS

      The company records all derivative financial instruments in its balance sheet at estimated fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in the results of operations or in shareholders’ equity (deficit) as a component of accumulated other comprehensive income, depending on whether the derivative instrument qualifies for hedge accounting as defined by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” and related interpretations(“SFAS No. 133”). Changes in the fair value of derivatives not qualifying for hedge accounting are included in the results of operations as they occur.

      The contingent conversion feature embedded in the company’s Bridge Financings notes and other convertible notes meets all the criteria of SFAS No. 133 paragraph 12 for bifurcation, is not part of a conventional convertible debt financing as defined in EITF 05-02 and does not meet the scope exception of paragraph 11 (a) of SFAS No. 133 to be excluded as a derivative. Accordingly, the contingent conversion feature related to the Bridge Financings and other convertible notes (for which conversion was elected by noteholders) has been accounted for as a derivative liability. See note 11 of our 2005 financial statements.

INCOME TAXES

      The company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”. SFAS No. 109 requires recognition of deferred tax liabilities and assets for the expected future tax

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consequences of events that have been included in the financial statements or tax returns. Under this method deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates for the year in which the differences are expected to reverse. We establish a valuation allowance in accordance with SFAS No. 109 when it is more likely than not that all or a portion of deferred tax assets will not be realized. At December 31, 2005,we have concluded that a full valuation allowance against our net deferred tax assets was appropriate. In making such a determination, a review of all available positive and negative evidence was considered, including scheduled reversal of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. In addition, we considered our cumulative losses in recent years. We expect to continually evaluate the realizability of our deferred tax attributes based on our future operating results.

RECENT ACCOUNTING PRONOUNCEMENTS

      In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB 51.” The primary objectives of FIN No. 46 are to provide guidance on the identification of entities for which control is achieved through means other than voting rights (variable interest entities or “VIEs”) and how to determine when and which business enterprise should consolidate the VIE. This new model for consolidation applies to an entity for which either: (a) the equity investors do not have a controlling financial interest; or (b) the equity investment at risk is insufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN No. 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. As amended in December 2003, the effective dates of FIN No. 46 for public entities that are small business issuers, as defined (“SBIs”), are as follows: (a) for interests in special-purpose entities (“SPEs”: periods ended after December 15, 2003; and (b) for all other VIEs: periods ending after December 15, 2004. The December 2003 amendment of FIN No. 46 also includes transition provisions that govern how an SBI which previously adopted the pronouncement (as it was originally issued) must account for consolidated VIEs. The company has determined that it does not have any variable interest and as a result, the adoption of this pronouncement did not have a material impact on the company’s financial statements.

      In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 establishes standards for how a company classifies and measures certain financial instruments with characteristics of both liabilities and equity, and is effective for public companies as follows: (a) in November 2003, the FASB issued FASB Staff Position (“FSP”) FAS 150-03 (“FSP 150-3”), which defers indefinitely (1) the measurement and classification guidance of SFAS No. 150 for all mandatorily redeemable non-controlling interests in (and issued by) limited-life consolidated subsidiaries, and (2) SFAS No. 150’s measurement guidance for other types of mandatorily redeemable non-controlling interests, provided they were created before November 5, 2003; (b) for financial instruments entered into or modified after May 31, 2003 that are outside the scope of FSP 150-3; and (c) otherwise, at the beginning of the first interim period beginning after June 15, 2003. The company adopted SFAS No. 150 on the aforementioned effective dates. The adoption of this pronouncement had a material impact on the company’s results of operations or financial condition, as it relates to common stock subject to redemption.

      In December 2004, the FASB issued SFAS No. 153, “Exchange of Nonmonetary Assets, an Amendment of APB NO. 29, “Accounting for Nonmonetary Transactions.” The amendments made by SFAS No. 153 are based on the principle that exchanges of non-monetary assets should be measured using the estimated fair value of the assets exchanged. SFAS No. 153 eliminates the narrow exception for nonmonetary exchanges of similar productive assets, and replaces it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. A non-monetary exchange has “commercial substance” if the future cash flows of the entity are expected to change significantly as a result of the transaction. This pronouncement is effective for non-monetary exchanges in fiscal periods beginning after June 15, 2005. The adoption of this pronouncement did not have a material impact on the company’s financial statements.

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      In December 2004, the FASB issued SFAS No. 123-R, “Share-Based Payment,” which requires that the compensation cost relating to share-based payment transactions (including the cost of all employee stock options) be recognized in the financial statements. That cost will be measured based on the estimated fair value of the equity or liability instruments issued. SFAS No. 123-R, as interpreted by SEC Staff Accounting Bulletin No. 7, “Share-Based Payments,” covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. SFAS No. 123-R replaces SFAS No. 123 and supersedes APB 25 and is effective January 1, 2006. SFAS No 123(R) requires that the company’s financial statements will reflect an expense for (a) all share-based compensation arrangements granted on or after January 1, 2006 and for any such arrangements that are modified, cancelled, or repurchased on or after that date, and (b) the portion of previous share-based awards for which the requisite service has not been rendered as of that date, based on the grant-date estimated fair value. Upon adoption, $38,000 was expensed in 2006 related to the unvested portion of previous grants for which the requisite service has not been rendered.

      In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” which replaces APB Opinion No. 20 and FASB Statement No. 3. This pronouncement applies to all voluntary changes in accounting principle, and revises the requirements for accounting for and reporting a change in accounting principle. SFAS No. 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle, unless it is impracticable to do so. This pronouncement also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate that is affected by a change in accounting principle. SFAS No. 154 retains many provisions of APB Opinion 20 without change, including those related to reporting a change in accounting estimate, a change in the reporting entity, and correction of an error. The pronouncement also carries forward the provisions of SFAS No. 3 which govern reporting accounting changes in interim financial statements. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of SFAS No. 154. Management is evaluating the future effect of this pronouncement.

      Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the Securities and Exchange Commission (SEC) did not or are not believed by management to have a material impact on the company’s present or future financial statements.

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BUSINESS

Our Business Activities and Objectives

Overview

      NGTV is developing a pay television service branded as “No Good Television” for distribution on cable and satellite television. No Good Television (or “No Good TV”) focuses on uncensored news, entertainment and lifestyle-based programming that is TV-MA rated (television for mature audiences). TV-MA will enable us to feature programming which is uncensored, candid and uncut. No Good TV provides a platform to producers and artists to create and air programs that foster artistic freedom and free speech. The TV-MA rating permits profanity and limited nudity, but does not permit x-rated programming. Our programming will be unique by providing “uncensored” access to celebrities and musical artists, giving them wider latitude for self expression than can be found on network television by allowing profanity, limited nudity without bleeps, blurs or other forms of censorship. Our programming will not include sexually explicit material, or even sexually provocative material. Rather, the inclusion of limited nudity will be in the context of artistic freedom as may appear from time to time in celebrity interviews, director’s cut music videos, and celebrity and artist based reality programming.

      Our content has a fast paced tempo, with popular celebrities and musicians, and an edgy feel. We promote a youth oriented, high energy, feel throughout all of our programming by actively seeking interviews and situations with artists and celebrities where their conduct is likely to be edgy and racy, including in some cases using profanity and limited nudity. We expect this type of content will appeal primarily to 18-34 year old men.

      We will initially launch our programs by producing four-hour blocks of broadcast content for purchase on pay cable and satellite television stations. Our current business objectives are focused upon the initial launch of our programming in the US, together with the development, marketing and sale of DVDs and branded NGTV merchandise in the US. Assuming our programming and branding is successful, we would expand our programming hours up to an all day premium channel on cable or satellite television.

      We intend to develop revenue sources through the distribution of our programming to cable and satellite television distributors, distribution of our programming via the Internet, the development and sale of DVDs and the development of NGTV merchandise including clothing. We believe that the successful launch of our programming and viewer acceptance of our concept and presentation over time will allow us to develop a strong brand and image that can be leveraged for commercial exploitation.

Distribution and Initial Programming

      On January 10, 2006, we entered into a License Agreement with iN DEMAND L.L.C. (the “iN DEMAND Agreement”) which will serve as the initial US distribution agreement for our broadcast content. The iN DEMAND Agreement provides that through iN DEMAND L.L.C (“iN DEMAND”) our broadcast content will be available for purchase by subscription by cable television viewers in the United States and parts of the Caribbean, as well as Puerto Rico and Guam. iN DEMAND is a “multiple system operator” (“MSO”) providing pay-per-view movies and other programming to consumers through numerous local and regional cable operators throughout the United States. Through the iN DEMAND Agreement our programming will be available for purchase by cable television consumers, on a pay-per-day or pay-per-view basis, or as part of a Video-On-Demand (“VOD”) or Subscription Video-On-Demand (“SVOD”) basis.

      iN DEMAND is an MSO that distributes content to local and regional cable television carriers for broadcast on local and regional cable stations. Specifically, cable television programming content is delivered via cable wire to consumers by local cable companies. iN DEMAND does not distribute to satellite television operators (which deliver content “via satellite” transmission). However we intend to negotiate with satellite distributors for the distribution of our content via satellite operators. Our content can be aired on either digital or standard cable format or via satellite. Accordingly, under the iN DEMAND Agreement our content will be distributed by iN DEMAND to regional cable operators for broadcast via digital and standard cable formats.

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      The iN DEMAND Agreement is in the form of a license to broadcast or “exhibit” our finished content according to the terms of the iN DEMAND Agreement. The Agreement with iN DEMAND is not exclusive and we are negotiating with other cable and satellite distribution companies for additional distribution of our content in the United States and in foreign markets via cable and satellite television access. The term of the iN DEMAND Agreement is one year, provided that after six months, either party may terminate the Agreement upon sixty days prior written notice.

      Under the Agreement, our programs will broadcast weekly, in four-hour blocks, on cable television stations on a “Pay Per View” basis, including a VOD basis. Broadcast on a VOD basis means that a subscriber elects to view our programs on an “on demand basis”, i.e. at the time or times of such individual’s choosing, which are not regularly scheduled times. The suggested retail price of each pay-per-view showing is $4.95. NGTV will receive license fees computed as a percent of gross subscriber fees for VOD and non-VOD basis. Under the iN DEMAND Agreement, we must provide iN DEMAND with four hours per week of newly developed content. However, iN DEMAND may also broadcast previously aired content at varying times, or as part of a bundled SVOD presentation, or as part of a VOD purchase. In all cases, we would receive a fee each time our content is broadcast — whether or not the broadcast is of previously aired content.

      An SVOD Package is a package of programs available to paid subscribers where, for a fixed fee, the subscriber can watch a selection of all or a portion of such programs with “on demand” functions over a set period of time and as often as desired. With respect to SVOD Package broadcasts, we will receive a license fee based on the number of hours of NGTV programs included in the SVOD package and the number of subscribers to the SVOD Package. Our programs will also be available on an “all day ticket” meaning subscribers can view the programs throughout the day at their convenience. We cannot control the content selected by iN DEMAND for inclusion in the SVOD package, and our content will be aired together with content from other entertainment companies in the SVOD packages compiled by iN DEMAND. The retail price of the SVOD packages are negotiated between iN DEMAND and the local cable operators.

      The Agreement also provides that iN DEMAND is entitled to certain minimum distribution fees per quarter in the amount of $250,000. Any fees in excess of $250,000 collected by iN DEMAND in any single quarter will be prospectively applied to future quarters and applied to the minimum fee. In the event the minimum distribution fee is not collected by iN DEMAND based on total subscription dollars received for our content, iN DEMAND will be entitled to draw upon a letter of credit, which we must post, to satisfy any shortfall. We will not receive any revenues under the iN DEMAND Agreement until the minimum distribution fee per quarter is received by iN DEMAND. Thereafter, we will be entitled to our agreed share of revenues under the Agreement.

      As we continue to develop finished programming, and in the normal course of offering paid programming, our pay-per-day programs may combine new four-hour blocks with repeats from previous releases. We would be entitled to our share or revenues of all broadcasts — including broadcasts of previously aired programming.

      We will require a 4 month lead time for a national marketing campaign in connection with the launch of the programs to attract viewers and to complete final preparation of our content for broadcast use. We continue to have discussions with other cable and satellite operators, including other MSOs for additional distributions arrangements, but to date we have not entered into any other agreements for distribution of our programming.

      Maintaining a distribution agreement on terms acceptable to us is imperative for the company’s continued operations. Our current plans are to develop an NGTV brand identity in the U.S. market through our television programming, and to subsequently license or syndicate our programming in foreign markets. To date we have not generated revenues from our operations and we cannot determine when or if we will generate revenues.

NGTV Content Focus

      NGTV has spent the last five years obtaining and developing video content that presents an uncensored view of the entertainment world including celebrities, music, movies, television, sports and pop culture. NGTV

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original shows and programming will be produced from video footage including, (a) uncensored celebrity interviews, (b) uncensored “director’s cut” music videos, and (c) live event coverage. We are constantly acquiring new footage of celebrities and entertainment events to draw upon in our programming. We intend an overall branding strategy such that all our programming content and merchandise will be associated with a “No Good” theme of uncensored, artist-friendly entertainment. All of our content is acquired with the permission of the celebrity or artist involved — we do not conduct “ambush” or “paparazzi” style video footage.

Video Library

      We have already captured over 10,000 hours of footage for our library including over a thousand interviews with the television and movie industries’ biggest, hottest, and most popular stars. This number represents raw, uncut and full-length footage of celebrity interviews that have never been seen before. Currently, we create approximately 200 hours per month of new raw footage of celebrity interviews, which we plan to increase as necessary as we approach our launch date and begin expanded production. The library contains footage that was captured with the NGTV creative perspective, making it a unique resource for our contemplated programming. All of our video library footage was developed exclusively by NGTV and created with the consent of the celebrities involved.

      We will utilize our library of video footage in several ways. We will mix existing and older footage of celebrities and music artists with our coverage of live and contemporary events. We will also draw upon our library to produce shows focused on specific celebrities showing clips from various points in their career. And we will also use our library to create shows or segments that will be “classic clips” of celebrities showing them in a variety of contexts, over the course of the last several years. While we must continue to develop current footage of celebrities and music artists at today’s most prominent entertainment industry events and in connection with new movie, television and music releases, we believe our footage of celebrities always has value, especially since our footage contains uncensored material.

      All of the video footage of celebrity interviews and event coverage in our library is owned by us and is maintained for our exclusive use. We have obtained all necessary consents and releases to broadcast the footage we own. We also have all necessary licenses to broadcast the music videos and music concerts we have in our library that we may use in our programming.

Celebrity Interviews with NGTV Attitude; Attracting Celebrity Guests

      Our programming will be comprised largely of uncensored, candid and upbeat interviews with celebrities including movie and television stars as well as musical artists. Most celebrity interviews available in the mass media market today show celebrities “on good behavior” and conversely, most tabloid coverage seeks to exploit celebrities’ worst moments. We, however, will show celebrities having fun, at ease, expressing their opinions, sharing jokes and stories, drinking, and being completely candid and comfortable. We will not seek to embarrass celebrities or portray them in a judgmental way. Rather, our content is generated through the cooperation of the celebrities who, based on our experience, welcome the opportunity to be genuine and candid in front of our cameras and hosts.

      In addition to focused interview content, our library includes, and our programming will include, “B-roll” footage including celebrities captured while “off camera” or “off-air” such as back stage, during breaks at movie filming locations, traveling, during interview breaks and other non-performance venues and circumstances. Such footage is akin to “reality” television coverage of celebrities in their off camera moments. We will mix and utilize this footage with our celebrity interviews and other programming content.

      We believe that our talent booking personnel have very well developed relationships with celebrities and music artists, their agents and representatives, and with major studios and record labels. We have developed and maintain goodwill and trust in the industry that enables us access to the entertainment industry’s biggest and hottest stars, as evidenced by the number of celebrity interviews we have already obtained. We also believe that our celebrity guests enjoy the opportunity to show a candid, uncensored side of their personalities and free expression as shown by the quality and character of the interviews we have taken.

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      The entertainment industry tends to be driven by promotion and exposure of celebrities and music artists on their own and in connection with the projects they are currently involved in. NGTV will provide an additional and alternate platform for promotion and exposure of current talent and projects in the entertainment industry. Further, we believe our programming will appeal to the 18-34 year old male demographic that we believe is appealing to the entertainment industry, and many advertisers. Artists’ and celebrities’ desire for promotion and exposure, coupled with our goodwill in the celebrity community, have made it possible for us to obtain the footage in our library and continue to book new interviews and be invited to industry events. We also believe that this access is unique and that it provides us with a competitive edge in the entertainment news industry. Although we cannot say whether our ability to obtain celebrity interviews will continue after we are on the air, we expect that our ability to book new interviews will continue as a result of the positive exposure we will attempt to give each celebrity appearing in our programming notwithstanding the uncensored nature of the programming.

      The following is a partial list of celebrities, including movie and television stars and music artists who we have interviewed and/or have director’s cut music videos. The inclusion of any name on this list or in this prospectus does not imply and should not be construed as an endorsement by such person of the company, the company’s proposed programming, or this offering of units.

50 Cent

Adam Sandler

Alec Baldwin

Alicia Keys

Andy Garcia

Angelina Jolie

Ashley Judd

Ashley Simpson

Ashton Kutcher

Avril Lavigne

Beastie Boys

Ben Affleck

Ben Stiller

Benicio Del Toro

Beyonce

Billy Bob Thornton

Black Crowes

Black Eyed Peas

Blink 182

Bob Newhart

Brad Pitt

Britney Spears

Bruce Willis

Cameron Diaz

Carrie Underwood

Chad Michael Murray

Charlie Sheen

Charlize Theron

Cher

Christopher Walken

Coldplay

Colin Farrell

Danny Devito

Denzel Washington

Diane Keaton

Drew Barrymore

Dustin Hoffman

Ed Harris

Eddie Murphy

Edward Burns

Elijah Wood

Ellen DeGeneres

Elton John

Eminem

Eric Bana

Fall Out Boy

Foo Fighters

Frances McDormand

Gary Sinise

George Clooney

Glenn Close

Green Day

Greg Kinnear

Halle Berry

Harrison Ford

Hayden Christensen

Hilary Swank

Holly Hunter

Hugh Jackman

Ice Cube

Ja Rule

Jake Gyllenhaal

James Caan

Jamie Foxx

Janet Jackson

Jason Lee

Jay Z

Jennifer Connelly

Jennifer Garner

Jennifer Lopez

Jeremy Piven

Jessica Alba

Jessica Biel

Jessica Simpson

Jim Carrey

John Cusack

John Travolta

Johnny Depp

Jon Favreau

Julia Roberts

Julianne Moore

Kanye West

Kate Bosworth

Kate Hudson

Keanu Reeves

Kelly Clarkson

Kevin Costner

Kiefer Sutherland

Kirsten Dunst

Larry King

Lenny Kravitz

Lil’ Jon & the East Side Boyz

Lindsay Lohan

Linkin Park

LL Cool J

Ludacris

Madonna

Mariah Carey

Mark Wahlberg

Martin Lawrence

Matt Damon

Matt Dillon

Matthew McConaughey

Meg Ryan

Michael Caine

Michael Douglas

Missy Elliot

Morgan Freeman

My Chemical Romance

N’Sync

Naomi Watts

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Nelly

Nicolas Cage

Nicole Kidman

Nine Inch Nails

Orlando Bloom

Outkast

Owen Wilson

P. Diddy

Patrick Stewart

Paul Giamatti

Paul Walker

Philip Seymour Hoffman

Pierce Brosnan

Pink

Prince

Queen Latifah

Quentin Tarantino

Radiohead

Red Hot Chili Peppers

Rob Reiner

Rob Schneider

Rob Zombie

Robert Downey Jr.

Robert Duvall

Robin Williams

Russell Crowe

Samuel L. Jackson

Santana

Scarlett Johansson

Seann William Scott

Simple Plan

Sir Anthony Hopkins

Sir Ben Kingsley

Snoop Dogg

Steve Martin

Sum 41

System of a Down

The Killers

The Strokes

Tim Burton

Tom Cruise

Tommy Lee Jones

U2

Uma Thurman

Viggo Mortensen

Vin Diesel

Vince Vaughn

Weezer

Will Ferrell

Will Smith

Live Event Coverage

      Our video library includes coverage of live events including celebrity parties, and popular culture events such as film festivals, award shows, movie premieres, red carpet events, humanitarian efforts, and other large gatherings where celebrities or artists appear. Our hosts cover live events for us from the NGTV point of view. NGTV is routinely invited to attend such events and interact with celebrity guests and we will continue to accumulate new footage of live events. Our coverage includes interviews, footage of celebrities at events, behind the scenes tours and “vip” access. Like other featured content, live event coverage includes uncensored, candid moments with celebrities at such events.

Music Concerts

      We also have in our library complete footage of concerts and performances of today’s hottest music artists. We obtain all necessary licenses from the artists and/or promoters of such concerts for broadcast in our programming. We can draw upon this footage in connection with shows about particular artists, music genres or current concerts and promotions. Alternatively, we can show long clips from the concert or air substantially the entire event as part of our programming. We continue to film music concerts and musical performances both on location and in our own studio performance stage.

Uncut Music Videos

      We currently have the rights to broadcast over 5,000 uncut and uncensored music videos, known as “director’s cut” versions. Generally, music artists produce two versions of their music videos, much the way that many music compact discs are available for purchase in censored or “clean” versions. The majority of cable, satellite and network television stations that broadcast music videos are not TV-MA rated and cannot broadcast these uncut versions of popular music videos that often feature profanity, nudity and sexually suggestive materials. To our knowledge, we will be the only televised platform for such uncut music videos. The uncut music videos in our library were not developed for us and are not owned by us; rather we obtain a license to broadcast the videos as part of our programming. The owners of the videos retain the right to license the videos for broadcast on other television stations or venues.

      We obtain our uncut music videos from the music industry’s biggest record labels, including Sony Corporation, Broadcast Music Inc. (“BMI”), and Universal Music Group, as examples. We do not pay for the acquisition of the videos, however we are required to pay a nominal royalty fee each time we broadcast a music video. However, Universal also charges us an annual fee of $7,500 for the costs of shipping and reproducing videos they send to us. Since we anticipate broadcasting few music videos in each block of programming the cost to obtain and broadcast these videos is insignificant in our overall production costs.

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      We accept only uncut music videos from major record labels that feature today’s hottest music artists. We only accept and will only broadcast music videos that feature signed artists and do not accept and will not broadcast music videos featuring unknown or unsigned artists. Our uncut music video library includes primarily popular rock music, hip-hop, rap and alternative music. We do not expect to broadcast gospel, classical or other genres of music that we feel would be inconsistent with our No Good theme.

Developed Show Concepts

      We have already created and developed several original program series to premiere with the targeted launch of NGTV in mid-2006. To that end, the company has created on-air graphics packages and marketing materials and is in the process of shooting and editing the individual episodes of the shows in preparation for the launch. The individual programs will feature celebrity-based programs, original animated segments and a live action series. All of our shows will follow the general theme and branding of “no good” uncensored presentations.

      Many of our shows feature our hosts, Caroline “Carrie” Haney and Kimberly “Kim” Harold. Both of these individuals are employees of the company and Ms. Haney has been instrumental in the development of our programming and obtaining interesting and entertaining celebrity and artist interviews. Our hosts interview celebrities and act as “NGTV hosts” at live industry events such as red carpet promotions, concerts and celebrity parties. We will also utilize celebrity guest hosts periodically in our programming. We do not anticipate that we will compensate such celebrity guest hosts, but rather that such persons will seek to be guest hosts for the purpose of promoting themselves or their projects.

      We are also developing animated programs that will feature completely original animated characters and story lines developed in-house by our graphic arts department. In addition to animated segments, we have also developed animated graphics and programming graphics in house, all for our exclusive use in our programming.

Production and Programming; Creative Control

      We control all aspects of the filming and production of our content, as well as all post-production matters concerning our finished programming. To that end we maintain at our offices, a state of the art studio and performance space, audio/video equipment, computer systems and data storage systems. The company maintains audio processing equipment, including a voice over studio and mixing facility. The company’s in-house capabilities include live music engineering, advanced sound editing, music scoring and composition, music editing, mix and master capabilities. The company utilizes on-line digital video post-production facility, including Avid Adrenaline, Unity systems. We also maintain a storage and archive database system utilizing Storage Tek robotic tape which enables us to load our video footage into a central electronic data base that enhances access to our library for producers and programmers. We believe our technology is state of the art for use in the music and television industry.

      Mr. Kourosh Taj, our Co-President, also serves as our Vice President of Programming and oversees the development and production of all of our broadcast programming. Mr. Taj exercises complete creative control over the use of content, graphics, sound and images in our programming. Mr. Taj will also determine what finished programs to air in any given week or time frame. We will usually choose to air content related to current industry events, such as movie premiers, music releases, industry events such as “the Oscars” and similar industry news and promotions. We will also select programming that contains celebrities that the public perceives to be the hottest, most sought-after celebrities. Mr. Taj oversees our graphics and production personnel and will review all broadcast content to determine what to air on television or market on DVD.

      Currently most aspects of the creation and execution of our production and programming are handled internally. The company currently employs a production staff of 30 full time employees for graphics, development, production, post-production and programming. The company believes that employing production personnel, and maintaining the operating and creative space, technologies and equipment necessary to produce its programs is more cost-effective than outsourcing or subcontracting for such production resources. In addition to reducing our production costs it allows us to efficiently control the creative development of our

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programs. This also allows us to maintain the confidentiality and security of our programming concepts under development and assures that our programs will conform to our “No Good Television” brand, vision and in-house creative guidelines.

Targeted Demographics

      Our targeted demographic are individuals that are young at heart and interested in musical artists and celebrities expressing their artistic freedom in a more uncensored environment. We expect that the uncensored and sexually suggestive nature of our programming will appeal primarily to 18-34 year old men and those individuals, including women, interested in the juxtaposition of seeing “good” celebrities being “no good”. We believe top actors and celebrities will have appeal across a wider demographic group, but our inclusion of cutting edge music artists will likely narrow the targeted demographic to individuals interested in the rock and rap music genres we intend to focus on. We have not performed any market studies to determine which demographics will find our content most appealing.

Sources of Revenue

      The company expects to receive revenue from pay television subscriptions (i.e., distribution), Internet distribution, sponsorship and product placement advertising, and DVD and branded merchandise sales.

Distribution of Our Programs on Cable and Satellite Television

      We have entered into a Distribution Agreement with iN DEMAND that will be our initial source of revenue based on the distribution of our television shows on cable television in the US. We intend to enter into additional distribution agreements for the US and for foreign markets, to include other cable television and satellite distribution channels as well as VOD access. While our Agreement with iN DEMAND provides for four hours of new programming each week, we intend, over time, to increase the hours of new programming available for distribution, dependent upon the success and acceptance of our programming, as well as our ability to meet our capital requirements for such expansion.

Advertising, Sponsorship and Product Placement

      Because our programming will only be aired on pay cable television stations, we will not sell and cannot offer traditional 30 second “ad spots.” Rather, we anticipate that advertising revenues will be generated through segment sponsorship and commercial product placement. With respect to segment sponsorship, we believe that companies will sponsor and produce (or co-produce) segments, akin to our own original programming that will feature the sponsor’s products or will be segments in which the sponsorship is prominently displayed and made a part of the segment. Such sponsored segments will be presented seamlessly with our own programming. The company anticipates that this will reduce our costs for the programming. With certain sponsors we anticipate co-marketing opportunities, enhancing our ability to expand the marketing and promotion of the NGTV service.

      With respect to product placement, we will be paid to place commercially available products, such as sodas, alcoholic beverages, food items and similar items in our content, which is then broadcast, as a form of advertising for such products. We believe this will constitute an additional form of revenue for us at little if any cost to us. Our experience is that companies are eager to place products in television shows and movies as a way to passively advertise their products. Assuming our programming is popular we believe product placement opportunities will develop.

Internet Distribution

      We plan to market, distribute and sell our content via the Internet, primarily through established Internet video distributors, such as Google. Our content would be available for purchase by consumers on a per-per-view basis or for monthly subscription fees. Such distribution would be made on a revenue sharing or license fee basis with the Internet video distributors, much like our agreement with iN DEMAND. We have entered into a standard distribution arrangement with Google; however we are negotiating customized terms that will

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enhance the availability and distribution of our content through Google. Under the standard form agreement we have executed with Google, we may determine the price at which consumers may download or view our content via the internet. Since we are still developing our internet strategy and we are in negotiations with Google for a more customized agreement, we have not yet determined such a per view pricing model. Assuming we do establish such a per view price under the standard agreement terms, Google would pay to us 70% of the revenues received from the purchase of our content on Google’s internet sites, minus any extraordinary costs of hosting the content. We believe such costs, if any, will be insignificant. The standard Google agreement requires us to upload content to Google for viewing on the internet. We have not yet uploaded any of our content to Google. The agreement also provides Google with the right to display our name and branded images on various Google websites and promotional features. To our knowledge, Google has not utilized this right under the agreement. We may terminate the agreement upon thirty days prior notice and Google may terminate the agreement at any time without notice.

      We believe that the distribution of NGTV programming on the Internet will quickly expose a mass consumer audience to our content. We envision that such Internet distribution will be made to consumers who can access high quality video images on broadband high speed Internet connections. Similar to cable and satellite distributions, our content will be rated TV-MA and available for purchase by persons over 18 years of age. Any of our content on the Internet that is publicly available (i.e., which does not require advance purchase) will conform to PG-13 guidelines. Our plans for the development and distribution of our content on the Internet are developing and are subject to review and modification.

DVDs and Branded Merchandise

      We plan to develop other sources of revenue including the sale of “NGTV merchandise” for consumers, such as clothing and toys after our brand has been developed. We also intend to produce our content for sale on DVDs, which will constitute an additional source of revenue when such DVDs are produced, marketed and sold. To date, we have not designed or developed any merchandise or produced or distributed any DVDs. We will produce the content for the DVDs, which will include previously unseen footage and programming. We will outsource the production and distribution of DVDs.

      We plan to develop a merchandising initiative including hats, shirts, accessories, collector toys and other “NGTV brand” merchandise. We may sell such merchandise directly or through third party distributors. We may outsource the design and development of such merchandise.

      Our plans for the creation and production of DVDs and merchandise are developing. Our plans concerning our marketing and branding strategy will be further developed under the direction of our new chief executive officer. We intend to develop a strong brand that can be commercially exploited in the future. We believe that it may take between 6 and 12 months after launch to develop a brand that is ingrained in the public consciousness.

Marketing, Branding and Launch Plans

      Our launch plans are being developed. In order to fully launch the NGTV programs and brand, we anticipate that we will need to undertake a pervasive advertising and public relations campaign to attract viewers; therefore we intend to add to our operations an internal comprehensive marketing and promotions department as well as the retention of consultants. Our efforts will include the formation and staffing of an internal marketing group with respect to television broadcast, and the outsourcing of various marketing specialties including print, television and radio broadcast “appearances” (such as appearances on television talk shows) and street level recognition, such as posters and dissemination of fliers at targeted events. We will also utilize cross channel marketing, which includes cable distributors placing trailers and similar advertising “previews” on its various pay channels to sell and promote its own program offerings.

      In connection with our launch we will need to increase the staffing of our productions and graphics departments in order to increase the amount of broadcast ready programming we are developing. We plan to hire a director of marketing and a director of product integration. We will be adding additional employees to all of our creative and production departments, as well as purchasing or leasing additional equipment to

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support expanded production needs. We believe our existing management is capable of overseeing, implementing and managing the planned expansion in production and increase in personnel.

      We will require the proceeds of this offering to complete our initial marketing, launch and branding. We anticipate that our launch activities will require approximately four months to complete, and as such, we have targeted 4th quarter-2006 as our time frame to launch our programming. Even if we successfully launch our programming, we may require additional financing to continue to produce broadcast quality programming and maintain our marketing and branding activities, as well as commence the creation and distribution of DVDs and merchandise.

Management Team

      Our management team is composed of individuals that have a deep and diverse track record in the movie, television and music industries. We rely upon the expertise and experience of our management team to execute on our business objectives and develop additional commercial opportunities for our programming and brand.

      Included in our management team is our Chairman of our Board of Directors and celebrity spokesperson, Mr. Gene Simmons. Mr. Simmons’ career in entertainment began as a lead performer with the internationally successful rock band “KISS.” Mr. Simmons has since achieved great business success in exploiting the “KISS” brand and image in a variety of enterprises, including comprehensive merchandising of “KISS” branded items. Mr. Simmons will assist us in developing our branding and merchandising strategy and continuing to act as a spokesperson for the company. Mr. Simmons has also been instrumental in assisting us in capital raising activities and we may rely on him to do so in the future.

      Our team also includes Mr. Kourosh Taj who has extensive contacts with institutions and individuals within the entertainment industry that are critical to our continued success. We also have on our team, Mr. Richard Abramson, who has extensive experience managing projects and talent in the movie industry and engaging in finance and capital raising activities for the company.

Competition

      The entertainment industry in general, and the television and cable broadcast industry specifically, are highly competitive. The most important competitive factors include quality, differentiation of content (uniqueness) variety of product and marketing. Most of our competitors have significantly greater financial and other resources (such as personnel, financing and contacts) than we have. All of our competitors in the entertainment industry compete for talent and are producing products that may compete with ours for exhibition time on paid cable television, and on home video.

      Our success is highly dependent upon such unpredictable factors as the viewing public’s taste. We have not yet broadcast our programming and therefore cannot assure that our programming will be received favorably. Even if initially successful, public taste changes and a shift in demand could cause our broadcast programs and DVD products to lose their appeal. Therefore, acceptance of our products, whether as a pay television service, DVD or other broadcast media, cannot be assured.

      We do not currently represent a significant presence in the entertainment industry.

History

      Our predecessor company, MX Entertainment, Inc., a Nevada company, was incorporated on August 5, 1997 by Mr. Jay Vir, our Co-President and director. On June 26, 2000, MX Entertainment, Inc. merged into Netgroupie, a California company incorporated June 14, 2000. Netgroupie was the surviving corporation in the merger. On January 7, 2004, Netgroupie changed its name to NGTV.

      Our predecessor, MX Entertainment, Inc., was originally formed for the purpose of aggregating and licensing entertainment footage for Internet broadcast (or “streaming”) distribution. Beginning in 2000, the

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company began developing its current business plan and began filming raw footage of uncensored celebrity interviews, and obtaining the rights to broadcast uncensored music videos and live shows.

      Our offices and production studios are located at 9944 Santa Monica Boulevard, Beverly Hills, California, 90212. The company’s telephone number is (310) 556-8600. Our web site address is www.ngtv.com, however the web site and its contents are not a part of this prospectus. Our web site is under construction.

Employees

      As of May 15, 2006 we employed 53 full-time employees and 3 part time employees. We also have 6 consultants. We consider our employee relations to be satisfactory at the present time.

Intellectual Property

Rights and Clearance

      We obtain all required releases and consents necessary to interview celebrities, attend celebrity-based events and shoot footage of such events and to broadcast such interviews, related footage and footage of industry events that we have in our library. Such releases also permit us to edit such footage and produce it in final form for broadcast. We own all of the footage of celebrity interview and industry events that we have in our library and such releases provide for our unlimited, perpetual and exclusive use of the footage.

      We obtain broadcast licenses for the uncut music videos we have in our library, as well as for recorded music concerts. Such licenses give us the right to use clips from such music videos and concerts, or to broadcast them in their entirety. To the extent we believe we would make any use of such footage outside the scope of our current license with respect to any specific footage, we would need to obtain a new or additional license for such use. Reviewing our finished content and obtaining additional licenses as needed is customary in the television industry. We believe such additional licenses, if any, could be readily obtained by us.

      To the extent we wish to include images, video clips or other audio or visual materials we did not own — such as clips from movies and television — we would need to obtain a license to use such clips from the owners of that material. We believe such additional licenses, if any, could be readily obtained by us and such practices are customary in our industry. We plan to use very little footage or imagery in our content that we do not own and that we would need to license from other owners. However, the cost to license brief clips and imagery is nominal. Accordingly, we anticipate that the volume of such clips and/or the cost to acquire them and use them will be insignificant. Prior to the completion of our weekly programs, as part of our quality assurance and licensing compliance requirements, we will follow customary television production and licensing procedures of verifying that we have the necessary releases and consents for the footage we have selected from our library, required to broadcast images, likenesses, video footage and audio tracks that are included in our programming. To the extent any of our programming were to contain images, likenesses, footage or audio tracks we did not own or did not currently have a license to use, we would obtain the required licenses to broadcast such materials before we submitted the programming to our distributor or produced such content for DVDs.

Trademarks

      We own the following trademarks and rights to use trademarks:

      “NG” (Serial No. 78359665), United States trademark application filed on February 9, 2004. A Notice of Allowance was issued on August 30, 2005. A Statement of Use or extension to file the same is due on or about August 30, 2006.

      “NGTV” (Serial No. 78353035), United States trademark application based upon intent to use filed on January 16, 2004. A Notice of Allowance was issued on July 12, 2005. A Statement of Use or request for an extension to file the same is due on or about July 12, 2006.

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      “NO GOOD” (Serial No. 78353024), Unites States trademark application based upon intent to use filed on January 16, 2004. A Notice of Allowance was issued on July 12, 2005. A Statement of Use or request for an extension to file the same is due on or about July 12, 2006.

      “NO GOOD TV” (Serial No. 78398715), United States Trademark application based upon intent to use filed on April 8, 2004. A Notice of Allowance was issued on September 20, 2005. A Statement of Use or a second request for an extension to file the same is due on or about September 20, 2006.

      A United States Trademark application “NO GOOD FESTIVAL” (Serial No. 76584120) was filed on behalf of Mr. Gene Simmons, our Chairman of the Board. It was subsequently transferred to NGTV, but a Notice of Abandonment was issued because a statement of use (or extension request) was not timely filed. The Abandonment Notice was sent on October 11, 2005. In December 2005 the company filed a petition for review to revive the trademark application and the application was revived. A Statement of Use or a second request for extension to file the same will be due by August 8, 2006.

      We do not have any patent or copyright applications or registrations.

      We own the following domain names: Ngtv.com, Nogood.tv, Nogoodtv.net, Ngtvnetwork.com, and Ngtvnetworks.com. We intend to use our website and various domain names to assist in our marketing and promotional efforts. None of our domain names or websites, whether currently in use or under construction, constitute a part of this prospectus.

Overview of Television Broadcast Regulations and Ratings Related to Obscenity, Indecency and Profanity

      The Federal Communications Commission (FCC), an independent government agency established by the Communications Act of 1934 and made directly responsible to Congress, is charged with regulating interstate and international communications by television, radio, wire, satellite, and cable. However, the extent to which the FCC may regulate paid programming services remains unclear under prevailing case law.

      Many broadcasters are part of national networks of broadcasters such as ABC, CBS and NBC which broadcast content “over-the-air” as well as distribute content via cable services. Broadcasts over-the-air can be received on any television by the general public (i.e., there is not cost to obtain the broadcast). Basic cable is not broadcast, but rather is distributed pursuant to a privately owned cable network and may only be viewed by paying subscribers. The signal is not available to the general public, but rather is scrambled (or physically disconnected) so that it cannot be viewed by non-subscribers to the cable service. As a result of the widespread acceptance of cable throughout the United States, the differences between broadcast television and basic cable television has narrowed as a practical matter and there may continue to be a convergence in the regulatory framework applied to the two forms of distribution.

      Section 1464 of Title 18 of the United States Code prohibits the utterance of “any obscene, indecent or profane language by means of a radio communication.” (Radio communications have been interpreted to include television communications, as well.) “Obscene” material usually consists of hard-core pornography; “indecent” material contains sexual or excretory material that does not rise to the level of obscenity; and, lastly, “profane” material is comprised of highly offensive language. The FCC has created a “safe harbor” between 10:00 p.m. and 6:00 a.m. (local time), during which a station may air indecent and/or profane material. There is no safe harbor for obscene material, as it is not protected by the First Amendment of the Constitution. The FCC does not monitor programming per se, but rather enforces the prohibition on obscenity, indecency, and profanity only in response to complaints. Thus, any material alleged to be obscene, indecent, or profane by any complaint, and which is not subject to the safe harbor protection, shall be reviewed by the FCC and dealt with accordingly. The FCC does not, per se, have “police powers” to enforce ratings standards or monitor content.

      It is unclear whether the foregoing regulatory prohibitions apply only to conventional radio wave broadcast services (such as radio and television airwaves) or whether they also extend to subscription programming services that must be purchased by consumers — such as cable and satellite broadcasts. The FCC has taken the position that it has chosen to enforce the indecency and profanity prohibitions only for violations transmitted in conventional television airwaves broadcasts since they are more or less “public.” The

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FCC takes the position that the obscenity prohibition applies to all programming services, including those for which a subscription is required. Despite the FCC’s position, challengers have taken the stance that the FCC’s content prohibitions do not apply to subscription programming services that must be purchased by consumers. Since such programming is not broadcast over public airwaves, and must be specifically ordered and paid for prior to viewing, and also can be blocked by users who wish not to view such programming, it has been argued that the FCC lacks the authority to enforce content restrictions against cable and satellite providers. In fact, the Supreme Court held, in a case involving the Playboy Channel in 2000, that FCC rules impermissibly restricted Playboy to late-night hours because cable’s ability to block the channel constituted a less restrictive means of shielding children from indecent programming. There is a definite lack of consensus on the issue and no clear legal precedent, but it would be accurate to say that, in general, both the FCC and the various subscription programming providers conduct themselves as though the content prohibitions do not apply to paid subscription programs, but only to conventional (public airwaves) broadcasts.

      Pursuant to Section 551 of the Telecommunications Act of 1996, Congress gave the broadcasting industry an opportunity to establish a voluntary ratings system for its programming. Voluntary ratings were widely adopted by the industry in 1997. Each rating designates a range of “suitability” for particular audiences. Currently, a voluntary content rating appears in the corner of the television screen for the first 15 seconds of each broadcast, other than news, sports, and unedited movies on premium channels. Programs can receive one of six possible ratings — “TV-Y,” “TV-Y7,” “TV-G,” “TV-PG,” “TV-14” and “TV-MA”, and the selection of the rating is determined by the particular broadcaster with respect to the proposed content to be aired. It is the responsibility of the broadcaster to determine that the content falls within the rating standard it selects, since it is a voluntary and self-policing system. However, as noted above, should any materials broadcast not fall within the safe harbor on public airwaves, or become the subject of a complaint, then the FCC may review such complaints and seek to curtail broadcast of that content and also have the power to impose civil fines.

      The voluntary rating system is a tool used to reduce the likelihood of inadvertent disclosure to unsuspecting viewers of indecent or profane programming content. The purpose of the rating is to give information to the viewer in advance of viewing potentially offensive content, so that such content can be avoided in advance at the option of the viewer. The FCC defines the TV-MA rating as content intended for mature audiences only that may be unsuitable for children under 17. Some programmers and cable operators also rate programs using the guidelines established by the Motion Picture Association of America (the “MPAA”). Such ratings include G, PG, and R, among others.

      In addition, any effort to censor television programming by federal or state agencies is subject to a constitutional analysis weighing the state’s interest in censorship against the First Amendment rights of citizens to have access to free speech. Broadcast over-the-air of programming has a heightened risk of inadvertent exposure to children or non-consenting adults. Thus, the state’s interest in censorship is greater in the context of broadcast television (and arguably, basic cable). However, pay-per-view programming such as that provided by iN DEMAND requires an affirmative act by the viewer to receive the specific program (each program is separately purchased) and therefore the risk of inadvertent exposure is eliminated, and the state’s interest in censorship is greatly reduced. As referenced in the Playboy case mentioned above, the state must use the least restrictive method necessary to further legitimate state interests when attempting to censor television programming, particularly where there is little or no risk of inadvertent exposure.

      In summary, the rating system used by cable, satellite and regular television “airwaves” (regular network) stations is a voluntary system adopted by such stations to provide consumers with a guideline to evaluate content. The FCC generally does not enforce such ratings and may under law have no enforcement power against cable and satellite stations, but the legal authority on that point remains unsettled. Accordingly, our adoption of the TV-MA guideline, and delivery of our content only via pay-per-view programming should prevent our content from coming under FCC regulatory scrutiny, unless a complaint is formerly filed with the FCC against us alleging obscene material. We have no intention to ever use materials in its content which could be deemed to be obscene under current law. If a complaint were filed and the FCC reviewed the offending content, it is not clear whether the FCC would have jurisdictional authority to impose fines against us or iN DEMAND.

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Government Regulations and Ratings; NGTV Content

      The television content being produced by the company will be rated “TV-MA” which means that it may contain content suitable for mature audiences, including explicit sexual activity, crude indecent language, and graphic violence. The content we intend for broadcast will be within the guidelines for “TV-MA”. Televisions ratings, including “TV-MA,” are voluntary ratings adopted by broadcasters to enable audiences to evaluate program content with regard to appropriate audiences. Such ratings are not regulatory standards and are not produced or enforced by the FCC. The FCC does, however, review and may impose restrictions on content that is broadcast on public “airwaves” — such as regular network television shows. Some programmers and cable operators also rate programs using the guidelines established by the Motion Picture Association of America (the “MPAA”). Such ratings include G, PG, and R, among others. We intend to voluntarily rate our programming as “R” rated, in addition to “TV-MA” rated, in order to provide further disclosure to prospective purchasers of our programming as to the nature of the programming content we will provide. We do not intend to distribute programming which we have determined, based on our own internal censorship standards, exceeds generally accepted parameters of TV-MA or R rated programming content. Although we could revise our voluntary rating to an “AO” (Adults Only) or “X” rating (pornography), we have not developed such content and we have no intention of developing such content.

      The FCC does respond to complaints of obscene materials broadcast on paid cable and satellite television stations. The FCC has the authority to impose fines, revoke broadcast licenses and impose money damages, depending on the nature of the complaint and violations of obscenity that the FCC is investigating. Since our programming will be provided by paid subscription only and not broadcast on the public airwaves, we do not believe that under current law the FCC has the power to scrutinize our content or impose censorship on our planned programming provided our content does not contain obscene materials.

      Compliance with the TV-MA rating will be undertaken by us as we review and submit content to our cable or satellite distributors for broadcast, or produce content for DVDs (so that we may label the content as TV-MA or R). Our distributors are not responsible for monitoring compliance with the TV-MA rating, but may refuse to air any content they determine exceeds the TV-MA rating standard and which may be deemed obscene under federal law, which could trigger a complaint with the FCC. We believe all of our planned content will fall within the TV-MA standards for profanity and limited nudity and we will only prepare broadcast content that we believe adheres to TV-MA standards. We have no plans to produce any content that is considered obscene under current law.

      With respect to our Agreement with iN DEMAND, we have agreed with iN DEMAND that our content will comply with the TV-MA rating, and that it will not contain any indecent or obscene materials beyond the scope of the TV-MA rating. The TV-MA rating is generally assigned to a program that is specifically designed to be viewed by adults and therefore may be unsuitable for children under 17. Programming in this category may contain one or more of the following: graphic violence, explicit sexual activity, or crude indecent language. (We have no current intention however to include graphic violence in its content.) As a practical matter, iN DEMAND is not obligated to distribute any content that it deems to exceed the TV-MA rating, and in turn, we have no incentive to produce content that is not acceptable for broadcast as TV-MA. Because our content will only be available under paid subscription, our content will include profanity, limited nudity, and other content unsuitable for children under 17, in accordance with TV-MA guidelines. By choice and under the Agreement with iN DEMAND, the content will not exceed the voluntary ratings guidelines. We could be subject to FCC enforcement in the event a complaint is filed with the FCC alleging that our content is obscene. However, depending on the circumstances, we would challenge such complaints and corresponding enforcement attempts as unlawful.

      The sale of DVDs will be subject to Federal Communications laws, including proper consumer labeling and ratings for such DVDs. As such, the company has no reporting or other regulatory obligations with respect to the broadcast or sale of its content on DVDs except to properly label DVDs if such DVDs are created and sold. The company’s business as it relates to “merchandising” will similarly be subject to consumer laws concerning the packaging and labeling of consumer products, such as clothing and toys. However, such merchandising activities will not take place for several months after the launch, if at all.

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Property

      Our principal offices are located at 9944 Santa Monica Boulevard, Beverly Hills, California, 90212. We lease an entire building at that location which is approximately 20,000 square feet of office space and production and performance studios, at a base cost of $372,000 per year. The lease will expire March 1, 2009, with an option to extend the lease through March 1, 2014. We believe the current space is adequate for our operations and needs for the foreseeable future. We maintain customary insurance for the leased space, including insurance on all material articles of equipment installed or stored at that location.

      In the operation of our business, we own or lease certain audio/video equipment, editing systems, data storage systems, servers and rendering systems. The items that we do not own are leased by us pursuant to capital lease agreements. Currently, our monthly payment for the equipment leases is approximately $25,000. We maintain customary and required insurance for the equipment.

Legal Proceedings

      From time to time, claims are made against us in the ordinary course of our business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods.

      On April 10, 2006 we entered into an Employment Agreement with Mr. John Burns under which he served as our Chief Executive Officer. On May 16, 2006, the company advised Mr. Burns of its intention to terminate his employment and to evaluate a termination for “cause” under the terms of his Employment Agreement. Two days later, Mr. Burns presented a written threat of litigation against the company and tendered his resignation for “good reason” under his Employment Agreement. Mr. Burns’ written threats include claims that he was fraudulently induced into signing his employment agreement with the company as Chief Executive Officer, that the company breached the Employment Agreement thereby giving him the right to resign under the Agreement and be paid his full severance package, and that any termination would allegedly be unlawful. Notwithstanding the foregoing threats, the company terminated Mr. Burns’ employment for “cause” as defined under his Employment Agreement effective May 23, 2006. At this time the company cannot determine what losses, if any, may arise as a result of this dispute other than the possible severance benefits provided under the Employment Agreement for a termination “without cause”. A termination “without cause” or a resignation for “good reason” provide for the same contractual severance benefits, including, among other things, payment of a severance amount equal to his base salary through the full term of the Agreement, continuation of health insurance benefits, and the accelerated vesting of all unvested options granted to Mr. Burns. No litigation has yet been filed against the company by Mr. Burns. In the event of litigation, the company would vigorously defend any actions commenced by Mr. Burns.

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MANAGEMENT

      Our bylaws provide that our board of directors shall consist of no less than seven and no more than nine directors. There are presently seven directors serving on our board of directors. There are no family relationships among our executive officers and directors.

      The following table sets forth certain information regarding our directors and executive officers.

Name	Age		Position
Gene Simmons		56	Chairman of the Board of Directors
Kourosh Taj		34	Co-President and Director, Vice President of Programming
Jay Vir		50	Co-President, Secretary and Director
Richard J. David		47	Chief Financial Officer
Richard Abramson		58	Director, Strategic Advisor — Entertainment
Al Cafaro		56	Director, Strategic Advisor — Music(1)
Patrick Dovigi		26	Director
Andrew A. De Francesco		36	Director
John Burns		62	Director

(1)  We have extended an offer to Mr. Cafaro to become our Chief Operating Officer. Mr. Cafaro has accepted the offer contingent on reaching a mutually acceptable form of employment agreement. We anticipate that such agreement and Mr. Cafaro’s service as our Chief Operating Officer will be effective prior to the completion of the unit offering.

Election of Directors

      At each annual meeting of shareholders, directors will be elected by the holders of common stock to succeed those directors whose terms are expiring. Directors will be elected annually and will serve until successors are elected and qualified or until a director’s earlier death, resignation or removal. Our bylaws provide that the authorized number of directors may be changed only by a vote of the shareholders of our company. Vacancies in our board of directors may be filled by a majority vote of the board of directors with such newly appointed director to serve until the next annual meeting of shareholders, unless sooner removed or replaced.

Committees of the Board of Directors

      In connection with the listing of the units, common stock and public warrants on the American Stock Exchange, our board of directors will establish three committees, an audit committee, a compensation committee and a nominating committee, as well as adopt new corporate governance policies and procedures that comply with the requirements of the American Stock Exchange.

Audit Committee

      In connection with the listing of our units, common stock and public warrants on the American Stock Exchange, we will be required to establish an audit committee, which will be comprised of one independent director after the closing of this offering. Our board of directors does not currently include a “financial expert” as that term is defined in rules promulgated by the U.S. Securities and Exchange Commission, or SEC, to serve on the audit committee. Within 90 days from the date of this prospectus, we will expand our audit committee to two members and within one year, to three members, and we will recruit a financial expert to our board of directors and add such financial expert as the chair of the audit committee. The audit committee will assist the board in overseeing and reviewing: (a) the integrity of our financial reports and financial information provided to the public and to governmental and regulatory agencies; (b) the adequacy of our internal accounting systems and financial controls; and (c) the annual independent audit of our financial statements, including the independent auditor’s qualifications and independence. The audit committee:

•  will have sole authority to select, evaluate, terminate and replace our independent auditors;

•  will have sole authority to approve in advance all audit and non-audit engagement fees and terms with our independent auditors;

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•  will review the activities, plan, scope of authority, organizational structure and qualifications of any persons overseeing our accounting and financial reporting processes and the audits of our financial statements; and

•  will review our audited financial statements, public filings and each press release prior to issuance, filing or publication.

      The specific functions and responsibilities of the audit committee will be as set forth in an audit committee charter to be adopted by our board of directors. Our board of directors expects that, following the date of this prospectus, at least one member of our audit committee will qualify as an audit committee financial expert as defined under SEC and American Stock Exchange rules and regulations and the other members of our audit committee will satisfy the financial literacy requirements for audit committee members under current such rules and regulations.

Compensation Committee

      Our board of directors intends to establish a compensation committee, which will be comprised of three independent directors, within one year after the date of this prospectus. The principal functions of the committee will be to:

•  evaluate the performance of our named executive officers and approve their compensation;

•  prepare an annual report on executive compensation for inclusion in our proxy statement;

•  review and approve compensation plans, policies and programs, considering their design and competitiveness;

•  administer and review changes to our equity incentive plans pursuant to the terms of the plans; and

•  review our non-employee independent director compensation levels and practices and recommend changes as appropriate.

      The compensation committee will review and approve corporate goals and objectives relevant to executive officers’ compensation, evaluate the executive officers’ performance in light of those goals and objectives, and recommend to the board the executive officers’ compensation levels based on its evaluation.

      The compensation committee will administer our 2000 Equity Incentive Plan. The specific functions and responsibilities of the compensation committee will be determined by the board of directors.

Nominating Committee and Corporate Governance

      Our board of directors will establish a nominating and corporate governance committee, which will be comprised of at least one independent director as of the date of this prospectus. Within 90 days of the date of this prospectus, we will expand the nominating committee to include two independent directors, and within one year, three independent directors. This committee is responsible for seeking, considering and recommending to the board qualified candidates for election as directors and recommending a slate of nominees for election as directors at our annual meeting, as well as overseeing compliance with various governance matters. The specific functions and responsibilities of the nominating and corporate governance committee will be determined by the board of directors.

Corporate Governance

      In connection with the listing of our securities on the American Stock Exchange, we will be required to adopt many new corporate governance practices, in addition to establishing our new board committees. Such practices include maintaining a majority of independent directors on our board, providing that all compensation payable to our chief executive officer be approved by a compensation committee composed of independent directors, and requiring that any newly adopted stock option and stock compensation plans be approved by our shareholders. We have already adopted a code of ethics.

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Business Experience

      Mr. Gene Simmons. Mr. Simmons was elected to our board of directors in February 2004 and became Chairman of the board in February 2004. Mr. Simmons assists the company with its marketing and public relations, and acts as a spokesperson for the company. Mr. Simmons currently has numerous other projects and businesses for which he serves as director and manager, as well as investor during the past five years. Three decades ago, Mr. Simmons co-founded one of the most famous and most successful rock groups in the world — KISS. Mr. Simmons is President of his own record label, Simmons Records, as well as a film and television producer, having produced “Detroit Rock City” for New Line Cinema. He has a book imprint, Simmons Books, and he also publishes his own magazine Tongue, available at all newsstands.

      Mr. Kourosh Taj. Mr. Taj became our Co-President and was elected to our board of directors at the inception of the company in 2000. Mr. Taj has been in the music and entertainment industry for over 12 years holding various positions in television production, development, licensing, talent booking and operations. Prior to co-founding NGTV, Mr. Taj held the position of Executive Vice President of MusiTopia and spearheaded the creative components and development of a landmark music theme park project for the re-use of the old Atlantic City Convention Center. For more than the last five years, Mr. Taj has led NGTV programming, talent acquisition, production, business development, content licensing from artists and labels, as well acting as the creative director and development director of the NGTV premium channel.

      Mr. Jay Vir. Mr. Vir became our Co-President and was elected to our board of directors at the inception of the company in 2000. Mr. Vir has been a media executive since 1996, and has an extensive background and network of relationships in the cable television, music and entertainment industries. Prior to NGTV he consulted and spearheaded the strategic development, operations, finance and content licensing for MusiTopia, a landmark music and entertainment project, which included media, television, record label and live venue components. He was also a co-founder and CEO of NetInfo, a Microsoft network content partner, and was instrumental in developing a revenue sharing partnership with Microsoft. Prior to 1996 he was a business entrepreneur and a consultant in the media, finance, publishing, technology and automobile industries. For more than the last five years, Mr. Vir had lead NGTV operations, including distribution, marketing, content licensing, corporate and business affairs, programming and broadcast operations. Mr. Vir has also consulted for major US corporations, which include Daily Journal, RJR Nabisco, Nissan and Lockheed. Mr. Vir received his Bachelor’s degree in Electrical Engineering, in 1977, from the Indian Institute of Technology in Bombay and an MBA, in 1979, from the Indian Institute of Management in Calcutta.

      Mr. Richard J. David. Mr. David became our Chief Financial Officer in October 2005. Mr. David joined NGTV as its Vice President of Finance in March 2004. From April, 2002 through March 2004, Mr. David was a consultant with Sunbelt Business Brokers of Beverly Hills, where he consulted with senior management of private companies. Through April 2002, Mr. David was Vice President, Finance and Administration with Simon Marketing, Inc. (“SMI”), a public entity trading on Nasdaq National Market. At SMI, Mr. David was responsible for financial controls, budgets and SEC Filings, as well as operational issues. In addition, Mr. David has performed extensive work consulting with management of mid-level firms on finance, enterprise valuations, mergers and acquisitions. He earned his MBA in Finance and Organizational Development, from Loyola Marymount University, Los Angeles, California, in 1998.

      Mr. Richard Abramson. Mr. Abramson joined NGTV in February 2004, as its Co-Chief Executive Officer and as a director. In July 2004, Mr. Abramson stepped down from this position, but continues to serve as a director and consultant. Mr. Abramson’s successful career spans more than 25 years and several industries. In the film industry, Mr. Abramson has served as Co-Creator, Producer and Executive Producer on numerous films for studios such as Paramount, New Line Cinema, Warner Bros. and Columbia. Mr. Abramson was the personal manager of the character known as Pee-wee Herman. Mr. Abramson was co-creator and producer of Pee-Wee’s Playhouse and Pee-Wee’s Big Adventure for Warner Brothers and Executive Producer of BIG-TOP PEE-WEE for Paramount. In 2001, Mr. Abramson became Chairman of EastWest Resort Development Corporation, a real estate development company. Since 2004, Mr. Abramson has been managing member of SAB 1, LLC, an entertainment services company. SAB 1, LLC is co-owned with Mr. Gene Simmons, Chairman of our board.

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      Mr. Al Cafaro. Mr. Cafaro was elected to our board of directors in October 2000. Mr. Cafaro also acts as our strategic advisor in the area of music. He is a well-respected music industry veteran, now in his third decade in the music business. He held the position of Chairman and CEO of A&M Records from 1996 to 1999. Mr. Cafaro joined A&M Records in 1976 as the regional promotion representative in North and South Carolina. In 1987, he was named Vice President of Promotion and relocated to A&M’s home base in Los Angeles. Thereafter, he was promoted to Senior Vice President and eventually to General Manager of the label. In 1990, Mr. Cafaro was appointed President & CEO of the company and, in 1996 he was promoted to the position of Chairman and CEO of A&M Records. Mr. Cafaro also served on the board of Radio Industry Association of America from 1990-1999. From 1999 through 2002 Mr. Cafaro worked as an individual consultant in the music industry for various clients. In 2002, Mr. Cafaro formed Metropolitan/ Hybrid Recordings, a small record company with 6 contemporary artists and a concert promotion company promoting music shows in the northeastern region of the United States, which he continues to manage.

      Mr. Patrick Dovigi. Mr. Dovigi was elected to our board of directors in February 2004. Mr. Dovigi graduated from Ryerson University in Toronto, Canada in 2000 with a degree in Business Management. Prior to that he was employed by both the Edmonton Oilers and the Detroit Red Wings Organization of the National Hockey League (NHL) as a Professional Hockey player. From 2002 through 2004 Mr. Dovigi was Vice President of Brovi Investments. Since September 2004, he has also been President of Waste Excellence Corporation, a company involved in Municipal Waste and Recycling Transfer Stations. From 1999 through January 2002, Mr. Dovigi was Vice President of Right Lease, a construction equipment and automotive leasing company.

      Mr. Andrew A. De Francesco. Mr. De Francesco was appointed to our board of directors on May 2, 2006. From September 2005 to the present he has been the President of Apollo Limited Partnership, a private Canadian hedge fund. Prior to that, since September 2001, he was the Managing Partner of Standard Securities Capital Corp., a Canadian investment boutique. From February 2001 to September 2001, he served as Vice President of Canaccord Capital, a Canadian brokerage firm. Over the last ten years, he has been involved in capital raising activities for small cap companies in the United States and Canada. He is a graduate of Western Ontario University and he has successfully completed the Canadian Securities Course and the Partners, Directors and Officers exams under Canadian securities laws.

      Mr. John Burns. John Burns has over 20 years experience in the cable and satellite industries and for more than the past 5 years he has served as the CEO of The Burns Group, a consulting firm specializing in cable network and interactive services, whose clients have included Sony Television, the Game Show Network, Columbia Tri-Star International Television, Wisdom Networks, The Parenthood Channel and Gemstar International. Previously, Mr. Burns held the position of President, Distribution for the ABC Family Channel where he oversaw the Affiliate Sales and Marketing efforts, as well as Local Ad Sales. From 1981 to 1992, Mr. Burns worked with Viacom’s Showtime Networks, where he held numerous marketing and sales positions, last serving as Senior Vice President, Affiliate Sales and Marketing. Thereafter, John was Executive Vice President, Sales and Marketing, and subsequently named President of StarSight Telecast, Inc., where he formulated the business plan and all marketing, sales, distribution, engineering, product planning and development strategies for the world’s first interactive on-screen television navigation system. He holds a Bachelor’s Degree from Guilford College and earned a JD from the University of North Carolina, Chapel Hill. Mr. Burns served as our Chief Executive Office for the period April 10, 2006 through May 23, 2006.

Legal Matters Concerning Certain Members of our Management

      On August 19, 2005, Mr. Al Cafaro, one of our directors, filed a petition for bankruptcy protection under Chapter 7 of the United States Bankruptcy Code. The petition was filed in the United States Bankruptcy Court for the Southern District of New York, as case number 05-16684. The case is pending and no order of discharge has been entered. The case relates solely to Mr. Cafaro’s personal financial affairs and assets.

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Executive Compensation

      The following table sets forth information concerning the total compensation that we have paid or accrued on behalf of our Chief Executive Officer and other officers with annual compensation exceeding $100,000 (collectively, the “named executive officers”) during the fiscal years ending December 31, 2003, 2004 and 2005.

SUMMARY COMPENSATION TABLE

				Annual Compensation					Restricted		Securities
							Other Annual		Stock		Underlying		All Other
Name and Principal Position		Year		Salary		Bonus	Compensation		Awards($)		Options(#)		Compensation
Allan Brown*(a)			2005		240,000
	Former Chief Executive Officer		2004		212,000					881,929		98,175
			2003
Jay Vir*(b)			2005		302,580
	President		2004		295,200
			2003		288,000					149,999
Kourosh Taj*(c)			2005		252,150
	President		2004		246,000
			2003		240,000					79,999
Richard David*(d)			2005		185,962					10,804		43,048
	Chief Financial Officer		2004		133,846
			2003
Paul Allen			2005		186,923
	Vice President, Post Production		2004		143,308
			2003
Al Cafaro(e)			2005					50,000				25,829
	Director		2004
			2003

*	These executives are covered by employment agreements which are discussed elsewhere in this prospectus.
(a)	Mr. Brown’s employment with the company as Chief Executive Officer was terminated effective February 12, 2006 and he resigned from our board of directors effective February 27, 2006. There are no severance or other payments, or stock options or issuances, presently due Mr. Brown in connection with his departure from the company. In February 2004, an entity controlled by Mr. Brown was provided with a consulting arrangement and paid $310,000 for marketing services. The contract was subsequently canceled on October 28, 2004. In February 2004, Mr. Brown converted $50,000 of debt that we owed to him into 242,100 shares of common stock; the net benefit to Mr. Brown, based on fair market value of the stock and related options at the time, was $881,929. In addition, in February 2004, Mr. Brown was awarded 98,175 sub-penny options to purchase common stock, all of which were exercised as of December 31, 2005. As of December 31, 2005, all of Mr. Brown’s outstanding options have been exercised and he maintains a total of 320,088 shares of common stock, after the assignment of certain shares to a non-related party.
(b)	In 2005, Mr. Vir was provided with sub-penny warrants to purchase common stock, in connection with outstanding debt that we owed to him. During that year, 280,173 warrants were issued to him, which, based on the Black-Scholes option pricing model at the time that the warrants were issued, were estimated to be valued at $170,759. In 2003, Mr. Vir was awarded 322,859 shares of common stock, worth $149,999, based on fair market value at the time of the award. As of December 31, 2005, Mr. Vir holds a total of 857,230 shares of common stock.
(c)	In 2005, Mr. Taj was provided with sub-penny warrants to purchase common stock, in connection with outstanding debt that we owed to him. During that year, 126,061 warrants were issued to him, which, based on the Black-Scholes option pricing model (minimum pricing method) at the time that the warrants were issued, were estimated to be valued at $76,831. In 2003, Mr. Taj was awarded 172,191 shares of common stock, worth $79,999, based on fair market value at the time of the award. As of December 31, 2005, Mr. Taj holds a total of 461,835 shares of common stock.
(d)	In 2005, Mr. David was awarded 17,084 shares of common stock worth $10,804 based on fair market value of the stock at the time of the award. Additionally, Mr. David was provided with 43,048 options under our Equity Incentive Plan, at a strike price of $2.59 per share. Approximately 44% of these options are vested at December 31, 2005.
(e)	In 2000, the company entered into a consulting agreement with Mr. Cafaro, a director, whereby he earned a maximum of $10,000 per month, in connection with his services to the company, including, but not limited to those services required of him as a director. Compensation accrued under this agreement has been negotiated to a lesser

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amount, in conjunction with the agreement being modified to include a monthly fee of $4,000, plus expenses, due to Mr. Cafaro in exchange for his services as a director. In December 2005, we agreed to pay Mr. Cafaro $50,000 for past services, with an additional $50,000 to be paid to him upon the achievement of certain financing thresholds. Additionally, Mr. Cafaro was awarded a ten-year option to purchase 25,829 shares of the company’s common stock, at $2.59 per share. Mr. Cafaro will continue to earn $4,000 per month as a director.

Director Compensation

      We do not have a plan pursuant to which members of our board of directors are compensated and members of the board of directors do not receive cash compensation or equity for their services on the board of directors; except for Mr. Al Cafaro who receives $4,000 per month under the terms of his letter agreement with the company, and received an option to purchase 25,829 shares of common stock at an exercise price of $2.59 per share. Mr. Cafaro’s option was issued to him on November 22, 2005, is fully vested and is exercisable for a period of 10 years.

Employment and Consulting Agreements With Executive Management and Directors

      Mr. Gene Simmons. Mr. Simmons entered into a consulting and license agreement (the “Agreement”) with the company dated February 12, 2004. The Agreement expired on February 12, 2006, and is in the process of being extended. Under the Agreement, Mr. Simmons is entitled to an option to purchase 98,175 shares of NGTV stock, at a price per share of $.0232 (the “Option”), which has been fully exercised. Under the Agreement, Mr. Simmons is also entitled to a reimbursement for reasonable and necessary business and entertainment expenses incurred by him in connection with performing his duties, including, without limitation, expenses for business development, business or first class travel, meals, first class accommodations, and related expenditures.

      The Agreement provides for early termination by Mr. Simmons at any time, without good reason. The Agreement also calls for early termination by Mr. Simmons for good reason at any time upon the material breach of the Agreement without cause by NGTV, or upon the breach of material representations and warranties forming part of the Common Stock Purchase Agreement between NGTV and Gene Simmons LLC, a limited liability company wholly owned by Mr. Simmons dated February 12, 2004.

      The Agreement also contains provisions relating to Mr. Simmons’ obligation to maintain the confidentiality of information that is confidential and proprietary to the company. In addition the Agreement contains provisions prohibiting competition with the company, solicitation of company employees, and interference with the customer and client relationships of the company. Under the Agreement, the company is obligated to maintain director and officer liability insurance.

      Mr. Kourosh Taj. Mr. Taj was employed as Chief Executive Officer of the company under an executive employment agreement (the “Agreement”) dated July 1, 2003, which expires July 1, 2009 (the “Employment Term”). On February 12, 2004, Mr. Taj’s Agreement was amended to make him Co-President of NGTV (“Amended Agreement”). On April 10, 2006, Mr. Taj’s Agreement was amended to clarify his exclusive control over all creative and artistic aspects of the company’s business and products. Under the Amended Agreement, Mr. Taj is entitled to a base salary of Twenty Thousand Dollars ($20,000) per month during the first twelve (12) months of the Employment Term. Thereafter, effective upon the first day of each subsequent anniversary of the Agreement, Mr. Taj’s base salary increases by 5% over his base salary of the previous year. In addition, Mr. Taj is entitled as a bonus to share in video/ DVD sales, cable and satellite distribution and other ancillary revenues, as follows: (i) $0.10 for each video or DVD sold; (ii) $0.02 for each new subscriber for the NGTV programming plus 2% of the gross revenues derived from domestic cable, satellite, pay-per-view or similar distribution of the NGTV programming, including from our agreement with iN DEMAND; and (iii) 2% of all gross revenues derived from sponsorship or licensing or merchandising. Mr. Taj’s bonus shall accrue and be deferred until such time that the gross proceeds to the company including all distribution, sales and licensing revenues and proceeds from capital raising activities are equal to or exceed Fifteen Million Dollars ($15,000,000). Further, any bonus amounts in excess of 1% of the gross proceeds to the company shall accrue and the company shall defer such payment until the following calendar year. Under the Amended Agreement, Mr. Taj is entitled to a management fee equal to 1% of any gross proceeds derived from the

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occurrence of a material event (including a sale of the company, but not including a public offering of securities, based on per share valuation of the company in excess of $14.1703 per share. Notwithstanding the foregoing, the proceeds of the recent bridge financings, as well as the proceeds of the unit offering covered by this prospectus, are not to be included in the determination of gross proceeds for the purposes of determining whether there has been gross proceeds in excess of $15,000,000. The Agreement provided Mr. Taj with the right to purchase 172,191 shares of company common stock for a purchase price of $400, which he exercised. Mr. Taj is not entitled under the terms of his Amended Agreement to receive a fee relating to any of the proceeds of this offering.

      Mr. Taj is entitled to reimbursement for reasonable and necessary business and entertainment expenses incurred by him in connection with performing his duties, including, without limitation, expenses for business development, business or first class travel, meals, first class accommodations, and related expenditures.

      The Amended Agreement provides for early termination by NGTV for good cause or without cause. In the event of termination for any reason, NGTV will be entitled to payment of all accrued but unpaid compensation, benefits, and reimbursement expenses. In the event of termination without cause, and in additional to all amounts owning to Mr. Taj, Mr. Taj will be entitled to base salary for the remainder of the Employment Term, including annual increases, and an amount equal to the bonus payments that would have accrued had his employment not been terminated. In the event of termination by either NGTV or Mr. Taj for any reason, Mr. Taj or his estate may require NGTV to repurchase Mr. Taj’s shares of common stock at fair market value.

      The Agreement contains a provision granting Mr. Taj an individual executive producing credit or individual production credit on all programming acquired, released or distributed during the Employment Term. The Agreement also contains a provision whereby Mr. Taj assigns and licenses any intellectual property he generates while employed with NGTV to NGTV and waives any moral rights with respect to such intellectual property.

      The Agreement also contains provisions relating to Mr. Taj’s obligation to maintain the confidentiality of information that is confidential and proprietary to the company. In addition the Agreement contains provisions prohibiting competition with the company, solicitation of company employees, interference with the customer and client relationships of the company. Under the Agreement, Mr. Taj is required to assign to the company all intellectual property developed by him for the company.

      Mr. Jay Vir. Mr. Vir (formerly known as Mr. “Janak Vibhakar”) was employed as President of the company under an executive employment agreement (the “Agreement”) dated July 1, 2003, which expires July 1, 2009 (“the Employment Term”). On February 12, 2004, Mr. Vir’s Agreement was amended to make him Co-President of NGTV (“Amended Agreement”). On April 10, 2006, Mr. Vir’s Agreement was amended to provide Mr. Vir with certain exclusive authority over certain licensing, brand and intellectual property transactions and subject matters. Under the Amended Agreement, Mr. Vir is entitled to a base salary of Twenty Four Thousand Dollars ($24,000) per month during the first twelve (12) months of his employment. Thereafter, effective upon the first day of each subsequent anniversary of the Agreement, Mr. Vir’s base salary increases by 5% over his base salary of the previous year. In addition, Mr. Vir is entitled as a bonus to share in video/ DVD sales, cable and satellite distribution and other ancillary revenues, as follows: (i) $0.10 for each video or DVD sold; (ii) $0.02 for each new subscriber for the NGTV programming plus 2% of the gross revenues derived from domestic cable, satellite, pay-per-view or similar distribution of the NGTV programming, including from our agreement with iN DEMAND; and (iii) 2% of all gross revenues derived from sponsorship or licensing or merchandising. Mr. Vir’s bonus shall accrue and be deferred until such time that the gross proceeds to the company including all distribution, sales and licensing revenues and proceeds from capital raising activities, are equal to or exceed Fifteen Million Dollars ($15,000,000). Further, any bonus amounts in excess of 1% of the gross proceeds to the company shall accrue and NGTV shall defer such payment until the following calendar year. Notwithstanding the foregoing, the proceeds of the recent bridge financings, as well as the proceeds of the unit offering covered by this prospectus, are not to be included in the determination of gross proceeds for the purposes of determining whether there has been gross proceeds in excess of $15,000,000. Mr. Vir is also entitled to purchase 322,858 shares of NGTV Common Stock, no par

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value, for a purchase price of $750, which he has exercised. Mr. Vir is entitled to a management fee equal to 1% of any gross proceeds derived from a material event, (including a sale of the company, but not including a public offering of securities, based on per share valuation of the company in excess of $14.1703 per share). Mr. Vir is not entitled under the terms of his Agreement to receive a fee relating to the proceeds of this offering.

      Under the Amended Agreement, Mr. Vir is entitled to a reimbursement for reasonable and necessary business and entertainment expenses incurred by him in connection with performing his duties, including, without limitation, expenses for business development, business or first class travel, meals, first class accommodations, and related expenditures.

      The Amended Agreement provides for early termination by NGTV for cause or without cause. In the event of termination for any reason, Mr. Vir will be entitled to payment of all accrued but unpaid compensation, if any, benefits, and reimbursement expenses. In the event of termination without cause, and in additional to all amounts owning to Mr. Vir, Mr. Vir will be entitled to base salary for the remainder of the Employment Term, including annual increases, and an amount equal to the bonus payments that would have accrued had his employment not been terminated. In the event of termination by either NGTV or Mr. Vir for any reason, Mr. Vir or his estate may require NGTV to repurchase Mr. Vir’s shares of common stock at fair market value. The Agreement contains a provision granting Mr. Vir an individual executive producing credit or individual production credit on all programming acquired, released or distributed by NGTV during the Employment Term. The Agreement also contains a provision whereby Mr. Vir assigns and licenses any intellectual property he generates while employed with NGTV to NGTV and waives any moral rights with respect to such intellectual property, as the term is defined in the Agreement.

      The Agreement also contains provisions relating to Mr. Vir’s obligation to maintain the confidentiality of information that is confidential and proprietary to the company. In addition the Agreement contains provisions prohibiting competition with the company, solicitation of company employees, and interference with the customer and client relationships of the company.

      Mr. Richard J. David. Mr. David is employed as a Senior Vice-President and Chief Financial Officer of the company under an executive employment agreement (the “Agreement”) dated March 14, 2005, which expires March 14, 2007 (the “Term”). Under the Agreement, Mr. David is entitled to a base salary of One Hundred and Eighty Thousand Dollars ($180,000) per annum. No later than March 13, 2006, Mr. David’s salary shall be reviewed and increased as warranted, but by no less than 5%. Mr. David is entitled to receive bonuses at the discretion of management, and the company has acknowledged that a bonus of Fifty Five Thousand Dollars ($55,000) was due and payable as of the date of the Agreement. One half of that bonus was paid on December 15, 2005 and the balance will be paid May 15, 2006. Mr. David is entitled to options to acquire shares of NGTV common stock pursuant to the terms of NGTV’s Equity Incentive Plans, or other means available, subject to terms detailed in the Agreement. Thereunder, Mr. David was awarded an option to purchase 43,048 shares of common stock at an exercise price of $2.59 per share. The Agreement also provides for early termination by NGTV for good cause or without cause. In the event that Mr. David is terminated by NGTV without cause, Mr. David is entitled to severance pay in the amount of the lesser of one year’s salary owed under the Term, plus any accrued vacation and unpaid compensation, bonuses, and other reimbursements, as well as any and all unissued stock options to be granted under the Agreement, or the remaining balance of his base salary plus any accrued vacation and unpaid bonuses and other reimbursements, as well as any and all unissued stock options to be granted under the Agreement.

      Mr. Richard Abramson. Mr. Abramson entered into a Consulting Agreement with the company dated as of July 28, 2004 (the “Agreement”). The Agreement expired on February 11, 2006, and is in the process of being extended. Under the Agreement, Mr. Abramson is entitled to monthly compensation of Twenty Thousand Dollars ($20,000). Mr. Abramson was granted an option for 98,175 shares of NGTV Common Stock at a price per share of $0.0232. All such options have been fully exercised and 98,175 shares were issued to him upon exercise. Mr. Abramson is entitled to reimbursement for reasonable and necessary business and entertainment expenses incurred by him in connection with performing his duties. The Agreement provides for early termination by Mr. Abramson or the company at any time without cause. The Agreement also contains

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provisions relating to confidentiality, non-competition, non-solicitation, and non-interference. The Agreement also includes an express obligation by the company to indemnify, defend and hold harmless Mr. Abramson from any claims or other liabilities other than those arising from his own gross negligence, intentional misconduct, or knowing violation of the law.

      Mr. Al Cafaro. On November 1, 2005, we entered into an Agreement with Mr. Al Cafaro, our director, to memorialize the terms upon which will we compensate him for his services as a director (the “Agreement”). The Agreement provides that in consideration of his services as a director, he will be entitled to receive a monthly retainer of $4,000, subject to his attendance at meetings of our board of directors. He will also be granted an option to purchase 25,829 shares of common stock that will have an exercise price equal to the fair market value on the date of the grant, as determined by our board. Mr. Cafaro’s expenses as a director will be reimbursed in accordance with our expense reimbursement policy as in effect from time to time. The Agreement also provides for compensation on account of past services to the board, as follows: for the year 2004, we have paid $10,000 and accrued fees of $50,000; and for the year 2005, we have accrued $50,000 of fees. The total accrued compensation of $100,000 shall be paid upon the successful completion of certain capital raising activities including this offering of units.

Pending Agreements

      We have extended an offer to Mr. Cafaro to become our Chief Operating Officer. Mr. Cafaro has accepted the offer contingent on reaching a mutually acceptable form of employment agreement. We are in discussions with Mr. Cafaro regarding the terms and timing of such employment.

      We are presently negotiating for the extension of our agreements with Mr. Simmons and Mr. Abramson.

      We are also negotiating further amendments to our employment agreements with each of Mr. Vir and Mr. Taj.

Agreement with Capital Growth Financial, LLC to Nominate an Advisor or Representative to our Board of Directors

      For a period of five years after the date of this prospectus, we have agreed to engage a designee of the representative as an advisor to our board of directors where the advisor shall attend meetings of the board, receive all notices and other correspondence and communications sent by us to members of our board of directors and receive compensation commensurate with other non-officer directors, excluding the chairman of our audit committee. In addition, the advisor will be reimbursed for expenses incurred in attending any meeting. The representative’s designee as an advisor to our board of directors will have no duties, rights or powers of a director. In lieu of the representative’s right to designate an advisor to our board, the representative shall have the right during the five-year period after the date of this prospectus, in its sole discretion, to designate one person for election as a director to our board of directors, who we have agreed to use our best efforts to cause to be elected, and who shall be entitled to receive the same expense reimbursements and other basic benefits as any other non-employee director and shall have the same duties, rights and powers as other directors on our board.

      We will indemnify and hold such advisor or director harmless against any and all claims, actions, damages, costs and expenses, and judgments arising out of the services rendered by such advisor or director, to the same extent as we indemnify our other directors, and, if we maintain a liability insurance policy affording coverage for the acts of our officers and directors, we shall, if possible, include such advisor or director as an insured under such policy.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

      On July 1, 2003, we issued 322,858 shares of restricted common stock to Mr. Jay Vir, our Co-President and a director, for a cash purchase price of $750, or $0.0023 per share. At the time of issuance, we believe that the fair market value per share was $0.465. Accordingly, we recognized compensation expenses related to this transaction of $149,999. All certificates for the shares contain a restrictive legend.

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      On July 1, 2003, we issued 172,191 shares of restricted common stock to Mr. Kourosh Taj, our Co-President and a director, for a cash purchase price of $400, or $0.0023 per share. At the time of issuance, we believe that the fair market value per share was $0.465. Accordingly, we recognized compensation expenses related to this transaction of $79,999. All certificates for the shares contain a restrictive legend.

      On February 12, 2004, we issued 242,100 shares of restricted common stock to each of Gene Simmons LLC, Richard Abramson LLC, and Mr. Allan Brown (our former Chief Executive Officer and director), in consideration of cancellation of loans previously made to us in the aggregate of $150,000. Gene Simmons LLC is a limited liability company wholly owned by Mr. Gene Simmons, a director and Chairman of the Board. Richard Abramson LLC is a limited liability company wholly owned by Mr. Richard Abramson, a director. These shares were issued at an equivalent of $0.2065 per share. At the time of issuance, we believe that the fair market value per share was $2.481. Accordingly, we recognized a loss on conversion of debt related to this transaction of approximately $1,652,000. All certificates for the shares contain a restrictive legend.

      On February 12, 2004, the Registrant granted 98,175 options to each of Mr. Gene Simmons, Mr. Richard Abramson and Mr. Allan Brown, all directors of our company at the time of grant, with vesting over 24 months and exercise prices of $0.0232 per share. The options were granted in consideration of each individual’s agreement to serve on our board of directors. The options were also granted in consideration of an Executive Employment Agreement entered into as of February 12, 2004 with respect to Mr. Allan Brown (which has since terminated) and Mr. Richard Abramson, and in consideration of a Consulting and Licensing Agreement with respect to Mr. Gene Simmons. The options were fully exercised by each person as follows: 36,816 were exercised on December 7, 2004, 16,362 were exercised on April 28, 2005, and 44,997 were exercised on September 16, 2005. We issued shares of our common stock pursuant to the foregoing option exercises on the dates indicated. We recorded compensation expense of $482,576 over the vesting period of Mr. Brown’s and Mr. Abramson’s options, based on the difference between the exercise price and our estimated fair value of the underlying shares of $2.458 on the date of grant. We will record professional fees expense approximating $241,288 over the vesting period of Mr. Simmons’ options, based on the Black-Scholes option pricing model.

      In February 2004, we entered into a consulting agreement for marketing services with SMS, an entity majority owned and operated by our former chief executive officer, Mr. Allan Brown. During 2004 we paid SMS an aggregate of $310,000 in fees for services rendered. In October 2004, when it was determined that marketing services would be premature at that time, we terminated the agreement. No other amounts are due or owing to SMS.

      In September 2005, we offered three-year promissory notes (the “September Note Offering”) with warrants. A total of $2,191,768 in notes were issued in connection with the September Note Offering to six investors including Jay Vir, our Co-President and a director, in the principal amount of $792,263; Mr. Kourosh Taj, our Co-President and a director, in the principal amount of $353,254; and SAB 1 LLC, an entity owned and controlled by Mr. Gene Simmons, our chairman of the board, Mr. Allan Brown, our former chief executive officer and director and Mr. Richard Abramson, a director, in the principal amount of $550,000. A total of 280,171 warrants were issued to Mr. Vir, 126,060 were issued to Mr. Taj and 92,257 were issued to SAB 1 LLC, each with an exercise price of $0.0023 per share, all of which were exercised in September and October 2005. Accordingly no warrants remain outstanding under the September Note Offering. Since the offering consisted of the conversion of prior indebtedness of the company, there was no new cash invested. A total of $2,023,723 of prior debt plus $168,045 of accrued interest was converted into new notes under the September Note Offering. We believe that the fair market value per share was $0.6096 (based on the Black-Scholes option pricing model. For debt modifications deemed to be extinguishments, we recognized a loss on extinguishment totaling $357,750. For debt modifications not deemed to be extinguishments, we recorded a debt discount totaling $47,870.

      On September 23, 2005, we issued 17,084 shares of common stock to Richard David, our Chief Financial Officer, as compensation for services rendered. We determined that the value of the services provided was approximately $10,804 and we recognized compensation expense in that amount. All certificates for the shares contain a restrictive legend.

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      On October 12, 2005, promissory notes issued previously to Mr. Gene Simmons in the amount of $593,940, Mr. Kourosh Taj in the amount of $145,342, and Mr. Jay Vir in the amount of $817,358 were converted into notes substantially identical to the Second Bridge Notes (the “Conversion Notes”). All such Conversion Notes shall convert into units at a 33¹/3 % discount to the public offering price, as described elsewhere in this prospectus. The units held by such persons are not registered as part of this prospectus and these individuals are not selling shareholders herein.

      In connection with the Employment Agreement of our Chief Executive Officer dated April 10, 2006, Mr. John Burns, we issued options to Mr. Burns to purchase 325,000 shares of our common stock at $2.70 per share. Of the options, 125,000 are vested immediately, and the balance were to vest over a two year period at the rate of 1/24th per month. A total of 133,333 options were vested prior to Mr. Burns’ termination from the company. No other options will vest in his favor and 191,667 options have been cancelled.

      With respect to each of the foregoing transactions, the transaction prices and values were determined by negotiation between the company and the other parties thereto. Each transaction was approved by the board of directors at the time of each transaction. Management believes that all such transactions were on terms no less favorable to the company than may have been obtained in an arm’s length transaction.

RECENT BRIDGE FINANCINGS

The September Bridge Financing

      On September 28, 2005, the company initiated a private offering of notes in connection with a $1,200,000 bridge financing (the “First Bridge”). Under the terms of the First Bridge, the company issued and sold $1,200,000 of 12% unsecured convertible promissory notes (the “First Bridge Notes”). The First Bridge Notes bear interest at the rate of 12% per annum, and are due and payable June 30, 2006 (the “First Bridge Maturity Date”). The offering was completed on October 26, 2005.

      The First Bridge Notes contain the option to convert the outstanding principal amount of, and any accrued and unpaid interest on, the note into the units to be sold in this offering (the “IPO”) at a conversion price equal to 50% of the price to the public of such units. In lieu of the conversion alternative, the holder may elect to (a) have all principal and any accrued and unpaid interest paid out of the proceeds of the IPO and (b) receive from the company, a five-year warrant (the “IPO Warrant”) to purchase a number of units (identical to the units offered hereby) equal to (1) the outstanding principal amount of the note plus accrued and unpaid interest, divided by (2) the initial unit offering price to the public, exercisable at the offering price to the public.

      The holders of the First Bridge Notes under their terms were required to make their election as to conversion or repayment of the Notes prior to the filing of the registration statement of which this prospectus is a part. The holders of First Bridge Notes in the principal amount of $837,500 have elected to convert their Notes into the units and to have the units registered hereunder. The holders of First Bridge Notes in the principal amount of $362,500 have elected to convert their Notes into the units, but such units are not registered hereunder. Accordingly, 279,171 units covered by this prospectus and offered by the selling security holders arise from the conversion of the First Bridge Notes. The holders of 120,836 units who elected not to be selling security holders under this prospectus are entitled to have their units (or underlying common stock and warrants) registered with the SEC. In addition, all but two such holders are entitled to receive an additional warrant to purchase one half share of common stock.

      In connection with the First Bridge, Capital Growth Financial, LLC, a registered broker-dealer, acted as placement agent. Capital Growth Financial, LLC received a commission equal to 10% of the gross proceeds of that offering ($120,000 commission on the $1,200,000 in gross proceeds), plus reimbursement for actual out-of-pocket expenses in the amount of $17,606.29.

67

The October Bridge Financing

      On October 13, 2005, the company initiated a private offering of notes in connection with a $6,000,000 bridge financing (the “Second Bridge”). Under the terms of the Second Bridge, the company issued and sold $5,785,000 of 10% unsecured convertible promissory notes (the “Second Bridge Notes”). The Second Bridge Notes bear interest at the rate of 10% per annum, payable monthly, and are due and payable in full on July 31, 2006 (the “Second Bridge Maturity Date”). The offering was completed on January 17, 2006.

      The Second Bridge Notes contain a mandatory conversion feature whereby, in the event that, prior to the Maturity Date, the company completes an initial public offering of securities resulting in gross proceeds of at least $20,000,000 to the company (the “IPO”), the Notes will automatically convert at the effectiveness of the IPO into securities of the type offered in the IPO (the “IPO Securities”) at a 33¹/3 % discount to the initial offering price to the public. The conversion feature of the Second Bridge Notes is mandatory in connection with the IPO. Accordingly, all of the $5,785,000 of Second Bridge Notes issued to investors in the Second Bridge, including all principal and interest accrued thereunder is being converted into units in connection with the company’s offering of the units under this prospectus. 1,153,888 units covered by this prospectus and offered by the selling security holders arise from the conversion of the First Bridge Notes. Holders of 292,362 units elected not to be selling security holders under this prospectus and will be entitled to have their units (or underlying common stock and warrants) registered with the SEC one year after the date of this prospectus. In connection with their election not to include their securities in this offering, such holders are entitled to receive an additional warrant to purchase one half share of common stock.

      In connection with the Second Bridge, Capital Growth Financial LLC, a registered broker-dealer, acted as placement agent.

      Capital Growth Financial LLC received a commission equal to 10% of the gross proceeds of that offering ($578,500 commission on the $5,785,000 in gross proceeds), plus an expense allowance equal to 2% ($115,700) of the gross offering proceeds of the Second Bridge.

Conversion of Prior Indebtedness Into Notes Upon the Same Terms and Conditions as the Second Bridge Notes

      In October 2005, the holders of indebtedness of the company totaling $3,227,619 agreed to convert such indebtedness into notes (the “Conversion Notes”) that will contain substantially the same terms and conditions as the Second Bridge Notes. The Conversion Notes shall convert into units on the same terms and conditions as the Second Bridge Notes. Certain of these former debt holders are named as selling security holders in the Selling Shareholder Table together with the First Bridge and Second Bridge investors who are selling in this offering. The holders of such Conversion Notes include certain officers and directors of the company as follows: Mr. Jay Vir, our Co-President and a member of our board of directors, received a Conversion Note in the principal amount of $817,358 that will convert into 204,340 units; Mr. Kourosh Taj, our Co-President and a member of our board of directors, received a Conversion Note in the principal amount of $145,342 that will convert into 36,336 units; and Gene Simmons received a Conversion Note in the principal amount of $593,940 that will convert into 148,485 units. In addition, $404,738 of indebtedness due to Richardson & Patel LLP, the company’s counsel, was converted into Conversion Notes on the same terms as the other holders and will convert into 101,185 units. None of the selling security holders covered by this prospectus are directors or officers, or entities controlled or owned by directors and officers, of NGTV. The foregoing assumes an initial public offering price of $6.00 for the units.

Treatment of Units held by Persons other than the Selling Security Holders

      The holders of the First and Second Bridge Notes and the Conversion Notes were given the option to have their units included in the registration statement of which this prospectus is a part and to be named as selling security holders therein. In lieu of selling such units to the underwriters, any holder who opted to not participate as selling security holder in this prospectus, was granted (a) a warrant to purchase one half of one share of common stock at an exercise price to be equal to the exercise price of the public warrants, and (b) registration rights to have such units and the securities (the common stock, and common stock underlying

68

the warrants) underlying such units registered by the company one year after the date of this prospectus, to the extent such securities are not available for resale under Rule 144.

2006 Debt Financing

      In April 2006, the company initiated a private secured debt financing in order to sustain operations pending the completion of the offering described in this prospectus (the “Debt Financing”). In connection with the Debt Financing, the company issued and sold 10% Senior Secured Promissory Notes in the principal amount of $3,500,000 (the “Secured Notes”), and issued to each holder of a Secured Note a Warrant to Purchase Common Stock (the “Debt Warrants”). The Notes accrue interest at the rate of ten percent (10%) per annum and are due and payable on the earlier of (i) the completion of the unit offering described in this prospectus, or (ii) the first anniversary of the date of issuance. The Notes are secured by a lien on substantially all of the assets of the company. The lien will be released upon payment in full of the Notes at the completion of the offering described in this prospectus. The Debt Warrants entitle the holders to purchase up to 875,000 shares of common stock (assuming the unit offering is completed on or before August 13, 2006) at a price per share equal to (i) two-thirds of the per unit price to the public if the offering of units is completed on or before August 13, 2006, or (ii) one-half of the per unit price to the public if the offering of units is completed after August 13, 2006. Accordingly, based on an assumed offering price of $6.00 per unit, the Debt Warrants would either be exercisable for $4.00 per share, or $3.00 per share, based on the time the offering of units is completed. The Debt Warrants will become exercisable one year after the date of issuance. Debt Warrants issued in connection with $2,000,000 of Notes will become exercisable on June 2, 2007 and Debt Warrants issued in connection with $1,500,000 of Notes will become exercisable on April 18, 2007. The Debt Warrants are exercisable for five years from the date of issuance.

      The common shares underlying the Debt Warrants are entitled to registration rights in favor of the holders, requiring the company to register the shares (i) on demand, at any time after 180 days following the date hereof (or the completion of the offering of the units), or (ii) as part of any other registration statement the company may file, other than registrations of stock for the purpose of registering employee stock options, purchase, bonus or other benefit plans.

      In connection with the Debt Financing, Capital Growth Financial, LLC, a registered broker-dealer, acted as placement agent.

      Capital Growth Financial, LLC received a commission equal to 10% of the gross proceeds of the placement ($350,000 commission on the $3,500,000 in gross proceeds), plus an expense allowance equal to 2% ($70,000) of the gross offering proceeds of the Debt Financing.

SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information as of May 31, 2006 as to each person or group who is known to us to be the beneficial owner of more than 5% of our outstanding voting securities and as to the security and percentage ownership of each of our executive officers and directors and of all of our officers and directors as a group.

      Beneficial ownership is determined under the rules of the Securities and Exchange Commission and generally includes voting or investment power over securities. The number of shares shown as beneficially owned in the tables below are calculated pursuant to Rule 13d-3(d)(1) of the Securities Exchange Act of 1934. Under Rule 13d-3(d)(1), shares not outstanding that are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but not deemed outstanding for the purpose of calculating the percentage owned by each other person listed. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each shareholder identified in the table possesses sole voting and investment power over all of the shares of common stock shown as beneficially owned by the shareholder.

      The address for each of the persons named below is 9944 Santa Monica Boulevard, Beverly Hills, California, 90212, unless otherwise indicated.

69

      The following table presents beneficial ownership on an actual, pre-offering basis (not assuming the issuance of any units), and on an adjusted post-offering basis, assuming the issuance and sale of all the units (including units not registered in this prospectus), except for the units issuable upon the exercise of the underwriters over-allotment option and the underwriters warrant.

				Amount and						Amount and
				Nature of						Nature of
				Beneficial			Percentage			Beneficial			Percentage
				Ownership			of Class			Ownership			of Class
				Prior to the			Prior to the			After the			After the
				Offering			Offering			Offering			Offering
Name and Address		Title of Class		(a)			(a)			(b)			(b)
Richard Abramson			Common Stock		355,653	(1)		7.1	%		355,653	(1)		2	%
Allan Brown			Common Stock		320,088			6.4	%		320,088			2	%
John Burns			Common Stock		133,333	(13)		*			133,333			*
Al Cafaro			Common Stock		64,572	(2)		1.3	%		64,572	(2)		*
Richard David			Common Stock		42,912	(3)		*			42,912	(3)		*
Andrew A. De Francesco			Common Stock		—			—			—			—
Patrick Dovigi			Common Stock		—			—			—			—
Gene Simmons			Common Stock		401,781	(4)		8	%		698,751	(9)		4.1	%
Kourosh Taj			Common Stock		461,834			9.2	%		498,170	(10)		2.9	%
Jay Vir			Common Stock		857,229			17.1	%		1,265,909	(11)		7.4	%
BTR Capital Limited(6)			Common Stock		336,505			6.7	%		336,505			2	%
	c/o Ogier Fiduciary Services (Cayman) Limited Queensgate House, 5th Floor 113 South Church Street P.O. Box 1234 GT George Town, Grand Cayman Cayman Islands
Hazelton Capital Limited Partnership(7)			Common Stock		386,470			7.7	%		386,470			3	%
	28 Hazelton Avenue Toronto, Ontario Canada M5R 2E2
Aegon Capital Management Inc.(12)			Common Stock		407,566			8.15	%		407,566			2	%
	300 Consilium Place, 17th Floor Toronto, Ontario Canada M1H 3G2
All directors and officers as a group (9 persons)(5)			Common Stock		2,481,834			48.8	%		3,823,038	(8)		22.1	%

  * Indicates less than 1%

(a)

Based on a total of 5,000,152 shares of common stock outstanding on May 31, 2006 and prior to the offering of the units and prior to the conversion of notes into units.

(b)

Based on a total of 17,971,589 common shares outstanding including 5,000,152 common shares issued and outstanding and all common shares, and common shares underlying warrants underlying the units, issued upon the conversion of the company’s bridge notes and conversion notes, as discussed elsewhere in this prospectus. Also assumes the exercise of all warrants underlying all units, although such warrants

70

	may not become exercisable until the units detach, which may not occur prior to 60 days following the date of this prospectus. Does not include the underwriters over-allotment option or any other warrants including the underwriters option, options or convertible securities outstanding, except for any such securities required to be included under Rule 13d-3(d)(1).
(1)	Includes 242,100 shares of common stock owned by Richard Abramson LLC, a Delaware limited liability company, of which Mr. Abramson has a controlling interest and over which Mr. Abramson exercises voting control and control over the disposition of such shares.
(2)	Includes a fully vested option to purchase 38,743 shares of common stock at an exercise price of $2.59 per share. Also includes a fully vested option to purchase 25,829 shares of common stock at an exercise price of $2.59 per share.
(3)	Includes 17,083 common shares owned, plus vested options to purchase 25,829 shares of common stock at an exercise price of $2.59 (total option to purchase 43,048 shares of common stock, currently 60% vested; as such, current holding is an option to purchase 25,829 shares of common stock).
(4)	Includes 242,100 shares of common stock owned by Gene Simmons LLC, a Delaware limited liability company, of which Mr. Simmons has a controlling interest and over which Mr. Simmons exercises voting control and control over the disposition of such shares.
(5)	Includes 64,572 shares underlying an option to purchase common shares owned by Mr. Cafaro. (See Note 2 above). Also includes shares underlying an option to purchase common shares owned by Mr. David. (See Note 3 above).
(6)	Includes 14,172 common shares and a warrant to purchase 11,848 common shares owned by BTR Global Growth Trading Limited (“BTR Growth”), a Cayman Islands company. Includes 218,405 common shares owned by BTR Global Arbitrage Trading Limited (“BTR Arbitrage”), a Cayman Islands company. Also includes 92,080 common shares owned by BTR Global Opportunity Trading Limited (“BTR Opportunity”), a Cayman Islands company. BTR Growth, BTR Arbitrage and BTR Opportunity are owned and ultimately controlled by BTR Capital Limited, a Cayman Islands company. BTR Growth, BTR Arbitrage and BTR Opportunity are advised by a common investment advisor. BTR Capital Limited disclaims beneficial ownership of the common shares owned by BTR Growth, BTR Arbitrage and BTR Opportunity. Mr. Danny Guy exercises voting and investment control over the shares held by BTR Growth and BTR Opportunity Funds. Mr. Brad White exercises voting and investment control over BTR Arbitrage Fund.
(7)	Hazelton Capital Limited Partnership is an Ontario, Canada registered limited partnership. Hazelton Capital Ltd., an Ontario, Canada company, is the general partner of Hazelton Capital Limited Partnership. Mr. Emlyn David exercise voting and investment control over the shares held by Hazelton Capital Limited Partnership.
(8)	Includes 64,572 shares underlying an option to purchase common shares owned by Mr. Cafaro. (See Note 2 above). Also includes 20,687 shares underlying an option to purchase common shares owned by Mr. David. (See Note 3 above).
(9)	Includes 296,970 common shares and common shares underlying warrants which comprise the units owned by Mr. Simmons, which units are not included in this prospectus.
(10)	Includes 72,672 common shares and common shares underlying warrants which comprise the units owned by Mr. Taj, which units are not included in this prospectus.
(11)	Includes 408,680 common shares and common shares underlying warrants which comprise the units owned by Mr. Vir, which units are not included in this prospectus.
(12)	Mr. Mark Johnson exercises voting and investment control over the shares held by Aegon Capital Management.
(13)	Includes 133,333 shares underlying vested options exercisable at a price of $2.70 per share. The options will expire on August 23, 2006.

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SELLING SECURITY HOLDERS

      The following table provides certain information with respect to the selling security holders’ beneficial ownership of our securities as of the date of this prospectus. The selling security holders will sell their units to the underwriters pursuant to the terms of the underwriting agreement and as described elsewhere in this prospectus. The table below assumes that the selling shareholders will sell all units owned by them and covered by this prospectus. Except as indicated, none of the selling security holders are or were affiliated with registered broker-dealers.

      The table has been presented to reflect the number of shares of common stock beneficially owned by each selling security holder based upon (a) the number of shares of common stock underling the units to be owned by such holder, plus (b) the number of shares of common stock underlying each public warrant underlying the units to be owned by such holder, notwithstanding that such warrants will not become exercisable until at least 60 days following the date of this prospectus. The information in the table assumes a public offering price of $6.00 per unit. The information in this table does not reflect the over-allotment option or the underwriters option.

      Certain holders in this table own units which are registered in this prospectus (the “Registered Units”) and units which are not registered in this prospectus (the “Unregistered Units”). Each Registered Unit consists of one share of common stock and one warrant to purchase one half share of common stock. Each Unregistered Unit consists of one share of common stock and two warrants each to purchase one half share of common stock. Holders of both types of units are indicated with a (#) and their beneficial ownership reflects the underlying common stock of both types of units.

	Number of									Number of
	Shares of							Number of		Shares of
	Common Stock		Percentage of					Shares of		Common Stock		Percentage of
	Beneficially		Common			Number of		Common Stock		Beneficially		Common
	Owned		Stock Owned			Units		Underlying		Owned		Stock Owned
	Prior to the		Prior to the			Being		Units Being		After the		After the
Name	Offering(1)		Offering(2)			Offered(3)		Offered(4)		Offering (5)		Offering (6)
Almiron Finance Corp(24)		93,750		*			62,500		93,750		—		—
Andan, Ltd(25)		18,750		*			12,500		18,750		—		—
Katherine Baldwin		11,250		*			7,500		11,250		—		—
Luis Henrique Ball		56,250		*			37,500		56,250		—		—
Tim Barham		18,750		*			12,500		18,750		—		—
Mark and Anne Bilawsky, JTTEN		9,375		*			6,250		9,375		—		—
Scott Buckner		18,750		*			12,500		18,750		—		—
Brant Cali		93,536		*			50,877		76,316		8,610		*
Alfonso Campalans		18,750		*			12,500		18,750		—		—
Capital Growth Equity Fund I, LLC(7)		50,001		*			33,334		50,001		—		—
Robert F. Converse		18,750		*			12,500		18,750		—		—
DCI Master LDC (26)		25,001		*			16,667		25,001		—		—
Denton Business, Inc(27)		100,001		*			66,667		100,001		—		—
Earnco MPPP(28)		18,750		*			12,500		18,750		—		—
Moe Engler Revocable Trust UA DTD 7/7/99(29)		9,375		*			6,250		9,375		—		—
Robert A. Engler		9,375		*			6,250		9,375		—		—
Richard D. and Luanne C. Fortner, Tenants in Common		37,500		*			25,000		37,500		—		—
Forum Global Opportunities Master Fund LP(8)(#)		328,125		1.91	%		93,750		140,625		187,500		1.09	%
E. Robert Fraser, Jr.		50,001		*			33,334		50,001		—		—
Front Street Investment Management, Inc(30)		282,235		1.64	%		38,456		57,684		224,551		1.31	%

72

	Number of									Number of
	Shares of							Number of		Shares of
	Common Stock		Percentage of					Shares of		Common Stock		Percentage of
	Beneficially		Common			Number of		Common Stock		Beneficially		Common
	Owned		Stock Owned			Units		Underlying		Owned		Stock Owned
	Prior to the		Prior to the			Being		Units Being		After the		After the
Name	Offering(1)		Offering(2)			Offered(3)		Offered(4)		Offering (5)		Offering (6)
Ganderland Corp(40)		187,500		1.09	%		125,000		187,500		—		—
RBC Dain Rauscher Custodian FBO Robin Garman, IRA(31)		9,375		*			6,250		9,375		—		—
John L. Giglio		9,375		*			6,250		9,375		—		—
Sanford Greenberg c/f Andrew Greenberg		9,375		*			6,250		9,375		—		—
Sanford Dean Greenberg		9,375		*			6,250		9,375		—		—
Jack Grumet(9)(#)		43,750		*			12,500		18,750		25,000		*
Iraj Hamidi		9,375		*			6,250		9,375		—		—
Natasha Hamidi		18,750		*			12,500		18,750		—		—
Shirin Hamidi		18,750		*			12,500		18,750		—		—
Tania Hamidi		9,375		*			6,250		9,375		—		—
Caroline Haney(10)		272,761		1.53	%		24,329		36,494		236,267		1.33	%
Michael Herman		9,375		*			6,250		9,375		—		—
Martin Hodas		18,750		*			12,500		18,750		—		—
Jeff Hollander		75,000		*			50,000		75,000		—		—
Iroquois Master Fund, Ltd.(32)		93,750		*			62,500		93,750		—		—
Jag Multi Investment, LLC(33)		412,500		2.32	%		25,000		37,500		375,000		2.11	%
Christopher D. Jennings(12)(#)		14,585		*			4,167		6,251		8,334		*
Stephen J. Jesmok, III		18,750		*			12,500		18,750		—		—
Howard Kaye		37,500		*			25,000		37,500		—		—
Kathy R. Kelly		9,375		*			6,250		9,375		—		—
Nathaniel Kramer		56,250		*			37,500		56,250		—		—
David Lopez		18,750		*			12,500		18,750		—		—
Lower East Capital Partners(34)		123,554		*			82,369		123,554		—		—
L.W. Securities, Ltd.(14)(#)		109,375		*			31,250		46,875		62,500		*
Frank and Antonietta Madia, JTTEN		18,750		*			12,500		18,750		—		—
Angelo J. Mancuso, III		18,750		*			12,500		18,750		—		—
Market Cap Partners(35)		9,375		*			6,250		9,375		—		—
Scott Marsh(15)(#)		20,000		*			10,000		15,000		5,000		*
Hasti Marzban		9,375		*			6,250		9,375		—		—
RBC Dain Rauscher Custodian FBO
Jonathan Meyers, IRA(36)		18,750		*			12,500		18,750		—		—
Jonathan and Patricia Meyers, JTTEN		18,750		*			12,500		18,750		—		—
Joel B. Miller and Victoria Miller, JTTEN		25,001		*			16,667		25,001		—		—
Harrison S. Mullin(16)(#)		21,875		*			6,250		9,375		12,500		*
Sylvia A. Naiditch		18,750		*			12,500		18,750		—		—
Tina Newkirk & Clement Sarafin		38,445		*			25,630		38,445		—		—
Newman Family Trust(17)(#)		10,400		*			4,200		6,300		4,100		*

73

	Number of									Number of
	Shares of							Number of		Shares of
	Common Stock		Percentage of					Shares of		Common Stock		Percentage of
	Beneficially		Common			Number of		Common Stock		Beneficially		Common
	Owned		Stock Owned			Units		Underlying		Owned		Stock Owned
	Prior to the		Prior to the			Being		Units Being		After the		After the
Name	Offering(1)		Offering(2)			Offered(3)		Offered(4)		Offering (5)		Offering (6)
Dennis O’Connor(18)(#)		41,250		*			17,500		26,250		15,000		*
Omicron Master Trust(39)		93,750		*			62,500		93,750		—		—
Milton Podolsky Rev. Living Trust(37)		37,500		*			25,000		37,500		—		—
RFJM Partners, LLC(38)		50,001		*			33,334		50,001		—		—
Richardson & Patel LLP(19)		267,058		1.50	%		101,185		151,778		115,280		*
Mitchell J. Sassower		28,125		*			18,750		28,125		—		—
Barry Shemaria		18,750		*			12,500		18,750		—		—
Dr. Robin L. Smith		37,500		*			25,000		37,500		—		—
Clara Sola		18,750		*			12,500		18,750		—		—
Eric Stanton		63,068		*			34,440		51,660		11,408		*
Ken Stroscher(20)		159,760		*			24,329		36,494		123,266		*
Jonathan Tepper(21)(#)		14,219		*			6,563		9,845		4,374		*
William F. and Susan E. Thompson, JTTEN		18,750		*			12,500		18,750		—		—
Verde Trading Group LLC(22)(#)		100,000		*			50,000		75,000		25,000		*
Robert Weidenbaum		18,750		*			12,500		18,750		—		—
Delaware Charter c/f Richard Winelander		9,375		*			6,250		9,375		—		—
Ralph Wondra(23)(#)		10,938		*			3,125		4,688		6,250		*
Paul Zarcadoolas		50,001		*			33,334		50,001		—		—
Scott A. Ziegler		75,000		*			50,000		75,000		—		—

(1)	The number and percentage of common shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934 (except that public warrants underlying the units have been included, notwithstanding that such warrants will not become exercisable until at least 60 days following the date of this prospectus), and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any common shares to which each selling security holder has sole or shared voting power or investment power and also any common shares which the selling security holder has the right to acquire within 60 days. Includes shares of common stock, and shares of common stock underlying warrants, held by each holder owning Unregistered Units, as applicable. Does not include any other warrants or options outstanding and does not include any common stock or warrants with respect to the over-allotment option or the underwriters’ warrants. Calculated on a pro forma basis (to reflect the issuance of the Registered Units and the Unregistered Units) totaling 17,779,922 shares issued and outstanding effective at the time of the offering.
(2)	Includes common stock and shares of common stock underlying options and warrants owned by such holder; including shares underlying the Registered Units and the Unregistered Units. Calculated on a pro forma basis (to reflect the issuance of the Registered Units and the Unregistered Units) totaling 17,779,922 shares issued and outstanding effective at the time of the offering.
(3)	The notes held by the selling security holders immediately prior to this offering will be converted to units upon the effectiveness of the registration statement of which this prospectus is a part. Such units are registered hereby unless otherwise indicated as “Unregistered Units” for the purposes of this table. In the event an odd number of units are indicated, the holder also holds an odd number of warrants

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	exercisable for one half share each. For ease of reference only, the numbers listed in columns (1) and (4) have been rounded up to the next whole share for such holders since shares may only be issued as whole shares.
(4)	Includes shares of common stock included in the Registered Units and shares of common stock underlying the public warrants. Does not include shares of common stock underlying any other warrants, options or convertible securities of the company owned by such holder.
(5)	Assumes that all Registered Units will be sold in this offering by each selling security holder. Includes shares of common stock underlying options or warrants owned by such holder, and includes shares of common stock, and shares of common stock underlying warrants, held by each holder owning Unregistered Units, as applicable.
(6)	The number and percentage of common shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any common shares as to which each selling security holder has sole or shared voting power or investment power and also any common shares, which the selling security holder has the right to acquire within 60 days. Includes shares of common stock, and shares of common stock underlying warrants, held by each holder owning Unregistered Units, as applicable. Does not include any other warrants or options outstanding and does not include any common stock or warrants with respect to the over-allotment option or the underwriters option. Assumes that all Registered Units will be sold in this offering by each selling security holder.
(7)	Capital Growth Equity Fund I was an investor in the First Bridge Financing. The manager of Capital Growth Equity Fund I is Capital Growth Investment Fund Advisors, LLC, a Florida limited liability company that is a wholly owned subsidiary of Capital Growth Financial, Ltd. Neither Capital Growth Financial, LLC, or its related persons is a beneficial owner of Capital Growth Equity Fund I; however, Capital Growth Investment Fund Advisors, LLC, would be entitled to receive a contingent profit participation payment, if and when such profits are earned by the Equity Fund. Due to the relationship with Capital Growth Financial, LLC, Capital Growth Equity Fund I is an underwriter under Section 2(11) of the Securities Act of 1933, as amended. The persons that share voting and investment control over these securities are Mr. Michael Jacobs and Mr. Alan Jacobs.
(8)	Includes common shares underlying 93,750 Unregistered Units. The person that exercises voting and investment control over these securities is Mr. J. Jose Pedreira.
(9)	Includes common shares underlying 12,500 Unregistered Units.

(10)	Includes 107,123 shares of common stock, and an option to purchase 129,144 shares of common stock pursuant to the 2000 Equity Incentive Plan at an exercise price of $2.59 per share, and an expiration date of October 25, 2015.
(11)	Omitted.
(12)	Includes common shares underlying 4,167 Unregistered Units. Christopher D. Jennings is Managing Director of Roth Capital Partners, a registered broker dealer. Mr. Jennings purchased the securities owned by him in the ordinary course of business, and at the time of the purchase, Mr. Jennings did not have any agreements or understandings, directly or indirectly, with any person to distribute the securities.
(13)	Omitted.
(14)	Includes common shares underlying 31,250 Unregistered Units. The person who exercises voting and investment control over these securities is Mr. Carlos A. Zacles.
(15)	Includes common shares underlying 2,500 Unregistered Units.
(16)	Includes common shares underlying 6,250 Unregistered Units.
(17)	Includes common shares underlying 2,050 Unregistered Units. The person who exercises voting and investment control over these securities is Mr. Garry Newman.
(18)	Includes common shares underlying 7,500 Unregistered Units.

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(19)	Includes 79,734 existing common shares and a warrant to purchase 25,631 shares of common stock. The warrant is exercisable at $7.596 per share with respect to 12,815 shares and $13.926 per share with respect to 12,816 shares. The warrant expires on August 31, 2007. Also includes an option to purchase 12,915 shares of common stock at an exercise price of $2.59 per share, exercisable until October 25, 2015, issued to Mr. Addison Adams, a partner of Richardson & Patel LLP. Richardson & Patel LLP is counsel to the company and has given us an opinion relating to the due issuance of the units, common stock and warrants being registered. Mr. Addison Adams exercises voting and investment control with respect to the options owned by him. Mr. Erick Richardson, Jr., a partner of Richardson & Patel LLP, exercises investment and voting control over the securities owned by Richardson & Patel LLP.
(20)	Includes 103,894 shares of common stock, and an option to purchase 19,372 shares of common stock pursuant to the 2000 Equity Incentive Plan at an exercise price of $2.59 per share, and an expiration date of April 1, 2014.
(21)	Includes common shares underlying 2,187 Unregistered Units.
(22)	Includes common shares underlying 12,500 Unregistered Units.
(23)	Includes common shares underlying 3,125 Unregistered Units.
(24)	The person who exercises voting and investment control over these securities is Mr. Omar Mentesinos.
(25)	The person who exercises voting and investment control over these securities is Mr. Martin Lustgarten.
(26)	The person who exercises voting and investment control over these securities is Mr. Michael Crow
(27)	The person who exercises voting and investment control over these securities is Luis A. Davis.
(28)	The person who exercises voting and investment control over these securities is Mr. Earnest Mathis.
(29)	The person who exercises voting and investment control over these securities is Mr. Moe Engler.
(30)	The persons who exercise shared voting and investment control over these securities are Mr. Marvin Igleman, Mr. Romeo DiBattista and Ms. Catherine Brewer.
(31)	The person who exercises voting and investment control over these securities is Ms. Robin Garman.
(32)	The person who exercises voting and investment control over these securities is Mr. Richard Abbe.
(33)	The person who exercises voting and investment control over these securities is Mr. James Goren. Includes 375,000 shares underlying warrants, assuming an exercise price of $4.00 per share and completion of the unit offering before August 13, 2006.
(34)	The person who exercises voting and investment control over these securities is Mr. Frank Mersh.
(35)	The person who exercises voting and investment control over these securities is Mr. Darren Marsh.
(36)	The person who exercises voting and investment control over these securities is Mr. Jonathan Meyers.
(37)	The person who exercises voting and investment control over these securities is Mr. Milton Podolsky.
(38)	The persons who share voting and investment control over these securities are Mr. Richard Friedman and Mr. Jeff Markowitz.
(39)	The person who exercises voting and investment control over these securities is Mr. Bruce Bernstein.
(40)	The person who exercises voting and investment control over these securities is Mr. Omar G. Camero.

      At the closing of the unit offering covered by this prospectus, we will issue to the representative or such of its designees as are permitted under the rules and regulations of the NASD, options to purchase 416,667 units at an exercise price of $7.20 (assuming an initial price per unit to the public of $6.00). These Underwriters Options are described elsewhere in this prospectus. The designees of the representative are not presently known and will not be known until the closing of this offering of units. This prospectus covers the resale of the shares and warrants underlying the Underwriters Options to purchase 416,667 units by the representative and its designees. To the extent required by applicable rules and regulations, we will file a post effective amendment or sticker supplement to update this prospectus to identify those holders of the Underwriters Options who may become selling security holders under this prospectus.

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DESCRIPTION OF OUR SECURITIES

Common Stock

      We are authorized by our Amended and Restated Certificate of Incorporation to issue 140,000,000 shares of common stock, no par value. Upon the effectiveness of this offering the units will be traded on the American Stock Exchange under the symbol “NGI.U”. Assuming the units detach into common stock and warrants, and the common stock and warrants trade separately (as described elsewhere in this prospectus), they will trade on the American Stock Exchange under the symbols “NGI” and “NGI.W”, respectively.

      As of May 31, 2006 we had issued and outstanding 5,000,152 shares of common stock. Holders of our common stock are entitled to one vote per share on all matters subject to shareholder vote. If the board of directors were to declare a dividend out of funds legally available therefore, all of the outstanding shares of common stock would be entitled to receive such dividend ratably. We have never declared dividends and we do not intend to declare dividends in the foreseeable future. If our business were liquidated or dissolved, holders of shares of common stock would be entitled to share ratably in assets remaining after satisfaction of our liabilities. No holder of our common stock has any preemptive right to subscribe for any shares of capital stock issued in the future. All of the outstanding shares of common stock are, and the shares offered by us in this offering will be, fully paid and non-assessable.

      Holders of common stock have cumulative voting rights with respect to the election of directors pursuant to the bylaws.

Existing Warrants

      As of May 31, 2006 we have the following warrants to purchase our common stock outstanding:

      On February 15, 2002, in connection with consulting services rendered, we granted a warrant to purchase 21,524 shares of our common stock to Global Media Strategies. The warrant is exercisable at $5.171 per share. The warrant expires in five years on February 15, 2007.

      On October 27, 2004, in connection with a bridge financing, we granted a warrant to purchase 4,305 shares of our common stock to Hunter World Markets, Inc. The warrant is exercisable at $3.136 per share. The warrant expires in five years from the date of the warrant, October 27, 2009. Upon the exercise of the warrant, we will provide piggyback registration rights subject to underwriters’ discretion and customary indemnification agreements with respect to the underlying shares of common stock.

      On October 27, 2004, in connection with a bridge financing, we granted a warrant to purchase 6,458 shares of our common stock to IKZA Holding Corp. The warrant is exercisable at $3.136 per share. The warrant expires in five years from the date of the warrant, October 27, 2009. Upon the exercise of the warrant, we will provide piggyback registration rights subject to underwriters’ discretion and customary indemnification agreements with respect to the underlying shares of common stock.

      On December 23, 2004, in connection with a note in the amount of $150,000, we granted a warrant to purchase 11,848 shares of our common stock to BTR Global Growth Trading Limited. The warrant is exercisable at $7.596 per share. The warrant expires in two years on December 26, 2006.

      On August 31, 2005, in consideration of the settlement of legal fees payable, we granted a warrants to purchase 25,631 shares of our common stock to Richardson & Patel LLP. The warrant is exercisable at $7.596 per share with respect to 12,815 shares and $13.926 per share with respect to 12,816 shares. The warrant expires three years from the date of the issuance of the warrant on August 31, 2007.

      In April and May 2006, in connection with a private secured debt financing (the “Debt Financing”) the company issued and sold 10% Senior Secured Promissory Notes in the principal amount of $3,500,000 and issued to each holder a Warrant to Purchase Common Stock (the “Debt Warrants”). The Debt Warrants entitle the holders to purchase up to 875,000 shares of common stock (assuming the unit offering is completed on or before August 13, 2006 and at an initial price per unit of $6.00) at a price per share equal to (i) two-thirds of the per unit price to the public if the offering of units is completed on or before August 13, 2006, or (ii) one-half of the per unit price to the public if the offering of units is completed after August 13, 2006.

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Accordingly, based on an assumed offering price of $6.00 per unit, the Debt Warrants would either be exercisable for $4.00 per share, or $3.00 per share, based on the time the offering of units is completed. The Debt Warrants will become exercisable one year after the date of issuance. Debt Warrants issued in connection with $2,000,000 of Notes will become exercisable on June 2, 2007 and Debt Warrants issued in connection with $1,500,000 of Notes will become exercisable on April 18, 2007. The Debt Warrants are exercisable for five years from the date of issuance.

Units

      We and the selling security holders will issue and sell 6,032,591 units (or 6,657,591 units if the over-allotment option is exercised by the underwriters), with each unit consisting of one share of our common stock and one warrant (the public warrants) to purchase one half of one share of our common stock. The number of units issued will depend in part upon the final agreed price of the units to the public. See “Recent Bridge Financings” elsewhere in this prospectus. The units will have no rights (i.e., voting, redemption, etc.) independent of the rights existing in the common stock and public warrants that form the unit. Until the units are divided into their separate components of one share of common stock and one warrant, only the units will trade on the American Stock Exchange (assuming our application for listing is approved). The common stock and warrants will initially trade as a unit, until detached, upon 30 days prior written notice from the representative of the underwriters, which shall be determined in its sole and absolute discretion, but in no event less than 60 days immediately following the sooner of the date of this prospectus or the exercise of the over-allotment option. Following the separation of the units, the shares of common stock will trade on the American Stock Exchange and each public warrant will trade separately from the common stock on such exchange (assuming our application for listing is approved). The units will cease to exist at that time.

Public Warrants

      Each unit will consist of one share of common stock and one warrant to purchase one half of one share of common stock. Each warrant to be issued as a part of a unit will entitle the holder to purchase one half of one share of common stock at an exercise price of $3.00 (assuming an initial price of $6.00 per unit)for a period of five years from the date hereof, subject to our redemption rights described below. The warrants will be issued pursuant to the terms of a warrant agreement between the warrant agent, U.S. Stock Transfer Corporation and us. We have authorized and reserved for issuance the shares of common stock issuable on exercise of the warrants. The warrants are exercisable to purchase a total of 3,016,302 shares of our common stock unless the underwriters’ over-allotment option relating to the warrants is exercised, in which case the warrants are exercisable to purchase a total of 3,328,802 shares of common stock.

      The warrant exercise price and the number of shares of common stock purchasable upon exercise of the warrants are subject to adjustment in the event of, among other events, a stock dividend on, or a subdivision, recapitalization or reorganization of, the common stock, or the merger or consolidation of us with or into another corporation or business entity.

      Commencing upon separation of the units into their component common stock and warrants, but no less than four months from the date of this prospectus, and continuing until the expiration of the warrants, we may redeem all outstanding warrants, in whole but not in part, upon not less than 30 days’ notice, at a price of $0.25 per warrant, provided that the average of the closing bid price of our common stock equals or exceeds $8.40 (140% of the offering price of the units) for 10 consecutive trading days preceding our redemption announcement. The redemption notice must be provided not more than five business days after conclusion of the 10 consecutive trading days in which the closing bid price of the common stock equals or exceeds 140% of the offering price of the units. In the event we exercise our right to redeem the warrants, the warrants will be exercisable until the close of business on the date fixed for redemption in such notice. If any warrant called for redemption is not exercised by such time, it will cease to be exercisable and the holder thereof will be entitled only to the redemption price. We are not required to redeem the warrants and under certain circumstances we may be prohibited under California law from proceeding with a redemption of the warrants.

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      We must have on file a current registration statement with the SEC pertaining to the common stock underlying the warrants in order for a holder to exercise the warrants or in order for the warrants to be redeemed by us. The shares of common stock underlying the warrants must also be registered or qualified for sale, or exempt from such registration or qualification requirements, under the securities laws of the states in which the warrant holders reside. We intend to use our best efforts to keep the registration statement current, but we cannot assure you that such registration statement (or any other registration statement filed by us covering shares of common stock underlying the warrants) can be kept current. In the event the registration statement covering the underlying common stock is not kept current, or if the common stock underlying the warrants is not registered or qualified for sale in the state in which a warrant holder resides, or exempt from such registration or qualification requirements, the warrants may be deprived of any value.

      We are not required to issue any fractional shares of common stock upon the exercise of warrants or upon the occurrence of adjustments pursuant to the equitable adjustment provisions. Warrants may only be exercised for whole shares; accordingly warrants must be exercised in even numbers at the whole share price. The warrants may only be exercised for whole shares and the exercise price is $6.00 for each whole share of common stock. In the event of a purported exercise of one warrant for one half of one share of common stock (or any exercise of an odd number of warrants), we will reject the exercise as to the single or odd warrant and return the exercise price of $3.00 to the holder along with a replacement warrant certificate representing the single warrant.

      The warrants may be exercised upon surrender of the certificate representing such warrants on or prior to the expiration date (or earlier redemption date) of such warrants at the offices of the warrant agent with the form of “Election to Purchase” on the reverse side of the warrant certificate completed and executed as indicated, accompanied by payment of the full exercise price in cash or by official bank or certified check payable to the order of us for the number of warrants being exercised. Shares of common stock issued upon exercise of warrants for which payment has been received in accordance with the terms of the warrants will be fully paid and nonassessable.

      The warrants do not confer on the warrant holder any voting or other rights of our stockholders. Upon notice to the warrant holders, we have the right to reduce the exercise price or extend the expiration date of the warrants. Although this right is intended to benefit warrant holders, to the extent we exercise this right when the warrants would otherwise be exercisable at a price higher than the prevailing market price of the common stock, the likelihood of exercise, and the resultant increase in the number of shares outstanding, may impede or make more costly a change in our control.

Non-Public Warrants Issued in Connection With the Bridge Offerings

      The holders of the First and Second Bridge Notes and the Conversion Notes were given the option to have their units included in the registration statement of which this prospectus is a part and to be named as selling security holders herein. In lieu of selling such units to the underwriters, any holder who opted to not participate as selling security holder in this prospectus, was issued unregistered units identical to the units offered hereby, and granted an additional warrant to purchase one half of one share of common stock at an exercise price to be equal to the exercise price of the public warrants. The warrants issued to those holders (i.e., both the additional warrant and the warrant underlying the unregistered unit) are identical to the public warrants, except for the lack of registration herein and the delay in the company’s redemption right until after registration of such underlying shares. These warrants are subject to redemption upon the same terms and conditions as the public warrants, provided such redemption can only be commenced no less than four months following the registration of the shares underlying the unregistered units, and the shares underlying the non-public warrants (both the additional warrant and the warrant underlying the unregistered unit) on an effective registration statement.

Underwriters Options

      We will sell to the representative of the underwriters on completion of this offering, for a total purchase price of $416, options to purchase 416,667 units identical to the units covered by this prospectus (sometimes referred to as the “Underwriters Options”). The Underwriters Options will be exercisable beginning 180 days after the date of this prospectus at an exercise price of 120% of the price per unit in this offering. The warrants

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included in the units issuable upon exercise of the Underwriters Options will be exercisable beginning 180 days after the date of this prospectus at an exercise price of 120% of the exercise price of the unit warrant. The Underwriters Options contain anti-dilution provisions providing for appropriate adjustments on the occurrence of certain events and contain customary participatory registration rights and contain cashless exercise provisions (which allow the holder to exercise the option or warrant by surrendering a portion of the warrants underlying it instead of paying cash). We have agreed to register for sale the common stock and warrants issuable upon exercise of the Underwriters Options.

Change of Control Provisions

      Other than the provisions of California law that may be applicable to take over transactions, the company does not have any device, agreement or plan that would have the intended effect of delaying or preventing the attempted take-over or change of control of the company.

SHARES ELIGIBLE FOR FUTURE SALE

      As of May 31, 2006, all of our outstanding common stock is restricted.

      Sales of a substantial number of shares of our common stock in the public markets, or the perception that these sales may occur, could cause the market price of our common stock to decline.

      All of the 5,997,174 units sold in this offering will be freely tradable without restriction under the Securities Act of 1933 unless those units are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933. Upon detachment, all of the 5,997,174 shares of common stock that comprise the units sold in this offering will be freely tradable without restriction under the Securities Act of 1933 unless those units are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933. Upon detachment, all of the 5,997,174 public warrants that comprise the units sold in this offering will be freely tradable without restriction under the Securities Act of 1933 unless those units are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933. All of the 2,998,588 shares of common stock underlying the public warrants will be freely tradable, upon exercise of the public warrants, without restriction under the Securities Act of 1933 unless those shares are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933. The units will detach into shares of common stock and warrants not less than sixty days after the date of this prospectus or the exercise of the over-allotment option. Upon detachment, the units will cease to exist and the common stock and warrants will trade separately.

      Assuming that no common stock is issued for the payment of dividends and that there is no exercise of options or warrants that are outstanding as of the effective date of this offering (other than the public warrants) and including conversion of certain loans to directors into unregistered units upon the closing of the unit offering, 2,482,741 shares of common stock will be subject to contractual lockup agreements with the representative of the underwriters pursuant to which the holders of the shares will agree not to sell their shares for 12 months after the date of the Registration Statement, of which this prospectus is a part, first becomes effective. The lock up agreements cover common stock, warrants and options including (a) 2,093,581 shares of our common stock, (b) 107,621 shares of common stock underlying options, and (c) 389,161 unregistered units. Notwithstanding the foregoing, three of our directors, Mr. Jay Vir, Mr. Gene Simmons and Mr. Kourosh Taj may sell up to 90,000 shares of common stock in the aggregate under Rule 144, in each quarter during which the lock up is in effect, commencing 90 days after the date of this prospectus, or the number of shares permitted under Rule 144(e), whichever is less.

      The remaining outstanding common shares will become eligible for public sale as follows.

Rule 144

      In general, under Rule 144 as currently in effect, so long as a holder has beneficially owned restricted shares for at least one year, beginning 90 days after the date of this prospectus, a person deemed to be our affiliate, or a person holding restricted shares who beneficially owns shares that were not acquired from us or

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our affiliate within the previous one year, would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

•  1% of the then outstanding shares of our common stock, or

•  the average weekly trading volume of our common stock during the four calendar weeks preceding the date on which notice of the sale is filed with the Securities and Exchange Commission.

      Sales under Rule 144 are subject to requirements relating to manner of sale, notice and availability of current public information about us. Assuming the date of this prospectus is June 30, 2006, 2,763,173 shares not subject to the Lock Up Agreement may be sold 90 days after the date of this prospectus under Rule 144, of which 2,092,495 may be sold pursuant to Rule 144(k) as described below. Six months after the date of this prospectus, an additional 75,758 shares not subject to the Lock Up Agreement will become available for sale under Rule 144, of which 36,816 may be sold pursuant to Rule 144(k) as described below.

Rule 144(k)

      A person who is not deemed to have been our affiliate at any time during the 90 days immediately preceding a sale and who owned shares for at least two years, including the holding period of any prior owner who is not an affiliate, would be entitled to sell restricted shares following this offering under Rule 144(k) without complying with the volume limitations, manner of sale provisions, public information or notice requirements of Rule 144. Assuming there are Lock Up Agreements with all of our directors and officers, 2,045,938 shares may be sold as of the date of this prospectus under Rule 144(k), assuming the date of this prospectus is June 30, 2006, and an additional 46,557 shares may be sold within 90 days after the date of this prospectus.

Rule 701 and Options

      Rule 701 permits resales of shares in reliance upon Rule 144 but without compliance with some restrictions of Rule 144. Any employee, officer or director or consultant who purchased his shares under a written compensatory plan or contract may rely on the resale provisions of Rule 701. Under Rule 701:

•  affiliates can sell Rule 701 shares without complying with the holding period requirements of Rule 144;

•  non-affiliates can sell these shares in reliance on Rule 144 without having to comply with the holding period, public information, volume limitation or notice provisions of Rule 144; and

•  Rule 701 shares must be held at least 90 days after the date of this prospectus before they can be resold.

      50,582 shares issued and sold under Rule 701 may be sold 90 days after the date of this prospectus, subject to the restrictions above, and those same 50,582 shares are also included in the shares eligible for sale under Rule 144 referenced above. Of such shares eligible for resale under Rule 701, none are subject to lock up agreements with the underwriters.

Registration Statement on Form S-8

      Promptly following the date of this prospectus, we will register up to 1,169,784 shares of common stock under our 2000 Equity Incentive Plan on a Form S-8 Registration Statement, including 493,892 shares underlying currently outstanding but unexercised options granted under the Plan that were granted under Rule 701. All such shares will be freely tradable upon the exercise of the options including all future grants of options or shares under the Plan.

Stock Options and Warrants

      As of May 31, 2006, options to purchase a total of 493,892 shares of our common stock are outstanding, 454,782 of which are vested and exercisable, and warrants to purchase a total of 69,766 shares of our common stock were outstanding, all of which are currently exercisable. Assuming the initial price to the public is $6.00 per share, and this offering is completed before August 13, 2006, then warrants to purchase an additional 875,000 shares of common stock will be outstanding, none of which will be exercisable for one year.

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Accordingly, the shares underlying these warrants and options may be eligible for sale in the public markets, subject to the restrictions described above. In the alternative, such options may be registered on a Form S-8, as described above.

Lock-up Agreements

      Our officers and directors, who hold a total of 2,093,581 shares of our outstanding common stock, 389,161 unregistered units (assuming an initial offering price of $6.00 per unit) and 107,621 options, have agreed, pursuant to the underwriting agreement and other agreements, not to sell any of our common stock until 12 months from the date of this prospectus without the prior consent of the representative of the underwriters. Notwithstanding the foregoing, three of our directors, Mr. Jay Vir, Mr. Gene Simmons and Mr. Kourosh Taj may sell up to 90,000 shares of common stock in the aggregate under Rule 144, during any quarter (for three consecutive quarters) commencing 90 days after the date of this prospectus. As a result of these contractual restrictions, notwithstanding possible earlier eligibility for sale under the provisions of Rules 144, 144(k) and 701, 2,482,742 additional shares (not including shares underlying options and warrants) will be available beginning after expiration of the 12 month lock-up period, subject in some cases to certain volume limitations.

Registration Rights

Investor Rights Agreement dated February 12, 2004

      On February 12, 2004, the company raised approximately $6.0 million in capital from the sale of common stock and warrants to purchase common stock to various investors including certain founders and principal shareholders, which together represent an aggregate of 1,799,107 shares of common stock (collectively, the “February Investor Shares”). In connection with the financing, the company entered into an Investor Rights Agreement dated February 12, 2004. Under the Investor Rights Agreement, the company has agreed to use its reasonable best efforts to register such share of common stock held by the February Investors (the “Registrable Securities”) upon the written demand of individual investors or investors owning at least 50% of the Registrable Securities. The demand may be made after the 6-month anniversary of the closing of the company’s initial public offering of securities. These holders have waived their rights to have their shares of common stock included in this prospectus.

      If the Investor intends to distribute the Registrable Securities by means of an underwriting, they shall advise the company; provided that (among other conditions): (a) All investors proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form; and (b) if the underwriter determines that marketing factors require a limitation of the number of securities to be underwritten (including the Registrable Securities) then the number of February Investor Shares may be reduced only if, first, all securities of the company held by the Founders are entirely excluded from the underwriting and registration and then all other securities of the company are entirely excluded from the underwriting and registration. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

      In addition, the company has agreed to provide certain piggyback registration rights to the holders of the Registrable Securities as provided in the Investor Rights Agreement, which are subject to underwriting limitations as described above and in the Investor Rights Agreement. The company also agreed to cause a Form S-3 registration (or any successor to Form S-3) or any similar short-form registration statement with respect to all or part of the Registrable Securities owned by such investor or investors, in excess of $1 million upon demand six months following the date of this prospectus. The company shall not be obligated to effect any registration (among other conditions): (a) if the amount of securities to be sold pursuant to such registration on Form S-3 is less than $1 million; (b) if Form S-3 is not available for such offering by the investors; (c) if within 30 days of receipt of a written request from any investors, the company gives notice of the company’s intention to make a public offering within 90 days; (d) if the filing of the Form S-3 registration would be detrimental to the company and its shareholders; (e) if the company has already effected 2 registration on Form S-3 for the investors; or (f) in any jurisdiction in which the company would be required to do business.

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      The registration obligation of the company set out in the Investors Rights Agreement shall terminate upon the earlier of the following events: (a) the date which is 5 years following the completion of the company’s initial public offering of securities; and (b) the date following the completion of the initial public offering of securities on which each investor holds less than 1% of the then issued and outstanding shares of common stock and such shares may be sold pursuant to Rule 144.

Hunter World Markets, Inc. and IKZA Holding Corp. Warrants

      On October 27, 2004, the company issued warrants to purchase a total 10,762 shares of common of stock to Hunter World Markets, Inc. and IKZA Holding Corp. in relation to a 2004 private offering of securities. These warrants expire October 25, 2009 and none of the warrants have been exercised. The Holders of the warrants have “piggyback” registration rights to have the common shares underlying the warrants included in any registration undertaken by the company, subject to certain limitations applicable to underwritten offerings. The holder of that warrants has waived its registration rights in connection with this offering. The holder of the warrant issued to Hunter World Markets, Inc. has waived its registration rights under the warrant in connection with this offering.

July 15, 2005 Note Offering

      On July 15, 2005, the company entered into a Note and Warrant Purchase Agreement, between the company and the Purchasers referenced therein (the “Purchase Agreement”). Under the Purchase Agreement the company issued and sold an aggregate of $1,003,437 of promissory notes and warrants to purchase 76,239 shares of common stock. The company granted the Purchasers unlimited “piggyback” rights to have the common shares underlying the warrants included in any registration undertaken by the company, subject to certain limitations applicable to underwritten offerings. All warrants issued in connection with the Purchase Agreement have been exercised in full and are reflected in the number of currently outstanding common shares. These holders have waived their rights to have their shares of common stock included in this prospectus.

September 2005 Debt Conversion Transaction

      In September of 2005, the company agreed to convert certain outstanding and past due debts and obligations into newly issued three-year promissory notes plus warrants (the “August Debt Conversion”). A total of $2,191,768 was converted as part of the September Debt Conversion and warrants to purchase 636,160 shares have been issued. The company granted the warrant holders “piggyback” registration rights. These holders have waived their rights to have their shares of common stock included in this prospectus.

Bridge Note Holders

      The holders of the First and Second Bridge Notes and the Conversion Notes were given the option to have their units included in the registration statement of which this prospectus is a part and to be named as selling security holders therein. In lieu of selling such units to the underwriters, any holder who opted to not participate as selling security holder in this prospectus, was granted (a) a warrant to purchase one half of one share of common stock at an exercise price to be equal to the exercise price of the public warrants, and (b) registration rights to have such units and the securities underlying such units registered by the company one year after the date of this prospectus. In addition, certain holders of Conversion Notes were not included as selling security holders herein and were granted the same registration rights as the Bridge Note holders who elected to not be selling security holders in this prospectus.

Debt Warrant Holders

      In April and May 2006, in connection with a private secured debt financing in (the “Debt Financing”) the company issued and sold 10% Senior Secured Promissory Notes in the principal amount of $3,500,000 and issued to each holder a Warrant to Purchase Common Stock (the “Debt Warrants”). The Debt Warrants

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entitle the holders to purchase up to 875,000 shares of common stock (assuming the unit offering is completed on or before August 13, 2006) at a price per share equal to (i) two-thirds of the per unit price to the public if the offering of units is completed on or before August 13, 2006, or (ii) one-half of the per unit price to the public if the offering of units is completed after August 13, 2006. The Debt Warrants will become exercisable one year after the date of issuance. Debt Warrants issued in connection with $2,000,000 of Notes will become exercisable on June 2, 2007 and Debt Warrants issued in connection with $1,500,000 of Notes will become exercisable on April 18, 2007. The Debt Warrants are exercisable for five years from the date of issuance. The common shares underlying the Debt Warrants are entitled to registration rights in favor of the holders, requiring the company to register the shares (i) on demand, at any time after 180 days following the date hereof (or the completion of the offering of the units), or (ii) as part of any other registration statement the company may file, other than registrations of stock for the purpose of registering employee stock options, purchase, bonus or other benefit plans.

INDEMNIFICATION, LIMITATION OF LIABILITY, AND

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

      Section 204(a)(10) of the California General Corporation Law (the “CGCL”) permits a corporation to include in its Articles of Incorporation provisions eliminating or limiting the personal liability of directors for monetary damages in an action brought by or in the right of the corporation for breach of a director’s fiduciary duties, except: (a) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law; (b) for acts or omissions that a director believes to be contrary to the best interests of a company or its shareholders or that involve the absence of good faith on the part of the director; (c) for any transaction for which a director derived an improper benefit; (d) for acts or omissions that show a reckless disregard for the director’s duty to us or our shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of serious injury to a company or its shareholders; (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to us or our shareholders; (f) with respect to certain transactions, or the approval of transactions in which a director has a material financial interest; or (g) expressly imposed by statute, for approval of certain improper distributions to shareholders or certain loans or guarantees.

      Section 317 of the CGSL requires a corporation to indemnify its directors and other agents to the extent they incur expenses in defending lawsuits brought against them by reason of their status as directors or agents, subject to certain limitations. Section 317 also permits a corporation to indemnify its directors and other agents to a greater extent than specifically required by law.

      Section 5 of our Amended and Restated Articles of Incorporation authorizes us to provide indemnification of our agents (as defined in Section 317(a) of the CGSL) to the fullest extent permissible under California law through bylaw provisions, agreements with our agents, vote of the shareholders or disinterested directors, or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the CGSL. In addition, we are authorized to provide insurance for agents as set forth in Section 317 of the CGSL.

      We provide indemnification to our officers, directors and agents to the full extent permitted under law. Under Article IX, Section 1 of our bylaws there is a mandatory indemnification clause which requires us, to the extent permitted under the CGCL, to indemnify each of our directors and officers against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by their status as directors or agents. In addition, under Article IX, Section 4 of our bylaws, we must purchase and maintain insurance on behalf of any person who is or was an agent of our company against any liability arising out of such person’s status.

      We carry directors’ and officers’ liability insurance covering our directors and officers against liability asserted against or incurred by the person arising out of his or her capacity as an officer or director, including any liability for violations of the Securities Act of 1933 or the Securities Exchange Act of 1934, subject to some exclusions and coverage limitations. Our liability insurance policy is with Chubb Group of Insurance

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Companies. The policy has a combined maximum aggregate limit of liability for all claims of $6,000,000. The deductible amount for individual or corporate claims is $50,000. The policy covers the period from June 21, 2005 through June 21, 2006. The annual cost of this policy is approximately $36,000.

      Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us for expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether our indemnification is against public policy as expressed in the Securities Act and we will be governed by the final adjudication of the issue by the court.

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UNDERWRITING

      Capital Growth Financial LLC, is acting as the representative of the underwriters. We have entered into an underwriting agreement with the representative, and a separate underwriting agreement with the representative and the selling security holders, with respect to the units being offered by this prospectus. In connection with this offering and subject to certain conditions, each of the underwriters named below has severally, and not jointly, agreed to purchase on a firm commitment basis, and we and the selling security holders have agreed to sell, the number of units set forth opposite the name of each underwriter.

Name of Underwriter	Number of Units
Total

      The underwriting agreement provides that if the underwriters purchase any of the units presented in the foregoing table, then they must purchase all of the units. No underwriter is obligated to purchase any units allocated to a defaulting underwriter except under limited circumstances. The underwriting agreement provides that the obligations of the underwriters are subject to certain conditions precedent, including the absence of any material adverse change in our business and the receipt of certain certificates, opinions and certificates from us, our counsel and our independent registered public accountants.

Over-Allotment Option

      We have granted to the underwriters an option which expires 45 days after the effective date of this offering, exercisable as provided in the underwriting agreements, to purchase up to an additional                      units at the public offering price set forth on the cover page of this prospectus, less underwriting discounts and commissions. This option may be exercised only for the purpose of covering over-allotments, if any. If the underwriters exercise the over-allotment in full, the total price to the public would be $          , the total underwriting discounts would be $ (computed on the total offering) and the total proceeds (before payment of expenses of this offering) would be $          . None of the units underlying the over-allotment option will be sold by the selling security holders. The non-accountable expense allowance will not be paid on units issuable in the event of exercise of the over-allotment option.

Underwriters’ Compensation

      We and the selling security holders will sell the units to the underwriters at the public offering price indicated on the cover page of this prospectus, less:

•  An underwriting discount payable by us in an amount equal to 10% of the initial public offering price on all units being offered by us; and

•  An underwriting discount payable by the selling security holders in an amount equal to 5% of the initial public offering price on all units being offered by the selling security holders.

      The representative has advised us that the underwriters propose to offer the units to the public at the public offering price indicated on the cover page of this prospectus, and to certain selected dealers who are members of the National Association of Securities Dealers, Inc. (“NASD”), at such price less a concession of not less than $           per unit. Our underwriters may allow, and the selected dealers may reallow, a concession not in excess of $           per unit to certain brokers and dealers. After the public offering, the offering price, concessions and discounts to brokers and dealer and other selling terms may be changed by the underwriters.

      The underwriting agreement between the company and the representative provides that we will reimburse the underwriters for their expenses on a non-accountable basis in the amount equal to 1.39% of the aggregate public offering price of the units offered hereby, of which $25,000 has been paid to date, and the balance of which will be paid on the closing of this offering. The entire non-accountable expense allowance will be paid by us and not by the selling security holders.

      At the closing of the offering, we will enter into a consulting agreement retaining the representative, Capital Growth Financial LLC, as financial consultant at an aggregate of $5,000 per month for a 24-month

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period; provided, however, the total amount under the consulting agreement of $120,000, shall be paid upon execution of the consulting agreement.

      For a period of five years after the date of this prospectus, we have agreed to engage a designee of the representative as an advisor to our board of directors where the advisor shall attend meetings of the board, receive all notices and other correspondence and communications sent by us to members of our board of directors and receive compensation commensurate with the compensation paid to other non-officer directors, excluding the chairman of our audit committee. In addition, the advisor will be reimbursed for expenses incurred in attending any meeting. The representative’s designee as an advisor to our board of directors will have no duties, rights or powers of a director. In lieu of the representative’s right to designate an advisor to our board, the representative shall have the right during the five-year period after the date of this prospectus, in its sole discretion, to designate one person for election as a director to our board of directors, who we have agreed to use our best efforts to cause to be elected, and who shall be entitled to receive the same expense reimbursements and other basic benefits as any other non-employee director and shall have the same duties, rights and powers as other directors on our board.

      We will indemnify and hold such advisor or director harmless against any and all claims, actions, damages, costs and expenses, and judgments to the extent arising out of the services rendered by such advisor or director, to the same extent as we indemnify our other directors, and, if we maintain a liability insurance policy affording coverage for the acts of our officers and directors, we shall include such advisor or director under such policy.

      We have agreed not to solicit public warrant exercises other than through the underwriters. Upon any exercise of the warrants after the first anniversary of the date of this prospectus, we will pay the underwriters a fee of 5% of the aggregate warrant exercise price, if: (a) the market price of our common stock on the date the warrants are exercised is greater than the then exercise price of the warrants, (b) the exercise of the warrants was solicited by a member of the NASD and such solicitation has been designated in writing by the warrant holder, (c) the warrants are not held in a discretionary account, (d) disclosure of compensation arrangements was made both at the time of the offering and at the time of exercise of the warrants; and (e) the solicitation of exercise of the warrant was not in violation of Regulation M promulgated under the Securities Exchange Act of 1934, as amended.

      We and the selling security holders have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute to payments that may be required to be made with respect to those liabilities. We have been advised that, in the opinion of the Securities and Exchange Commission, indemnification for liabilities under the Securities Act is against public policy as expressed in the Securities Act, and is therefore, unenforceable.

Representative’s Options

      We will sell to the representatives of the underwriters on completion of this offering, for a total purchase price of $416, options to purchase 416,667 units identical to the units covered by this prospectus (sometimes referred to as the “Underwriters Options”). The Underwriters Options will be exercisable beginning 180 days after the date of this prospectus at an exercise price of 120% of the public offering price per unit in this offering. The warrants included in the units issuable upon exercise of the Underwriters Options will be exercisable beginning 180 days after the date of this prospectus at an exercise price of 120% of the exercise price of the unit warrant. The Underwriters Options contain anti-dilution provisions providing for appropriate adjustments on the occurrence of certain events and contain customary participatory registration rights and cashless exercise provisions (which allow the holder to exercise the options or warrants included in the units issuable upon exercise of the Underwriters Options by surrendering a portion of the shares or warrants underlying it instead of paying cash). We have agreed to register for sale the common stock and warrants issuable upon exercise of the Underwriters Options.

      We will set aside and at all times have available a sufficient number of warrants and shares of common stock to be issued upon exercise of the Underwriters Options. Subject to certain limitations and exclusions, we have agreed, at the request of the representative, to register for sale the common stock and warrants issuable

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upon exercise of the Underwriters Options, including the common stock issuable upon exercise of the warrants underlying the Underwriters Options.

      In accordance with Rules 2710(f)(2)(H) and 2710(g)(1) of the Conduct Rules of the NASD:

•  Neither the Underwriters Options nor the warrants issuable upon exercise of the Underwriters Options may be exercised more than five years from the date of this prospectus;

•  No common or preferred stock, options, warrants, and other equity securities of NGTV, including debt securities convertible to or exchangeable for equity securities of NGTV, that are unregistered and acquired by an underwriter and related person during 180 days prior to initial filing of the registration statement, or thereafter, and deemed to be underwriting compensation by the NASD, and securities excluded from underwriting compensation pursuant to Conduct Rule 2710(d)(5) above, may be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person during the 180 days immediately following the date of this prospectus or the commencement of this offering, whichever is later, except transfers to any NASD member participating in the offering or its officers or partners, or except as otherwise specifically permitted by Conduct Rule 2710(g)(2);

•  The securities underlying the Underwriters Options are subject to only one demand registration right, and such right may not be exercised more than five years from the date of this prospectus or commencement of sales in this offering, whichever is later;

•  Piggy-back registration rights covering the securities underlying the Underwriters Options may not be exercised more than seven years from the date of this prospectus or commencement of sales in this offering, whichever is later; and

•  Neither the Underwriters Options nor the securities underlying the Underwriters Options contain anti-dilution rights that allow the underwriter and related persons to receive more shares or to exercise at a lower price than originally agreed upon on the date of this prospectus, when the public shareholders have not been proportionally affected by a stock split, stock dividend or other similar event; or that contain anti-dilution terms that allow the underwriter and related persons to receive or accrue cash dividends prior to exercise.

Regulation M and Stabilization

      Regulation M may prohibit the underwriters from engaging in any market-making activities with regard to our securities for the period from five business days (or such other applicable period as Regulation M may provide) prior to any solicitation by the underwriters of the exercise of the warrants until the later of the termination of such solicitation activity or the termination (by waiver or otherwise) of any right that the underwriters may have to receive a fee for the exercise of warrants following such solicitation. As a result, the underwriters may be unable to provide a market for our securities during certain periods while the warrants are exercisable.

      In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934, as amended.

•  Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

•  Over-allotment transactions involve sales by the underwriters of units in excess of the number of units the underwriters are obligated to purchase, which creates a short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of units over-allotted by the underwriters are not greater than the number of units that it may purchase in the over-allotment option. In a naked short position, the number of units involved is greater than the

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	number of units in the over-allotment option. The underwriters may close out any covered short position by either exercising its over-allotment option or purchasing units in the open market.
•	Covering transactions involve the purchase of securities in the open market after the distribution has been completed in order to cover short positions. In determining the source of securities to close out the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open market as compared to the price at which it may purchase securities through the over-allotment option. If the underwriters sell more units than could be covered by the over-allotment option, creating a naked short position, the position can only be closed out by buying securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the securities in the open market after pricing that could adversely affect investors who purchase in this offering.
•	Penalty bids permit the underwriters to reclaim a selling concession from a selected dealer when the units, or securities comprising the units, originally sold by the selected dealer is purchased in a stabilizing covering transaction to cover short positions.

      These stabilizing transactions, covering transactions and penalty bids may have the effect of raising or maintaining the market price of our units, common stock or public warrants or preventing or retarding a decline in the market price of our units, common stock or public warrants. As a result, the price of our common stock or public warrants may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the American Stock Exchange or otherwise and, if commenced, may be discontinued at any time.

Other Agreements with the Underwriters

      We have agreed not to directly or indirectly, issue, sell or distribute any shares of our common stock, options to acquire common shares, or any related security or instrument, for a period of six months from the closing of this offering, without the prior written consent of the representative of the underwriters, except in limited circumstances. Additionally, we have agreed not to offer, sell or distribute, for a period of 12 months from the closing of this offering, any of our equity securities or securities which are convertible into equity at a price that may, at the time of the conversion, be less than the fair market value of our common stock on the date of the original sale without the prior written consent of the representative of the underwriters. Fair market value shall mean the greater of: (a) the average of the volume weighted average price of our common stock for each of the 30 trading days prior to the date of the original sale; and (b) the last sale price of our common stock, during normal operating hours, as reported on the American Stock Exchange, or any other exchange or electronic quotation system on which our common stock is then traded. We have also agreed that for 24-months following the closing, we will not offer, sell or distribute any equity securities or convertible securities convertible at a price that may, upon exercise, be less than the then prevailing warrant exercise price.

      Our officers and directors have agreed with the representative of the underwriters not to publicly sell the shares of our common stock which they own for a period of 12 months from the closing of this offering without the prior written consent of the representative of the underwriters. Notwithstanding the foregoing, Mr. Jay Vir, Mr. Gene Simmons and Mr. Kourosh Taj may sell collectively, pursuant to Rule 144 under the Securities Act, up to 90,000 shares of our common stock each quarter during which the lock up is in effect, commencing 90 days after the date of this prospectus, or the number of shares permitted under Rule 144(e), whichever is less. The representative of the underwriters has no present intention to waive or shorten the lock-up period. The representative’s determination to release all or any portion of the shares from the lock-up agreements will depend on several factors including, but not limited to, the market price and demand for our common stock and the general condition of the securities markets. However, the representative’s decision is arbitrary and may not be based on any specific parameters.

Offering Expenses

      We estimate that the expenses of the offering to be paid by the company, not including underwriting discounts, commissions, the non-accountable expense allowance and the financial advisory fee, will be

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approximately $650,000. Such expenses include, but are not limited to, SEC registration fees, NASD filing fees, background checks for management, due diligence “road shows,” accounting fees and expenses, legal fees and expenses, printing and engraving expenses, transfer agent fees and blue sky fees and expenses.

Determination of Offering Price

      Prior to this offering, there was no public market for the units, common stock or public warrants. The initial public offering price of our units and the exercise price of the public warrants were determined by negotiation between us and the underwriters. The principal factors considered in determining the public offering price of the units and the exercise price of the public warrants contained in the units included:

•  the information in this prospectus and otherwise available to the underwriters;

•  the history and the prospects for the industry in which we will compete;

•  the ability of our management;

•  the prospects for our future earnings;

•  the present state of our development and our current financial condition;

•  the general condition of the economy and the securities markets at the time of this offering; and

•  the recent market prices of, and the demand for, publicly traded securities of generally comparable companies.

      We cannot be sure that the initial public offering price will correspond to the price at which the units, the common stock and the public warrants will trade in the public market following this offering or that an active trading market for the units, the common stock and the public warrants will develop and continue after this offering.

Other Matters

      In connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses electronically. No forms of prospectus other than printed prospectuses and electronically distributed prospectuses that are printable in Adobe PDF format will be used in connection with this offering.

      The underwriters have informed us that they do not expect to confirm sales of units offered by this prospectus to accounts over which they exercise discretionary authority without obtaining the specific approval of the account holder.

EXPERTS

      Our balance sheets as of December 31, 2005 and 2004, and the related statements of operations, shareholders’ deficit and cash flows for each of the three years in the period ended December 31, 2005 included in this prospectus have been audited by Squar, Milner, Reehl & Williamson, LLP, independent registered public accountants, as stated in their report appearing herein. The aforementioned financial statements are included herein in reliance upon the report of such firm, given upon their authority as experts in accounting and auditing.

      Certain information contained in this prospectus is derived from third-party valuation reports dated February 28, 2006, prepared by Pacific Summit Securities. We have relied upon the reports of such firm given upon their authority as experts in the valuation of business entities and securities.

LEGAL MATTERS

      Richardson & Patel LLP has given us an opinion relating to the due issuance of the units, common stock and warrants being registered. The law firm of Richardson & Patel LLP, or its various principals, collectively own 76,732 shares of our common stock and warrants to purchase 25,631 shares of common stock at exercise

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prices ranging from $7.50 per share to $13.93 per share. We have executed a promissory note in favor of Richardson & Patel LLP for the legal expenses in the principal amount of $378,000, which we have converted into Conversion Notes that will convert into units in this offering upon the same terms and conditions as the Second Bridge Notes. The units to be owned by Richardson & Patel LLP are covered by this prospectus and Richardson & Patel LLP is a selling security holder. Mr. Addison Adams, a partner of Richardson & Patel LLP owns an option to purchase 12,915 shares of common stock at an exercise price of $2.59 per share, exercisable until October 25, 2015.

      Certain legal matters will be passed upon for the representative of the underwriters by Schneider Weinberger & Beilly LLP, Boca Raton, Florida.

WHERE YOU CAN FIND FURTHER INFORMATION ABOUT US

      We filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the units being offered in this offering. Although this prospectus, which forms a part of the registration statement, contains all of the material information set forth in the registration statement, parts of the registration statement are omitted in accordance with the rules and regulations of the Commission.

      The omitted information may be inspected and copied, at prescribed rates, at the public reference facilities maintained by the Commission at 100 F Street, NE., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. For further information with respect to our company and the securities being offered in this offering, reference is hereby made to the registration statement, including the exhibits thereto and the financial statements, notes, and schedules filed as a part thereof.

      The registration statement, including all exhibits and schedules and amendments, has been filed with the SEC through the Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. We do not currently file periodic reports with the SEC; however, following the effective date of the registration statement relating to this prospectus, we will become a reporting company and will file annual, quarterly and current reports, and other information with the SEC. Copies of all of our filings with the SEC may be viewed on the SEC’s internet web site at http://www.sec.gov. We also maintain a website at http://www.ngtv.com. We may include our public filings on our website, and will include such information to the extent required by applicable law and the rules and regulations of any exchange on which our shares are listed.

TRANSFER AGENT AND WARRANT AGENT

      We have retained U.S. Stock Transfer Corporation to act as our transfer agent and warrant agent with respect to the units, the public warrants and our common stock. The address of the Transfer Agent and Warrant Agent is 1745 Gardena Avenue, Glendale, California, 91204; telephone number (818) 502-1404.

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INDEX TO FINANCIAL STATEMENTS

Year-End Financial Statements — December 31, 2005 (Restated), 2004 and 2003
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Shareholders’ Deficit	F-5
Statements of Cash Flows	F-9
Notes to Financial Statements	F-11
Interim Condensed Financial Statements — March 31, 2006 (Unaudited) and Three Months Ended March 31, 2006 and 2005 (Unaudited)
Balance Sheets	F-42
Statements of Operations	F-43
Statements of Shareholders’ Deficit	F-44
Statements of Cash Flows	F-48
Notes to Condensed Financial Statements	F-49

F-1

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
NGTV

      We have audited the accompanying balance sheets of NGTV (the “Company”), a development stage company incorporated in the state of California, as of December 31, 2005 and 2004, and the related statements of operations, shareholders’ deficit and cash flows for each of the three years in the period ended December 31, 2005, and for the period June 23, 2000 (Inception) through December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

      In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NGTV as of December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, and for the period June 23, 2000 (Inception) through December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

      The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has been in the development stage since its inception and has not generated any revenues from its principal operations. Additionally, the Company has suffered negative cash flow from operations and recurring net losses since June 23, 2000 (Inception). These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 2. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

      As discussed in Note 2, the accompanying 2005 financial statements have been revised to reflect accounting for a modification of certain notes payable as a debt extinguishment (as more fully described in Note 9) and to revise the accounting for a derivative liability associated with certain notes payable (as more fully described in Note 11). As a result of these adjustments, total liabilities and shareholders’ deficit at December 31, 2005 and the net loss for the year then ended decreased by approximately $185,000.

/s/ SQUAR, MILNER, REEHL

               & WILLIAMSON, LLP

May 1, 2006 (except for Note 16, as to which the date is June 2, 2006)
Newport Beach, California

F-2

NGTV

(A Development Stage Company)

BALANCE SHEETS

December 31, 2005 and 2004

			2005
			(As Restated)			2004
ASSETS
Current Assets
	Cash		$	3,133,164		$	48,618
	Debt issuance costs, net			726,206			—
	Other current assets			25,440			—
		Total current assets		3,884,810			48,618
Property and Equipment, net				1,534,211			986,393
Capitalized Production Costs				3,366,065			1,005,344
Deposits and Other Assets				349,273			354,274
TOTAL ASSETS			$	9,134,359		$	2,394,629
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities
	Accounts payable and accrued liabilities		$	903,848		$	937,051
	Accrued executive compensation			465,333			1,043,711
	Capital lease obligations, current portion			171,922			7,650
	Notes payable			—			450,000
	Due to related parties			465,430			760,809
	Convertible notes payable, net — bridge financings			6,022,093			—
	Other convertible notes payable, net (including related party notes payable of $1,895,798)			3,227,619			—
	Other liabilities, primarily derivative liabilities			2,061,698			—
		Total current liabilities		13,317,943			3,199,221
Long-Term Liabilities
	Common stock subject to redemption			612,835			935,137
	Capital lease obligations, net of current portion			519,854			26,857
		Total long-term liabilities		1,132,689			961,994
Total Liabilities				14,450,632			4,161,215
Commitments and Contingencies — Note 14
Shareholders’ (Deficit)
	Preferred stock, no par value; 12,480,952 shares authorized; none issued or outstanding at December 31, 2005 and 2004			—			—
	Common stock, no par value; 140,000,000 shares authorized; 5,000,152(*) shares and 3,682,884(*) shares issued and outstanding at December 31, 2005 and 2004, respectively			9,452,588			7,884,351
	Additional paid-in capital, net			4,582,741			3,453,879
	Deficit accumulated during the development stage			(19,351,602	)		(13,104,816	)
		Total shareholders’ deficit		(5,316,273	)		(1,766,586	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT			$	9,134,359		$	2,394,629

(*) Reflects the effect of 23.23 to 1 reverse stock split for common shareholders in December 2005.

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

F-3

NGTV

(A Development Stage Company)

STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2005 2004 and 2003 and

For the Period June 23, 2000 (Inception) Through December 31, 2005

											June 23, 2000
											(Inception)
											Through
											December 31,
		2005									2005
		(As Restated)			2004			2003			(As Restated)
REVENUES		$	—		$	—		$	—		$	—
OPERATING EXPENSES
	Compensation and related benefits (net of amounts capitalized)		1,392,513			2,008,135			1,394,706			4,904,567
	Professional fees (including related party consulting fees of $310,000 in 2004)		1,530,410			1,476,849			231,722			3,862,673
	Selling, general and administrative		1,225,417			1,716,657			91,731			3,889,965
			4,148,340			5,201,641			1,718,159			12,657,205
OPERATING LOSS			(4,148,340	)		(5,201,641	)		(1,718,159	)		(12,657,205	)
OTHER INCOME (EXPENSE)
	Loss on conversion of debt to common stock		—			(2,359,951	)		—			(2,359,951	)
	Interest on common stock subject to redemption		322,302			1,276,404			(1,995,441	)		(396,735	)
	Change in fair value of derivative liabilities		(536,823	)		—			—			(536,823	)
	Penalty warrants expense		—			(367,000	)		—			(367,000	)
	Loss on extinguishment of debt, net of gains (including a $570,423 loss associated with related party debt extinguishments)		(675,251	)		—			—			(675,251	)
	Interest and other expense (including amortization of debt issuance costs and debt discount of $372,653 in 2005)		(1,212,783	)		(143,163	)		(45,876	)		(1,485,822	)
	Interest and other income		4,109			6,018			—			205,794
			(2,098,446	)		(1,587,692	)		(2,041,317	)		(5,615,788	)
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE AND CARRYOVER DEFICIT OF PREDECESSOR AFFILIATED COMPANY			(6,246,786	)		(6,789,333	)		(3,759,476	)		(18,272,993	)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE			—			—			(212,789	)		(212,789	)
LOSS BEFORE CARRYOVER DEFICIT OF PREDECESSOR AFFILIATED COMPANY			(6,246,786	)		(6,789,333	)		(3,972,265	)		(18,485,782	)
CARRYOVER DEFICIT OF PREDECESSOR AFFILIATED COMPANY			—			—			—			(238,820	)
NET LOSS			(6,246,786	)		(6,789,333	)		(3,972,265	)		(18,724,602	)
PREFERRED STOCK REPURCHASE AND RETIREMENT IN EXCESS OF ORIGINAL PURCHASE PRICE			—			(627,000	)		—			(627,000	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS AND LOSS ACCUMULATED DURING THE DEVELOPMENT STAGE		$	(6,246,786	)	$	(7,416,333	)	$	(3,972,265	)	$	(19,351,602	)
BASIC AND DILUTED LOSS PER COMMON SHARE(*)		$	(1.45	)	$	(2.27	)	$	(4.27	)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES(*) OUTSTANDING			4,301,000			3,274,000			930,000

(*) Reflects the effect of 23.23 to 1 reverse stock split for common shareholders in December 2005.

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

F-4

NGTV

(A Development Stage Company)

STATEMENTS OF SHAREHOLDERS’ DEFICIT

For the Period June 23, 2000 (Inception) Through December 31, 2005

													Deficit
													Accumulated
	Preferred Stock				Common Stock*				Additional				During the
									Paid-in		Unearned		Development
	Shares		Amount		Shares		Amount		Capital		Compensation		Stage			Total
INCEPTION — June 23, 2000 — Carryover basis of predecessor affiliated company (Note 1)		—	$	—		115,415	$	2,681	$	3,932	$	—	$	(238,820	)	$	(232,207	)
Five-for-one common stock split, September 29, 2000		—		—		461,650		—		—		—		—			—
Exercise of warrants for common stock, September 29, 2000		—		—		86,096		400		—		—		—			400
Series-A preferred stock issued at $0.22 per share, net of $10,000 fees, September 29, 2000		2,380,952		520,000		—		—		—		—		—			520,000
Net loss		—		—		—		—		—		—		(441,048	)		(441,048	)
BALANCE — December 31, 2000		2,380,952		520,000		663,161		3,081		3,932		—		(679,868	)		(152,855	)
Series-A preferred stock issued at $0.2226 per share, March 1, 2001		224,618		50,000		—		—		—		—		—			50,000
Series-A preferred stock issued at $0.2226 per share, April 1, 2001		89,847		20,000		—		—		—		—		—			20,000
Series-A preferred stock issued at $0.2226 per share, May 1, 2001		112,309		25,000		—		—		—		—		—			25,000
Series-A preferred stock issued at $0.2226 per share, June 1, 2001		224,618		50,000		—		—		—		—		—			50,000
Series-A preferred stock issued at $0.2226 per share, July 1, 2001		336,927		75,000		—		—		—		—		—			75,000
Series-A preferred stock issued at $0.2226 per share, November 1, 2001		1,046,721		233,000		—		—		—		—		—			233,000
Net loss		—		—		—		—		—		—		(479,742	)		(479,742	)
BALANCE — December 31, 2001		4,415,992		973,000		663,161		3,081		3,932		—		(1,159,610	)		(179,597	)
Warrants issued to consultants for services		—		—		—		—		13,413		—		—			13,413

F-5

NGTV

(A Development Stage Company)

STATEMENTS OF SHAREHOLDERS’ DEFICIT — (Continued)

																			Deficit
																			Accumulated
	Preferred Stock						Common Stock*						Additional						During the
													Paid-in			Unearned			Development
	Shares			Amount			Shares			Amount			Capital			Compensation			Stage			Total
Options issued to non-employees for compensation		—			—			—			—			73,750			—			—			73,750
Net loss		—			—			—			—			—			—			(556,608	)		(556,608	)
BALANCE — December 31, 2002		4,415,992			973,000			663,161			3,081			91,095			—			(1,716,218	)		(649,042	)
Common stock issued to employees for compensation, July 1, 2003		—			—			589,757			135,629			—			(135,629	)		—			—
Amortization of restricted stock compensation expense		—			—			—			—			—			19,848			—			19,848
Common shares repurchased at cost, February and March 2003		—			—			(35,516	)		(165	)		—			—			—			(165	)
Employee stock- based compensation expense		—			—			—			—			228,770			—			—			228,770
Options granted to non-employees for services		—			—			—			—			98,907			—			—			98,907
Warrants issued to consultants for services		—			—			—			—			55,000			—			—			55,000
Common stock subject to redemption		—			—			—			(3,311	)		—			—			—			(3,311	)
Net loss		—			—			—			—			—			—			(3,972,265	)		(3,972,265	)
BALANCE — December 31, 2003		4,415,992			973,000			1,217,402			135,234			473,772			(115,781	)		(5,688,483	)		(4,222,258	)
Common stock issued to retire related party debt		—			—			1,112,769			400,001			—			—			—			400,001
Excess of fair value of common stock exchanged over carrying amount of converted debt		—			—			—			—			2,359,951			—			—			2,359,951
Common stock and warrants issued in connection with 2004 Equity Private Placement, net, February 12, 2004		—			—			987,982			6,156,814			—			—			—			6,156,814
Retirement of Series A-1 preferred shares, February 12, 2004		(4,415,992	)		(973,000	)		—			—			—			—			(627,000	)		(1,600,000	)
Common shares issued as finder’s fees, in connection with 2004 Equity Private Placement, February 12, 2004		—			—			157,081			389,600			(389,600	)		—			—			—
Common stock and warrants issued in private placement, May 19, 2004		—			—			50,645			400,000			—			—			—			400,000

F-6

NGTV

(A Development Stage Company)

STATEMENTS OF SHAREHOLDERS’ DEFICIT — (Continued)

													Deficit
													Accumulated
	Preferred Stock				Common Stock*				Additional				During the
									Paid-in		Unearned		Development
	Shares		Amount		Shares		Amount		Capital		Compensation		Stage			Total
Options granted to employees for compensation, February 12, 2004		—		—		—		—		415,660		—		—			415,660
Options granted to consultants for services, February 12, 2004		—		—		—		—		210,276		—		—			210,276
Warrants issued to consultants for services, February 12, 2004		—		—		—		—		16,820		—		—			16,820
Amortization of restricted stock compensation expense		—		—		—		—		—		115,781		—			115,781
Common stock and warrants issued, July and August 2004		—		—		40,270		346,100		—		—		—			346,100
Common stock issued for services, August 3, 2004		—		—		6,287		54,037		—		—		—			54,037
Warrants issued for penalty under 2004 Equity Private Placement, August 10, 2005		—		—		—		—		367,000		—		—			367,000
Stock options exercised, December 7, 2004		—		—		110,448		2,565		—		—		—			2,565
Net loss		—		—		—		—		—		—		(6,789,333	)		(6,789,333	)
BALANCE — December 31, 2004		—		—		3,682,884		7,884,351		3,453,879		—		(13,104,816	)		(1,766,586	)
Common stock issued for exercised warrants, February 16, 2005		—		—		123,505		1,047,185		—		—		—			1,047,185
Common stock issued for exercised warrants, March 8, 2005		—		—		55,758		472,750		—		—		—			472,750
Common stock issued for exercised warrants, March 8, 2005		—		—		1,849		4		—		—		—			4
Common stock issued for exercised warrants, March 10, 2005		—		—		146,359		340		—		—		—			340
Common stock issued for exercised options, March 15, 2005		—		—		50,582		118		—		—		—			118

F-7

NGTV

(A Development Stage Company)

STATEMENTS OF SHAREHOLDERS’ DEFICIT — (Continued)

													Deficit
													Accumulated
	Preferred Stock				Common Stock*				Additional				During the
									Paid-in		Unearned		Development
	Shares		Amount		Shares		Amount		Capital		Compensation		Stage			Total
Common stock issued for exercised options, April 28, 2005		—		—		49,089		1,140		—		—		—			1,140
Common stock and warrants issued to settle accounts payable, August 31, 2005		—		—		25,631		16,210		27,339		—		—			43,549
Common stock issued for exercised warrants, September 8, 2005		—		—		397,793		9,241		—		—		—			9,241
Common stock issued for exercised warrants, September 9, 2005		—		—		27,444		638		—		—		—			638
Common stock issued for exercised warrants, September 15, 2005		—		—		287,177		6,671		—		—		—			6,671
Common stock issued for exercised options, September 15, 2005		—		—		134,997		3,136		—		—		—			3,136
Common stock issued for services, September 15, 2005		—		—		17,084		10,804		—		—		—			10,804
Options granted to employees for compensation		—		—		—		—		453,157		—		—			453,157
Options granted to non-employees for services		—		—		—		—		225,316		—		—			225,316
Warrants issued in connection with debt		—		—		—		—		423,050		—		—			423,050
Net loss (as restated)		—		—		—		—		—		—		(6,246,786	)		(6,246,786	)
BALANCE — December 31, 2005 (as restated)		—	$	—		5,000,152	$	9,452,588	$	4,582,741	$	—	$	(19,351,602	)	$	(5,316,273	)

*  Reflects effect of 23.23 to 1 reverse stock split for common shareholders in December 2005.

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

F-8

NGTV

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2005, 2004 and 2003, and

For the Period June 23, 2000 (Inception) Through December 31, 2005

												June 23, 2000
												(Inception)
												Through
												December 31,
			2005									2005
			(As Restated)			2004			2003			(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss before carryover deficit of predecessor affiliated company			$	(6,246,786	)	$	(6,789,333	)	$	(3,972,265	)	$	(18,485,782	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization			188,485			252,217			4,014			500,574
	Amortization of debt issuance costs			112,600			—			—			112,600
	Amortization of debt discount			260,053			—			—			260,053
	Stock-based employee compensation			453,157			531,441			248,618			1,233,216
	Options granted to non-employees for services			225,316			210,276			98,907			608,249
	Common stock and/or warrants issued to consultants for services			10,805			416,820			55,000			496,038
	Penalty warrant expense			—			367,000			—			367,000
	Loss on conversion of debt to common stock			—			2,359,951			—			2,359,951
	Change in fair value of derivative liabilities			536,823			—			—			536,823
	Loss on extinguishment of debt			675,251			—			—			675,251
	Interest on common stock subject to redemption			(322,302	)		(1,276,404	)		1,995,441			396,735
	Cumulative effect of change in accounting principle			—			—			212,789			212,789
	Changes in operating assets and liabilities:
		Other current assets		(23,727	)		—			—			(23,727	)
		Capitalized production costs		(2,013,222	)		(959,492	)		(45,852	)		(3,018,566	)
		Deposits and other assets		5,001			(346,177	)		—			(348,778	)
		Accounts payable and accrued liabilities		762,589			716,595			156,754			1,820,722
		Accrued executive compensation		536,333			(60,667	)		1,007,333			1,482,999
Net cash used in operating activities				(4,839,624	)		(4,577,773	)		(239,261	)		(10,813,853	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment				(345,662	)		(1,200,266	)		—			(1,605,800	)
Net cash used in investing activities				(345,662	)		(1,200,266	)		—			(1,605,800	)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related parties				599,950			807,085			240,528			1,891,236
Repayments of advances from related parties				(214,950	)		(333,990	)		—			(548,940	)
Principal repayments on capital lease obligation				(80,871	)		(3,837	)		—			(84,708	)
Proceeds from issuance of notes payable				710,000			450,000			—			1,160,000
Repayments of notes payable				(280,000	)		—			—			(280,000	)
Proceeds from issuance of convertible notes payable, net				5,996,194			—			—			5,996,194
Proceeds from issuance of common stock and warrants, net				—			6,502,914			—			6,502,914
Proceeds from issuance of Series A-1 preferred stock				—			—			—			973,000
Retirement of Series A-1 preferred stock				—			(1,600,000	)		—			(1,600,000	)
Proceeds from issuance of common stock							—			—			400
Proceeds from exercise of stock options				4,394			2,565			—			6,959

F-9

NGTV

(A Development Stage Company)

STATEMENTS OF CASH FLOWS — (Continued)

									June 23, 2000
									(Inception)
									Through
									December 31,
		2005							2005
		(As Restated)		2004		2003			(As Restated)
Proceeds from exercise of warrants			1,535,115		—		—			1,535,115
Common stock repurchased at cost			—		—		(165	)		(165	)
Net cash provided by financing activities			8,269,832		5,824,737		240,363			15,552,005
NET INCREASE IN CASH			3,084,546		46,698		1,102			3,132,352
CASH — beginning of period			48,618		1,920		818			812
CASH — end of period		$	3,133,164	$	48,618	$	1,920		$	3,133,164
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
	Income taxes	$	800	$	800	$	800		$	4,928
	Interest	$	168,368	$	34,056	$	—		$	197,424
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES
Property and equipment acquired under capital lease		$	738,140	$	38,344	$	—		$	776,484
Debt issuance costs		$	838,806	$	—	$	—		$	838,806
Allocation of proceeds to detachable stock purchase warrants issued with debt		$	65,300	$	—	$	—		$	65,300
Conversion of accrued executive compensation to debt		$	1,114,711	$	—	$	—		$	1,114,711
Conversion of accrued interest and other payables to debt		$	239,393	$	—	$	—		$	382,193
Debt converted to common stock		$	—	$	400,001	$	—		$	400,001
Common stock issued to settle accounts payable		$	—	$	54,037	$	—		$	54,037
Common stock issued as financing fees		$	—	$	389,600	$	—		$	389,600
Derivative financial instruments issued in connection with bridge financings and notes payable		$	2,061,698	$	—	$	—		$	2,061,698

See the accompanying notes to these financial statements for additional information on non-cash investing and financing activities during the years ended December 31, 2005, 2004 and 2003, and for the period from June 23, 2000 (Inception) through December 31, 2005.

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

F-10

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

December 31, 2005, 2004 and 2003

1. ORGANIZATION AND BUSINESS

      NGTV (the “Company”) is a development stage company incorporated in the state of California. NGTV is currently developing a premium Pay TV cable and satellite service, branded as “No Good TV” that will provide uncensored entertainment and programming focused on the world of celebrities, pop music, movies, television, sports, and pop culture. NGTV programming will include (i) uncensored director’s cut music videos prior to editing for general broadcast, (ii) uncensored celebrity interviews, (iii) live events, and (iv) original shows.

      NGTV was formerly known as Netgroupie, Inc. (“Netgroupie”), a California corporation formed June 23, 2000 (Inception). Netgroupie was formed to become the surviving entity in a merger with MX Entertainment, Inc, a Nevada corporation formed August 5, 1997. As part of the merger, the shareholders of MX Entertainment, Inc. (the “Predecessor”) received shares of Netgroupie on a one-for-one basis and became shareholders in Netgroupie. The transaction between NetGroupie and MX Entertainment, Inc. represented a transfer of equity interests between entities under common control, as the two entities have the same shareholders. Accordingly, the assets and liabilities transferred were recorded at the carrying amounts of the Predecessor at the date of transfer. The deficit carried over from the Predecessor at date of transfer totaled $238,820 and is included in deficit accumulated during the development stage in the accompanying balance sheets and separately reported in the accompanying statements of operations.

      In February 2004, NGTV raised approximately $6.2 million in net capital from outside investors through the issuance of 22,950,820 common stock units; each unit includes approximately ¹/23 share of common stock and a warrant entitling the holder to purchase approximately ¹/46  share of common stock subject to certain terms (the “2004 Equity Private Placement”). Proceeds from the 2004 Equity Private Placement were used for retirement of the Series A-1 preferred shares, production and development of additional programming content, operating expenses and working capital. (see Note 12 for more information).

      In August 2005, the Company entered into an agreement with an investment bank to undertake an initial public offering (the “2006 Proposed Offering”).

      During the third quarter of 2005, the Company completed a debt restructuring pursuant to which it extended certain obligations including accrued executive compensation, notes payable and payables to related parties into two year and three year notes. These transactions are hereinafter collectively described as the “2005 Debt Restructuring” and are explained in Notes 5-7 and Note 9.

      Between September and December 2005, the Company initiated two bridge financings of convertible notes payable which raised approximately $6.8 million in gross proceeds through December 31, 2005 (the “Bridge Financings”). Proceeds from these Bridge Financings were used for working capital purposes.

      In December 2005, the Company’s Board of Directors approved a 23.23 to 1 reverse stock split for common shareholders of record as of December 5, 2005. Common shares outstanding prior to and after the reverse stock split totaled 116,152,273 and 5,000,152 shares, respectively. The December 2005 reverse stock split has been retroactively reflected in the accompanying financial statements for all periods presented. Unless otherwise indicated, all references to outstanding common shares, including common shares to be issued upon the exercise of warrants and options, refer to post-split shares.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of Company management, who is responsible for their integrity and objectivity. These accounting policies

F-11

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements. The Company is classified as a development stage enterprise under U.S. GAAP and has not generated revenues from its planned principal operations.

Restatement

      The accompanying December 31, 2005 financial statements have been restated to reflect accounting for a modification of certain notes payable as an extinguishment (as more fully described in Note 9) and to revise the accounting for a derivative liability associated with certain notes payable issued in the fourth quarter of 2005, as of the inception of the notes. Such change included revising the allocation of the proceeds from such financings between the notes payable and a related derivative liability, and reflecting the change in the estimated fair value of such derivative liability between the inception or modification of the notes and December 31, 2005 in our 2005 results of operations (as more fully described in Note 11). These adjustments decreased total liabilities and shareholders’ deficit at December 31, 2005 and the net loss for the year then ended by approximately $185,000.

Going Concern Basis of Presentation

      The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has been in the development stage since its inception and has not generated revenues from its principal operations. Additionally, as of December 31, 2005, the Company had an accumulated deficit approximating $19.4 million and a working capital deficit approximating $9.4 million. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

      Management’s plans in regard to these matters are to seek additional sources of capital while the Company continues to grow its library and develop its content at a minimal expense level. Management believes that until the generation of revenues is realized through the distribution of its product, reduced operations can be funded through additional sources of capital, including private placement of equity, issuance of debt instruments, and/or the public offering of its securities.

      The Company entered into an agreement for distribution of its programming in July 2005 with iN DEMAND, a multiple system operator providing pay-per-view programming on a network of cable providers. The Company is in negotiations with other cable and satellite programming providers and currently anticipates, subject to the consummation of contracts and other conditions including obtaining sufficient capital for production and normal operations, that programming will be launched in 2006. While the Company strongly believes there will be other distribution agreements in the near term, there is no assurance that the Company will be able to consummate any other contracts with cable and satellite programming providers or obtain or produce additional programming content.

      Further, there can be no assurance that the Company will ever generate revenues or obtain additional financing on favorable terms or at all. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

Use of Estimates

      The Company prepares its financial statements in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include,

F-12

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

among others, realizability of capitalized production costs, the fair value of derivative liabilities, valuation of equity instruments and other instruments indexed to the Company’s common stock, and deferred income tax asset valuation allowances. Actual results could differ materially from those estimates.

Cash Equivalents

      The Company considers highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. At December 31, 2005 and 2004, the Company does not have any cash equivalents.

Risks and Uncertainties

      The Company has not yet generated revenue from its principal business operations. As a pre-revenue entity in its current form, the Company faces risks and uncertainties relating to its ability to successfully implement and fulfill its strategy. Among other things, these risks include the ability to develop programming; find channels for its distribution; obtain revenues; manage operations; competition; attract, retain and motivate qualified personnel; maintain and develop new strategic relationships; and the ability to anticipate and adapt to the changing entertainment market and any changes in government regulations. Therefore, the Company may be subject to the risks of delays in consummating contracts with additional satellite programming providers and cable operators, raising sufficient capital to achieve its objectives and other uncertainties, including financial, operational, technological, regulatory and other risks associated with an emerging business, including the potential risks of business failure.

      Entertainment companies with which the Company is expected to compete, in general, are well capitalized. The Company is competing against entities with the financial and intellectual resources and expressed intent of performing rapid technological innovation. The Company’s resources are limited and must be allocated to very focused objectives in order to succeed.

Concentrations

      Financial instruments that may subject the Company to credit risk include uninsured cash-in-bank balances. The Company places its cash with high credit quality institutions. At times, the Company’s bank balance may exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). At December 31, 2005, the Company had approximately $3 million in excess of the FDIC limits. At December 31, 2004, the Company did not have any cash balances in excess of the FDIC limit.

Fair Value of Financial Instruments

      Statement of Financial Accounting Standards (“SFAS”) No. 107, “Disclosures About Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. Management believes that the carrying amounts of the Company’s financial instruments, consisting primarily of cash, accounts payable and accrued liabilities approximated their fair values as of December 31, 2005 and 2004, due to their short-term nature. The fair values of notes payable approximate their carrying amounts due to their relatively short-term nature (due within less than one year). Additionally, common stock subject to redemption and derivative liabilities are carried at estimated fair value. (Additional information about accounting for derivative financial instruments is presented below.)

      Management has concluded that it is not practical to determine the estimated fair value of amounts due to related parties. SFAS No. 107 requires that for instruments for which it is not practicable to estimate their fair value, information pertinent to those instruments be disclosed, such as the carrying amount, interest rate, and maturity, as well as the reasons why it is not practicable to estimate fair value. Information about these related party instruments is included in Notes 6 and 9. Management believes it is not practical to estimate the

F-13

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

fair value of such financial instruments because the transactions cannot be assumed to have been consummated at arm’s length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practicable due to the lack of data regarding similar instruments, if any, and the associated potential costs.

Debt Issuance Costs

      Costs to originate the Bridge Financings are amortized over the term of the related notes using the effective interest method. Amortization of financing costs is included in interest expense. Debt issuance costs consisted of investment banker fees and other related costs.

Property and Equipment

      Property and equipment consists of computers and production equipment, furniture and fixtures, and leasehold improvements, which are stated at cost. Computers and production equipment and furniture and fixtures are depreciated using the straight-line method over estimated useful lives of three years. Leasehold improvements are amortized over the term of the related lease or the estimated useful lives of the assets, whichever is shorter. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement, other disposition of property and equipment or termination of a lease, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in results of operations.

Impairment of Long-Lived Assets

      SFAS No. 144, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” addresses financial accounting and reporting for the impairment or disposal of long-lived assets and requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

      In the event a condition is identified that may indicate an impairment issue, an assessment is performed using a variety of methodologies, including analysis of undiscounted future cash flows and independent appraisals. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. SFAS No. 144 also requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to stockholders) or is classified as held for sale. Assets to be disposed are reported at the lower of the carrying amount or estimated fair value less costs to sell. As of December 31, 2005 and 2004, management has determined that no impairment exists. Accordingly, no adjustments have been made to the carrying values of long-lived assets. There can be no assurance, however, that market conditions will not change or that demand for the Company’s products will materialize, which could result in a future impairment of long-lived assets.

Capitalized Production Costs

      The Company capitalizes direct film production costs in accordance with American Institute of Certified Public Accountants Statement of Position (“SOP”) 00-2, “Accounting by Producers or Distributors of Films.” Film production costs include costs to acquire, develop, and adapt raw content, edit, package programming and television specials for distribution on premium channels. Acquisition costs are minimal as the Company produces its own content at minimal cost or receives raw content at no cost (which approximates fair value) from movie or recording studios, artists or other sources seeking enhanced promotion and visibility. Accordingly, film production costs consist primarily of salaries, equipment and production overhead. Production overhead, a component of film costs, includes allocable costs of individuals or

F-14

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

departments with exclusive or significant responsibility for the production of programming. Substantially all of the Company’s resources are dedicated to the production of programming. Capitalized production overhead does not include administrative, general or research and development expenses. Marketing, exploitation, and internal costs to promote the NGTV brand are expensed as incurred.

      Capitalized production costs consist solely of direct-to-television product not released and was comprised of the following at December 31:

	2005		2004
Pre-production costs and library	$	2,529,423	$	783,103
In development programming		836,642		222,241
	$	3,366,065	$	1,005,344

      During the years ended December 31, 2005, 2004, and 2003, the Company capitalized film production costs approximating $2,361,000, $960,000, and $46,000, respectively. Once programming is released, capitalized production costs will be amortized in the proportion that the revenue during the period for each film bears to the estimated revenue to be received from all sources under the individual-film-forecast-computation method as defined in SOP 00-2.

      Pre-production and library costs include expenditures to acquire and develop raw content, to adapt videos or other properties and to categorize such content (by artist, genre) for inclusion in the Company’s library. The Company draws upon its content library in the production of shows/programs. Consequently, at December 31, 2005, management believes the Company’s library has future economic benefits in excess of capitalized costs. Programs in development are set in production, utilizing the library and/or developing new content. The Company has complete discretion in the development of programs under its distribution agreements. Management regularly evaluates its programs under development to determine if they will be ultimately utilized and delivered. In the event a program is not set in production within three years from the first capitalized transaction, all such costs will be expensed and loss recognized in earnings. Other factors evaluated by management include among others, (1) adverse changes in expected performance prior to release, (2) actual costs in excess of budgeted costs, (3) substantial delays, (4) changes in release plans, and (5) insufficient funding or resources to complete production. Whenever any of these factors is present, an assessment is carried out to determine whether estimated fair value is less than the carrying amounts. Fair value is estimated based on discounted cash flows methodology. Management carried out an evaluation at December 31, 2005, and based on such evaluation, determined that capitalized production costs are not impaired as of that date. The ultimate recovery of these costs is fully dependent upon the successful completion of the 2006 proposed offering.

Derivative Financial Instruments

      The Company records all derivative financial instruments in its balance sheet at estimated fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in the results of operations or in shareholders’ deficit as a component of accumulated other comprehensive income, depending on whether the derivative instrument qualifies for hedge accounting as defined by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” and related interpretations (“SFAS No. 133”). Changes in the fair value of derivatives not qualifying for hedge accounting are included in the results of operations as they occur.

F-15

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

Revenue Recognition

      Subsequent to the Company’s expected launch date, revenues are expected to be generated from the distribution and airing of the Company’s programming pursuant to license agreements with cable and satellite television operators and recognized in accordance with SOP 00-2.

      Participation costs are accrued when incurred. At December 31, 2005, there were no accrued participation costs. Participation costs are not expected to be significant in the foreseeable future until the Company achieves sustainable production and distribution.

Common Stock Subject to Redemption

      The Company adopted SFAS No. 150, “Accounting for Certain Financial Instruments with Certain Characteristics of Both Liabilities and Equity” in 2003. Accordingly, shares subject to mandatory redemption or other obligations to be settled in shares of the Company, if any, are classified as liabilities when all the conditions of SFAS No. 150 have been met. The liability is initially recorded at its estimated fair value with changes in the fair value reflected in the results of operations. Upon the adoption of SFAS No. 150, the difference between the estimated redemption amount of shares subject to mandatory redemption and their book value totaled $212,789 and has been reflected as a cumulative change in accounting principle (see Note 10).

Equity Instruments Indexed to the Company’s Common Stock

      The Company evaluates free-standing instruments indexed to its common stock to properly classify such instruments within equity or as liabilities in its financial statements, pursuant to the requirements of the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) Issue No. 00-19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock”, EITF 01-06, “The Meaning of Indexed to a Company’s Own Stock”, EITF 05-04, “The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument Subject to EITF Issue No. 00-19”, and SFAS No. 133. The Company’s policy is to settle instruments indexed to its common shares on a first-in-first-out basis.

Debt Modifications

      Debt modifications and exchanges are evaluated under and accounted for pursuant to the requirements of EITF 96-19, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments,” which requires a measurement of the difference between the estimated present values of the cash flows (which may include any other consideration at estimated fair value, in accordance with EITF 05-07, “Accounting for Modifications to Conversion Options Embedded in Debt Instruments and Related issues”) to be received by the holder of the debt instrument, as modified (together with additional consideration granted, if any) and under the debt instrument’s current terms. When such difference is greater than 10%, debt modifications are accounted for as extinguishments.

Equity Instruments for Services

      The Company follows SFAS No. 123, “Accounting for Stock-Based Compensation” (as amended by EITF 96-18, “Accounting for Equity Instruments That Are Issued To Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”) to account for transactions involving goods and services provided by third parties where the Company issues equity instruments as part of the consideration. Pursuant to paragraph 8 of SFAS No. 123, the Company accounts for such transactions using the estimated fair value of the consideration received (i.e. the value of the goods or services) or the estimated fair value of the equity

F-16

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

instruments issued, whichever is more reliably measurable. The Company applies EITF 96-18 when the value of the goods and/or services are not readily determinable and (1) the fair value of the equity instruments is more reliably measurable and (2) the counterparty receives equity instruments in full or partial settlement of the transactions, using the following methodology:

      (a) For transactions where goods have already been delivered or services rendered, the equity instruments are issued on or about the date the performance is complete (and valued on the date of issuance).

      (b) For transactions where the instruments are issued on a fully vested, non-forfeitable basis, the equity instruments are valued on or about the date of the contract.

      (c) For any transactions not meeting the criteria in (a) or (b) above, the Company re-measures the consideration at each reporting date based on its then current stock value.

Income Taxes

      The Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”. SFAS No. 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or income tax returns. Under this method deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates for the year in which the differences are expected to reverse. Additionally, SFAS No. 109 requires that a valuation allowance must be established when it is more likely than not that all or a portion of deferred tax assets will not be realized (see Note 13).

Stock-Based Compensation

      The Company accounts for stock-based compensation issued to employees using the intrinsic value based method as prescribed by Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock issued to Employees”. Under the intrinsic value based method, compensation expense is the excess, if any, of the estimated fair value of the stock at the grant date or other measurement date over the amount an employee must pay to acquire the stock. Compensation expense, if any, is recognized over the applicable service period, which is usually the vesting period.

      During the years ended December 31, 2005, 2004 and 2003, the Company granted options to employees under one stock-based compensation plan (see Note 12). Stock-based compensation cost related to employee options totaled $453,157 and $415,660 during the years ended December 31, 2005 and 2004, respectively. Stock-based employee compensation cost related to options was immaterial to the financial statements for 2003 and for the period from June 23, 2000 (Inception) through December 31, 2002.

      During the year ended December 31, 2003, the Company granted the right to buy a total of 495,050 shares of common stock to two executives for $1,150, which was below the then estimated fair value of the underlying shares. Consequently, compensation expense totaling $228,770 was recorded in 2003 for the difference between fair value and the amount paid for such shares.

      SFAS No. 123, if fully adopted, changed the method of accounting for employee stock-based compensation to the fair value based method. For stock options and warrants, fair value is determined using an option pricing model that takes into account the stock price at the grant date, the exercise price, the expected life of the option or warrant, stock volatility and the annual rate of quarterly dividends. Compensation expense, if any, is recognized over the applicable service period, which is usually the vesting period.

      The adoption of the accounting methodology of SFAS No. 123 was optional for equity instruments granted to employees, and the Company has elected to account for stock-based compensation issued to

F-17

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

employees using APB No. 25; however, pro forma disclosures, as if the Company adopted the cost recognition requirement under SFAS No. 123, are required to be presented. For stock-based compensation issued to non-employees, the Company uses the fair value method of accounting under the provisions of SFAS No. 123.

      SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of SFAS No. 123”, was issued in December 2002 and is effective for fiscal years ended after December 15, 2002. SFAS No. 148 amended the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.

      If the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation for all periods presented, the effect would be insignificant. See Note 12 for additional disclosures related to the Company’s stock-based compensation plans.

      In December 2004, the FASB issued SFAS No. 123-R, “Share-Based Payments,” as subsequently interpreted by SEC Staff Accounting Bulletin No. 107, “Share-Based Payments,” which replaces SFAS No. 123 and supersedes APB Opinion No. 25. As originally issued, SFAS No. 123 established as preferable a fair-value-based method of accounting for share-based payment transactions with employees. However, that pronouncement permitted entities to continue applying the intrinsic-value-based model of APB Opinion No. 25, provided that the financial statements disclosed the pro forma net income or loss based on the fair-value method. Due to the United States Securities and Exchange Commission (the “SEC”) announcement delaying the effective date, the Company applied SFAS No. 123-R as of January 1, 2006. Thus, the Company’s financial statements will reflect an expense for (a) all share-based compensation arrangements granted beginning January 1, 2006 and for any such arrangements that are modified, cancelled, or repurchased after that date, and (b) the portion of previous share-based awards for which the requisite service has not been rendered as of that date, based on the grant-date estimated fair value of those awards.

      FASB Interpretation (“FIN”) No. 44, “Accounting for Certain Transactions Involving Stock Compensation, an Interpretation of APB 25”, clarifies the application of APB No. 25 for (a) the definition of employee for purpose of applying APB No. 25, (b) the criteria for determining whether a plan qualifies as a non-compensatory plan, (c) the accounting consequence of various modifications to the terms of a previously fixed stock option or award, and (d) the accounting for an exchange of stock compensation awards in a business combination. Management believes that the Company accounts for transactions involving stock-based compensation in accordance with FIN No. 44.

Basic and Diluted Loss Per Common Share

      The Company computes loss per common share using SFAS No. 128 “Earnings Per Share”. Basic loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts, such as stock options and warrants to issue common stock, were exercised, using the treasury stock method and convertible securities were converted into common shares using the if-converted method (see Note 5, 6, 7, 8, 9 and 11). The Company has recorded net losses from June 23, 2000 (Inception) through December 31, 2005. As a result, potentially dilutive common shares have been excluded from the calculation of diluted net loss per share, because the inclusion of those shares would be anti-dilutive.

Comprehensive Income (Loss)

      SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for the reporting and display of comprehensive income or loss and its components in a full set of general-purpose financial statements.

F-18

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

Comprehensive income or loss is defined in FASB Concepts Statement No. 6 as “the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.” For the years ended December 31, 2005, 2004 and 2003 and for the period from June 23, 2000 (Inception) through December 31, 2005, the Company had no items of other comprehensive income (loss). Therefore, net loss equals comprehensive loss for the periods presented.

Significant Recent Accounting Pronouncements

      SFAS No. 150 establishes standards for how a company classifies and measures certain financial instruments with characteristics of both liabilities and equity, and is effective for public companies as follows: (i) in November 2003, the FASB issued FASB Staff Position (“FSP”) FAS 150-03 (“FSP 150-3”), which defers indefinitely (a) the measurement and classification guidance of SFAS No. 150 for all mandatory redeemable non-controlling interests in (and issued by) limited-life consolidated subsidiaries, and (b) SFAS No. 150’s measurement guidance for other types of mandatory redeemable non-controlling interests, provided they were created before November 5, 2003; (ii) for financial instruments entered into or modified after May 31, 2003 that are outside the scope of FSP 150-3; and (iii) otherwise, at the beginning of the first interim period beginning after June 15, 2003. The Company adopted SFAS No. 150 during 2003. The adoption of this pronouncement had a material impact on the Company’s results of operations and/or financial condition (see Note 10).

      In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets, an amendment of APB Opinion 29, Accounting for Nonmonetary Transactions”. The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured using the estimated fair value of the assets exchanged. SFAS No. 153 eliminates the narrow exception for nonmonetary exchanges of similar productive assets and replaces it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has “commercial substance” if the future cash flows of the entity are expected to change significantly as a result of the transaction. This pronouncement is effective for nonmonetary exchanges in fiscal periods beginning after June 15, 2005. The adoption of this pronouncement is not expected to have a material impact on the Company’s financial statements.

      In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” which replaces APB Opinion No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements.” This pronouncement applies to all voluntary changes in accounting principle, and revises the requirements for accounting for and reporting a change in accounting principle. SFAS No. 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle, unless it is impracticable to do so. This pronouncement also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate that is affected by a change in accounting principle. SFAS No. 154 retains many provisions of APB Opinion No. 20 without change, including those related to reporting a change in accounting estimate, a change in the reporting entity, and correction of an error. The pronouncement also carries forward the provisions of FASB No. 3 which govern reporting accounting changes in interim financial statements. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of SFAS No. 154. The adoption of this pronouncement is not expected to have a material impact on the Company’s future financial statements.

F-19

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

      In February 2006, the FASB issued SFAS No. 155 entitled “Accounting for Certain Hybrid Financial Instruments,” an amendment of SFAS No. 133 (“Accounting for Derivative Instruments and Hedging Activities”) and SFAS No. 140 (“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”). In this context, a hybrid financial instrument refers to certain derivatives embedded in other financial instruments. SFAS No. 155 permits fair value re-measurement of any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation under SFAS No. 133. SFAS No. 155 also establishes a requirement to evaluate interests in securitized financial assets in order to identify interests that are either freestanding derivatives or “hybrids” which contain an embedded derivative requiring bifurcation. In addition, SFAS No. 155 clarifies which interest/principal strips are subject to SFAS No. 133, and provides that concentrations of credit risk in the form of subordination are not embedded derivatives. SFAS No. 155 amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative. When SFAS No. 155 is adopted, any difference between the total carrying amount of the components of a bifurcated hybrid financial instrument and the fair value of the combined “hybrid” must be recognized as a cumulative-effect adjustment of beginning deficit/retained earnings.

      SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. Earlier adoption is permitted only as of the beginning of a fiscal year, provided that the entity has not yet issued any annual or interim financial statements for such year. Restatement of prior periods is prohibited.

      As noted in Stock-Based Compensation above, SFAS No. 123-R was issued in December 2004, and the Company will be required to apply the provisions of this Statement as of January 1, 2006. Upon adoption, this pronouncement did not have a material effect on our results of operations and basic and diluted loss per share.

      In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB 51”. The primary objectives of FIN No. 46 are to provide guidance on the identification of entities for which control is achieved through means other than voting rights (variable interest entities, or “VIEs”) and how to determine when and which business enterprise should consolidate the VIE. This new model for consolidation applies to an entity for which either: (1) the equity investors don’t have a controlling financial interest; or (2) the equity investment at risk is insufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN No. 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. As amended in December 2003, the effective dates of FIN No. 46 for public entities that are not small business issuers are as follows: (a) For interests in special-purpose entities: the first period ended after December 15, 2003; and (b) For all other types of VIEs: the first period ended after March 15, 2004. Management has concluded that the Company does not have any VIEs. Consequently, the adoption of FIN No. 46 (Revised) did not have a significant effect on the Company’s financial statements.

      Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

F-20

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

3. PROPERTY AND EQUIPMENT

      Property and equipment consists of the following at December 31:

	2005			2004
Computers and production equipment	$	2,011,983		$	1,016,223
Furniture and fixtures		57,815			56,108
Leasehold improvements		312,486			226,151
		2,382,284			1,298,482
Accumulated depreciation and amortization		(848,073	)		(312,089	)
	$	1,534,211		$	986,393

      Computers and production equipment at December 31, 2005 and 2004 include assets recorded under capital leases totaling $776,484 and $38,344, respectively. The related accumulated amortization at December 31, 2005 and 2004 was $117,186 and $3,595, respectively.

4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      Accounts payable and accrued liabilities consist of the following as of December 31:

	2005		2004
Payroll and related accruals	$	281,335	$	461,755
Accounts payable and other accruals		622,513		475,296
	$	903,848	$	937,051

5. ACCRUED EXECUTIVE COMPENSATION

      On July 1, 2003 the Company entered into employment agreements with certain executives and key employees which provide for incentive compensation. Under these agreements, incentive compensation accrues to the extent salary amounts remain unpaid through payroll. The incentive compensation becomes payable as follows: (1) 50%, if and when the Company raises $5 million or more of capital and (2) 50% when the Company raises an additional $10 million or more of capital. Interest has been imputed on such accrued executive compensation at 10%. At December 31, 2004, the Company had accrued executive compensation, including imputed interest at 10% per annum, totaling $1,043,711. During 2005, an additional $680,484 of compensation to these executives and key employees, plus imputed interest at 10%, was accrued and deferred. As a result, accrued executive compensation increased to $1,780,195 prior to the refinancing described below.

      In September 2005, in connection with the 2005 Debt Restructuring, the Company agreed to convert $1,114,711 of accrued executive compensation into long-term notes payable. The notes bear interest at 10% per annum and principal and interest are due by February 28, 2007. Alternatively, in the event the Company raises (i) $10 million in debt or equity financing, 50% of the note balance becomes immediately due and payable or (ii) $20 million in debt and equity financing, the entire note payable amount becomes immediately due and payable.

      Upon the issuance of the notes, the Company granted warrants to acquire the Company’s common stock to these executives and key employees at the rate of approximately ¹/15 warrant for each $1 of principal and interest converted to notes payable. This resulted in the grant of 71,978 warrants which expire on September 8, 2008 and are immediately exercisable at $0.0232 per share. Additionally, as further inducement to the employees, penalty warrants were granted upon the issuance of the notes payable at the rate of approximately

F-21

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

¹/15 warrant for each $1 of principal and interest outstanding for each calendar quarter that the obligation remained unpaid dating back to 2004. As such, penalty warrants to acquire 325,811 common shares were granted to these employees. The warrants can be settled in unregistered shares (see Note 12). The Company evaluated the exchange of debt instruments and other consideration in accordance with EITF 96-19 and accounted for the transaction as an extinguishment. The excess consideration totaled $242,676 and was included in loss on extinguishment of debt in the accompanying statement of operations for the year ended December 31, 2005.

      Subsequent to the aforementioned note issuances, the remaining accrued executive compensation plus imputed interest totaled $465,333 at December 31, 2005.

      The Company modified the terms of the new notes effective October 12, 2005. Upon such modification, these notes were reclassified to other convertible notes payable, as presented in the accompanying December 31, 2005 balance sheet (see Note 9).

6. DUE TO RELATED PARTIES

      Amounts due to related parties consist of the following at December 31:

	2005		2004
Advances from directors of the Company, which are non-interest bearing; due on demand	$	203,128	$	83,752
Advance from officer of the Company, bearing interest at 15% per annum; due on demand		—		227,057
Unsecured notes payable to stockholders, bearing interest at 10% per annum; due on demand		242,302		150,000
Unsecured notes payable to an entity owned by members of the Company’s management and directors; bearing interest at the Wall Street Journal Prime Rate (5.25% at December 31, 2004); due on demand		—		300,000
Advances from officer of the Company, non-interest bearing, due on demand		20,000		—
	$	465,430	$	760,809

      During the year ended December 31, 2005, the Company received $250,000 as loans from an entity that is owned by members of the Company’s management and directors. The loans bore interest at the Wall Street Journal prime rate and were due on demand.

      The Company received cash totaling $75,000 from a convertible loan from a shareholder in January 2005. The loan bears interest at 10% per annum and is due on demand. The loan holders were entitled to automatically convert to common stock upon the closing of a certain private placement, as defined. Such private placement did not occur, and therefore the contingent conversion feature expired.

      In September 2005, in connection with the 2005 Debt Restructuring, the Company replaced related party notes payable totaling $777,057. The new notes bear interest at 10% per annum, with principal and interest due by September 2008. Alternatively, in the event the Company raises (i) $10 million in debt or equity financing, 50% of the notes payable balance becomes immediately due and payable or (ii) at least $20 million, the entire amount becomes immediately due and payable. Upon the issuance of the aforementioned related party long-term notes, the Company granted warrants to acquire common shares at the rate of approximately ¹/15 warrant for each $1 of principal and interest. This resulted in the grant of warrants to acquire 50,176 common shares, which expire on March 31, 2006 and are immediately exercisable at $0.0232 per share.

F-22

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

Additionally, as further inducement to the debt holders, warrants were granted upon the issuance of the notes payable, pursuant to the above formula. As such, warrants to acquire 134,940 shares were granted to these related parties. The warrants can be settled in unregistered common shares (see Note 12). The Company evaluated the exchange of debt instruments and other consideration in accordance with EITF 96-19 and EITF 05-07, and accounted for one loan totaling $227,057 as a modification and the balance of the transaction as an extinguishment. A debt discount approximating $48,000 (based on the estimated fair value of the warrants granted as consideration, using the Black-Scholes option pricing model) was recorded on the modified note payable. The excess consideration on extinguished notes payable approximated $65,000 and was included in loss on extinguishment of debt in the accompanying statement of operations for 2005.

      The Company modified the terms of the new notes effective October 12, 2005. Upon such modification, these notes were reclassified to other convertible notes payable, as presented in the accompanying December 31, 2005 balance sheet (see Note 9).

      During the year ended December 31, 2005, the Company received cash totaling $274,950 from other short-term loans from employees and/or Directors of the Company. Such loans are generally due on demand and bear interest at 10% per annum. The Company made cash repayments during 2005 on related party notes payable totaling $214,950. Approximately $97,000 of accrued interest was reclassified into related party notes payable during the year ended December 31, 2005.

      In early 2004, debt totaling $400,001 was converted into 1,112,769 shares of the Company’s common stock at conversion rates deemed beneficial in relation to the estimated fair value of the common stock. The conversion represented an inducement not contemplated by the original terms of these debt agreements. The Company recognized a $2,359,951 charge upon the exchange and accounted for the transaction as an extinguishment pursuant to EITF 96-19 (See Note 12).

7. NOTES PAYABLE

      Notes payable, all current, consist of the following at December 31:

	2005		2004
Note payable to an unrelated bridge lender; unsecured; bearing interest at 7% per annum; repaid in 2005	$	—	$	150,000
Notes payable to an investment banker; unsecured; bearing interest at the Wall Street Journal prime rate (5.25% at December 31, 2004), due on demand; modified to convertible debt in 2005		—		300,000
	$	—	$	450,000

      In September 2005, in connection with the 2005 debt restructuring, the Company agreed to replace notes payable totaling $100,000 borrowed in January 2005 plus $300,000 borrowed in 2004 with new long-term notes payable. The new notes bear interest at 10% per annum with principal and accrued interest due at dates through September 2008. Alternatively, in the event the Company raises (i) $10 million in debt or equity financing, 50% of the notes payable balance becomes immediately due and payable or (ii) at least $20 million, the entire amount becomes immediately due and payable. Upon the issuance of the new notes, the Company granted warrants to acquire the Company’s common stock to the debt holders at rates between ¹/15 and ¹/23 warrant for each $1 of principal and interest converted to notes payable. This resulted in the grant of warrants to acquire 23,676 common shares, which expire in September 2008 and are immediately exercisable at $0.0232 per share.

      Additionally, as further inducement to the debt holders, penalty warrants were granted upon the issuance of the notes payable at rates ranging from ¹/15 to ¹/23 warrant for each $1 of principal and interest outstanding.

F-23

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

As such, additional warrants to acquire 67,171 common shares were granted. The warrants can be settled in unregistered common shares (see Note 12). The Company evaluated the exchange of debt instruments and other consideration in accordance with EITF 96-19 and EITF 05-07. The modification to the 2004 notes was deemed to be an extinguishment and a loss on extinguishment approximating $17,000 was recorded. The modification of the January 2005 note was accounted for as a modification. A debt discount approximating $5,000 (based on the estimated fair value of the warrants granted as consideration, using the Black-Scholes option pricing model), was recorded on such modified note payable.

      On August 31, 2005, the Company issued two new notes payable totaling $378,437 and equity instruments valued at approximately $44,000 in connection with the refinancing of $556,399 of accounts payable. The notes bear interest at 10% per annum and mature in September 2007. The equity instruments consisted of 25,631 common shares plus warrants to acquire an aggregate of 70,445 common shares at exercise prices ranging from $0.023 to $13.93. The transaction was accounted for as an extinguishment pursuant to EITF 96-19 and a gain on the extinguishment of $134,413 was recognized.

      During the year ended December 31, 2005, the Company borrowed $525,000 under several two-year notes payable. The notes bear interest at 10% per annum. In the event the Company raises (i) $10 million in debt or equity financing, 50% of the notes payable balance becomes immediately due and payable or (ii) $20 million, the entire amount becomes immediately due and payable. Upon the issuance of the new notes, the Company granted warrants to acquire the Company’s common stock to the debt holders at the rate of approximately ¹/23 warrant for each $1 of principal and interest converted to notes payable. This resulted in the grant of warrants to acquire 22,600 common shares, which expire in September 2008 and are immediately exercisable at $0.0232 per share. Debt discounts approximating $14,000 (based on the estimated fair value of the warrants granted, using the Black-Scholes option pricing model, and the relative fair value of the proceeds) were recorded in connection with these debt and warrant issuances. Prior to December 31, 2005, the Company repaid $45,000 on these notes payable. The remaining notes payable were modified in October 2005 (see below).

      During the year ended December 31, 2005, the Company received $85,000 under several notes payable that were due on demand and accrued interest at 10% per annum. Such notes were repaid in full prior to December 31, 2005. Additionally, a $150,000 note payable from 2004 was repaid in full during the year ended December 31, 2005.

      The Company modified the terms of the remaining $1,258,437 of notes payable effective October 12, 2005. Upon such modification, these notes were reclassified to other convertible notes payable, as presented in the accompanying December 31, 2005 balance sheet (see Note 9).

8. CONVERTIBLE NOTES PAYABLE — BRIDGE FINANCINGS

      In September, 2005, the Company initiated a bridge financing of notes totaling $1,200,000 (the “September Bridge Financing”). Through December 31 2005, the Company had raised $1,200,000 (before investment bankers’ fees and commissions totaling $162,606). The notes range in principal between $25,000 and $200,000, are unsecured and bear interest at 12% per annum which is payable monthly. The notes carry a mandatory election, whereby the note holder was required to make an election whereby they could (i) convert into units which will remain unregistered for one year at a 50% discount to the initial offering price in the 2006 Proposed Offering and receive a five year warrant for one half share (ii) elect to convert into registered common units in the 2006 Proposed Offering (each unit consisting of one share of common stock and a warrant to purchase one half share) at 50% of the initial public offering price and have their units purchased by the underwriters or (iii) not convert and be repaid from proceeds. Principal and any unpaid accrued interest are due on June 30, 2006. Proceeds from the notes were used for working capital purposes. Holders of aggregate principal totaling approximately $838,000 in the September Bridge Financing have agreed to

F-24

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

convert into common stock units to be registered with the remaining holders expected to receive unregistered common stock units upon the closing of the 2006 Proposed Offering.

      In October 2005, the Company initiated a second bridge financing of notes up to $6.0 million (the “October Bridge Financing”). Through December 31, 2005, the Company had raised $5,635,000 (before investment bankers’ fees and commissions totaling $676,200). The notes vary in principal amount, are unsecured, and bear interest at 10% per annum, which is payable (interest only) monthly. Holders of the notes automatically convert into: (i) common stock units which will remain unregistered for one year at a 33.33% discount to the initial offering price in the 2006 Proposed Offering and receive a five year warrant for one half share or (ii) registered common units in the 2006 Proposed Offering at 66.67% of the initial public offering price and have their units purchased by the underwriters. Principal and any remaining accrued interest are due on July 31, 2006. Proceeds from the notes were used for working capital purposes. Holders of aggregate principal totaling approximately $4,616,000 in the October Bridge Financing have agreed to convert into common stock units to be registered with the remaining holders expected to receive unregistered common stock units upon the closing of the 2006 Proposed Offering.

      Holders of Bridge Financing notes that elected to convert into unregistered shares were provided with a warrant to purchase one half share of common stock Approximately 120,000 warrants were granted, which constituted a modification to the original terms. The value of the warrants was estimated using the Black Scholes option-pricing model pursuant to EITF 96-19 and was deemed insignificant.

Liquidated Damages

      The note documents provide that in the event the 2006 Proposed Offering is not completed prior to July 31, 2006, all Bridge Financing notes will become due and payable and, in addition to repayment of the notes on the maturity date, a post-maturity warrant will be issued to each note holder entitling the holder to purchase the number of shares of common stock of the Company equal to the principal amount of each note, at an exercise price equal to the fair market value of one share of common stock as of the maturity date.

Registration Rights

      The Company has agreed, as more fully described in the Bridge Financing documents, to (a) register for resale the securities into which the Bridge Financing notes may be converted in a registration statement to be filed with the SEC as part of its initial public offering (b) for a period of two years following conversion of the notes, grant the holders of the notes certain piggy-back registration rights requiring the Company to register the resale of the securities in any registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) if for any reason the initial registration statement is no longer effective and (c) grant the holders of the securities issuable upon exercise of the post-maturity warrant certain piggy-back registration rights requiring the Company to register the resale of the shares issuable upon exercise of such warrant in any registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) for two years following exercise of the post-maturity warrants.

Evaluation of Conversion Feature and Registration Rights

      The contingent conversion feature embedded in the Company’s Bridge Financing Notes (for which conversion was elected) meets all the criteria of SFAS No. 133 paragraph 12 for bifurcation, is not part of a conventional convertible debt financing and does not meet the scope exception of paragraph 11(a) of SFAS No. 133 to be excluded as a derivative. Accordingly, the contingent conversion feature related to the Bridge Financing Notes has been accounted for as derivative liability (See Note 11).

F-25

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

9. OTHER CONVERTIBLE NOTES

      Other convertible notes consist of the following at December 31:

	2005		2004
Notes payable to related parties, net	$	1,895,798	$	—
Notes payable to unrelated parties		1,331,821		—
	$	3,227,619	$	—

      Notes payable to related parties arose as part of the 2005 Debt Restructuring during the third quarter of 2005, upon the conversion of accrued executive compensation payable of $1,114,711 and other related party obligations totaling $777,057, plus accrued interest, into three year term notes plus warrants (see Notes 5 and 6). As per the original terms, these notes were unsecured, bore interest at 10% per annum, and matured through September 2008.

      Notes payable to unrelated parties consist of two year term notes issued in 2005 for $1,258,437 (see Note 7) plus accrued interest. As per the original terms, these notes are unsecured, bear interest at 10% per annum and matured at dates through September 2007.

      The Company modified the terms of the aforementioned notes payable, pursuant to which, effective October 12, 2005, holders received the right to convert their notes into shares of the Company’s common stock at a discount of 33.33% to the offering price in the 2006 Proposed Offering, as defined. Upon such modification, these notes were reclassified to other convertible notes payable, as presented in the accompanying December 31, 2005 balance sheet. The Company evaluated the modification to these debt instruments in accordance with EITF 96-19 and EITF 05-07 and accounted for the transactions as extinguishments at the modification date. In connection with these extinguishments, the Company recognized an aggregate loss of approximately $452,000.

      The modification provided the note holders with liquidated damages and registration rights similar to the October Bridge Financing holders as described below:

Liquidated Damages

      The note documents (as modified) provide that in the event the 2006 Proposed Offering is not completed prior to July 31, 2006, the notes referred to above will become due and payable and, in addition to repayment of the notes on the maturity date, a post-maturity warrant will be issued to each note holder entitling the holder to purchase the number of shares of common stock of the Company equal to the principal amount of each note, at an exercise price equal to the fair market value of one share of common stock as of the maturity date.

Registration Rights

      Pursuant to the modification, the Company agreed to (a) register for resale the securities into which the notes may be converted in a registration statement to be filed with the SEC as part of its initial public offering (b) for a period of two years following conversion of the notes, grant the holders of the notes certain piggy-back registration rights requiring the Company to register the resale of the securities in any registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) if for any reason the initial registration statement is no longer effective and (c) grant the holder of the securities issuable upon exercise of the post-maturity warrant certain piggy-back registration rights requiring the Company to register the resale of the shares issuable upon exercise of such warrant in any

F-26

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) for two years following exercise of the post-maturity warrants.

Evaluation of Conversion Feature and Registration Rights

      The contingent conversion feature embedded in the Company’s Bridge Financing Notes meets all the criteria of SFAS No. 133 paragraph 12 for bifurcation, is not part of a conventional convertible debt financing and does not meet the scope exception of paragraph 11(a) of SFAS No. 133 to be excluded as a derivative. Accordingly, the contingent conversion feature related to the Bridge Financing Notes has been accounted for as a derivative liability (See Note 11).

10. COMMON STOCK SUBJECT TO REDEMPTION

      Pursuant to provisions in certain employment agreements (see Note 14), the Company may be required to purchase shares held by two executives/founders for an amount in cash equal to their fair market value in the event of termination or death. Under SFAS No. 150, which was adopted in 2003, these shares are considered mandatorily redeemable upon an event certain to occur and therefore, outside of the Company’s control. Accordingly, vested shares held by the executives have been classified as liabilities at December 31, 2005 and 2004, respectively. The liability is carried at the estimated redemption amount (or fair value) at each reporting date with changes in redemption amounts reflected in the accompanying statements of operations. Estimated fair value of the Company’s common shares was determined by an independent third-party valuation. Shares subject to mandatory redemption upon termination or death of holders were as follows at December 31:

	2005		2004
Shares subject to redemption		1,319,060		960,181
Redemption amount (fair value of shares at the balance sheet date)	$	612,835	$	935,137
Changes in redemption amount	$	322,302	$	1,276,404

      Upon the adoption of SFAS No. 150 during the year ended December 31, 2003, the difference between the estimated redemption amount of the shares and their book value which totaled $212,789 was reflected as a cumulative effect of change in accounting principle.

11. DERIVATIVE LIABILITIES

      The Bridge Financing notes (issued between September and December 2005; see Note 8) and certain other notes payable (as modified in the fourth quarter of 2005; see Note 9) provided the holders with an election to convert into common stock units in the 2006 Proposed Offering at a discount (33.33% to 50%) to the initial public offering price. In addition, the note holders were provided with registration rights requiring the underlying common stock units to be registered and have them purchased by the underwriters. The Company will be required to pay significant penalties (in the form of post-maturity warrants) equal in number to the principal amount of each note, in the event the 2006 Proposed Offering is not completed by maturity dates. Management believes the conversion feature embedded in such notes payable (for which conversion was elected) must be bifurcated and accounted for as a derivative liability under SFAS No. 133.

      The embedded contingent conversion feature that is part of such Company’s notes meets all the criteria of SFAS No. 133 paragraph 12 for bifurcation as follows: (i) the economic characteristics of the conversion feature are not closely related to the host Notes payable; (ii) the host Notes payable are not re-measured at fair value under current U.S. GAAP and (iii) a free-standing financial instrument with the same characteristics as the embedded contingent conversion feature would qualify as a derivative under paragraphs 6-8 of SFAS No. 133. Specifically, (i) there is a notional (the number of shares to be issued at

F-27

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

conversion or face amount), (ii) an underlying (the 2006 Proposed Offering price); (iii) no initial investment value at the inception of the contract, and (iv) the contingent conversion feature meets the net settlement criteria because the holders can convert into registered common units and have the right to immediately sell such units to the underwriter (at the IPO date) (pursuant to paragraphs 6(c) and 9(b) of SFAS No. 133).

      Further, the embedded conversion feature does not meet the scope exception of paragraph 11(a) of SFAS No. 133. Specifically, because the conversion rate is based on a percentage of the 2006 Proposed Offering price, the number of shares required for settlement of the conversion option is not fixed. As a result, the Bridge Financings notes and Other Convertible notes are not considered conventional convertible debt financings pursuant to EITF 05-02 and thus, an evaluation under EITF 00-19 was carried out. Management determined that the registration rights granted to note holders provide for significant penalties payable, and as a result, the Company is required to assume settlement in registered shares, which is considered beyond the control of the Company. Accordingly, the contingent embedded conversion feature has been accounted for as a derivative liability.

      Under SFAS No. 133, a derivative liability is carried at estimated fair value at each reporting date and changes in such value are reflected in our results of operations. The Company estimated the fair value of the derivative liabilities associated with the contingent conversion feature embedded in the Bridge Financing notes and the other convertible notes using the methodology described in the following paragraph. With respect to the Bridge Financing notes, the estimated fair value of the derivative liability was approximately $1,073,000 at inception. Proceeds of the Bridge Financings were applied as follows: $5,777,000 to the Bridge Financing Notes, and $1,073,000 to the related derivative liability. Amounts allocated to such derivative liability have been classified as debt discounts and are amortized to interest expense over the term of the notes. With respect to the other convertible notes, the estimated fair value of the derivative liability was approximately $411,000. Such derivative liability was established at the modification date and offset with a corresponding charge to results of operations (the debt modification transaction giving rise to the contingent conversion feature was accounted for as an extinguishment under EITF 96-19, as amended by EITF 05-7).

      Management estimated the fair value of the derivative liabilities (represented by the contingent embedded conversion feature), in consultation with a valuation expert, using the following assumptions: (i) an estimated conversion price at a discount of 33.33% to 50% to the initial offering price, (ii) an estimated initial offering price of $6 per common stock unit, (iii) volatility of 120% using an industry sector index and (iv) a risk free interest rate of 4.7% per annum. In addition, the estimated value of the contingent embedded conversion was adjusted for the probability of completing the initial public offering and a discount for liquidity after the initial public offering.

      Using the same methodology, management estimated the value of such derivative liability at December 31, 2005. The risk free interest rate at December 31, 2005 was 4.8% per annum. The change in fair value of the derivative liability was reflected in the results of operations and approximated $537,000 for the period from inception of the notes to December 31, 2005.

12. EQUITY TRANSACTIONS

Preferred Stock

      The Company has authorized the issuance of up to 12,480,952 shares of preferred stock. The Company designated 4,456,423 shares as the Series A-1 convertible preferred stock (“Series A-1”). At December 31, 2003, 4,415,992 shares of Series A-1 preferred shares were outstanding which had been issued at an original price of $0.2226 per share. The Series A-1 preferred shares (i) were convertible into shares of common stock on a one-for-one basis, subject to certain adjustments; (ii) carried a dividend yield of 9% per annum (dividends are non cumulative, if and when declared); (iii) entitled the holders to elect one director and to

F-28

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

vote equally with the common shares outstanding with respect to certain other matters; (iv) carried voting rights requiring a majority to approve any amendment of the bylaws, any change to the number of authorized preferred shares, any recapitalization of the Company and other events; and (v) had a liquidation preference at the original issue price plus dividends declared. The Series A-1 preferred shares also had special voting rights with regard to the occurrence of certain events, including a change in control or sale of substantially all of the assets of the Company.

      On February 12, 2004, the 4,415,992 Series A-1 preferred shares were retired for $1,600,000, using the proceeds from the 2004 Equity Private Placement. Such preferred shares were originally issued for net proceeds of $973,000. The Company charged the $627,000 excess retirement price as an imputed dividend, directly to deficit accumulated during the development stage.

Common Stock

      The Company has authorized the issuance of up to 140,000,000 shares of common stock at no par value.

      In February 2004, debt from related parties, totaling $400,001 was converted into 1,112,769 shares of the Company’s common stock at conversion rates deemed beneficial in relation to the fair value of the common stock. The conversion represented an inducement not previously contemplated by the original terms of these debt agreements. The Company estimated the fair value of the common shares at $2,759,951 based on factors including contemporary common stock issuance prices. Accordingly, pursuant to EITF 96-19, the transaction was accounted for as an extinguishment and the Company recorded a loss on conversion of debt to common stock of $2,359,951 representing the difference between the carrying value of the debt and the estimated fair value of the common shares issued (see Note 6).

      On February 12, 2004, the Company raised approximately $6 million in net capital from outside investors, in connection with the 2004 Equity Private Placement, through the issuance of 22,950,820 common stock units, including approximately ¹/23 share of common stock and a warrant entitling the holder to purchase approximately ¹/46 of a common share, subject to certain terms as more fully described herein.

      Additionally, the Company issued 157,081 common shares as finder’s fees to a consultant, in connection with the 2004 Equity Private Placement. This transaction was valued at $389,600, based on the estimated fair value of the common shares issued.

      In July 2003, the Company issued 589,757 shares of restricted common stock to several employees in connection with employment agreements (see Note 14). Based on the then estimated fair value of the underlying stock, the Company estimated that total compensation expense approximating $135,629 to be recorded over the vesting period of the restricted shares. Pursuant to the original terms, the shares vest 15% 6-months from the date of grant, then 2.5% on the first day of each succeeding month thereafter for the next 34 months. The shares became fully vested concurrent with the 2004 Equity Private Placement. Accordingly, for the year ended December 31, 2004, the Company recorded the remaining unamortized amount to compensation expense.

      On May 19, 2004, the Company raised approximately $400,000 in capital from two outside investors through the issuance of 1,176,472 common stock units; each unit includes approximately ¹/23 share of common stock and a warrant entitling the holder to purchase approximately ¹/46 of a common share, subject to certain terms.

      During July and August 2004, the Company raised $346,100 in capital from four investors through the issuance of 935,404 common stock units; each unit includes approximately ¹/23 share of common stock and a warrant entitling the holder to purchase approximately ¹/46  share of common stock, subject to certain terms.

F-29

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

      In August 2004, one of the Company’s vendors converted amounts due for legal services into common stock units. The Company issued 146,046 common stock units for $54,037 of services provided. Each unit includes ¹/23 share of common stock and a warrant entitling the holder to purchase ¹/46  share of common stock, subject to certain terms.

      In December 2004, the Company issued 110,448 shares of common stock to three of its directors for an aggregate exercise price of $2,565 in connection with the exercise of options issued in prior years.

      On September 15, 2005, the Company issued 17,084 common shares to an employee for services performed.

Options Issued Under the Plan

      The Company’s 2000 Equity Incentive Plan (the “Plan”) has reserved 469,784 shares of common stock for the issuance of option grants to officers, directors and consultants of the Company. The options have a 10-year life, and generally 25% vest immediately upon the date of grant and thereafter ratably over a stipulated vesting period based on the recipient, generally two to three years. Effective October 25, 2005, the Board of Directors and majority shareholders approved an increase in the number of shares of common stock issuable pursuant to the Company’s 2000 Equity Incentive Plan (the “Plan”).

      Between June 2000 and December 31, 2002, the Company granted options to acquire 106,479 shares of common stock under the Plan to consultants for completed services. In accordance with SFAS No. 123 and EITF 96-18, the Company expensed an amount equal to the estimated fair value of these options on the date of grant, as determined using the Black-Scholes option-pricing model, which totaled $73,750.

      In March, 2003, the Company granted options to acquire 46,276 common shares to employees and 4,305 common shares to a consultant for completed services. Expense recorded related to the grant of such options to employees was not significant. With respect to options granted to non-employees, in accordance with SFAS No. 123 and EITF 96-18, the Company expensed an amount equal to the estimated fair value of these options on the date of grant, as determined using the Black-Scholes option-pricing model (minimum value method). Such amount was also immaterial to these financial statements.

      In November 2004, the Company granted to an employee options to acquire 11,389 shares with an exercise price of $4.18 per share, a life of five years and vest upon the grant date. The exercise price was deemed to be in excess of the estimated fair value of the underlying common stock, and therefore, no compensation expense was recorded.

      The number of shares of common stock issuable under the Plan was increased by 301,334 common shares in December 2005 as described below to a total of 469,784 common shares. Concurrent with the increase in the Plan, options to purchase 223,848 common shares were issued to employees and consultants of the Company. Options granted to employees have an exercise price of $2.59 per share, expire in October 2015, and vest 25% on the first anniversary of the employee’s date of hire and then ratably over the following 36 months. The exercise price was deemed to be in excess of the estimated fair value of the underlying shares on the date of grant, and therefore no compensation expense was recorded per APB Opinion No. 25. The options granted to one consultant have substantially the same terms as those granted to employees and had no significant grant date fair value, as determined by the Black-Scholes option pricing model (minimum value method).

      As of November 22, 2005, the Company’s Board of Directors approved and formalized changes to an agreement with a director, pursuant to which the director will receive, in addition to cash compensation, an option to purchase 25,829 shares of common stock for his services as a director. The options have an exercise price of $2.59 per share, expire in October 2015, and vest immediately. The exercise price was deemed to be in

F-30

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

excess of the estimated fair value of the underlying shares on the date of grant, and therefore no compensation expense was recorded per APB Opinion No. 25.

      In December 2005, the Company granted option to acquire 30,134 shares of the Company’s common stock at $3.60 per share in connection with a consulting agreement. The options expire in December 2007 and vest monthly over the two-years following the date of grant. The options had no significant grant date fair value, as determined by the Black-Scholes option pricing model (minimum value method).

      During the year ended December 31, 2005, options to acquire 234,659 common shares were exercised at prices between $0.0023 and $0.0232 per share for total consideration of $4,394.

Non-Plan Options

      Concurrent with the 2004 Equity Private Placement, the Company granted options to acquire 196,350 common shares to two directors of the Company for their services as officers of the Company. Such options have an exercise price of $0.0232 per share, a life of five years, vest 25% on August 12, 2004, and the balance vests monthly in equal installments for the subsequent 18 months. The exercise price of such options was deemed to be less than the estimated fair value of the underlying stock, and in accordance with APB Opinion No. 25, the Company is recording the intrinsic value of approximately $900,000 as compensation expense over the vesting period, of which approximately $450,000 and $410,000 was expensed during the years ended December 31, 2005 and 2004, respectively.

      In addition, on the same date the Company granted options to purchase 98,175 common shares to a non-employee director for consulting services under an agreement that expires in 2006. The options had the same terms as those mentioned above. In accordance with EITF 96-18, the expense to be recognized for these options was based on the applicable fair value of the options as the services are performed. At the date of grant, the Company estimated the fair value of these options to be approximately $450,000, using the Black-Scholes option-pricing model (minimum value method). For the years ended December 31, 2005 and 2004, the Company expensed approximately $225,000 and $210,000, respectively, based on the services performed and estimated fair value of the options at year-end.

      A summary of the stock option activity for the period June 23, 2000 (Inception) through December 31, 2005 is presented below:

			Weighted
			Average
			Exercise
	Options(*)		Price(*)
Options outstanding — June 23, 2000 (Inception)		—	$	—
Options granted		20,888	$	2.5855
Options exercised		—	$	—
Options expired or forfeited		—	$	—
Options outstanding — December 31, 2000		20,888	$	2.5855
Options granted		66,186	$	2.5855
Options exercised		—	$	—
Options expired or forfeited		—	$	—
Options outstanding — December 31, 2001		87,074	$	2.5855

F-31

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

				Weighted
				Average
				Exercise
	Options(*)			Price(*)
Options granted		19,405		$	2.5855
Options exercised		—		$	—
Options expired or forfeited		—		$	—
Options outstanding — December 31, 2002		106,479		$	2.5855
Options granted		50,581		$	0.0023
Options exercised		—		$	—
Options expired or forfeited		—		$	—
Options outstanding — December 31, 2003		157,060		$	1.7539
Options granted		305,915		$	0.1789
Options exercised		(110,448	)	$	0.0232
Options expired or forfeited		—			—
Options outstanding — December 31, 2004		352,527		$	0.9292
Options granted		279,815		$	2.5855
Options exercised		(234,659	)	$	0.0187
Options expired or forfeited		(11,389	)	$	4.1814
Options outstanding — December 31, 2005		386,294		$	2.6646

(*) Reflects effect of 23.23 to 1 reverse stock split declared in December 2005.

	Options Outstanding						Options Exercisable
	Number of						Number of
	Options(*)		Weighted		Weighted		Options(*)		Weighted
	Outstanding at		Average		Average		Exercisable at		Average
Exercise	December 31,		Remaining		Exercise		December 31,		Exercise
Price(*)	2005		Life in Years		Price(*)		2005		Price(*)
$2.5855		356,162		7.8	$	2.5855		303,799	$	2.5855
$3.6000		30,132		0.2	$	3.6000		1,256	$	3.6000
		386,294		8.0	$	2.6646		305,055	$	2.5942

(*) Reflects effect of 23.23 to 1 reverse stock split declared in December 2005.

      The weighted average grant-date fair value per share of options granted during 2005 and 2004 was approximately $0 and $2.46, respectively. Such fair value was estimated by using a Black-Scholes option pricing model (minimum value method) based on the exercise price per share, the estimated fair value of the Company’s common stock, and following weighted average assumptions:

	2005		2004
Expected life		5 Years		5 Years
Estimated volatility		0%		0%
Risk-free interest rate		4.41%		4.08%
Dividends		None		None

F-32

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

Warrants

      In connection with the 2004 Equity Private Placement, the Company issued 22,950,820 common stock units, including approximately ¹/23 share of common stock and a warrant entitling the holder to purchase approximately ¹/46  share of common stock. As a result, warrants to acquire 493,991 shares of common stock were granted to the investors. Such warrants have an exercise price of $8.48 per share, a life of one year, and were fully vested upon the date of grant. Additionally, the Company granted warrants to acquire 98,798 common shares to a consultant for the 2004 Equity Private Placement.

      On May 19, 2004, the Company issued 1,176,472 common stock units, including approximately ¹/23 share of common stock and warrants entitling the holders to purchase approximately ¹/46  share of common stock. As a result, warrants to acquire 25,322 common shares were granted to the investors. Such warrants have an exercise price of $9.29 per share, a life of one year, and were fully vested upon the date of grant. Additionally, the Company granted warrants to acquire 3,444 common shares to a consultant as a finder’s fee for this investment.

      In July and August 2004, the Company issued 935,404 common stock units, including approximately ¹/23 share of common stock and warrants entitling the holders to purchase approximately ¹/46  share of common stock. As a result, warrants to acquire 21,386 common shares were issued to the investors. Such warrants have an exercise price of ranging from $9.29 to $10.22 per share, a life of one year, and were fully vested upon the date of grant.

      In August 2004, the Company issued 146,046 common stock units, including approximately ¹/23 share of common stock and warrants entitling the holders to purchase approximately ¹/46  share of common stock, for legal services. As a result, warrants to acquire 3,936 common shares were issued. Such warrants have an exercise price of $10.22 per share, a life of one year, and were fully vested upon the date of grant.

      In August 2004, warrants to acquire 148,197 common shares were granted to investors that were part of the 2004 Equity Private Placement. Provisions of the 2004 Equity Private Placement called for the investors to receive approximately 0.006 warrants for each unit purchased as liquidated damages in the event that the Company’s stock is not publicly traded on a recognized stock exchange within 180 days following the closing date. The warrants are exercisable at a price of $0.0023 per share, expire one year from the date of grant and were fully vested upon the date of grant. At the date of grant, the Company estimated the fair value of these warrants to be approximately $367,000, using the Black-Scholes option-pricing model. Such expense is included as penalty warrants expense in the accompanying statement of operations for the year ended December 31, 2004. See “Classification of Warrants” below.

      In December 2004, the Company granted warrants to acquire 11,848 common shares in connection with a loan (see Note 6). The warrants are exercisable at $7.5962 per share, expire in one year, and were fully vested upon the date of grant. Using the Black-Scholes option-pricing model, the estimated fair value of the warrants was not significant. The warrants can be settled in unregistered shares.

      During the year ended December 31, 2005, warrants to acquire 1,039,891 common shares were exercised at prices between $0.0023 and $8.47 per share for total consideration of $1,536,828.

      On August 31, 2005, the Company issued 25,631 common shares plus 70,445 warrants to purchase common shares in connection with the refinancing of certain vendor obligations payable totaling $556,399 into notes payable (see Note 7).

      During the year ended December 31, 2005, the Company granted warrants to acquire 397,789 common shares to employees in connection with the conversion of accrued executive compensation to long-term notes payable (see Note 5).

F-33

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

      During the year ended December 31, 2005, the Company granted warrants to acquire 269,809 common shares to note payable holders in connection with modifications to the terms of those notes (see Notes 6 and 7).

      A summary of the warrant activity for the period from June 23, 2000 (Inception) through December 31, 2005 is presented below:

				Weighted
				Average
				Exercise
	Warrants(*)			Price(*)
Warrants outstanding — June 23, 2000 (Inception)		182,789		$	0.0256
Warrants granted		—		$	—
Warrants exercised		(86,096	)	$	0.0046
Warrants expired or forfeited		—		$	—
Warrants outstanding — December 31, 2000		96,693		$	0.0465
Warrants granted		—		$	—
Warrants exercised		—		$	—
Warrants expired or forfeited		—		$	—
Warrants outstanding — December 31, 2001		96,693		$	0.0465
Warrants granted		116,229		$	5.5032
Warrants exercised		—		$	—
Warrants expired or forfeited		—		$	—
Warrants outstanding — December 31, 2002		212,922		$	3.0245
Warrants granted		—		$	—
Warrants exercised		—		$	—
Warrants expired or forfeited		—		$	—
Warrants outstanding — December 31, 2003		212,922		$	3.0245
Warrants granted		817,685		$	6.8203
Warrants exercised		—		$	—
Warrants expired or forfeited		—
Warrants outstanding — December 31, 2004		1,030,607		$	6.0282
Warrants granted		738,043		$	0.3961
Warrants exercised		(1,039,891	)	$	6.9412
Warrants expired		(585,813	)	$	1.4779
Warrants outstanding — December 31, 2005		142,946		$	6.2212

      Approximately 11,800 warrants expire before December 31, 2006.

(*) Reflects effect of 23.23 to 1 reverse stock split declared in December 2005.

F-34

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

	Warrants Outstanding						Warrants Exercisable
	Number of		Weighted		Weighted		Number of		Weighted
	Warrants(*)		Average		Average		Warrants(*)		Average
Exercise	Outstanding at		Remaining		Exercise		Exercisable at		Exercise
Price(*) Range	December 31, 2005		Life in Years		Price(*)		December 31, 2005		Price(*)
$3.1361		10,762		3.82	$	3.1361		10,762	$	3.1361
$5.1710		94,705		1.25	$	5.1710		94,705	$	5.1710
$7.5962		24,664		1.86	$	7.5962		24,664	$	7.5962
$13.9264		12,815		2.67	$	13.9264		12,815	$	13.9264
		142,946		1.68	$	6.4723		142,946	$	6.4723

(*) Reflects effect of 23.23 to 1 reverse stock split declared in December 2005.

      The weighted average grant-date fair value per share of warrants granted during 2005 and 2004 was approximately $0.59 and $0.70 per share, respectively. Such fair value was estimated by using the Black-Scholes stock option pricing model (minimum value method) based on the exercise price per share, the estimated fair value of the Company’s common stock, and following weighted average assumptions:

	2005		2004
Expected life		1  Year		1  Year
Estimated volatility		0%		0%
Risk-free interest rate		3.75%		4.08%
Dividends		None		None

Classification of Warrants

      Based on the Company’s settlement policy, the warrants described below constitute pre-existing commitments and would be settled into shares of common stock before other instruments indexed to the Company’s common stock (see Notes 9 and 10).

      In connection with the 2004 Equity Private Placement, the Company issued units consisting of 987,981 shares of common stock and 493,991 warrants with a one year term, to investors and a consultant. The Investor Rights Agreement issued as part of the 2004 Equity Private Placement provides holders of the shares with registration rights as follows: (1) investors holding at least 50% of the shares may, after six months from the closing, request the Company to file a registration statement, in which case the Company shall use reasonable efforts, subject to certain limitations, to register the shares with no specified deadline to do so; or (2) piggy-back registration rights, if and when the Company decides to register its shares. The Investor Rights Agreement also provides that in the event the Company does not complete the following within six months from the closing: (1) a reverse merger (2) its stock is not listed on a public exchange or (3) have an effective registration statement covering the Company’s shares, the holders of units would be entitled to 0.15 warrants as penalty.

      Based on the foregoing factors, the Company concluded that the warrants, as a separate instrument, meet the scope exception of paragraph 11(a) of SFAS No. 133, as they are indexed to the Company’s common stock and would be classified within equity (after consideration of the requirements of EITF 00-19). In addition, the liquidated damages penalty is a separate instrument that would be classified as a liability. The penalty was settled in August 2004 when the Company issued penalty warrants valued at $367,000. All warrants issued in connection with the 2004 Equity Private Placement were exercised in February 2005 in exchange for unregistered shares.

F-35

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

      In connection with the 2005 Debt Restructuring, the Company issued warrants for the purchase of 724,442 shares of the Company’s common stock. The warrants have an exercise price of $0.023 and expire at dates up to three years. The purchase rights represented by these warrants are exercisable at any time during the term by the surrender of the warrant and by payment in cash, cancellation of debt or by net issue exercise, as defined. The number of shares issuable pursuant to the warrants may be subject to adjustment upon certain events as defined, including a recapitalization, among others. The holders of the warrants are entitled to piggyback registration rights in the event the Company determines to register its common shares. There are no penalties or liquidated damages includes in the notes or warrant agreements. Accordingly, at September 30, 2005, the Company concluded under EITF 01-06 that the warrants are indexed to the Company’s common stock and can be classified within equity pursuant to EITF 00-19. Management considered in its evaluation that the warrants can be settled in unregistered shares (as the Company does not have an unconditional obligation to register its shares) and further, that the Company has sufficient unissued (and uncommitted) authorized shares available for settlement. The warrants issued in connection with the 2005 Debt Restructuring were all exercised between September 2005 and December 2005.

      Based on the foregoing factors, the Company concluded that the warrants described in the preceding paragraph meet the scope exception of paragraph 11(a) of SFAS No. 133 as they are indexed to the Company’s common stock and would be classified within equity (after consideration of the requirements of EITF 00-19).

13. INCOME TAXES

      The Company had no significant current or deferred income tax expense. Income tax expense, all current, for the years ended December 31, 2005, 2004, and 2003 differed from the amounts computed by applying the U.S. Federal income tax rate of 34 percent to the loss before income taxes as a result of the following:

	2005			2004			2003
U.S. Federal Statutory tax at 34%	$	(2,123,907	)	$	(2,644,795	)	$	(521,990	)
Adjustment in income taxes resulting from:
Change in valuation allowance		2,595,042			3,111,523			604,688
State taxes, net of federal benefit		(374,807	)		(466,728	)		(83,215	)
Other		(96,328	)		—			517
Provision for income taxes	$	—		$	—		$	—

F-36

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

      The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at December 31, 2005 and 2004 are presented below:

		2005			2004
Deferred tax assets
	Net operating losses carry forward	$	5,348,240		$	3,583,077
	Deferred compensation		712,078			417,484
	Equity compensation		218,133			129,312
	Warrants		435,002			221,381
	Loss on extinguishment of debt		105,480			—
	Derivative liability		214,729			—
	Accrued wages		48,275			52,348
			7,081,937			4,403,602
	Deferred tax liability Depreciation		(6,726	)		(132,730	)
			7,075,211			4,270,872
	Less: Valuation allowance		(7,075,211	)		(4,270,872	)
	Net deferred tax asset	$	—		$	—

      As of December 31, 2005, the Company had tax net operating loss carryforwards (“NOLs”) of approximately $13.5 million and $12.9 million available to offset future taxable income for Federal and State purposes, respectively. The Federal and State carryforwards expire in varying amounts through 2025 and 2015, respectively. Effective September 11, 2002, pursuant to California revenue and tax code section 24416.3, no net operating loss deduction will be allowed for any taxable year beginning on or after January 1, 2002, and before January 1, 2004. For any suspended losses, the carryforward period is extended by one year for losses incurred in tax years beginning on or after January 1, 2002, and before January 1, 2003; and by two years for losses incurred in taxable years beginning before January 1, 2002.

      Due to the change in ownership provisions of the Internal Revenue Code Section 382, net operating loss carryforwards for Federal and State income tax reporting purposes could be subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to their use in future years.

      SFAS No. 109 requires that a valuation allowance must be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. In making such determination, a review of all available positive and negative evidence was considered, including scheduled reversal of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. The accounting guidance further states that forming a conclusion that a valuation allowance is not needed is difficult when there is evidence such as cumulative losses in recent years. As a result of the Company’s recent cumulative losses, the Company concluded that a full valuation allowance should be recorded at December 31, 2005 and 2004.

F-37

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

14. COMMITMENTS AND CONTINGENCIES

General

      The Company’s commitments and contingencies include the obligations of a producer of film programming in the normal course of business. Management believes these matters will not have a material adverse effect, if any, on the Company’s financial position and results of operations.

Leases

      The Company leases its office facilities under a non-cancelable operating lease expiring on February 1, 2009. Rental expense was $378,738, $329,085 and $56,956 for the years ended December 31, 2005, 2004 and 2003.

      The Company has leased equipment under capital leases that are included within computer and equipment in the accompanying balance sheets. Future minimum annual rental under operating and capital leases for the years ending December 31 are as follows:

		Operating		Capital
	2006	$	380,997	$	259,976
	2007		392,429		259,976
	2008		404,197		204,282
	2009		33,765		108,445
	2010		—		51,531
		$	1,211,388		844,210
Less amount representing interest					(192,434	)
Present value of net minimum lease payments					691,776
Less current maturities of capital lease obligations					(171,922	)
Capital lease obligations, net of current portion				$	519,854

Legal Matters

      From time to time, claims are made against the Company in the ordinary course of our business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. The Company settled a litigation matter in January 2006 for $141,000, which had been accrued for as of December 31, 2005. The Company is not a party to any other pending or threatened legal proceedings.

Employment Agreements

      On July 1, 2003, the Company entered into employment agreements with certain executive officers and key employees of the Company. Such agreements have terms of four to six years, provide for aggregate payments of base salary approximating $44,000 per month and increasing 5% every 12 months. The employment agreements also provide for accrued and deferred compensation (see Note 5) and can be terminated for cause, as defined, or without cause upon the vote or written consent of two-thirds of the vote of members of the Board of Directors. Such agreements were amended and ratified in February 2004 contemporaneously with the 2004 Equity Private Placement and provide that, two executives be eligible for

F-38

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

various bonuses, including each receiving 2% of certain net operations revenues, as defined, derived from domestic cable, satellite, pay-per-view, or any other similar distribution channels, and from licensing, merchandising and sponsorships, including $0.02 per subscriber and $0.10 per DVD sold.

      Bonuses shall accrue and be deferred until such time that the Gross Proceeds, as defined, are equal to or exceed $15,000,000. Further, any bonus amounts in excess of 1% of the Gross Proceeds shall accrue and the Company shall defer such payment until the following calendar year. Under the amended agreements, the executives are entitled to a management fee equal to 1% of any Gross Proceeds derived from the occurrence of a Material Event (including a sale of the Company), as the term is defined in the Agreement, based on the valuation of the Company up to $30,000,000, plus 2% of any Gross Proceeds from any occurrence of a Material Event based on a valuation of the Company equal to or greater than $30,000,000, and all amounts of compensation owing to them shall be due and payable upon the occurrence of a Material Event. At December 31, 2005, no incentive bonus compensation was earned under these employment contracts.

      Further, the amended agreements entitled the executives to purchase 267,145 shares of common stock for $1,150, which they purchased in 2003. The Company recognized compensation expense for the excess of the fair value of the shares over amounts paid (see Note 2). In addition, the amended agreements provide that in the event of termination or death, the Company may be required to purchase vested common shares held by the executives for fair market value. See Note 10 for relevant accounting of common stock held by these executives.

Distribution and Initial Programming

      On January 10, 2006, the Company entered into a License Agreement with iN DEMAND L.L.C. (the “iN DEMAND Agreement”) which will serve as the initial US distribution agreement for the Company’s broadcast content. The iN DEMAND Agreement provides that through iN DEMAND L.L.C. (“iN DEMAND”) the Company’s broadcast content will be available for purchase by subscription by cable television viewers in the United States and parts of the Caribbean, as well as Puerto Rico and Guam. iN DEMAND is a multiple system operator providing pay-per-view movies and other programming to consumers through numerous local and regional cable operators throughout the United States. Through the iN DEMAND Agreement the Company’s programming will be available for purchase, by consumers, on a pay-per-view basis, and may be available as part of a Video-On-Demand (“VOD”) or Subscription Video-On-Demand (“SVOD”) basis.

      The iN DEMAND Agreement is in the form of a license to broadcast or “exhibit” the Company’s finished content according to the terms of the iN DEMAND Agreement. The Agreement with iN DEMAND is not exclusive and the Company is negotiating with other cable and satellite distribution companies for additional distribution of the Company’s content in the United States and in foreign markets via cable and satellite television access. The term of the iN DEMAND Agreement is one year, provided that after six months, either party may terminate the Agreement upon sixty days prior written notice. As part of the distribution agreement with iN DEMAND, the Company required to place a $250,000 letter of credit with them to cover certain distribution charges. We expect that this letter of credit will need to be 100% cash-collateralized.

      Under the Agreement, the Company’s programs will broadcast weekly, in four-hour blocks, on cable television stations on a “Pay Per View” basis, including a VOD basis. Broadcast on a VOD basis means that a subscriber elects to view the Company’s programs on an “on demand basis”, i.e. at the time or times of such individual’s choosing, which are not regularly scheduled times. The suggested retail price of each pay-per-view showing is $4.95. The Company will receive license fees computed as a percent of gross subscriber fees for VOD and non-VOD basis.

F-39

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

      An SVOD Package is a package of programs available to paid subscribers where, for a fixed fee, the subscriber can watch a selection of all or a portion of such programs with “on demand” functions over a set period of time and as often as desired. With respect to SVOD Package broadcasts, the Company will receive a license fee based on the number of hours of the Company’s programs included in the SVOD package and the number of subscribers to the SVOD Package. The Company’s programs will also be available on an “all day ticket” meaning subscribers can view the programs throughout the day at their convenience.

      The Agreement also provides that iN DEMAND is entitled to certain minimum distribution fees per quarter. In the event the minimum distribution fee is not collected by iN DEMAND based on subscription dollars received for the Company’s content, iN DEMAND will be entitled to draw upon a letter of credit, which the Company must post, to satisfy any shortfall.

      The minimum license per quarter due to iN DEMAND is $250,000; any amounts paid in excess of this minimum, can be carried forward to offset future minimum quarterly requirements. The Company will not receive any revenues under the iN DEMAND Agreement until the minimum distribution fee per quarter is received by iN DEMAND. In the event the minimum distribution fee is not collected by iN DEMAND based on subscription dollars received for our content, iN DEMAND will be entitled to draw upon a letter of credit, which the Company must post, to satisfy any shortfall. Thereafter, the Company will be entitled to its agreed share of revenues under the Agreement.

Uncut Music Videos

      The Company has the rights to broadcast over 5,000 uncut and uncensored music videos, known as “director’s cut” versions. The majority of cable, satellite and network television stations that broadcast music videos do not broadcast these uncut versions of popular music videos that often feature profanity, nudity and sexually suggestive materials.

      The Company obtains its uncut music videos from the music industry’s biggest record label companies. The Company does not pay for the acquisition of the videos, however the Company is required to pay a nominal royalty fee each time it broadcasts a music video. However, one of the record label companies also charges an annual fee of $7,500 for the costs of shipping and reproducing videos they send to the Company. Since the Company anticipates broadcasting few music videos in each block of programming the cost to obtain and broadcast these videos is expected to be insignificant in the Company’s overall production costs.

15. OTHER RELATED PARTY TRANSACTIONS

      In February 2004, the Company entered into an agreement for marketing consulting services with an entity in which an officer of the Company is a principal. The Company incurred and paid $310,000 under this agreement through October 2004, when the agreement was terminated. Fees related to the agreement are included in professional services in the accompanying statement of operations for 2004.

      Advances totaling $20,000 were received during the fourth quarter of 2005 from a related party for working capital purposes. The advances are non-interest bearing and are due on demand.

      Other related party transactions are discussed elsewhere in these notes to the accompanying financial statements.

16. SUBSEQUENT EVENTS

      In April 2006, the Company granted stock options to acquire 325,000 common shares to an executive officer in connection with the execution of an employment agreement. Of the options granted, 125,000 vested immediately, and the balance was to have vested ratably over a two year period. In May 2006, the Company

F-40

NGTV

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

terminated the employment agreement with the officer for “cause” At the time of termination, a total of 133,333 options were vested. No other options will vest and 191,667 options have been cancelled. The former officer has tendered a written threat of litigation alleging that the Company breached the employment agreement, among other claims. No litigation has yet been filed against the Company. At this time the Company cannot determine what losses, if any, may arise as a result of this dispute other than the possible severance benefits provided under the employment agreement for a termination “without cause”. A termination “without cause” or a resignation for “good reason” provide for the same contractual severance benefits, including, among other things, payment of an amount equal to his base salary through the full term of the agreement, continuation of health insurance benefits, and the accelerated vesting of all unvested options granted to the former officer. The Company is actively engaged in settlement discussions in an attempt to avoid litigation.

      In April 2006, the Company initiated a private secured debt financing in order to sustain operations pending the completion of the initial public offering (the “Debt Financing”). In connection with the Debt Financing, the Company issued and sold 10% Senior Secured Promissory Notes in the principal amount of $3,500,000 (the “Secured Notes”), and issued to each holder of a Secured Note a Warrant to Purchase Common Stock (the “Debt Warrants”). The Secured Notes accrue interest at the rate of ten percent (10%) per annum and are due and payable on the earlier of (i) the completion of the Company’s initial public offering, or (ii) the first anniversary of the date of issuance. The Secured Notes are secured by a lien on substantially all of the assets of the company. The lien will be released upon payment in full of the Secured Notes at the completion of the Company’s initial public offering. The Debt Warrants entitle the holders to purchase up to 875,000 shares of common stock (assuming the unit offering is completed prior to August 13, 2006) at a price per share equal to the lower of (i) 67% of the per unit price to the public if the offering of the common stock units is completed before August 13, 2006, or (ii) 50% of the per unit price to the public if the offering of the common stock units is completed on or after August 13, 2006. Accordingly, based on an assumed offering price of $6.00 per unit, the Debt Warrants would either be exercisable for $4.00 per share, or $3.00 per share, based on the time the offering of common stock units is completed. The Debt Warrants are exercisable for five years from the date of issuance.

      The common shares underlying the Debt Warrants are entitled to registration rights in favor of the holders, requiring the Company to register the shares (i) on demand, at any time after 180 days following the date of issuance of the 10% Senior Secured Promissory Notes (or the completion of the offering of the units), or (ii) as part of any other registration statement the Company may file, other than registrations of stock for the purpose of registering employee stock options, purchase, bonus or other benefit plans.

      In May 2006, the Company entered into a standard distribution arrangement with a large Internet information provider. The Company is negotiating customized terms for this distribution agreement expected to enhance the availability and distribution of its content through this provider.

F-41

NGTV

(A Development Stage Company)

CONDENSED BALANCE SHEETS

March 31, 2006 (Unaudited) and December 31, 2005 (As Restated)

				March 31,			December 31,
				2006			2005
				(Unaudited)			(As Restated)
ASSETS
Current Assets
	Cash			$	250,041		$	3,133,164
	Debt issuance costs, net				425,260			726,206
	Other current assets				408,826			25,440
		Total current assets			1,084,127			3,884,810
Property and Equipment, net					1,581,915			1,534,211
Capitalized Production Costs					4,295,290			3,366,065
Deposits and Other Assets					435,830			349,273
TOTAL ASSETS				$	7,397,162		$	9,134,359
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities
	Accounts payable and accrued liabilities			$	835,761		$	903,848
	Accrued executive compensation				492,833			465,333
	Capital lease obligations, current portion				184,660			171,922
	Due to related parties				445,430			465,430
	Convertible notes payable, net — Bridge Financings, net				6,520,482			6,022,093
	Other convertible notes payable, net (including related party notes payable of $1,895,798), net				3,227,619			3,227,619
	Other liabilities, primarily derivative liabilities				2,144,771			2,061,698
			Total current liabilities		13,851,556			13,317,943
Long-Term Liabilities
	Common stock subject to redemption				612,835			612,835
	Capital lease obligation, net of current portion				469,313			519,854
			Total long-term liabilities		1,082,148			1,132,689
Total Liabilities					14,933,704			14,450,632
Commitments and Contingencies — Note 12
Shareholders’ Deficit
	Preferred stock, no par value; 12,480,952 shares authorized; none issued or outstanding at March 31, 2006 (Unaudited) and December 31, 2005				—			—
	Common stock, no par value; 140,000,000 shares authorized; 5,000,152(*) shares issued and outstanding at March 31, 2006 (Unaudited) and December 31, 2005				9,452,588			9,452,588
	Additional paid-in capital				4,639,802			4,582,741
	Deficit accumulated during the development stage				(21,628,932	)		(19,351,602	)
		Total shareholders’ deficit			(7,536,542	)		(5,316,273	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT				$	7,397,162		$	9,134,359

(*) Reflects the effect of 23.23 to 1 reverse stock split for common shareholders in December 2005.

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

F-42

NGTV

(A Development Stage Company)

CONDENSED STATEMENTS OF OPERATIONS

For the Three-Month Periods Ended March 31, 2006 and 2005 and

For the Period June 23, 2000 (Inception) Through March 31, 2006

		(Unaudited)						June 23, 2000
		Three Months Ended						(Inception)
		March 31,						Through
								March 31,
		2006			2005			2006
REVENUES		$	—		$	—		$	—
OPERATING EXPENSES
	Compensation and related benefits (net of amounts capitalized)		367,041			489,410			5,271,608
	Professional fees (including related party consulting fees of $310,000 in 2004)		409,984			163,686			4,272,657
	Selling, general and administrative		491,111			272,425			4,641,129
			1,268,136			925,521			14,185,394
NET OPERATING LOSS			(1,268,136	)		(925,521	)		(14,185,394	)
OTHER INCOME (EXPENSE)
	Loss on conversion of debt to common stock		—			—			(2,359,951	)
	Interest on common stock subject to redemption		—			—			(396,735	)
	Change in fair value of derivative liabilities		(83,073	)		—			(619,896	)
	Penalty warrants expense		—			—			(367,000	)
	Loss on extinguishment of debt, net of gains (including $570,423 loss associated with related party extinguishments)		—			—			(675,251	)
	Interest and other expense (including $667,335 amortization of debt discount and debt issuance costs in 2006)		(948,694	)		(9,352	)		(2,174,463	)
	Interest and other income		22,573			8,695			228,367
			(1,009,194	)		(657	)		(6,364,929	)
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE AND CARRYOVER DEFICIT OF PREDECESSOR AFFILIATED COMPANY			(2,277,330	)		(926,178	)		(20,550,323	)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE			—			—			(212,789	)
LOSS BEFORE CARRYOVER DEFICIT OF PREDECESSOR AFFILIATED COMPANY			(2,277,330	)		(926,178	)		(20,763,112	)
CARRYOVER DEFICIT OF PREDECESSOR AFFILIATED COMPANY			—			—			(238,820	)
NET LOSS			(2,277,330	)		(926,178	)		(21,001,932	)
PREFERRED STOCK REPURCHASE AND RETIREMENT IN EXCESS OF ORIGINAL PURCHASE PRICE			—			—			(627,000	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS AND LOSS ACCUMULATED DURING THE DEVELOPMENT STAGE		$	(2,277,330	)	$	(926,178	)	$	(21,628,932	)
BASIC AND DILUTED LOSS PER COMMON SHARE(*)		$	(0.46	)	$	(0.24	)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES(*) OUTSTANDING			5,000,152			3,799,737

(*)  Reflects the effect of 23.23 to 1 reverse stock split for common shareholders in December 2005.

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

F-43

NGTV

(A Development Stage Company)

CONDENSED STATEMENTS OF SHAREHOLDERS’ DEFICIT

For the Years Ended December 31, 2005, 2004 and 2003 and

For the Period June 23, 2000 (Inception) Through March 31, 2006

													Deficit
													Accumulated
	Preferred Stock				Common Stock*				Additional				During the
									Paid-In		Unearned		Development
	Shares		Amount		Shares		Amount		Capital		Compensation		Stage			Total
INCEPTION — June 23, 2000 — Carryover basis of predecessor affiliated company (Note 1)		—	$	—		115,415	$	2,681	$	3,932	$	—	$	(238,820	)	$	(232,207	)
Five-for-one common stock split, September 29, 2000		—		—		461,650		—		—		—		—			—
Exercise of warrants for common stock, September 29, 2000		—		—		86,096		400		—		—		—			400
Series-A preferred stock issued at $0.22 per share, net of $10,000 fees, September 29, 2000		2,380,952		520,000		—		—		—		—		—			520,000
Net loss		—		—		—		—		—		—		(441,048	)		(441,048	)
BALANCE — December 31, 2000		2,380,952		520,000		663,161		3,081		3,932		—		(679,868	)		(152,855	)
Series-A preferred stock issued at $0.2226 per share, March 1, 2001		224,618		50,000		—		—		—		—		—			50,000
Series-A preferred stock issued at $0.2226 per share, April 1, 2001		89,847		20,000		—		—		—		—		—			20,000
Series-A preferred stock issued at $0.2226 per share, May 1, 2001		112,309		25,000		—		—		—		—		—			25,000
Series-A preferred stock issued at $0.2226 per share, June 1, 2001		224,618		50,000		—		—		—		—		—			50,000
Series-A preferred stock issued at $0.2226 per share, July 1, 2001		336,927		75,000		—		—		—		—		—			75,000
Series-A preferred stock issued at $0.2226 per share, November 1, 2001		1,046,721		233,000		—		—		—		—		—			233,000
Net loss		—		—		—		—		—		—		(479,742	)		(479,742	)
BALANCE — December 31, 2001		4,415,992		973,000		663,161		3,081		3,932		—		(1,159,610	)		(179,597	)
Warrants issued to consultants for services		—		—		—		—		13,413		—		—			13,413
Options issued to non-employees for compensation		—		—		—		—		73,750		—		—			73,750
Net loss		—		—		—		—		—		—		(556,608	)		(556,608	)

F-44

NGTV

(A Development Stage Company)

CONDENSED STATEMENTS OF SHAREHOLDERS’ DEFICIT — (Continued)

																			Deficit
																			Accumulated
	Preferred Stock						Common Stock*						Additional						During the
													Paid-In			Unearned			Development
	Shares			Amount			Shares			Amount			Capital			Compensation			Stage			Total
BALANCE — December 31, 2002		4,415,992			973,000			663,161			3,081			91,095			—			(1,716,218	)		(649,042	)
Common stock issued to employees for compensation, July 1, 2003		—			—			589,757			135,629			—			(135,629	)		—			—
Amortization of restricted stock compensation expense		—			—			—			—			—			19,848			—			19,848
Common shares repurchased at cost, February and March 2003		—			—			(35,516	)		(165	)		—			—			—			(165	)
Employee stock- based compensation expense		—			—			—			—			228,770			—			—			228,770
Options granted to non-employees for services		—			—			—			—			98,907			—			—			98,907
Warrants issued to consultants for services		—			—			—			—			55,000			—			—			55,000
Common stock subject to redemption		—			—			—			(3,311	)		—			—			—			(3,311	)
Net loss		—			—			—			—			—			—			(3,972,265	)		(3,972,265	)
BALANCE — December 31, 2003		4,415,992			973,000			1,217,402			135,234			473,772			(115,781	)		(5,688,483	)		(4,222,258	)
Common stock issued to retire related party debt		—			—			1,112,769			400,001			—			—			—			400,001
Excess of fair value of common stock exchanged over carrying amount of converted debt		—			—			—			—			2,359,951			—			—			2,359,951
Common stock and warrants issued in connection with 2004 Equity Private Placement, net, February 12, 2004		—			—			987,982			6,156,814			—			—			—			6,156,814
Retirement of Series A-1 preferred shares, February 12, 2004		(4,415,992	)		(973,000	)		—			—			—			—			(627,000	)		(1,600,000	)
Common shares issued as finder’s fees, in connection with 2004 Equity Private Placement, February 12, 2004		—			—			157,081			389,600			(389,600	)		—			—			—
Common stock and warrants issued in private placement, May 19, 2004		—			—			50,645			400,000			—			—			—			400,000
Options granted to employees for compensation, February 12, 2004		—			—			—			—			415,660			—			—			415,660

F-45

NGTV

(A Development Stage Company)

CONDENSED STATEMENTS OF SHAREHOLDERS’ DEFICIT — (Continued)

													Deficit
													Accumulated
	Preferred Stock				Common Stock*				Additional				During the
									Paid-In		Unearned		Development
	Shares		Amount		Shares		Amount		Capital		Compensation		Stage			Total
Options granted to consultants for services, February 12, 2004		—		—		—		—		210,276		—		—			210,276
Warrants issued to consultants for services, February 12, 2004		—		—		—		—		16,820		—		—			16,820
Amortization of restricted stock compensation expense		—		—		—		—		—		115,781		—			115,781
Common stock and warrants issued , July and August 2004		—		—		40,270		346,100		—		—		—			346,100
Common stock issued for services, August 3, 2004		—		—		6,287		54,037		—		—		—			54,037
Warrants issued for penalty under 2004 Equity Private Placement, August 10, 2005		—		—		—		—		367,000		—		—			367,000
Stock options exercised, December 7, 2004		—		—		110,448		2,565		—		—		—			2,565
Net loss		—		—		—		—		—		—		(6,789,333	)		(6,789,333	)
BALANCE — December 31, 2004		—		—		3,682,884		7,884,351		3,453,879		—		(13,104,816	)		(1,766,586	)
Common stock issued for exercised warrants, February 16, 2005		—		—		123,505		1,047,185		—		—		—			1,047,185
Common stock issued for exercised warrants, March 8, 2005		—		—		55,758		472,750		—		—		—			472,750
Common stock issued for exercised warrants, March 8, 2005		—		—		1,849		4		—		—		—			4
Common stock issued for exercised warrants, March 10, 2005		—		—		146,359		340		—		—		—			340
Common stock issued for exercised options, March 15, 2005		—		—		50,582		118		—		—		—			118
Common stock issued for exercised options, April 28, 2005		—		—		49,089		1,140		—		—		—			1,140
Common stock and warrants issued to settle accounts payable with related party, August 31, 2005		—		—		25,631		16,210		27,339		—		—			43,549
Common stock issued for exercised warrants, September 8, 2005		—		—		397,793		9,241		—		—		—			9,241

F-46

NGTV

(A Development Stage Company)

CONDENSED STATEMENTS OF SHAREHOLDERS’ DEFICIT — (Continued)

													Deficit
													Accumulated
	Preferred Stock				Common Stock*				Additional				During the
									Paid-In		Unearned		Development
	Shares		Amount		Shares		Amount		Capital		Compensation		Stage			Total
Common stock issued for exercised warrants, September 9, 2005		—		—		27,444		638		—		—		—			638
Common stock issued for exercised warrants, September 15, 2005		—		—		287,177		6,671		—		—		—			6,671
Common stock issued for exercised options, September 15, 2005		—		—		134,997		3,136		—		—		—			3,136
Common stock issued for services, September 15, 2005		—		—		17,084		10,804		—		—		—			10,804
Options granted to employees for compensation		—		—		—		—		453,157		—		—			453,157
Options granted to non-employees for services		—		—		—		—		225,316		—		—			225,316
Warrants issued in connection with debt		—		—		—		—		423,050		—		—			423,050
Net loss (as restated)		—		—		—		—		—		—		(6,246,786	)		(6,246,786	)
BALANCE — December 31, 2005 (as restated)		—		—		5,000,152		9,452,588		4,582,741		—		(19,351,602	)		(5,316,273	)
Options compensation expense — employees		—		—		—		—		38,295		—		—			38,295
Options compensation expense — non- employees		—		—		—		—		18,766		—		—			18,766
Net loss		—		—		—		—		—		—		(2,277,330	)		(2,277,330	)
BALANCE — March 31, 2006 (Unaudited)		—	$	—		5,000,152	$	9,452,588	$	4,639,802	$	—	$	(21,628,932	)	$	(7,536,542	)

*  Reflects effect of 23.23 to 1 reverse stock split for common shareholders in December 2005.

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

F-47

NGTV

(A Development Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS

For the Three-Month Periods Ended March 31, 2006 and 2005 and

For the Period June 23, 2000 (Inception) Through March 31, 2006

			(Unaudited)						June 23, 2000
			Three Months Ended						(Inception)
			March 31,						Through
									March 31,
			2006			2005			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss before carryover deficit of predecessor affiliated company			$	(2,277,330	)	$	(926,178	)	$	(20,763,112	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization			80,923			45,316			581,497
	Amortization of debt issuance costs			318,946			—			431,546
	Amortization of debt discount			348,389			—			608,442
	Stock-based employee compensation			38,295			113,289			1,271,511
	Options granted to non-employees for services			18,766			56,329			627,015
	Common stock and/or warrants issued to consultants for services			—			—			496,038
	Penalty warrants expense			—			—			367,000
	Loss on conversion of debt to common stock			—			—			2,359,951
	Change in fair value of derivative liabilities			83,073			—			619,896
	Loss on extinguishment of debt			—			—			675,251
	Interest on common stock subject to redemption			—			—			396,735
	Cumulative effect of change in accounting principle			—			—			212,789
	Changes in operating assets and liabilities:
		Other current assets		(383,386	)		(3,486	)		(407,113	)
		Capitalized production costs		(827,526	)		(400,427	)		(3,846,092	)
		Deposits and other assets		(86,557	)		4,343			(435,335	)
		Accounts payable and accrued liabilities		(68,087	)		(32,526	)		1,752,635
		Accrued executive compensation		27,500			—			1,510,499
Net cash used in operating activities				(2,726,994	)		(1,143,340	)		(13,540,847	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment				(230,326	)		(82,127	)		(1,836,126	)
Net cash used in investing activities				(230,326	)		(82,127	)		(1,836,126	)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related parties				—			200,000			1,891,236
Repayments of advances from related parties				(20,000	)		—			(568,940	)
Principal repayments on capital lease obligation				(37,803	)		(2,424	)		(122,511	)
Proceeds from issuance of notes payable				—			100,000			1,160,000
Repayments on notes payable				—			—			(280,000	)
Proceeds from issuance of convertible notes payable, net				132,000			—			6,128,194
Proceeds from issuance of common stock and warrants, net				—			—			6,502,914
Proceeds from issuance of Series A-1 preferred stock				—			—			973,000
Retirement of Series A-1 preferred stock				—			—			(1,600,000	)
Proceeds from the issuance of common stock				—			—			400
Proceeds from exercise of stock options				—			108			6,959
Proceeds from exercise of warrants				—			1,520,278			1,535,115
Common stock repurchased at cost				—			—			(165	)
Net cash provided by financing activities				74,197			1,817,962			15,626,202
NET (DECREASE) INCREASE IN CASH				(2,883,123	)		592,495			249,229
CASH — beginning of period				3,133,164			48,618			812
CASH — end of period			$	250,041		$	641,113		$	250,041
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
	Income taxes		$	—		$	1,564		$	4,928
	Interest		$	281,329		$	9,352		$	478,753

      See accompanying notes to these unaudited condensed financial statements for more information on non-cash investing and financing activities during the three months ended March 31, 2006 and 2005, and for the period from June 23, 2000 (Inception) through March 31, 2006.

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

F-48

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

March 31, 2006 (Unaudited)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS

Basis of Presentation

      The accompanying condensed balance sheet as of December 31, 2005, which has been derived from the audited financial statements and the unaudited interim condensed financial statements of NGTV (the “Company”) for the three months ended March 31, 2006 and 2005 and for the period June 23, 2000 (Inception) through March 31, 2006 and the related footnote information have been prepared on a basis substantially consistent with the Company’s annual audited financial statements as of December 31, 2005 included elsewhere in this registration statement. In the opinion of management, the accompanying unaudited interim condensed financial statements contain all adjustments (which, except as described elsewhere herein, consisted only of normal recurring adjustments) that management considers necessary to present fairly the financial position of the Company at March 31, 2006 and the results of operations, shareholders’ deficit and cash flows for the three months period ended March 31, 2006 and 2005 and for the period June 23, 2000 (Inception) through March 31, 2006, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain note disclosures normally included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission for the preparation of interim financial statements, although the Company believes that the disclosures made are adequate to make the information not misleading. The accompanying condensed financial statements and the notes thereto should be read in conjunction with the Company’s audited annual financial statements for the year ended December 31, 2005 included beginning on page F-1. The results of operations for the three month periods ended March 31, 2006 are not necessarily indicative of the results anticipated for the entire year ending December 31, 2006.

      In December 2005, the Company’s Board of Directors approved a 23.23 to 1 reverse stock split for common shareholders of record as of December 5, 2005. Common shares outstanding prior to and after the reverse stock split totaled 116,152,273 and 5,000,152 shares, respectively. The December 2005 reverse stock split has been retroactively reflected in the accompanying financial statements for all periods presented. Unless otherwise indicated, all references to outstanding common shares, including common shares to be issued upon the exercise of warrants and options, refer to post-split shares.

Nature of Business

      NGTV is a development stage company incorporated in the state of California. NGTV is currently developing a premium Pay TV cable and satellite service, branded as “No Good TV” that will provide uncensored entertainment and programming focused on the world of celebrities, pop music, movies, television, sports, and pop culture. NGTV programming will include (i) uncensored director’s cut music videos prior to editing for general broadcast, (ii) uncensored celebrity interviews, (iii) live events, and (iv) original shows.

      NGTV was formerly known as Netgroupie, Inc. (“Netgroupie”), a California corporation formed June 23, 2000 (Inception). Netgroupie was formed to become the surviving entity in a merger with MX Entertainment, Inc, a Nevada corporation formed August 5, 1997. As part of the merger, the shareholders of MX Entertainment, Inc. (the “Predecessor”) received shares of Netgroupie on a one-for-one basis and became shareholders in Netgroupie. The transaction between NetGroupie and MX Entertainment, Inc. represented a transfer of equity interests between entities under common control, as the two entities have the same shareholders. Accordingly, the assets and liabilities transferred were recorded at the carrying amounts of the Predecessor at the date of transfer. The deficit carried over from the Predecessor at date of transfer totaled $238,820 and is included in deficit accumulated during the development stage in the accompanying balance sheets and separately reported in the statements of operations.

F-49

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

      In February 2004, NGTV raised approximately $6.2 million in net capital from outside investors through the issuance of 22,950,820 common stock units; each unit includes approximately 1/23 share of common stock and a warrant entitling the holder to purchase approximately 1/46 share of common stock subject to certain terms (the “2004 Equity Private Placement”). Proceeds from the 2004 Equity Private Placement were used for retirement of the Series A-1 preferred shares, production and development of additional programming content, operating expenses and working capital.

      In August 2005, the Company entered into an agreement with an investment bank to undertake an initial public offering (the “2006 Proposed Offering”).

      During the third quarter of 2005, the Company completed a debt restructuring pursuant to which it extended certain obligations including accrued executive compensation, notes payable and payables to related parties into two year and three year notes. These transactions are hereinafter collectively referred to as the “2005 Debt Restructuring” and are more fully described in Notes 5 through Note 8.

      Between September and December 2005, the Company initiated two bridge financings of convertible notes payable which raised approximately $6.8 million in gross proceeds through December 31, 2005 (the “Bridge Financings”). Proceeds from these Bridge Financings were used for working capital purposes (as more fully described in Note 7).

Restatement

      The accompanying December 31, 2005 balance sheet reflects revisions in the accounting for a modification of certain notes payable as an extinguishment (as more fully described in Note 8) and a derivative liability associated with certain notes payable issued in the fourth quarter of 2005, as of the inception of such notes. Such change included revising the allocation of proceeds from such financings between the notes and a related derivative liability, and reflecting the change in the estimated fair value of such derivative liability between the date of inception (or modification) of the notes and December 31, 2005 in the 2005 statement of operations (see Note 10). As a result of these adjustments, total liabilities and shareholders’ deficit at December 31, 2005 decreased by approximately $185,000.

Going Concern Basis of Presentation

      The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has been in the development stage since its inception and has not generated revenues from its principal operations. Additionally, as of March 31, 2006, the Company had an accumulated deficit approximating $21.6 million and a working capital deficit approximating $13.1 million. These matters raise doubt about the Company’s ability to continue as a going concern.

      Management’s plans in regard to these matters are to seek additional sources of capital while the Company continues to grow its library and develop its content at a minimal expense level. Management believes that until the generation of revenues is realized through the distribution of its product, reduced operations can be funded through additional sources of capital, including private placement of equity, issuance of debt instruments, and/or the public offering of its securities.

      The Company entered into an agreement for distribution of its programming on or about July 4, 2005 with iN DEMAND, a multiple system operator providing pay-per-view programming on a network of cable providers. The Company is in negotiations with other cable and satellite programming providers and currently anticipates, subject to the consummation of contracts and other conditions including obtaining sufficient capital for production and normal operations, that programming will be launched in 2006. While the Company strongly believes there will be other distribution agreements in the near term, there is no assurance that the

F-50

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

Company will be able to consummate any other contracts with cable and satellite programming providers or obtain or produce additional programming content.

      Further, there can be no assurance that the Company will ever generate revenues or obtain additional financing on favorable terms or at all. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

2. CERTAIN SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

      The Company prepares its financial statements in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, realizability of capitalized production costs, fair value of derivative liabilities, valuation of equity instruments and other instruments indexed to the Company’s common stock, and deferred income tax asset valuation allowances. Actual results could differ materially from those estimates.

Cash Equivalents

      The Company considers highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. At March 31, 2006 and December 31, 2005, the Company does not have any cash equivalents.

Risks and Uncertainties

      The Company has not yet generated revenue from its principal business operations. As a pre-revenue entity in its current form, the Company faces risks and uncertainties relating to its ability to successfully implement and fulfill its strategy. Among other things, these risks include the ability to develop programming; find channels for its distribution; obtain revenues; manage operations; competition; attract, retain and motivate qualified personnel; maintain and develop new strategic relationships; and the ability to anticipate and adapt to the changing entertainment market and any changes in government regulations. Therefore, the Company may be subject to the risks of delays in consummating contracts with additional satellite programming providers and cable operators, raising sufficient capital to achieve its objectives and other uncertainties, including financial, operational, technological, regulatory and other risks associated with an emerging business, including the potential risks of business failure.

      Entertainment companies with which the Company is expected to compete, in general, are well capitalized. The Company is competing against entities with the financial and intellectual resources and expressed intent of performing rapid technological innovation. The Company’s resources are limited and must be allocated to very focused objectives in order to succeed.

Concentrations

      Financial instruments that may subject the Company to credit risk include uninsured cash-in-bank balances. The Company places its cash with high credit quality institutions. At times, the Company’s bank balance may exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). At March 31, 2006 and December 31, 2005, the Company had approximately $453,000 and $3 million in excess of the FDIC limits, respectively.

F-51

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

Capitalized Production Costs

      The Company capitalizes direct film production costs in accordance with American Institute of Certified Public Accountants Statement of Position (“SOP”) 00-2, “Accounting by Producers or Distributors of Films.” Film production costs include costs to acquire, develop, and adapt raw content, edit, package programming and television specials for distribution on premium channels. Acquisition costs are minimal as the Company produces its own content at minimal cost or receives raw content at no cost (which approximates fair value) from movie or recording studios, artists or other sources seeking enhanced promotion and visibility. Accordingly, film production costs consist primarily of salaries, equipment and production overhead. Production overhead, a component of film costs, includes allocable costs of individuals or departments with exclusive or significant responsibility for the production of programming. Substantially all of the Company’s resources are dedicated to the production of programming. Capitalized production overhead does not include administrative, general or research and development expenses. Marketing, exploitation, and internal costs to promote the NGTV brand are expensed as incurred.

      Capitalized production costs consist solely of direct-to-television product not released and was comprised of the following:

	March 31,
	2006		December 31,
	(Unaudited)		2005
Pre-production costs and library	$	3,227,701	$	2,529,423
In development programming		1,067,589		836,642
	$	4,295,290	$	3,366,065

      During the three months ended March 31, 2006 and the year ended December 31, 2005, the Company capitalized film production costs approximating $929,000 and $2,361,000, respectively. Once programming is released, capitalized production costs will be amortized in the proportion that the revenue during the period for each film bears to the estimated revenue to be received from all sources under the individual-film-forecast-computation method as defined in SOP 00-2.

      Pre-production and library costs include expenditures to acquire and develop raw content, to adapt videos or other properties and to categorize such content (by artist, genre) for inclusion in the Company’s library. The Company draws upon its content library in the production of shows/programs. Consequently, at March 31, 2006, management believes the Company’s library has future economic benefits in excess of capitalized costs. Programs in development are set in production, utilizing the library and/or developing new content. The Company has complete discretion in the development of programs under its distribution agreements. Management regularly evaluates its programs under development to determine if they will be ultimately utilized and delivered. In the event a program is not set in production within three years from the first capitalized transaction, all such costs will be expensed and loss recognized in earnings. Other factors evaluated by management include among others, (1) adverse changes in expected performance prior to release, (2) actual costs in excess of budgeted costs, (3) substantial delays, (4) changes in release plans, and (5) insufficient funding or resources to complete production. Whenever any of these factors is present, an assessment is carried out to determine whether estimated fair value is less than the carrying amounts. Fair value is estimated based on discounted cash flows methodology. Management carried out an evaluation at March 31, 2006, and based on such evaluation, it determined that capitalized production costs are not impaired as of that date. The recovery of such costs is fully dependent upon the successful completion of 2006 proposed offering.

F-52

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

      Participation costs are accrued when incurred. At March 31, 2006 and December 31, 2005, there were no accrued participation costs. Participation costs are not expected to be significant in the foreseeable future until the Company achieves sustainable production and distribution.

      Subsequent to the Company’s expected launch date, revenues are expected to be generated from the distribution and airing of the Company’s programming pursuant to license agreements with cable and satellite television operators and recognized in accordance with SOP 00-2.

Derivative Financial Instruments

      The Company records all derivative financial instruments in its balance sheet at estimated fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in the results of operations or in shareholders’ equity (deficit) as a component of accumulated other comprehensive income, depending on whether the derivative instrument qualifies for hedge accounting as defined by Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities” and related interpretations(“SFAS No. 133”). Changes in the fair value of derivatives not qualifying for hedge accounting are included in the results of operations as they occur.

Basic and Dilutive Loss per Common Share

      The Company computes loss per common share using SFAS No. 128 “Earnings Per Share”. Basic loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts, such as stock options and warrants to issue common stock, were exercised, using the treasury stock method and convertible securities were converted into common shares using the if-converted method (see Note 7 and 8). The Company has recorded net losses from June 23, 2000 (Inception) through March 31, 2006. As a result, potentially dilutive common shares have been excluded from the calculation of diluted net loss per share, because the inclusion of those shares would be anti-dilutive.

3. BASIC AND DILUTED LOSS PER SHARE

      The Company computes loss per common share using SFAS No. 128 “Earnings Per Share”. Accordingly, basic and loss per common share excludes dilution for potentially dilutive securities and is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts, such as convertible debt instruments, stock options and warrants to issue common

F-53

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

stock, were exercised or converted into common stock, using the treasury stock method. When a company is in a loss position, basic and diluted loss per common shares are the same.

		Three Months Ended
		March 31,
		2006			2005
		(Unaudited)
Numerator:
	Net loss	$	(2,277,330	)	$	(926,178	)
Denominator:
Weighted average number of common share outstanding			5,000,152			3,799,737
	Basic and diluted loss per common share	$	(0.46	)	$	(0.24	)

      Potential common shares resulting from options, warrants and convertible debt to acquire 5,137,061 and 4,518,733 common shares at March 31, 2006 and 2005, respectively, have been excluded from the calculation of diluted net loss per share, because the inclusion of those shares would be anti-dilutive.

4. STOCK-BASED COMPENSATION

      The Company has one equity incentive plan (the 2000 Equity Incentive Plan) which provides for the grant of options to officers, directors, employees and consultants of the Company. The term of stock options granted under this plan generally may not exceed 10 years, and generally vest 25% immediately upon the date of grant and thereafter ratably over a stipulated period based on the recipient, generally ranging from two to three years. An aggregate of 469,784 shares of common stock have been authorized for issuance under the 2000 Equity Incentive Plan.

      On January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R) using the prospective transition method. As a result, we expect our compensation expense related to the granting of share-based awards subsequent to adoption to be higher than in prior periods. Under the prospective transition method, nonpublic entities (which include those that become public entities after June 15, 2005) that used the minimum value method of measuring equity share options and similar instruments for either recognition or pro forma disclosure purposes under Statement 123 shall apply SFAS No. 123(R) prospectively to new awards and to awards modified, repurchased, or cancelled on or after the effective date (January 1, 2006). The Company will continue to account for any portion of awards outstanding at the date of initial application using the accounting principles originally applied to those awards (either the minimum value method under SFAS No. 123 or the provisions of Accounting Principles Board (“APB”) Opinion No. 25 and its related interpretive guidance). Consistent with the prospective transition method, our results of operations for prior periods have not been restated.

      Additionally, a nonpublic entity that used the minimum value method for pro forma disclosure purposes under the original provisions of SFAS No. 123 shall not continue to provide those pro forma disclosures for outstanding awards accounted for under the intrinsic value method of APB Opinion 25.

      Prior to January 1, 2006, the Company accounted for stock-based payments under the recognition and measurement provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations as permitted by SFAS No. 123, “Accounting for Stock-Based Compensation.” In accordance with APB Opinion No. 25, no compensation expense was required to be recognized for options granted that had an exercise price equal to or greater than the market value of the underlying common stock on the date of grant.

F-54

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

      The Company follows the straight line method of attributing the value of stock-based compensation expense consistent with periods prior to the adoption of SFAS No. 123(R). The Company recognizes these compensation costs over the service period of the award, which is generally the option vesting term ranging from two to three years.

      During the three months ended March 31, 2006, the Company awarded no stock options and thus, recorded no compensation expense related to stock options after the adoption of SFAS 123(R). In addition, there were no option awards modified, repurchased, or cancelled after December 31, 2005. During the three months ended March 31, 2006, no stock options were exercised, and therefore, no cash was received from stock option exercises.

      For purposes of the valuation of new grants or modification of existing awards, when applicable, the Company intends to utilize the Black-Scholes option pricing model. The valuation methodologies and assumptions in estimating the fair value of stock options that may be granted in 2006 and thereafter will use the historical volatility of our industry sector index as a basis for the expected volatility assumption to value stock options. The Company will begin to accumulate share prices during its trading history for future use. The expected dividend yield will be based on our practice of not paying dividends. The risk-free rate of return will be based on the yield of U.S. Treasury Strips with terms equal to the expected life of the option as of the grant date. The expected life in years will be based on historical stock option exercise experience. The Company will apply its history of forfeitures at the time of grant, and the adoption of SFAS No. 123(R) had no material impact on forfeitures.

      Stock option transactions for our stock option plan for the quarter ended March 31, 2006 are summarized as follows:

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining
	Options		Price		Life
Outstanding at December 31, 2005		386,294	$	2.6646		8.0
Granted		—		—		—
Forfeited		—		—		—
Exercised		—		—		—
Outstanding at March 31, 2006		386,294		2.6646		7.7
Options exercisable at March 31, 2006		317,503		2.6040		7.2

5. ACCRUED EXECUTIVE COMPENSATION

      On July 1, 2003 the Company entered into employment agreements with certain executives and key employees which provide for incentive compensation. Under these agreements, incentive compensation accrues to the extent salary amounts remain unpaid through payroll. The incentive compensation becomes payable as follows: (1) 50%, if and when the Company raises $5 million or more of capital and (2) 50% when the Company raises an additional $10 million or more of capital. Interest has been imputed on such accrued executive compensation at 10%. At December 31, 2004, the Company had accrued executive compensation, including imputed interest at 10% per annum, totaling $1,043,711. During 2005, an additional $680,484 of compensation to these executives and key employees, plus imputed interest at 10%, was accrued and deferred. As a result, accrued executive compensation increased to $1,780,195 prior to the refinancing described below.

      In September 2005, in connection with the 2005 Debt Restructuring, the Company agreed to convert $1,114,711 of accrued executive compensation into long-term notes payable.

F-55

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

      The Company modified the terms of the new notes, effective October 12, 2005. Upon such modification, these notes were reclassified to other convertible notes payable, as presented in the accompanying March 31, 2006 and December 31, 2005 balance sheets (see Note 8).

      During the quarter ended March 31, 2006, the Company imputed interest totaling $10,963 based on 10% per annum. The remaining accrued executive compensation plus imputed interest, totaled $492,833 at March 31, 2006.

6. DUE TO RELATED PARTIES

      Amounts due to related parties consist of the following:

	March 31,
	2006		December 31,
	(Unaudited)		2005
Advances from directors of the Company, which are non-interest bearing; due on demand	$	183,128	$	203,128
Unsecured notes payable from stockholders, bearing interest at 10% per annum; due on demand		242,302		242,302
Advances from officer of the Company, non-interest bearing, due on demand		20,000		20,000
	$	445,430	$	465,430

      In September 2005, in connection with the 2005 Debt Restructuring, the Company replaced related party notes payable totaling $777,057.

      The Company modified these terms of the new notes, effective October 12, 2005. Upon such modification, these notes were reclassified to other convertible notes payable, as presented in the accompanying December 31, 2005 balance sheet (see Note 8).

7. CONVERTIBLE NOTES PAYABLE — BRIDGE FINANCINGS

      Convertible notes payable — Bridge Financings consist of the following:

	March 31,
	2006			December 31,
	(Unaudited)			2005
Convertible notes payable to accredited investors, unsecured, bearing interest at 12% per annum, matures on June 30, 2006	$	1,200,000		$	1,200,000
Convertible notes payable to accredited investors, unsecured, bearing interest at 10% per annum, matures on July 31, 2006		5,785,000			5,635,000
Discount		(464,518	)		(812,907	)
	$	6,520,482		$	6,022,093

      In September, 2005, the Company initiated a bridge financing of notes totaling $1,200,000 (the “September Bridge Financing”). Through March 31 2006, the Company had raised $1,200,000 (before investment bankers’ fees and commissions totaling $162,606). The notes range in principal between $25,000 and $200,000, are unsecured and bear interest at 12% per annum which is payable monthly. The notes carry a mandatory election, whereby the note holder was required to make an election whereby they could (i) convert into units which will remain unregistered for one year at a 50% discount to the initial offering price in the 2006 Proposed Offering and receive a five year warrant for one half share (ii) elect to convert into registered

F-56

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

common units in the 2006 Proposed Offering (each unit consisting of one share of common stock and a warrant to purchase one half share) at 50% of the initial public offering price and have their units purchased by the underwriters or (iii) not convert and be repaid from proceeds. Principal and any unpaid accrued interest are due on June 30, 2006. Proceeds from the notes were used for working capital purposes. Holders of aggregate principal totaling approximately $838,000 in the September Bridge Financing have agreed to convert into common stock units to be registered with the remaining holders expected to receive unregistered common stock units upon the closing of the 2006 Proposed Offering.

      In October 2005, the Company initiated a second bridge financing of notes up to $6.0 million (the “October Bridge Financing”). Through March 31, 2006, the Company had raised $5,785,000 (before investment bankers’ fees and commissions totaling $694,200). The notes vary in principal amount, are unsecured, and bear interest at 10% per annum, which is payable (interest only) monthly. Holders of the notes automatically convert into: (i) common stock units which will remain unregistered for one year at a 33.33% discount to the initial offering price in the 2006 Proposed Offering and receive a five year warrant for one half share or (ii) registered common units in the 2006 Proposed Offering at 66.67% of the initial public offering price and have their units purchased by the underwriters. Principal and any remaining accrued interest are due on July 31, 2006. Proceeds from the notes were used for working capital purposes. Holders of aggregate principal totaling approximately $4,616,000 in the October Bridge Financing have agreed to convert into common stock units to be registered with the remaining holders expected to receive unregistered common stock units upon the closing of the 2006 Proposed Offering.

      Holders of Bridge Financing notes that elected to convert into unregistered shares were provided with a warrant to purchase one half share of common stock. Approximately 120,000 warrants were granted, which constituted a modification to the original terms. The value of the warrants was estimated using the Black-Scholes option-pricing model pursuant to EITF 96-19 and was deemed insignificant.

Liquidated Damages

      The note documents provide that in the event the 2006 Proposed Offering is not completed prior to July 31, 2006, all Bridge Financing notes will become due and payable and, in addition to repayment of the notes on the maturity date, a post-maturity warrant will be issued to each note holder entitling the holder to purchase the number of shares of common stock of the Company equal to the principal amount of each note, at an exercise price equal to the fair market value of one share of common stock as of the maturity date.

Registration Rights

      The Company has agreed, as more fully described in the Bridge Financing documents, to (a) register for resale the securities into which the Bridge Financing notes may be converted in a registration statement to be filed with the SEC as part of its initial public offering (b) for a period of two years following conversion of the notes, grant the holders of the notes certain piggy-back registration rights requiring the Company to register the resale of the securities in any registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) if for any reason that is no longer effective and (c) grant the holders of the securities issuable upon exercise of such warrant certain piggy-back registration rights requiring the Company to register the resale of the shares issuable upon exercise of the post-maturity warrant in any registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) for two years following exercise of the post-maturity warrants.

Evaluation of Conversion Feature and Registration Rights

      The contingent conversion feature embedded in such Company’s Bridge Financing Notes meets all of the criteria of SFAS No. 133 (paragraph 12) for bifurcation; is not part of a conventional convertible debt

F-57

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

financing and does not meet the scope exception of paragraph 11(a) of SFAS No. 133 to be excluded as a derivative. Accordingly, the embedded contingent conversion feature related to the Bridge Financing Notes has been accounted for as a derivative liability (see Note 10).

8. OTHER CONVERTIBLE NOTES

      At March 31, 2006, other convertible Notes consist of notes payable to related parties of $1,895,798 and notes payable to other parties of $1,331,821.

      Notes payable to related parties arose as part of the 2005 Debt Restructuring during the third quarter of 2005, upon the conversion of accrued executive compensation payable of $1,114,711 and other related party obligations totaling $777,057, plus accrued interest, into three year term notes plus warrants (see Notes 5 and 6). As per the original terms, these notes were unsecured, bore interest at 10% per annum, and matured through September 2008.

      Notes payable to other parties relate to two year term notes issued as part of the 2005 Debt Restructuring for $1,258,437 plus accrued interest. As per the original terms, these notes were unsecured, bear interest at 10% per annum and matured at dates through September 2007.

      The Company modified the terms of the aforementioned notes payable, pursuant to which, effective October 12, 2005, holders received the right to convert their notes into common stock units at a discount of 33.33% to the offering price in the 2006 Proposed Offering, as defined. Upon such modification, these notes were reclassified to other convertible notes payable, as presented in the accompanying March 31, 2006 and December 31, 2005 balance sheets (see Note 9). The Company evaluated the modification to these debt instruments in accordance with EITF 96-19 and EITF 05-07 and accounted for the transactions as extinguishments. A loss on extinguishments of approximately $452,000 was recognized in the fourth quarter of 2005.

      The modification provided the note holders with liquidated damages and registration rights similar to the October Bridge Financing holders as described below:

Liquidated Damages

      The note documents (as modified) provide that in the event the 2006 Proposed Offering is not completed prior to July 31, 2006, the notes referred to above will become due and payable and, in addition to repayment of the notes on the maturity date, a post-maturity warrant will be issued to each note holder entitling the holder to purchase the number of shares of common stock of the Company equal to the principal amount of each note, at an exercise price equal to the fair market value of one share of common stock as of the maturity date.

Registration Rights

      Pursuant to the modification, the Company agreed to (a) register for resale the securities into which the notes may be converted in a registration statement to be filed with the SEC as part of its initial public offering (b) for a period of two years following conversion of the notes, grant the holders of the notes certain piggy-back registration rights requiring the Company to register the resale of the securities in any registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) if for any reason the is no longer effective and (c) grant the holder of the securities issuable upon exercise of the post-maturity warrant certain piggy-back registration rights requiring the Company to register the resale of the shares issuable upon exercise of such warrant in any registration statements filed by the Company following the initial public offering (other than registration statements on Form S-4 and S-8) for two years following exercise of the post-maturity warrants.

F-58

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

Evaluation of Conversion Feature and Registration Rights

      The contingent conversion feature embedded in the Company’s notes, as modified meets all the criteria of SFAS No. 133 (paragraph 12) for bifurcation; is not part of a conventional convertible debt financing; and does not meet the scope exception of paragraph 11 (a) of SFAS No 133 to be excluded as a derivative. Accordingly, the contingent conversion feature related to these Notes has been accounted for as a derivative liability (see Note 10).

9. COMMON STOCK SUBJECT TO REDEMPTION

      Pursuant to provisions in certain employment agreements (see Note 14), the Company may be required to purchase shares held by two executives/founders for an amount in cash equal to their fair market value in the event of termination or death. Under SFAS No. 150, which was adopted in 2003, these shares are considered mandatorily redeemable upon an event certain to occur and therefore, outside of the Company’s control. Accordingly, vested shares held by the executives have been classified as liabilities at December 31, 2005 and 2004, respectively. The liability is carried at the estimated redemption amount (or fair value) at each reporting date with changes in redemption amounts reflected in the accompanying statements of operations. Estimated fair value of the Company’s common shares was determined by an independent third-party valuation. Shares subject to mandatory redemption upon termination or death of holders did not change from December 31, 2005, and therefore, there was no effect on the accompanying statements of operations for the three months ended March 31, 2006.

10. DERIVATIVE LIABILITIES

      The Bridge Financing notes (issued between September and December 2005; see Note 7) and certain other notes payable (as modified in the fourth quarter of 2005; see Note 8) provided the holders with an election to convert into common stock units in the 2006 Proposed Offering at a discount (33.33% to 50%) to the initial public offering price. In addition, the note holders were provided with registration rights requiring the underlying common stock units to be registered and have them purchased by the underwriters. The Company will be required to pay significant penalties (in the form of post-maturity warrants) equal in number to the principal amount of each note, in the event the 2006 Proposed Offering is not completed by maturity dates. Management believes the conversion feature embedded in such notes payable (for which conversion was elected) must be bifurcated and accounted for as a derivative liability under SFAS No. 133.

      The embedded contingent conversion feature that is part of such Company’s notes meets all the criteria of SFAS No. 133 paragraph 12 for bifurcation as follows: (i) the economic characteristics of the conversion feature are not closely related to the host Notes payable; (ii) the host Notes payable are not re-measured at fair value under current U.S. GAAP and (iii) a free-standing instrument with the same characteristics as the embedded contingent conversion feature would qualify as a derivative under paragraphs 6-8 of SFAS No. 133. Specifically, (i) there is a notional (the number of shares to be issued at conversion or face amount), (ii) an underlying (the 2006 Proposed Offering price); (iii) no initial investment value at the inception of the contract, and (iv) the contingent conversion feature meets the net settlement criteria because the holders can convert into registered common stock units and have the right to immediately sell such units to the underwriter (at the IPO) (pursuant to paragraphs 6(c) and 9(b) of SFAS No. 133).

      Further, the embedded conversion feature does not meet the scope exception of paragraph 11 (a) of SFAS No. 133. Specifically, because the conversion rate is based on a percentage of the 2006 Proposed Offering price, the number of shares required for settlement of the conversion option is not fixed. As a result, the Bridge Financings notes and Other Convertible notes are not considered conventional convertible debt financings pursuant to EITF 05-02 and thus, an evaluation under EITF 00-19 was carried out. Management determined that the registration rights granted to note holders provide for significant penalties payable, and as

F-59

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

a result, the Company is required to assume settlement in registered shares, which is considered beyond the control of the Company. Accordingly, the contingent embedded conversion feature has been accounted for as derivative liability

      Under SFAS No. 133, a derivative liability is carried at estimated fair value at each reporting date and changes in such value are reflected in results of operations. The Company estimated the fair value of the derivative liabilities associated with the contingent conversion feature embedded in the Bridge Financing notes and the other convertible notes using the methodology described in the following paragraph. With respect to the Bridge Financing notes, the estimated fair value of the derivative liability was approximately $1,073,000 at inception. Proceeds of the Bridge Financings were applied as follows: $5,777,000 to the Bridge Financing Notes, and $1,073,000 to the related derivative liability. Amounts allocated to such derivative liability have been classified as debt discounts and are amortized to interest expense over the term of the notes. With respect to the other convertible notes, the estimated fair value of the derivative liability was approximately $411,000. Such derivative liability was established at the modification date and offset with a corresponding charge to results of operations (the debt modification transaction giving rise to the contingent conversion feature was accounted for as an extinguishment under EITF 96-19, as amended by EITF 05-7).

      Management estimated the fair value of the derivative liabilities (represented by the contingent embedded conversion feature), in consultation with a valuation expert, using the following assumptions: (i) an estimated conversion price at a discount of 33.33% to 50% to the initial offering price, (ii) an estimated initial offering price of $6 per common stock unit, (iii) volatility of 120% using an industry sector index and (iv) a risk free interest rate of 4.7% per annum. In addition, the estimated value of the contingent embedded conversion was adjusted for the probability of completing the initial public offering and a discount for liquidity after the initial public offering.

      Using the same methodology, management estimated the value of such derivative liability at December 31, 2005 and March 31, 2006. The risk free interest rates at March 31, 2006 and December 31, 2005 were 4.8% and 4.9%, respectively. The change in fair value was charged to earnings and totaled approximately $537,000 for the period from inception of the notes to December 31, 2005 and $83,000 for the three months ended March 31, 2006.

11. COMMITMENTS AND CONTINGENCIES

General

      The Company’s commitments and contingencies include the obligations of a producer of programming in the normal course of business. Management believes these matters will not have a material adverse effect, if any, on the Company’s financial position and results of operations.

Leases

      The Company leases its office facilities under a non-cancellable operating lease expiring on February 1, 2009.

F-60

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

      The Company leases certain equipment under capital leases that are included within property and equipment in the accompanying balance sheets. The following is a schedule by years of future minimum lease payments under operating and capital leases as of March 31, 2006:

	Operating		Capital
2006	$	286,443	$	194,982
2007		392,429		259,976
2008		404,197		204,282
2009		33,765		105,501
20010		—		51,531
Thereafter		—		—
	$	1,116,834		816,272
Less amount representing interest				(162,299	)
Present value of net minimum lease payments				653,973
Less current maturities of capital lease obligations				(184,660	)
Capital lease obligations, net of current portion			$	469,313

Legal Matters

      From time to time, claims are made against the Company in the ordinary course of our business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. The Company settled a litigation matter in January 2006 for $141,000, which had been accrued for as of December 31, 2005. The Company is not a party to any other pending or threatened legal proceedings.

12. SUBSEQUENT EVENTS

      In April 2006, the Company granted stock options to acquire 325,000 common shares to an executive officer in connection with the execution of an employment agreement. Of the options granted, 125,000 vested immediately, and the balance was to have vested ratably over a two year period. In May 2006, the Company terminated the employment agreement with the officer for “cause” At the time of termination, a total of 133,333 options were vested. No other options will vest and 191,667 options have been cancelled. The former officer has tendered a written threat of litigation alleging that the Company breached the employment agreement, among other claims. No litigation has yet been filed against the Company. At this time the Company cannot determine what losses, if any, may arise as a result of this dispute other than the possible severance benefits provided under the employment agreement for a termination “without cause”. A termination “without cause” or a resignation for “good reason” provide for the same contractual severance benefits, including, among other things, payment of an amount equal to his base salary through the full term of the agreement, continuation of health insurance benefits, and the accelerated vesting of all unvested options granted to the former officer. The Company is actively engaged in settlement discussions in an attempt to avoid litigation.

      In April 2006, the Company initiated a private secured debt financing in order to sustain operations pending the completion of the initial public offering (the “Debt Financing”). In connection with the Debt Financing, the Company issued and sold 10% Senior Secured Promissory Notes in the principal amount of $3,500,000 (the “Secured Notes”), and issued to each holder of a Secured Note a Warrant to Purchase

F-61

NGTV

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS — (Continued)

Common Stock (the “Debt Warrants”). The Secured Notes accrue interest at the rate of ten percent (10%) per annum and are due and payable on the earlier of (i) the completion of the Company’s initial public offering, or (ii) the first anniversary of the date of issuance. The Secured Notes are secured by a lien on substantially all of the assets of the company. The lien will be released upon payment in full of the Secured Notes at the completion of the Company’s initial public offering. The Debt Warrants entitle the holders to purchase up to 875,000 shares of common stock (assuming the unit offering is completed prior to August 13, 2006) at a price per share equal to the lower of (i) 67% of the per unit price to the public if the offering of the common stock units is completed before August 13, 2006, or (ii) 50% of the per unit price to the public if the offering of the common stock units is completed on or after August 13, 2006. Accordingly, based on an assumed offering price of $6.00 per unit, the Debt Warrants would either be exercisable for $4.00 per share, or $3.00 per share, based on the time the offering of common stock units is completed. The Debt Warrants are exercisable for five years from the date of issuance.

      The common shares underlying the Debt Warrants are entitled to registration rights in favor of the holders, requiring the Company to register the shares (i) on demand, at any time after 180 days following the date hereof (or the completion of the offering of the units), or (ii) as part of any other registration statement the Company may file, other than registrations of stock for the purpose of registering employee stock options, purchase, bonus or other benefit plans.

      In May 2006, the Company entered into a standard distribution arrangement with a large Internet information provider. The Company is negotiating customized terms for this distribution agreement expected to enhance the availability and distribution of its content through this provider.

F-62

      No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

      Until                     all dealers that effect transactions in these securities, whether or not participating in the offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

5,997,174 Units

NGTV

PROSPECTUS

CAPITAL GROWTH FINANCIAL, LLC

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.      Other Expenses of Issuance and Distribution.

      The estimated expenses of the offering, all of which are to be borne by the Registrant, are as follows:

SEC Filing Fee#	$	6,967
Printing Expenses*	$	150,000
Accounting Fees and Expenses*	$	150,000
Legal Fees and Expenses*	$	200,000
Blue Sky Fees and Expenses*	$	5,000
Registrar and Transfer Agent Fee*	$	10,000
Miscellaneous*	$	128,033
Total*	$	650,000

#	Paid with the initial filing of this Registration Statement.
*	Estimated. Includes the Registrant’s American Stock Exchange Application Fee of $65,000 that is refundable to the extent of $60,000, if the application is denied.

Item 14. Indemnification Of Directors And Officers

      Section 204(a)(10) of the California General Corporation Law (the “CGCL”) permits a corporation to include in its Articles of Incorporation provisions eliminating or limiting the personal liability of directors for monetary damages in an action brought by or in the right of the corporation for breach of a director’s fiduciary duties, except: (a) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law; (b) for acts or omissions that a director believes to be contrary to the best interests of a company or its shareholders or that involve the absence of good faith on the part of the director; (c) for any transaction for which a director derived an improper benefit; (d) for acts or omissions that show a reckless disregard for the director’s duty to us or our shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of serious injury to a company or its shareholders; (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to us or our shareholders; (f) with respect to certain transactions, or the approval of transactions in which a director has a material financial interest; or (g) expressly imposed by statute, for approval of certain improper distributions to shareholders or certain loans or guarantees.

      Section 317 of the CGSL requires a corporation to indemnify its directors and other agents to the extent they incur expenses in defending lawsuits brought against them by reason of their status as directors or agents, subject to certain limitations. Section 317 also permits a corporation to indemnify its directors and other agents to a greater extent than specifically required by law.

      Section 5 of our Amended and Restated Articles of Incorporation authorizes us to provide indemnification of our agents (as defined in Section 317(a) of the CGSL) to the fullest extent permissible under the California law through bylaw provisions, agreements with our agents, vote of the shareholders or disinterested directors, or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the CGSL. In addition, we are authorized to provide insurance for agents as set forth in Section 317 of the CGSL.

      We provide indemnification to our officers, directors and agents to the full extent permitted under law. Under Article IX, Section 1 of our bylaws there is a mandatory indemnification clause which requires us, to the extent permitted under the CGCL, to indemnify each of our directors and officers against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by their status as directors or agents. In addition, under Article IX, Section 4 of our bylaws,

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we must purchase and maintain insurance on behalf of any person who is or was an agent of our company against any liability arising out of such person’s status.

      We carry directors’ and officers’ liability insurance covering our directors and officers against liability asserted against or incurred by the person arising out of his or her capacity as an officer or director, including any liability for violations of the Securities Act of 1933 or the Securities Exchange Act of 1934, subject to some exclusions and coverage limitations.

      Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel that the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 15.      Recent Sales of Unregistered Securities

      The following discussion reflects a 23.23-for-1 reverse common stock split that was effective on December 15, 2005, even though the transaction may have occurred prior to that date.

      The following discussion reflects an assumed initial public offering price of units of $6.00 per unit.

      During the past three years, the Registrant issued the following securities without registration under the Securities Act of 1933, as amended (the “Securities Act”):

      On March 15, 2003, the Registrant granted an option to an employee, Ken Stroscher, under the company’s 2000 Equity Incentive Plan (the “Plan”) to purchase up to 21,524 shares of common stock at an exercise price of $0.0023 per share. The board of directors determined that the exercise price was the fair market value of the common stock on the date of grant, as required by the Plan. Mr. Stroscher was an employee at the time of grant of the option serving the Registrant as Vice President of Production. The option was issued as compensation and not as part of any capital raising transaction. The Registrant relied on the exemption from registration pursuant to Section 4(2) of the Securities Act. There were no underwriting commissions or discounts. On March 15, 2005, the option was exercised in full and 21,524 shares of common stock were issued to Mr. Stroscher pursuant to the exercise. At the time of exercise, Mr. Stroscher was a key employee of the Registrant serving as its Vice President of Production. All certificates for the shares contain a restrictive legend under the Securities Act and the restrictions imposed by the Plan. The issuance of such shares upon exercise of the option was exempt from registration pursuant to Section 4(2) of the Securities Act. The Registrant considers Mr. Stroscher to be sophisticated and to have had access to information about the Registrant at the time of the grant and the exercise. The Registrant believes that Mr. Stroscher acquired the options and the shares without a view to distribution.

      On March 15, 2003, the Registrant granted an option to an employee, Caroline Haney, under the company’s 2000 Equity Incentive Plan (the “Plan”) to purchase up to 24,753 shares of common stock at an exercise price of $0.0023 per share. The board of directors determined that the exercise price was the fair market value of the common stock on the date of grant, as required by the Plan. The Registrant relied on the exemption from registration pursuant to Section 4(2) of the Securities Act. There were no underwriting commissions or discounts. Ms. Haney was an employee at the time of grant of the option serving the Registrant as Vice President of Programming. The option was issued as compensation and not as part of any capital raising transaction. On March 15, 2005, the option was exercised in full and 24,753 shares of common stock were issued to Ms. Haney pursuant to the exercise. At the time of exercise, Ms. Haney was a key employee of the Registrant serving as its Vice President of Programming. All certificates for the shares

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contain a restrictive legend. The issuance of such shares upon exercise of the option was exempt from registration pursuant to Rule 701 of the Securities Act. The Registrant considers Ms. Haney to be sophisticated and to have had access to information about the Registrant at the time of the grant and the exercise. The Registrant believes that Ms. Haney acquired the options and the shares without a view to distribution.

      On March 15, 2003, the Registrant granted an option to an employee, Lina Ashar, under the company’s 2000 Equity Incentive Plan (the “Plan”) to purchase up to 4,305 shares of common stock at an exercise price of $0.0023 per share. The board of directors determined that the exercise price was the fair market value of the common stock on the date of grant, as required by the Plan and Rule 701 of the Securities Act. The Registrant relied on the exemption from registration pursuant to Rule 701 of the Securities Act. Ms. Ashar was an employee at the time of grant of the option. The option was issued as compensation and not as part of any capital raising transaction. The Registrant was not subject to the reporting requirements of section 13 or 15(d) of the Exchange Act. The aggregate sales price or amount of securities sold in reliance on this section during any consecutive 12-month period during the time of grant did not exceed $1,000,000, 15% of the total assets of the issuer, nor 15% of the outstanding amount of the common stock. On March 15, 2005, the option was exercised in full and 4,305 shares of common stock were issued to Ms. Ashar pursuant to the exercise. At the time of exercise, Ms. Ashar was an employee of the company. All certificates for the shares contain a restrictive legend. The issuance of such shares upon exercise of the option was exempt from registration pursuant to Rule 701 of the Securities Act.

      On July 1, 2003, the Registrant issued 322,858 shares of restricted common stock to Jay Vir, its Chief Executive Officer and a director, for a cash purchase price of $750. There were no underwriting discounts or commissions. The Registrant relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these shares. There were no underwriting commissions or discounts. Mr. Vir took his shares for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of the shares. All certificates for the shares contain a restrictive legend. The investor was permitted access to our management for the purpose of acquiring investment information. Due to the investor’s status as an officer and director of the Registrant, and his dealings with development companies generally, the Registrant deems the investor sophisticated for the purposes of Section 4(2) of the Securities Act.

      On July 1, 2003, the Registrant issued 172,191 shares of restricted common stock to Kourosh Taj, its Chief Executive Officer and director, for a cash purchase price of $400. There were no underwriting discounts or commissions. The Registrant relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these shares. There were no underwriting commissions or discounts. Mr. Taj took his shares for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of the shares. All certificates for the shares contain a restrictive legend. The investor was permitted access to our management for the purpose of acquiring investment information. Due to the investor’s status as an officer and director of the Registrant, and his dealings with development companies generally, we deem the investor sophisticated for the purposes of Section 4(2) of the Securities Act.

      On July 1, 2003, the Registrant issued 47,353 shares of restricted common stock to Ken Stroscher, an employee, for a cash purchase price of $110. The Registrant relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these shares. There were no underwriting commissions or discounts. Mr. Stroscher took his shares for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of the shares. All certificates for the shares contain a restrictive legend. The investor was permitted access to our management for the purpose of acquiring investment information. Due to the investor’s status as a key employee and his dealings with development companies generally, we deem the investor sophisticated for the purposes of Section 4(2) of the Securities Act.

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      On July 1, 2003, the Registrant issued 47,353 shares of restricted common stock to Caroline Haney, an employee, for a cash purchase price of $110. The Registrant relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these shares. There were no underwriting commissions or discounts. Ms. Haney took her shares for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of the shares. All certificates for the shares contain a restrictive legend. The investor was permitted access to our management for the purpose of acquiring investment information. Due to the investor’s status as a key employee and her dealings with development companies generally, we deem the investor sophisticated for the purposes of Section 4(2) of the Securities Act.

      On January 8, 2004, the Registrant issued a Promissory Note to Modena Investments Inc., in the principal amount of $250,000 (the “Modena Note”) in consideration of a cash loan made to the Registrant on that date. The Modena Note included a mandatory conversion feature whereby, upon raising a maximum private offering of $7,000,000 under an Agency Agreement with Standard Securities Capital Corporation, and satisfying certain other conditions, the Modena Note would convert into 386,470 shares of the Registrant’s restricted common stock. On February 12, 2004, the mandatory conversion feature of the Modena Note was satisfied and the Registrant issued 386,470 shares of its restricted common stock in full satisfaction of the Modena Note. All certificates for the shares contain a restrictive legend. The Registrant relied on Section 4(2) of the Securities Act to issue the shares inasmuch as the Registrant did not engage in general solicitation or advertising in making this offering, the acquirer was an accredited investor, the acquirer was permitted access to the Registrant’s management for the purpose of acquiring investment information, and the loan was made for investment purposes without a view to distribution. There were no underwriting commissions or discounts.

      On January 16, 2004, the Registrant issued a Promissory Note to HJG Partnership in the principal amount of $250,000 (the “HJG Note”) in consideration of a cash loan made to the Registrant on that date. The HJG Note included a mandatory conversion feature whereby, upon raising a minimum private offering of $5,000,000 under an Agency Agreement with Standard Securities Capital Corporation, and satisfying certain other conditions, the HJG Note would convert into the Registrant’s Units offered in the offering at the offering price. The Registrant relied on Section 4(2) of the Securities Act to issue the HJG Note inasmuch as the Registrant did not engage in general solicitation or advertising in making this offering, the acquirer was an accredited investor, the acquirer was permitted access to the Registrant’s management for the purpose of acquiring investment information, and the loan was made for investment purposes without a view to distribution. There were no underwriting commissions or discounts. The mandatory conversion feature was satisfied and the HJG Note was converted into Units in the private offering described below on February 12, 2004.

      On February 12, 2004, the Registrant issued 242,100 shares of restricted common stock to each of Gene Simmons LLC, Richard Abramson LLC, and Allan Brown, in consideration of cancellation of loans previously made to the Registrant in the aggregate of $150,000. Gene Simmons LLC is a limited liability company wholly owned by Gene Simmons, a director and Chairman of the board. Richard Abramson LLC is a limited liability company wholly owned by Richard Abramson, a director. Allan Brown is a former director and former Chief Executive Officer of our company. The Registrant relied on Section 4(2) of the Securities Act to issue the shares inasmuch as the Registrant did not engage in general solicitation or advertising in making this offering, the offerees are accredited investors, and the offerees or the persons who control and own them, occupy an insider status relative to the Registrant that affords them effective access to the information registration would otherwise provide. There were no underwriting commissions or discounts. All certificates for the shares contain a restrictive legend.

      On February 12, 2004, the Registrant granted 98,175 options to each of Gene Simmons, Richard Abramson and Allan Brown, all directors of the Registrant at the time of grant, with vesting over eighteen months and exercise prices of $0.0232 per share. The options were granted in consideration of each individual’s agreement to serve on the Registrant’s board of directors. The options were also granted in consideration of an Executive Employment Agreement entered into as of February 12, 2004 with respect to

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Allan Brown and Richard Abramson, and in consideration of a Consulting and Licensing Agreement with respect to Gene Simmons. The Registrant relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these options. They all took their options for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Act. In addition, there was no general solicitation or advertising for the acquisition of the options or the purchase of the Registrant’s shares upon their exercise. The investors were permitted access to our management for the purpose of acquiring investment information. Due to the investors’ status as directors and their dealings with development companies generally, the Registrant deems the investors sophisticated for the purposes of Section 4(2) of the Act. There were no underwriting commissions or discounts. The options were fully exercised by each director as follows: 36,816 were exercised on December 7, 2004, 16,363 were exercised on April 28, 2005, and 44,997 were exercised on September 16, 2005. The Registrant issued shares of its common stock pursuant to the foregoing option exercises on the dates indicated. In each case, they all took their shares for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Act. In addition, there was no general solicitation or advertising for the purchase of the Registrant’s shares. All certificates for the shares contain a restrictive legend. The investors occupy an insider status relative to the Registrant that affords them effective access to the information registration would otherwise provide. The investors were permitted access to our management for the purpose of acquiring investment information. Due to the investors’ status as directors, the Registrant deems the investors sophisticated for the purposes of Section 4(2) of the Securities Act.

      On February 12, 2004, the Registrant closed a private offering of its securities, issuing 987,982 Units to nineteen individual accredited investors at a price of $7.0852 per Unit, with each Unit consisting of one share of common stock and a one-year warrant to purchase one-half of one share of common stock at an exercise price of $8.479 per share. As a result of the offering, the Registrant received $6.4 million in cash and $650,000 from the conversion of debt for a total of $7 million. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the units were sold without any form of general solicitation or general advertising and sales were made only to accredited investors. In February and March 2005, certain warrants underlying the Units were exercised resulting in the issuance of 327,457 shares of common stock resulting in cash proceeds to the Registrant of $1,520,279. The issuance of shares upon exercise of the warrants underlying the Units was exempt from registration pursuant to Section 506 of the Securities Act. The remaining warrants issued in connection with the foregoing Units expired without exercise.

      In connection with the February 12, 2004 private offering, the Registrant issued a one-year Compensation Option to Standard Securities Capital Corporation, as placement agent for the private offering, entitling the agent to purchase up to 98,799 Units at an exercise price of $7.0852 per Unit. The Compensation Option expired on February 12, 2005 without exercise. The issuance of the Compensation Option to the agent was exempt from registration pursuant to Section 506 of the Securities Act.

      On May 10, 2004, the Registrant issued 157,081 shares of its common stock to Keith Stein, an individual accredited investor, as compensation for consulting services related to the February 12, 2004 private offering. The shares were issued pursuant to an exemption from registration provided by Rule 506 of Regulation D, as they were issued without any form of general solicitation or general advertising and Mr. Stein qualified as an accredited investor.

      On May 19, 2004, the Registrant issued a total of 50,645 Units to two individual accredited investors, Craig Berube and Joseph Reekie, at a price of $7.8982 per Unit, with each Unit consisting of one share of common stock and a one-year warrant to purchase one-half of one share of common stock at an exercise price of $9.292 per share. The warrants expired without exercise in May 2005. As a result of the offering, the Registrant received $400,000 in cash. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the Units were sold without any form of general solicitation or general advertising and sales were made only to accredited investors.

      In July and August, 2004, the Registrant issued a total of 46,557 Units to five individual accredited investors, including Robert Erickson, Harold M. Wolkin, Eryan Corporation, Richardson & Patel LLP, and

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Arshia Harrison Refoua, at a price of $8.5951 per Unit, with each Unit consisting of one share of common stock and a one-year warrant to purchase one-half of one share of common stock at an exercise price of $10.2212 per share. All warrants expired without exercise in July and August 2005. As a result of the offering, the Registrant received approximately $346,000 in cash and $54,000 from the conversion of accrued legal services payable for a total approximating $400,000. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the units were sold without any form of general solicitation or general advertising and sales were made only to accredited investors.

      On August 10, 2004, the Registrant issued 148,198 penalty warrants to the investors in the February 12, 2004 private offering. The Registrant became obligated to issue the penalty warrants as a result of failing to complete a going public transaction by that date. The penalty warrants were issued to the nineteen individual accredited investors with an exercise price of $0.0023 per share. All penalty warrants were exercised on March 10, 2005. The issuance of the penalty warrants, and the issuance of 148,198 shares upon exercise, were exempt from registration under the Securities Act pursuant to Section 506 of the Securities Act, inasmuch as the penalty warrants and the penalty shares were issued pursuant to the February 12, 2004 private offering without any form of general solicitation or general advertising and sales were made only to accredited investors.

      On October 27, 2004, the Registrant issued five-year warrants to two individual accredited investors, Ikza Holding Corporation and Hunter World Markets, Inc., in connection with a one-year bridge loan made to the Registrant in the amount of $150,000. The warrants authorize the holder to purchase up to an aggregate of 10,762 shares of common stock at an exercise price of $3.1361 per share. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the warrants were sold without any form of general solicitation or general advertising and sales were made only to accredited investors.

      On December 23, 2004, the Registrant issued a two-year warrant to an individual accredited investor, BTR Global Growth Trading Limited, in connection with a demand bridge loan made to the Registrant in the amount of $150,000. The warrant grants the holder the right to purchase up to 11,848 shares at an exercise price of $7.5962 per share. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the warrants were sold without any form of general solicitation or general advertising and sales were made only to accredited investors.

      On August 31, 2005 the Registrant issued 25,631 shares of our common stock to its attorneys, Richardson & Patel LLP, and granted a two-year warrant to purchase up to 25,631 shares of common stock at an exercise price of $7.5962 per share with respect to half of the warrant shares and an exercise price of $13.9264 per share with respect to the other half of warrant shares, plus warrants to acquire 44,814 shares at $0.0232 per share. The shares and the warrant were issued in settlement of payables for legal services rendered in connection with both capital raising transactions and non-capital raising transactions. These legal services had a value of approximately $556,000. The Registrant issued these securities in reliance on Section 4(2) of the Securities Act. There was no form of general solicitation or general advertising undertaken and, as the Registrant’s legal counsel, the acquirer occupies a status that affords it effective access to the information registration would otherwise provide. There were no underwriting commissions or discounts.

      In July 2005, the Registrant offered two-year promissory notes (the “July Note Offering”) with warrants. For every dollar accepted under the July Note Offering, a warrant was issued initially equal to the right to purchase one share of common stock for every dollar invested (whether in new money or in conversion of past due debt or obligations). The number of warrants increased every quarter after the date of the investment until the note is repaid in full. A total of $1,003,437 in notes were issued in connection with the July Note Offering to nine accredited investors. A total of 76,239 warrants were issued to the investors with an exercise price of $0.0023 per share, all of which were exercised between the months of July and October, 2005. All warrant certificates have since been amended precluding any further increase in number, and accordingly no warrants remain outstanding under the July Note Offering. As a result of the offering, the Registrant received approximately $525,000 in cash and $478,000 from the conversion of debt for a total of $1,003,437. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the warrants were

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sold and exercised without any form of general solicitation or general advertising and sales were made only to accredited investors.

      In September 2005, the Registrant offered three-year promissory notes (the “September Note Offering”) with warrants. For every dollar accepted under the July Note Offering, a warrant was issued initially equal to the right to purchase one and a half shares of common stock for every dollar invested (whether in new money or in conversion of past due debt or obligations). The number of warrants increased every quarter after the date of the investment until the note is repaid in full. A total of $2,191,768 in notes were issued in connection with the September Note Offering to six investors; Jay Vir, Kourosh Taj, Caroline Haney, Ken Stroscher, SAB 1, LLC, and Lower East Capital Partners. A total of 636,160 warrants were issued to the investors with an exercise price of $0.0232 per share, all of which were exercised in September and October, 2005. All warrant certificates have since been amended precluding any further increase in number, and accordingly no warrants remain outstanding under the September Note Offering. As a result of the offering, the Registrant received no cash and $2,191,768 from the conversion of short term or past due debt for a total of $2,191,768. The Registrant relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these warrants. There were no underwriting commissions or discounts. They all took their warrants for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Act. In addition, there was no general solicitation or advertising for the acquisition of the notes and warrants or the purchase of the Registrant’s shares upon their exercise. The investors were permitted access to our management for the purpose of acquiring investment information. Due to the investors’ access to the Registrant and their dealings with development companies generally, the Registrant deems the investors sophisticated for the purposes of Section 4(2) of the Securities Act.

      On September 23, 2005, the Registrant issued 17,084 shares of common stock to Richard David, its Chief Financial Officer, as compensation for services rendered. The Registrant determined that the value of the services provided was approximately $10,804. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these shares. There were no underwriting commissions or discounts. Mr. David took his shares for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of the shares. All certificates for the shares contain a restrictive legend. The investor was permitted access to our management for the purpose of acquiring investment information. Due to the investor’s status as Chief Financial Officer and his dealings with development companies generally, we deem the investor sophisticated for the purposes of Section 4(2) of the Securities Act.

      On September 28, 2005, the Registrant initiated a private offering of notes in connection with a $1,000,000 bridge financing (the “First Bridge”). Under the terms of the First Bridge, the Registrant issued and sold $1,200,000 of 12% unsecured convertible promissory notes (the “First Bridge Notes”). The First Bridge Notes bear interest at the rate of 12% per annum, and are due and payable June 30, 2006 (the “First Bridge Maturity Date”). The offering was completed on October 26, 2005. The First Bridge Notes contained the following payment and conversion options. Upon issuance of the notes, the holder had the option to convert the outstanding principal amount of, and any accrued and unpaid interest on, its note, into the securities to be issued and sold in the Registrant’s initial public offering of securities resulting in not less than $20,000,000 of gross proceeds to the Registrant (the “IPO”) at a conversion price equal to 50% of the price of such securities. Accordingly, the notes were eligible to be converted into the units offered by the Registrant under the prospectus included in this Registration Statement. In lieu of the conversion alternative, the holder may elect to (a) have all principal and any accrued and unpaid interest paid out of the proceeds of the initial public offering and (b) receive from the Registrant, a five-year warrant (the “IPO Warrant”) to purchase a number of units (identical to the units offered hereby) equal to (1) the outstanding principal amount of the note plus accrued and unpaid interest, divided by (2) the initial unit offering price to the public, exercisable at the offering price to the public. The holders of the First Bridge Notes under their terms were required to make their election as to conversion or repayment of the Notes prior to the filing of this Registration Statement. The holders of First Bridge Notes in the principal amount of $1,062,500 have elected to convert their Notes into

II-7

the units and to have such units registered in this offering, and the holders of First Bridge Notes in the principal amount of $362,500 have elected to not have their units registered in this offering. All but two of the First Bridge Holders that elected to not include their units in this Registration Statement each received an additional warrant to purchase one half share of common stock. Simultaneously with the effectiveness of this Registration Statement, the First Bridge Notes will convert into 400,000 units at 50% discount to the offering price to the public. Accordingly, 279,171 units covered by the prospectus included in this Registration Statement and offered by the selling security holders arise from the conversion of the First Bridge Notes. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the notes were sold and converted into units without any form of general solicitation or general advertising and sales were made only to accredited investors. In connection with the First Bridge, Capital Growth Financial, LLC, a registered broker-dealer, acted as placement agent. Capital Growth Financial, LLC received a commission equal to 10% of the gross proceeds of that offering, $1,200,000, plus reimbursement for actual out-of-pocket expenses, in the amount of $17,606.29.

      On October 13, 2005, the Registrant initiated a private offering of notes in connection with a $6,000,000 bridge financing (the “Second Bridge”). Under the terms of the Second Bridge, the Registrant issued and sold $5,785,000 ($5,635,000 through December 31, 2005) of 12% unsecured convertible promissory notes (the “Second Bridge Notes”). The Second Bridge Notes bear interest at the rate of 10% per annum, payable monthly, and are due and payable in full on July 31, 2006 (the “Second Bridge Maturity Date”). The offering was completed on January 17, 2006. Holders of Second Bridge Notes automatically convert at the effectiveness of the IPO into securities of the type offered in the IPO (the “IPO Securities”) at a 33% discount to the initial offering price to the public. The conversion feature of the Second Bridge Notes is mandatory in connection with the IPO. Accordingly, all of the $5,785,000 of Second Bridge Notes issued to investors in the Second Bridge are being converted into units in connection with the Registrant’s offering of the units under the prospectus included in this Registration Statement. 1,153,888 units covered by the prospectus included in this Registration Statement and offered by the selling security holders arise from the conversion of the First Bridge Notes. However, the holders of $1,169,488 worth of Second Bridge Notes, 292,362 units, elected to not register their units in this offering. The Registrant relied on Section 506 of the Securities Act to issue the securities, inasmuch as the notes were sold and converted into units without any form of general solicitation or general advertising and sales were made only to accredited investors. In connection with the Second Bridge, Capital Growth Financial, LLC, a registered broker-dealer, acted as placement agent. Capital Growth Financial, LLC, received a commission equal to 10% of the gross proceeds of that offering, $5,785,000, plus an expense allowance equal to 2% of the gross offering proceeds of the Second Bridge. Simultaneously with the effectiveness of this Registration Statement, the Second Bridge Notes will convert into 1,153,888 units at a 33% discount to the offering price to the public. The Second Bridge Holders that elected to not include their units in this Registration Statement each received an additional warrant to purchase one half share of common stock.

      On October 12, 2005, the holders of $3,288,095 in the aggregate of notes issued pursuant to the July Note Offering and the September Note Offering, agreed to convert all principal and accrued interest under said notes into new notes on substantially the same terms and conditions as the notes offered for sale in the Second Bridge Offering, described above (the “Conversion Notes”). We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these notes. There were no underwriting commissions or discounts. The investors took the notes for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of the notes. All certificates for the notes contain a restrictive legend. The investor was permitted access to our management for the purpose of acquiring investment information. Upon the effectiveness of the Registration Statement $3,288,095 of the Conversion Notes will convert to 807,024 units at a 33% discount to the offering price to the public. Of such units, 432,865 units are included in this Registration Statement. The balance of 389,161 units are not registered in this Registration Statement. The holders of such units that are not registered received an additional warrant to purchase one half share of common stock.

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      On October 25, 2005, the Registrant granted an option to purchase an aggregate of 210,935 shares of common stock at an exercise price of $2.5855 per share, to five employees; Caroline Haney, Richard David, Natasha Hamidi, Ariel Sinson and Troy Hardy, and an option to purchase 12,915 shares of common stock at an exercise price of $2.5855 per share, to a consultant, Addison Adams, a partner of Richardson & Patel LLP, legal counsel to the Registrant. The options were granted under the Company’s 2000 Equity Incentive Plan (the “Plan”). The board determined that the exercise price was the fair market value of the common stock on the date of grant, as required by the Plan and Rule 701 of the Securities Act. The Registrant relied on the exemption from registration pursuant to Rule 701 of the Securities Act. The recipients were employees (or consultants) at the time of grant of the options. The options were issued as compensation and not as part of any capital raising transaction. The Registrant was not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. The aggregate sales price or amount of securities sold in reliance on this Section during any consecutive 12-month period during the time of grant did not exceed $1,000,000, 15% of the total assets of the issuer, nor 15% of the outstanding amount of the common stock.

      On April 10, 2006, the Registrant issued options to purchase 325,000 shares of common stock to John Burns, its Chief Executive Officer, in connection with his Employment Agreement with the Registrant. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these shares. There were no underwriting commissions or discounts. Mr. Burns took his shares for investment purposes without a view to distribution and had access to information concerning the Registrant and its business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of the shares. All certificates for the shares contain a restrictive legend. The investor was permitted access to our management for the purpose of acquiring investment information. Due to the investor’s status as Chief Executive Officer and his dealings with development companies generally, we deem the investor sophisticated for the purposes of Section 4(2) of the Securities Act.

      In April 2006, the company initiated a private secured debt financing (the “Debt Financing”). In connection with the Debt Financing, the company issued and sold 10% Senior Secured Promissory Notes in the principal amount of $3,500,000 (the “Secured Notes”), and issued to each holder of a Secured Note a Warrant to Purchase Common Stock (the “Debt Warrants”). The Notes accrue interest at the rate of ten percent (10%) per annum and are due and payable on the earlier of (i) the completion of the unit offering described in this prospectus, or (ii) one year after the date of issuance. The Notes are secured by a lien on substantially all of the assets of the company. The lien will be released upon payment in full of the Notes at the completion of the offering described in the prospectus of which this Registration Statement is a part. The Debt Warrants entitle the holders to purchase up to 875,000 shares of common stock (assuming the unit offering is completed on or before August 13, 2006 and at an initial price per unit of $6.00) at a price per share equal to (i) two-thirds of the per unit price to the public if the offering of units is completed on or before August 13, 2006, or (ii) one-half of the per unit price to the public if the offering of units is completed after August 13, 2006. Accordingly, based on an assumed offering price of $6.00 per unit, the Debt Warrants would either be exercisable for $4.00 per share, or $3.00 per share, based on the time the offering of units is completed. The Debt Warrants will become exercisable one year after the date of issuance. Debt Warrants issued in connection with $2,000,000 of Notes will become exercisable on June 2, 2007 and Debt Warrants issued in connection with $1,500,000 of Notes will become exercisable on April 18, 2007. The Debt Warrants are exercisable for five years from the date of issuance. The company relied on an exemption from registration under set forth under Section 4(2) of the Securities Act and all of the holders of the notes and warrants are accredited investors within the meaning of Regulation 501, one of which is also a Qualified Institution Buyer, within the meaning of Rule 144A, who took the notes and warrants for investment purposes only and without a view to distribution.

Item 16.     Exhibits.

No.			Exhibit
	1	.1	Form of Underwriting Agreement between NGTV and the Underwriters.
	1	.2	Form of Selected Dealers Agreement.
	1	.3	Form of Agreement Among Underwriters.

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No.			Exhibit
	1	.4	Form of Underwriting Agreement between the Selling Security Holders and the Underwriters.
	1	.5	Form of Financial Advisory Agreement.
	3	.1##	Second Amended and Restated Articles of Incorporation of NGTV (formerly NETGROUPIE), as amended by the first amendment to Second Amended and Restated Articles of Incorporation of NGTV.
	3	.2##	Bylaws of NGTV (formerly NETGROUPIE), together with all amendments and restatements thereto.
	4	.1	Form of Lock Up Agreement executed by Officers and Directors and 10% or greater Shareholders.
	4	.2##	Investor Rights Agreement, as subsequently amended, dated February 12, 2004, between NGTV and the investors named therein.
	4	.3##	Right of First Refusal and Co-Sale Agreement dated February 12, 2004, between NGTV and the investors named therein.
	4	.4##	Voting Agreement, as subsequently amended, dated February 12, 2004, between NGTV and the investors named therein and Mr. Kourosh Taj, Mr. Jay Vir, and Gene Simmons LLC, Mr. Allan Brown, and Richard Abramson LLC.
	4	.5##	Voting Agreement dated February 12, 2004 between Gene Simmons LLC, Mr. Allan Brown and Richard Abramson LLC and Mr. Keith Stein.
	4	.6##	Anti-Dilution Agreement, dated February 12, 2004, between NGTV and Gene Simmons LLC, Mr. Allan Brown and Richard Abramson LLC and certain investors named therein.
	4	.7##	Form of One-Time Waiver of Registration Rights for Initial Public Offering, dated September 9, 2005, between NGTV and certain investors named in the Investor Rights Agreement.
	4	.8##	Form of One-Time Waiver of Registration Rights for Initial Public Offering, dated September 9, 2005, between NGTV and certain purchasers named in the Note and Warrant Purchase Agreement.
	4	.9##	Form of One-Time Waiver of Registration Rights for Initial Public Offering dated September 9, 2005, between NGTV and various holders of Registration Rights.
	4	.10##	Stock Option Agreement between NGTV and Mr. Gene Simmons, dated February 12, 2004.
	4	.11##	Stock Option Agreement between NGTV and Mr. Allan Brown, dated February 12, 2004.
	4	.12##	Stock Option Agreement between NGTV and Mr. Richard Abramson, dated February 12, 2004.
	4	.13##	Form of Common Stock Purchase Warrant issued by NGTV to Hunter World Markets, Inc. and IKZA Holding Corp. dated October 27, 2004.
	4	.14	Form of Option to be issued by NGTV to the Underwriter.
	4	.15##	Form of Common Stock Certificate.
	4	.16	Form of Public Warrant underlying the Unit.
	4	.17##	Form of 12% Unsecured Promissory Note issued by NGTV, pursuant to the $1 million dollar offering.
	4	.18##	Form of 10% Convertible Promissory Note issued by NGTV, pursuant to the $5 million dollar offering.
	4	.19##	Form of Common Stock Purchase Agreement, dated February 12, 2004, between NGTV and Gene Simmons LLC, Mr. Allan Brown, and Richard Abramson LLC.
	4	.20	Form of Warrant Agreement.
	4	.21##	Form of 10% Debt Conversion Note.
	4	.22##	Form of Registration Rights Letter.
	4	.23	Form of Unit Certificate.
	5		Legal Opinion of Richardson & Patel, LLP.
	10	.1##	Consulting Agreement, between NGTV and Mr. Richard Abramson, dated July 28, 2004.
	10	.2##	Employment Agreement, between NGTV and Mr. Allan Brown, dated February 12, 2004.

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No.			Exhibit
	10	.3##	Consulting Agreement dated as of December 19, 2005 between NGTV and Big Fish Marketing, Inc.
	10	.4##	Employment Agreement, between NGTV and Mr. Richard David, dated March 14, 2005.
	10	.5##	Consulting and License Agreement, between NGTV and Mr. Gene Simmons, dated February 12, 2004.
	10	.6##	Employment Agreement, as amended, between NGTV and Mr. Kourosh Taj, dated July 1, 2003.
	10	.7##	Employment Agreement, as amended, between NGTV and Mr. Jay Vir, dated July 1, 2003.
	10	.8##	Property Lease Agreement, as amended, between SAB1, LLC and 9944 Santa Monica, LLC, dated January 20, 2004.
	10	.9##	Assignment of Lease dated October 20, 2004 among NGTV, SAR1,LLC and 9944 Santa Monica, LLC.
	10	.10##	Equipment Lease Agreement, between NGTV and Avid Financial Services, dated June 23, 2005.
	10	.11##	NGTV 2000 Equity Incentive Plan, as amended.
	10	.12##	Form of Note and Warrant Purchase Agreement, dated as of July 15, 2005 between NGTV and purchasers named therein.
	10	.13##	Agreement between the Registrant and Al Cafaro dated as of November 1, 2005.
	10	.14## **	License Agreement by and between NGTV and iN DEMAND L.L.C. dated January 10, 2006.
	10	.15##	Form of Interview Consent and Release.
	10	.16##	Form of Participant Release.
	10	.17##	Form of Performance Consent.
	10	.18##	Form of Interview Consent and Release.
	10	.19###	Subscription Agreement for the $1 million dollar bridge offering with Form of Investor Questionnaire.
	10	.20###	Subscription Agreement for the $5 million dollar bridge offering with Form of Investor Questionnaire.
	10	.21###	Employment Agreement between NGTV and Mr. John Burns dated April 10, 2006.
	10	.22####	Form of $3.5M Subscription Agreement, April 2006.
	10	.23####	Form of $3.5M Secured Promissory Note, April 2006.
	10	.24####	Form of $3.5M Common Stock Purchase Warrant, April 2006.
	10	.25####	Registration Rights Letter.
	10	.26	Agreement with KCSA dated March 14, 2006.
	10	.27	Agreement with Google, Inc. dated April 18, 2006.
	11####		Earnings Per Share.
	14	.1##	Code of Business Conduct and Ethics, adopted February 1, 2006.
	23	.1	Consent of Squar, Milner, Reehl & Williamson, LLP.
	23	.2	Consent of Richardson & Patel, LLP (included in Exhibit 5).
	23	.3	Consent of Pacific Summit Securities.
	99	.1*	Audit Committee Charter.

**	Confidential treatment requested as to portions of the Exhibit. Omitted materials have been filed separately with the Securities and Exchange Commission.
*	To be filed by amendment.
##	Previously filed on February 3, 2006 with the initial filing of the Registration Statement.
###	Previously filed on April 12, 2006, with the filing of Amendment No. 1 to the Registration Statement.
####	Previously filed on June 5, 2006, with the filing of Amendment No. 2 to the Registration Statement.

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Item 17.     Undertakings.

      (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

      (a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

      (b) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement.

      (c) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

      (2) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

      (3) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

      (a) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

      (b) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

      (c) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

      (d) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

      (4) To provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

      (5) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-12

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Form S-1 to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Beverly Hills, State of California on the 26th day of June 2006.

NGTV

a California corporation

By:  /s/ JAY VIR

Jay Vir, Co-President and Director

By:  /s/ KOUROSH TAJ

Kourosh Taj, Co-President and Director

By:  /s/ RICHARD J. DAVID

Richard J. David, Chief Financial Officer and

Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-1 has been signed by the following persons in the capacities with NGTV and on the dates indicated.

Dated: June 26, 2006	/s/ RICHARD ABRAMSON Richard Abramson, Director
Dated: June 26, 2006	/s/ AL CAFARO Al Cafaro, Director
Dated: June 26, 2006	/s/ ANDREW A. DE FRANCESCO Andrew A. De Francesco, Director
Dated: June 26, 2006	/s/ PATRICK DOVIGI Patrick Dovigi, Director
Dated: June 26, 2006	/s/ GENE SIMMONS Gene Simmons, Director
Dated: June 26, 2006	/s/ KOUROSH TAJ Kourosh Taj, Director
Dated: June 26, 2006	/s/ JAY VIR Jay Vir, Director

II-13 EX-1.1 2 a16366a3exv1w1.htm EXHIBIT 1.1

EXHIBIT 1.1

NGTV

a California corporation

UNDERWRITING AGREEMENT

[5,997,174] Units, each Unit consisting of
One (1) Share of Common Stock and
One (1) Redeemable Common Stock Purchase Warrant

     , 2006

Capital Growth Financial, LLC
225 NE Mizner Blvd., Suite 750
Boca Raton, Florida 33432
As Representative of the Underwriters
named on Schedule A hereto

     Ladies and Gentlemen:

     NGTV, a corporation organized and existing under the laws of California (the “Company”), proposes to issue and sell to the several underwriters named in Schedule B hereto (collectively, the “Underwriters”), for whom Capital Growth Financial, LLC is acting as representative (in such capacity, the “Representative”), and certain shareholders of the Company identified on Schedule A hereto (collectively, the “Selling Security Holders”) severally propose to sell to the Underwriters, an aggregate of [5,997,174] units (the “Firm Units”), each Unit comprised of: one (1) share (each, a “Share” and collectively, the “Shares”) of the Company’s common stock, no par value per share (the “Common Stock”) and one (1) Redeemable Common Stock Purchase Warrant to purchase one-half (1/2) of one (1) share of Common Stock (each, a “Warrant” and collectively, the “Warrants”), of which [4,166,667] Units are to be issued and sold by the Company (the “Company Firm Units”) and [1,830,507] Units are to be sold by the Selling Security Holders (the “Holder Firm Units”), each Selling Security Holder selling the number of Holder Firm Units corresponding to its name on Schedule A.

     Each Warrant entitles its holder to purchase one-half of one share of Common Stock at a per share exercise price equal to the offering price of a Firm Unit, during the period commencing on the Separation Date (as hereinafter defined) and terminating on the five-year anniversary of the Effective Date (as hereinafter defined). Warrants may only be exercised in whole numbers, for full shares of Common Stock. The Warrants shall be redeemable by the Company, at its option, at a price of $.25 per Warrant, provided (i) the Warrants are exercisable, (ii) resale of the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) is the

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subject of an effective registration statement permitting their sale under the Securities Act (as hereinafter defined), and (iii) the Common Stock has closed at an average price in excess of [$8.40] per share for the ten consecutive trading days immediately prior to the date that the Warrants are called for redemption by the Company. The Warrants are to be issued under the terms of a Warrant Agreement (the “Warrant Agreement”) by and between the Company and U.S. Stock Transfer Corporation (the “Warrant Agent”), in substantially the form as most recently filed as an exhibit to the Registration Statement (as hereinafter defined).

     The Company also proposes to sell to the Underwriters, upon the terms and conditions set forth in Section 2(d) hereof, if and to the extent that the Representative elects to purchase, prior to the expiration of forty-five (45) days following the date of this Agreement, on behalf of the Underwriters (the “Over-Allotment Option”), an aggregate additional amount of [899,570] Units (the “Additional Units”). The Firm Units and any Additional Units purchased by the Underwriters, including the Shares and the Warrants forming a part of the Firm Units and Additional Units, are referred to herein as the “Securities.” The Securities are more fully described in the Registration Statement and Prospectus referred to below. The offering and sale of the Securities contemplated by this underwriting agreement (this “Agreement”) is referred to herein as the “Offering.”

     Until notice is given by the Company (“Notice of Separation”) to holders of the Units and to the American Stock Exchange, the Common Stock and the Warrants will be traded only as Units. The Notice of Separation will provide a date, not less than 30 days following the date of the Notice of Separation, that the Units will separate (the “Separation Date”). On the Separation Date the Units will be separated, the Units will cease to trade separately and the Common Stock and Warrants shall thereafter be traded only on a separate basis. The Separation Date shall be a date designated by the Representative, in its sole discretion, upon not less than 30 days’ prior written notice to the Company, but in no event prior to the later of (i) sixty (60) days following the effective date of the Registration Statement (as hereinafter defined), or (ii) sixty (60) days following the exercise by the Representative of the Over-Allotment Option

     The terms and conditions under which the Selling Security Holders will sell their Holder Firm Units to the Underwriters are contained in a Selling Security Holder Underwriting Agreement of even date herewith, by and between the Company, the Representative and the Selling Security Holders (the “Selling Security Holder Underwriting Agreement”).

     1. Representations and Warranties of the Company. The Company represents, warrants and covenants to, and agrees with, each of the Underwriters that, as of the date hereof and as of the Closing Date and each Additional Closing Date:

          (a) The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (Registration No. 333-131508), and amendments thereto, and related preliminary prospectuses for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the Securities and the securities underlying the Representative’s Unit Purchase Option (as hereinafter defined) which registration

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     , 2006
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statement, as so amended (including post-effective amendments, if any), has been declared effective by the Commission. The registration statement, as amended at the time it became effective, including the prospectus, financial statements, schedules, exhibits and other information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter referred to as the “Registration Statement.” If the Company has filed or is required pursuant to the terms hereof to file a registration statement pursuant to Rule 462(b) under the Securities Act registering additional shares of Common Stock or Warrants, or providing previously omitted information under Rule 430A (a “Rule 462(b) Registration Statement”), then, unless otherwise specified, any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes effective upon filing, no other document with respect to the Registration Statement has heretofore been filed with the Commission. All of the Securities have been registered under the Securities Act pursuant to the Registration Statement or, if any Rule 462(b) Registration Statement is filed, will be duly registered under the Securities Act with the filing of such Rule 462(b) Registration Statement. Based on communications from the Commission, no stop order suspending the effectiveness of either the Registration Statement or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. The Company, if required by the Securities Act and the rules and regulations of the Commission (the “Rules and Regulations”), proposes to file the Prospectus with the Commission pursuant to Rule 424(b) under the Securities Act (“Rule 424(b)”). The prospectus, in the form in which it is to be filed with the Commission pursuant to Rule 424(b), or, if the prospectus is not to be filed with the Commission pursuant to Rule 424(b), the prospectus in the form included as part of the Registration Statement at the time the Registration Statement became effective, is hereinafter referred to as the “Prospectus,” except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the Offering which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b)), the term “Prospectus” shall also refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is first provided to the Underwriters for such use. Any preliminary prospectus or prospectus subject to completion included in the Registration Statement or filed with the Commission pursuant to Rule 424 under the Securities Act is hereafter called a “Preliminary Prospectus.” Any reference herein to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to the effective date of the Registration Statement, the date of such Preliminary Prospectus or the date of the Prospectus, as the case may be. All references in this Agreement to the Registration Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus and the Prospectus, or any amendments or supplements to any of the foregoing shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). All references in this Agreement to the “Exchange Act” shall mean Securities Exchange Act of 1934, as amended, together with the Rules and Regulations promulgated thereunder.

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          (b) At the time of the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement or the effectiveness of any post-effective amendment to the Registration Statement, when the Prospectus is first filed with the Commission pursuant to Rule 424(b), when any supplement to or amendment of the Prospectus is filed with the Commission, when any document filed under the Exchange Act was or is filed and at the Closing Date and the Additional Closing Date (as hereinafter respectively defined), if any, the Registration Statement and the Prospectus and any amendments thereof and supplements or exhibits thereto complied or will comply in all material respects with the applicable provisions of the Securities Act, the Exchange Act and the Rules and Regulations, and did not and will not contain an untrue statement of a material fact and did not and will not omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. To the best of the Company’s knowledge, when any Preliminary Prospectus was first filed with the Commission (whether filed as part of the registration statement for the registration of the Shares or any amendment thereto or pursuant to Rule 424(a) under the Securities Act) and when any amendment thereof or supplement thereto was first filed with the Commission, such Preliminary Prospectus and any amendments thereof and supplements thereto complied in all material respects with the applicable provisions of the Securities Act and the Rules and Regulations and did not contain an untrue statement of a material fact and did not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. No representation and warranty is made in this subsection (b), however, with respect to any information contained in or omitted from the Registration Statement or the Prospectus or any related Preliminary Prospectus or any amendment thereof or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representative specifically for use therein. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the information included in the “Underwriting” section of the Prospectus

          (c) To the best of the Company’s knowledge, Squar Milner Rheel & Williamson, LLP, which has expressed its opinion with respect to the financial statements and schedules filed as part of the Registration Statement, are independent registered public accountants as required by the Securities Act, the Exchange Act and the Rules and Regulations.

(d) Subsequent to the respective dates as of which information is presented in the Registration Statement and the Prospectus, and except as disclosed in the Registration Statement and the Prospectus: (i) the Company has not declared, paid or made any dividends or other distributions of any kind on or in respect of its capital stock, and (ii) there has been no material adverse change, whether or not arising from transactions in the ordinary course of business, in or affecting: (A) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of the Company, taken as a whole; (B) the long-term debt or capital stock of the Company; or (C) the Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus (a “Material Adverse Change”). Since the date of the latest balance sheet presented in the Registration Statement and the Prospectus, the Company has not incurred or undertaken

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     , 2006
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any liabilities or obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including any acquisition or disposition of any business or asset, which are material to the Company, except for liabilities, obligations and transactions which are disclosed in the Registration Statement and the Prospectus and after giving effect to the Offering and other transactions contemplated by the Offering and this Agreement.

          (e) As of the dates indicated in the Prospectus, the authorized, issued and outstanding shares of capital stock of the Company were as set forth in the Prospectus in the column headed “March 31, 2006” under the section thereof captioned “Capitalization” and, after giving effect to the debt conversion described in the Prospectus, will be as set forth in the column headed “March 31, 2006 Adjusted for Debt Conversion” in such section. After giving effect to the debt conversion described in the Prospectus, the other transactions contemplated by this Agreement, the Registration Statement and the Prospectus, the authorized, issued and outstanding shares of capital stock of the Company will be as set forth in the column headed “March 31, 2006 Post Offering” in the section of the Prospectus captioned “Capitalization.” Except as disclosed in the Registration Statement and Prospectus, all of the issued and outstanding Relevant Securities are fully paid and non-assessable and have been duly and validly authorized and issued, in compliance with all applicable state, federal and foreign securities laws and not in violation, of or subject to any preemptive or similar right that does or will entitle any Person (as defined below), upon the issuance or sale of any security, to acquire from the Company any Relevant Security, as would have a Material Adverse Affect on the Company. As used herein, the term “Relevant Security(ies)” means any Common Stock, Warrant or other security of the Company that is convertible into, or exercisable or exchangeable for Common Stock or equity securities, or that holds the right to acquire any Common Stock or equity securities of the Company or any other such Relevant Security, except for such rights as may have been fully satisfied or waived prior to the effectiveness of the Registration Statement. As used herein, the term “Person” means any foreign or domestic individual, corporation, trust, partnership, joint venture, limited liability company or other entity.

          (f) The Units and the Shares are duly authorized, and when issued and delivered pursuant to this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights of any security holder of the Company. Neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated in this Agreement gives rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any shares of Common Stock, except as described in the Registration Statement.

          The Warrants have been duly authorized and, when issued and delivered pursuant to this Agreement, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or other laws affecting the right of creditors generally or by general equitable principles, and holders thereof will be entitled to the benefits provided by the Warrant Agreement pursuant to which such Warrants are to be

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     , 2006
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issued. The Warrant Shares have been reserved for issuance and when issued in accordance with the terms of the Warrants and Warrant Agreement, including payment of the agreed consideration therefore, will be duly and validly authorized, validly issued, fully paid and non-assessable, and free of preemptive rights and no personal liability will attach to the ownership thereof. The Warrant Agreement has been duly authorized and, when executed and delivered will constitute the valid and legally binding obligation of the Company enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws affecting the rights of creditors generally or by general equitable principles.

          The Units issuable upon exercise of the Representatives Purchase Option (as hereinafter defined) and the Shares and the Warrants issuable upon exercise of the Representative’s Purchase Options have been duly authorized and, when duly issued and delivered, such Shares and Warrants will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms and entitled to the benefits provided by the Representative’s Option Agreement, Representative’s Unit Purchase Option, except as enforceability may be limited by bankruptcy, insolvency or other laws affecting the rights of creditors generally or by general equitable principles and the indemnification contained in paragraph 7 of the Representative’s Option Agreement (as hereinafter defined) may be unenforceable. The shares of Common Stock included in the Representative’s Purchase Options (and the shares of Common Stock issuable upon exercise of the Warrants included therein) when issued and sold in accordance with the terms thereof, will be duly authorized, validly issued, fully paid and non-assessable and free of preemptive rights and no personal liability will attach to the ownership thereof.

          (g) The Units, Common Stock, Warrants, including the Common Stock and Warrants issuable upon exercise of the Representative’s Unit Purchase Option (as hereinafter defined), have been duly and validly authorized and, when issued, delivered and paid for in accordance with this Agreement and as described in the Prospectus on each of the Closing Date and the Additional Closing Date, as applicable, will be duly and validly issued, fully paid and non-assessable, will have been issued in compliance with all applicable state, federal and foreign securities laws and will not have been issued in violation of or subject to any preemptive or similar right that does or will entitle any Person to acquire any Relevant Security from the Company upon issuance or sale of Securities in the Offering. The shares of Common Stock and the Warrants comprising the Securities conform to the descriptions thereof contained in the Registration Statement and the Prospectus. The Warrant Shares, including the shares of Common Stock issuable upon exercise of the Representative’s Unit Purchase Option, have been duly and validly authorized and, when issued, delivered and paid for in accordance with the terms of the Warrants, will be duly and validly issued, fully paid and non-assessable, will have been issued in compliance with all applicable state, federal and foreign securities laws and will not have been issued in violation of or subject to any preemptive or similar right that does or will entitle any Person to acquire any Relevant Security from the Company upon issuance or sale of Securities in the Offering. Except as disclosed in the Registration Statement and the Prospectus, the Company has no outstanding warrants, options or other securities convertible into Common

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     , 2006
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Stock, or any preemptive rights or other rights to subscribe for or to purchase, or any contracts or commitments to issue or sell, any Relevant Security.

          (h) The Company has no subsidiaries within the meaning of Rule 405 under the Securities Act.

          (i) The Company has been duly incorporated and validly exists in good standing under the laws of its jurisdiction of organization. The Company has all requisite power and authority to carry on its business as it is currently being conducted and as described in the Prospectus, and to own, lease and operate its respective properties. The Company is qualified to do business and is in good standing as a foreign corporation, partnership or limited liability company in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or the nature or conduct of its business makes such qualification necessary, except, in each case, for those failures to be so qualified or in good standing which (individually and in the aggregate) could not reasonably be expected to have a material adverse effect on: (i) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of the Company, taken as a whole; (ii) the long-term debt or capital stock of the Company; or (iii) the Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus (any such effect being a “Material Adverse Effect”).

          (j) Except as set forth in the Registration Statement, the Company is not: (i) in violation of its articles of incorporation or by-laws, (ii) in default under, and no event has occurred which, with notice or lapse of time or both, would constitute a default under or result in the creation or imposition of any lien, charge, encumbrance, claim or security interest (collectively, “Lien”) upon any of its property or assets pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject and/or (iii) in violation in any respect of any law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, foreign or domestic; except [in the case of clause (ii) above] for any Lien disclosed in the Registration Statement and the Prospectus, or in the case of (i), (ii) and (iii) above which would have a Material Adverse Effect.

          (k) The Company has full right, power and authority to execute and deliver this Agreement, the Representative’s Option Agreement, the Representative’s Unit Purchase Option (as hereinafter defined), the Warrant Agreement and the Financial Advisory Agreement (as hereinafter defined), to perform its obligations hereunder and thereunder and to consummate each of the transactions contemplated hereunder and thereunder. The Company has duly and validly authorized this Agreement, the Representative’s Option Agreement, the Representative’s Unit Purchase Option, the Warrant Agreement and the Financial Advisory Agreement and each of the transactions contemplated hereby and thereby. This Agreement, the Representative’s Option Agreement, the Representative’s Unit Purchase Option, the Warrant Agreement and the Financial Advisory Agreement have been duly and validly executed and delivered by the Company and each constitutes the legal, valid and binding obligation of the Company and is

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enforceable against the Company in accordance with its terms, except as enforceability may be limited by the laws of equity or applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          (l) The execution, delivery, and performance of this Agreement, the Representative’s Option Agreement, the Representative’s Unit Purchase Option, the Warrant Agreement and the Financial Advisory Agreement and the consummation of the transactions contemplated hereby and thereby and do not and, to the knowledge of the Company, will not: (i) conflict with, require consent under or result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any Lien upon any property or assets of the Company pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement, instrument, franchise, license or permit to which the Company is a party or by which the Company or its properties, operations or assets may be bound or (ii) violate or conflict with any provision of the articles of incorporation or by-laws of the Company, or (iii) violate or conflict with any law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, domestic or foreign, to which the Company is subject, the non-compliance with which would have a Material Adverse Effect.

          (m) The Company has all material consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other legal or governmental agencies and bodies and all third parties, foreign and domestic (collectively, the “Consents”), to own, lease and operate its properties and conduct its business as it is now being conducted and as disclosed in the Registration Statement and the Prospectus, except where the failure to obtain such Consents would not have a Material Adverse Effect, and each such Consent is valid and in full force and effect. The Company has not received notice of any investigation or proceedings which results in or, if decided adversely to the Company, could reasonably be expected to result in, the revocation of, or imposition of a materially burdensome restriction on, any Consent. No Consent contains a materially burdensome restriction not adequately disclosed in the Registration Statement and the Prospectus.

          (n) The Company complies, in all material respects, with all applicable laws, rules, regulations, ordinances, directives, judgments, decrees and orders, foreign and domestic, including those relating to transactions with affiliates, within the meaning of Rule 144 under the Securities Act (“Affiliates”), the non-compliance with which would not have a Material Adverse Effect.

          (o) The Representative’s Unit Purchase Option (as hereinafter defined) will conform to the description thereof in the Registration Statement and in the Prospectus (and, if the Prospectus is not in existence, the most recent Preliminary Prospectus) and, when sold to and paid for by the Representative in accordance with the Representative’s option agreement (“Representative’s Option Agreement”), which includes the form of Representative’s Unit

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Purchase Option, will have been duly authorized and validly issued and will constitute valid and binding obligations, enforceable against the Company in accordance with its terms, except as enforceability may be limited by the laws of equity or applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The shares of Common Stock and Warrants issuable upon exercise of the Representative’s Unit Purchase Option, including the Common Stock issuable upon exercise of such Warrants (the “Representative’s Option Securities”) have been duly authorized and reserved for issuance upon exercise of the Representative’s Unit Purchase Option by all necessary corporate action on the part of the Company and, when issued and delivered and paid for upon such exercise in accordance with the terms of the Representative’s Unit Purchase Option, will be validly issued, fully paid, nonassessable and free of preemptive rights and will conform to the description thereof in the Prospectus (and, if the Prospectus is not in existence, the most recent Preliminary Prospectus).

          (p) No Consent of, with or from any judicial, regulatory or other legal or governmental agency or body or any third party, foreign or domestic, is required for the execution, delivery and performance of this Agreement, the Representative’s Option Agreement, the Representative’s Unit Purchase Option, the Warrant Agreement or the Financial Advisory Agreement or consummation of each of the transactions contemplated hereby or thereby, including the issuance, sale and delivery of the Securities and the Representative’s Option Securities to be issued, sold and delivered hereunder and thereunder, except the registration under the Securities Act of the Securities and the Representative’s Option Securities, which has become effective, and such Consents as may be required under state securities or blue sky laws or the by-laws and rules of the American Stock Exchange LLC (“AMEX”) or other applicable self regulatory organization, each of which, to the best of the Company’s knowledge or belief, has been obtained and is in full force and effect.

          (q) Except as disclosed in the Registration Statement and the Prospectus, there is no judicial, regulatory, arbitral or other legal or governmental proceeding or other litigation or arbitration, domestic or foreign, pending to which the Company is a party or of which any property, operations or assets of the Company is the subject which, individually or in the aggregate, if determined adversely to the Company or any Subsidiary, could reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, no such proceeding, litigation or arbitration has been threatened; and the defense of all such proceedings, litigation and arbitration against or involving the Company could not reasonably be expected to have a Material Adverse Effect.

          (r) The financial statements, including the notes thereto, and the supporting schedules included in the Registration Statement and the Prospectus present fairly the financial position of the Company as of the dates indicated and the cash flows and results of operations for the periods. Except as otherwise stated in the Registration Statement and the Prospectus, said financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved.

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          (s) There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement and the Prospectus in accordance with Regulation S-X which have not been included as so required. The pro forma and pro forma as adjusted financial information included in the Registration Statement and the Prospectus under the captions “Capitalization,” “Dilution,” “Principal Shareholder” “Prospectus Summary — Common stock to be outstanding after the offering” has been properly compiled in all material respects and prepared in all material respects in accordance with the applicable requirements of the Securities Act and the Rules and Regulations and include all adjustments necessary to a fair presentation of such information.

          (t) The statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.

          (u) The Securities have been approved for listing on the AMEX, subject to official notice of issuance.

          (v) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Management has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company is made known to the Company’s principal executive officer and principal financial officer, or persons performing similar functions, by others within those entities and are effective in all material respects to perform the functions for which they were established. Based on its evaluation of its disclosure controls and procedures, the Company is not aware of (a) any significant deficiency in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data nor any material weaknesses in internal controls; or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

          (w) Except as disclosed in the Registration Statement and to the AMEX, the Company’s Board of Directors has validly appointed, or within the time permitted by the rules and regulations of AMEX, will validly appoint, an audit committee whose composition satisfies the requirements of Section 803 of the AMEX Company Guide (“AMEX Rules”) and the Board of Directors and/or audit committee has adopted a charter that satisfies the requirements of

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Section 121 of the AMEX Rules. Neither the Board of Directors nor the audit committee has been informed, nor is any director of the Company aware, of: (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

          (x) The Company own or possess, or can acquire on commercially reasonable terms, all legally enforceable rights to use all trademarks, service marks, trade names, domain names, copyrights, patents, inventions and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) as are necessary for the conduct of its business as now conducted and as proposed to be conducted, all as described in the Prospectus (“Intellectual Property”), except where the failure to own, possess or acquire such rights would not result in a Material Adverse Effect. Except as described in the Prospectus, (i) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any such Intellectual Property, (ii) there is no pending or threatened (in writing) action, suit, proceeding or claim by others challenging the Company’s rights in or to any such Intellectual Property, (iii) the Intellectual Property owned by the Company and, to the knowledge of the Company, the Intellectual Property licensed to the Company has not been adjudged invalid or unenforceable, in whole or in part, and there is no pending or threatened (in writing) action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, (iv) there is no pending or threatened (in writing) action, suit, proceeding or claim by others against the Company that the Company infringes, misappropriates or otherwise violates any intellectual property or other proprietary rights of others, and the Company has received no written notice of such claim, and (v) to the Company’s knowledge, no employee of the Company is the subject of any claim or proceeding involving a violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company or actions undertaken by the employee while employed with the Company, except, in each case in clauses (i) through (v), for any instances which would not, individually or in the aggregate, result in a Material Adverse Effect. None of the technology employed by the Company has been obtained or, to the Company’s knowledge, is being used by the Company in violation of the rights of any person or third party that could result in a Material Adverse Effect.

          (y) The Company has not violated: (i) the Bank Secrecy Act, as amended, (ii) the Money Laundering Control Act of 1986, as amended, (iii) the Foreign Corrupt Practices Act, or (iv) the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated under any such law, or any successor law, except for such violations which, singly or in the aggregate, would not have a Material Adverse Effect.

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          (z) During the period of 180 days after the effective date of the Registration Statement, neither the Company nor any of its Affiliates will directly or indirectly, take any action which constitutes or is designed to cause or result in, or which could reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities.

          (aa) The SEC Staff has not advised the Company that, in the view of the Staff, the Company or any of its Affiliates has, prior to the date hereof, made any offer or sale of any securities which are required to be “integrated” pursuant to the Securities Act or the Rules and Regulations with the offer and sale of the Securities pursuant to the Registration Statement.

          (bb) Except as disclosed in the Registration Statement and the Prospectus, no holder of any Relevant Security has any rights to require registration of any Relevant Security as part or on account of, or otherwise in connection with, the offer and sale of the Securities contemplated hereby, and any such rights so disclosed have either been fully complied with by the Company or effectively waived by the holders thereof, and any such waivers remain in full force and effect.

          (cc) To the Company’s knowledge, the conditions for use of Form S-1 to register the Offering under the Securities Act, as set forth in the General Instructions to such Form, have been satisfied.

          (dd) To the Company’s knowledge, it is not and, at all times up to and including consummation of the transactions contemplated by this Agreement, and after giving effect to application of the net proceeds of the Offering, will not be, subject to registration as an “investment company” under the Investment Company Act of 1940, as amended, and is not and will not be an entity “controlled” by an “investment company” within the meaning of such act.

          (ee) There are no contracts or other documents (including, without limitation, any voting agreement), which are required to be described in the Registration Statement and the Prospectus or filed as exhibits to the Registration Statement by the Securities Act, the Exchange Act or the Rules and Regulations and which have not been so described, filed or incorporated by reference.

          (ff) No relationship, direct or indirect, exists between or among any of the Company or any Affiliate of the Company, on the one hand, and any director, officer, shareholder, customer or supplier of the Company or any affiliate of the Company, on the other hand, which is required by the Securities Act, the Exchange Act or the Rules and Regulations to be described in the Registration Statement or the Prospectus which is not so described and described as required. Except as disclosed in the Registration Statement and the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members, except as disclosed in the Registration Statement and the Prospectus. The Company has not, in

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violation of the Sarbanes-Oxley Act of 2002 (“Sarb-Ox”), directly or indirectly (other than as permitted under the Sarb-Ox for depositary institutions), extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

          (gg) Except as set forth in the Registration Statement and Prospectus, the Company is in material compliance with the provisions of Sarb-Ox and the Rules and Regulations promulgated thereunder and related or similar rules and regulations promulgated by AMEX or any other governmental or self regulatory entity or agency, except for such violations which, singly or in the aggregate, would not have a Material Adverse Effect. Without limiting the generality of the foregoing, except as set forth in the Registration Statement and Prospectus: (i) all members of the Company’s board of directors who are required to be “independent” (as that term is defined under applicable laws, rules and regulations), including, without limitation, all members of the audit committee of the Company’s board of directors, meet the qualifications of independence as set forth under applicable laws, rules and regulations and (ii) the audit committee of the Company’s board of directors does not have at least one member who is an “audit committee financial expert” (as that term is defined under applicable laws, rules and regulations).

          (hh) Except as disclosed in the Registration Statement and the Prospectus, there are no contracts, agreements or understandings between the Company and any Person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or other like payment in connection with the transactions contemplated by this Agreement or, to the Company’s knowledge, and as otherwise disclosed to the Underwriters, any arrangements, agreements, understandings, payments or issuance with respect to the Company or any of its officers, directors, shareholders, partners, employees or Affiliates that may affect the Underwriters’ compensation as determined by the NASD.

          (ii) The Company owns no real property. The Company leases all such properties as are necessary to the conduct of its business as presently operated and as proposed to be operated as described in the Registration and the Prospectus. The Company has good and marketable title to all personal property owned by it, in each case free and clear of all Liens except such as are described in the Registration Statement and the Prospectus or such as would not (individually or in the aggregate) have a Material Adverse Effect. Any real property and buildings held under lease or sublease by the Company is held by it under valid, subsisting and enforceable leases with such exceptions as are not material to, and do not interfere with, the use made and proposed to be made of such property and buildings by the Company. The Company has received no any notice of any claim adverse to its use of any real or personal property or of any claim against the continued possession of any real property, whether owned or held under lease or sublease by the.

          (jj) The Company maintains insurance of the types and in the amounts which are customary for companies engaged in similar businesses, including, but not limited to: (i) directors’ and officers’ insurance (including insurance covering the Company, its directors and

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officers for liabilities or losses arising in connection with this Offering, including, without limitation, liabilities or losses arising under the Securities Act, the Exchange Act, the Rules and Regulations; and (ii) insurance covering real and personal property owned or leased by the Company against theft, damage, destruction, acts of vandalism and all other risks customarily insured against. There are no claims by the Company under any policy or instrument described in this subparagraph as to which any insurance company is denying liability or defending under a reservation of rights clause. All of the insurance policies described in this subparagraph are in full force and effect. The Company has not been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not materially adversely affect the business, business prospects, properties, condition (financial or otherwise) or results of operations of the Company.

          (kk) The Company has accurately prepared and timely filed all federal, state, foreign and other tax returns that are required to be filed by it and has paid or made provision for the payment of all taxes, assessments, governmental or other similar charges, including without limitation, all sales and use taxes and all taxes which the Company is obligated to withhold from amounts owing to employees, creditors and third parties, with respect to the periods covered by such tax returns (whether or not such amounts are shown as due on any tax return). No deficiency assessment with respect to a proposed adjustment of the Company’s federal, state, local or foreign taxes is pending or, to the Company’s knowledge, threatened. The accruals and reserves on the books and records of the Company in respect of tax liabilities for any taxable period not finally determined are adequate to meet any assessments and related liabilities for any such period and, since the date of the Company’s most recent audited financial statements, the Company has not incurred any liability for taxes other than in the ordinary course of its business. There is no tax lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business of the Company.

          (ll) No labor disturbance by the employees of the Company currently exists or, to the Company’s knowledge, is likely to occur.

          (mm) The Company has at all times operated its business in material compliance with all Environmental Laws, and no material expenditures are or will be required in order to comply therewith. The Company has received no any notice or communication that relates to or alleges any actual or potential violation or failure to comply with any Environmental Laws that will result in a Material Adverse Effect. As used herein, the term “Environmental Laws” means all applicable laws and regulations, including any licensing, permits or reporting requirements, and any action by a Federal state or local government entity pertaining to the protection of the environment, protection of public health, protection of worker health and safety, or the handling of hazardous materials, including without limitation, the Clean Air Act, 42 U.S.C. § 7401, et seq., the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1321, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., the

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Resource Conservation and Recovery Act, 42 U.S.C. § 690-1, et seq., and the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.

          (nn) Except as set forth in the Registration Statement or the Prospectus, the Company is not a party to an “employee benefit plan,” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”) which: (i) is subject to any provision of ERISA and (ii) is or was at any time maintained, administered or contributed to by the Company or any Subsidiary and covers any employee or former employee of the Company or any Subsidiary or any ERISA Affiliate (as defined hereafter). These plans are referred to collectively herein as the “Employee Plans.” For purposes of this Section, “ERISA Affiliate” of any person or entity means any other person or entity which, together with that person or entity, could be treated as a single employer under Section 414(m) of the Internal Revenue Code of 1986, as amended (the “Code”), or is an “affiliate,” whether or not incorporated, as defined in Section 407(d)(7) of ERISA, of the person or entity.

          (oo) The Registration Statement and the Prospectus identify each employment, severance or other material arrangement, policy and plan providing for insurance coverage (including any self-insured arrangements), workers’ compensation, disability benefits, severance benefits, supplemental unemployment benefits, vacation benefits, retirement benefits or for deferred compensation, profit-sharing, bonuses, stock options, stock appreciation or other forms of incentive compensation, or post-retirement insurance, compensation or benefits which: (i) is not an Employee Plan, (ii) is entered into, maintained or contributed to, as the case may be, by the Company or any of its ERISA Affiliates, and (iii) covers any employee or former employee of the Company or any of its ERISA Affiliates. These contracts, plans and arrangements are referred to collectively in this Agreement as the “Benefit Arrangements.” Each Benefit Arrangement has been maintained in substantial compliance with its terms and with requirements prescribed by any and all statutes, orders, rules and regulations that are applicable to that Benefit Arrangement.

          (pp) Except as set forth in the Registration Statement or the Prospectus, there is no liability in respect of post-retirement health and medical benefits for retired employees of the Company or any of its ERISA Affiliates other than medical benefits required to be continued under applicable law, determined using assumptions that are reasonable in the aggregate, over the fair market value of any fund, reserve or other assets segregated for the purpose of satisfying such liability (including for such purposes any fund established pursuant to Section 40 1(h) of the Code). With respect to any of the Company’s Employee Plans which are “group health plans” under Section 4980B of the Code and Section 607(1) of ERISA, there has been material compliance with all requirements imposed there under such that the Company or its ERISA Affiliates have no (and will not incur any) loss, assessment, tax penalty, or other sanction with respect to any such plan.

          (qq) Except as set forth in the Registration Statement or the Prospectus, the Company is not a party to or subject to any employment contract or arrangement providing for annual future compensation, or the opportunity to earn annual future compensation (whether

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through fixed salary, bonus, commission, options or otherwise) of more than $60,000 to any officer, consultant, director or employee.

          (rr) The execution of this Agreement, the Representative’s Unit Purchase Option and consummation of the Offering does not constitute a triggering event under any Employee Plan or any other employment contract, whether or not legally enforceable, which (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (of severance pay or otherwise), acceleration, increase in vesting, or increase in benefits to any current or former participant, employee or director of the Company or any Subsidiary other than an event that is not material to the financial condition or business of the Company, either individually or taken as a whole.

          (ss) No “prohibited transaction” (as defined in either Section 406 of the ERISA or Section 4975 of Code), “accumulated funding deficiency” (as defined in Section 302 of ERISA) or other event of the kind described in Section 4043(b) of ERISA (other than events with respect to which the 30-day notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee benefit plan for which the Company would have any liability; each employee benefit plan of the Company is in compliance in all material respects with applicable law, including (without limitation) ERISA and the Code; the Company has not incurred and does not expect to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from any “pension plan”; and each employee benefit plan of the Company that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, which could cause the loss of such qualification.

          (tt) Neither the Company, nor, to the Company’s knowledge, any of its employees or agents has at any time during the last five (5) years: (i) made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law, or (ii) made any payment to any federal or state governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments that are not prohibited by the laws of the United States of any jurisdiction thereof.

          (uu) The Company has not offered, or caused the Underwriters to offer, the Firm Units to any Person or entity with the intention of unlawfully influencing: (i) a customer or supplier of the Company to alter the customer’s or supplier’s level or type of business with the Company or (ii) a journalist or publication to write or publish favorable information about the Company, or its products or services.

          (vv) Neither (i) the Issuer-Represented General Free Writing Prospectus(es) and the Prospectus, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not

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apply to statements in or omissions from the Prospectus or any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by any Underwriter specifically for use therein. As used in this paragraph and elsewhere in this Agreement: (A) “Issuer-Represented Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Shares that (1) is required to be filed with the SEC by the Company, (2) is a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the SEC, or (3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the offering of Shares pursuant to this Agreement; (B) “Issuer-Represented General Free Writing Prospectus” means any “Issuer- Represented Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in a schedule to this Underwriting Agreement; and (C) “Issuer-Represented Limited-Use Free Writing Prospectus” means any “Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus.

          (ww) Each Issuer-Represented Free Writing Prospectus, as of its issue date and at all subsequent times through each Closing Date did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement. If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances, not misleading, the Company has notified or will notify promptly the Representatives so that any use of such Issuer-Represented Free Writing Prospectus may cease until it is amended or supplemented. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein.

          (xx) Unless the Company obtains the prior consent of the Representatives, it has not made and will not make any offer relating to the Units that would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. The Company has complied and will comply with the requirements of Rule 433 applicable to any Issuer-Represented Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. The Company has satisfied and will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.

          As used in this Agreement, references to matters being “material” with respect to the Company mean a material event, change, condition, status or effect related to the condition (financial or otherwise), properties, assets (including intangible assets), liabilities, business, prospects, operations or results of operations of the Company, either individually or taken as a whole, as the context requires.

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          As used in this Agreement, the term “knowledge of the Company” (or similar language) shall mean the knowledge of the executive officers and directors of the Company who are named in the Prospectus, with the assumption that such executive officers and directors shall have made reasonable and diligent inquiry of the matters presented (with reference to what is customary and prudent for the applicable individuals in connection with the discharge by the applicable individuals of their duties as executive officers and/or directors of the Company).

          Any certificate signed by or on behalf of the Company and delivered to the Representative or to counsel for the Representative (“Underwriters’ Counsel”) shall be deemed to be a representation and warranty by the Company to each Underwriter listed on Schedule A hereto as to the matters covered thereby.

     2. Purchase, Sale and Delivery of the Securities and the Representative’s Unit Purchase Option.

          (a) On the basis of the representations, warranties, covenants and agreements herein contained, but subject to the terms and conditions herein set forth, the Company hereby agrees to sell to the Underwriters, and each Underwriter, upon the basis of the representations, warranties, covenants and agreements herein contained, but subject to the conditions herein stated, agrees, severally and not jointly, agrees to purchase from the Company, at the purchase price per Unit hereinafter set forth (the “Purchase Price”) the number of Company Firm Units (subject to such adjustments to eliminate fractional Units as you may deem appropriate) set forth on Schedule B hereto opposite the name of such Underwriter. The Purchase Price for the Company Firm Units shall be [$5.40] per Unit.

          (b) Payment of the purchase price for, and delivery of certificates representing, the Firm Units shall be made at the offices of the Representative, or at such other place as shall be agreed upon by the Representative and the Company, at 10:00 A.M., Florida time, on the third (3rd) or, as permitted under Rule 15c6-1 under the Exchange Act, fourth (4th) business day (unless postponed in accordance with the provisions of Section 9 hereof) following the date of the effectiveness of the Registration Statement, or such other time not later than ten (10) business days after such date as shall be agreed upon by the Representative and the Company as permitted under Rule 15c6-1 under the Exchange Act (such time and date of payment and delivery being herein called the “Closing Date”). The closing of the payment of the purchase price for, and delivery of certificates representing, the Firm Units is referred to herein as the “Closing.” The Company shall be responsible for delivery at the Closing of certificates evidencing the Company Firm Units and shall, sufficiently in advance of Closing, issue instructions to its transfer agent to deliver certificates evidencing the Holder Firm Units, as contemplated by Sections 2(h) of this Agreement and the Selling Security Holder Underwriting Agreement, so as to permit certificates evidencing the Holder Firm Units to be available at Closing, registered in the manner described paragraph (c) of this Section.

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          (c) Payment of the purchase price for the Company Firm Units shall be made by wire transfer in immediately available funds to or as directed by the Company, upon delivery of certificates for the Firm Units to the Representative through the facilities of The Depository Trust Company for the respective accounts of the several Underwriters. Certificates for the Firm Units shall be registered in such name or names and shall be in such denominations as the Representative may request at least two (2) business days before the Closing Date. The Company will permit the Representative to examine and package such certificates for delivery at least one (1) full business day prior to the Closing Date.

          (d) In addition, on the basis of the representations, warranties, covenants and agreements herein contained, but subject to the terms and conditions herein set forth, the Company hereby grants to the Underwriters an option to purchase up to an aggregate of [899,576] Additional Units at the same purchase price per Unit to be paid by the Underwriters for the Company Firm Units as set forth in Section 2(a) above, for the sole purpose of covering over-allotments in the sale of Firm Units by the Underwriters. This Over-Allotment option may be exercised at any time and from time to time on or before the forty-fifth (45^th) day following the final date of the Prospectus, by written notice from the Representative to the Company. Such notice shall set forth the aggregate number of Additional Units as to which the option is being exercised and the date and time, as reasonably determined by the Representative, when the Additional Units are to be delivered (any such date and time being herein sometimes referred to as the “Additional Closing Date”); provided, however, that no Additional Closing Date shall occur earlier than the Closing Date or earlier than the second (2^nd) full business day after the date on which the option shall have been exercised nor later than the eighth (8th) full business day after the date on which the option shall have been exercised (unless such time and date are postponed in accordance with the provisions of Section 9 hereof). Upon any exercise of the option as to all or any portion of the Additional Units, each Underwriter, acting severally and not jointly, agrees to purchase from the Company the number of Additional Units that bears the same proportion of the total number of Additional Units then being purchased as the number of Firm Units set forth opposite the name of such Underwriter on Schedule B hereto (or such number increased as set forth in Section 9 hereof) bears to the total number of Firm Units that the Underwriters have agreed to purchase hereunder, subject, however, to such adjustments to eliminate fractional Units as the Representative in its sole discretion shall make.

          (e) Payment of the purchase price for, and delivery of certificates representing, the Additional Units shall be made at the office of Underwriters’ Counsel, or at such other place as shall be agreed upon by the Representative and the Company, at 10:00 A.M., Florida time, on the Additional Closing Date (unless postponed in accordance with the provisions of Section 9 hereof), or such other time as shall be agreed upon by the Representative and the Company.

          (f) Payment of the purchase price for the Additional Units shall be made by wire transfer in immediately available funds to or as directed by the Company upon delivery of certificates for the Additional Units to the Representative through the facilities of The Depository Trust Company for the respective accounts of the several Underwriters. Certificates

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for the Additional Units shall be registered in such name or names and shall be in such denominations as the Representative may request at least two (2) business days before the Additional Closing Date. The Company will permit the Representative to examine and package such certificates for delivery at least one full business day prior to the Additional Closing Date.

          (g) On the Closing Date, the Company will further issue and sell to the Representative or, at the direction of the Representative, to other Underwriters or selling group members or bona fide officers of the Underwriters or selling group members, for an aggregate purchase price of [$416.00], options to purchase Units (the “Representative’s Unit Purchase Options”) pursuant to the Representative’s Option Agreement, entitling the holders thereof to purchase an aggregate of [416,667] Units for a period of four years, such period to commence on the first anniversary of the effective date of the Registration Statement. The Representative’s Unit Purchase Options shall be exercisable at a price equal to [120%] of the initial public offering price per Unit and shall contain terms and provisions more fully described herein below and as set forth more particularly in the Representative’s Option Agreement and the Representative’s Unit Purchase Options to be executed by the Company on the effective date of the Registration Statement, including, but not limited to, (i) cashless exercise; (ii) customary anti-dilution provisions in the event of stock dividends, split mergers, sales of all or substantially all of the Company’s assets and other events; and (iii) prohibitions of mergers, consolidations or other reorganizations of or by the Company or the taking by the Company of other action during the five-year period following the effective date of the Registration Statement unless adequate provision is made to preserve, in substance, the rights and powers incidental to the Representative’s Option Agreement and the Representative’s Unit Purchase Options. The Representative’s Unit Purchase Options shall not be redeemable, provided, however, the Warrants issuable upon exercise of the Representative’s Unit Purchase Option shall be redeemable upon the same terms as the Warrants sold to the public. The Securities to be received by the Underwriters upon exercise of the Representative’s Unit Purchase Options shall be the same as delivered to the public in the Offering. The Company has reserved and shall continue to reserve a sufficient number of Shares and Warrants for issuance upon exercise of the Representative’s Unit Purchase Options. As provided in the Representative’s Option Agreement, the Representative may designate that the Representative’s Unit Purchase Options be issued in varying amounts directly to other Underwriters and selling group members and to bona fide officers of the Underwriters and selling group members. Notwithstanding the foregoing, no common or preferred stock, options, warrants, and other equity securities of NGTV, including debt securities convertible to or exchangeable for equity securities of NGTV, that are unregistered and acquired by an underwriter or related person during 180 days prior to the initial filing of the Registration Statement, or thereafter, and deemed to be underwriting compensation by the National Association of Securities Dealers, Inc. (“NASD”), and securities excluded from underwriting compensation pursuant to NASD Conduct Rule 2710(d)(5), may be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person during the 180 days immediately following the effective date of the Registration Statement or the commencement of the offering, whichever is

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later, except transfers to any NASD member participating in the offering or its officers or partners, or except as otherwise specifically permitted by NASD Conduct Rule 2710(g)(2).

     3. Offering. Upon authorization of the release of the Firm Units by the Representative, the Underwriters propose to offer the Securities for sale to the public upon the terms and conditions set forth in the Prospectus.

     4. Covenants of the Company. The Company acknowledges, covenants and agrees with the Underwriters that:

          (a) The Registration Statement and any amendments thereto have been declared effective, and if Rule 430A is used or the filing of the Prospectus is otherwise required under Rule 424(b), the Company will file the Prospectus (properly completed if Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time period and will provide evidence satisfactory to the Representative of such timely filing.

          The Company will notify the Representative immediately (and, if requested by the Representative, will confirm such notice in writing): (i) when the Registration Statement and any amendments thereto become effective, (ii) of any request by the Commission for any amendment of or supplement to the Registration Statement or the Prospectus or for any additional information, (iii) of the Company’s intention to file or prepare any supplement or amendment to the Registration Statement or the Prospectus, (iv) of the mailing or the delivery to the Commission for filing of any amendment of or supplement to the Registration Statement or the Prospectus, including but not limited to Rule 462(b) under the Securities Act, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of the initiation, or the threatening, of any proceedings therefor, it being understood that the Company shall make every effort to avoid the issuance of any such stop order, (vi) of the receipt of any comments from the Commission, and (vii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for that purpose. If the Commission shall propose or enter a stop order at any time, the Company will make every reasonable effort to prevent the issuance of any such stop order and, if issued, to obtain the lifting of such order as soon as possible. The Company will not file any amendment to the Registration Statement or any amendment of or supplement to the Prospectus (including the prospectus required to be filed pursuant to Rule 424(b)) that differs from the prospectus on file at the time of the effectiveness of the Registration Statement or file any document under the Exchange Act if such document would be deemed to be incorporated by reference into the Prospectus to which the Representative shall object in writing after being timely furnished in advance a copy thereof. The Company will provide the Representative with copies of all such amendments, filings and other documents a sufficient time prior to any filing or other publication thereof to permit the Representative a reasonable opportunity to review and comment thereon.

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          (b) The Company shall comply with the Securities Act, the Exchange Act and all applicable Rules and Regulations to permit completion of the distribution as contemplated in this Agreement, the Registration Statement and the Prospectus. If, at any time when a prospectus relating to the Securities is required to be delivered under the Securities Act, the Exchange Act and all applicable Rules and Regulations in connection with the sales of Securities, any event shall have occurred as a result of which the Prospectus as then amended or supplemented would, in the judgment of the Underwriters or the Company, include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances existing at the time of delivery to the purchaser, not misleading, or if, to comply with the Securities Act, the Exchange Act or the Rules and Regulations, it shall be necessary at any time to amend or supplement the Prospectus or Registration Statement, or to file any document which is an exhibit to the Registration Statement or the Prospectus or in any amendment thereof or supplement thereto, the Company will notify the Representative promptly and prepare and file with the Commission, subject to Section 4(a) hereof, an appropriate amendment or supplement (in form and substance satisfactory to the Representative) which will correct such statement or omission or which will effect such compliance and will use its best efforts to have any amendment to the Registration Statement declared effective as soon as possible.

          (c) The Company will promptly deliver to the Underwriters and Underwriters’ Counsel a signed copy of the Registration Statement, as initially filed and all amendments thereto, including all consents and exhibits filed therewith, and will maintain in the Company’s files manually signed copies of such documents for at least five (5) years after the date of filing thereof. The Company will promptly deliver to each of the Underwriters such number of copies of any Preliminary Prospectus, the Prospectus, the Registration Statement, and all amendments of and supplements to such documents, if any, and all documents which are exhibits to the Registration Statement and Prospectus or any amendment thereof or supplement thereto, as the Underwriters may reasonably request. Prior to 10:00 A.M., Florida time, on the second business day next succeeding the date of this Agreement and from time to time thereafter, the Company will furnish the Underwriters with copies of the Prospectus in Florida in such quantities as the Underwriters may reasonably request.

          (d) The Company consents to the use and delivery of the Preliminary Prospectus by the Underwriters in accordance with Rule 430 and Section 4(b) of the Securities Act.

          (e) If the Company elects to rely on Rule 462(b) under the Securities Act, the Company shall both file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the Act by the earlier of: (i) 10:00 p.m., Florida time, on the date of this Agreement, and (ii) the time that confirmations are given or sent, as specified by Rule 462(b)(2).

          (f) The Company will use its best efforts, in cooperation with the Representative, at or prior to the time of effectiveness of the Registration Statement, to qualify

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the Securities for offering and sale under the securities laws relating to the offering or sale of the Securities of such jurisdictions as the Representative may designate and to maintain such qualification in effect for so long as required for the distribution thereof; except that in no event shall the Company be obligated in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process.

          (g) The Company will make generally available to its security holders and to the Underwriters as soon as practicable, but in any event not later than twelve (12) months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Securities Act), an audited earnings statement of the Company and the Subsidiaries complying with Section 11(a) of the Securities Act and the Rules and Regulations (including, at the option of the Company, Rule 158).

          (h) The Company will, for so long as any of the Securities are registered under the Exchange Act or listed on AMEX, hold an annual meeting of shareholders for the election of directors in accordance with the applicable requirements of the Exchange Act and the rules and regulations of AMEX, and, in connection therewith, provide the Company’s shareholders with the audited financial statements of the Company to the extent required by Rule 14a-3 under the Exchange Act and the rules and regulations of AMEX.

          (i) The Company will reserve and keep available that maximum number of its authorized but unissued securities that are issuable upon exercise of the Warrants and the Representative’s Unit Purchase Option and warrants thereunder outstanding from time to time.

          (j) So long as any Warrants are outstanding, the Company shall use its best efforts to cause post-effective amendments, if required by the Securities Act, to the Registration Statement to become effective in compliance with the Securities Act and without any lapse of time between the effectiveness of any such post-effective amendments and cause a copy of each Prospectus, as then amended, to be delivered to each holder of record of a Warrant and to furnish to the Representative and each dealer as many copies of each such Prospectus as the Representative or any such dealer may reasonably request. The Company shall not call for redemption of any of the Warrants unless a registration statement covering the securities underlying the Warrants has been declared effective by the Commission and remains current at least until the date fixed for redemption.

          (k) During the twelve (12) months following the Closing Date, without the consent of the Representative which shall not be unreasonably withheld, the Company will not file any registration statement relating to the offer or sale of any of the Company’s securities; provided; however, that the foregoing (a) shall not prohibit the Company from filing a Registration Statement on Form S-8 covering no more shares than are funded in the Company’s incentive compensation plans as they exist on the date hereof and (b) shall not apply to the Company’s compliance with registration obligations in effect on the date hereof that do not require registration prior to the expiration of six months from the date hereof.

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          (l) Each of the Company’s officers and directors (“Lock-Up Parties”) have entered into a written agreement with the Representative that, except as otherwise disclosed in the Prospectus, for a period of 12 months after the Effective Date (for the respective parties the “Lock-Up Period”), without the Representative’s prior written consent, he, she or it will not publicly sell any shares of the Company’s Common Stock, including shares of Common Stock underlying options, warrants or any other convertible security, owned directly, indirectly or beneficially by him, her or it (as defined by the 1934 Act and rules promulgated thereunder). In the event of a private transfer by a “Lock-Up Party,” such transferee will become a “Lock-Up party” with respect to the transferred shares for the balance of the Lock-Up Period. The Company will cause each of the Lock-Up Parties to deliver to the Representative the agreements of each of the Lock-Up Parties to the foregoing effect prior to the Closing Date, which agreements shall be in the form attached hereto as Annex II.

          (m) During the six (6) month period following the Closing Date, the Company will not offer, sell or distribute any of its securities, other than pursuant to the Company’s incentive equity plans, covering no more shares than are funded on the date hereof, or in connection with an acquisition transaction approved by a majority of the Company’s independent directors, without the prior written consent of the Representative.

          (n) During the twelve (12) months following the Closing, the Company will not offer, sell or distribute any equity securities or convertible securities convertible at a price that may, at the time of conversion, be less than the Fair Market Value of the Common Stock on the date of the original sale, without the consent of the Representative. For purposes of this Section 4, the term “Fair Market Value” shall mean the greater of: (i) the average of the volume weighted average price of the Company’s common stock for each of the 30 trading days prior to the date of the original sale; and (ii) the last sale price of the Common Stock, during normal operating hours, as reported on AMEX, or any other exchange or electronic quotation system on which the Common Stock is then listed. During the twenty-four months following the Closing, the Company will not offer, sell or distribute any equity securities or convertible securities convertible at a price that may, at the time of conversion, be less than the then prevailing Warrant exercise price, without the consent of the Representative

          (o) For a period of two (2) years from the effective date of the Registration Statement, the Company, at its expense, shall provide the Representative on a weekly basis with a copy of the Company’s weekly transfer sheets from the previous week and securities positions listings.

          (p) During the period of two (2) years from the effective date of the Registration Statement, the Company will furnish to the Underwriters copies of all reports or other communications (financial or other) furnished to security holders or from time to time published or publicly disseminated by the Company, and will deliver to the Underwriters as soon as they are available, copies of any reports, financial statements and proxy or information statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed. Reports required to be delivered

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pursuant to this Section 4(p) shall be deemed to have been delivered on the date on which such reports are posted on the SEC’s website at www.sec.gov, and such postings shall be deemed to satisfy the delivery requirements of this Section 4(p); provided, that the Company shall deliver paper copies of such reports upon request of the Representative.

          (q) The Company will use its good faith best commercially reasonable efforts to maintain its key person life insurance with a insurer rated at least AA or better in the most recent addition of “Best’s Life Reports” in the amount of $2,000,000 on the lives of each of Jay Vir and Kourosh Taj in full force and effect for a period of three (3) years from the Closing Date. The Company shall be the sole beneficiary of such policy.

          (r) Upon conclusion of the Offering, the Company will engage (for no less than two (2) years from the date of the Closing Date) a financial public relations firm mutually acceptable to the Company and the Representative. The Company further agrees for a period of one (1) year from the date of this Agreement, to provide the Underwriters, simultaneously with the distribution to the public of any financial information, news releases, and/or other publicity regarding the Company, its business, or any terms of the proposed Offering.

          (s) For as long as the Company is required to file reports with the Commission under Section 12 of the Exchange Act, the Company will maintain U. S Stock Transfer Corporation as its Transfer Agent and Warrant Agent, or other entity reasonably acceptable to the Representative, which may be the same entity, and, if necessary under the same jurisdiction of incorporation as the Company, as well as a Registrar (which may be the same entity as the Transfer and Warrant Agent) for its Common Stock and Warrants.

          (t) The Company agrees that it will, upon completion of the proposed public offering contemplated herein, for a period of no less than five (5) years commencing on the date hereof, engage a designee of Representative as an advisor (“Advisor”) to its Board of Directors where such Advisor shall attend meetings of the Board, receive all notices and other correspondence and communications sent by the Company to members of its Board of Directors and receive compensation commensurate with the compensation of other non-officer Directors, excluding the Chairperson of the Company’s audit committee. In addition, such Advisor shall be entitled to receive reimbursement for all costs incurred in attending such meetings including, food, lodging, and transportation. The Company further agrees that, during said five (5) year period, it shall schedule no less than four (4) formal and “in person” meetings of its Board of Directors in each such year at which meetings such Advisor shall be permitted to attend as set forth herein; said meetings shall be held quarterly each year and at least ten (10) days advance notice of such meetings shall be given to the Advisor. Advisor shall execute and deliver to the Company, a confidentiality agreement in form and substance reasonably satisfactory to the Company and the Representative. Further, during such five (5) year period, the Company shall give notice to the Representative with respect to any proposed acquisitions, mergers, reorganizations or other similar transactions. In lieu of the Representative’s right to designate an Advisor, the Representative shall have the right during such five-year period, in its sole discretion, to designate one person for election as a director (“Director”) of the Company and

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the Company will utilize its best efforts to obtain the election of such person who shall be entitled to receive compensation, expense reimbursements and other benefits commensurate with those provided to other non-employee directors, excluding the Chairperson of the Company’s audit committee.

     The Company shall, during such five-year period, give the Representative timely prior written notice of any proposed acquisitions, mergers, reorganizations or other similar transactions. The Company shall indemnify and hold such Advisor or Director harmless against any and all claims, actions, damages, costs and expenses, and judgments arising solely out of the attendance and participation of such Advisor or Director at any such meeting described herein, and, if the Company maintains a liability insurance policy affording coverage for the acts of its officers and directors, it shall, if possible, include such Advisor or Director as an insured under such policy.

          (u) The Company shall retain the Representative as a financial advisor at a monthly fee of $5,000 per month for a twenty-four (24) month period commencing on the Closing Date, pursuant to a financial advisory agreement (“Financial Advisory Agreement”) to be executed by the Company and the Representative. The entire fee of $120,000 shall be payable on the Closing Date.

          (v) The Company will apply the net proceeds from the sale of the Securities as set forth under the caption “Use of Proceeds” in the Prospectus; provided that management of the Company reserves the right to allocate proceeds differently if the board of directors determines, in good faith, that such other allocation is permitted by applicable laws, rules and regulations and is in the best interests of the Company and its shareholders. Except as set forth in the Prospectus, without the written consent of the Representative, no proceeds of the Offering will be used to pay outstanding loans from officers, directors or shareholders or to pay any accrued salaries or bonuses to any employees or former employees.

          (w) The Company will use its best efforts to effect and maintain the listing of the Securities on AMEX.

          (x) The Company, during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act, will timely file all documents required to be filed with the Commission pursuant to the Securities Act, the Exchange Act and the Rules and Regulations. For so long as any of the Securities are registered under the Exchange Act, the Company shall file all reports required to be filed thereunder and under the Rules and Regulations, and shall use its best efforts to do so on a timely basis. The Company shall not, prior to the expiration of five (5) years from the effective date of the Registration Statement, without the prior written consent of the Representative, seek to deregister any its Securities under the Exchange Act or delist any of its Securities from AMEX; provided that nothing in this Section shall require the Company to maintain registration or listing of the Units following the Separation Date.

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          (y) The Company will use its best efforts to do and perform all things required to be done or performed under this Agreement by the Company prior to the Closing Date or the Additional Closing Date, as the case may be, and to satisfy all conditions precedent to the delivery of the Firm Units and the Additional Units.

          (z) The Company will not take, and will cause its officers and/or directors not to take, directly or indirectly, any action which constitutes or is designed to cause or result in, or which could reasonably be expected to constitute, cause or result in, a violation of the Exchange Act and the Rules and Regulations, or in the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities.

          (aa) The Company shall cause to be prepared and delivered to the Representative, at its expense, within one (1) business day from the effective date of this Agreement, an Electronic Prospectus to be used by the Underwriters in connection with the Offering. As used herein, the term “Electronic Prospectus” means a form of prospectus, and any amendment or supplement thereto, that meets each of the following conditions: (i) it shall be encoded in an electronic format, satisfactory to the Representative, that may be transmitted electronically by the other Underwriters to offerees and purchasers of the Securities for at least the period during which a Prospectus relating to the Securities is required to be delivered under the Securities Act; (ii) it shall disclose the same information as the paper prospectus and prospectus filed pursuant to EDGAR, except to the extent that graphic and image material cannot be disseminated electronically, in which case such graphic and image material shall be replaced in the electronic prospectus with a fair and accurate narrative description or tabular representation of such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic format, satisfactory to the Representative, that will allow recipients thereof to store and have continuously ready access to the prospectus at any future time, without charge to such recipients (other than any fee charged for subscription to the Internet as a whole and for on-line time). The Company hereby confirms that it has included or will include in the Prospectus filed pursuant to EDGAR or otherwise with the Commission and in the Registration Statement at the time it was declared effective an undertaking that, upon receipt of a request by an investor or his or her representative within the period when a prospectus relating to the Securities is required to be delivered under the Securities Act, the Company shall transmit or cause to be transmitted promptly, without charge, a paper copy of the Prospectus.

     5. Consideration; Payment of Expenses; Warrant Solicitation; Financial Advisory Services.

     (a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters or their respective designees the following compensation:

          (i) an underwriting discount equal to ten percent (10%) of the gross proceeds from the sale of the Company Firm Units and Additional Units to be sold by the Company, payable by the Company; and

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               (ii) a non-accountable expense allowance equal to [one and thirty-nine hundredths percent (1.39%)] of the gross proceeds from the sale of the Firm Units(exclusive of any proceeds from the sale of Additional Units), all of which shall be paid by the Company, $25,000 of which has been paid.

          (b) The Representative reserves the right to reduce any item of its compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by the NASD to the effect that the Underwriters’ aggregate compensation is in excess of NASD rules or that the terms thereof require adjustment.

          (c) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement is terminated, the Company hereby agrees to pay or reimburse all costs and expenses incident to the performance of its obligations hereunder, including the following:

               (i) all expenses in connection with the preparation, printing, “edgarization” and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and any and all amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers;

               (ii) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Securities and the Representative’s Option Securities under the Securities Act and the Offering;

               (iii) the cost of producing this Agreement and any agreement among Underwriters, blue sky survey, closing documents and other instruments, agreements or documents (including any compilations thereof) in connection with the Offering and the cost of eight (8) bound volumes of such documents for the Representative;

               (iv) all expenses in connection with the qualification of the Securities and the Representative Option Securities for offering and sale under state or foreign securities or blue sky laws, including the fees and disbursements of counsel for the Company in connection with such qualification and in connection with any blue sky survey undertaken by such counsel;

               (v) the filing fees incident to securing any required review by the NASD of the terms of the Offering;

               (vi) all fees and expenses in connection with listing the Securities on the AMEX;

               (vii) all expenses incurred in connection with attending or hosting meetings with prospective purchasers of the Securities (“Road Show Expenses”);

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               (viii) any stock transfer taxes incurred in connection with this Agreement or the Offering;

               (ix) the cost of preparing certificates representing the Securities;

               (x) the cost and charges of any transfer agent or registrar for the Securities;

               (xi) all other costs and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 5; and

               (xii) the cost of two (2) “tombstone” advertisements to be placed in appropriate daily or weekly periodicals of the Representative’s choice (i.e., The Wall Street Journal and The New York Times) up to $20,000.

          (d) The Company shall also reimburse the Underwriter for the payment of background investigations of each of the Company’s officers and directors in an amount not to exceed $3,500 per individual.

          (e) It is understood, however, that except as provided in this Section, and Sections 6, 7 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel. Notwithstanding anything to the contrary in this Section 5, in the event that this Agreement is terminated pursuant to Section 5 or 10(b) hereof, or subsequent to a Material Adverse Change, the Company will pay all accountable expenses of the Underwriters (including but not limited to fees and disbursements of counsel to the Underwriters) incurred in connection herewith.

          (f) Upon any exercise of the Warrants after twelve months from the Effective Date, the Company agrees to pay any Underwriter a fee of 5% of the aggregate Warrant exercise price, if: (i) the market price of the Common Stock on the date the Warrants are exercised is greater than the then exercise price of the Warrants, (ii) the exercise of the Warrants is solicited by a member of the NASD and such solicitation has been designated in writing by the holder of the Warrants, (iii) the Warrants are not held in a discretionary account, (iv) disclosure of compensation arrangements was made both at the time of the Offering and at the time of exercise of the Warrants; and (v) the solicitation of exercise of the Warrant was not in violation of Regulation M promulgated under the Securities Exchange Act of 1934, as amended. No Warrant solicitation by the Underwriters will occur for a period of twelve months after the Effective Date.

          (g) The Company shall retain the Representative as a financial advisor at a monthly fee of $5,000 for a twenty-four (24) month period commencing on the Closing Date, pursuant to the Financial Advisory Agreement to be executed by the Company and the Representative. The entire fee of $120,000 shall be payable on the Closing Date.

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          6. Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Firm Units and the Additional Units as provided herein shall be subject to: (i) the accuracy of the representations and warranties of the Company herein contained, as of the date hereof and as of the Closing Date and as of any Additional Closing Date, (ii) the absence from any certificates, opinions, written statements or letters furnished to the Representative or to Underwriters’ Counsel pursuant to this Section 6 of any material misstatement or omission (iii) the performance by the Company of its obligations hereunder, and (iv) each of the following additional conditions. For purposes of this Section 6, the terms “Closing Date” and “Closing” shall refer to the Closing Date for the Firm Units and any Additional Closing Date, if different, for the Additional Units, and each of the foregoing and following conditions must be satisfied as of each Closing.

          (a) The Registration Statement shall have become effective and all necessary regulatory or listing approvals shall have been received not later than 5:30 P.M., Florida time, on the date of this Agreement, or at such later time and date as shall have been consented to in writing by the Representative. If the Company shall have elected to rely upon Rule 430A under the Securities Act, the Prospectus shall have been filed with the Commission in a timely fashion in accordance with the terms hereof and a form of the Prospectus containing information relating to the description of the Shares and the method of distribution and similar matters shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period; and, at or prior to the Closing Date or the actual time of the Closing, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereof shall have been issued and no proceedings therefor shall have been initiated or threatened by the Commission.

          (b) The Company shall have requested counsel to render, and the Representative shall have received the favorable written opinion of Richardson and Patel LLP, legal counsel for the Company, dated as of the Closing Date, addressed to the Underwriters and in form attached hereto as Annex I.

          (c) All proceedings taken in connection with the sale of the Firm Units and the Additional Units as herein contemplated shall be satisfactory in form and substance to the Representative and to Underwriters’ Counsel.

          (d) The Representative shall have received a certificate of each of the Chairman, Chief Executive Officer and Chief Financial Officer of the Company, dated as of the Closing Date to the effect that: (i) the condition set forth in subsection (a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of the applicable Closing Date, the representations and warranties of the Company set forth in Section 1 hereof are accurate, (iii) as of the applicable Closing Date, all agreements, conditions and obligations of the Company to be performed or complied with in all material respects hereunder on or prior thereto have been duly performed or complied with, (iv) the Company has not sustained any material loss or interference with their respective businesses, whether or not covered by insurance, or from any labor dispute or any

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legal or governmental proceeding, (v) no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereof has been issued and no proceedings therefor have been initiated or threatened by the Commission, (vi) there are no pro forma or as adjusted financial statements that are required to be included or incorporated by reference in the Registration Statement and the Prospectus pursuant to the Rules and Regulations which are not so included or incorporated by reference and (vii) subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus there has not been any Material Adverse Change or any development involving a prospective Material Adverse Change, whether or not arising from transactions in the ordinary course of business, in or affecting (x) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of the Company and the Subsidiaries, taken as a whole; (y) the long-term debt or capital stock of the Company; or (z) the Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement and the Prospectus.

          (e) On the Closing Date and, as the case may be, on each Additional Closing Date, the Representative shall have received a “cold comfort” letter from Squar Milner Reehl & Williamson, LLP, independent registered public accountants for the Company, dated, respectively, as of the date of the date of delivery and addressed to the Underwriters and in form and substance satisfactory to the Representative and Underwriters’ Counsel, confirming that they are independent certified public accountants with respect to the Company within the meaning of the Securities Act and the Rules and Regulations, and stating, as of the date of delivery (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five (5) days prior to the date of such letter), the conclusions and findings of such firm with respect to the financial information and other matters relating to the Registration Statement covered by such letter and, with respect to letters issued as of Additional Closing Dates, confirming the conclusions and findings set forth in such prior letter.

          (f) Subsequent to the execution and delivery of this Agreement or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto), there shall not have been any material change in the capital stock or long-term debt of the Company or any change or development involving a change, whether or not arising from transactions in the ordinary course of business, in the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of the Company, including but not limited to the occurrence of any fire, flood, storm, explosion, accident, act of war or terrorism or other calamity, the effect of which, in any such case described above, is, in the sole judgment of the Representative, so material and adverse as to make it impracticable or inadvisable to proceed with the Offering on the terms and in the manner contemplated in the Prospectus (exclusive of any supplement).

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          (g) The Representative shall have received a lock-up agreement from each Lock-Up Party, duly executed by the applicable Lock-Up Party, in each case in the form attached hereto as Annex II.

          (h) The Representative shall have received a duly executed management confirmation letter from the Company’s directors and officers relating to certain information appearing in the Registration Statement, which letter shall certify as to the accuracy of the information contained in the Registration Statement and Prospectus.

          (i) The Securities shall have been approved for quotation on AMEX.

          (j) The NASD shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.

          (k) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Securities; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities.

          (l) The Company shall have furnished the Underwriters and Underwriters’ Counsel with such other certificates, opinions or other documents as they may have reasonably requested.

          (m) Selling Security Holders holding at least 50% of the Holder Firm Units shall have delivered executed Selling Security Holder Signature Pages to the Selling Security Holder Underwriting Agreement, and the transactions contemplated by the Selling Security Holder Underwriting Agreement shall be consummated at the Closing by such Selling Security Holders.

          If any of the conditions specified in this Section 6 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates, opinions, written statements or letters furnished to the Representative or to Underwriters’ Counsel pursuant to this Section 6 shall not be reasonably satisfactory in form and substance to the Representative and to Underwriters’ Counsel, all obligations of the Underwriters hereunder may be cancelled by the Representative at, or at any time prior to, the consummation of the Closing, and the obligations of the Underwriters to purchase the Additional Units may be cancelled by the Representative at, or at any time prior to, the Additional Closing Date. Notice of such cancellation shall be given to the Company in writing, or by telephone. Any such telephone notice shall be confirmed promptly thereafter in writing.

     7. Indemnification and Contribution.

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          (a) The Company agrees to indemnify and hold harmlesseach Underwriter, its affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to (i) any Underwriter furnished to the Company in writing by or on behalf of such Underwriter expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (c) below; or (ii) any Selling Security Holder furnished to the Company in writing by such Selling Security Holder expressly for use therein, it being understood that the only such information furnished to the Company in writing by such Selling Security Holder consists of (i) the representations and warranties of the Selling Security Holder in the Selling Security Holder Underwriting Agreement, (ii) the information provided by the Selling Security Holder on the Selling Security Holder Signature Page to the Selling Security Holder Underwriting Agreement and (iii) the information relating to the Selling Security Holder contained or referenced under columns “(1), “(3)” and “(4)” of the table under the heading “Selling Security Holders” in the Prospectus, and the footnotes corresponding thereto.. The foregoing indemnity agreement shall not inure to the benefit of any Underwriter who failed to deliver a Prospectus (as then amended or supplemented, provided by the Company to the several Underwriters in the requisite quantity and on a timely basis to permit proper delivery on or prior to the Closing Date) to the person asserting any losses, claims, damages and liabilities and judgments caused by any untrue statement or alleged untrue statement of a material fact contained in any preliminary or superseded prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such material misstatement or omission or alleged material misstatement or omission was cured, as determined by a court of competent jurisdiction in a decision not subject to further appeal, in such Prospectus and such Prospectus was required by law to be delivered at or prior to the written confirmation of sale to such person.

          (b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged

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untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but only insofar as any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by or on behalf such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, it being understood and agreed upon that the only such information furnished by any Underwriter consists of the information in the Prospectus under the caption “Underwriting.”

          (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section 7, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 7 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 7. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representative, and any such separate firm for the Company, its directors, its officers who

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signed the Registration Statement and any control persons of the Company shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

          (d) If the indemnification provided for in paragraphs (a) and (b), above, is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Securities and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Shares. The relative fault of the Company on the one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

          (e) The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person

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in connection with any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 7 are several in proportion to their respective purchase obligations hereunder and not joint.

          (f) The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     8. Intentionally Omitted.

     9. Underwriter and Selling Security Holder Defaults.

          (a) If any Underwriter or Underwriters shall default in its or their obligation to purchase Firm Units or Additional Units hereunder, and if the Firm Units or Additional Units with respect to which such default relates (the “Default Securities”) do not (after giving effect to arrangements, if any, made by the Representative pursuant to subsection (b) below) exceed in the aggregate 10% of the number of Firm Units or Additional Units, each non-defaulting Underwriter, acting severally and not jointly, agrees to purchase from the Company that number of Default Securities that bears the same proportion of the total number of Default Securities then being purchased as the number of Firm Units set forth opposite the name of such Underwriter on Schedule B hereto bears to the aggregate number of Firm Units set forth opposite the names of the non-defaulting Underwriters, subject, however, to such adjustments to eliminate fractional Units as the Representative in its sole discretion shall make.

          (b) In the event that the aggregate number of Default Securities exceeds 10% of the number of Firm Units or Additional Units, as the case may be, the Representative may in its discretion arrange for itself or for another party or parties (including any non-defaulting Underwriter or Underwriters who so agree) to purchase the Default Securities on the terms contained herein. In the event that within five calendar days after such a default the Representative does not arrange for the purchase of the Default Securities as provided in this Section 9, this Agreement or, in the case of a default with respect to the Additional Units, the obligations of the Underwriters to purchase and of the Company to sell the Additional Units shall thereupon terminate, without liability on the part of the Company with respect thereto (except in each case as provided in Sections 4, 6, 7, 9 and 11(d)) or the Underwriters, but nothing in this Agreement shall relieve a defaulting Underwriter or Underwriters of its or their liability, if any,

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to the other Underwriters and the Company for damages occasioned by its or their default hereunder.

          (c) In the event that any Default Securities are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the Company shall have the right to postpone the Closing Date or Additional Closing Date, as the case may be for a period, not exceeding five (5) business days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment or supplement to the Registration Statement or the Prospectus which, in the reasonable opinion of Underwriters’ Counsel, may thereby be made necessary or advisable. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 9 with like effect as if it had originally been a party to this Agreement with respect to such Firm Units and Additional Units.

          (d) If Selling Security Holders owning more than 50% of the Holder Firm Units shall fail to sell and deliver to the Underwriters the Holder Firm Units to be sold and delivered by the Selling Security Holders at the Closing Date pursuant to this Agreement, then the Underwriters may at their option, by written notice from the Representatives to the Company and the Selling Security Holders, either (i) terminate this Agreement without any liability on the part of any Underwriter or, except as provided in Section 7 hereof, the Company or the Selling Security Holders, (ii) purchase the Firm Units which the Selling Security Holders have agreed to sell and deliver in accordance with the terms hereof or (iii) require the Company to deliver for sale any Firm Units which the Selling Security Holders fail to sell or deliver.

     10. Survival of Representations and Agreements. All representations and warranties, covenants and agreements of the Company and the Underwriters contained in this Agreement or in certificates of officers of the Company or any Subsidiary submitted pursuant hereto, including the agreements contained in Section 5, the indemnity agreements contained in Section 7 and the contribution agreements contained in Section 7 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any controlling Person thereof or by or on behalf of the Company, any of its officers and directors or any controlling Person thereof, and shall survive delivery of and payment for the Shares to and by the Underwriters. The representations contained in Section 1 hereof and the covenants and agreements contained in Sections 4, 5, 7, this Section 10 and Sections 14 and 15 hereof shall survive any termination of this Agreement, including termination pursuant to Section 9 or 11 hereof.

     11. Effective Date of Agreement; Termination.

          (a) This Agreement shall become effective upon the later of: (i) receipt by the Representative and the Company of notification of the effectiveness of the Registration Statement or (ii) the execution of this Agreement. Notwithstanding any termination of this

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Agreement, the provisions of this Section 11 and of Sections 1, 4, 6, 7 and 12 through 16, inclusive, shall remain in full force and effect at all times after the execution hereof.

          (b) The Representative shall have the right to terminate this Agreement at any time prior to the consummation of the Closing or to terminate the obligations of the Underwriters to purchase the Additional Units at any time prior to the consummation of any closing to occur on an Additional Closing Date, as the case may be, if: (i) any domestic or international event or act or occurrence has materially disrupted, or in the opinion of the Representative will in the immediate future materially disrupt, the market for the Company’s securities or securities in general; or (ii) trading on the New York Stock Exchange, The NASDAQ National Market or the American Stock Exchange (“AMEX”) shall have been suspended or been made subject to material limitations, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the New York Stock Exchange, The NASDAQ National Market or the AMEX or by order of the Commission or any other governmental authority having jurisdiction; or (iii) a banking moratorium has been declared by any state or federal authority or if any material disruption in commercial banking or securities settlement or clearance services shall have occurred; or (iv) (A) there shall have occurred any outbreak or escalation of hostilities or acts of terrorism involving the United States or there is a declaration of a national emergency or war by the United States or (B) there shall have been any other calamity or crisis or any change in political, financial or economic conditions if the effect of any such event in (A) or (B), in the judgment of the Representative, makes it impracticable or inadvisable to proceed with the offering, sale and delivery of the Firm Units or the Additional Units, as the case may be, on the terms and in the manner contemplated by the Prospectus.

          (c) Any notice of termination pursuant to this Section 11 shall be in writing.

          (d) If this Agreement shall be terminated pursuant to any of the provisions hereof (other than pursuant to Section 9(b) hereof), or if the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth herein is not satisfied or because of any refusal, inability or failure on the part of the Company or the Selling Security Holders to perform any agreement herein or comply with any provision hereof, provided such refusal, inability or failure is not caused by the unexcused non-performance or unexcused breach by the Underwriters of their obligations hereunder, the Company and/or the Selling Security Holders, as the case may be, will, subject to demand by the Representative, reimburse the Underwriters for all out-of-pocket expenses (including the fees and expenses of their counsel), incurred by the Underwriters in connection herewith.

     12. Notices. All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing, and:

          (a) if sent to the Representative or any Underwriter, shall be mailed, delivered, or faxed and confirmed in writing, to Capital Growth Financial, LLC, 225 NE Mizner Blvd., Suite 750, Boca Raton, Florida 33432, Attention: Michael S. Jacobs, President, in each

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case, with a copy to Underwriters’ Counsel at Schneider Weinberger & Beilly LLP, 2200 Corporate Blvd. NW, Suite 210, Boca Raton, Florida 33431, Attention: Steven I. Weinberger, Esq.; and

          (b) if sent to the Company shall be mailed, delivered, or faxed and confirmed in writing to the Company and its counsel at the addresses set forth in the Registration Statement.

provided, however, that any notice to an Underwriter pursuant to Section 7 shall be delivered or sent by mail or facsimile transmission to such Underwriter at its address set forth in its acceptance facsimile to the Representative, which address will be supplied to any other party hereto by the Representative upon request. Any such notices and other communications shall take effect at the time of receipt thereof.

     13. Parties. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Underwriters, the Company and the controlling Persons, directors, officers, employees and agents referred to in Sections 6 and 7 hereof, and their respective successors and assigns, and no other Person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and said controlling Persons and their respective successors, officers, directors, heirs and legal representatives, and it is not for the benefit of any other Person. The term “successors and assigns” shall not include a purchaser, in its capacity as such, of Firm Units or Additional Units from any of the Underwriters.

     14. Governing Law. This Agreement shall be deemed to have been executed and delivered in Florida and both this Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other respects by the laws of the State of Florida, without regard to the conflicts of laws principals. Each of the Underwriters and the Company: (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in a State or Federal Court located in Palm Beach County, Florida, (b) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (c) irrevocably consents to the jurisdiction of State and Federal Courts located in Palm Beach County, Florida in any such suit, action or proceeding. Each of the Underwriters and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the a State or Federal Court located in Palm Beach County, Florida and agrees that service of process upon the Company mailed by certified mail to the Company’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Underwriters mailed by certified mail to the Underwriters’ address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service process upon the Underwriter, in any such suit, action or proceeding. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND

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CREDITORS) HEREBY WAIVES ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.

     15. Entire Agreement. This Agreement, together with the schedule and exhibits attached hereto and as the same may be amended from time to time in accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no other or further agreements outstanding not specifically mentioned herein.

     16. Severability. If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.

     17. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile transmission shall constitute valid and sufficient delivery thereof.

     18. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

     19. Time is of the Essence. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

[Signature Pages Follow]

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     If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

Very truly yours,
NGTV, a California corporation
By:
	Name:
	Title:

Accepted by the Representative, acting for itself and as
Representative of the Underwriters named on Schedule A attached hereto,
as of the date first written above:

CAPITAL GROWTH FINANCIAL, LLC

By:
	Name:
	Title:

[End of Signature Page to Underwriting Agreement]

SCHEDULE A

Selling Security Holders

Name of Selling Security Holder	Number of Holder Firm Units to be Sold
TOTAL	[1,830,507]

SCHEDULE B

Underwriters

							Number of
							Additional Units to
							be Purchased if
	Total Number of		Number of Company		Number of Holder		Over-Allotment
	Firm Units to be		Firm Units to be		Firm Units to be		Option is Fully
Underwriter	Purchased		Purchased		Purchased		Exercised
Capital Growth Financial, LLC
TOTAL		[5,997,174]		[4,166,667]		[1,830,507]		[899.576]

ANNEX I

Form of Opinion of Company Counsel

_______, 2006

Capital Growth Financial, LLC [Co-leads, if any]
[Address]

          Re:     NGTV, a California Corporation

Ladies and Gentlemen:

     We have acted as counsel to NGTV, a California corporation, (the “Company") in connection with the filing of a Registration Statement on Form S-1 (the “Registration Statement"). This opinion has been requested by Capital Growth Financial, LLC as the representative[s] of the several underwriters named in the Underwriting Agreement dated as of [          ], 2006 (the “Agreement"). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

     In rendering this opinion, we have examined such documents, records and matters of law as we have deemed necessary for purposes of this opinion.

     We have assumed the genuineness of all signatures (except those of authorized officers of the Company), the authenticity of all documents submitted to us as originals and the conformity to original documents of documents submitted to us as certified, conformed or photostatic copies. We have also assumed, without verification, the legal capacity of each individual who has executed the Agreement. With respect to certain factual matters, we have relied, without independent investigation, on the facts stated in the representations and warranties contained in the Agreement.

     We have also assumed, without verification (i) that the parties to the Agreement and the other agreements, instruments and documents executed in connection therewith, other than the Company, have the power (including, without limitation, corporate power where applicable) and authority to enter into and perform the Agreement and such other agreements, instruments and documents, (ii) the due authorization, execution and delivery by such other parties of the Agreement and such other agreements, instruments and documents, and (iii) that the Agreement and such other agreements, instruments and documents constitute legal, valid and binding obligations of each such other party, enforceable against each such other party in accordance with their respective terms.

     Whenever our opinion is stated to be “to our knowledge”, “to the best of our knowledge”, or “known to us,” that phrase shall mean that, in the course of our representation of the Company, no facts have come to the attention of the attorneys in our firm performing such

services which should give us actual knowledge of the existence or absence of such facts. No inferences of knowledge may be drawn from the fact of our representation of the Company. Our opinions are limited to those expressly stated herein and no other or additional opinions shall be inferred.

     We do not undertake to advise you or anyone else of any changes in the opinions expressed herein resulting from changes in law, changes in facts or any other matters that hereafter might occur or be brought to our attention that did not exist on the date hereof and of which we had no knowledge.

     We express no opinion as to the law of any jurisdiction other than the federal law of the United States and the laws of the State of California. To the extent the laws of any state other than the State of California govern any of the opinions expressed herein, we have assumed that the laws of such state are the same as the laws of the State of California.

     Based upon our consideration of such questions of law as we have deemed relevant under the circumstances, and subject to the limitations and qualifications herein set forth, it is our opinion that:

     1. The Company has been duly incorporated, is validly existing and in good standing under the laws of the State of California and has full corporate power and authority to own or lease all the assets owned or leased by it as described in the Registration Statement and Prospectus and to conduct its business as described in the Registration Statement and Prospectus.

     2. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not have a material adverse effect on the condition (financial or otherwise), earnings, operations or business of the Company.

     3. The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and the Prospectus. Since our representation of the Company began on [___date], all of such outstanding capital stock of the Company issued thereafter has been duly authorized, validly issued and is fully paid and nonassessable, and, to our knowledge, was not issued in violation of applicable state and federal securities laws or subject to any preemptive or, to our knowledge, similar rights that have not been waived or satisfied.

     4. To our knowledge, the Company does not own or control, directly or indirectly, any shares of stock or any other equity or long-term debt securities of any corporation or have any equity interest in any corporation, firm, partnership, joint venture, association or other entity.

     5. The description of the capital stock of the Company included in the Registration Statement and the Prospectus conforms in all material respects to the terms thereof.

     6. To our knowledge, there are no judicial, regulatory or other legal or governmental proceedings pending or threatened to which the Company is a party or to which any of its

properties is subject that are required to be described in the Registration Statement or the Prospectus but are not so described.

     7. No consent, approval, authorization, order, regulation, filing, qualification, license, permit or declaration with, any court or any judicial, regulatory or other legal or governmental agency or body is required for the execution, delivery and performance by the Company of the transactions on its part contemplated under each of the Underwriting Agreement, Representative’s Option Agreement, Warrant Agreement and Financial Advisory Agreement except such as have been obtained or made under the Act or the Rules and Regulations and such as may be required under state securities or Blue Sky laws or the by-laws and rules of the NASD or the American Stock Exchange in connection with the purchase and distribution by the Underwriters of the Shares.

     8. The Company has full corporate power and authority to execute and deliver each of the Underwriting Agreement, the Securities, Representative’s Option Agreement, Representative’s Option Securities, Warrant Agreement and Financial Advisory Agreement and to perform its obligations thereunder. Each of the Underwriting Agreement, Representative’s Option Agreement, Warrant Agreement and Financial Advisory Agreement have been duly authorized, executed and delivered by the Company. Each of the Underwriting Agreement, Representative’s Option Agreement, Warrant Agreement and Financial Advisory Agreement constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

     9. The Securities have been duly authorized for issuance and sale by the Company to the Underwriters pursuant to the Underwriting Agreement and, when issued and delivered by the Company pursuant to the Underwriting Agreement against payment of the consideration set forth in the Underwriting Agreement, will be validly issued and fully paid and non-assessable and no holder of the Securities issued and sold by the Company is or will be subject to personal liability solely by reason of being such a holder and will not have been issued in violation of or subject to preemptive or, to such counsel’s knowledge, similar rights that entitle or will entitle any Person to acquire any Securities from the Company upon issuance or sale thereof. The Securities, the Representative’s Option Agreement, Representative’s Option Securities, and the Warrant Agreement conform in all material respects to the respective descriptions thereof contained in the Prospectus; the Warrant Shares, the Representative’s Unit Purchase Options and the Representative’s Option Securities, upon issuance in accordance with the terms of such Warrants, the Warrant Agreement, and the Representative’s Option Agreement have been duly authorized and, when issued and delivered in accordance with their respective terms and applicable California law, will be duly and validly issued, fully paid, non-assessable, free of preemptive rights and no personal liability will attach to the ownership thereof; a sufficient number of shares of Common Stock has been reserved for issuance upon exercise of the Warrants, Representative’s Option Agreement and upon the exercise of the Warrants underlying the Representative’s Option Agreement and to the best of such counsel’s knowledge, neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by the Agreement gives rise to any registration rights other than (i) those which have been waived or

satisfied for or relating to the registration of any shares of Common Stock in the Registration Statement, (ii) those that have been described in the Registration Statement, or (iii) those contained in the Representative’s Option Agreement.

     10. The Representative’s Option Agreement is duly authorized and upon payment of the purchase price specified in Section 2(g) of the Underwriting Agreement will be validly issued and constitute valid and binding obligations of the Company; and the certificates representing the Representative’s Option Agreement and Representative’s Option Securities are in due and proper form under law.

     11. The Securities have been authorized for listing on the American Stock Exchange subject to official notice of issuance.

     12. The execution and delivery of each of the Underwriting Agreement, Representative’s Option Agreement, Warrant Agreement and Financial Advisory Agreement, the compliance by the Company with all of the terms thereof and the consummation of the transactions contemplated thereby (A) does not contravene any material provision of applicable law or the Articles of Incorporation or By-Laws of the Company, (B) to our knowledge, will not result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company pursuant to the terms and provisions of, conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give any party a right to terminate any of its obligations under, or result in the acceleration of any obligation under, any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement or other evidence of indebtedness, lease, contract or other agreement, document or instrument known to us to which the Company is a party or by which the Company or its properties is bound or affected, except for such liens, charges, encumbrances, conflicts, breaches, violations, defaults or rights that would not have a material adverse effect on the condition (financial or otherwise), earnings, operations or business of the Company, or (C) violate or conflict with (i) any judgment, ruling, decree or order known to us or (ii) any statute, rule or regulation of any court or other governmental agency or body, applicable to the business or properties of the Company, except for such violations or conflicts that would not have a Material Adverse Effect on the condition (financial or otherwise), earnings, operations or business of the Company.

     13. To our knowledge, there is no document or contract of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that is not described or filed or incorporated by reference as required, and each description of such contracts and documents that is contained or incorporated by reference in the Registration Statement and Prospectus fairly presents in all material respects the information required under the Act and the Rules and Regulations.

     14. The statements under the captions “Business — Intellectual Property,” “Business - Government Regulations and Ratings; NGTV Content,” “Business — Overview of Television Broadcast Regulations and Ratings Related to Obscenity, Indecency and Profanity,” “Shares Available for Future Sale,” “Indemnification, Limitations of Liability, and Disclosure of Commission Position on Indemnification for Securities Act Liabilities” and “Description of Our Securities” in the Prospectus and Items 14 and 15 of Part II of the Registration Statement, insofar

as such statements constitute a summary of the legal matters, documents or proceedings referred to therein, fairly present in all material respects the information called for with respect to such legal matters, documents and proceedings.

     15. To our knowledge, no holder of securities of the Company has rights, which have not been waived or satisfied, to require the Company to register with the Commission shares of Common Stock or other securities, as part of the Offering.

     16. The Registration Statement has been declared effective under the Act; any required filing of the Prospectus pursuant to Rule 424(b) and Rule 430A have been made; and, to the best of our knowledge (a) no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereof has been issued under the Act and (b) no proceedings for that purpose have been instituted or are pending or threatened by the Commission.

     17. The Registration Statement and the Prospectus comply as to form in all material respects with the requirements of the Act and the Rules and Regulations (other than the financial statements, schedules and other financial data contained or incorporated by reference in the Registration Statement or Prospectus, as to which we express no opinion).

     18. The Company is not required, and upon the issuance and sale of the Securities as contemplated in the Underwriting Agreement and the application of the net proceeds therefrom as described in the Registration Statement and Prospectus will not be required, to register as an “investment company” under the 1940 Act.

     19. The Company is not in violation of its Articles of Incorporation or By-laws and, to such counsel’s knowledge after due inquiry, the Company is not in default in the performance of any material obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument that is material to the Company, taken as a whole, to which the Company is a party or by which the Company’s property is bound.

     20. The Company has such authorizations of, and has made all filings with and notices to, all governmental or regulatory authorities and self-regulatory organizations and all courts and other tribunals, as are necessary to own, lease, license and operate its properties and to conduct its business as described in the Prospectus, except where the failure to have any such authorization or to make any such filing or notice would not, singly or in the aggregate, have a Material Adverse Effect. Each such authorization is valid and in full force and effect and the Company is in compliance with all the terms and conditions thereof and with the rules and regulations of the authorities and governing bodies having jurisdiction with respect thereto. To the best knowledge of such counsel, no event has occurred (including, without limitation, the receipt of any notice from any authority or governing body) which allows or, after notice or lapse of time or both, would allow, revocation, suspension or termination of any such authorization or results or, after notice or lapse of time or both, would result in any other impairment of the rights of the holder of any such authorization.

     As counsel, we have participated in conferences with officers and representatives of the Company, representatives of the independent public accountants for the Company and the Underwriters at which the contents of the Registration Statement and the Prospectus and related matters were discussed and, no facts have come to our attention which would lead us to believe that either the Registration Statement, at the time it became effective (including the information deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or any amendment thereof made prior to the Closing Date, as of the date of such amendment, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or that the Prospectus, as of its date (or any amendment thereof or supplement thereto made prior to the Closing Date as of the date of such amendment or supplement) and as of the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that we do not express any belief or opinion with respect to the financial statements and schedules and other financial data included or incorporated by reference therein).

     Notwithstanding anything in this letter to the contrary, we express no opinion with respect to, and assume no responsibility for, any of the following matters:

     (1) The enforceability, under certain circumstances, of provisions in the Agreement to the effect that rights or remedies are not exclusive; that every right or remedy is cumulative and may be exercised in addition to or with any other right or remedy; that the election of a particular remedy or remedies does not preclude recourse to one or more other remedies; or that failure to exercise or a delay in exercising rights or remedies will not operate as a waiver of any such right or remedy.

     (2) The enforceability of provisions of the Agreement where circumstances have rendered performance by any party thereto impossible.

     (3) The validity or enforceability of any provisions of the Agreement that: (i) provide for the confession of judgment; (ii) contain a waiver of (1) broadly or vaguely stated rights, (2) the benefits of statutory, regulatory, or constitutional rights (such as, by way of example and not limitation, the statute of limitations and the right to a jury trial), unless and to the extent the statute, regulation, or constitution explicitly allows waiver or cases have determined that waiver is enforceable, (3) unknown future defenses, or (4) rights to damages, defenses, counter-claims and set-offs; (iii) attempt to change or waive rules of evidence or fix the method or quantum of proof to be applied in litigation or similar proceedings; (iv) select the forum for the resolution of any disputes or consents to the jurisdiction of any jurisdiction (both as to personal jurisdiction and subject matter jurisdiction).

     This letter is provided as a legal opinion. This letter is rendered personally to the Underwriters and is solely for the benefit of the Underwriters in connection with the Agreement, the Representative’s Option Agreement and the Representative’s Financial Advisory Agreement, and may not be relied upon for any other purpose, or quoted to or relied upon by any other

person or entity for any purpose, without our prior written consent, except that this letter may be disclosed to regulatory authorities to the extent required by applicable law. This letter speaks only as of the date hereof.

Richardson & Patel LLP

ANNEX III

Form of Lock-Up Agreement

                    , 2006

Capital Growth Financial, LLC
225 NE Mizner Blvd., Suite 750
Boca Raton, Florida 33432
As Representative of the Underwriters

     Re:     NGTV

Ladies and Gentlemen:

     This letter agreement (this “Agreement”) relates to the proposed public offering (the "Offering”) by NGTV, a California corporation (the “Company”), of Units comprised of shares of common stock of the Company (the “Common Stock”) and warrants to purchase Common Stock.

     The Offering is governed by a certain Underwriting Agreement dated ___, 2006 by and between the Company and Capital Growth Financial, LLC, as representative of the several underwriters named therein (the “Representative”). In order to induce the Representative to act as underwriter for the Offering, the undersigned hereby agrees that, except as set forth herein, without the prior written consent of CGF during the Lock-Up Period (as defined below), the undersigned shall not, directly or indirectly:

     (a) offer, sell, agree to offer or sell, solicit offers to purchase, grant any call option or purchase any put option with respect to, pledge, borrow or otherwise dispose of any Relevant Security (as defined below), and/or

     (b) establish or increase any “put equivalent position” or liquidate or decrease any “call equivalent position” with respect to any Relevant Security (in each case within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder), or otherwise enter into any swap, derivative or other transaction or arrangement that transfers to another, in whole or in part, any economic consequence of ownership of a Relevant Security, whether or not such transaction is to be settled by delivery of Relevant Securities, other securities, cash or other consideration.

     As used herein, the term “Lock-Up Period” means the period beginning on the date hereof and ending on the twelve (12) month anniversary of the date upon which the registration statement for securities issued in connection with the Offering is declared effective by the Securities and Exchange Commission (the “Effective Date”).

     As used herein, the term “Relevant Security” means any shares of Common Stock or any other debt, equity, option, warrant or other security or instrument (“Other Securities”) of or

binding upon the Company or any subsidiary thereof that is convertible into, or exercisable or exchangeable for, shares of Common Stock or any Other Securities of the Company or any subsidiary thereof or that holds the right to acquire any shares Common Stock or Other Securities of the Company or any subsidiary thereof.

     The undersigned hereby authorizes the Company during the Lock-Up Period to cause any transfer agent for the Relevant Securities to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, Relevant Securities for which the undersigned is the record holder and, in the case of Relevant Securities for which the undersigned is the beneficial but not the record holder, agrees during the Lock-Up Period to cause the record holder to cause the relevant transfer agent to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, such Relevant Securities.

     The undersigned hereby further agrees that, without the prior written consent of CGF during the Lock-Up Period the undersigned shall not:

     (x) file or participate in the filing with the Securities and Exchange Commission of any registration statement, or circulate or participate in the circulation of any preliminary or final prospectus or other disclosure document with respect to any proposed offering or sale of a Relevant Security, and/or

     (y) exercise any rights the undersigned may have to require registration with the Securities and Exchange Commission of any proposed offering or sale of a Relevant Security [provided, however;

     (z) with respect to shares of Common Stock forming a part of unregistered units issuable to the undersigned on the Effective Date (upon automatic conversion into unregistered units of the Company’s promissory note in favor of the undersigned in the principal amount of $593,940 dated October 12, 2005), CGF hereby consents to the undersigned receiving the same registration rights as have been accorded to other holders of unregistered units whose promissory notes are automatically converted into unregistered units on the Effective Date; provided that nothing in this subparagraph (z) shall entitle the undersigned to sell any Relevant Security prior to expiration of the Lock-Up Period]*.

     The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this Agreement constitutes the legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms. Upon request, the undersigned will execute any additional documents necessary in connection with enforcement hereof. Any obligations of the undersigned shall be binding upon the successors and assigns of the undersigned from the date first above written.

     Notwithstanding any provision of this Agreement to the contrary, the restrictions contained in this Agreement shall not apply to:

     [(i)] the resale of any Relevant Security acquired by the undersigned in the public markets subsequent to the Effective Date;

     [(ii) in any three month period, the resale of the lesser of [___] shares of Common Stock of the Company beneficially owned by the undersigned or the maximum number of shares that the undersigned could sell during any three month period pursuant to the provisions of Rule 144 under the Securities Act of 1933, as amended; provided such resales shall not commence until a date that is at least 90 days following the Effective Date (and, in any event, after the Units detach); and such resales are made (a) pursuant to and in accordance with the exemption from registration provided by Rule 144 or (b) by private transfer in compliance with all applicable corporate and securities laws, rules and regulations.]*

     It is understood that if the Effective Date does not occur prior to June 30, 2006, 2006, then, without further act by or on the part of the Representative, the undersigned will be released from his, her or its obligation under this Agreement.

     This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to the conflicts of laws principles thereof. Delivery of a signed copy of this letter by facsimile transmission shall be effective as delivery of the original hereof.

Very truly yours,

By:

Print Name:

* Information in [brackets] applies only to lock up agreements executed by Gene Simmons, Kourosh Taj and Jay Vir]

EX-1.1

exv1w1

EX-1.2

EXHIBIT 1.2

CAPITAL GROWTH FINANCIAL, LLC
225 Mizner Blvd.
Suite 750
Boca Raton, FL 33432

SELECTED DEALERS AGREEMENT

Dear Sirs:

     1. Registration under the Securities Act of 1933, as amended (the “Act”), of the [5,997,174] Units¹ of NGTV, a California corporation (the “Company”), as more fully described in the Preliminary Prospectus, dated                     , 2006, and in the final prospectus (“Prospectus”) which will be forwarded to you, will become effective in the near future. We, as the Underwriters, are offering certain of the Units for purchase by a selected group of dealers (the “Selected Dealers”) on the terms and conditions stated herein.

     (a) The authorized public offering price is [$6.00] per Unit.

     (b) The dealers’ selling concession is not to exceed $0.___per Unit payable upon termination of this Agreement, except as provided below. We reserve the right not to pay such concession on any of the Units purchased by any of the Selected Dealers from us and repurchased by us at or below the price stated above prior to such termination.

     (c) You may reallow not in excess of $0.___per Unit as a selling concession to dealers who are members in good standing of the National Association of Securities Dealers, Inc. (“NASD”) or to foreign dealers who are not eligible for membership in the NASD and who have agreed (i) not to sell the Unit within the United States of America, its territories or possessions or to persons who are citizens thereof or residents therein, and (ii) to abide by the applicable Conduct Rules of the NASD.

     (d) Delivery of the Unit shall be made on or about                     , 2006 or such later date as we may advise on not less than one day’s notice to you, at the office of Capital Growth Financial, LLC,. or at such other place as we shall specify on not less than one day’s notice to you. Payment for the Unit is to be made, against delivery, at the authorized public offering price stated above, or, if we shall so advise you, at the authorized public offering price less the dealers’ selling concession stated above, by a certified or official bank check in New York Clearing House Funds payable to the order of Capital Growth Financial, LLC

     (e) This Agreement shall terminate at the close of business on the 45th day following the effective date of the Registration Statement (of which the enclosed Prospectus forms a part), unless extended at our discretion for a period or periods not to exceed in the aggregate 30 additional days. We may terminate this Agreement, whether or not extended, at any time without notice.

     2. Any of the Units purchased by you hereunder are to be offered by you to the public at the public offering price, except as herein otherwise provided and except that a reallowance from such public offering price not in excess of the amount set forth on the first page of this Agreement may be allowed as

¹ Plus the over-allotment option available to the Underwriters to purchase up to an additional [899,576] Units.

1

consideration for services rendered in distribution to dealers that (a) are actually engaged in the investment banking or securities business; (b) execute the written agreement prescribed by Rule 2740 of the NASD Conduct Rules; and (c) are either members in good standing of the NASD or foreign banks, dealers or institutions not eligible for membership in the NASD that represent to you that they will promptly reoffer such Unit at the public offering price and will abide by the conditions with respect to foreign banks, dealers and institutions set forth in paragraph 9 below.

     3. You, by becoming a member of the Selected Dealers, agree (a) upon effectiveness of the Registration Statement and your receipt of the Prospectus, to take up and pay for the number of Units allotted and confirmed to you;, (b) not to use any of the Unit to reduce or cover any short position you may have; (c) upon our request, to advise us of the number of Units purchased from us as manager of the Selected Dealers remaining unsold by you and to resell to us any or all of such unsold Units at the public offering price stated above, less all or such part of the concession allowed you as we may determine, and (d) to make available a copy of the Prospectus to all persons who on your behalf will solicit orders for the Units prior to the making of such solicitations by such persons. You are not authorized to give any information or to make any representations other than those contained in the Prospectus or any supplements or amendments thereto.

     4. As contemplated by Rule l5c2-8 under the Securities Exchange Act of 1934, as amended, we agree to mail a copy of the Prospectus to any person making a written request therefor during the period referred to in the rules and regulations adopted under such Act, the mailing to be made to the address given in the request. You confirm that you have delivered all preliminary prospectuses and revised preliminary prospectuses, if any, required to be delivered under the provisions of Rule 15c2-8 and agree to deliver all copies of the Prospectus required to be delivered thereunder. We have heretofore delivered to you such preliminary prospectuses as have been required by you, receipt of which is hereby acknowledged, and will deliver such further prospectuses as may be requested by you.

     5. You agree that until termination of this Agreement you will not make purchases or sales of the Units except (a) pursuant to this Agreement, (b) pursuant to authorization received from us, or (c) in the ordinary course of business as broker or agent for a customer pursuant to any unsolicited order.

     6. Additional copies of the Prospectus and any supplements or amendments thereto shall be supplied in reasonable quantity upon request.

     7. The Units are offered by us for delivery when, as and if sold to, and accepted by, us and subject to the terms herein and in the Prospectus or any supplements or amendments thereto, to our right to vary the concessions and terms of offering after their release for public sale, to approval of counsel as to legal matters and to withdrawal, cancellation or modification of the offer without notice.

     8. Upon written application to us, you shall be informed as to the jurisdictions under the securities or blue sky laws of which we believe the Units are eligible for sale, but we assume no responsibility as to such eligibility or the right of any member of the Selected Dealers to sell any of the Units in any jurisdiction. We have caused to be filed a Further State Notice relating to such of the Units to be offered to the public in New York in the form required by, and pursuant to, the provisions of Article 23A of the General Business Law of the State of New York. Upon the completion of the public offering contemplated herein, each member of the Selected Dealers agrees to promptly furnish to us, upon our request, territorial distribution reports setting forth each jurisdiction in which sales of the Units were made by such member, the number of Units sold in such jurisdiction, and any further information as we may request, in order to permit us to file on a timely basis any report that we as the Underwriters of the

2

offering or manager of the Selected Dealers may be required to file pursuant to the securities or blue sky laws of any jurisdiction.

     9. You, by becoming a member of the Selected Dealers, represent that you actually engaged in the investment banking or securities business and that you are (a) a member in good standing of the NASD and will comply with Rule 2740 of the NASD Conduct Rules, or (b) a foreign dealer or institution that is not eligible for membership in the NASD and that has agreed (i) not to sell Units within the United States of America, its territories or possessions or to persons who are citizens thereof or residents therein; (ii) that any and all sales shall be in compliance with Rule 2110 of the NASD Conduct Rules; (iii) to comply, as though it were a member of the NASD, with Rules 2730, 2740 and 2750 of the NASD Conduct Rules, and to comply with Rule 2420 thereof as that Rule applies to a non-member broker or dealer in a foreign country.

     10. Nothing herein shall constitute any members of the Selected Dealers partners with us or with each other, but you agree, notwithstanding any prior settlement of accounts or termination of this Agreement, to bear your proper proportion of any tax or other liability based upon the claim that the Selected Dealers constitute a partnership, association, unincorporated business or other separate entity and a like share of any expenses of resisting any such claim.

     11. Capital Growth Financial, LLC shall be the Representative of the several underwriters of the offering and managers of the Selected Dealers and shall have full authority to take such action as we may deem advisable in respect of all matters pertaining to the offering or the Selected Dealers or any members of them. Except as expressly stated herein, or as may arise under the Act, we shall be under no liability to any member of the Selected Dealers as such for, or in respect of (i) the validity or value of the Units (ii) the form of, or the statements contained in, the Prospectus, the Registration Statement of which the Prospectus forms a part, any supplements or amendments to the Prospectus or such Registration Statement, any preliminary prospectus, any instruments executed by, or obtained or any supplemental sales data or other letters from, the Company, or others, (iii) the form or validity of the Underwriting Agreement(s) or this Agreement, (iv) the eligibility of any of the Units for sale under the laws of any jurisdiction, (v) the delivery of the Units, (vi) the performance by the Company or others of any agreement on its or their part, or (vii) any matter in connection with any of the foregoing, except our own want of good faith.

     12. If, for federal income tax purposes, the Selected Dealers, among themselves or with the several Underwriters, should be deemed to constitute a partnership, then you elect to be excluded from the application of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986, as amended, and you agree not to take any position inconsistent with such selection. You authorize us, in our discretion, to execute and file on your behalf such evidence of such election as may be required by the Internal Revenue Service.

     13. All communications from you shall be addressed to Capital Growth Financial, LLC, at 225 NE Mizner Blvd, Suite 750, Boca Raton, FL 33432, Attention: Alan L. Jacobs, CEO. Any notice from us to you shall be deemed to have been fully authorized by the Underwriters and to have been duly given if mailed, telegraphed or sent by confirmed facsimile transmittal to you at the address to which this letter is mailed. This Agreement shall be construed in accordance with the laws of the State of Florida without giving effect to conflict of laws. Time is of the essence in this Agreement.

     If you desire to become a member of the Selected Dealers, please advise us to that effect immediately by facsimile transmission and sign and return to us the enclosed counterpart of this letter.

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Very truly yours, CAPITAL GROWTH FINANCIAL, LLC
By:
	Michael S. Jacobs, President

We accept membership in the Selected Dealers on the terms specified above.

Dated:                     , 2006

(Name of Selected Dealer)

By:

Name:

Title:

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EX-1.3

EXHIBIT 1.3

NGTV
a California corporation

[5,997,174] Units¹
Consisting of
One Share of Common Stock and
One Redeemable Common Stock Purchase Warrant

AGREEMENT AMONG UNDERWRITERS

                                        , 2006

Capital Growth Financial, LLC
As Representative of the several
     Underwriters named in Schedule I hereto
225 NE Minzer Blvd
Suite 750
Boca Raton, FL 33432

Ladies and Gentlemen:

     We understand that NGTV, a California corporation (“Company”), desires to enter into agreements, substantially in the form of Exhibits A and B hereto (“Underwriting Agreements”). The Underwriting Agreements provide for the sale by the Company and the Selling Security Holders named therein to you and the other prospective Underwriters named in Schedule B to the Underwriting Agreements, severally and not jointly, of an aggregate of [5,997,174] Units (“Firm Units”), each Firm Unit consisting of one share (“Shares”) of Common Stock and one Warrant (“Warrant”). Each Warrant entitles the holder to purchase one-half of one Share of Common Stock commencing on the Separation Date (as such term is defined in the Underwriting Agreements) and expiring on the five year anniversary of the effective date of the Registration Statement. The Warrant is exercisable at [$6.00] per Share. The Warrants are redeemable in whole and not in part, at the option of the Company, at a price of $.25 per Warrant at any time after they become exercisable upon not less 30 days prior written notice, if the average closing price of the Common Stock has been at least [$8.40] per share for 10 consecutive trading days ending on the fifth business day prior to the date on which notice of redemption is given. The Shares and Warrants underlying the Firm Units are not immediately detachable and may trade separately on a date determined by the Representatives after the 60th day after the effective date of the Registration Statement. Pursuant to the Underwriting Agreements, the Company will grant to the Underwriters an option to purchase up to an additional [899,576] Units (“Option Units”), each Option Unit identical to the Firm Units for the purpose of covering over-allotments in connection with the sale of the Firm Units. The Option Units and the securities comprising same are hereinafter collectively called the “Option Securities”; and the Option Units and Firm Units are hereinafter referred to as the “Units.” The Units,

¹ Plus an option to acquire an additional [899,576] Units pursuant to the Underwriters’ over-allotment option.

Shares and Warrants, and any Option Securities purchased pursuant to the Underwriting Agreements are herein called the “Securities.”

     We understand that changes may be made in those who are to be Underwriters and in the respective number of Securities to be purchased by them, but that the number of Securities to be purchased by us, as set forth in said Schedule I will not be changed without our consent, except as provided herein or in the Underwriting Agreements. The parties on whose behalf you execute the Underwriting Agreements are herein cal1ed the “Underwriters.”

     We desire to confirm the agreement among you, the undersigned, and the other Underwriters with respect to the purchase of the Securities by the Underwriters, severally and not jointly, from the Company. The aggregate number of Securities which any Underwriter will be obligated to purchase from the Company pursuant to the terms of the Underwriting Agreements is herein called the “Underwriting Obligation” of that Underwriter.

     1. Authority and Compensation of Representative. We hereby authorize you, as our representative and on our behalf, (a) to enter into an agreement with the Company, in substantially the form attached’ hereto as Exhibit A, but with such changes therein as in your judgment will not be materially adverse to the Underwriters, providing for the purchase by us, severally and not jointly, from the Company, at the purchase price per Unit determined as set forth in said Exhibit A, of the number of Units set forth opposite our name in Schedule I to said Exhibit A, and our proportionate share of the Option Units which you determine to be purchased; (b) to exercise all the authority and discretion vested in the Underwriters and in you by the provisions of the Underwriting Agreements; (c) to take all such action as you in your discretion may deem necessary or advisable in order to carry out the provisions of the Underwriting Agreements and of this Agreement, and the sale and distribution of the Securities; and (d) to determine all matters relating to the public advertisement of the Securities.

     As our share of the compensation for your services hereunder, we will pay to you, and we authorize you to charge to our account on the Closing Dates referred to in the Underwriting Agreement, $                     per Unit in respect of’ the aggregate number of Units which we shall agree to purchase pursuant to the Underwriting Agreements.

     2. Public Offering of Units. The sale of Units to the public is to be made, as herein provided, as soon after the Registration Statement relating to the Units becomes effective as in your judgment is advisable. The purchase price to be paid by the Underwriters for the Units and the initial public offering price have been determined by agreement between you and the Company. The Units shall be first offered to the public at the initial public offering price as so determined (“Initial Public Offering Price”). You will advise us by facsimile or telephone when the Units shall be released for offering and when the Registration Statement relating to the Units shall become effective. We agree not to sell any of the Units until you have released them for that purpose. We authorize you, after the initial public offering, to change the public offering price, the concession, and the re-allowance if, in your sole discretion, such action becomes desirable by reason of changes in general market conditions or otherwise. As used herein, the terms “Registration Statement,” “Preliminary Prospectus,” and “Prospectus” shall have the meanings ascribed; thereto in the Underwriting Agreements. The public offering price at the time in effect is herein called the “Offering Price.” After notice from you that the Units are released for public sale, we will offer to the pub1ic in conformity with the provisions hereof and with the terms of offering set forth in the Prospectus such of our Units as you advise us are not reserved. We agree not to offer or sell any of the Units to persons over whose accounts we exercise investment discretion without their specific advance consent.

2

     3. Offering to Dealers and Retail Sales. We authorize you to reserve for offering and Sale, and on our behalf to sell, to retail purchasers (such sales being herein called “Retail Sales”) and to dealers selected by you (such dealers, among whom any Underwriter may be included, being herein called “Selected Dealers”) all or any part of our Units as you, in your sole discretion, shall determine. Such sales, if any, shall be made (a) in the case of Retail Sales, at the Offering Price, and (b) in the case of sales to Selected Dealers, at the Offering Price less such concession as you, in your sole discretion, shall determine. Except for such sales as are designated by a purchaser to be for the account of a particular Underwriter or Selected Dealer, any sales to Selected Dealers made for our account shall be as nearly as practicable in the ratio that the Units reserved for our account for offering to Selected Dealers bears to the aggregate of all Units of all Underwriters so reserved.

     You agree to notify us promptly on the date of the public offering as to the number, if any, of the Units which we may retain for direct sale by us. Prior to the termination of the provisions referred to in Section 13 hereof, you may reserve for offering and sale as hereinbefore provided any Units theretofore retained by us remaining unsold, and we may, with your consent, retain any Units heretofore reserved by you remaining unsold.

     We agree that, from time to time prior to the termination of the provisions referred to in Section 13 hereof, we shall furnish to you such information as you may request in order to determine the number of Units purchased by us under the Underwriting Agreements which then remain unsold, and we shall upon your request sell to you for the account of any Underwriter as many of such unsold Units as you may designate at the Offering Price, less all or any part of the concession to Selected Dealers as you, in your sole discretion, shall determine. The provisions of Section 4 hereof shall not be applicable in respect of any such sale.

     We authorize you to determine the form and manner of any communications or agreements with Selected Dealers. In the event that there shall be any agreements with Selected Dealers, you are authorized to act as manager thereunder and we agree, in such event, to be governed by the terms and conditions of such agreements. The form of Selected Dealer Agreement attached hereto as Exhibit B is satisfactory to us.

     It is understood that any Selected Dealer to whom an offer may be made as hereinbefore provided shall be actually engaged in the investment banking or securities business and shall be either (a) a member in good standing of the National Association of Securities Dealers, Inc. (“NASD”) or (b) a foreign dealer or institution which is not eligible for membership in the NASD and which agrees not to make any sales within the United States of’ America, its territories or its possessions or to persons who are citizens thereof or residents therein. Each Selected Dealer shall agree to comply with the provisions of Rules 2740 and 2790 of the NASD Conduct Rules. Each foreign Selected Dealer who is not a member of the NASD also shall agree to comply with the NASD’s Free-Riding Interpretation, as may be in effect from time-to-time, and to comply, as though it were a member of the NASD, with Rules 2730, 2740 and 2750 of the NASD’s Conduct Rules, and to comply with Rule 2420 thereof as that Rule applies to a non-member broker or dealer in a foreign country. The several Underwriters may allow, and the Selected Dealers, if any, may re-allow, such concession or concessions as you may determine from time to time on sales of Securities to any qualified dealer, all subject to the NASD’s Conduct Rules.

     You, and any of the several Underwriters with your prior consent, may make purchases or sales of the Units from or to any of the other Underwriters, at the Offering Price, less all or any part of the gross spread, and from or to any of the Selected Dealers at the Offering Price, less all or any part of the concession to Selected Dealers.

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     Upon your request, we will advise you of the identity of any dealer to whom we allow such a discount and any Underwriter or Selected Dealer from whom we receive such a discount.

     4. Repurchase in the Open Marker. Any Units sold by us (otherwise than through you) which shall be contracted for or purchased in the open market by you on behalf of any Underwriter or Underwriters shall be repurchased by us on demand at a price equal to the cost of such purchase plus commissions and taxes on redelivery. Any Units delivered on such repurchase need not be the identical certificates originally sold by us. In lieu of delivery of such Units to us, you may sell such Units in any manner for our account and charge us with the amount of any loss or expense or credit us with the amount of any profit, less any expense resulting from such sale, or charge our account with an amount not in excess of the concession to Selected Dealers.

     5. Delivery and Payment. Upon your request, we shall deliver to you payment for the Units to be purchased by us under the Underwriting Agreements in an amount equal to the Initial Public Offering Price for such Units, less the concession to Selected Dealers. Such payment shall be made in such form and at such time and place as may be specified in such request, and we authorize you to make payment for such Units against delivery thereof for our account hereunder. If we are a member of, or clear through a member of, The Depository Trust Company (“DTC”), you may, in your discretion, deliver our Units through the facilities of DTC.

     You shall remit to us, as promptly as practicable, the amounts received by you from Selected Dealers and retail purchasers as payment in respect of’ Units sold by you for our account pursuant to Section 3 hereof for which payment has been received. Units purchased by us under the Underwriting Agreements and not reserved or sold by you for our account pursuant to Section 3 hereof shall be delivered to us as promptly as practicable after receipt by you. Any Units purchased by us and so reserved which remain unsold at any time prior to the settlement of accounts hereunder may, in your discretion, and shall, upon your request, be delivered to us, but, until termination of the Selected Dealers Agreements pursuant to the terms thereof and of other selling arrangements, such delivery shall be for carrying purposes only. In case any Units reserved for sale in Retail Sales or to Selected Dealers shall not be purchased and paid for in due course as contemplated hereby, we agree (a) to accept delivery when tendered by you of any Units so reserved for our account and not so purchased and paid for, and (b) in case we shall have received payment from you in respect of any such Units, to reimburse you on demand for the full amount which you shall have paid us in respect of’ such Units.

     In the event of our failure to tender payment for Units as provided in the Underwriting Agreements, you shall have the right under the provisions thereof to arrange for other persons, who may include you and any other Underwriter, to purchase such Units which we had agreed to purchase, but without re1ieving us from liability for our default.

     6. Authority to Borrow. We authorize you to advance your funds for our account (charging current interest rates) and to arrange loans for our account or the account of the Underwriters for the purpose of carrying out this Agreement, and in connection therewith to execute and deliver any notes or other instruments, and to handle or pledge as security therefor all or any part of our Units purchased hereunder for our account. Any lender is hereby authorized to accept your instructions in all matters relating to such loans. Any part of our Securities so held by you may be delivered to us for carrying purposes and, if so delivered, will be redelivered to you upon demand.

     7. Allocation of Expenses and Liability. We authorize you to charge our account with and we agree to pay (a) all transfer taxes on sales made by you for our account, except as herein otherwise provided; and (b) our proportionate share (based on our Underwriting Obligation) of all expenses

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incurred by you in connection with the purchase, carrying, sale and distribution of’ the Units and all other expenses arising under the terms of the Underwriting Agreements or this Agreement. Your determination of all such expenses and your allocation thereof shall be final and conclusive. You may at any time make partial distributions of credit balances or call for payment of debit balances. Funds for our account at any time in your hands may be held in your general funds without accountability for interest. As soon as practicable after the termination of this Agreement, the net credit or debit balance in our account after proper charge and credit for all interim payments and receipts, shall be paid to or by us, provided that you may establish such reserve as you, in your sole discretion, shall deem advisable to cover possible additional expenses chargeable to the several Underwriters. Notwithstanding any settlement, we will remain liable for any taxes on transfers for our account and for our proportionate share (based on our Underwriting Obligations) of all expenses and liabilities that may be incurred for the accounts of the Underwriters.

     8. Liability for Future Claims. Neither any statement by you of any credit or debit balance in our account, nor any reservation from distribution to cover possible additional expenses relating to the Securities, shall constitute any representation by you as to the existence or nonexistence of possible unforeseen expenses or liabilities of, or charges against, the several Underwriters. Notwithstanding the distribution of any net credit balance to us or the termination of this Agreement or both, we shall be and remain liable for, and will pay on demand, (a) our proportionate share (based on our Underwriting Obligation) of all expenses and liabilities which may be incurred by or for the accounts of the Underwriters if they are deemed to constitute an association, unincorporated business, partnership or any separate entity, and (b) any transfer taxes paid after such settlement on account of any sale or transfer for our account.

     9. Stabilization and Over-Allotment. We authorize you (a) to make purchases and sales of Securities in the open market or otherwise, for long or short account, and on such terms and at such prices as you, in your sole discretion, shall deem advisable; (b) in arranging for sales of the Units, to over-allot; and (c) either before or after the termination of this Agreement, to cover any short position or liquidate any long position incurred pursuant to this Section 9; subject, however, to the applicable rules and regulations of the Securities and Exchange Commission (“Commission”) under the Securities Exchange Act of 1934, as amended (“1934 Act”). All such purchases and sales and over-allotments shall be made for the accounts of the several Underwriters as nearly as practicable in proportion to their respective Underwriting Obligations; provided, however, that our net position resulting from such purchases and sales and over-allotment shall not exceed, for either long or short account, 15% of the aggregate amount which we shall become obligated to pay in respect of the total number of Units purchased for our account. We agree to take up at cost on demand any Units or Securities purchased for our account pursuant to this Section 9, and to deliver on demand any such Units over-allotted for our account pursuant to this Section 9.

     If you effect any stabilizing purchase pursuant to this Section 9, you will promptly notify us of the date and time when the first stabilizing purchase was effected, and the date and time when stabilizing was terminated. You will retain such information as is required to be retained by you “as manager” pursuant to Rule 17a-2 under the 1934 Act. We will furnish to you not later than three business days following the date on which stabilizing was commenced such information as is required by Rule 17a-2(d) and notify you of the date and time when stabilizing was terminated.

     10. Open Market Transactions. We agree that we will not make bids or offers, or make or induce purchases or sales for our own account or the accounts of customers, in the open market or otherwise, either before or after the purchase of the Units and for either long or short account of any Securities or any security of the same class and series, or any right to purchase any such security except

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(a) as provided in this Agreement, the Underwriting Agreements, and the Selected Dealers Agreements or otherwise approved by you; (b) in brokerage transactions not involving solicitation of the customer’s order; and (c) in connection with option and option-related transactions that are consistent with the “no-action” position set forth in Release No. 17609, as amended in Release No. 19565, of the Commission under the 1934 Act. We further agree that we will not lend, either before or after the purchase of the Securities, to any customer, Underwriter, Selected Dealer, or to any other securities broker or dealer, any Securities. Before the completion of our participation in the distribution (as defined in Regulation M), we will otherwise comply with Regulation M.

     11. Blue Sky. Before the initial offering by the Underwriters, you will inform us as to the states and other jurisdictions under the respective securities or blue sky laws of which it is believed that the Securities have been qualified for sale or are exempt from such qualification, but you do not assume any responsibility or obligation as to the accuracy of such information or as to the right of any Underwriter or dealer to offer or sell the Securities in any state or other jurisdiction. You agree to file or cause to be filed, on behalf of the Underwriters, a Further State Notice in respect of the Securities pursuant to Article 23-A of the General Business Law of the State of New York, if necessary.

     12. Default by Underwriters. Default by one or more Underwriters in respect of their obligations under the Underwriting Agreement shall not release us from any of our obligations, or in any way affect the liability of any defaulting Underwriter to the other Underwriters for damages resulting from such default. In the event of such default by one or more Underwriters, you are authorized to increase, pro rata with the other non-defaulting Underwriters, the amount of Units which we shall be obligated to purchase from the Company; provided, however, that the aggregate amount of all such increases for all non-defaulting Underwriters shall not exceed 10% of the Units and, if the aggregate amount of the Units not taken up by such defaulting Underwriters exceeds such 10%, you are further authorized, but shall not be obligated, to arrange for the purchase by other persons, who may include you and other non-defaulting Underwriters, of all or a portion of the Units not taken up by such Underwriter. In the event any such increases or arrangements are made, the respective amounts of the Units to be purchased by the non-defaulting Underwriters and by any such other person or persons shall be taken as the basis for the Underwriter’s Obligations under this Agreement, but this shall not in any way affect the liability of any defaulting Underwriter to the other Underwriters for damages resulting from such default.

     In the event of default by one or more Underwriters in respect of their obligations under this Agreement to take up and pay for any Units purchased by you for their respective accounts pursuant to Section 9 hereof, or to deliver any such Units sold or over-allotted by you for their respective accounts pursuant to any provision of this Agreement, and to the extent that arrangements shall not have been made by you for other persons to assume the obligations of such defaulting Underwriter or Underwriters, each non-defaulting Underwriter shall assume its proportionate share of the aforesaid ob1igations of each such defaulting Underwriter without relieving any such defaulting Underwriter of its liability therefor.

     13. Termination. Section 2, the second paragraph and the first sentence of the third paragraph of Section 3, Section 4, the first sentence of Section 9 (other than clause (c) thereof) and Section 10 hereof will terminate at the close of business on the forty-fifth calendar day after the effective date of the Registration Statement, unless extended or sooner terminated as hereinafter provided. You may extend such provisions, or any of them, for a period not to exceed thirty additional calendar days by notice to us to such effect. You may terminate any of such provisions at any time by notice to us, and you may terminate all such provisions at any time by notice to us to the effect that the offering provisions of this Agreement are terminated.

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     14. General Position of the Representatives. In taking action under this Agreement, you shall act only as agent of the several Underwriters. Your authority shall include the taking of such action as you may deem advisable in respect of all matters pertaining to any and all offers and sales of the Units, including the right to make any modifications which you consider necessary or desirable in the arrangements with Selected Dealers or others. You shall be under no liability for or in respect of the value of the Units or the validity or form thereof, the Registration Statement, the Prospectus, or agreements or other instruments executed by the Company or others; or for or in respect of the delivery of the Units; or for the performance by the Company or others of any agreement on its or their part; nor shall you as Representatives or otherwise be liable under any of the provisions hereof or for any matters connected herewith, except for want of good faith, and except for any liability arising under the Securities Act of 1933, as amended (“1933 Act”); and only obligations expressly assumed by you as Representatives herein shall be implied from this Agreement. In representing the Underwriters hereunder, you shall act as the Representatives of each of them, respectively. Nothing herein contained shall constitute the several Underwriters partners with you or with each other, or render any Underwriter liable for the commitments of any other Underwriter, except as otherwise provided in Section 12 hereof and in section 6 of the Underwriting Agreement. If the Underwriters shall be deemed to constitute a partnership for Federal income tax purposes, it is the intent of each Underwriter to be excluded from the application of Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code of 1986, as amended. Each Underwriter elects to be so excluded and agrees not to take any position inconsistent with such election. Each Underwriter authorizes you, in your discretion, to execute and file on behalf of the Underwriters such evidence of election as may be required by the Internal Revenue Service. The commitments and liabilities of each of the several Underwriters are several in accordance with their respective Underwriting Obligations, and are not joint.

     15. Acknowledgment of Receipt of Registration Statement, Etc. We hereby confirm that we have examined the Registration Statement relating to the Units as heretofore filed by the Company with the Commission and each amendment thereto, if any, filed through the date hereof, including any documents filed under the 1934 Act through the date hereof and incorporated by reference into the Prospectus, that we are willing to be named as an Underwriter therein and to accept the responsibilities of an Underwriter thereunder, and that we are willing to proceed as therein contemplated. We confirm that we have authorized you to advise the Company on our behalf (a) as to the statements to be included in any Preliminary Prospectus and in the Prospectus under the heading “Underwriting” insofar as they relate to us; and (b) that there is no other information about us required to be stated in the Registration Statement or Prospectus. We understand that the aforementioned documents are subject to further change and that we will be supplied with copies of any further amendments or supplements to the Registration Statement, of any document filed under the 1934 Act after the effective date of the Registration Statement and before termination of the offering of the Units by the Underwriters, if such document is deemed to be incorporated by reference into the Prospectus, and of any amended or supplemented Prospectus promptly, if and when received by you, but the making of such changes, amendments and supplements shall not release us or affect our obligations hereunder or under the Underwriting Agreements.

     16. (a) Indemnity. We agree to indemnify and hold harmless each other Underwriter and any person who controls any such Underwriter within the meaning of Section 15 of the 1933 Act, to the extent that, and upon the terms on which, we agree to indemnify and hold harmless the Company and other specified persons as set forth in the Underwriting Agreements. Our indemnity agreement contained in this Section 16 shall remain in full force and effect, regardless of any investigation made by or on behalf of such other Underwriter or controlling person, and shall survive the delivery of and payment for the Units and the termination of this Agreement and the similar agreements entered into with the other Underwriters.

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     (b) Claims Against Underwriters. Each Underwriter (including you) will pay, upon request, as contribution, its proportionate share, based upon its underwriting obligation, of any loss, claim, damage, or liability, joint or several, paid or incurred by any Underwriter (including you) to any person other than an Underwriter, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, any amendment or supplement thereto or any Preliminary Prospectus or any other selling or advertising material approved by you for use by the Underwriters in connection with the sale of the Securities, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (other than an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with written information furnished to the Company through you by or on behalf of an Underwriter expressly for use therein) or relating to any transaction contemplated by this Agreement; and will pay such proportionate share of any legal or other expense reasonably incurred by you or with your consent in connection with investigating or defending against any such loss, claim, damage, or liability, or any action in respect thereof. In determining the amount of our obligation under this paragraph, appropriate adjustment may be made by you to reflect any amounts received by any one or more Underwriters in respect of such claim from the Company pursuant to the Underwriting Agreements or otherwise. There shall be credited against any amount paid or payable by us pursuant to this paragraph any loss, claim, damage, liability, or expense which is incurred by us as a result of any such claim asserted against us, and if such loss, claim, damage, liability, or expense is incurred by us subsequent to any payment by us pursuant to this paragraph, appropriate provision shall be made to effect such credit, by refund or otherwise. If any such claim is asserted, you may take such action in connection therewith as you deem necessary or desirable, including retention of counsel for the Underwriters, and in your discretion separate counsel for any particular Underwriter or group of Underwriters, and the fees and disbursements of any counsel so retained by you shall be included in the amounts payable pursuant to this paragraph. In determining amounts payable pursuant to this paragraph, any loss, claim, damage, liability or expense incurred by any person who controls any Underwriter within the meaning of Section 15 of the 1933 Act which has been incurred by reason of such control relationship shall be deemed to have been incurred by such Underwriter. Any Underwriter may elect to retain, at its own expense, its own counsel. You may settle or consent to the settlement of any such claim on advice of counsel retained by you. Whenever you receive notice of the assertion for any claim to which the provisions of this paragraph would be applicable, you will give prompt notice thereof to each Underwriter. If any Underwriter or Underwriters default in its or their obligation to make any payments under this paragraph, each non-defaulting Underwriter shall be obligated to pay its proportionate share of all defaulted payments, based upon the proportion such non-defaulting Underwriter’s Underwriting Obligation bears to the Underwriting Obligations of all non-defaulting Underwriters. Nothing herein shall relieve a defaulting Underwriter from liability for its default.

     17. Capital Requirements. We confirm that the incurrence by us of our obligations under this Agreement and under the Underwriting Agreement will not place us in violation of the net capital requirements of Rule 15c3-1 under the 1934 Act or of any applicable rules relating to capital requirements of any securities exchange to which we are subject.

     18. Undertaking to Mail Prospectus. We represent to you that, to the extent applicable, we have taken all action on our part required to have been taken to satisfy the policy set forth in Release No. 33-4968 of the Commission under the 1933 Act, including the distribution in the manner and at or prior to the time set forth in such release, of copies of the Preliminary Prospectus relating to the Securities (or if you have so requested, copies of any revised Preliminary Prospectus) to all persons to whom we expect to mail confirmation of sale.

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     As contemplated by Rule 15c2-8 under the 1934 Act, you agree to mail a copy of the Prospectus mentioned in the Underwriting Agreements to any person making a written request therefor during the period referred to in said rule, the mailing to be made to the address given in the request. We confirm that we have delivered all Preliminary Prospectuses and revised Preliminary Prospectuses, if any, required to be delivered under the provisions of Rule 15c2-8 and agree to deliver all Prospectuses required to be delivered thereunder. We acknowledge that the copies of the Preliminary Prospectus furnished to us have been distributed to dealers who have been notified of the foregoing requirements pertaining to the delivery of Preliminary Prospectuses and Prospectuses. You have heretofore delivered to us such number of copies of Preliminary Prospectuses as have been reasonably requested by us, receipt of which is hereby acknowledged, and will deliver such number of copies of Prospectuses as will be reasonably requested by us.

     19. Miscellaneous. Any notice hereunder from you to us or from us to you shall be deemed to have been duly given if sent by registered mail, telegram or facsimile transmission, to us at our address provided to you in writing, or to you c/o Capital Growth Financial, LLC, 225 NE Mizner Blvd, Suite 750, Boca Raton, FL 33432.

     We understand that you are a member in good standing of the NASD. We hereby confirm that we are actually engaged in the investment banking or securities business and are either (a) a member in good standing of the NASD and will comply with Rules 2740 and 2790 of the NASD Conduct Rules (b) a foreign dealer or institution which is not eligible for membership in the NASD and which agrees (i) not to make any sales within the United States of America, its territories, or its possessions, or to persons who are citizens thereof or residents therein (except that we may participate in sales to Selected Dealers and others under Section 3 of this Agreement); (ii) that any and all sales shall be in compliance with Rule 2790 of the NASD Conduct Rules; (iii) to comply, as though it were a member of the NASD, with Rules 2730, 2740 and 2750 of the NASD’s Conduct Rules, and to comply with Rule 2420 thereof as that Rule applies to a non-member broker or dealer in a foreign country. In connection with sales and offers to sell Units made by us outside the United States, its territories, and possessions (a) we will either furnish to each person to whom any such sale or offer is made a copy of the then current Preliminary Prospectus or the Prospectus, as the case may be, or inform such person that such Preliminary Prospectus or Prospectus will be available upon request, and (b) we will furnish to each person to whom any such sale or offer is made such prospectus, advertisement, or other offering document containing information relating to the Securities or the Company as may be required under the law of the jurisdiction in which such sale or offer is made. Any prospectus, advertisement, or other offering document furnished by us to any person in accordance with the preceding sentence and any such additional offering material as we may furnish to any person shall (i) comply in all respects with the law of the jurisdiction in which it is so furnished, (ii) be prepared and so furnished at our sole risk and expense and (iii) not contain information relating to the Units or the Company which is inconsistent in any respect with the information contained in the then current Preliminary Prospectus or in the Prospectus, as the case may be. This instrument may be signed by or on behalf of the Underwriters in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement among all the Underwriters, and shall become effective at such time as all the Underwriters shall have signed or have had signed on their behalf such counterparts and you shall have confirmed all such counterparts. You may confirm such counterparts by facsimile signature.

     This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without giving effect to the choice of law or conflicts of laws principles thereof.

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     Please confirm that the foregoing correctly states the understanding between us by signing and returning to us a counterpart.

Very truly yours,
 

As Attorney-in-Fact for each of the several 

Underwriters named in Schedule B to the Underwriting Agreements 

As Attorney-in-Fact for each of the several 

Underwriters named in Schedule B to the Underwriting Agreements 

Confirmed as of the date first above written:

As Representative:

CAPITAL GROWTH FINANCIAL, LLC

By:
	Michael S. Jacobs
Title:	President

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EX-1.4

EXHIBIT 1.4

NGTV

a California corporation

SELLING SECURITY HOLDER
UNDERWRITING AGREEMENT

[5,997,174] Units, each Unit consisting of
One (1) Share of Common Stock and
One (1) Redeemable Common Stock Purchase Warrant

                    , 2006

Capital Growth Financial, LLC
225 NE Mizner Blvd., Suite 750
Boca Raton, Florida 33432
As Representative of the Underwriters
named on Schedule A hereto

Ladies and Gentlemen:

     This Selling Security Holder Underwriting Agreement relates to the proposed sale by NGTV, a corporation organized and existing under the laws of California (the “Company”), and certain shareholders of the Company identified on Schedule A hereto (collectively, the “Selling Security Holders”), to the several underwriters named on Schedule B hereto (collectively, the “Underwriters”), for whom Capital Growth Financial, LLC is acting as representative (in such capacity, the “Representative”), severally, of an aggregate of [5,997,174] units (the “Firm Units”), each Firm Unit comprised of: one (1) share of the Company’s common stock, no par value per share, and one (1) Redeemable Common Stock Purchase Warrant to purchase one-half (1/2) of one (1) share of common stock, of which [4,166,667] Firm Units are to be issued and sold by the Company (the “Company Firm Units”) and [1,830,507] Firm Units are to be sold by the Selling Security Holders (the “Holder Firm Units”), each Selling Security Holder selling the number of Holder Firm Units corresponding to its name on Schedule A.

     The terms and conditions under which the Company has agreed to issue and sell the Company Units are set forth in an Underwriting Agreement of even date herewith by and between the Company and the Representative (the “Company Underwriting Agreement”). Defined terms not otherwise defined herein shall have the meanings ascribed to them in the Company Underwriting Agreement. The Firm Units do not include Additional Units that may be sold by the Company to the Underwriters pursuant to the Company Underwriting Agreement in the event that the Representative exercises the Over-Allotment Option granted to it by the

Capital Growth Financial, LLC
                    , 2006
Page 2

Company. The Firm Units are being sold to the Underwriters in connection with a proposed public offering of the Firm Units and the Additional Units pursuant to this Agreement, the Company Underwriting Agreement and a registration statement on Form S-1 filed by the Company with the United States Securities and Exchange Commission.

     1. Representations and Warranties and Agreements of the Selling Security Holders. Each Selling Security Holder, severally and not jointly, represents and warrants to and agrees with the Company and each of the Underwriters that:

          (a) This Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Security Holder and contains the valid and binding agreements of such Selling Security Holder, enforceable against such Selling Security Holder in accordance with the terms hereof, except as enforceability may be limited by the laws of equity or applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          (b) The execution and delivery by such Selling Security Holder of, and the performance by such Selling Security Holder of its obligations under this Agreement, does not and will not contravene any provision of applicable law, or the certificate of incorporation or bylaws of such Selling Security Holder (if such Selling Security Holder is a corporation), organizational documents (if such Selling Security Holder is an entity other than a corporation) or any agreement or other instrument binding upon such Selling Security Holder or any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Selling Security Holder, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by such Selling Security Holder of its obligations under this Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the Offering.

          (c) Such Selling Security Holder has, and on the Closing Date will have, valid title or entitlement to the Holder Firm Units to be sold by such Selling Security Holder under this Agreement (the “Holder’s Units”), free and clear of all Liens, and the legal right and power, and all authorization and approval required by law, to enter into this Agreement and to sell, transfer and deliver the Holder’s Units to the Underwriters.

          (d) Such Selling Security Holder (i) has not heretofore received delivery of certificates evidencing the Holder’s Units (or their component Unit Shares and Unit Warrants) and (ii) confirms that the Holder’s Units are issuable to such Selling Security Holder at the time of automatic conversion into Holder Firm Units of a certain convertible promissory note previously issued by the Company to the Selling Security Holder (the “Seller Note”).

          (e) Subject to the provisions of this Agreement and delivery to the Selling Security Holder of the Purchase Price for the Holder’s Units in accordance with Section 3 of this Agreement, in order to facilitate timely delivery of certificates evidencing the Holder’s Units to

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                    , 2006
Page 3

the Underwriters at the Closing, upon conversion of its Seller Note into Seller Firm Units, the Selling Security Holder hereby waives receipt of certificates evidencing the Holder’s Units (or their component Unit Shares and Unit Warrants).

          (f) For purposes of effectuating the provisions of Section 1(e) and 3(d) hereof, upon conversion of the Seller Note into Holder’s Units, the Selling Security Holder hereby appoints the President of the Company, with full power of substitution, as its duly constituted attorney-in-fact to (i) instruct the Company’s transfer agent to (A) register the Holder’s Units on its books and records in the name of the Selling Security Holder and (B) transfer the Holder’s Units to the Underwriter at the Closing of the Offering, against payment therefore, and register such Holder’s Units in such name(s) as may be designated by the Representative and (ii) do all things that are reasonably necessary in order to effectuate the provisions of this Section 1(f) and Section 3(d) hereof. The Selling Security Holder hereby indemnifies and holds the Company harmless from and against any and all claims, liabilities, damages, costs and expenses that arise as a result of the Company performing the actions described in this Section 1(f) and 3(d) hereof.

          (g) Delivery of the Holder’s Units and payment therefore pursuant to this Agreement will pass valid title to such Holder’s Units, free and clear of Liens or other adverse claim, to each Underwriter who purchased such Holder’s Units without notice of an adverse claim.

          (h) Such Selling Security Holder is not prompted by any information concerning the Company which is not set forth in the Prospectus to sell its Holder’s Units pursuant to this Agreement.

          (i) Except as otherwise disclosed in writing by such Selling Security Holder to the Company and the Representative, such Selling Security Holder:

               (i) is not a party to an oral or written agreements with the Representative, any Underwriter or any other member of the National Association of Securities Dealers, Inc. (“NASD”) or any associated person of the Representative, any Underwriter or any such member, concerning the disposition of its Holder’s Units, other than as set forth in this Agreement;

               (ii) is not a broker or dealer or otherwise employed by, or an equity owner of, the Representative, any Underwriter or an NASD member firm or their respective affiliates;

               (iii) is not an “underwriter or related person.” For purposes hereof, an “underwriter or related person” means the Representative, any Underwriter, counsel to the Underwriters, financial consultants and advisors to the Representative or any Underwriter, finders, any NASD member participating in the Offering, and any other persons related to any

Capital Growth Financial, LLC
                    , 2006
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member participating in the Offering, any associated person of the member, any members of their immediate family, and any affiliates of the member;

               (iv) has not provided any consulting or other services to NGTV; and

               (v) does not have an “immediate family” relationship with the Representative, any Underwriter or any other NASD member firm. For purposes hereof, “immediate family” relationship means the parents, mother-in-law, father-in-law, spouse, brother or sister, brother-in-law or sister-in-law, son-in-law or daughter-in-law, and children of an employee or associated person of an NASD member, except any person other than the spouse and children who does not live in the same household as, have a business relationship with, provide material support to, or receive material support from, the employee or associated person of a member. In addition, the immediate family includes any other person who either lives in the same household as, provides material support to, or receives material support from, an employee or associated person of a member.

          (j) Such Selling Security Holder does not have any registration or other similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the Offering, other than as described in the Registration Statement and as have been waived in writing in connection with the Offering.

          (k) In order to document the Underwriters’ compliance with the reporting and withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982, and the Interest and Dividend Tax Compliance Act of 1983 with respect to the transactions contemplated by this Agreement, such Selling Security Holder agrees to deliver to you prior to or at the Closing Date, to the extent determined to be necessary by the Representative, a properly completed and executed United States Treasury Department Form W-8 or W-9 (or other applicable form or statement specified by Treasury Department regulations in lieu thereof).

          (l) Such Selling Security Holder (i) confirms that the information regarding the number of securities of the Company beneficially owned by such Selling Security Holder and the identity of any person(s) who exercise investment powers over such securities, as set forth in the Registration Statement and Prospectus under the section captioned “Selling Security Holders,” is true correct and (ii) acknowledges that such information is deemed furnished to the Company and the Underwriters in writing for inclusion in the Registration Statement, the Prospectus, and any amendments or supplements thereto.

          (m) Such Selling Security Holder has not offered, or caused the Underwriters to offer, the Holder’s Units to any person or entity with the intention of unlawfully influencing: (i) a customer or supplier of the Company to alter the customer’s or supplier’s level or type of business with the Company or (ii) a journalist or publication to write or publish favorable information about the Company, or its products or services.

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                    , 2006
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          (n) Such Selling Security Holder has been advised that (i) the Company Underwriting Agreement has been filed as an exhibit to the Registration Statement pursuant to the EDGAR filing system and may be examined on the SEC’s web site at www.wec.gov and (ii) a copy of the Company Underwriting Agreement will be furnished by the Company to such Selling Security Holder upon request.

     2. Representations and Warranties of the Company. The representations and warranties of the Company, as set forth in Section 1 of the Company Underwriting Agreement, are hereby incorporated by reference and are hereby made by the Company to each of the Underwriters and the Selling Security Holders as if such representations and warranties were fully set forth at length herein.

     3. Purchase, Sale and Delivery of the Securities.

          (a) On the basis of the representations, warranties, covenants and agreements herein contained, but subject to the terms and conditions herein set forth, each of the Selling Security Holders, severally and not jointly, hereby agrees to sell to the Underwriters, and each Underwriter, upon the basis of the representations, warranties, covenants and agreements herein contained, but subject to the conditions herein stated, agrees, severally and not jointly, agrees to purchase from such Selling Security Holder, at the purchase price per Unit hereinafter set forth (the “Purchase Price”) the number of Holder Firm Units (subject to such adjustments to eliminate fractional Units as you may deem appropriate) that bears the same proportion to the number of Holder Firm Units to be sold by such Selling Security Holder as the number of Firm Units set forth on Schedule B hereto opposite the name of such Underwriter bears to the total number of Firm Units. The Purchase Price for the Holder Firm Units shall be [$5.70] per Unit. The Purchase Price gives effect to the underwriting discount described in Section 5(a) hereof.

          (b) Payment of the purchase price for, and delivery of certificates representing, the Holder Firm Units shall be made at such time and place as is designated in the Company Underwriting Agreement with respect to the Company Units. The closing of the payment of the purchase price for, and delivery of certificates representing, the Holder Firm Units is referred to herein as the “Closing.”

          (c) Payment of the purchase price for the Holder Firm Units shall be made in the manner directed by each Selling Security Holder on the Selling Security Holder Signature Page to this Agreement, upon delivery of certificates for the Holder Firm Units to the Representative through the facilities of The Depository Trust Company for the respective accounts of the several Underwriters. Certificates for the Holder Firm Units shall be registered in such name or names and shall be in such denominations as the Representative may request at least two (2) business days before the Closing Date.

          (d) Each Selling Security Holder hereby waives its right to receive physical delivery of certificates evidencing the Holder Firm Units corresponding to its name on Schedule A to this Agreement, and, as described in Section 1(f) hereof, hereby authorizes the Company’s

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                    , 2006
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transfer agent to (i) register the Holder’s Units in the name of the Selling Security Holder and (ii) sell and transfer the Holder’s Units to the Underwriters at the Closing, against delivery to the Selling Security Holder of the net proceeds of sale. Each Selling Security Holder agrees to furnish all information and deliver all signed documents or instruments that may be reasonably requested by the Company or the Representative in order to facilitate the issuance of the Holder Firm Units by the Company and the transfer agent as set forth in this paragraph and Section 1(f).

     4. Offering. Upon authorization of the release of the Holder Firm Units by the Representative, the Underwriters propose to offer the Holder Firm Units, Company Firm Units and, if the Over-Allotment Option is exercised, the Additional Units, for sale to the public upon the terms and conditions set forth in the Prospectus.

     5. Underwriting Discount.

          (a) In consideration of the services to be provided for hereunder, each Selling Security Holder shall pay to the Underwriters or their respective designees, an underwriting discount equal to five percent (5%) of the gross proceeds from the sale of such Selling Security Holder’s Holder Firm Units to be sold by the Selling Security Holders, payable by the Selling Security Holder. The Purchase Price set forth in Section 3(a) gives effect to payment of the underwriting discount.

          (b) The Representative reserves the right to reduce any item of its compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by the NASD to the effect that the Underwriters’ aggregate compensation is in excess of NASD rules or that the terms thereof require adjustment.

     6. Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Holder Firm Units as provided herein shall be subject to: (a) the accuracy of the representations and warranties of the Selling Security Holders herein contained, as of the date hereof and as of the Closing Date, (b) the performance by the Company of all of its obligations under the Company Underwriting Agreement, (c) the satisfaction of all conditions precedent to consummation of the transactions contemplated by the Company Underwriting Agreement, or the waiver thereof by the party entitled to performance and (d) consummation of the transactions contemplated by the Company Underwriting Agreement.

     If any of the conditions specified in this Section shall not have been fulfilled when and as required by this Agreement, all obligations of the Underwriters hereunder may be cancelled by the Representative at, or at any time prior to, the consummation of the Closing, and the obligations of the Underwriters. Notice of such cancellation shall be given to the Company in writing, or by telephone. Any such telephone notice shall be confirmed promptly thereafter in writing.

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                    , 2006
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     7. Indemnification and Contribution.

          (a) The Company agrees to indemnify and hold harmless each Selling Security Holder from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Selling Security Holder furnished to the Company in writing by such Selling Security Holder expressly for use therein.

          (b) Each Selling Security Holder agrees to indemnify and hold harmless the Company and each Underwriter, and their respective affiliates, directors and officers and each person, if any, who controls each such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, the legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, but only insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to the Selling Security Holder furnished to the Company or the Representative, in writing, by the Selling Security Holder, it being understood and agreed that the only such information furnished by the Selling Security Holder consists of (i) the representations and warranties of the Selling Security Holder in this Agreement, (ii) the information provided by the Selling Security Holder on the Selling Security Holder Signature Page to this Agreement and (iii) the information relating to the Selling Security Holder contained or referenced under columns "(1), “(3)” and “(4)” of the table under the heading “Selling Security Holders” in the Prospectus, and the footnotes corresponding thereto.

          (c) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless each Selling Security Holder from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, or caused by any

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                    , 2006
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omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but only insofar as any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by or on behalf such Underwriter expressly for use in the Registration Statement and the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, it being understood and agreed upon that the only such information furnished by any Underwriter consists of the information in the Prospectus under the caption “Underwriting.”

          (d) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section 7, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 7 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 7. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representative, any such separate firm for the Company, its directors, its officers who signed the Registration Statement and any control persons of the Company shall be designated in writing by the Company and any such separate firm for the Selling Security Holders shall be

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designated in writing by holders of a majority of Holder Firm Units. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

          (e) If the indemnification provided for in paragraphs (a), (b) and (c) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Security Holders on the one hand and the Underwriters on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Selling Security Holders on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Security Holders on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company and the Selling Security Holders from the sale of the Securities and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Firm Units. The relative fault of the Company and the Selling Security Holders on the one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Selling Security Holders or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

          (f) The Company, the Selling Security Holders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (e) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (e) above shall be deemed to

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                    , 2006
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include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 7 are several in proportion to their respective purchase obligations hereunder and not joint. Notwithstanding the provisions of this Section 7, in no event shall the liability of a Selling Security Holder under this Section 7 exceed the amount by which the proceeds to such Selling Security Holder, after underwriting discounts and commissions, exceeds the amount of any damages that the Selling Security Holder has otherwise been required to pay pursuant to this Section 7.

          (g) The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     8. Survival of Representations and Agreements. All representations and warranties, covenants and agreements of the Company and the Underwriters contained in this Agreement or in certificates of officers of the Company or any Subsidiary submitted pursuant hereto, including the indemnity and contribution agreements contained in Section 7 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any controlling person thereof or by or on behalf of the Company, any of its officers and directors or any controlling person thereof, and shall survive delivery of and payment for the Holder Firm Units to and by the Underwriters. The representations contained in Section 1 hereof and the covenants and agreements contained in Sections 5, 7, this Section 8 and Sections 10, 12, 13 and 14 hereof shall survive any termination of this Agreement, including termination pursuant to Section 9 hereof.

     9. Effective Date of Agreement; Termination. This Agreement shall become effective in the manner and at such time as the Company Underwriting Agreement becomes effective. The Representative shall have the right to terminate this Agreement at any time prior to the consummation of the Closing for any of the reasons and in the manner it is permitted to terminate the Company Underwriting Agreement.

     10. Notices. All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing, and:

          (a) if sent to the Representative or any Underwriter, shall be mailed, delivered, or faxed and confirmed in writing, to Capital Growth Financial, LLC, 225 NE Mizner

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                    , 2006
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Blvd., Suite 750, Boca Raton, Florida 33432, Attention: Michael S. Jacobs, President, in each case, with a copy to Underwriters’ Counsel at Schneider Weinberger & Beilly LLP, 2200 Corporate Blvd. NW, Suite 210, Boca Raton, Florida 33431, Attention: Steven I. Weinberger, Esq.;

          (b) if sent to the Company shall be mailed, delivered, or faxed and confirmed in writing to the Company and its counsel at the addresses set forth in the Registration Statement; and

          (c) if sent to the Selling Security Holders, shall be mailed, delivered, or faxed and confirmed in writing to the Selling Security Holders at their respective addresses and facsimile numbers designated on the applicable Selling Security Holder Signature Page to this Agreement.

provided, however, that any notice to an Underwriter pursuant to Section 7 shall be delivered or sent by mail or facsimile transmission to such Underwriter at its address set forth in its acceptance facsimile to the Representative, which address will be supplied to any other party hereto by the Representative upon request. Any such notices and other communications shall take effect at the time of receipt thereof.

     11. Parties. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Underwriters, the Company and the controlling persons, directors, officers, employees and agents referred to in Section 7 hereof, and the Selling Security Holders, and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and said controlling persons and their respective successors, officers, directors, heirs and legal representatives, and it is not for the benefit of any other person. The term “successors and assigns” shall not include a purchaser, in its capacity as such, of Holder Firm Units from any of the Underwriters.

     12. Governing Law. This Agreement shall be deemed to have been executed and delivered in Florida and both this Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other respects by the laws of the State of Florida, without regard to the conflicts of laws principals. Each of the Underwriters and the Company: (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in a State or Federal Court located in Palm Beach County, Florida, (b) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (c) irrevocably consents to the jurisdiction of State and Federal Courts located in Palm Beach County, Florida in any such suit, action or proceeding. Each of the Underwriters and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the a State or Federal Court located in Palm Beach County, Florida and agrees that service of process upon the Company mailed by certified

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                    , 2006
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mail to the Company’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Underwriters mailed by certified mail to the Underwriters’ address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service process upon the Underwriter, in any such suit, action or proceeding. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS. No Selling Security Holder not affected by any suit, action or proceeding arising out of or relating to this Agreement need be made a party to any such suit, action or proceeding.

     13. Entire Agreement. This Agreement, together with the schedule and exhibits attached hereto and as the same may be amended from time to time in accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no other or further agreements outstanding not specifically mentioned herein.

     14. Severability. If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.

     15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Each Selling Security Holder shall execute a separate counterpart Selling Security Holder Signature Page to this Agreement, each of which shall become a part of this Agreement. Delivery of a signed counterpart of this Agreement by facsimile transmission shall constitute valid and sufficient delivery thereof.

     16. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

     17. Time is of the Essence. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

[Signature Pages and Schedules Follow]

[COMPANY AND REPRESENTATIVE SIGNATURE PAGE]

     If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

Very truly yours, NGTV, a California corporation
By:
	Name:
	Title:

Accepted by the Representative, acting for itself and as Representative of the Underwriters named on Schedule A attached hereto, as of the date first written above:

CAPITAL GROWTH FINANCIAL, LLC

By:
	Name:
	Title:

[Selling Security Holder Signature Pages to Follow]

[SELLING SECURITY HOLDER SIGNATURE PAGE — INDIVIDUALS]

     If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

Signature of Selling Security Holder:

Signature of Joint Tenant, if any

Print Name of Selling Security Holder:

Address:

Telephone Number:

Fax Number:

Tax Identification Number:

Number of Holder’s Units:

Amount and Type of Other NGTV Securities Beneficially Owned by Selling Security Holder

Directions for Payment of Proceeds (initial one):

[                    ]	Deposit to my account at Capital Growth Financial LLC Account No.
[                    ]	Check sent by U.S. Mail to the Address Listed Above.
[                    ]	Wire transfer to the Following Coordinates (Selling Security Holder to pay any wire transfer fees imposed by Receiving Bank):
	ABA Code:
	SWIFT Code:
	Bank Name:
	Bank Address:
	Amount:
	F/B/O:
	Account No.:
	Other:

[Selling Security Holder Signature Page — Entities follows]

[SELLING SECURITY HOLDER SIGNATURE PAGE — ENTITIES]

     If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

Name of Entity:
Signature of Authority Signatory:
Print Name of Authorized Signatory:
Address:
Telephone Number:	(          )
Fax Number:	(          )
Tax Identification Number:
Number of Holder’s Units:
Amount and Type of Other NGTV Securities Beneficially Owned by Selling Security Holder

Directions for Payment of Proceeds (initial one):

[                    ]	Deposit to my account at Capital Growth Financial LLC Account No.
[                    ]	Check sent by U.S. Mail to the Address Listed Above.
[                    ]	Wire transfer to the Following Coordinates (Selling Security Holder to pay any wire transfer fees imposed by Receiving Bank):
	ABA Code:
	SWIFT Code:
	Bank Name:
	Bank Address:
	Amount:
	F/B/O:
	Account No.:
	Other:

[End of Signature Pages]

SCHEDULE A

Selling Security Holders

Name of Selling Security Holder	Number of Holder Firm Units
TOTAL		[1,830,507]

SCHEDULE B

Underwriters

							Number of
							Additional Units to
							be Purchased if
	Total Number of		Number of Company		Number of Holder		Over-Allotment
	Firm Units to be		Firm Units to be		Firm Units to be		Option is Fully
Underwriter	Purchased		Purchased		Purchased		Exercised
Capital Growth Financial, LLC
TOTAL		[5,997,174]		[4,166,667]		[1,830,507]		[899,576]

EX-1.5

EXHIBIT 1.5

CAPITAL GROWTH FINANCIAL, LLC
Suite 750
225 N.E. Mizner Blvd.
Boca Raton, FL 33432

_________, 2006

NGTV
9944 Santa Monica Blvd.
Beverly Hills, CA 90212

Ladies and Gentlemen:

     We are pleased that NGTV, a California corporation (the “Company”) has decided to retain Capital Growth Financial, LLC (“CGF”) to provide general financial advisory and investment banking services to the Company as set forth herein. This letter agreement (this “Agreement”) will confirm CGF’s acceptance of such retention and set forth the terms of our engagement.

     1. Retention. The Company hereby retains CGF as its non-exclusive financial advisor and investment banker to provide general financial advisory and investment banking services, for the term specified in Paragraph 2 below, and CGF accepts such retention on the terms and conditions set forth in this Agreement. In such capacity, CGF shall at the request and under direction of the Company’s executive officers: (i) assist the Company in developing appropriate acquisition criteria and identifying target acquisitions; (ii) screen potential acquisition candidates and report to the Company the results of such process; (iii) assist the Company in evaluating and make recommendations concerning the relationships among the Company’s various lines of business and potential areas for business growth; (iv) review and analyze the Company’s monthly, quarterly and annual financial statements; (v) review and contribute to the on-going development and modification of the Company’s business plan; (vi) consult with senior management in connection with expansion of the Company’s management team; (vii) assist the Company in identifying, and reviewing the qualifications of, persons to serve on the Company’s management team, including on its board of directors; (viii) explore and advise the Company in connection with strategic alliances and (ix) provide such other financial advisory and investment banking services upon which the parties may mutually agree.

     2. Term. Except as otherwise specified in this Agreement, this Agreement shall be effective for a two (2) year period commencing      , 2006 and ending on         , 2008. This Agreement shall not become effective unless and until the occurrence of a closing of the public offering of the Company’s securities (the “Offering”) contemplated by its registration statement on Form S-1 (SEC File No. 333-131508).

     3. Information. In connection with CGF’s activities hereunder, the Company will cooperate with CGF and furnish CGF upon request with all information regarding the business, operations, properties, financial condition, management and prospects of the Company (all such information so furnished being the “Information”) which CGF deems appropriate and will provide CGF with access to the Company’s officers, directors, employees, independent

accountants and legal counsel. The Company represents and warrants to CGF that all Information made available to CGF hereunder will be complete and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements are or will be made. The Company further represents and warrants that any projections and other forward-looking information provided by it to CGF will have been prepared in good faith and will be based upon assumptions which, in light of the circumstances under which they are made, are reasonable. The Company recognizes and confirms that CGF: (i) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (ii) does not assume responsibility for the accuracy or completeness of the Information and such other information; and (iii) will not make an appraisal of any assets of the Company. Any advice rendered by CGF pursuant to this Agreement may not be disclosed publicly without CGF’s prior written consent. CGF hereby acknowledges that certain of the Information received by CGF may be confidential and/or proprietary, including Information with respect to the Company’s technologies, products, business plans, marketing, and other Information which must be maintained by CGF as confidential. CGF agrees that it will not disclose such confidential and/or proprietary Information to any other companies in the industry in which the Company is involved.

     4. Compensation. As consideration for CGF’s services pursuant to this Agreement, CGF shall be entitled to receive, and the Company agrees to pay CGF, the following compensation:

          (a) The Company shall pay to CGF a fee of $5,000 per month for the term of this Agreement. The aggregate sum of $120,000 shall be due and payable upon the execution of this Agreement (“Initial Consulting Fee”).

          (b) The Company and CGF acknowledge and agree that, in the course of performing services hereunder, CGF may introduce the Company to third parties who may be interested in providing financing to the Company (a “Financing”) or in entering into a transaction with the Company, including, without limitation, a merger, acquisition or sale of stock or assets (in which the Company may be the acquiring or the acquired entity), joint venture, strategic alliance or other similar transaction (any such transaction, a “Transaction”). Each introduction related to a Transaction must be approved in writing by the Company. The Company agrees that, if during the term of this Agreement or within 18 months from the effective date of the termination of this Agreement either the Company or any party to whom the Company was introduced by CGF or who was contacted by CGF in connection with its services for the Company hereunder proposes a Financing or any Transaction involving the Company, and CGF is not engaged as the Company’s exclusive financial advisor, agent and/or investment banker in connection with such Financing or Transaction, then, if any such Financing or Transaction is consummated, the Company shall pay to CGF:

               (i) in the event of a Financing, fees in accordance with the Fee Schedule attached hereto as Exhibit B; or

               (ii) in the case of a Transaction which has been approved in writing by the Company, an amount equal to the greater of: (A) $250,000 or (B) 4.0% of the

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               aggregate consideration paid or received by the Company and/or its shareholders in such Transaction, as the case may be.

Such fees shall be payable to CGF in cash at the closing or closings of the Financing or Transaction to which it relates. The amount of consideration paid in a Transaction shall include, for purposes of calculating such fee, all forms of consideration paid or received, directly or indirectly, by the Company and/or its shareholders in such Transaction, including, without limitation, cash, securities, notes or other evidences of indebtedness, assumption of liabilities (whether by operation of law or otherwise), or any combination thereof. If all or portion of the consideration paid in the Transaction is other than cash or securities, then the value of such non-cash consideration shall be the fair market value thereof on the date the Transaction is consummated as mutually agreed upon in good faith by the Company and CGF. If such non-cash consideration consists of common stock, options, warrants or rights for which a public trading market existed prior to the consummation for the Transaction, then the value of such securities shall be determined based upon the closing or last sales price thereof on the date of the consummation of the Transaction. If such non-cash consideration consists of newly-issued, publicly-traded common stock, options, warrants or rights for which no public trading market existed prior to the consummation of the Transaction, then the value thereof shall be the average of the closing prices for the 20 trading days subsequent to the fifth trading day after the consummation of the Transaction. In such event, the fee payable to CGF pursuant to subparagraph 4(c)(ii) shall be paid on the 30^th trading day subsequent to consummation of the Transaction. If no public market exists for the common stock, options, warrants or other rights issued in the Transaction, then the value thereof shall be as mutually agreed upon in good faith by the Company and CGF. If the non-cash consideration paid in the Transaction consists of preferred stock or debt securities (regardless of whether a public trading market existed for such preferred stock or debt securities prior to consummation of the Transaction or exists thereafter), the value thereof shall be the maximum liquidation value (without regard to accrued dividends) of the preferred stock or the principal amount of the debt securities, as the case may be. Any amounts payable by a purchaser to the Company, any shareholder of the Company or an affiliate of either the Company or any stockholder of the Company in connection with a non-competition, employment, consulting, licensing, supply or other agreement (or payable by the Company if the Company is the acquiring entity) shall be deemed to be part of the consideration paid in the Transaction. If all or a portion of the consideration payable in connection with the Transaction includes contingent future payments, then the Company shall pay to CGF an additional cash fee, determined in accordance with Section 4(c)(ii), as, when and if such contingency payments are received. However, in the event of an installment purchase at a fixed price and fixed time schedule, the Company agrees to pay CGF, upon consummation of such Transaction, an additional cash fee, determined in accordance with this Section 4(c) based upon the present value of such installment payments using a discount rate of 10%. If with respect to any non-cash consideration the Company and CGF are unable to agree on the fair market value thereof, then such value shall be determined by submission of the question to a reputable appraisal firm with experience valuing property of the nature of the subject consideration acceptable to the Company and CGF (the fees and expenses of whom shall be borne equally by the Company and CGF).

     5. Indemnification. The Company agrees to indemnify CGF in accordance with the indemnification and other provisions attached to this Agreement as Exhibit A (the “Indemnification Provisions”), which provisions are incorporated herein by reference and shall survive the termination or expiration of this Agreement.

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     6. Other Activities. The Company acknowledges that CGF has been, and may in the future be, engaged to provide services as an underwriter, placement agent, finder, advisor and investment banker to other companies in the industry in which the Company is involved. Additionally, CGF shall not be required to devote any minimum amount of time towards providing services to the Company pursuant to this Agreement. Subject to the confidentiality provisions of CGF contained in Section 3 hereof, the Company acknowledges and agrees that nothing contained in this Agreement shall limit or restrict the right of CGF or of any member, manager, officer, employee, agent or representative of CGF, to be a member, manager, partner, officer, director, employee, agent or representative of, investor in, or to engage in, any other business, whether or not of a similar nature to the Company’s business, nor to limit or restrict the right of CGF to render services of any kind to any other corporation, firm, individual or association. CGF may, but shall not be required to, present opportunities to the Company.

     7. Termination; Survival of Provisions. Either CGF or the Company may terminate this Agreement at any time upon 30 days’ prior written notice to the other party. In the event that CGF terminates this Agreement prior to its expiration, it will promptly return a portion of the Initial Consulting Fee, determined by multiplying $5,000 by the number of months remaining under the Agreement, to the Company. In the event of termination of this Agreement by either the Company or CGF, the Company shall pay and deliver to CGF: (i) all compensation earned through the date of such termination (“Termination Date”) pursuant to any provision of Section 4 hereof, and (ii) all compensation which may be earned by CGF after the Termination Date pursuant to Section 4 hereof. Any reimbursement of the Initial Consulting Fee due to the Company shall be paid to the Company on the Termination Date. All such fees and reimbursements due to CGF pursuant to the immediately preceding sentence shall be paid to CGF on or before the Termination Date (in the event such fees and reimbursements are earned or owed as of the Termination Date) or upon the closing of a Financing or Transaction or any applicable portion thereof (in the event such fees are due pursuant to the terms of Section 4 hereof). Notwithstanding anything expressed or implied herein to the contrary the terms and provisions of Sections 4, 5 (including, but not limited to, the Indemnification Provisions attached to this Agreement and incorporated herein by reference), 6, 7, 8, 9 and 14 shall survive the termination of this Agreement.

     8. Notices. All notices provided hereunder shall be given in writing and either delivered personally or by overnight courier service or sent by certified mail, return receipt requested, or by facsimile transmission, if to CGF, to Capital Growth Financial, LLC, 225 NE Mizner Blvd., Suite 750, Boca Raton, Florida 33432, Attention: Michael S. Jacobs, President, Fax No. (561) 417-5680, and if to the Company, to the address, set forth on the first page of this Agreement, Attention: President, Fax No.: (310) 556-9024. Any notice delivered personally or by fax shall be deemed given upon receipt (with confirmation of receipt required in the case of fax transmissions); any notice given by overnight courier shall be deemed given on the next business day after delivery to the overnight courier; and any notice given by certified mail shall be deemed given upon the second business day after certification thereof.

     9. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida applicable to agreements made and to be fully performed therein, without regard to conflicts of law principles. The Company irrevocably submits to the exclusive jurisdiction of any court of the State of

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Florida or the United States Federal Courts located in Palm Beach County in the State of Florida for the purpose of any suit, action or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated hereby, which is brought by or against the Company, and agrees that service of process in connection with any such suit, action or proceeding may be made upon the Company in accordance with Section 8 hereof. The parties hereby expressly waive all rights to trial by jury in any suit, action or proceeding arising under this Agreement.

     10. Amendments. This Agreement may not be modified or amended except in a writing duly executed by the parties hereto.

     11. Headings. The section headings in this Agreement have been inserted as a matter of reference and are not part of this Agreement.

     12. Successors and Assigns. The benefits of this Agreement shall inure to the parties hereto, their respective successors and assigns and to the indemnified parties hereunder and their respective successors and assigns, and the obligations and liabilities assumed in this Agreement shall be binding upon the parties hereto and their respective successors and assigns. Notwithstanding anything contained herein to the contrary, neither CGF nor the Company shall assign any of its obligations hereunder without the prior written consent of the other party.

     13. No Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person or entity not a party hereto, except those entitled to the benefits of the Indemnification Provisions. Without limiting the foregoing, the Company acknowledges and agrees that CGF is not being engaged as, and shall not be deemed to be, an agent or fiduciary of the Company’s stockholders or creditors or any other person by virtue of this Agreement or the retention of CGF hereunder, all of which are hereby expressly waived.

     14. Waiver. Any waiver or any breach of any of the terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or of any other term or condition, nor shall any failure to insist upon strict performance or to enforce any provision hereof on any one occasion operate as a waiver of such provision or of any other provision hereof or a waiver of the right to insist upon strict performance or to enforce such provision or any other provision on any subsequent occasion. Any waiver must be in writing.

     15. Counterparts. This Agreement may be executed in any number of counterparts and by facsimile transmission, each of which shall be deemed to be an original instrument, but all of which taken together shall constitute one and the same agreement. Facsimile signatures shall be deemed to be original signatures for all purposes.

[Signature Page Follows]

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     If the foregoing correctly sets forth our agreement, please sign the enclosed copy of this Agreement in the space provided below and return it to us.

Very truly yours, CAPITAL GROWTH FINANCIAL, LLC
By:
	Michael S. Jacobs
	President

Agreed to and accepted this           day of ______ 2006

NGTV

By:
	Name:
	Title:

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Exhibit A

INDEMNIFICATION PROVISIONS

     Capitalized terms used in this Exhibit shall have the meanings ascribed to such terms in the Agreement to which this Exhibit is attached.

     The Company agrees to indemnify and hold harmless CGF and each of the other Indemnified Parties (as hereinafter defined) from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing, pursing or defending any such action, suit, proceeding or investigation (whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, “Losses”), directly or indirectly, caused by, relating to, based upon, arising out of, or in connection with, CGF’s acting for the Company, including, without limitation, any act or omission by CGF in connection with its acceptance of or the performance or non-performance of its obligations under the Agreement between the Company and CGF to which these indemnification provisions are attached and form a part (the “Agreement”), any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement (or in any instrument, document or agreement relating thereto, including any Agency Agreement), or the enforcement by CGF of its rights under the Agreement or these indemnification provisions, except to the extent that any such Losses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the Indemnified Party seeking indemnification hereunder. The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of CGF by the Company or for any other reason, except to the extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct.

     These Indemnification Provisions shall extend to the following persons (collectively, the “Indemnified Parties”): CGF, its parent, managers, members, officers, employees, agents and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members, managers, employees, agents and controlling persons, in their respective capacities as such, of any of them. These indemnification provisions shall be in addition to any liability that the Company may otherwise have to any Indemnified Party.

     If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Company with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the Company shall not relieve the Company from its obligations hereunder. An Indemnified Party shall have the right to retain counsel of its own choice to represent it, and the fees, expenses and disbursements of such counsel shall be borne by the Company. Any such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the Company and any counsel designated by the Company. The Company shall be liable for any settlement of any

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claim against any Indemnified Party made with the Company’s written consent. The Company shall not, without the prior written consent of CGF, settle or compromise any claim, or permit a default or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.

     In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company and its stockholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii) if (and only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent misrepresentation. The relative benefits received (or anticipated to be received) by the Company and it stockholders, subsidiaries and affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection with the transaction or transactions to which the Agreement relates relative to the amount of fees actually received by CGF in connection with such transaction or transactions. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount of fees previously received by CGF pursuant to the Agreement.

     Neither termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force and effect. The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives.

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Exhibit B

FEE SCHEDULE

     Capitalized terms used in this Exhibit shall have the meanings ascribed to such terms in the Agreement to which this Exhibit is attached.

Financing	For any Financing the Company shall:
Fees:
	a)	pay CGF a cash fee of 8% of the amount of capital raised; and
	b)	grant CGF Agent Warrants to purchase 8% of the amount of capital raised, in the form of, at CGF’s option, (a) the securities issued pursuant to a Financing or (b) common stock of the Company. The Agent Warrants shall have (a) an exercise price equal to that of the securities issued pursuant to the transaction, (b) a 5-year term, (c) cashless exercise provisions, (d) standard anti-dilution protections, and (e) one demand registration right and unlimited “piggy-back” registration rights; and
	c)	pay CGF a cash fee for unallocated expenses of 3% of the amount of capital raised; and
	d)	agree to pay CGF a warrant solicitation fee for any warrants issued to investors in the Financing, in an amount equal to five percent (5%) of the funds received by the Company upon such exercise, which fee shall be paid at any time that any such warrants are exercised.

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EX-4.1

EXHIBIT 4.1

Form of Lock-Up Agreement

_____________, 2006

Capital Growth Financial, LLC
225 NE Mizner Blvd., Suite 750
Boca Raton, Florida 33432
As Representative of the Underwriters

     Re:      NGTV

Ladies and Gentlemen:

     This letter agreement (this “Agreement”) relates to the proposed public offering (the “Offering”) by NGTV, a California corporation (the “Company”), of Units comprised of shares of common stock of the Company (the “Common Stock”) and warrants to purchase Common Stock.

     The Offering is governed by a certain Underwriting Agreement dated                     , 2006 by and between the Company and Capital Growth Financial, LLC, as representative of the several underwriters named therein (the “Representative”). In order to induce the Representative to act as underwriter for the Offering, the undersigned hereby agrees that, except as set forth herein, without the prior written consent of CGF during the Lock-Up Period (as defined below), the undersigned shall not, directly or indirectly:

     (a) offer, sell, agree to offer or sell, solicit offers to purchase, grant any call option or purchase any put option with respect to, pledge, borrow or otherwise dispose of any Relevant Security (as defined below), and/or

     (b) establish or increase any “put equivalent position” or liquidate or decrease any “call equivalent position” with respect to any Relevant Security (in each case within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder), or otherwise enter into any swap, derivative or other transaction or arrangement that transfers to another, in whole or in part, any economic consequence of ownership of a Relevant Security, whether or not such transaction is to be settled by delivery of Relevant Securities, other securities, cash or other consideration.

     As used herein, the term “Lock-Up Period” means the period beginning on the date hereof and ending on the twelve (12) month anniversary of the date upon which the registration statement for securities issued in connection with the Offering is declared effective by the Securities and Exchange Commission (the “Effective Date”).

     As used herein, the term “Relevant Security” means any shares of Common Stock or any other debt, equity, option, warrant or other security or instrument (“Other Securities”) of or binding upon the Company or any subsidiary thereof that is convertible into, or exercisable or exchangeable for, shares of Common Stock or any Other Securities of the Company or any

subsidiary thereof or that holds the right to acquire any shares Common Stock or Other Securities of the Company or any subsidiary thereof.

     The undersigned hereby authorizes the Company during the Lock-Up Period to cause any transfer agent for the Relevant Securities to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, Relevant Securities for which the undersigned is the record holder and, in the case of Relevant Securities for which the undersigned is the beneficial but not the record holder, agrees during the Lock-Up Period to cause the record holder to cause the relevant transfer agent to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, such Relevant Securities.

     The undersigned hereby further agrees that, without the prior written consent of CGF during the Lock-Up Period the undersigned shall not:

     (x) file or participate in the filing with the Securities and Exchange Commission of any registration statement, or circulate or participate in the circulation of any preliminary or final prospectus or other disclosure document with respect to any proposed offering or sale of a Relevant Security, and/or

     (y) exercise any rights the undersigned may have to require registration with the Securities and Exchange Commission of any proposed offering or sale of a Relevant Security [provided, however;

     (z) with respect to shares of Common Stock forming a part of unregistered units issuable to the undersigned on the Effective Date (upon automatic conversion into unregistered units of the Company’s promissory note in favor of the undersigned in the principal amount of $593,940 dated October 12, 2005), CGF hereby consents to the undersigned receiving the same registration rights as have been accorded to other holders of unregistered units whose promissory notes are automatically converted into unregistered units on the Effective Date; provided that nothing in this subparagraph (z) shall entitle the undersigned to sell any Relevant Security prior to expiration of the Lock-Up Period]*.

     The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this Agreement constitutes the legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms. Upon request, the undersigned will execute any additional documents necessary in connection with enforcement hereof. Any obligations of the undersigned shall be binding upon the successors and assigns of the undersigned from the date first above written.

     Notwithstanding any provision of this Agreement to the contrary, the restrictions contained in this Agreement shall not apply to:

     [(i)] the resale of any Relevant Security acquired by the undersigned in the public markets subsequent to the Effective Date;

     [(ii) in any three month period, the resale of the lesser of [                    ] shares of Common Stock of the Company beneficially owned by the undersigned or the maximum number of shares that the undersigned could sell during any three month period pursuant to the provisions of Rule 144 under the Securities Act of 1933, as amended; provided such resales shall not commence until a date that is at least 90 days following the Effective Date (and, in any event, after the Units detach); and such resales are made (a) pursuant to and in accordance with the exemption from registration provided by Rule 144 or (b) by private transfer in compliance with all applicable corporate and securities laws, rules and regulations.]*

     It is understood that if the Effective Date does not occur prior to June 30, 2006, 2006, then, without further act by or on the part of the Representative, the undersigned will be released from his, her or its obligation under this Agreement.

     This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to the conflicts of laws principles thereof. Delivery of a signed copy of this letter by facsimile transmission shall be effective as delivery of the original hereof.

Very truly yours,
 

By:  

Print Name:  

* Information in [brackets] applies only to lock up agreements executed by Mr. Gene Simmons, Mr. Kourosh Taj and Mr. Jay Vir]

EX-4.14

EXHIBIT 4.14

NGTV
AND
CAPITAL GROWTH FINANCIAL, LLC

FORM OF
REPRESENTATIVE’S OPTION AGREEMENT FOR UNITS

Dated as of                          , 2006

     REPRESENTATIVE’S OPTION AGREEMENT FOR UNITS dated as of                     , 2006 among NGTV, a California corporation (the “Company”) and CAPITAL GROWTH FINANCIAL, LLC, the representative of the underwriters, a Florida limited liability company (hereinafter referred to variously as the “Holder”, “Underwriter” or “Representative”).

W I T N E S S E T H:

     WHEREAS, the Representative has agreed pursuant to the underwriting agreement (the “Underwriting Agreement”) between the Representative, on behalf of the several underwriters, the Company and the Selling Security Holders named therein, to underwrite, on a firm commitment basis, the Company’s proposed public offering (“Public Offering”) of up to [5,997,174] units (exclusive of [899,576] over allotment units) (“Units”) at a public offering price of [$6.00] per Unit, each Unit consisting of one (1) share of the Company’s common stock no par value per share (“Common Stock”) and one (1) Redeemable Common Stock Purchase Warrant to purchase one-half of one share of Common Stock (“Warrant”); and

     WHEREAS, the Company proposes to issue to the Representative options (“Representative Unit Purchase Options”) to purchase up to an aggregate of 416,667 Units [10% of the Units sold in the Offering excluding Units being sold by the Selling Security Holders and Units issuable in the event the over-allotment option is exercised] (the “Representative Units”) of the Company at a purchase price of $.001 per Unit Purchase Option, exercisable at [120%] of the public offering price of the Units; and

     WHEREAS, the Representative Units shall be identical to the units sold in the Public Offering (“Public Units”) and each Representative Unit shall consist of (i) one share of Common Stock (“Unit Share”) and (ii) one Warrant (“Unit Warrant”); and

     WHEREAS, the Representative’s Unit Purchase Options to be issued pursuant to this Agreement will be issued by the Company on the Closing Date (as such term is defined in the Underwriting Agreement) in consideration for, and as part of the compensation in connection with the Public Offering;

     NOW, THEREFORE, in consideration of the premises, the payment by the Representative to the Company of an aggregate of One Hundred Sixteen Dollars ($416.00 or $0.001 per Unit), the agreements herein set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Grant. The Holder is hereby granted the right to purchase, at any time from                     2007 [one year from the Effective Date] until 5:00 P.M., Pacific Time, on                     , 2011, up to an aggregate of [416,667] Representative Units at an initial exercise price per Unit (subject to adjustment as provided in Section 8 hereof) of [120%] of the Public Offering Price (the “Exercise Price”).

     2. Representative’s Unit Purchase Option Certificates. The Representative’s option certificates (the “Representative’s Unit Purchase Option Certificates”) delivered and to be delivered pursuant to this Agreement shall be in the form set forth in Exhibit A, attached hereto and made a part hereof, with such appropriate insertions, omissions, substitutions, and other variations as required or permitted by this Agreement.

     3. Exercise of Representative’s Unit Purchase Options. The Representative’s Unit Purchase Options initially are exercisable at the exercise price (subject to adjustment as provided in Section 8 hereof) per Unit, as set forth in Section 6 hereof, payable by (i) certified or official bank check in New York Clearing House funds, subject to adjustment as provided in Section 8 hereof; or (ii) through a cashless exercise. “Cashless Exercise” means an exercise of Unit Purchase Options in which, in lieu of payment of the Exercise Price, the Holder elects to receive a lesser number of securities such that the value of the securities that such Holder would otherwise have been entitled to receive but has agreed not to receive, as determined by the closing price of such securities on the date of exercise or, if such date is not a trading day, on the next prior trading day, is equal to the Exercise Price with respect to such exercise. A Holder may only elect a Cashless Exercise if the class of securities issuable by the Company on such exercise is publicly traded. Upon surrender at the Company’s principal offices in California (presently located at 9944 Santa Monica Blvd., Beverly Hills, California 90012), of Representative’s Unit Purchase Options with the annexed Form of Election to Purchase duly executed, together with payment of the Purchase Price (as hereinafter defined) for the Representative Units purchased, the registered holder of a Representative’s Unit Purchase Option (“Holder” or “Holders”) shall be entitled to receive a certificate or certificates for the Representative Units so purchased. The Representative Units shall be identical to the Units and shall consist of one Unit Share and one Unit Warrant. The purchase rights represented by each Representative’s Unit Purchase Option are exercisable at the option of the Holder thereof, in whole or in part (but not as to fractional shares of Common Stock underlying the Representative Units). In the case of the purchase of less than all the Representative Units purchasable under any Representative’s Unit Purchase Option Certificate, the Company shall cancel the Representative’s Unit Purchase Option Certificate upon the surrender thereof, and shall execute and deliver a new Representative’s Unit Purchase Option Certificate of like tenor for the balance of the Representative Units purchasable thereunder.

     4. Issuance of Certificates. Upon the exercise of Representative’s Unit Purchase Options, the issuance of certificates for the Units, Unit Warrants and Unit Shares or other securities, properties or rights underlying such Representative’s Unit Purchase Option, shall be made forthwith (and in any event within five (5) business days thereafter) without charge to the

Holder thereof including, without limitation, any tax which may be payable in respect of the issuance thereof, and such certificates shall (subject to the provisions of Sections 5 and 7 hereof) be issued in the name of, or in such names as may be directed by, the Holder thereof; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Representative and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

     The Representative’s Unit Purchase Options and the certificates representing the Units, Unit Warrants and Unit Shares issuable upon exercise of the Representative’s Unit Purchase Options shall be executed on behalf of the Company by the manual or facsimile signature of the Chairman or Vice Chairman of the Board of Directors or any President or Vice President of the Company under its corporate seal reproduced thereon, attested to by the manual or facsimile signature of the then present Secretary or Assistant Secretary of the Company. The Representative’s Unit Purchase Options shall be dated the date of the execution by the Company upon initial issuance, division, exchange, substitution or transfer. The certificates representing the Units, Unit Warrants and Unit Shares issuable upon exercise of the Representative’s Unit Purchase Options shall be identical in form and substance to those issued and sold to the public in connection with the Public Offering, including the terms of redemption for the Warrants. Notwithstanding the foregoing, if, at the time of exercise of the Representative’s Unit Purchase Option, the Units into which the Representative’s Unit Purchase Option are exercisable have been separated and no longer trade as Units, then, upon exercise of the Representative’s Unit Purchase Option, and in lieu of Representative’s Units, the Company shall issue to the registered Holder, in the manner provided in the first paragraph of this Section 4:

     (i) such number of Unit Shares as would have been included in each of the Representative Units had Units been issued upon exercise of the Representative’s Unit Purchase Option by such Holder, registered in such name(s) as may be designated by the Holder not inconsistent with Section 5 hereof; and

     (ii) such number of Unit Warrants as would have been included in the Representative’s Units had Units been issued upon exercise of the Representative’s Unit Purchase Option by such Holder, registered in such name(s) as may be designated by the Holder not inconsistent with Section 5 hereof.

     5. Restriction On Transfer of Representative’s Unit Purchase Option. Neither the Unit Purchase Option nor the securities of NGTV issuable thereunder may be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the Unit Purchase Option or the NGTV securities issuable thereunder by any person during the 180 days immediately following the effective date of the Registration Statement or the commencement of the Offering, whichever is later, except transfers to any NASD member participating in the Offering or its officers or partners, or except as otherwise specifically permitted by NASD Conduct Rule 2710(g)(2).

6. Exercise Price.

     6.1 Initial and Adjusted Exercise Price. Except as otherwise provided in Section 8 hereof, the initial exercise price of each Representative’s Unit Purchase Option shall be [$7.20] (120% of Unit Offering Price) per Unit. The exercise price shall be adjusted from time to time in accordance with the provisions of Section 8 hereof.

     6.2 Exercise Price. The term “Exercise Price” herein shall mean the initial exercise price or the adjusted exercise price, as the context may require.

7. Registration Rights.

     7.1 Demand Registration Under the Securities Act of 1933. At any time commencing after                     , 2007 [one (1) year from the Effective Date] through and including                     , 2011 [five (5) years from the Effective Date], the Holders of Representative’s Unit Purchase Options, Unit Warrants and Unit Shares, representing a “Majority” of the shares of Common Stock issuable upon the exercise of the Representative Units (assuming the exercise of all of the Representative’s Unit Purchase Options and all of the Unit Warrants included therein) shall have the right (which right is in addition to the registration rights under Section 7.2 hereof), exercisable by written notice to the Company, to have the Company prepare and file with the Commission, on one occasion, a registration statement and such other documents, including a prospectus, as may be necessary in order to comply with the provisions of the Act, so as to permit a public offering and sale of their respective Unit Warrants and Unit Shares during a period equal to the longer of: (i) nine (9) months or (ii) the unexpired term of the Unit Warrants by such Holders and any other Holders of Representative’s Unit Purchase Options, Representative Units, Unit Shares and Unit Warrants who shall notify the Company within ten (10) days after receiving notice from the Company of such request.

     7.2 Piggyback Registration. If, at any time commencing after                     , 2006, through and including                     , 2011 [five (5) years from the Effective Date], the Company proposes to register any of its securities under the Act (other than in connection with a merger or pursuant to Form S-8 or similar form) it will give written notice by registered or certified mail, at least thirty (30) days prior to the filing of each such registration statement, to the Representative and to all other Holders of Representative’s Unit Purchase Options, Representatives Units, Unit Warrants or Unit Shares underlying the Representative Units, of its intention to do so. If any of the Representatives or other Holders of Representative’s Unit Purchase Options, Representative’s Units, Unit Warrants or Unit Shares underlying the Representative Units, notify the Company within twenty (20) days after receipt of any such notice of its or their desire to include any of the Unit Warrants and/or Unit Shares beneficially owned by them in such proposed registration statement, the Company shall afford each of the Representative and each such Holder, the opportunity to have any of their Unit Warrants and/or Unit Shares registered under such registration statement.

     Notwithstanding the provisions of this Section 7.2, the Company shall have the right at any time after it shall have given written notice pursuant to this Section 7.2 (irrespective of whether a written request for inclusion of any such securities shall have been made) to elect not to file any such proposed registration statement, or to withdraw the same after the filing but prior to the Effective Date thereof.

     7.3 Notice of Registration. The Company covenants and agrees to give written notice of any registration request under Section 7.1 by any Holder or Holders to all other registered Holders of the Representative’s Unit Purchase Option, Unit Shares and Unit Warrants underlying the Representative Units within ten (10) days from the date of the receipt of any such registration request.

     7.4 Covenants of the Company With Respect to Registration. In connection with any registration under Section 7.1 or 7.2 hereof, the Company covenants and agrees as follows:

     (a) The Company shall use its best efforts to file a registration statement within sixty (60) days of receipt of any demand therefor in accordance with Section 7.1, shall use its best efforts to have any registration statement declared effective at the earliest possible time, and shall furnish each Holder whose securities are included in such registration statement such number of prospectuses as shall reasonably be requested. Notwithstanding the foregoing sentence, the Company shall be entitled to postpone the filing of any registration statement otherwise required to be prepared and filed by it pursuant to this Section 7.4(a) if (i) the Company is under contract or other binding legal obligation for a material acquisition, reorganization or divestiture, or (ii) the Company is publicly committed to a self-tender or exchange offer and the filing of a registration statement would cause a violation of Regulation M under the Securities Exchange Act of 1934. In the event of such postponement, the Company shall be required to file the registration statement pursuant to this Section 7.4(a) upon the earlier of (i) the consummation or termination, as applicable, of the event requiring such postponement or (ii) 90 days after the receipt of the initial demand for such registration.

     (b) The Company shall pay all costs (excluding fees and expenses of Holder(s) counsel and any underwriting or selling commissions), fees and expenses in connection with all registration statements filed pursuant to Sections 7.1 and 7.2 hereof including, without limitation, the Company’s legal and accounting fees, printing expenses, and blue sky fees and expenses. If the Company shall fail to comply with the provisions of Section 7.4(a), the Company shall, in addition to any other equitable or other relief available to the Holder(s), be liable for any or all incidental, special and consequential damages and damages due to loss of profit sustained by the Holder(s) requesting registration of their Unit Shares and Unit Warrants underlying the Representative Units.

     (c) The Company will take all necessary action which may be required in qualifying or registering the Unit Shares and Unit Warrants underlying the Representative Units included in a registration statement for offering and sale under the securities or blue sky laws of such states as reasonably are requested by the Holder(s), provided that the Company shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction.

     (d) The Company shall indemnify the Holder(s) of Representative’s Unit Purchase Options, Representative Units, Unit Shares and Unit Warrants to be sold pursuant to any registration statement and each person, if any, who controls such Holders within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Representative contained in Section 7 of the Underwriting Agreement.

     (e) The Holder(s) of Representative’s Unit Purchase Options, Representative’s Units, Unit Shares and Unit Warrants underlying the Representative Units to be sold pursuant to a registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, its officers and directors and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 7 of the Underwriting Agreement pursuant to which the Representative has agreed to indemnify the Company.

     (f) Nothing contained in this Agreement shall be construed as requiring the Holder(s) to exercise their Representative’s Unit Purchase Options or their Unit Warrants prior to the initial filing of any registration statement or the effectiveness thereof.

     (g) If the Unit Shares and Unit Warrants underlying the Representative Units are to be sold in an underwritten public offering, the Company shall use its best efforts to furnish to each Holder participating in the offering and to each such underwriter, a signed counterpart, addressed to such underwriter, of (i) an opinion of counsel to the Company dated the date of the closing under the underwriting

agreement, and (ii) a “cold comfort” letter dated the date of the closing under the underwriting agreement signed by the independent public accountants who have issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities.

     (h) The Company shall as soon as practicable after the Effective Date of the registration statement, and in any event within 15 months thereafter, have made “generally available to its security holders” (within the meaning of Rule 158 under the Act) an earnings statement (which need not be audited) complying with Section 11(a) of the Act and covering a period of at least 12 consecutive months beginning after the Effective Date of the registration statement.

     (i) The Company shall deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below, and the managing underwriters, copies of all correspondence between the Commission and the Company, its counsel or auditors and all Company memoranda (excluding memoranda to and from counsel) relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of the National Association of Securities Dealers, Inc. (“NASD”). Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times and as often as any such Holder shall reasonably request.

     (j) The Company shall enter into an underwriting agreement with the managing underwriter(s) selected for such underwriting, if any, which underwriter shall be subject to approval by Holders of a Majority of Representative’s Unit Purchase Options, Representative Units, Unit Shares and Unit Warrants underlying the Representative Units requesting to be included in such underwriting. Such underwriting agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter(s).

     The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Units Shares and Unit Warrants underlying the Representative’s Units and may, at their option, require that any or all the

representations, warranties and covenants of the Company to or for the benefit of such underwriter(s) shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriter(s) except as they may relate to such Holders, their intended methods of distribution, and except for matters related to disclosures with respect to such Holders, contained or required to be contained, in such registration statement under the Act and the rules and regulations thereunder.

     (k) For purposes of this Agreement, the term “Majority” in reference to the Holders of Representative’s Unit Purchase Options, Representative Units, Unit Shares and Unit Warrants, shall mean in excess of fifty percent (50%) of the Common Stock of the Company issuable upon full exercise of all Representative’s Unit Purchase Options, including the Unit Warrants included in the Representative Units that have not been resold to the public pursuant to Rule 144 under the Act or a registration statement filed with the Commission under the Act.

     8. Adjustments to Exercise Price and Number of Securities. The Exercise Price and number of securities issuable with respect to the Unit Warrants shall be adjusted on the same terms and conditions, and at the same time, as any adjustments in the Exercise Price and number of shares issuable with respect to the Public Warrants required by the terms of the Public Warrants.

     9. Exchange and Replacement of Representative’s Unit Purchase Option. Each Representative’s Unit Purchase Option Certificate is exchangeable without expense, upon the surrender thereof by the registered Holder at the principal executive office of the Company, for a new Representative’s Unit Purchase Option Certificate of like tenor and date representing in the aggregate the right to purchase the same number of Units as provided in the original Representative’s Unit Purchase Options in such denominations as shall be designated by the Holder thereof at the time of such surrender.

     Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Representative’s Unit Purchase Options, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Representative’s Unit Purchase Option Certificate, if mutilated, the Company will make and deliver a new Representative’s Unit Purchase Option Certificate of like tenor, in lieu thereof.

     10. Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of shares of Common Stock upon the exercise of the Representative’s Unit Purchase Options, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of shares of Common Stock or other securities, properties or rights.

     11. Reservation and Listing of Securities. The Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely for the purpose of issuance upon the exercise of the Representative’s Unit Purchase Options, such number of shares of Common Stock or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Representative’s Unit Purchase Options and/or the Representative Unit Warrants and payment of the Exercise Price therefor, all Representative Units, Unit Shares or Unit Warrants and other securities issuable upon such exercise shall be duly and validly issued, fully paid, non-assessable and not subject to the preemptive rights of any stockholder. As long as the Representative’s Unit Purchase Options and/or Representative Units shall be outstanding, the Company shall use its best efforts to cause all Unit Shares and Unit Warrants issuable upon the exercise of the Representative’s Unit Purchase Option and Representative Units to be listed (subject to official notice of issuance) on all securities exchanges on which the Common Stock issued to the public in connection herewith may then be listed and/or quoted on the American Stock Exchange.

     12. Notices to Representative’s Option Holders. Nothing contained in this Agreement shall be construed as conferring upon the Holders the right to vote or to consent or to receive notice as a stockholder in respect of any meetings of stockholders for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at any time prior to the expiration of the Representative’s Unit Purchase Options or Unit Warrants and their exercise, any of the following events shall occur:

     (a) the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or

     (b) the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or

     (c) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property assets and business as an entirety shall be proposed;

then, in any one or more of such events the Company shall give written notice of such event at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of closing the transfer books, as the case may be. Failure to give such notice or any defect therein shall not affect the validity of any action taken in connection with the declaration or payment of any such dividend, or the issuance of any convertible or exchangeable securities, or subscription rights, options or warrants, or any proposed dissolution, liquidation, winding up or sale.

     13. Notices. All notices requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered, or mailed by registered or certified mail, return receipt requested:

     (a) If to the registered Holder of Representative’s Unit Purchase Options, to the address of such Holder as shown on the books of the Company; or

     (b) If to the Company, to the address set forth in Section 3 hereof or to such other address as the Company may designate by notice to the Holders.

     14. Supplements and Amendments. The Company and the Representative may from time to time mutually supplement or amend this Agreement without the approval of any holders of Representative’s Unit Purchase Option (other than the Representative) in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any provisions herein or to make any other provisions in regard to matters or questions arising hereunder which the Company and the Representative may deem necessary or desirable and which the Company and the Representative deem shall not adversely affect the interests of the Holders of Representative’s Unit Purchase Options.

     15. Successors. All the covenants and provisions of this Agreement shall be binding upon and inure to the benefit of the Company, the Holders and their respective successors and assigns hereunder.

     16. Termination. This Agreement shall terminate at the close of business on                     , 2011. Notwithstanding the foregoing, the indemnification provisions of Section 7 shall survive such termination until the close of business on                     , 2012.

     17. Governing Law: Submission to Jurisdiction.

     (a) This Agreement and each Representative’s Unit Purchase Option issued hereunder shall be deemed to be a contract made under the laws of the State of Florida and for all purposes shall be construed in accordance with the laws of such State without giving effect to the rules of said State governing the conflicts of laws.

     (b) The Company, the Representative and the Holders hereby agree that any action, proceeding or claim against it arising out of, or relating in any way to, this Agreement shall be brought and enforced in the courts of the State of Florida or of the United States of America Federal Courts located in the State of Florida, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company, the Representative and the Holders hereby irrevocably waive any objection to such exclusive jurisdiction or inconvenient forum. Any such process or summons to be served upon any of the Company, the Representative and the Holders (at the option of the party bringing such action, proceeding or claim) may be served by transmitting a copy thereof, by

registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 13 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the party so served in any action, proceeding or claim. The Company, the Representative and the Holders agree that the prevailing party(ies) in any such action or proceeding shall be entitled to recover from the other party(ies) all of its/their reasonable legal costs and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor.

     18. Entire Agreement; Modification. This Agreement (including the Underwriting Agreement to the extent portions thereof are referred to herein) contains the entire understanding between the parties hereto with respect to the subject matter hereof and, except as provided in Section 14 hereof, may not be modified or amended except by a writing duly signed by the party against whom enforcement of the modification or amendment is sought.

     19. Severability. If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement.

     20. Captions. The caption headings of the Sections of this Agreement are for convenience of reference only and are not intended, nor should they be construed as, a part of this Agreement and shall be given no substantive effect.

     21. Benefits or this Agreement. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company and the Representative and any other registered Holder(s) of the Representative’s Unit Purchase Option or Unit Shares or Unit Warrants underlying the Representative’s Unit any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company and the Representative and any other Holder(s) of the Representative’s Unit Purchase Option or Representative Units.

     22. Facsimile; Counterparts. This Agreement may be executed by facsimile signature, in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

[SEAL]	NGTV
	By:
		Name:
		Title:	President
Attest:
Secretary
	CAPITAL GROWTH FINANCIAL, LLC
	By:
		Name:
		Title:

EXHIBIT A

[FORM OF REPRESENTATIVE’S UNIT PURCHASE OPTION CERTIFICATE]

     THE REPRESENTATIVE’S UNIT PURCHASE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

     THE TRANSFER OR EXCHANGE OF THE REPRESENTATIVE’S UNIT PURCHASE OPTIONS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE REPRESENTATIVE’S OPTION AGREEMENT FOR UNITS REFERRED TO HEREIN.

EXERCISABLE ON OR BEFORE
5:00 P.M., PACIFIC TIME,                     , 2011

No. W-                     Representative’s Unit Purchase Options

Representative’s Unit Purchase Options

     This Representative’s Unit Purchase Option Certificate certifies that Capital Growth Financial, LLC, or registered assigns, is the registered holder of                      [                    ] Representative’s Unit Purchase Options to purchase initially, at any time from                     , 2007 until 5:00p.m. Pacific Time on                     , 2011 (“Expiration Date”), up to                      [                    ] Units (the “Units”) of NGTV, a California corporation (the “Company”), at an initial exercise price, subject to adjustment in certain events (the “Exercise Price”), of $                     [120% of the public offering price of the Units] upon surrender of this Representative’s Unit Purchase Option Certificate and payment of the Exercise Price at an office or agency of the Company, but subject to the conditions set forth herein and in the Representative’s Option Agreement for Units dated as of                     , 2006 between the Company and Capital Growth Financial, LLC (the “Representative’s Option Agreement”). Subject to cashless exercise, as defined and in the manner provided for in Section 2 of the Representative’s Option Agreement, payment of the Exercise Price shall be made by certified or official bank check in New York Clearing House funds payable to the order of the Company.

     No Representative’s Unit Purchase Options may be exercised after 5:00 p.m., Pacific Time, on the Expiration Date, at which time all Representative’s Unit Purchase Options evidenced hereby, unless exercised prior thereto, shall thereafter be void.

     The Representative’s Unit Purchase Option evidenced by this Representative’s Unit Purchase Option Certificate is part of a duly authorized issue of Units pursuant to the Representative’s Option Agreement, which Representative’s Option Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Company and the holders (the words “holders” or “holder” meaning the registered holders or registered holder) of the Representative’s Unit Purchase Options.

     The Representative’s Option Agreement provides that upon the occurrence of certain events the exercise prices and/or number of the Company’s securities issuable thereupon may, subject to certain conditions, be adjusted. In such event, the Company will, at the request of the holder, issue a new Representative’s Unit Purchase Option Certificate evidencing the adjustment in the exercise price and the number and/or type of securities issuable upon the exercise of the Representative’s Unit Purchase Options; provided, however, that the failure of the Company to issue such new Representative’s Unit Purchase Options shall not in any way change, alter or otherwise impair, the rights of the holder as set forth in the Representative’s Option Agreement.

     Upon due presentment for registration of transfer of this Representative’s Unit Purchase Option Certificate at an office or agency of the Company, a new Representative’s Unit Purchase Option Certificate of like tenor and evidencing in the aggregate a like number of Representative’s Unit Purchase Options shall be issued to the transferee(s) in exchange for this Representative’s Unit Purchase Option Certificate, subject to the limitations provided herein and in the Representative’s Option Agreement, without any charge except for any tax or other governmental charge imposed in connection with such transfer.

     Upon the exercise of less than all of the Representative’s Unit Purchase Options evidenced by this Certificate, the Company shall forthwith issue to the holder hereof a new Representative’s Unit Purchase Option Certificate representing such number of unexercised Representative’s Unit Purchase Options.

     The Company may deem and treat the registered holder(s) hereof as the absolute owner(s) of the Representative’s Unit Purchase Options evidenced by this Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and of any distribution to the holder(s) hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary.

     All terms used in this Representative’s Unit Purchase Option which are defined in the Representative’s Option Agreement shall have the meanings assigned to them in the Representative’s Option Agreement.

[Signature Page Follows]

     IN WITNESS WHEREOF, the Company has caused this Representative’s Unit Purchase Option Certificate to be duly executed under its corporate seal.

Dated as of                     , 2006

[SEAL]	NGTV
	By:
		Name:
		Title:	President
Attest:
Secretary

[FORM OF ELECTION TO PURCHASE]

     The undersigned hereby irrevocably elects to exercise the right, represented by this Representative’s Unit Purchase Option Certificate, to purchase                     Representative’s Units and herewith tenders in payment for such securities a certified or official bank check payable in New York Clearing House Funds to the order of NGTV. in the amount of $                                         , or pursuant to the cancellation of Representative’s Unit Purchase Options pursuant to a cashless exercise of this Representative’s Unit Purchase Option, in accordance with Section 3 of the Representative’s Option Agreement for Units, all in accordance with the terms hereof. The undersigned requests that a certificate for such securities be registered in the name of                      whose address is                      and that such Certificate be delivered to                      whose address is                    

Dated:

Signature

(Signature must conform in all respects to name of holder as specified on the face of the Representative’s Unit Purchase Option Certificate.)

(Insert Social Security or Other Identifying Number of Holder)

EX-4.16

Exhibit 4.16

NGTV Public Warrant Face Side Text

This Warrant Certificate certifies that                                                              or registered assigns, is the registered Holder of                                          Warrants.

WARRANTS TO PURCHASE ¹/2 SHARE OF COMMON STOCK OF NGTV

Each Warrant, unless and until redeemed by NGTV, a corporation incorporated under the laws of the State of California (the “Company”) as provided in the Warrant Agreement hereinafter more fully described (the “Warrant Agreement”), entitles the holder thereof to purchase from the Company, subject to the terms and conditions set forth hereinafter and in the Warrant Agreement, at any time on or after the date which is thirty days after notice is given by the representative of the underwriters (as set forth in the final prospectus prepared in connection with the Company’s initial public offering) that the “units” (as described in the final prospectus) shall be detached, provided that such detachment shall not occur until the sooner of (i) sixty days following the date of the final prospectus prepared in connection with the Company’s initial public offering or (ii) the exercise in full of the “over allotment option” of the underwriters, as described in the final prospectus (the “Initial Exercise Date”) and before the close of business on                     , 20___ (“Expiration Date”), one half of one share of fully paid and non-assessable Common Stock of the Company (“Common Stock”) upon presentation and surrender of this Warrant Certificate, with the instructions for the registration and delivery of Common Stock filled in, at the stock transfer office in Glendale, California of U.S. Stock Transfer Corporation, Warrant Agent of the Company (“Warrant Agent”) or of its successor warrant agent or, if there be no successor warrant agent, at the corporate offices of the Company, and upon payment of the Exercise Price (as defined in the Warrant Agreement) and any applicable taxes paid either in cash, or by certified or official bank check, payable in lawful money of the United States of America to the order of the Company. Each Warrant initially entitles the holder to purchase one half of one share of Common Stock for $                    . The number and kind of securities or other property for which the Warrants are exercisable are subject to adjustment in certain events, such as mergers, splits, stock dividends, reverse splits and the like, to prevent dilution. The Company may, but is not obligated to, redeem any or all outstanding and unexercised warrants beginning four months after the date of the final prospectus prepared in connection with the Company’s initial public offering, by giving not less than 30 days prior notice at any time after the closing price of the Common Stock on the principal market on which it is traded has equaled or exceeded $                     per share on each of ten consecutive trading days after the date that is four months subsequent to the date of the final prospectus prepared in connection with the Company’s initial public offering . The Redemption Price is $0.25 per Warrant (subject to adjustment in the event of a stock split, dividend or the like). All Warrants not theretofore exercised will expire on the Expiration Date.

This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Warrant Agent.

WITNESS the facsimile signatures of the proper officers of the Company and its corporate seal.

NGTV Public Warrant Face Side Text

SUMMARY OF THE TERMS OF THE WARRANT

     This Warrant Certificate is subject to all of the terms, provisions and conditions of the Warrant Agreement, dated as of                     , 2006, between the Company and the Warrant Agent, to all of which terms, provisions and conditions the registered holder of this Warrant Certificate consents by acceptance hereof. The Warrant Agreement is incorporated herein by reference and made a part hereof and reference is made to the Warrant Agreement for a full description of the rights, limitations of rights, obligations, duties and immunities of the Warrant Agent, the Company and the holders of the Warrant Certificates. Copies of the Warrant Agreement are available for inspection at the stock transfer office of the Warrant Agent or may be obtained upon written request addressed to the Company at NGTV, 9944 Santa Monica Boulevard, Beverly Hills, California, 90212, Attention: Chief Financial Officer.

     The Company shall not be required upon the exercise of the Warrants evidenced by this Warrant Certificate to issue fractions of Warrants, Common Stock or other securities, but shall reject any such attempted exercise as provided in the Warrant Agreement.

     In certain cases, the sale of securities by the Company upon exercise of Warrants may violate the securities laws of the United States, certain states thereof or other jurisdictions. The Company has agreed to use all commercially reasonable efforts to provide that such sales comply with the Securities Act of 1933, and to take such action under the laws of various states as may be required to cause the sale of securities upon exercise to be lawful.

     This Warrant Certificate with or without other Certificates, upon surrender to the Warrant Agent, any successor warrant agent, or in the absence of any successor warrant agent, at the corporate offices of the Company, may be exchanged for another Warrant Certificate or Certificates evidencing in the aggregate the same number of Warrants as the aggregate Warrant Certificate or Certificates so surrendered. If the Warrants evidenced by this Warrant Certificate shall be exercised in part, the holder hereof shall be entitled to receive upon surrender hereof another Warrant Certificate or Certificates evidencing the number of Warrants not so exercised.

     No holder of this Warrant Certificate, as such, shall be entitled to vote, receive dividends or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose whatsoever, nor shall anything contained in the Warrant Agreement or herein be construed to confer upon the holder of this Warrant Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof or give or withhold consent to any corporate action (whether upon any matter submitted to stockholders at any meeting thereof, or give or withhold consent to any merger, recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, conveyance or otherwise) or to receive notice of meetings or other actions affecting stockholders (except as provided in the Warrant Agreement) or to receive dividends or subscription rights or otherwise until the Warrants evidenced by this Warrant Certificate shall have been exercised and the Common Stock purchasable upon the exercise thereof shall have become deliverable as provided in the Warrant Agreement.

NGTV Public Warrant Face Side Text

     If this Warrant Certificate shall be surrendered for exercise within any period during which the transfer books for the Company’s Common Stock or other class of stock purchasable upon the exercise of the Warrants evidenced by this Warrant Certificate are closed for any purpose, the Company shall not be required to make delivery of certificates for shares purchasable upon such transfer until the date of the reopening of said transfer books.

     This Warrant Certificate and the Warrants represented hereby are subject to redemption rights on the part of the Company, as set forth in the Warrant Agreement.

     Every holder of this Warrant Certificate by accepting the same consents and agrees with the Company, the Warrant Agent, and with every other holder of a Warrant Certificate that:

(a)

this Warrant Certificate is transferable on the registry books of the Warrant Agent only upon the terms and conditions set forth in the Warrant Agreement, and

(b)

the Company and the Warrant Agent may deem and treat the person in whose name this Warrant Certificate is registered as the absolute owner hereof (notwithstanding any notation of ownership or other writing thereon made by anyone other than the Company or the Warrant Agent) for all purposes whatsoever and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. The Company shall not be required to issue or deliver any certificate for shares of Common Stock or other securities upon the exercise of Warrants evidenced by this Warrant Certificate until any tax which may be payable in respect thereof by the holder of this Warrant Certificate pursuant to the Warrant Agreement shall have been paid, such tax being payable by the holder of this Warrant Certificate at the time of surrender.

EX-4.20

EXHIBIT 4.20

WARRANT AGREEMENT

NGTV

and

U.S. Stock Transfer Corporation

Warrant Agent

                    , 2006

WARRANT AGREEMENT

     THIS AGREEMENT dated as of                     , 2006, between NGTV, a California corporation (the “Company”), and U.S. Stock Transfer Corporation, a transfer agency located in Glendale, California (the “Warrant Agent”).

WHEREAS:

     The Company proposes to issue and, along with certain selling security holders, sell, through an initial public offering (the “Public Offering”),                     units of the Company’s securities (the “Units”), with each Unit consisting of one share of common stock of the Company, no par value per share (“Common Stock”), and a warrant to purchase one half of one share of Common Stock (each a “Firm Warrant”);

     The Company also has granted the several underwriters (the “Underwriters”) of the Company’s Public Offering pursuant to an underwriting agreement (the “Underwriting Agreement”), the option to purchase up to an additional                      Units consisting of in the aggregate                     shares of Common Stock and                     Warrants (the “Over-Allotment Warrants”) exercisable to purchase up to an aggregate of                     shares of Common Stock (“Over-Allotment Option”); and

     The Company desires to provide for the issuance, registration, transfer, exchange and exercise of certificates (the “Warrant Certificates”) representing the Firm Warrants and the Over-Allotment Warrants (collectively, herein, the “Warrants”) and for the exercise of the Warrants;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth and for the purpose of defining the terms and provisions of the Warrant Certificates and the Warrants, and the respective rights and obligations thereunder of the Company, the registered holders of the Warrant Certificates and the Warrant Agent, the parties hereto agree as follows:

     1.  Definitions. As used herein:

     (a) “Common Stock” shall mean Common Stock, of the Company, whether now or hereafter authorized, holders of which have the right to participate in the distribution of earnings and assets of the Company without limit as to amount or percentage.

     (b) “Corporate Office” shall mean the place of business of the Warrant Agent (or its successor) located in Glendale, California, which office is presently located at 1745 Gardena Avenue, Glendale, California, 91204.

     (c) “Effective Date” shall mean                     , 2006, the date on which the Company’s Registration Statement is declared effective by the Securities and Exchange Commission.

     (d) “Exercise Date” shall mean the date of surrender for exercise of any Warrant Certificate, provided such surrender takes place during the Exercise Period, the exercise form on the back of the Warrant Certificate or a form substantially similar thereto has been completed in full by the Registered Owner or a duly appointed attorney and the Warrant Certificate is accompanied by payment in full of the Exercise Price.

     (e) “Exercise Period” shall mean the period commencing on the Separation Date and extending to and through the Expiration Date.

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     (f) “Exercise Price” shall mean a purchase price of $            per one half share of Common Stock; provided, however, that in the event the Company reduces the Exercise Price in accordance with Section 9(i) hereof, the Exercise Price shall be as established by the Company in accordance with such Section; and provided further, however, that Warrants may only be exercised in whole numbers for whole shares of Common Stock, so that the Exercise Price per whole share of Common Stock shall be $          .

     (g) “Expiration Date” shall mean 5:00 P.M. Eastern Time on the last day of the      th month period commencing on the Effective Date, subject to the terms provided in Section 5 herein for redemption and subject to extension by the Board of Directors of the Company; provided however, if such date shall be a holiday or a day on which banks are authorized to close, then Expiration Date shall mean 5:00 p.m., Eastern Time on the next following day which in the State of Georgia is not a holiday or a day on which banks are authorized to close. The Expiration Date may be extended from time to time, by resolution of the Board of Directors of the Company, to a later date upon giving notice to the Warrant Agent and the Registered Owners; provided, however, that notice to the Registered Owners of an extension of the Expiration Date may be made by publication or by release to Dow Jones, P.R. Newswire or other means of general distribution. If the Company redeems the Warrants as provided in Section 5 of this agreement, the Expiration Date shall be the date fixed for redemption.

     (h) “Firm Warrants” shall mean                     Warrants to purchase                     shares of Common Stock, all of which will be purchased as part of the Units by the several Underwriters from the Company and sold in the Public Offering in accordance with the Underwriting Agreement.

     (i) “Over-Allotment Warrants” shall mean                     Warrants to purchase                     shares of Common Stock, any or all of which may be purchased as part of the Units by the Representative for the several Underwriters from the Company in accordance with the Underwriting Agreement. The Over-Allotment Warrants shall have identical terms and conditions to those established for the Firm Warrants, subject to their issuance in accordance with Section 2 hereof.

     (j) “Representative” shall mean Capital Growth Financial, LLC, and                    , the representatives of the several Underwriters.

     (k) “Registered Owner” shall mean the person in whose name any Warrant Certificate shall be registered on the books maintained by the Warrant Agent pursuant to Section 6 of this Agreement.

     (l) “Registration Statement” shall mean the Company’s Registration Statement on Form S-1 (S.E.C. File No.333-131508), as amended.

     (m) “Separation Date” shall mean a date on which the Units shall separate into their component Common Stock and Warrants, such date to be designated by the Representative, in its sole discretion, upon       days’ prior written notice to                     , but in no event prior to the later of (i) sixty (60) days following the Effective Date, or (ii) sixty (60) days following the exercise by the Representative of the Over-Allotment Option the Offering. Prior to the Separation Date, the Warrants may not be exercised and the shares of Common Stock and the Warrants comprising the Units may not be detached or separately traded.

     (n) “Subsidiary” shall mean any corporation of which shares having ordinary voting power to elect a majority of the Board of Directors of such corporation (regardless of whether the shares of any other class or classes of such corporation shall have or may have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned by the Company or one or more subsidiaries of the Company.

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     (o) “Warrant” or the “Warrants” shall mean and include up to                     Warrants to purchase                     authorized and unissued Shares of Common Stock of the Company and, unless otherwise noted, shall include                      Firm Warrants and                     Over-Allotment Warrants.

     (p) “Warrant Agent” shall mean U.S. Stock Transfer Corporation, or its successor, as the transfer agent and registrar of the Warrants.

     (q) “Warrant Shares” shall mean and include up to                      authorized and unissued shares of Common Stock reserved for issuance on exercise of the Warrants, and unless otherwise noted, shall include                     shares of Common Stock issuable upon exercise of the Firm Warrants and                     shares of Common Stock issuable upon exercise of the Over-Allotment Warrants and any additional shares of Common Stock or other property which may hereafter be issuable or deliverable on exercise of the Warrants pursuant to Section 9 of this Agreement.

     2. Warrants and Issuance of Warrant Certificates. Each Warrant shall initially entitle the Registered Owner of the Warrant Certificates representing such Warrant to purchase one half of one share of Common Stock on exercise thereof, subject to modification and adjustment as hereinafter provided in Section 9; and provided that Warrants may only be exercised in whole numbers for whole shares of Common Stock. Warrant Certificates representing                     Firm Warrants and evidencing the right to purchase an aggregate of                     shares of Common Stock of the Company shall be executed by the proper officers of the Company and delivered to the Warrant Agent for countersignature. Certificates representing the Firm Warrants to be delivered to the Warrant Agent shall be in direct relation to the Firm Shares sold as a Unit in the Company’s Public Offering and shall be attached to certificates representing an equal number of Firm Shares. The Warrant Certificates representing the Firm Warrants will be issued and delivered on written order of the Company signed by its President and attested by its Secretary or Assistant Secretary. The Warrant Agent shall deliver Warrant Certificates in required whole number denominations to the persons entitled thereto in connection with any transfer or exchange permitted under this Agreement.

     The Over-Allotment Warrants shall be identical to the Firm Warrants, as described herein. Up to                     Over-Allotment Warrants may be issued and such Over-Allotment Warrants shall evidence the right of the Registered Owners thereof to purchase an aggregate of up to                     shares of Common Stock of the Company. Any Warrant Certificates for Over-Allotment Warrants to be issued will be executed by the proper officers of the Company and delivered to the Warrant Agent for countersignature on exercise of the option to purchase Over-Allotment Warrants by the several Underwriters in accordance with the Underwriting Agreement.

     Except as provided in Section 8 hereof, share certificates representing the Warrant Shares shall be issued only on or after the Separation Date on exercise of the Warrants or on transfer or exchange of the Warrant Shares. The Warrant Agent, if other than the Company’s Transfer Agent, shall arrange with the Transfer Agent for the issuance and registration of all Warrant Shares.

     The Warrants are exercisable in even numbers, for whole shares of the Company’s Common Stock. In the case of the exercise of less than all the Warrants represented in a Certificate, the Warrant Agent shall cancel the Certificate upon the surrender thereof and shall deliver a new Warrant Certificate or Warrant Certificates of like tenor, which the Warrant Agent shall countersign, for the balance of such Warrants. In the case that the attempted exercise of all of the Warrants represented thereby would require the issuance of a fractional share of Common Stock, the Warrants shall be deemed to have been exercised for the nearest whole number of shares of Common Stock into which the Warrants may be exercised. No half shares or fractional shares will be issued by the Company. The Warrant Agent shall not permit the exercise of any single Warrants for one half share of Common Stock.

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     3. Form and Execution of Warrant Certificates. The Warrant Certificates shall be substantially in the form attached as Exhibit “A” and may have such letters, numbers or other marks of identification and such legends, summaries or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement. The Warrant Certificates shall be dated as of the date of issuance, whether on initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen or destroyed Warrant Certificates.

     Each Warrant Certificate for Firm Warrants shall be initially issued only when attached to a certificate representing the same number of Firm Shares of Common Stock as Firm Warrants and shall be separately transferable from the certificate representing Firm Shares only on and after the Separation Date. Warrant Certificates issued for Over-Allotment Warrants shall be issued together with certificates representing the same number of shares of Common Stock as Over-Allotment Warrants and shall be separately transferable only on and after the Separation Date.

     The Warrant Certificates shall be executed on behalf of the Company by its President and Secretary, by manual signatures or by facsimile signatures printed thereon, and shall have imprinted thereon a facsimile of the Company’s seal. The Warrant Certificates shall be manually countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned. In the event any officer of the Company who executed the Warrant Certificates shall cease to be an officer of the Company before the date of issuance of the Warrant Certificates or before countersignature and delivery by the Warrant Agent, such Warrant Certificates may be countersigned, issued and delivered by the Warrant Agent with the same force and effect as though the person who signed such Warrant Certificates had not ceased to be an officer of the Company.

     4. Exercise. The exercise of Warrants in accordance with this Agreement shall only be permitted during the Exercise Period.

     Warrants shall be deemed to have been exercised immediately prior to the close of business on the Exercise Date. The exercise form shall be executed by the Registered Owner thereof or his attorney duly authorized in writing and shall be delivered together with payment to the Warrant Agent, in cash or by official bank or certified check, of an amount in lawful money of the United States of America. Such payment shall be in an amount equal to the Exercise Price as hereinabove defined.

     The person entitled to receive the number of Warrant Shares deliverable on such exercise shall be treated for all purposes as the Registered Owner of such Warrant Shares as of the close of business on the Exercise Date. The Company shall not be obligated to issue any fractional share interests in Warrant Shares. If Warrants represented by more than one Warrant Certificate shall be exercised at one time by the same Registered Owner, the number of full Warrant Shares which shall be issuable on exercise thereof shall be computed on the basis of the aggregate number of full Warrant Shares issuable on such exercise.

     As soon as practicable on or after the Exercise Date and in any event within 30 days after such date, the Warrant Agent shall cause to be issued and delivered by the Transfer Agent to the person or persons entitled to receive the same, a certificate or certificates for the number of Warrant Shares deliverable on such exercise. No adjustment shall be made in respect of cash dividends on Warrant Shares deliverable on exercise of any Warrant. The Warrant Agent shall promptly notify the Company and CGF, in writing, of any exercise and of the number of Warrant Shares caused to be delivered, and shall cause payment of an amount in cash equal to the Exercise Price to be made promptly to the order of the Company. The parties contemplate such payments will be made by the Warrant Agent to the Company on a weekly basis and will consist of collected funds only. The Warrant Agent shall hold any proceeds collected and not yet paid to the

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Company in a Federally-insured account at a commercial bank selected by agreement of the Company and the Warrant Agent, at all times relevant hereto. Following a determination by the Warrant Agent that collected funds have been received, the Warrant Agent shall cause the Transfer Agent to issue share certificates representing the number of Warrant Shares purchased by the Registered Owner.

     Expenses incurred by the Warrant Agent, including administrative costs, costs of maintaining records and other expenses, shall be paid by the Company according to the standard fees imposed by the Warrant Agent for such services. All expenses incurred by the Warrant Agent shall be invoiced to the Company.

     A detailed accounting statement setting forth the number of Warrants exercised, the number of Warrant Shares issued, the net amount of exercised funds and all expenses incurred by the Warrant Agent shall be transmitted to the Company on payment of each exercise amount. Such accounting statement shall serve as an interim accounting for the Company during the Exercise Period. The Warrant Agent shall render to the Company, at the completion of the Exercise Period, a complete accounting setting forth the number of Warrants exercised, the identity of persons exercising such Warrants, the number of Warrant Shares issued, the amounts distributed to the Company, and all expenses incurred by the Warrant Agent.

     At any time upon exercise of Warrants commencing one (1) year following the Effective Date and during the Exercise Period, if (i) the Market Price (as hereinafter defined) of the Company’s Common Stock is equal to or greater than the Exercise Price, (ii) the exercise of the Warrant is solicited by an Underwriter at a time when such Underwriter is a member of the National Association of Securities Dealers, Inc., (iii) the Warrant is not held in a discretionary account, and (iv) the solicitation of the Warrant is not in violation of Regulation M promulgated under the Securities Exchange Act of 1934, then the soliciting Underwriter shall be entitled to receive from the Company upon exercise of each Warrant so exercised, a fee of five percent (5%) of the aggregate price of the Warrants so exercised (the “Exercise Fee”). Within five (5) days after the end of each month commencing one (1) year following the Effective Date, the Warrant Agent shall notify the Representative of each Warrant Certificate which has been properly completed for exercise by holders of Warrants during the preceding month. The Warrant Agent will provide the Representative with the following information in connection with the exercise of each Warrant: the Exercise Date; the name of the soliciting Underwriter and such other information as the Representative shall reasonably request that is available from the records of the Warrant Agent. The Company hereby authorizes and instructs the Warrant Agent to deliver to the soliciting Underwriter(s), if known to the Warrant Agent, or to the Representative if not so known, the Exercise Fee, prior to payment to the Company of the net proceeds of the exercise of such Warrant. The Representative may, at any time commencing one (1) year following the Effective Date and continuing until six (6) months following expiration of the Exercise Period, during business hours, examine the records of the Warrant Agent, including its ledger of original Warrant Certificates returned to the Warrant Agent upon the exercise of Warrants, in order to allow the Representative to confirm the aggregate Exercise Fee to which it is entitled hereunder. Notwithstanding any provision of this Agreement to the contrary, the provisions of this paragraph may not be amended, modified or deleted without the prior written consent of the Representative.

     The Company may be required to deliver a prospectus that satisfies the requirements of Section 10 of the Securities Act of 1933, as amended (the “1933 Act”) with delivery of the Warrant Shares and must have a registration statement (or a post-effective amendment to an existing registration statement) effective under the 1933 Act in order for the Company to comply with any such prospectus delivery requirements. The Company will advise the Warrant Agent of the status of any such registration statement under the 1933 Act and of the effectiveness of the Company’s registration statement or lapse of effectiveness.

     No issuance of Warrant Shares shall be made unless there is an effective registration statement under the 1933 Act, and registration or qualification of the Warrant Shares, or an exemption therefrom, has been obtained from state or other regulatory authorities in the jurisdiction in which such Warrant Shares are sold.

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The Company will provide to the Warrant Agent written confirmation of all such registration or qualification, or an exemption therefrom, when requested by the Warrant Agent.

     5. Redemption. Commencing four months from the Effective Date, the Company may, at its option, redeem the Warrants in whole, but not in part, for a redemption price of $0.25 per Warrant, on not less than 30 days’ notice to the Registered Owners. The right to redeem the Warrants may be exercised by the Company following such four month period and during the Exercise Period only in the event (i) the closing sale price for the Company’s shares of Common Stock has equaled or exceeded $     for 10 consecutive trading days immediately preceding the date of the Company’s notice of redemption, (ii) any notice of the call for redemption is given not more than five (5) business days after the conclusion of the 10 consecutive trading days referred to in the foregoing (i), (iii) the Company has a registration statement (or a post-effective amendment to an existing registration statement) pertaining to the Warrant Shares effective with the Securities and Exchange Commission, which registration statement would enable a Registered Owner to receive upon exercise, one or more certificates evidencing the Warrant Shares, without legend restricting the transferability of such Warrant Shares, and (iv) the expiration of the 30 day notice period is within the Exercise Period. In the event the Company exercises its right to redeem the Warrants, the Expiration Date will be deemed to be, and the Warrants will be exercisable until the close of business on, the date fixed for redemption in such notice. If any Warrant called for redemption is not exercised by such time, it will cease to be exercisable and the Registered Owner thereof will be entitled only to the redemption price.

     6. Reservation of Shares and Payment of Taxes. The Company covenants that it will at all times reserve and have available from its authorized shares of Common Stock such number of shares of Common Stock as shall then be issuable on exercise of all outstanding Warrants. The Company covenants that all Warrant Shares issuable shall be duly and validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof.

     The Registered Owner shall pay all documentary, stamp or similar taxes and other government charges that may be imposed with respect to the issuance of the Warrants, or the issuance, transfer or delivery of any Warrant Shares on exercise of the Warrants. In the event the Warrant Shares are to be delivered in a name other than the name of the Registered Owner of the Warrant Certificates, no such delivery shall be made unless the person requesting the same has paid to the Warrant Agent or Transfer Agent the amount of any such taxes or charges incident thereto.

     The Company will supply the Warrant Agent with blank Warrant Certificates, so as to maintain an inventory satisfactory to the Warrant Agent. The Company will file with the Warrant Agent a statement setting forth the name and address of its Transfer Agent for Warrant Shares and of each successor Transfer Agent, if any.

     7. Registration of Transfer. The Warrant Certificates may be transferred in whole or in part and may be separately transferred from the Common Stock share certificate to which such Warrant Certificate is attached only following the Separation Date and during the Exercise Period. Warrant Certificates to be exchanged shall be surrendered to the Warrant Agent at its corporate office. The Company shall execute and the Warrant Agent shall countersign, issue and deliver in exchange therefor, the Warrant Certificate or Certificates that the holder making the transfer shall be entitled to receive.

     The Warrant Agent shall keep transfer books at its corporate office on which Warrant Certificates and the transfer thereof shall be registered. On due presentment for registration of transfer of any Warrant Certificate at such office, the Company shall execute and the Warrant Agent shall issue and deliver to the transferee or transferees a new Warrant Certificate or Certificates representing an equal aggregate number of Warrants.

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     All Warrant Certificates presented for registration of transfer or exercise shall be duly endorsed or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and the Warrant Agent.

     Prior to due presentment for registration of transfer thereof, the Company and the Warrant Agent may treat the Registered Owner of any Warrant Certificate as the absolute owner thereof (notwithstanding any notations of ownership or writing thereon made by anyone other than the Company or the Warrant Agent) and the parties hereto shall not be affected by any notice to the contrary.

     8. Loss; Mutilation or Exchange. On receipt by the Company and the Warrant Agent of evidence satisfactory as to the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate, the Company shall execute and the Warrant Agent shall countersign and deliver in lieu thereof, a new Warrant Certificate representing an equal aggregate number of Warrants. In the case of loss, theft or destruction of any Warrant Certificate, the Registered Owner requesting issuance of a new Warrant Certificate shall be required to secure an indemnity bond in favor of the Company and Warrant Agent in an amount satisfactory to each of them. In the event a Warrant Certificate is mutilated, such Certificate shall be surrendered and cancelled by the Warrant Agent prior to delivery of a new Warrant Certificate. Applicants for a substitute Warrant Certificate shall also comply with such other regulations and pay such other reasonable charges as the Company may prescribe.

     If, at any time and from time to time following the Separation Date, a holder of Units shall tender his, her or its Unit certificate(s) and request that the Unit certificate(s) be replaced by certificates evidencing the number of shares of Common Stock and the number of Warrants comprising the Unit(s) so tendered, then the Warrant Agent shall cause the Transfer Agent to cancel the Unit certificate(s) so tendered and, in the place and stead of such Unit certificate(s), the Warrant Agent (a) shall cause the Transfer Agent to issue and deliver to such holder, a share certificate registered in the name of the holder evidencing the number of shares of Common Stock included in the Units tendered by the holder and (b) shall issue and deliver to such holder, a Warrant Certificate registered in the name of the holder evidencing the number of Warrants included in the Units tendered by the holder.

     9. Adjustment of Exercise Price and Shares.

     (a) If at any time prior to the expiration of the Warrants by their terms or by exercise, the Company increases or decreases the number of its issued and outstanding shares of Common Stock, or changes in any way the rights and privileges of such shares of Common Stock, by means of (i) the payment of a share dividend or the making of any other distribution on such shares of Common Stock payable in its shares of Common Stock, (ii) a split or subdivision of shares of Common Stock, or (iii) a consolidation or combination of shares of Common Stock, then the Exercise Price in effect at the time of such action and the number of Warrants required to purchase each Warrant Share at that time shall be proportionately adjusted so that the numbers, rights and privileges relating to the Warrant Shares then purchasable upon the exercise of the Warrants shall be increased, decreased or changed in like manner, for the same aggregate purchase price set forth in the Warrants, as if the Warrant Shares purchasable upon the exercise of the Warrants immediately prior to the event had been issued, outstanding, fully paid and nonassessable at the time of that event. Any dividend paid or distributed on the shares of Common Stock in shares of any other class of shares of the Company or securities convertible into shares of Common Stock shall be treated as a dividend paid in shares of Common Stock to the extent shares of Common Stock are issuable on the payment or conversion thereof.

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     (b) In the event, prior to the expiration of the Warrants by exercise or by their terms, the Company shall be recapitalized by reclassifying its outstanding shares of Common Stock into shares with a different par value, or by changing its outstanding shares of Common Stock to shares without par value or in the event of any other material change in the capital structure of the Company or of any successor corporation by reason of any reclassification, recapitalization or conveyance, prompt, proportionate, equitable, lawful and adequate provision shall be made whereby any Registered Owner of the Warrants shall thereafter have the right to purchase, on the basis and the terms and conditions specified in this Agreement, in lieu of the Warrant Shares theretofore purchasable on the exercise of any Warrant, such securities or assets as may be issued or payable with respect to or in exchange for the number of Warrant Shares theretofore purchasable on exercise of the Warrants had such reclassification, recapitalization or conveyance not taken place; and in any such event, the rights of any Registered Owner of a Warrant to any adjustment in the number of Warrant Shares purchasable on exercise of such Warrant, as set forth above, shall continue and be preserved in respect of any stock, securities or assets which the Registered Owner becomes entitled to purchase.

     (c) In the event the Company, at any time while the Warrants shall remain unexpired and unexercised, shall sell all or substantially all of its property, or dissolves, liquidates or winds up its affairs, prompt, proportionate, equitable, lawful and adequate provision shall be made as part of the terms of such sale, dissolution, liquidation or winding up such that the Registered Owner of a Warrant may thereafter receive, on exercise thereof, in lieu of each Warrant Share which he would have been entitled to receive, the same kind and amount of any stock, securities or assets as may be issuable, distributable or payable on any such sale, dissolution, liquidation or winding up with respect to each share of Common Stock of the Company; provided, however, that in the event of any such sale, dissolution, liquidation or winding up, the right to exercise the Warrants shall terminate on a date fixed by the Company, such date to be not earlier than 5:00 P.M., Eastern Time, on the 30th day next succeeding the date on which notice of such termination of the right to exercise the Warrants has been given by mail to the Registered Owners thereof at such addresses as may appear on the books of the Company.

     (d) In the event prior to the expiration of the Warrants by exercise or by their terms, the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to purchase its shares of Common Stock at a price per share more than 10% below the then-current market price per share (as defined below) at the date of taking such record, then, (i) the number of Warrant Shares purchasable pursuant to the Warrants shall be redetermined as follows: the number of Warrant Shares purchasable pursuant to a Warrant immediately prior to such adjustment (taking into account fractional interests to the nearest 1,000th of a share) shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock of the Company outstanding (excluding shares of Common Stock then owned by the Company) immediately prior to the taking of such record, plus the number of additional shares offered for purchase, and the denominator of which shall be the number of shares of Common Stock of the Company outstanding (excluding shares of Common Stock owned by the Company) immediately prior to the taking of such record, plus the number of shares which the aggregate offering price of the total number of additional shares so offered would purchase at such current market price; and (ii) the Exercise Price per Warrant Share purchasable pursuant to a Warrant shall be redetermined as follows: the Exercise Price in effect immediately prior to the taking of such record shall be multiplied by a fraction, the numerator of which is the number of Warrant Shares purchasable immediately prior to the taking of such record, and the denominator of which is the number of Warrant Shares purchasable immediately after the taking of such record as determined pursuant to clause (i) above; provided, however, (i) that any adjustment in the number of shares issuable as set forth above shall be effective only to the extent sufficient shares of Common Stock have been registered through a registration statement effective under the 1933 Act, and (ii) that any adjustment in the Exercise Price does not cause the Company to receive proceeds in excess of the amount authorized by any such registration statement. For the purposes of any computation hereunder, the “Current Market Price” at any date shall be the closing price of the Common Stock on the business day next preceding the event requiring an adjustment hereunder. If the principal trading market for such securities is an exchange, the closing price shall be the reported last sale price on such exchange on such day provided if trading of such Common Stock is listed on any consolidated tape, the closing price shall be the reported last

9

sale price set forth on such consolidated tape. If the principal trading market for such securities is the over-the-counter market, the closing price shall be the last reported sale price on such date as set forth by The Nasdaq Stock Market, Inc., or, if the security is not quoted on such market, the average closing bid and asked prices as set forth in the National Quotation Bureau pink sheet or the Electronic Bulletin Board System for such day. Notwithstanding the foregoing, if there is no reported last sale price or average closing bid and asked prices, as the case may be, on a date prior to the event requiring an adjustment hereunder, then the Current Market Price shall be determined as of the latest date prior to such day for which such last sale price or average closing bid and asked price is available.

     (e) The Warrants are exercisable in even numbers at the option of the holder for whole shares of the Company’s Common Stock. No fractional interests will be issued. In the case of the exercise of less than all the Warrants represented in a Certificate, the Warrant Agent shall cancel the Certificate upon the surrender thereof and shall deliver a new Warrant Certificate or Warrant Certificates of like tenor, which the Warrant Agent shall countersign, for the balance of such Warrants. In the case that the attempted exercise of all of the Warrants represented thereby would require the issuance of a fractional share of Common Stock, the Warrants shall be deemed to have been exercised for the nearest whole number of shares of Common Stock into which the Warrants may be exercised. No half shares or fractional shares will be issued by the Company. The Warrant Agent shall not provide for the exercise of any single Warrants for one half share of Common Stock.

     (f) In the event, prior to expiration of the Warrants by exercise or by their terms, the Company shall determine to take a record of the holders of its shares of Common Stock for the purpose of determining shareholders entitled to receive any stock dividend, distribution or other right which will cause any change or adjustment in the number, amount, price or nature of the shares of Common Stock or other stock, securities or assets deliverable on exercise of the Warrants pursuant to the foregoing provisions, the Company shall give to the Registered Owners of the Warrants at the addresses as may appear on the books of the Company at least 30 days’ prior written notice to the effect that it intends to take such a record provided, however, that notice to the Registered Owners of an extension of the Expiration Date may be made by publication or by release to Dow Jones, P.R. Newswire or other means of general distribution. Such notice shall specify the date as of which such record is to be taken; the purpose for which such record is to be taken; and the number, amount, price and nature of the shares of Common Stock or other stock, securities or assets which will be deliverable on exercise of the Warrants after the action for which such record will be taken has been completed. Without limiting the obligation of the Company to provide notice to the Registered Owners of the Warrants of any corporate action hereunder, the failure of the Company to give notice shall not invalidate such corporate action of the Company.

     (g) The Warrants shall not entitle the Registered Owner thereof to any of the rights of shareholders or to any dividend declared on the shares of Common Stock unless the Warrant is exercised and the Warrant Shares purchased prior to the record date fixed by the Board of Directors of the Company for the determination of holders of shares of Common Stock entitled to such dividend or other right.

     (h) No adjustment of the Exercise Price shall be made as a result of or in connection with (i) the issuance of shares of Common Stock of the Company pursuant to options, warrants, employee stock ownership plans and share purchase agreements outstanding or in effect on the date hereof, (ii) the establishment of additional option plans of the Company, the modification, renewal or extension of any plan now in effect or hereafter created, or the issuance of shares of Common Stock on exercise of any options pursuant to such plans, and (iii) the issuance of shares of Common Stock in connection with compensation arrangements for officers, employees or agents of the Company or any subsidiary, and the like.

10

     (i) The Company shall be empowered, in the sole and unconditional discretion of the Board of Directors, at any time during the Exercise Period, to reduce the applicable Exercise Price of all but not part of the Warrants then outstanding. Any such reduction in the applicable Exercise Price shall be effective upon written notice to the Warrant Agent, which notice shall be given pursuant to a duly and validly authorized resolution of the Board of Directors of the Company. Any such reduction in the Exercise Price shall not entitle the Registered Owners to issuance of any additional Common Shares pursuant to the adjustment provisions set forth elsewhere herein, regardless of whether the reduction in the Exercise Price was effected either prior to or following exercise of Warrants by the Registered Owners thereof. A nonexercising Registered Owner shall have no remedy or rights to receive any additional Warrant Shares as a result of any reduction in any applicable Exercise Price pursuant to this subsection. Any reduction in the Exercise Price shall be effective for minimum periods of not less than ten (10) business days.

     10. Duties, Compensation and Termination of Warrant Agent. The Warrant Agent shall act hereunder as agent and in a ministerial capacity for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not, by issuing and delivering Warrant Certificates or by any other act hereunder, be deemed to make any representations as to the validity, value or authorization of the Warrant Certificate or the Warrants represented thereby or of the Warrant Shares or other property delivered on exercise of any Warrant. The Warrant Agent shall not be under any duty or responsibility to any holder of the Warrant Certificates to make or cause to be made any adjustment of the Exercise Price or to determine whether any fact exists which may require any such adjustments.

     The Warrant Agent shall not (i) be liable for any recital or statement of fact contained herein or for any action taken or omitted by it in reliance on any Warrant Certificate or other document or instrument believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties, (ii) be responsible for any failure on the part of the Company to comply with any of its covenants and obligations contained in this Agreement or in the Warrant Certificates, or (iii) be liable for any act or omission in connection with this Agreement except for its own negligence or willful misconduct.

     The Warrant Agent may at any time consult with counsel satisfactory to it (who may be counsel for the Company) and shall incur no liability or responsibility for any action taken or omitted by it in good faith in accordance with the opinion or advice of such counsel.

     Any notice, statement, instruction, request, direction, order or demand of the Company shall be sufficiently evidenced by an instrument signed by its President and attested by its Secretary or Assistant Secretary. The Warrant Agent shall not be liable for any action taken or omitted by it in accordance with such notice, statement, instruction, request, direction, order or demand.

     The Company agrees to pay the Warrant Agent reasonable compensation for its services hereunder and to reimburse the Warrant Agent for its reasonable expenses. The Company further agrees to indemnify the Warrant Agent against any and all losses, expenses and liabilities, including judgments, costs and counsel fees, for any action taken or omitted by the Warrant Agent in the execution of its duties and powers hereunder, excepting losses, expenses and liabilities arising as a result of the Warrant Agent’s negligence or willful misconduct.

     The Warrant Agent may resign its duties or the Company may terminate the Warrant Agent and the Warrant Agent shall be discharged from all further duties and liabilities hereunder (except liabilities arising as a result of the Warrant Agent’s own negligence or willful misconduct) on 30 days’ prior written notice to the other party. At least 12 days prior to the date such resignation is to become effective, the Warrant Agent shall cause a copy of such notice of resignation to be mailed to the Registered Owner of each Warrant Certificate. On such resignation or termination, the Company shall appoint a new Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of the resignation by the Warrant Agent, then the Registered Owner of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent. Any new Warrant Agent,

11

whether appointed by the Company or by such court, shall be a bank or trust company having a capital and surplus, as shown by its last published report to its shareholders, of not less than $1,000,000, and having its principal office in the United States.

     After acceptance in writing of an appointment of a new Warrant Agent is received by the Company, such new Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as the Warrant Agent, without any further assurance, conveyance, act or deed; provided, however, if it shall be necessary or expedient to execute and deliver any further assurance, conveyance, act or deed, the same shall be done at the expense of the Company and shall be legally and validly executed. The Company shall file a notice of appointment of a new Warrant Agent with the resigning Warrant Agent and shall forthwith cause a copy of such notice to be mailed to the Registered Owner of each Warrant Certificate.

     Any corporation into which the Warrant Agent or any new Warrant Agent may be converted or merged, or any corporation resulting from any consolidation to which the Warrant Agent or any new Warrant Agent shall be a party, or any corporation succeeding to the corporate trust business of the Warrant Agent shall be a successor Warrant Agent under this Agreement, provided that such corporation is eligible for appointment as a successor to the Warrant Agent. Any such successor Warrant Agent shall promptly cause notice of its succession as Warrant Agent to be mailed to the Company and to the Registered Owner of each Warrant Certificate. No further action shall be required for establishment and authorization of such successor Warrant Agent.

     The Warrant Agent, its officers or directors and it subsidiaries or affiliates may buy, hold or sell Warrants or other securities of the Company and otherwise deal with the Company in the same manner and to the same extent and with like effect as though it were not the Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company.

     11. Modification of Agreement. The Warrant Agent and the Company may by supplemental agreement make any changes or corrections in this Agreement they shall deem appropriate to cure any ambiguity or to correct any defective or inconsistent provision or mistake or error herein contained. Additionally, the parties may make any changes or corrections deemed necessary which shall not adversely affect the interests of the Registered Owners of Warrant Certificates; provided, however, this Agreement shall not otherwise be modified, supplemented or altered in any respect except with the consent in writing of the Registered Owners of Warrant Certificates representing not less than a majority of the Warrants outstanding. Additionally, no change in the number or nature of the Warrant Shares purchasable on exercise of a Warrant or the Exercise Price therefore shall be made without the consent in writing of the Registered Owner of the Warrant Certificate representing such Warrant, other than such changes as are specifically prescribed by this Agreement.

     12. Notices. All notices, demands, elections, opinions or requests (however characterized or described) required or authorized hereunder shall be deemed given sufficiently in writing and sent by registered or certified mail, return receipt requested and postage prepaid, or by tested telex, telegram or cable to, in the case of the Company:

COMPANY:

NGTV
9944 Santa Monica Boulevard
Beverly Hills, California 90212
Fax: 310-556-8655
Attention: President

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     with a copy to:

Richardson & Patel LLP
10900 Wilshire Boulevard, Suite 500
Los Angeles, California 90024
Fax: 310-208-1154
Attention: Addison Adams, Esq.

     and in the case of the Warrant Agent:

U.S. Stock Transfer Corporation
1745 Gardena Avenue
Glendale, California 91204
Fax:

     and if to the Registered Owner of a Warrant Certificate, at the address of such Registered Owner as set forth on the books maintained by the Warrant Agent.

     13. Persons Benefiting. This Agreement shall be binding upon and inure to the benefit of the Company, the Warrant Agent and their respective successors and assigns, and the Registered Owners and beneficial owners from time to time of the Warrant Certificates. Nothing in this Agreement is intended or shall be construed to confer on any other person any right, remedy or claim or to impose on any other person any duty, liability or obligation.

     14. Further Instruments. The parties shall execute and deliver any and all such other instruments and shall take any and all such other actions as may be reasonable or necessary to carry out the intention of this Agreement.

     15. Severability. If any provision of this Agreement shall be held, declared or pronounced void, voidable, invalid, unenforceable or inoperative for any reason by any court of competent jurisdiction, government authority or otherwise, such holding, declaration or pronouncement shall not affect adversely any other provision of this Agreement, which shall otherwise remain in full force and effect and be enforced in accordance with its terms, and the effect of such holding, declaration or pronouncement shall be limited to the territory or jurisdiction in which made.

     16. Waiver. All the rights and remedies of either party under this Agreement are cumulative and not exclusive of any other rights and remedies as provided by law. No delay or failure on the part of either party in the exercise of any right or remedy arising from a breach of this Agreement shall operate as a waiver of any subsequent right or remedy arising from a subsequent breach of this Agreement. The consent of any party where required hereunder to any act or occurrence shall not be deemed to be a consent to any other action or occurrence.

     17. General Provisions. This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of California. Except as otherwise expressly stated herein, time is of the essence in performing hereunder. This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof, and this Agreement may not be modified or amended or any term or provision hereof waived or discharged except in writing signed by the party against whom such amendment, modification, waiver or

13

discharge is sought to be enforced. The headings of this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning thereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above mentioned.

THE COMPANY:

NGTV

By:

Name:

Title:

THE WARRANT AGENT:

U.S. STOCK TRANSFER CORPORATION

By:

Name:

Title:

14

EX-4.23

Exhibit 4.23

CERTIFICATE
NUMBER
U-	UNITS
SEE REVERSE FOR
CERTAIN DEFINITIONS

NGTV
Incorporated under the laws of the State of California

CUSIP #                    

EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE WARRANT EACH TO PURCHASE ONE-HALF SHARE OF COMMON STOCK

THIS CERTIFIES THAT                                                                                                                         

is the registered owner of                                                                                                                                             Units.

Each Unit (“Unit”) consists of one (1) share of common stock, no par value per share (“Common Stock”), of NGTV, a California corporation (the “Company”), and one redeemable warrant (the “Warrants”). This Certificate is issued in connection with the Company’s public offering (the “Offering”) of Units (SEC File No. 333-___). Each Warrant entitles the holder to purchase one-half (1/2) of one (1) share of Common Stock for $             per share (subject to adjustment). Each Warrant will become exercisable on the Separation Date (as hereinafter defined) and will expire unless exercised before 5:00 p.m., New York City Time, on                     , 2011, or earlier upon redemption (the “Expiration Date”). The Common Stock and Warrants comprising the Units represented by this certificate are not transferable separately prior to a date designated by Capital Growth Financial LLC, in its sole discretion, upon ___days’ prior written notice to                     , but in no event prior to the later of (i) sixty (60) days following the effective date of the Offering (the “Effective Date”), or (ii) sixty (60) days following the exercise by the Underwriters of a certain “over-allotment option” granted to them in connection with the Offering (the “Separation Date”). The terms of the Warrants are governed by a Warrant Agreement, dated as of the Effective Date, between the Company and U.S. Stock Transfer Corporation, as Warrant Agent, and are subject to the terms and provisions contained therein, all of which terms and provisions are incorporated herein by reference and consented to by the holder of this certificate by its acceptance hereof. Copies of the Warrant Agreement are on file at the office of the Warrant Agent at 1745 Gardena Avenue, Glendale, California, 91204, and are available to any Warrant holder on written request and without cost.

This certificate is not valid unless countersigned by the Transfer Agent and Registrar of the Company.

Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.

By:
	President	Secretary

Counter Signed and Registered:

U.S. Stock Transfer Corporation, Transfer Agent and Registrar

SECURITY INSTRUCTIONS ON REVERSE

NGTV

     The Registered Holder hereby is entitled, at any time after the Separation Date , to exchange each Unit represented by this Unit Certificate for one share of Common Stock and one Warrant Certificate representing the right to purchase one-half of one share of Common Stock, upon surrender of this Unit Certificate to the Transfer Agent and Registrar together with any documentation required by such agent.

     REFERENCE IS MADE TO THE WARRANT AGREEMENT REFERRED TO ON THE FACE HEREOF, AND THE PROVISIONS OF SUCH WARRANT AGREEMENT SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH ON THE FACE OF THIS CERTIFICATE. COPIES OF THE WARRANT AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE TRANSFER AGENT AND REGISTRAR, US STOCK TRANSFER CORPORATION.

     The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM	-as tenants in common	UNIF GIFT MIN ACT-		Custodian
			(Cust)		(Minor)
TEN ENT	-as tenants by the entireties	under Uniform Gifts to Minors Act
					(State)
JT TEN	-as joint tenants with right of survivorship and not as tenants in common	UNIF TRF MIN ACT		Custodian (until age     )
			(Cust)			(Minor)
		under Uniform Transfers to Minors Act
					(State)
	Additional abbreviations may also be used though not in the above list.

For value received,	hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)
represented by the within Certificate, and do hereby irrevocably constitute and appoint	Units

	Attorney
to transfer the said units on the books of the within-named Corporation with full power of substitution in the premises.

Dated:		20	Signature:
Signature	(s) Guaranteed:		Signature:
BY:				Notice:	THE SIGNATURE TO THIS ASSIGNMENT MUST
					CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.					OR ENLARGEMENT, OR ANY CHANGE WHATEVER
SECURITY INSTRUCTIONS
THIS IS WATERMARKED PAPER, DO NOT ACCEPT WITHOUT NOTING WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK.

EX-5

Exhibit 5

RICHARDSON & PATEL LLP
10900 Wilshire Boulevard
Suite 500
Los Angeles, California 90024
Telephone (310) 208-1182
Facsimile (310) 208-1154

June 26, 2006

NGTV
9944 Santa Monica Boulevard
Beverly Hills, California 90212

     Re: NGTV, Registration Statement on Form S-1

Members of the Board of Directors:

     We are acting as counsel to NGTV, a California corporation (the “Company”), in connection with the issuance and sale of up to 6,896,750 units (the “Units”) which include (i) one share of Common Stock, no par value per share, of the Company (the “Common Stock”), and (ii) one warrant to purchase one half of one share of Common Stock (the “Public Warrants”) pursuant to the Underwriting Agreement (the “Underwriting Agreement”) proposed to be entered into between the Company and Capital Growth Financial, LLC, as representative of the underwriters to be named therein (“Underwriters”). We are also counsel in connection with the issuance and sale of the shares of Common Stock underlying the Public Warrants (the “Warrant Shares”). The Units, the Common Stock, the Public Warrants and the Warrant Shares are registered on a Form S-1, file number 333-131508, filed with the Securities and Exchange Commission on February 3, 2006, as subsequently amended (the “Registration Statement”).

     In rendering this opinion, we have examined such documents, records and matters of law as we have deemed necessary for purposes of this opinion.

     Based upon the foregoing and subject to the qualifications and limitations stated herein, we are of the opinion that the Units to be issued and sold to the Underwriters by the Company, and the underlying Common Stock and Public Warrants, are duly authorized and, when issued and delivered to the Underwriters pursuant to the terms of the Underwriting Agreement against payment of the consideration therefor as provided therein and in the Registration Statement, will be validly issued, fully paid, and nonassessable. In addition, based upon the foregoing and subject to the qualifications and limitations stated therein, we are of the opinion that the Units to be sold to the Underwriters by the selling security holders named in the Registration Statement, and the underlying Common Stock and Public Warrants, have been duly authorized and validly issued, are fully paid, and nonassessable.

     Also, based upon the foregoing and subject to the qualifications and limitations stated herein, we are of the opinion that the Warrant Shares, when issued under the terms of the Public Warrants, including the receipt of the consideration required therefor as provided therein and in the Registration Statement, will be validly issued, fully paid and nonassessable.

     Members of this firm are qualified to practice law in the state of California and we express no opinion as to the laws of any jurisdictions except for those of California and the United States of America.

     We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the reference to us under the caption “Legal Matters” in the prospectus constituting a part of such Registration Statement. In giving such consent, we do not hereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

Very truly yours,

/s/ RICHARDSON & PATEL LLP

EX-10.26

EXHIBIT 10.26

March 14, 2006

Mr. Jay Vir
President
NGTV
9944 Santa Monica Blvd.
Beverly Hills, CA 90212

Dear Jay:

Once again, we at KCSA are extremely pleased that NGTV has selected KCSA Worldwide as its investor relations counsel.

This letter, when signed by you, will confirm that NGTV has retained KCSA Worldwide as investor relations counsel commencing March 15, 2006. For our services, our monthly minimum fee will be $8,000 until such time as NGTV prices its IPO and becomes a publicly traded company. Upon completing its IPO, the monthly fee will be reduced to $5,500, commencing on the month following the closing.

The agreement will be for an initial period of six months, and unless terminated 30 days prior to the end of this period, in writing, it will continue with a 90-day written notice of cancellation in effect. The first fee payment (for the period March 15 to April 30, 2006) is payable with the return of this signed agreement and future monthly fees will be billed on the first of each month and are payable in ten days.

It is mutually agreed that any individual out-of-pocket expenses such as newswire distribution, messengers, air courier, clipping service, offset and mass mailings will be rebilled to NGTV with the standard agency charge of 20 percent. Telephone, xerox, postage, travel, electronic data services, interactive services and editorial lunches will be rebilled without markup. All individual expenditures above $500.00 will be expended only after client approval.

KCSA Public Relations Worldwide will take all and any step necessary to keep secret and protect from any disclosure whatsoever any information, data or other tangible or intangible property that NGTV may regard as confidential. We will not make any use of the same at any time during this agreement, for any purpose whatsoever except to fulfill this agreement.

NGTV agrees to indemnify and hold harmless KCSA Public Relations Worldwide from and against all losses, claims, damages, expenses or liabilities which we may incur based on information, representations, reports or data you furnish us, to the extent that such

material is furnished, prepared, approved and/or just used by us. Similarly, KCSA Public Relations Worldwide agrees to indemnify and hold harmless NGTV from and against all losses, claims, expenses or liabilities which NGTV may incur based on the misuse of information, representations, reports or data you furnish us.

Recognizing the time and expense of KCSA’s investment in its employees, NGTV agrees that it shall not directly or indirectly employ, hire or retain any person who is an employee of KCSA during the term of this Agreement and for a period of one (1) year following the termination of this Agreement.

Once again, we are pleased to have to opportunity to serve you, and you have the assurance of our very best efforts.

Cordially, KCSA PUBLIC RELATIONS, INC.
By:	/s/ Jeff Corbin
	Jeff Corbin
	Managing Partner Chief Executive Officer

AGREED AND ACCEPTED
NGTV

By: /s/ Jay Vir 

EX-10.27

EXHIBIT 10.27

PLEASE READ VERY CAREFULLY THESE TERMS AND CONDITIONS AND THE PROGRAM FREQUENTLY ASKED QUESTIONS LOCATED ON THE PROGRAM WEBSITE AT https://upload.video.google.com/ (THE “FAQ”) BEFORE REGISTERING FOR THE GOOGLE VIDEO UPLOAD PROGRAM (THE “PROGRAM”). THE TERMS AND CONDITIONS OF THIS CONTENT HOSTING SERVICES AGREEMENT (THE “AGREEMENT”) GOVERN YOUR PROVISION OF CONTENT TO GOOGLE (INCLUDING, IF APPLICABLE, YOUR DOWNLOAD AND USE OF THE VIDEO UPLOADER SOFTWARE (THE “UPLOADER”)) FOR POSSIBLE INCLUSION IN THE PROGRAM. IF YOU DO NOT AGREE TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, YOU HAVE NO RIGHT TO PARTICIPATE IN THE PROGRAM OR TO DOWNLOAD OR USE THE UPLOADER. THIS AGREEMENT BETWEEN YOU (AS DEFINED BELOW) AND GOOGLE INC. AND ITS AFFILIATES (“GOOGLE” OR “WE” OR “US”) IS SUBJECT TO CHANGE BY GOOGLE AT ANY TIME IN ITS SOLE AND ABSOLUTE DISCRETION. BY CLICKING ON THE “I ACCEPT” BUTTON BELOW OR BY SIGNING THIS AGREEMENT YOU (I) ACCEPT THIS AGREEMENT EITHER FOR YOURSELF OR ON BEHALF OF YOUR EMPLOYER OR ANOTHER ENTITY, (II) AGREE TO BE BOUND BY THESE TERMS AND CONDITIONS AND (III) HAVE ENTERED INTO A BINDING AGREEMENT BETWEEN YOU AND GOOGLE INC. IF YOU ARE ENTERING INTO THIS AGREEMENT ON BEHALF OF YOUR EMPLOYER OR ANOTHER ENTITY, YOU REPRESENT AND WARRANT THAT YOU HAVE FULL LEGAL AUTHORITY TO BIND YOUR EMPLOYER OR SUCH ENTITY TO THESE TERMS AND CONDITIONS.

Introduction. By entering into this Agreement, You are requesting to participate in the Program where Google provides hosting services at the direction of content providers who seek to make their content available to end users, subject to the terms of this Agreement. “You” means you or, if you are entering into this Agreement on behalf of your employer or another entity, then “You” means that employer or entity and affiliates. We may revise the terms of this Agreement by providing the new terms and conditions for You to accept or reject when You next log in to the Program and by sending notice to You at your email address of record. You must accept or reject the new terms and conditions within five (5) days from the date the notice was sent to You, by logging into the Program at https://upload.video.google.com/ or as otherwise designated in writing by Google, and accepting or rejecting the new terms. If You do not accept or reject the new terms within the five (5) day period, You will be deemed to have accepted and be bound by the new terms. If You do not wish to be bound by the new terms, you must terminate this Agreement but You will no longer be able to participate in the Program.

1. Program Participation. Participation in the Program is subject to Google’s prior approval and Your continued compliance with the terms of this Agreement. We reserve the right to refuse participation to any applicant or participant at any time in our sole and absolute discretion, and to withdraw content, suspend, restrict and/or terminate the services provided under this Agreement and Your participation in the Program, immediately without notice to You and without liability to Google, for any reason, including repeat violations of our copyright policy or other Program policies. You must register for the Program and create an account in order to participate in the Program. To register and create an account, go to https://upload.video.google.com/. Multiple accounts held by the same individual or entity are subject to immediate termination unless expressly authorized in writing by Google (including by electronic mail). You are solely responsible for keeping your email address and other contact information updated.

2. Your Content. After entering into this Agreement, You may designate content for hosting and display to end users (i) by uploading such content directly to Us, by sending copies of Your content to Google at the address located at www.google.com/corporate/address.html, Attention: Google Video Upload Program, in a format designated by Google, or to such other address as designated by Google, and/or by otherwise making such content available to Us; and (ii) by providing additional information about Your content in the form provided online when You upload Your content and/or by submitting a completed metadata form as provided by Google to You (each, a “Metadata Form”) to Google at video-partner@google.com. All content so designated by You and contained within or provided by You in association with such content, including but not limited to all images, closed captioning, metadata and music, is referred to collectively as “Authorized Content.” Google shall have no obligation whatsoever to return any materials delivered to it for uploading under this Agreement.

3. Use of Content. By entering into this Agreement and uploading, sending or otherwise making available Your Authorized Content to Google, you are directing and authorizing Google to, and granting Google a royalty-free, non-exclusive right and license to, host, cache, route, transmit, store, copy, modify, distribute, perform, display, reformat, excerpt, facilitate the sale or rental of copies of, analyze, and create algorithms based on the Authorized Content in order to (i) host the Authorized Content on Google’s servers, (ii) index the Authorized Content; (iii) display, perform and distribute the Authorized Content, in whole or in part, in the territory(ies) designated in the Metadata Form, in connection with Google products and services now existing or hereafter developed including without limitation for syndication on third party sites; and in connection with each of the uses, if any, of the Authorized Content authorized in the video information page (the “Video Information Page”) which will be made available to You no sooner than at the time Google enables any of the features designated on the Video Information Page. This license gives Google the right to display Your Authorized Content via streaming and/or downloading technologies, and to display limited excerpts of Your Authorized Content for no fee to the end user. Google may in its sole discretion display a link or links to the website You designate (subject to Google’s approval) in the Metadata Form in connection with any display of Your Authorized Content, and to display links to third party commercial retailer web sites where purchases of the Authorized Content may be available, to the extent such third party commercial retailer web site serves as a distributor of the Authorized Content. You expressly agree that any and all links provided by You shall function properly and effectively to allow end users to transfer immediately to the intended and indicated site(s), and that You are solely responsible for maintaining and updating as necessary any such links. Failure to do so may result in immediate termination without notice to You. Unless You specify otherwise in the Video Information Page, Google reserves the right to display advertisements in connection with any display of Your Authorized Content. Notwithstanding the foregoing, Google is not

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required to host, index, or display any Authorized Content uploaded or otherwise provided to Google, and may remove or refuse to host, index or display any Authorized Content. Google is not responsible for any loss, theft, intellectual property infringement or damage of any kind to the Authorized Content.

4. Promotional License, Brand Features, Publicity. You hereby grant Google a non-exclusive, world-wide, royalty-free license to use Your name and logo (“Brand Features”), in connection with Your Authorized Content, and to use limited excerpts from Your Authorized Content for advertising or promotional purposes, including without limitation the right to publicly display, perform, reproduce and distribute such excerpts and Brand Features on the Internet in presentations, marketing materials, customer lists, financial reports and Web site listings of customers. If this Agreement is terminated, Google may continue to use such excerpts and Brand Features in printed (versus “online”) materials that are in existence as of the date of termination until such materials are depleted or are redesigned, whichever comes first.

5. Uploader. You may use the Uploader for the sole purpose of providing Your Authorized Content to Google. You must immediately notify Us of any known unauthorized use of the Uploader. You may not use the Uploader for any other reason, including but not limited to (i) selling or otherwise redistributing any aspect of the Uploader, (ii) modifying, adapting, translating, or reverse engineering any portion of the Uploader; (iii) attempting to break security, access, tamper with or use any unauthorized areas of the Uploader; (iv) removing any copyright, trademark or other proprietary rights notices contained in or on the Uploader; (v) attempting to collect or maintain any information about other users of the Uploader or other third parties for unauthorized purposes; (vi) transmitting any viruses, worms, defects, Trojan horses or other malicious code or items of a destructive nature; or (vii) using the Uploader for any unlawful, harassing, abusive, criminal or fraudulent purpose.

6. Proprietary Rights. Nothing contained in this Agreement conveys any ownership right to Us in any of the Authorized Content, or other materials provided by You. You acknowledge that as between You and Google, Google owns all right, title and interest in and to the Program, Google products and services, and the Uploader and portions thereof, including without limitation all intellectual property rights.

7. Confidentiality. You agree not to disclose Google Confidential Information without Our prior written consent. “Google Confidential Information” includes without limitation: (i) all Google software, technology, programming, technical specifications, materials, guidelines and documentation relating to this Program; (ii) any click-through rates, financial information (including pricing), business information, including operations, planning, marketing interests, products, and any other reporting information (including revenues, if any, paid to You by Google) provided by Google; and (iii) any other information designated in writing by Google as “Confidential” or an equivalent designation or that would otherwise be reasonably considered confidential or proprietary under the circumstances. It does not include information that has become publicly known through no breach by You, or information that has been (a) independently developed without access to Google Confidential Information, as evidenced in writing; (b) rightfully received by You from a third party without a breach of confidentiality by such third party; or (c) required to be disclosed by law or by a governmental authority.

8. Payment. You may designate a purchase and/or rental price in the Metadata Form that end users must pay in order to download Your Authorized Content. If you do not designate a price for Your Authorized Content, the price will automatically be set at zero. Except as otherwise set forth herein, In the event of any download of Your Authorized Content, by end users, We will pay to You seventy percent (70%) of the gross revenues, if any, recognized by Google and attributable to such video playback of Your Authorized Content based upon the price you designate. If We incur extraordinary costs and expenses in hosting, indexing and displaying Your Authorized Content relative to its designated price, then We may retain a greater percentage of the revenues in order to defray these costs. If You have not designated a price for Your Authorized Content and We incur extraordinary costs and expenses in hosting, indexing and displaying Your Authorized Content, we may charge a fee to end users in order to defray these costs. Provided You have registered for the Program and have provided all necessary information to Google in order for Us to make payments to You, Payments to You shall be sent by Google within approximately thirty (30) days after the end of any calendar quarter, at a minimum; provided that (i) Your earned balance is $100 or more and (ii) this Agreement has been in effect for at least sixty (60) days in that quarter. If Your earned balance is less than $100 but greater than $1, Google will pay Your earned balance within approximately thirty (30) days following the end of the calendar year or the end of the calendar quarter in which You earn a balance of over $100, whichever comes first. In the event that this Agreement is terminated, Google shall pay Your earned balance to You within approximately ninety (90) days after the end of the calendar month in which Google recognizes that the Agreement has been terminated, but in no event shall Google make payments for any earned balance less than $10. All references herein to dollars shall be to United States dollars. Google reserves the right to retain all other revenues derived from Google services. The number of purchases and/or rentals of Your Authorized Content, as reported by Google, shall be the number used in calculating payments hereunder, if any. The number of purchases and/or recorded by Google shall be the conclusive and definitive amount for the purpose of calculation of any payments due and owing to You. You agree to pay all applicable taxes or charges imposed by any government entity in connection with Your rights and obligations under this Agreement. You further agree to indemnify Google for any taxes, interest, penalties, etc. imposed on it by any taxing authority in the event that You fail to make any payment for which you are responsible, as provided herein. Nothwithstanding the foregoing, Google shall not be liable for any payment (i) based on any purchase or rental of or access to Your Authorized Content through any fraudulent or invalid means, including but not limited to the fraudulent use of credit cards of other means of payment, (ii) based on purchases or rentals of Your Authorized Content that are refunded or (iii) as a result of any claim that, if true, would constitute a breach of Section 10 of this Agreement, or (iv) as a result of any other breach of this Agreement by You. Google reserves the right to withhold payment or charge back Your account due to any of the foregoing, or if necessary to enforce its rights under Section 11. You agree to cooperate with Google in its investigation of any of the foregoing. To ensure proper payment, You are solely responsible for providing and maintaining accurate contact and payment information associated with Your account. For U.S. taxpayers, this information includes without limitation a valid U.S. tax identification number and a fully-completed Form W-9. All payments under this Agreement will reflect the payment of any taxes imposed by governmental entities of whatever kind and imposed with respect to transactions in connection with this

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Agreement. Any bank fees related to returned or cancelled checks due to a contact or payment information error or omission may be deducted from the newly issued payment. You shall not, and shall not authorize or encourage any third party to directly or indirectly purchase, rent or otherwise obtain access to Your Authorized Content through any automated, deceptive, fraudulent or other invalid means, including but not limited to through repeated manual clicks, the use of robots or other automated query tools and/or computer generated search requests, and/or the fraudulent use of other search engine optimization services and/or software or credit cards. Google reserves the right to investigate, at its own discretion, any activity that may violate this Agreement.

9. Disclaimer and Limitation of Liability. THE PROGRAM, GOOGLE PRODUCTS AND SERVICES, ANY COPY PROTECTION, SECURITY FEATURES AND THE UPLOADER ARE PROVIDED “AS IS” WITH NO WARRANTIES WHATSOEVER. GOOGLE AND ITS LICENSORS AND THIRD-PARTY SERVICE PROVIDERS (INCLUDING BUT NOT LIMITED TO TELECOMMUNICATIONS, SERVER AND HOSTING SERVICES, POWER SUPPLIERS, AND OTHER SERVICE PROVIDERS (COLLECTIVELY, “SERVICE PROVIDERS”) EXPRESSLY DISCLAIM ANY WARRANTIES REGARDING THE SECURITY, RELIABILITY, AND PERFORMANCE OF THE PROGRAM, ANY TECHNOLOGY USED IN CONNECTION THEREWITH, THE AUTHORIZED CONTENT, TERRITORY RESTRICTION FEATURES AND TECHNOLOGY AND THE UPLOADER, THE WARRANTIES OR CONDITIONS OF NONINFRINGEMENT, MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE AND WARRANTIES AS TO THE PERFORMANCE OF COMPUTERS OR NETWORKS. GOOGLE, ITS LICENSORS AND SERVICE PROVIDERS MAKE NO WARRANTY THAT ANY GOOGLE PRODUCTS OR SERVICES WILL BE UNINTERRUPTED, TIMELY OR ERROR-FREE OR THAT THE RESULTS OR INFORMATION OBTAINED FROM USE OF GOOGLE PRODUCTS OR SERVICES WILL BE ACCURATE OR RELIABLE. EXCEPT FOR ANY PAYMENT OBLIGATIONS SET FORTH IN SECTION 8, IN NO EVENT SHALL GOOGLE, ITS LICENSORS AND SERVICE PROVIDERS BE LIABLE UNDER THIS AGREEMENT FOR ANY DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT, EXEMPLARY OR PUNITIVE DAMAGES, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, EVEN IF WE OR THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

YOU UNDERSTAND AND AGREE THAT YOU USE THE PROGRAM AND THE UPLOADER AT YOUR OWN DISCRETION AND RISK AND THAT YOU WILL BE SOLELY RESPONSIBLE FOR YOUR AUTHORIZED CONTENT, AND FOR ANY DAMAGES TO YOUR COMPUTER SYSTEM OR LOSS OF DATA THAT RESULTS FROM THE DOWNLOAD OR USE OF THE UPLOADER.

10. You Must Have the Right to Use All of the Images, Music and Data of Any Sort in Your Authorized Content, and You Must Have the Right to Grant the Licenses in this Agreement. By entering into this Agreement and uploading or otherwise providing Your Authorized Content to Google, You represent and warrant to Google the following: (a) You are at least 18 years of age if You are a natural person; (b) all of the information provided by You to Google to enroll and participate in the Program is correct and current (including without limitation information You provide in the Metadata Form); (c) the Authorized content is not, in whole or in part, pornographic or obscene; (d) You hold and will continue to hold necessary rights, including but not limited to all copyrights, trademark rights and rights of publicity in and to Your Authorized Content and Your Brand Features to enter into this Agreement and to grant the rights granted herein; (e) You have the legal right and authority to enter into this Agreement, to perform the acts required of You under the Agreement, and to grant the rights and licenses described in this Agreement. You further represent and warrant that (i) the Authorized Content and the rights and licenses granted to Google under this Agreement and Google’s authorized use of Your Authorized Content (including the public display, public performance, distribution and reproduction of Your Authorized Content): (i) do not and will not violate any applicable law, statute, ordinance or regulation and (ii) do not breach and will not breach any duty towards or rights of any person or entity including, without limitation, rights of intellectual property, publicity or privacy, or rights or duties under consumer protection, product liability, tort or contract theories and (ii) that the web site (including products and services therein) You designate in the Metadata Form to which Google may display a link in connection with the display of the Authorized Content does not and will not violate or encourage violation of any applicable law, statute, ordinance or regulation.

11. Your Obligation to Indemnify. You agree to indemnify, defend and hold Google and its respective directors, officers, employees, and applicable third parties (e.g. relevant advertisers, syndication partners, licensors, licensees, consultants and contractors) (collectively “Indemnified Person(s)”) harmless from and against any and all third party claims, liability, loss and expense (including reasonable legal fees, damage awards, and settlement amounts) brought against any Indemnified Person(s) arising out of, or related to or which may arise from Your Authorized Content, Your Brand Features, Google’s authorized use of any of the foregoing, Your use of the Program and the Uploader, and/or Your breach of this Agreement. The Indemnified Persons may in their sole direction control the defense, at Your expense of any claim indemnified herein. In the event that the Indemnified Parties determine not to control the defense of any claim hereunder, any Indemnified Person may join in defense with counsel of its choice at is own expense. You will not settle or resolve any such claim in a manner that imposes any liability or obligation on Google or affects Google’s rights in connection therewith without the advance written approval of Google, which will not be unreasonably withheld or delayed.

12. Termination; Withdrawal of Content. Either party may terminate this Agreement immediately upon written notice to the other party if the other party files a petition for bankruptcy, becomes insolvent, or makes an assignment for the benefit of its creditors, or a receiver is appointed for the other party or its business. You may terminate this Agreement for convenience upon thirty (30) days prior written notice. You may withdraw Your Authorized Content from public display in the Program by providing Google with a written request as set forth in the FAQ. Google will use commercially reasonable efforts to remove Your Authorized Content from public display within ten (10) days from receipt of notice of termination or withdrawal. Google may at any time in its sole discretion and without liability to Google terminate the Program or any product, service or feature offered in the Program, terminate this Agreement or withdraw any Authorized Content in the Program.

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13. Privacy and Information Rights. You agree that We may use information that You provide to Us when You register for the Program in accordance with the privacy policy located at http://www.google.com/privacy.html. In addition, You agree that Google may transfer and disclose this information, including personally identifiable information, to third parties for the purpose of approving and enabling your participation in the Program, including to third parties that reside in jurisdictions with less restrictive data laws than Your own. Google may provide any of the above information in response to valid legal processes, such as subpoenas, search warrants and court orders, or to establish or exercise its legal rights or defend against legal claims. Google disclaims all responsibility, and will not be liable to You, however, for any disclosure of that information by any such third party.

14. General.

      a. Notices. Unless provided for to the contrary in this Agreement, any and all notices or other communications or deliveries required or permitted to be made under this Agreement shall be sent (a) if to You at the electronic mail address You provide in registering for the Program and (b) if to Google to such address as provided at www.google.com/corporate/address.html or as otherwise provided in writing for such notice purposes. A second copy of every notice to Google shall be sent to the same address, “Attn: Legal Dept.” Notice shall be deemed received (i) upon receipt when delivered personally, (ii) upon written verification of receipt from overnight courier, (iii) upon verification of receipt of registered or certified mail (iv) upon verification of receipt via facsimile, provided that such notice is also sent simultaneously via first class mail, or (v) by electronic mail when sent by Google only. Contact information shall be updated as necessary to ensure that each party has current information regarding all such contacts.

      b. Miscellaneous. You may not resell, assign or transfer any of Your rights hereunder. Any such attempt shall be null and void. The relationship between Google and You is not one of a legal partnership relationship, but is one of independent contractors. The words “You” or “Your” shall also mean heirs, executors, administrators, successors, legal representatives and permitted assigns. This Agreement does not affect any right that either party would have had, or shall have, independent of the Agreement including rights relating to Authorized Content under applicable law, including but not limited to copyright law. Neither party shall be liable for failing or delaying performance of its obligations resulting from any condition beyond its reasonable control, including but not limited to, governmental action, acts of terrorism, earthquake, fire, flood or other acts of God, labor conditions, power failures and Internet or other network disturbances. If any provision of this Agreement shall be adjudged by any court of competent jurisdiction to be unenforceable or invalid, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and remain enforceable between the parties. The failure of either party to act in the event of a breach of this Agreement by the other shall not be deemed a waiver of such breach or a waiver of future breaches. The section titles used in this Agreement are purely for convenience and carry with them no legal or contractual effect. Except as to any prior version of this Content Hosting Service Agreement between you and Google that sets forth the license to and use by Google of your Authorized Content, (i) nothing in this Agreement is intended to be, or will be construed as, altering, revising, modifying or otherwise amending any other content hosting services agreement; and (ii) in the event of a conflict between this Agreement and any other content hosting service agreement that You enter into with Google with respect to Your Authorized Content, the terms of that other content hosting services agreement shall govern. Except as otherwise set forth herein, this Agreement sets forth the entire understanding and agreement between the parties with respect to the subject matter hereof. This Agreement shall be construed as if jointly drafted by the parties. This Agreement shall be governed by the laws of the State of California, without regard to its principles of conflicts of law. Any litigation hereunder shall be brought in any state or federal court of competent jurisdiction in Santa Clara County, California; the parties agree that venue shall be proper in, and consent to the personal jurisdiction of, such courts. The parties specifically exclude from application to the Agreement the United Nations Convention on Contracts for the International Sale of Goods and the Uniform Computer Information Transactions Act. The provisions of Sections 4, 5, 6, 7, 8, 9, 11, 13 and 14 shall survive any expiration or termination of this Agreement.

NGTV

BY:	/s/ JAY VIR
NAME:	JAY VIR
TITLE:	PRESIDENT

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EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 (Amendment No. 3) of (i) our report dated May 1, 2006 (except for Note 16, as to which the date is June 2, 2006) relating to the financial statements of NGTV as of December 31, 2005 and 2004, the three year period ended December 31, 2005 and the period June 23, 2000 (inception) to December 31, 2005, which appear in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ SQUAR, MILNER, REEHL & WILLIAMSON, LLP

Newport Beach, California
June 23, 2006

EX-23.3

EXHIBIT 23.3

PACIFIC SUMMIT SECURITIES
6 VENTURE, SUITE 100
IRVINE, CALIFORNIA 92618

CONSENT OF INDEPENDENT VALUATION FIRM

We hereby consent to the use in this Registration Statement on Form S-1 (Amendment No. 3) of our reports dated February 28, 2006 relating to the valuation of NGTV and certain securities as of September 30, 2005 and December 31, 2005 and portions of which are restated in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

Pacific Summit Securities

By: /s/ James L. Watts

Irvine, California
June 26, 2006