S-1/A 1 a16366a5sv1za.htm AMENDMENT TO FORM S-1 sv1za
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As filed with the Securities and Exchange Commission on July 21, 2006
Registration No. 333-131508
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No 5. 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(6)
                         
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
                         
Underwriters options
      416,667     $ .001     $      417     $ 1
                         
Units issuable upon exercise of underwriters options
      416,667     $ 7.20(4)     $ 3,000,002     $ 321
                         
Common stock included in units issuable upon exercise of underwriters options
      416,667            
                         
Warrants included in units issuable upon exercise of underwriters options
      416,667            
                         
Common stock issuable upon exercise of warrants included in units issuable upon exercise of underwriters options
      208,334     $ 6.00     $ 1,250,004     $ 134
                         
Total
    26,013,627           $66,321,173     $7,098
                         
                         
    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 included in the units issuable upon exercise of the underwriters options are identical to the public warrants and are exercisable at $6.00, 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, $157 paid on the filing of Amendment Number 3 on June 26, 2006.
    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.
 
 


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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 JULY  , 2006
PRELIMINARY PROSPECTUS
5,997,174 Units
NGTV
(NGTV LOGO)
     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 (a) 899,576 units that may be offered by NGTV in the event the over-allotment option granted to the underwriters is exercised, and (b) the offer and sale to the representative of the underwriters of options to purchase up to 416,667 units identical to the units offered hereby. Resale of those options and their underlying securities is restricted for a period of 180-days from the date of this prospectus. 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 or redeemed 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 no sooner than 45 days and no later than nine months following the date of this prospectus. However, the representative may, in its sole discretion, permit the units to detach at any time during that period. You will be given 30 days prior notice by public announcement of the detachment date. 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 8.
     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 S.W. Bach & Company
The date of this prospectus is                     2006.


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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”


 

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    F-1  
 Exhibit 5
 Exhibit 23.1
 Exhibit 23.3


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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 $24.7 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 $17,991,522 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. The Notes and Warrants have been issued to the purchasers. The offering of the 10% Senior Secured Promissory Notes and Warrants has terminated.
 
  •  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. 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 the offer and sale to the representative of the underwriters of options to purchase up to 416,667 units identical to the units offered hereby. Resale of those options and their underlying securities is restricted for a period of 180-days from the date of this prospectus. NGTV will not receive the proceeds of the units sold by the selling security holders.
 
Detachment of units The separation date is the date on which the units detach and cease to trade as units. On and after the separation date, our common stock and warrants will trade separately.
 
The separation date will be determined by the representative, in its sole discretion, upon not less than 30 days’ written notice to the company and to the American Stock Exchange. The separation date (a) may not be prior to forty-five days after the date of this prospectus, or (b) may not be more than nine months following the date of this prospectus. You will be given thirty days prior notice of detachment by public announcement. In the event the representative has not provided notice of separation prior to eight months from the date of this prospectus, the units will detach on the nine-month anniversary of the date of this prospectus.
 
Among the factors that the representative will consider in determining whether to detach the units earlier than nine months from the date of this prospectus are the relative strengths of the securities markets and American Stock Exchange companies in general, and the trading pattern of, and demand for, our securities in particular. The representative will also consider the company’s progress towards launching its programming and the company’s levels or anticipated levels of revenue as such factors might influence a demand for the company’s securities. The representative will also consider the “market over-hang” or the potential volume of unregistered shares of common stock that are eligible to enter the market for trading upon detachment. The company will file a current report on Form 8-K and disseminate a press release to publicly disclose the separation date within two business days’ of its receipt of notice of separation from the representative. The warrants included in the units may not be exercised until the separation date.

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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 but not prior to detachment of the units, 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 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.
 
Common stock to be outstanding after the offering 11,835,101 shares including 5,997,174 shares which form a part of the units offered hereby and 837,775 shares of common stock underlying unregistered units. If the underwriter’s over-allotment option is exercised in full, an additional 899,576 shares and warrants to purchase an additional 449,788 shares will be outstanding after the offering. The number of shares of common stock to be outstanding after the offering (11,835,101) does not include the following: 4,781,128 shares underlying outstanding but unexercised warrants including the public warrants; 346,541 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; 772,661 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.

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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.
 
American Stock Exchange symbols The units — “NGI.U”, the common stock — “NGI” and the warrants — “NGI.W”.

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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
    (4,129,298 )     (657 )     (2,098,446 )     (1,587,692 )     (2,254,106 )
                               
Net Loss
    (5,397,434 )     (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
  $ (5,397,434 )   $ (926,178 )   $ (6,246,786 )   $ (7,416,333 )   $ (3,972,265 )
                               
Per Common Share Data
                                       
Net Loss Per Share — Basic & Diluted
  $ (1.08 )   $ (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
    18,053,808       14,450,632       4,161,215  
Total Shareholders’ Deficit
    (10,656,646 )     (5,316,273 )     (1,766,586 )
Accumulated Deficit
    (24,749,036 )     (19,351,602 )     (13,104,816 )
 
As restated — See Note 2 to the annual 2005 financial statements and Note 1 to our March 31, 2006 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 development 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 $24.7 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 $24.7 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 extent 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 expires February 11, 2009; and (iv) Mr. Abramson’s agreement expires February  11, 2009. 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 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 vesting of all options granted to Mr. Burns. Mr. Burns has filed a demand for arbitration against the company regarding this dispute. The company will vigorously defend this action although we cannot control the outcome. In the event 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.
  Our common stock redemption obligations under certain employment agreements may be substantial; this obligation fluctuates with the market value of our stock, and any rise in the value of the stock will require an increase in the obligation and a corresponding negative effect on our results of operations, both of which could ultimately have an adverse effect on your investment.
      Under our employment agreements with Mr. Vir and Mr. Taj, under certain circumstances if they leave the company, we must purchase the common stock of the company that they own. As of March 31, 2006, we estimated the value of each share of common stock subject to the redemption provisions to be $2.83 per share. As of June 30, 2006, and as of the date hereof, that value is higher. Our determination of the value of that stock on March 31, 2006 was determined using a third party valuation expert. However, as of the date hereof and in the future, the value of the common stock subject to redemption under those agreements will correspond to the trading price of our securities, including our common stock. Accordingly, the dollar amount of the redemption obligation could potentially increase substantially from that reflected within our balance sheet as of March 31, 2006, as the value of our common stock increases in the public market (assuming such increase is realized in the trading price). Increasing this obligation requires recording a corresponding expense, which will have a negative outcome on our results of operations. Your investment may be adversely affected by any potential negative impact to our financial statements, as a result of recording these redemption obligations.
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

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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.
  The units may detach at anytime during the nine-month period following the date of this prospectus; we cannot control whether or when the units will detach into common stock and warrants prior to expiration of that period; the uncertainty as to when detachment will occur may have an adverse effect on the market prices of our securities.
      Through negotiation with the representative of the underwriters for this offering, and in order to permit the underwriters to seek to establish and maintain an orderly and stabile market in our units following completion of this offering, we have agreed to allow the representative of the underwriters to determine, in its sole discretion, whether to permit the units to detach into common stock and public warrants prior to the nine-month anniversary of the date of this prospectus. The detachment will not occur less than forty-five days from the date of this prospectus. In considering when to detach the units, the representative will consider the relative strengths of the securities markets and the American Stock Exchange companies in general, and the trading pattern of, and demand for our securities. The representative will also consider the company’s progress towards launching its programming and the company’s levels or anticipated levels of revenue as such factors might influence a demand for the company’s securities. The representative will also consider the “market over-hang” or the potential volume of unregistered shares of common stock that are eligible to enter the market for trading upon detachment. We may be unable to influence any decision by the representative to detach the units prior to expiration of the nine-month period. Upon detachment, the common stock and public warrants will trade separately and the units will cease to exist. The warrants cannot be exercised by the unit holders until the units detach.
      Detachment, and an inability to anticipate precisely when such detachment will occur, may cause confusion to investors as to how long the units will continue to trade and may make it more difficult for investors to evaluate whether or when to buy or sell our units. 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

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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 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.
  The warrants sold in this offering are subject to redemption; you may be forced to sell them to the company for a nominal amount or exercise them on short notice, either of which could harm the value of your investment in our securities.
      The public warrants covered by this prospectus are subject to redemption at the company’s option. Beginning four months after the date of this prospectus, and following detachment of the units, at any time when the common stock is trading at least $8.40 per share for 10 consecutive trading days, the company may – but is not required to – decide to redeem the warrants at a price of $0.25 per warrant. You may consider that price to be too low of a price. However, the company must give you at least 30 days prior notice of that redemption, so that instead of allowing the company to buy them back at that price, you can exercise the warrants at the current exercise price and obtain the common stock upon exercise. However, since you will only have thirty days to decide, you may have to exercise at a time when you do not wish to, or do not want to own common stock of the company. You will have no choice, however, but to exercise your warrant in that thirty day period, or sell the warrants to the company at $0.25 per warrant. The forced redemption of the warrants at a time that you cannot determine or plan for may be harmful to your investment in the company’s securities, as it may lower or eliminate your return on your investment in the units or warrants you are purchasing, or otherwise interfere with your investment strategies.

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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 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.

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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 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.

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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, 2,802,830 of these shares are 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 2,998,587 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 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
    (800 )     3 %
Repayment of debt
    (500 )     2 %
Repayment of amounts due to directors(1)
    (550 )     2 %
Letter of Credit required for distribution agreement
    (250 )     1 %
             
Cash available for general corporate purposes
  $ 1,700       7 %
             
 
(1)  Represents accrued but unpaid fees due to certain directors two of whom are also consultants to the company.
      We intend to repay $3,500,000 of financing obtained in the second quarter of 2006, plus accrued interest. 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.

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      Out of the proceeds of this offering, we intend to repay certain debt and outstanding obligations totaling about $500,000, 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 $1,700,000 ($6,449,761 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 $17,991,522 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 33 1 / 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 and the issuance of the underwriters’ options:
                         
    (Unaudited)
     
        (b)    
        March 31, 2006   (c)
    (a)   Adjusted For   March 31, 2006
    March 31, 2006   Debt Conversion   Post Offering
             
    (Unadjusted)        
Long-term liabilities
  $ 4,202,252     $ 4,202,252     $ 4,202,252  
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
    (24,749,036 )     (24,749,036 )     (24,749,036 )
                   
Total Shareholders Equity (Deficit)
    (10,656,646 )     308,651       19,135,651  
                   
Total Capitalization(3)(4)
  $ (6,454,394 )   $ 4,510,903     $ 23,337,903  
                   
 
(1)  The value of the common units has been bifurcated between equity and short term liabilities, based on the estimated fair value of the units components (common shares and warrants), The fair value of the warrants was estimated using a Black-Scholes option pricing model. The fair value of the common shares represents the difference between the units value and the value of the warrants. The warrants are deemed as short term liabilities pursuant to EITF 00-19 and SFAS No. 133 (which require that securities be classified as liabilities rather than equity, under certain conditions), have an estimated value of approximately $1,027,000 and 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.
 
(4)  Excludes the effect of underwriter options which will be issued upon the consummation of this offering. Such options are deemed short term derivative liabilities pursuant to EITF 00-19 and SFAS No. 133 (which require that securities be classified as liabilities rather than equity, under certain conditions), have an estimated fair value of approximately $408,000 and can be exercised beginning 180 days from the date of issuance. These options are expected to be subject to additional registration requirements subsequent to issuance. If the company is unable to register the securities underlying the underwriters options, there may be significant cash penalties.
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

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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 $(10,656,646) or $(1.39) per share.
      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 $19,135,651, or $1.62 per common share. This amount represents an immediate increase of $3.01 per share to our existing shareholders and an immediate dilution of $4.38 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
  $ (1.39 )        
Increase in pro forma net tangible book value per share attributable to this offering
    3.01          
             
Less, pro forma net tangible book value per share after this offering
            (1.62 )
             
Dilution per share to new investors
          $ 4.38  
             
      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)
    7,668,434       64.8 %   $ 19,725,682       44.1 %   $ 2.57  
New investors(2)
    4,166,667       35.2 %     25,000,000       55.9 %     6.00  
                               
 
Total(3)
    11,835,101       100.0 %   $ 44,725,682       100.0 %   $ 3.78  
                               
 
(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 detach on a date determined by the representative, upon not less than 30 days’ written notice to us and to the American Stock Exchange; provided that the detachment date (a) may not be prior to the business day following the date that is 45 days after the

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date of this prospectus, and (b) may not be more than nine months following the date of this prospectus. Holders of the units will be given 30 days’ prior notice of detachment by public notice. 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.
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 detachment of the units and 120 days following the date of this prospectus. 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 June 30, 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)
    346,541     $ 2.59       72,661  
NGTV outstanding warrants(2)
    69,766     $ 7.33       n/a  
 
Total
    416,307     $ 4.38       72,661  
 
(1)  As amended.
 
(2)  Issued to consultants and suppliers. Does not include warrants issued or issuable to bridge investors as described elsewhere in this prospectus.
      Our 2000 Equity Incentive Plan provides for the issuance of 469,784 awards of shares and options. There are 346,541 options outstanding, of which 309,406 are currently exercisable. 72,661 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(8)   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)
    (4,129,298 )     (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
  $ (5,397,434 )   $ (926,178 )   $ (6,246,786 )   $ (7,416,333 )   $ (3,972,265 )   $ (556,608 )   $ (479,742 )
                                           
Loss Per Common Share(2)
  $ (1.08 )   $ (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(8)   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)
    3,732,939       612,835       935,137       2,211,541              
Convertible Preferred Stock(6)
                      973,000       973,000        
Shareholders’ Deficit
    (10,656,646 )     (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 July 31, 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.
 
(8)  As restated — See Note 1 to the unaudited March 31, 2006 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 $5,397,434. 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 $24.7 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 were approximately $300,000 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 employees and third parties for services; $137,000 in general legal fees 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,

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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 in order to reflect the estimated fair market value of the stock, and for the three month period ended March 31, 2006, the liability was increased, for which we booked an expense of $3,120,104. 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 $5,397,434 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 $4.1 million, including interest on common stock subject to redemption, interest expense, 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 $2.01 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 $3.4 million,

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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 $348,000 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 $1.6 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 $2,013,000 and $348,000 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 $839,000 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

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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 $9.5 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 $24.7 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
    3,517,000  
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
  $ 24,749,000  
       
      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 July 31, 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. The notes automatically convert into (a) registered units in this offering at 66.67% of the initial public offering price or (b) unregistered units identical to the units in this offering, plus an additional five-year warrant to purchase 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 offering does not close prior to the maturity of the notes, a five-year

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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 397,792 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 248,492 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 21,313 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 $18.9 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)
    795,399       259,976       526,034       9,389  
Operating Lease Obligation(2)
    1,085,007       254,616       830,391        
Other Long-Term Obligations(3)
    3,732,939                   3,732,939  
                         
Total
  $ 18,861,446     $ 13,762,693     $ 1,356,425     $ 3,742,328  
                         
 
(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 $929,000. 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- 223,852 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 March 31, 2006) 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
      Consequently, we expect such future valuation at the date of the offering to exceed our current 2005 stock value.

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  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 9 to our interim March 31, 2006 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 our Board of Directors. In estimating the fair value of our common stock, a number of factors are considered including:
  •  recent transactions in our common stock with third parties;
 
  •  contemporaneous or retrospective valuations performed by independent valuation experts.
 
  •  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.
      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 expert. 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 expert include evaluation of financial risks, including the probability of completion of our initial public offering; and business risks, including but not limited to the status of negotiations with cable and satellite providers for the distribution of our content; the state of our marketing programs, the state of our programming and library content in anticipation of our launch date; as well how we are financing the growth-specifically, 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 results of operations and financial condition to date including 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 expert, 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

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at December 31, 2005 than our future prospects. We had 1,319,600 common shares carried at a redemption amount of approximately $613,000 at December 31, 2005, based on such valuation.
      With respect to the fair value of our common stock at March 31, 2006, we obtained a contemporaneous valuation from an independent valuation expert. In determining the value of our stock at March 31, 2006, consideration was given to progress made in our business plan and the achievement of certain milestones and progress made toward our initial public offering during the first quarter of 2006, including a) the signing of iNDEMAND for distribution of our content, b) the filing of a registration statement with the Securities and Exchange Commission for the sale of our common stock units and c) the progress made in several fronts with respect to additional development of our programming content and marketing of our brand name. Without such progress, the value of our stock would have remained flat or decreased. We had 1,319,600 common shares carried at approximately $3,733,000 at March 31, 2006, based on such valuation. Consequently, a charge of approximately $3,120,000 was made in the three months ended March 31, 2006 resulting from the estimated increase in the value of our stock and the related increase in the redemption amount of our common stock subject to redemption obligation at 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 March 31, 2006 (the date of our last 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:
  •  Executed agreements with iN DEMAND and Google to air our programming through cable tv and web-based distribution. We expect further advancement in our discussions related to obtaining additional distribution channels within the satellite and wireless environments
 
  •  The expansion of our internal resources through increased staff levels. Since the beginning of 2006, we have increased our staff in excess of 35%, including high level marketing and production personnel, and we will continue to expand staffing throughout the year, in order to advance our capabilities
 
  •  The completion of our press kit and public relations materials, which significantly facilitate our ability to attract sponsorships and marketing opportunities
 
  •  The expansion of our marketing efforts, including securing third-party grass-roots and viral marketing resources in support of our launch
 
  •  Engagement of investor relations, marketing and public relations firms
 
  •  On-going and continued progress in the development of our finished product as well as our channel packaging. The expanding of our staff, as indicated above continues to facilitate this effort
 
  •  We will have readied our website for rollout
 
  •  We continue to further expand and develop our extensive video and music libraries, with increased focus on top-tier celebrity talent.
      Consequently, as we make additional progress in our business plan milestones and in the registration and marketing of our securities, we expect the value of our common stock to reflect such incremental value due to our progress. Accordingly, we expect the value of our common stock at June 30, 2006, as well as at the IPO date to significantly exceed our most recent available estimate as of March 31, 2006.
      Our determination of the value of our common stock as of March 31, 2006 and in the past have been determined by our Board of Directors, evaluating recent stock transactions or using a independent third party valuation expert. However, in the future, the value of the common stock subject to redemption liability will correspond to the trading price of our common stock, assuming our IPO is successfully consummated. Accordingly, the amount of our redemption obligation under these employment agreements could potentially increase substantially from that reflected within our balance sheet as of March 31, 2006, as the value of our common shares increases in the public market (assuming such increase is realized in the trading price). A change in the value of our common stock of $.25 per share will result in a change in the carrying amount of our liability of approximately $330,000.

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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 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

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(“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.
      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, this pronouncement did not have a material effect on our results of operations and basic and diluted loss per share.
      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 July 19, 2006 we employed 56 full-time employees and 8 part time employees. We also have 5 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 vesting of all options granted to Mr. Burns. Mr. Burns has filed a demand for arbitration against the company. The company will vigorously defend the action but cannot control the outcome.

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MANAGEMENT
      Our bylaws provide that our board of directors shall consist of no less than seven and no more than eleven directors. There are presently nine 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)(4)
Patrick Dovigi
    26     Director
Andrew A. De Francesco
    36     Director(3)(4)
Troy R. Barnett
    33     Director(2)
Greg Suess
    33     Director(3)(4)
 
  (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.
 
  (2)  Member and Chair of our Audit Committee.
 
  (3)  Member of our Compensation Committee.
 
  (4)  Member of our Nominating Committee.
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 have established an audit committee, comprised of one independent director. We consider this director to be a “financial expert” as that term is defined in rules promulgated by the U.S. Securities and Exchange Commission, or SEC. 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. Our financial expert will serve 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;

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  •  will have sole authority to approve in advance all audit and non-audit engagement fees and terms with our independent auditors;
 
  •  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 has established a compensation committee, which is comprised of two independent directors. Within one year after the date of this prospectus we will increase the committee to three members. 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 has established a nominating and corporate governance committee comprised of 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. Troy R. Barnett. Mr. Barnett was appointed to our board of directors on June 29, 2006. Mr. Barnett is a certified public accountant and will serve as the chair of our audit committee. From 1994 to 2002, Mr. Barnett was a Senior Manager at Deloitte & Touche, LLP a registered public accounting firm. In 2002, Mr. Barnett left Deloitte & Touch, LLP and founded his own public accounting firm, Barnett & Company, Inc. with offices in South Orange County, California. Mr. Barnett received a B.S. in accounting and a Masters of Business Taxation from the University of Southern California. He is certified as a public accountant in the State of California. We believe Mr. Barnett qualifies as a “financial expert” within the meaning of the rules and regulations of the Securities and Exchange Commission and the American Stock Exchange.
      Mr. Greg Suess. Mr. Suess was appointed to our board of directors on June 29, 2006. Mr. Suess is an attorney and since 1997 has practiced law with the firm Christensen, Glaser, Fink, Jacobs, Weil & Shapiro, LLP. He specializes in entertainment law. Mr. Suess is also a founding partner of ROAR, LLC, an entertainment management and production company based in Beverly Hills, California. Under the ROAR banner, Mr. Suess has co-executive produced two films and is producing several other entertainment projects in various stages of development. Mr. Suess is a graduate of the University of Southern California and he holds a Master of Business Administration and a Juris Doctor degree from Pepperdine University, in California. Mr. Suess is a member of the Bar of the State of California.
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                     $ 600,470       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 $600,470. 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. In addition, in consideration of his service on our board of directors, Mr. Dovigi will receive monthly cash compensation in the amount of $4,000. Mr. Dovigi’s compensation will be retroactive to April 1, 2006. In consideration of their service on our board of directors, each of Mr. Suess and Mr. Barnett will receive monthly cash compensation in the amount of $2,000, commencing on July 1, 2006.
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, as amended on June 1, 2006. The Agreement expires on February 12, 2009. 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 $20,000 monthly compensation and 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,

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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 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

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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 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, as amended June 1, 2006 (the “Agreement”). The Agreement expires on February 11, 2009. 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

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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 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. In the event Mr. Cafaro becomes our Chief Operating Officer, he will no longer be considered an “independent” director and we will reconfigure our committee composition to meet American Stock Exchange and SEC requirements.
      We are 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.

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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.
      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 $907,111 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 $979,720 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

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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.
      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. Due to Mr. Burns’ separation from the company, all of such options have been canceled and are no longer outstanding.
      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 July 31, 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 $787,500 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 $412,500 have elected to convert their Notes into the units, but such units are not registered hereunder. Accordingly, 262,504 units covered by this prospectus and offered by the selling security holders arise from the conversion of the First Bridge Notes. The holders of 137,502 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.

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      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.
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. 1,135,138 units covered by this prospectus and offered by the selling security holders arise from the conversion of the Second Bridge Notes. Holders of 311,112 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.

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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 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 June 30, 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

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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.
      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)     2.1 %
Troy R. Barnett
    Common Stock                          
Allan Brown
    Common Stock       320,088       6.4 %     320,088       1.9 %
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       9,654 (13)     *       9,654 (13)     *  
Patrick Dovigi
    Common Stock                          
Gene Simmons
    Common Stock       401,781 (4)     8 %     698,751 (9)     4.1 %
Greg Suess
    Common Stock                          
Kourosh Taj
    Common Stock       461,834       9.2 %     534,506 (10)     3.2 %
Jay Vir
    Common Stock       857,229       17.1 %     1,265,909 (11)     7.5 %
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
(10 persons)(5)
    Common Stock       2,513,723       50.1 %     3,282,391 (8)     19.4 %
 
  * Indicates less than 1%

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(a)  Based on a total of 5,000,152 shares of common stock outstanding on June 30, 2006 and prior to the offering of the units and prior to the conversion of notes into units.
 
(b)  Based on a total of 16,962,770 common shares to be outstanding after the offering including 5,000,152 common stock issued and outstanding and all common shares, and common stock 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 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 25,829 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.

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(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 9,654 shares of common stock owned by Catherine Brewer, Mr. De Francesco’s wife. He disclaims beneficial ownership of such shares. Mr. De Francesco is a one-third owner of Lower East Capital Partners, a selling security holder in this offering. Lower East Capital Partners owns a bridge note that will convert into 82,369 units to be sold in this offering (assuming a price of $6.00 per unit). Lower East Capital Partners is a corporate entity formed under the laws of Canada. Because Mr. De Francesco owns less than 51% of such entity, he disclaims beneficial ownership and does not report such units, all of which will be sold on the date of this prospectus.
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              
Leonard A. Ayre
    28,125       *       18,750       28,125              
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              

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    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)
                         
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 %
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              

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    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)
                         
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       *  
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       *  
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 16,962,770 shares issued and outstanding effective at the time of the offering.

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  (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 16,962,770 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 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.

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(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.
 
(19)  Includes 76,734 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 person who exercises voting and investment control over these securities is Mr. Frank Mersh.
 
(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 persons who exercise shared voting and investment control over these securities are Mr. Marvin Igleman, Mr. Romeo DiBattista and Ms. Catherine Brewer.
 
(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

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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 offer and sale of the Underwriters Options and the shares and warrants underlying the Underwriters Options by the representative and its permitted designees. We will undertake to file a post effective amendment to the registration statement of which this prospectus is a part, to update this prospectus to identify those holders of the Underwriters Options who become selling security holders under this prospectus, and include such persons in the Selling Security Holders table above.
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 June 30, 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 June 30, 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

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$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. 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 5,997,174 units (or 6,896,750 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. The separation date will be determined by the representative, in its sole discretion, upon not less than 30 days’ written notice to the company and to the American Stock Exchange; provided that the separation date (a) may not be prior to the business day following the date that is 45 days following the date of this prospectus and (b) may not be more than nine months following the date of this prospectus. Holders of the units will be given 30 days’ prior notice of detachment by public notice. In the event the representative has not provided notice of separation prior to eight months from the date of this prospectus, the units will detach on the nine-month anniversary of the date of this prospectus.
      The representative has advised us that it expects to detach the units at the earliest appropriate time consistent with an analysis of general market conditions, trading activities in AMEX-traded securities as a whole, and trading activities in and the demand for our units. The representative will consider the following factors in determining when and whether to detach the units prior to the end of the nine-month period:
  •  We have a large number of holders of restricted common stock that are not subject to lock-up agreements. To the extent that there is a trading market in our common stock, those restricted shares could be sold under Rule 144 commencing 90 days following the date of this prospectus. The representative will determine when the market can support the introduction of such unregistered shares of common stock that are eligible for trading.
 
  •  We are not expected to generate significant revenues until we launch our NGTV programming. Until we launch our programming and generate revenues there may not be a high demand for our securities. The representative will determine at what point in our development with respect to launching our programming and generating revenues there will be a higher demand for our securities which can support trading in both common stock and warrants.
 
  •  Unlike Nasdaq-listed securities, whose markets are maintained by a network of “market-makers,” trading in AMEX-listed securities is generally managed by one “specialist.” The representative believes it is more difficult for a specialist to manage trading markets in two separate securities,

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  particularly during the early stages of trading following an initial public offering when the market is generally more unstable and volatile. The representative will determine when the market for our securities can best withstand detachment of the units and the development of orderly and stable markets in our common stock and warrants, after the initial trading market of our units is stabilized. The representative will discuss the market and detachment with the AMEX specialist as it determines that other factors lend to a decision to detach the units.

      The company will file a current report on Form 8-K and disseminate a press release to publicly disclose the separation date within two business days’ of its receipt of notice of separation from the representative. The warrants included in the units may not be exercised until the separation date. 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 2,998,587 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 3,448,375 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.
      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.

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      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. As of the closing of the offering of units covered hereby, 837,775 unregistered units will be issued and outstanding.
Underwriters Options
      We will sell to the representative of the underwriters on completion of this offering, for a total purchase price of $417, 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 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 identical to the exercise price of the unit warrant issued to the public. 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 registered for sale the common stock and warrants issuable upon exercise of the Underwriters Options.

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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 June 30, 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 2,998,587 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, 3,299,612 shares of common stock including shares underlying units, warrants and options, 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) 2,413,669 shares of our common stock, (b) 107,621 shares of common stock underlying options, (c) 389,161 unregistered units consisting of one share of common stock and a warrant to purchase one-half share of common stock, and (d) 194,582 shares underlying warrants. 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 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.

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      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, 2,443,085 shares not subject to the Lock Up Agreement may be sold 90 days after the date of this prospectus under Rule 144, of which 1,885,960 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. 1,839,003 shares not subject to Lock Up Agreements 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 469,784 shares of common stock under our 2000 Equity Incentive Plan on a Form S-8 Registration Statement, including 346,541 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 June 30, 2006, options to purchase a total of 346,541 shares of our common stock are outstanding, 309,406 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. 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.
      We have also registered the offer and sale to the representative of the underwriters, of options to purchase up to 416,667 units identical to the units offered by this prospectus, and we have provided the holders of the options certain registration rights for the securities underlying the options. Resale of those options and their underlying securities is restricted for a period of 180-days from the date of this prospectus. In the event that

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the underwriters options are exercised, the resale of the securities underlying the option will increase the number of our securities entering the marketplace and may adversely affect the market price for our securities.
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 and warrants to purchase 194,581 shares of common stock (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. In the event the offering is terminated, the advanced expenses will be returned to us to the extent not actually incurred, as provided by NASD Conduct Rule 2710(f)(2)(c).

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      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 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.
Underwriters Options
      We will sell to the representatives of the underwriters on completion of this offering, for a total purchase price of $417, 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 identical to the exercise price of the unit warrant issued to the public. 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 units, common stock and warrants issuable upon exercise of the Underwriters Options.

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      We will set aside and at all times have available a sufficient number of units, 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 units, common stock and warrants issuable 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

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  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 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
      The underwriting agreement between the company and the underwriters permits the representative of the underwriters to determine, in its sole discretion, when prior to expiration of the period commencing 45 days following the date of this prospectus and terminating nine months following the date of this prospectus the units will detach. This contractual provision was negotiated between the company and the representative at the time we reached initial agreement in principle to proceed with this offering. We are advised that the representative requested complete discretion to determine when during that eight and one half month period to detach the units because the representative’s activities will include their assistance in maintaining an orderly market in our securities following this offering, and because trading activities in securities following an initial public offering are traditionally more volatile and unstable than trading markets that exist after the impact of an initial public offering have settled. We agreed to provide the representative with this discretion because we have little experience in matters affecting trading markets in general, and because we have confidence that the experience of the representative in market-maintaining and stabilizing activities makes them more sensitive to trading patterns and market fluctuations than we are, so that they are better able to make an informed analysis as to when the market can best absorb separate trading of both common stock and warrants.
      The representative has advised us that it expects to detach the units at the earliest appropriate time consistent with an analysis of general market conditions, trading activities in AMEX-traded securities as a whole, and trading activities in and the demand for our units. We understand that it is not unusual in initial public offerings of units, for the units to detach between 30 to 60 days following the effective date of the offering. However, the representative and the Company have agreed to a period of up to nine months from the date of this prospectus date for detachment of the units primarily for the following reasons:
  •  It is customary for officers, directors and large shareholders of a company undertaking an initial public offering to agree not to sell their shares during a period of time (usually one to two years) following the effective date. A primary reason for this no sale period is to reduce pressure on the trading markets that will likely occur if insider resales of their securities occur soon after a public offering, during which time trading markets are traditionally less stable. The presence of a large number of unregistered securities that could be sold into the market (known as “market overhang”) makes it more difficult to

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  maintain an orderly and stable trading market. Our officers and directors have similarly signed no sale agreements under which they have agreed, subject to limited exceptions, not to sell their securities of the company for 12 months following the date of this prospectus. However, due to the numerous financings we have completed prior to our initial public offering, we have an inordinately large number of holders of restricted common stock that are not subject to lock-up agreements. To the extent that there is a trading market in our common stock, those restricted shares could be sold under Rule 144 commencing 90 days following the date of this prospectus. For so long as the trading market in our securities is limited to units, there will be no trading market into which holders of our restricted common stock may sell their common stock under Rule 144. The representative believes, and we concur, a period of up to nine month will better position the marketplace to absorb the market overhang in our restricted common stock.
 
  •  We are not expected to generate significant revenues until we launch our NGTV programming. The launch of our programming is not expected to occur until the fourth quarter of 2006, and we do not anticipate that the launch will result in meaningful revenue-generation for several months thereafter. The representative believes, and we concur, that there will be a direct relationship between our revenue-generation and the demand for our securities. Given the timing of our projected revenue-generation, the period of up to nine months in which to detach the units is expected to coincide with what we hope will be a more active trading market resulting from projected revenues. The representative believes that increased activity will also allow the market to better absorb the market overhang discussed above. Notwithstanding the projected timing of our revenue-generation, the representative has advised us that it will monitor the progress of our launch and consider detachment of the units as soon as the representative believes that revenue-generation or the prospects of revenue-generation suggest that the demand for our securities will permit a more stable market in both our common stock and warrants following detachment.
 
  •  We are advised by the representative that it is not unusual for sophisticated traders to “arbitrage” the difference between the trading price of units and the trading price of the individual components of the units. The representative believes that arbitrage activities create downward pressure on the market price of our securities, as well as volatility in the trading activity in each of the component securities. The representative has advised us that it believes the effects of arbitrage activities can be reduced if investors do not know precisely when the units will detach. As a result, the company and the representative have determined that the market in our securities will be more stable and less volatile with up to a nine-month period prior to detachment.
 
  •  Unlike Nasdaq-listed securities, whose markets are maintained by a network of “market-makers,” trading in AMEX-listed securities is generally managed by one “specialist.” The representative believes it is more difficult for a specialist to manage trading markets in two separate securities, particularly during the early stages of trading following an initial public offering when the market is generally more unstable and volatile. The representative has also advised us that it will discuss with our specialist his or her evaluation of the trading market in our units, and consider the views of our specialist in connection with the representative’s evaluation of when during the period commencing 45 days and terminating nine months following the date of this prospectus the market in our units can best withstand detachment of the units and the development of orderly and stable markets in our common stock and warrants.

      We have agreed with the representative to file a current report on Form 8-K and disseminate a press release to publicly disclose the date that the units will detach within two business days’ of our receipt of notice of detachment from the representative.
      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

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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 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.

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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 and for the period June 23, 2000 (Inception) through 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 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.

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      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
       
    F-2  
    F-3  
    F-4  
    F-5  
    F-9  
    F-11  
Interim Condensed Financial Statements — March 31, 2006 (Unaudited) and Three Months Ended March 31, 2006 and 2005 (Unaudited)
       
    F-42  
    F-43  
    F-44  
    F-48  
    F-49  

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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 July 19, 2006)
Newport Beach, California

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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.

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Table of Contents

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


Table of Contents

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  

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Table of Contents

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