c6151018k1.htm

Engagement Summary

UHY Advisors FLVS, Inc. (“UHY”) was engaged by the Special Committee of the Board of Directors of NeuLion Inc. (“NeuLion” or
the “Company”) (“Client”), as an independent valuator, to perform a business valuation and determine a range of fair market value for
NeuLion as of March 31, 2010 (“Valuation Date”). This valuation opinion and related report are only for the Client’s corporate
planning purposes in connection with the potential acquisition of TransVideo International, Ltd. by NeuLion and should not be
utilized, referred to, or distributed for any other purpose without the express written consent of UHY. Our engagement, nor our
valuation conclusions expressed in our report, are not to be considered a fairness opinion or any indication as what one may be able to
raise capital for in the public market or from any individual investor.

Standard and Definition of Value

The standard of value used in our analysis is fair market value. Fair market value is defined in Internal Revenue Service Revenue
Ruling 59-60 (“Revenue Ruling 59-60”) as:

…the price at which the property would change hands between a willing buyer and a willing seller when the former is not
under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of
relevant facts.

Fair market value is also defined in the International Glossary of Business Valuation Terms1 as:

The price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing
and able buyer and a hypothetical willing and able seller, acting at arms length in an open and unrestricted market, when
neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.

1 The International Glossary of Business Valuation Terms is a joint effort of the American Institute of Certified Public Accountants, American Society of
Appraisers, Canadian Institute of Chartered Business Valuators, National Association of Certified Valuation Analysts, and The Institute of Business Appraisers.

Page | 4

Scope of Work

We have considered the follow factors in our analysis of NeuLion.

1. The nature of the business and the history of the enterprise from its inception.

2. The economic outlook in general and the condition and outlook of the specific industry in particular.

3. The bookvalue of the stock and the financial condition of the business.

4. The earning capacity of the Practice.

5. The dividend-paying capacity.

6. Whether or not the enterprise has goodwill or other intangible value.
7. Sales of the stock and the size of the block or stock to be valued.

8. The market price of stocks of corporations engaged in the same or a similar line of business having their stocks actively traded in a
free and open market, either on an exchange or over-the-counter.

As part of our assignment, on April 15, 2010 we performed a site visit to the office of NeuLion located at 1600 Old Country Road in
Plainview, NY. We also performed management interviews with key management personnel at NeuLion concerning the Company, its
historic operations, nature and operations of the Company, including trends and prospects for growth as of the Valuation Date and
Managements financial forecast. Additionally, we reviewed various documents and material provided by Management and those available
through our research. A summary of those documents are included in Appendix A of our report.

Page | 5

Level of Value

Obtain indirectly by reference to

STRATEGIC VALUE

control values via strategic premium

Strategic Premium/Merger Economics

Obtain indirectly by reference to freely

CONTROL VALUE

traded values via control premium

Premium for Control

Lack of Control Discount

FREELY TRADED VALUE OR

Obtain indirectly by reference to control

MARKETABLE,

values via lack of control discount

NON-CONTROLLING

Lack of Marketability Discount

Obtain indirectly by reference to freely

NON-MARKETABLE,

traded values via lack of marketability

NON-CONTROLLING

discount

Source: Based on Z. Christopher Mercer, "Understanding and Quantifying Control Premiums: The Value of Control vs. Synergies of Strategic
Advantages, Part II," The Journal of Business Valuation, p.51.

In this report, we used a Control Value basis for the 100% equity ownership of NeuLion.

Premise of Value

NeuLion was valued on a going-concern basis, which assumes that the businesses will continue operating into the future.

Page | 6

Business History and Overview

NeuLion was incorporated on January 14, 2000 under the Canada Business Corporations Act, and its common shares are listed on the
Toronto Stock Exchange. NeuLion is a technology company that offers an end-to-end suite of internet television technology services.

NeuLion partners with large professional sports organizations such as the NHL, NFL, NCAA programs, and international content
providers to stream media through the internet anywhere in the world. The service is called “IPTV”, which refers to the distribution of
streamed audio, video and other multimedia content, over an Internet Protocol network. NeuLion’s business model is set up to
provide customized network platforms for content that is provided by its clients. NeuLion acquires, processes, and streams content
through private networks to subscribers and pay-per-view customers on Internet-connected browser-based devices such as personal
computers, laptops and mobile devices and on standard television sets through Internet-connected set top boxes (“STBs”).

Page | 7

Employees

As of March 10, 2010, The Company had 224 total employees, all of whom were full-time employees.

Ms. Nancy Li, NeuLion’s CEO, is married to the Chairman of the Board, Charles Wang, and has been the CEO of the Company since
the merger with Jump TV in 2008. G. Scott Paterson, the former CEO of Jump TV, is now the Vice Chairman of the Company. Mr.
Paterson has an extensive background in the technology sector, and was an investment banker focused on start up technology
companies earlier in his career. In general, the management team at the Company is experienced and have worked together previously
at Computer Associates. Management has indicated the need to add more seasoned professionals to drive revenue going forward. The
current officers of NeuLion include:

Name

Age

Office

Nancy Li

Chief Executive Officer

G. Scott Paterson

Vice Chairman

Arthur J. McCarthy

Chief Financial Officer

Roy E. Reichbach

General Counsel and Corporate Secretary

Horngwei (Michael) Her

Executive Vice President of Research and Development

Ronald Nunn

Executive Vice President of Operations

J. Christopher Wagner

Executive Vice President of Sales

Page | 9

Market Price Information

There is no established public trading market for NeuLion’s shares in the United States. The principal established foreign public trading
market for the Shares is the Toronto Stock Exchange. It is important to note that NeuLion’s stock is thinly traded, and pink sheeted. At the
end of the first quarter 2010, NeuLion’s stock price was $0.64, with 3 month average volume of approximately 15 thousand2.

Time Period

High Low

2010

First Quarter

$0.84

$0.50

2009

First Quarter

$0.62

$0.28

Second Quarter

$0.81

$0.45

Third Quarter

$1.20

$0.70

Fourth Quarter

$1.00

$0.62

Shareholders

As of March 10, 2010, there were approximately 171 holders of record of Shares. Charles Wang and G. Scott Paterson are major
shareholders of the Company.

Dividends

The Company has paid no dividends since its inception.

2 Yahoo Finance.

Page | 10

• NeuLion provides services for hundreds of television channels. The
Company transcodes and delivers live linear channels, libraries of
video on demand, and live events using industry set top boxes and
consumer devices.

• The IPTV experience is better than cable and satellite and they use the
internet so you can go anywhere in the world.

• NeuLion is different than typical IPTV companies because it
provides the full suite of end-to-end services.

• NeuLion’s service encodes, delivers, stores and manages an
unlimited range of multimedia content and the operational support
system maintains all billing and customer support services.

• The visual illustration to the right shows how NeuLion acquires
various forms of content, as well as the other processes that bring the
media to market.

Page | 12

Service Lines and Content Partners

NeuLion provides television solutions, web solutions, and sports media solutions. The Company’s client base can be broken down into
three main segments as shown below:

• Professional Sports (B2B)

• Collegiate Sports (B2B)

• International Programming (B2B and B2C)

Professional Sports Programming (B2B)

NeuLion provides professional sports organizations a complete sports media platform that includes web and video publishing, ecommerce
tools, auctions, live streaming, ticketing, and a donor management systems. It is typically the responsibility of the partners to market the
service, while NeuLion designs and builds a platform that brings the media to market. Below is a sample list of some clients that NeuLion
has partnered with in the professional sports market:

• National Football League (NFL);

• National Hockey League (NHL);

• Major League Soccer (MLS);

• Indy Car Series

• American Hockey League (AHL)

Projected

Professional Sports and Variety Programming Revenue

2009

2010

Subscription Revenue

*******

Technology Services Revenue (website, set-up, transcoder, professional)

*******

Total

$4,415,819

*******

Total revenue from professional and variety networks services was approximately ******* in 2009, which translates to approximately
******* of the Company’s total revenue for 2009. *******.

Page | 13

Collegiate Sports Programming (B2B)

The Company also provides over one hundred NCAA organizations with sports media platforms that create and maintain websites, handle
merchandising, ticketing, and donor management programs which help increase donations to athletic programs. For instance, the University
of North Dakota recently used NeuLion to re launch its website, www.fightingsioux.com. Also, NeuLion has a cutting edge ticketing and
donor management system that handles ticket sales for many NCAA organizations through an easy to use seating request process that
features attendance-driven loyalty programs and print-at-home ticketing. NeuLion's sports media platform integrates digital ticketing, a
donor database, and a "priority points calculator" that allows fans and donors to track their purchases and donations with a points system that
can be used to earn tickets, venue access, and other items. In fact, NeuLion recently entered new ticketing deals with Duke University and
Ohio State University.

The following table shows a breakdown for revenue from collegiate sports programming in terms of subscription, ecommerce, and
technology services revenue for the year ended December 31, 2009.

Projected

College Networks Services

2009

2010

Subscription

*******

Ecommerce (advertising, merchandising, ticketing, donor management, auction)

Technology Services (website, set-up, transcoder, professional)

Total

$8,313,725

*******

Total revenue from College Networks Services was approximately ******* in 2009, which translates to approximately ******* of
NeuLion’s total revenue. *******.

Page | 14

Ethnic/International and Specialty Programming (B2B and B2C)

NeuLion also offers what is referred to in the industry as “ethnic television,” which the Company defines as programming directed at a
specific diaspora community, as determined by a shared nationality, language or culture, and generally excluding communities for which
English is the primary language. The Company has license agreements directly with channel partners representing approximately 185
channels in 55 countries that give NeuLion rights to stream, predominantly on an exclusive world-wide basis, the channel partners’ live
linear television feeds over the public internet using proprietary private networks such as Talfazat and TV-Desi. The Company has
significant opportunities for growth with its Talfazat (Arabic), KyLinTV (Chinese), and TV Desi (South Asian) content. Additionally,
NeuLion recently entered into an agreement with Arab Radio and Television Network (ART) on April 13, 2010 to distribute Arabic content
through an IPTV platform in Canada.

NeuLion’s subsidiary, INSINC, also distributes government and entertainment content. Its clients in those industries include Business News
Network (BNN), CTV News Channel, Rogers Sportsnet, TVG Networks, The Canadian Press, the Canadian Ministry of Justice, the BC
Ministry of Education, and the Legislative Assemblies of British Columbia and Newfoundland and Labrador, among others. NeuLion also
has relationships with other specialty programming customers such as Sky Angel U.S. LLC, which streams faith-based programming.

Projected

Ethnic, International, and Specialty

2009

2010

Subscription:

Sky Angel

*******

International B2B

Other International B2C

INSINC

Total Subscription

Technology Services (website, set-up, transcoder, professional)

Equipment (set top boxes)

Total

$13,518,605

*******

Total revenue from ethnic/international and specialty programming was approximately

******* in

2009, which translates to

approximately ******* of NeuLion’s total revenue. *******.

Page | 15

New Deals and Business Partners

Dish Network
NeuLion recently entered into a new deal with Dish Network to take advantage a new strategy to bring IPTV to the New York market.
Dish Network has had difficulty in highly populated metropolitan areas such as Manhattan, because some apartment buildings do not allow
tenants to install satellite dishes on top of their buildings. As a result, Dish Network has partnered with NeuLion to offer its customers ethnic
content (Arabic and Chinese) through STB’s without using satellite dishes. The STB’s are provided by NeuLion.

Under the terms of the agreement, NeuLion will sell Set Top Boxes to Dish Network, and receive a fee per subscriber ranging from ******* to
******* per month depending on the total number of subscribers. In order for Dish to renew this contract they will need to have a minimum of
65 thousand subscribers by the end of *******.

Based on achieving certain levels of subscribers, Dish has a right to receive up to a total of 2 million warrants to purchase common stock of
NeuLion. *******. This information is broken down in the table below.

Threshold for Vesting

Series Number of Warrants Exercise Price

Expiration*

(number of subscribers)

D-1

*******

$1.50

*******

January 4, 2013

D-2

1.50

January 4, 2013

D-3

1.50

January 4, 2014

D-4

2.00

January 4, 2015

D-5

2.00

January 4, 2015

* Earlier of termination of contract or expiration date. The contract expires at the end of 2012, subject to automatic
renewal if Dish achieves a level of ******* subscribers by such date.

Page | 16

Other New Deals

Additionally, the Company has entered in a number of different deals within its professional sports, college sports, and international
programming business lines. NeuLion has been able to leverage its industry leading technology and end-to-end capabilities to add high-
profile clients including Major League Soccer, the NHL, Ole Miss Athletics, Duke University, Arab Radio and Television Network, TV-
Desi, and others.

NeuLion recently announced a new deal with Major League Soccer for a dedicated online video service that will be built and managed by
NeuLion. The service will have DVR-like functionality and HD quality video which will enable fans to watch and engage with the game
through a number of exciting and interactive real time services. NeuLion will provide Major League Soccer with end-to-end services that
will deliver up to 300 games as well as archived games and real time highlights3.

The NHL and NeuLion also partnered to create the “NHL Ice Time - Playoffs Edition” app, which is the first official NHL app for Apple’s
new product, the iPad. The app allows fans access to live scores, live in-game stats, condensed versions of full games, highlight reels, video
archives, game photos, and more4. The original NHL Ice Time app was the first application for the iPhone and iTouch, and was released in
more than 70 countries outside the United States.

NeuLion continues to increase its reputation and brand awareness through its leading technology and high-profile partners. Recently,
NeuLion was nominated for the “Best in Sports Technology” award at the 2010 Sports Business Awards.

3 www.marketwire.com /press-release/NeuLion-Chosen-as-Major-League-Soccers-Digital-Video-Partner
4 www.nhl.com/ice/news

Page | 17

Facilities

The Company leases office space in the following locations:

Location

Toronto, Ontario, Canada
Shanghai, China

Sanford, Florida

New York, New York
Plainview, New York
London, England
Centennial, Colorado

Burnaby, British Columbia, Canada

• The Company is headquartered out of Plainview, NY, with approximately 70 people on location;

• The Company has a Toronto office as a result of the merger with Jump TV. The office is small with no significant operations other
than a marketing and sales staff of approximately 15 people. The Toronto office is important due to its large presence with the NHL
and Maple Leaf Entertainment;

• The Company’s office in Shanghai, China is focused on product and network development, and it currently houses approximately 40
development technicians;

• The Company’s Sanford, FL office has approximately 50 employees. This office houses a small development group; a support group
for end users (NHL, NCAA), B2B clients, and NeuLion billings; and web marketing employees. This office also has a project
management group for college and small broadcast operations to handle streaming and video content;

• The Company’s London office has four employees who handle the Cycling TV operations;

• The Company’s Centennial, CO office employs a college sports sales staff;

• The Company’s Burnaby, British Columbia, Canada office employs 15 people. The office is primarily focused on minor league
hockey in Canada and servicing Canadian TV customers. These were former customers of INSINC, which was recently acquired.

Page | 18

Competition:

The IPTV industry has experienced the launch of various closed network IPTV services around the world. As IPTV companies strive to
maintain and grow their customer bases, fixed line telecommunications companies will likely see closed network IPTV as a central element
of a “triple-play” strategy that will package telephone, television and Internet services in a single offering. Moreover, certain IPTV service
providers have an internal IP distribution strategy whereby they make their live linear feeds, as well as repurposed content, available through
their own websites on a paid basis or free advertisement-supported basis.

Management of NeuLion indicated that the following three entities all have end-to-end IPTV network capabilities and are generally
considered direct competitors of NeuLion, due to the fact that NeuLion has such a strong emphasis in the sports segment:

• www.mlb.com/tv

o Major League Baseball streams IPTV through a licensing agreement with MLB Advanced Media. This company is
considered a major competitor, and has control of the baseball sports market in the IPTV industry.

• www.cstv.com

o College Sports TV, which was purchased by CBS 4 - 5 years ago for $325 million. $74 million of the purchase price
was allocated to the Broadband business, which was doing $10-$12 million in revenue at the time. The cable piece of
the business accounted for the remaining $250 million.

• www.performtv.net

o This is a private company based in the United Kingdom that is focused on the Premiership League (English Soccer
League). APEX, a Russian, UK based investment firm, is the controlling shareholder.

In addition to the competitors that were identified by Management, NeuLion competes with the following list of IPTV companies:

International Content Providers

• www.mediaZone.com

o Media Zone is an online broadcaster that specializes in sports (Rugby, Tennis, etc.) and international programming by
subscription and pay per view access to live and on-demand programming.

•

Page | 22

• www.joost.com

o Joost is an IPTV distribution Company based in the Netherlands that works with content copyright owners to provide
professionally produced online video. The IPTV platform brings together advertisers, content owners, and viewers
(viewers view content free of charge).

• www.africast.tv

o Africast Global Media is the world’s leading broadcaster of African ethnic television over broadband Internet. This
company broadcasts over 40 channels from 25 African countries.

• www.wactchindia.tv

o Watch India TV is a subscription based online broadcaster of Indian TV shows. This company’s target market is the
non-resident Indian population, which is approximately 30 million people.

International Sports Providers

• www.universalsports.com

o Universal Sports is a partnership between NBC Sports and InterMedia Partners that is an online broadcaster of Olympic
sports and lifestyle sports programming.

College and Domestic Sports Providers

• www.espn.com

o ESPN Broadband is a business unit of ESPN (Entertainment Sports Programming Network) that provides sports
content to users over a high speed internet connection through ESPN Motion, ESPN 260, ESPN Pnlin

• www.scout.com

o Scout is an integrated sports publishing company that offers sports websites related to College and Professional Sports.
The Company also publishes college and professional magazines.

Page | 23

In addition to these companies, NeuLion competes with Hispanic content providers, ethnic content providers, and many smaller players that
provide a much narrower choice of services, but do not necessarily have the full end-to-end capabilities.

The Company seeks to be an end-to-end service provider for its customers, meaning that NeuLion can provide all of the necessary services to
bring the customers content to market. NeuLion’s technology and services are directed at the entire spectrum of content aggregation and
delivery to the end user. Many companies in the IPTV market offer narrower choices of services than NeuLion. For example, some content
providers deliver only their own content, while NeuLion offers the content of multiple providers. NeuLion also provides the Set Top Boxes
(“STB’s”) used to view content on a television set. These STB’s are procured from key suppliers including TransVideo International, Ltd.

An additional source of competition includes operators of pirated video content and bootleggers. These are not legitimate entities, but they
are competitors in the IPTV market, and some even offer ethnic content which competes with NeuLion’s international and ethnic offerings.

Page | 24

Business Risks

There are several risks that effect NeuLion currently and their ability to meet their financial projections. Below is a summary of risk factors
that could have a negative impact on the Company.

Supplier Dependence:

NeuLion depends upon TransVideo International, Ltd. and Tatung Technology Incorporated to provide the STBs used by its customers.
However, NeuLion has indicated that these boxes are becoming somewhat of a commodity in the marketplace. Also, the Company relies on
outside parties for content.

Access to Working Capital:

The Company runs the risk of burning through its cash due to its status as a second stage venture company, and the lack of borrowing
capacity inherent with early stage technology companies. This is a serious risk as any major glitches in operations or loss of business could
have a serious financial impact on NeuLion. NeuLion’s current financial position could also impact any capital needs for growth internally
and externally.

Consumer Demand for IPTV:

IPTV is a relatively new service, and potential customers may be slow to use the internet as a medium through which they watch television
and receive media content. At the same time, as IPTV becomes an accepted medium more competition will enter the market putting more
pressure on NeuLion.

Subscriber Turnover:

Because the IPTV market is increasingly competitive, increased subscriber churn could have a significant negative impact on the Company’s
operations due to increased costs related to customer acquisition and retention.

Regulation:

Governments and regulatory authorities in some jurisdictions in which NeuLion’s subscribers reside could potentially impose rules and
regulations affecting the content distributed over IPTV, however the extent of the regulation is unknown as of the date of this report.

Page | 25

Investments

KylinTV was launched in September 2005, and is the only IPTV service dedicated to the Chinese community living in North America. This
company offers access to over 60 of the most popular Chinese TV channels and more than 40,000 hours of Video-On-Demand
programming. The company is controlled by Charles B. Wang, founder of Computer Associates and Chairman of the Board of NeuLion; and
Charles Dolan, founder of Cablevision.

• As of March 31, 2010 NeuLion has a 12.2% equity position in KyLinTV. As of December 31, 2009, the NeuLion had an equity
interest in KyLinTV of 17.1%.

o On February 26, 2010, a group of investors invested $10.0 million in KyLinTV for 15.1% of its equity, which reduced
NeuLion’s equity interest in KyLinTV to 12.2%. Of the total $10.0 million investment, $1.0 million was invested by
AvantaLion LLC, a company controlled by Charles Wang, while the remainder was invested by Investor AB, which is a
Nordic-based industrial holding company that has a long history in this investment circle.5

• Beijing TransVideo Digital Technology Co. Limited, a related entity, has a 31.8% ownership interest in Kylin TV.

KyLin TV is in business to create the best Chinese language IPTV platform overseas for spreading the Chinese culture. Through the use of
IPTV, KyLinTV TV’s patent pending Video technology brings high quality broadcast channels and VOD to the TV set using existing Home
DSL or Cable broadband. KyLinTV is based in Plainview, New York. Through the use of the Technology, set top boxes, and Platform from
NeuLion and TransVideo, KyLinTV is able to bring to North America the exclusive broadcasting of mainland China television and local
videos on demand.

5 www.investorab.com

Page | 27

The income statement and balance sheet of KyLinTV are summarized below for the years ended December 31, 2008 and 2009:

KyLinTV Condensed Income Statements6

December 31, 2009

December 31, 2008

Condensed income statement information:

Net sales

$8,127,760

$6,568,101

Net loss

$(5,604,118)

$(8,148,974)

Condensed balance sheet information:

Current assets

$1,924,891

$927,427

Non-current assets

$913,977

$2,411,319

Total assets

$2,838,868

$3,338,746

Current liabilities

$15,168,149

$10,063,909

Non-current liabilities

Equity (deficiency)

$(12,329,281)

$(6,725,163)

Total liabilities and equity

$2,838,868

$3,338,746

NeuLion and KyLinTV have an agreement wherein NeuLion builds and delivers the set up and back office operation of KyLinTV TV’s
IPTV service. As part of this agreement, NeuLion earns a portion of the subscriber revenue generated from KyLinTV subscribers. In 2008
and 2009, this generated NeuLion subscriber revenue of ******* and *******, respectively. *******.

6 KyLinTV TV’s financial statements are derived from NeuLion, Inc’s 2010 10K.

Page | 28

INSINC

On October 31, 2009, NeuLion acquired INSINC, a Canadian IPTV company for an aggregate purchase price of $6,694,293.

INSINC is a media company that is positioned to take advantage of the rapidly expanding broadband online video market. The company
offers an enabling platform, with proprietary software tools for broadcasting video over the Internet. INSINC offers a range of software tools
for broadcasting video content over IPTV using the NeuLion platform.

Similar to NeuLion, its largest clients are in the area of sports, and include the Western Hockey League (WHL), Ontario Hockey League
(OHL), Central Hockey League (CHL), British Columbia Hockey League (BCHL), Central Canadian Hockey League (CCHL), Alberta
Junior Hockey League (AJHL), and Central Junior Hockey League (CJHL). When combined with NeuLion clients such as the National
Hockey League (NHL) and the American Hockey League (AHL), the Company will have a strong presence in the delivery of online video
experiences for the North American hockey world.

INSINC's other sports clients include the Canadian Football League (CFL) which is similar to NeuLion’s relationship with the National
Football League (NFL) and approximately 175 US colleges, schools and conferences for which NeuLion provides online broadcasting of
football and sports programming.

INSINC also provides its services to government and entertainment broadcasting sectors with clients including Business News Network
(BNN), CTV News Channel, Rogers Sportsnet, TVG Networks, The Canadian Press, the Canadian Ministry of Justice, the BC Ministry of
Education, and the Legislative Assemblies of British Columbia and Newfoundland and Labrador.

Page | 29

The income statement for INSINC for 2009 is included in the Company’s consolidated statement of operations from October 31, 2009
through December 31, 2009, and is summarized in the table below.

Description

2009

Revenue

$575,347

Cost of Revenue

$(238,309)

Operating Expenses

$(264,816)

Depreciation and Amortization

$(8,965)

Loss on Foreign Exchange

$(6,169)

Net Income

$57,088

A breakdown of INSINC’s projected operations for 2010 through 2014 is shown in the table below. This forecast was part of a valuation of

INSINC’s intangible assets as of October 31, 2009 as prepared by Peter Ott & Associates, Inc with input from Management.

Description

12/31/2010

12/31/2011

12/31/2012

12/31/2013

12/31/2014

Revenue

Existing Contract Revenue

*******

New Customer Revenue

Total Revenue

Cost of Sales

Existing Contract Cost of Sales

New Customer Cost of Sales

Total Cost of Sales

Gross Profit

Existing Contract Gross Profit

New Customer Gross Profit

Total Gross Profit

Operating Expenses

SG&A Costs

Operating Income

Income Tax Expense

Net Income

Page | 30

Prior Transactions

The current Company (NeuLion) is the result of a merger between Jump TV Inc. and NeuLion, Inc. that was completed on October 20, 2008
with a total purchase price of $33,558,784. Under the terms of the Merger, NeuLion issued 49,577,427 shares directly, as well as 1,840,097
shares subject to a performance escrow relating to a prior acquisition, which represented approximately the entire issued and outstanding
shares of NeuLion prior to closing, to the security holders of NeuLion USA in exchange for their NeuLion USA securities. The escrow
shares were subsequently cancelled in September 2009. Pursuant to the Merger, the Company also issued 5,000,000 warrants to purchase
shares, fully vested and exercisable for two years at US$0.63 per share, and 2,700,000 employee stock options to purchase shares, vesting in
equal monthly amounts over 48 months and exercisable for five years at US$0.60 per Share, to employees of NeuLion USA who became
employees of the Company.

On October 20, 2008, the following two transactions also took place which produced aggregate gross proceeds of CDN$11 million, or
USD$9.2 million:

1. AvantaLion LLS, which is an entity controlled by Mr. Charles Wang, Chairman of the Board of Directors, purchased 10 million units
from Jump TV’s treasury stock at CDN$1 per unit. Each unit consists of the following:

1 common share

b.½ common share purchase warrant, with an exercise price of CDN$1 (exercisable for a period of two years)
2. Mr. G. Scott Paterson, CEO of Jump TV, purchased 1 million units under the same terms as Mr. Wang.

On June 4, 2009, the company then known as NeuLion, Inc. changed its name to NeuLion USA, Inc. (“NeuLion USA”). On July 13, 2009,
Jump TV Inc. changed its name to NeuLion, Inc. (the “Company” or “NeuLion”). In conjunction with the name change, NeuLion’s stock
symbol on the Toronto Stock Exchange was changed from “JTV” to “NLN”.

Management has indicated that Mr. Paterson is the only member of Jump TV senior management that is still with NeuLion, Inc.

Page | 31

Financial Statement Analysis

Schedules 1 and 3 present the balance sheets of NeuLion as of December 31, 2007 through December 31, 2009. Presented in schedule 2 are
common size balance sheets for the Company as of the same dates. The financial statements presented in this report represent the combined
assets and liabilities, and results of operations from NeuLion USA and NeuLion, Inc., as detailed in the excerpt from the Company’s 2009
Audited Financial Statements taken from the 2009 Form 10K:

“On October 20, 2008, the company now known as NeuLion USA, Inc. (“NeuLion USA”) completed a merger (the
“Merger”) with the company then known as NeuLion, Inc. (“NeuLion” or the “Company”) that was accounted for as a
reverse takeover. As a result of the Merger, NeuLion USA became the legal subsidiary of NeuLion.

On June 4, 2009, the company now known as NeuLion, Inc., a Delaware corporation and wholly-owned subsidiary of
the company then known as Jump TV Inc., a Canadian corporation, changed its name to NeuLion USA. On July 13,
2009, Jump TV Inc. changed its name to NeuLion.

These consolidated financial statements for the years ended December 31, 2009 and 2008, and as at December 31,
2009 and 2008 are issued under the name of the legal acquirer in the Merger (NeuLion) but are deemed to be a
continuation of the accounting acquirer (NeuLion USA). These financial statements reflect the assets, liabilities and
results of operations of NeuLion USA, the accounting acquirer, and only include the assets, liabilities and results of
operations of NeuLion, the legal acquirer, subsequent to the reverse takeover on October 20, 2008.”7

7 NeuLion Inc. 2009 Form 10K

Page | 32

Below are NeuLion’s key reported balance sheet items as of December 31, 2007 through 2009.
Key Reported Balance Sheet Items8

Description

2009

20089

200710

Cash & Equivalents

$12,957,679

$27,323,021

$608,464

Inventories

928,592

347,600

323,500

Accounts Receivable

1,809,147

2,284,242

2,017,137

Prepaid Expenses & Deposits

966,101

1,830,260

525,637

Total Current Assets

17,765,679

33,320,146

3,663,593

Net Fixed Assets

5,754,255

6,474,989

2,281,667

Customer Relationships

9,462,904

5,668,916

Trademarks

79,167

80,415

Goodwill

6,757,194

6,846,183

Total Assets

$40,269,163

$53,737,682

$7,211,951

Working Capital

$964,371

$18,110,823

$242,774

Total Liabilities

$17,998,829

$16,724,104

$3,965,018

Shareholders' Equity

$22,270,334

$37,013,578

$3,246,933

A discussion of NeuLion’s key balance sheet items follows:

• The Company’s cash and equivalents balance has fluctuated considerably over the observed period. Although NeuLion successfully
executed an IPO, it is still spending significant funds on early stage expenses. NeuLion does not have a credit facility, so it relies on
cash to fund its operations. The Company’s cash outlays are offset by the capital that has periodically been raised over the past five

8This information comes from audited financial statements contained in NeuLion 2009 10k, and Jump TV’s 2008 10K

9 The 2008 Balance Sheet includes financial information for Jump TV after the date of the acquisition in October, 2008.
10 The 2007 Balance Sheet does not include the results of Jump TV.

Page | 33

years. The most recent round of financing caused the spike in cash in 2008, which has subsequently fallen to approximately $13
million in 2009. During 2009, NeuLion used $11.7 million to fund operations, which included working capital changes of $1.8
million, $1.2 million to purchase fixed assets and $1.6 million to acquire INSINC. NeuLion is burning through cash very quickly,
which could be a problem if the Company does not generate positive cash flow in the near future.

•The Company’s average accounts receivable balance is $1.8 million as of December 31, 2009, which is relatively low as a percentage
of revenue compared to the guideline public companies (these entities will be discussed in detail later in the report). The Company’s
average accounts receivable turnover ratio is 14.5 turns compared to the guideline public company median of 5.7. The Company’s
allowance for doubtful accounts was $30 thousand as of December 31, 2009, and $291 thousand as of December 31, 2008.
Accordingly, NeuLion’s credit policy and collection efforts appear to be fairly effective.

•The Company’s inventory balance of approximately $930 thousand as of December 31, 2009 is made up of Set Top Boxes. This is a
fairly low level of inventory because the Company is focused on providing end-to-end services as opposed to just selling STB’s.
Service revenue is recurring, while STB revenue is not. Management expects revenue from STB sales to have a much slower growth
rate than services revenue.

•Total current assets at December 31, 2009 were $17.8 million, a decrease of $15.5 million from the December 31, 2008 balance of $33.3
million. As mentioned earlier, the change is primarily due to a decrease in cash and cash equivalents of $14.4 million.

•Current liabilities at December 31, 2009 were $16.8 million, an increase of $1.6 million from the December 31, 2008 balance of $15.2
million. The change is primarily due to the fair value of the derivative liability of $1.4 million (which is a non-cash liability).

•The net working capital at December 31, 2009 was $964 thousand, a significant decrease from the December 31, 2008 net working
capital of $18.1 million. The decreased working capital is primarily due to funding operations of $11.7 million and the fair value of
the derivative liability of $1.4 million on December 31, 2009 (which is a non-cash liability).

o Because the company used significant funds in 2009, it will need to generate positive cash flow going forward. If the Company
is unable to generate positive cash flow it is likely that additional capital will need to be raised to continue funding losses.

•The Company has no interest bearing debt as of December 31, 2009. In general, the Company’s balance sheet is fairly healthy, but the
liquidity position will be a critical component of NeuLion’s success going forward. If positive cash flow is not generated NeuLion
will need additional cash going forward.

Page | 34

Schedule 4 presents the income statements of NeuLion for the years ended December 31, 2007 through December 31, 2009. Presented in
schedule 5 are common size income statements for the Company for the same time periods.

Key Reported Income Statement Items11

Description

2009

200812

200713

Net Revenues

$28,093,677

$13,443,339

$7,810,711

Gross Profit

$13,706,525

$5,804,190

$2,306,457

Operating Expenses

$32,908,166

$16,830,832

$4,771,434

Total Other Income

$(439,280)

$(610,618)

$(2,050,782)

Net Income

$(19,640,921)

$(11,637,260)

$(4,515,759)

EBITDA

$(15,499,804)

$(10,064,768)

$(3,954,682)

In the following section of this report, the term “organic” refers to the period-over-period changes in NeuLion’s revenues and expenses,
excluding the revenues and expenses of INSINC, a business that was recently acquired by the NeuLion, and excluding Jump TV. This
allows for a better comparison of current year and prior year revenues and expenses, and to understand changes that have occurred, without
regard to the effect of the Merger or the acquisition of INSINC. Also, the term “Acquired Business” refers to Jump TV.

Please note that a set of proforma income statements for 2007 and 2008 presented as if NeuLion and Jump TV had merged on January 1,
2007 is shown after the discussion of the Company’s actual audited financial statements.

Revenue

The Company’s revenue generation *******. However, in more general terms, NeuLion’s revenue can be divided into service revenue and

equipment revenue which is the focus of our financial statement analysis.

11 This information comes from audited financial statements contained in NeuLion 2009 10k, and Jump TV’s 2008 10K

12 The 2008 Income Statement includes the results of operations for Jump TV after the date of the acquisition in October, 2008.

13 The 2007 Income Statement does not include the results of Jump TV.

Page | 35

•

Service Revenue

o Services revenue includes revenue from subscribers, eCommerce and technology services. Services revenue increased from
$9.5 million for the year ended December 31, 2008 to $26.5 million for the year ended December 31, 2009. According to the

Company’s 10K, the increase was due to the organic growth in services revenue, the effect of the Merger on October 20, 2008

and the acquisition of INSINC effective October 31, 2009. The organic growth in the Company’s services revenue was $5.6 million.

The growth in the Acquired Business comprised $10.8 million, and INSINC comprised $0.6 million, of total services revenue.

■ Subscriber revenue increased from $7.0 million for the year ended December 31, 2008 to $18.5 million for the year
ended December 31, 2009. The increase was due to the growth in subscribers, the effect of the Merger on October 20,
2008 and the acquisition of INSINC effective October 31, 2009. The organic growth in the Company’s subscriber
revenue was $4.5 million resulting from $4.0 million in revenue growth from the Company’s existing customers
coupled with $0.5 million in revenue generated from 15 new customers. The growth in the Acquired Business was
$6.7 million and INSINC comprised $0.3 million of total subscriber revenue for the year.

■ eCommerce revenue increased from $0.9 million for the year ended December 31, 2008 to $3.9 million for the year
ended December 31, 2009. The Acquired Business comprised all of eCommerce revenue for the year.

■ Technology services revenue increased from $1.6 million for the year ended December 31, 2008 to $4.1 million for
the year ended December 31, 2009. The increase was due to organic growth in technology services revenue, the effect
of the Merger on October 20, 2008, and the October 31, 2009 effective date of the acquisition of INSINC. As new
customers begin streaming video or develop their user interface, the Company earns technology services revenue.
This revenue is recognized over the life of the contractual relationship. The organic growth in the Company’s
technology services revenue was$1.0 million. The growth in the Acquired Business was$1.2 million. INSINC
comprised $0.3 million of total technology services revenue for the year.

•

Equipment Revenue

o Equipment revenue decreased from $3.9 million for the year ended December 31, 2008 to $1.6 million for the year ended
December 31, 2009. The decrease in equipment revenue is a result of the uneven nature of the revenue stream. The
Company’s customers often place large single orders to meet minimum order requirements to manage the lead time between
ordering and shipping and to minimize the related shipping costs.

Page | 36

Cost of Revenue

• Cost of services revenue increased from $4.5 million, or 47%, of services revenue for the year ended December 31, 2008 to $12.8
million or 49% of services revenue for the year ended December 31, 2009. This increase was due to the costs associated with
increased revenue, the effect of the Merger on October 20, 2008 and the acquisition of INSINC effective October 31, 2009. Cost of
services revenue for the Acquired Business increased by $5.9 million. INSINC comprised $0.3 million of total costs of services
revenue for the year.

• Organic cost of services revenue increased from $2.5 million or 39.7% of services revenue for the year ended December 31, 2008 to
$4.6 million or 39.0% of services revenue for the year ended December 31, 2009. The $2.1 million increase was a result of
additional costs relating to co-location and network fees in support of increased revenue. The 0.7% improvement (as a percentage
of services revenue) primarily relates to negotiated lower rates on bandwidth costs.

• Cost of equipment revenue decreased from $3.1 million for the year ended December 31, 2008 to $1.5 million for the year ended
December 31, 2009 on lower revenue. Cost of equipment revenue is directly variable with changes in equipment revenue. Cost of
equipment revenue as a percentage of equipment revenue increased from 80% for the year ended December 31, 2008 to 94% for the
year ended December 31, 2009 due to increased shipping costs related to TV-Desi and Talfazat rental STBs that generate no
equipment revenue.

Operating Expenses

• Operating Expenses increased from $14.2 million for the year ended December 31, 2008 to $28.8 million for the year ended
December 31, 2009. The Acquired Business accounted for $9.1 million of the total increase, INSINC accounted for $0.3 million and
the remaining increase of $5.2 million relates to the organic increase. The individual variances are due to the following:

o Wages and benefits increased from $8.8 million for the year ended December 31, 2008 to $20.0 million for the year ended
December 31, 2009. The Acquired Business accounted for $6.5 million of the total increase of $11.2 million in wages and
benefits for the year. The organic increase of $4.5 million was primarily related to the increase in employees to support the
increased revenue and the Merger with the Acquired Business. In conjunction with the Merger, the Company added senior
management and provided market level compensation for the CEO. INSINC comprised $0.2 million of total wages and
benefits for the year.

Page | 37

o Stock-based compensation expense decreased from $1.8 million for the year ended December 31, 2008 to $1.2 million for the
year ended Decembeor 31, 2009. This decrease was the result of 5 million fully vested warrants being issued in the prior year.

o Marketing expenses increased from a $0.4 million for the year ended December 31, 2008 to $1.1 million for the year ended
December 31, 2009. The Acquired Business accounted for $0.5 million of the total increase of $0.7 million in marketing
expenses for the year. The Acquired Business is more of a business-to-consumer focused business and incurs higher
marketing expenses including search engine marketing and search engine optimization on the Internet.

o Professional fees increased from $1.2 million for the year ended December 31, 2008 to $1.7 million for the year ended
December 31, 2009. The increase was primarily related to professional fees incurred in connection with the acquisition of
INSINC.

o Depreciation and amortization increased from $1.5 million for the year ended December 31, 2008 to $4.1 million for the year
ended December 31, 2009. The increase was due to amortization on assets acquired in the Merger ($1.9 million) and
amortization of the intangible assets acquired in the acquisition of INSINC.

o Other SG&A expenses increased from $2.0 million for the year ended December 31, 2008 to $4.8 million for the year ended
December 31, 2009. The Acquired Business accounted for $2.3 million of the total increase of $2.8 million for the year. The
organic increase of $0.5 million was primarily related to increases in bank and processing fees and corporate systems costs of
$0.4 million.

o It is important to note that the Company has never paid income taxes, because it has never generated positive net income.
Accordingly, the Company has a tax loss carry-forward available to offset future taxable income of $93.4 million as of
December 31, 2009 that expires between the tax years 2010 and 2029. If the Company is able to generate positive net income
in subsequent to 2009, the Company will record the benefit as a reduction in income tax expense.

Page | 38

Proforma Income Statements:

The table below presents the unaudited, combined proforma income statements for NeuLion and Jump TV, as if the two had been merged
since the beginning of 2007. Please note that the net loss of $92 million in 2008 is partially attributable to impairment charges totaling $54
million.

NeuLion and Jump TV - Combined Proforma Income Statements14

2008

2007

Total revenue

$ 25,708,760

$16,785,370

Total cost of sales

$(18,836,212)

$(14,282,438)

Gross profit

$6,872,548

$2,502,932

Total sales, general and administrative

$(38,482,996)

$(32,487,244)

Stock-based compensation

$(3,374,767)

$(5,293,738)

Impairment of goodwill

$(47,882,317)

Impairment of long-lived assets

$(5,982,030)

Depreciation and amortization

$(3,602,169)

$(3,202,306)

Net loss

(92,459,364)

$(36,019,502)

14 This financial information is from NeuLion’s 2009 10K.

Page | 39

Financial Projections15

*******. Please note that the percentages in between the columns represent annual growth rates. The breakdown below is an indication of the

Company’s expected financial performance for 2010 - 2014, which is presented in greater detail in Schedule 10. *******. Please refer to schedules

9 - 13 for a detail of ******* projection.

Description

2010

2011

2012

2013

2014

Net Revenues

*******

Cost of Revenues

Gross Profit

Operation Expenses

Depreciation

Amortization

Net Income

EBITDA

• Total Revenue is forecast to increase from approximately ******* as reported in 2009 to ******* in 2010, representing a *******

growth in revenue. Management has indicated that NeuLion *******. Subsequent to 2010, ******* year, until it reaches $123 million in

2014. This resents a compound annual growth rate of *******, which is consistent with the industry forecasts presented in the industry analysis

section of this report. Below is a breakdown of the various components of revenue.

15 Note that these projections were provided by the management of NeuLion. We have not audited or rendered any opinion with respect to this prospective data. The
actual future results could be different than those forecasted by management and the difference could be material.

Page | 40

Dish Network Analysis

Based on our analysis of Management’s projections for NeuLion, Inc. we performed additional due diligence on the portion of the
forecast related to Dish Network, which was previously discussed under the New Deals and Business Partners section of this report. As
part of our analysis, we set up two different scenarios to test the conservativeness of Management’s forecast. The first scenario, which
is the base case “Scenario A”, uses Management forecasts, while “Scenario B” uses more aggressive growth assumptions. The
assumptions and results of the forecasts are detailed below.

In Scenario A, we used Managements detailed projections for 2010 to model NeuLion’ subscriber revenue, set top box revenue, and
technology revenue from the agreement with Dish Network. In addition, we used Management’s assumptions about the cost of
revenues for each of these sources to develop a forecasted gross margin from 2010 through 2014. Accordingly, Scenario A is *******.

Subscription revenue for these subscribers was based on a pricing structure that is summarized in the table below:

Number of Subscribers

Revenue Per Subscriber

******* subs *******

*******

******* subs

*******

******* subs

*******

******* subs

*******

Accordingly, Management’s forecast assumes a total of ******* subscribers by the end of 2010, translating to subscriber revenue of
*******, and a gross profit of *******.

The next component of Management’s forecast is the sale of set top boxes to Dish, which is based on the following pricing structure:

Number of Set Top Boxes Revenue Per STB

******* STB's or *******

*******

******* STB's

*******

*******STB's

*******

Page | 43

Accordingly, the revenue from set top box sales to Dish Network *******was ******* in 2010, translating to a gross profit of *******.

The third and final piece of the forecast is the technology piece, which was estimated to have revenue of ******* and a gross margin
of ******* in 2010.

Accordingly, Management projected total revenues relating to the Dish Network agreement to be ******* for 2010 and a gross
profit of ******* for 2010.

Using ******* 2010 projection, we increased the number of subscribers at the total revenue growth rate from 2011 through 2014
in ******* forecast which is shown in the table below.

Scenario A:

Description

2010

2011

2012

2013

2014

NeuLion Total Revenue Growth Rates

*******

Per Management Financial Forecast

Number of Subs Year End

Annual Sub Revenue

Annual STB Revenue

Annual Technology Revenue

Total Dish Revenue

Total Cost of Goods Sold

Gross Profit

Based on the above analysis it is clear that the forecast is conservative, since *******.

Page | 44

To show the sensitivity of NeuLion’s projections, we performed a Scenario B analysis which contains significantly more aggressive
growth assumptions.

It is important to note that since there is no history for this business plan by Dish Network, there is no true supportable basis to include
this aggressive projection in NeuLion’s forecasted results at this time.

Using the same pricing structure and gross profit margin calculations for the three sources of business from the Dish Network deal, we
have updated the growth assumptions *******.

Scenario B:

Description

2010

2011

2012

2013

2014

NeuLion Total Revenue Growth Rates

*******

Number of Subs Year End

Annual Sub Revenue

Annual STB Revenue

Annual Technology Revenue

Total Dish Revenue

Total Cost of Goods Sold

Gross Profit

As shown above, if *******, and the gross margin in each year from 2011 through 2015 is increased significantly relative to Scenario A.

Accordingly, if Management’s forecast had utilized more aggressive assumptions it would have a positive impact on the Company’s value16.

16 It should be noted that more aggressive assumptions typically require a much higher discount rate to account for the significant risk associate with the probability of
achieving such aggressive results.

Page | 45

In conjunction with our analysis of the fair market value of the Company, we reviewed the national economic condition at or around the
Valuation Date. The following is a summary of our findings.17

General Economic Conditions

The gross domestic product (GDP), the broadest measure of the U.S. economy, grew at a 5.7% annual rate in the fourth quarter of 2009. This
was the GDP’s fastest pace in more than six years. GDP growth this quarter was much stronger than some analysts had forecasted, as
economists surveyed by Briefing.com had forecasted growth at an annual rate of 4.7%. To many, this quarter’s economic growth provides
yet another sign that an economic recovery is taking hold. Although the GDP report does not mark an official end to the recession, two
straight quarters of economic growth is typically a sign of a recovery. Many economists agree that the recession ended at some point in the
middle of 2009.

Gross Domestic Product

The U.S. Department of Commerce reported that the nation's economy—as indicated by the GDP—increased at an annual rate of 5.7% in the
fourth quarter. The economy grew at a 2.2% annualized rate in the third quarter of 2009. The GDP is the total market value of goods and
services produced in the U.S. economy and is generally considered the most comprehensive measure of economic growth.

The fourth quarter increase in real GDP primarily reflected positive contributions from private inventory investment, exports, and personal
consumption expenditures. Imports, which are a subtraction in the calculation of GDP, increased. Despite this quarter’s growth, the
economy contracted by 2.4% in 2009. The economy grew by 0.4% and 2.1% in 2008 and 2007, respectively. Although the GDP declined
this year, the third and fourth-quarter figures signal that the worst is over to many economists.

The 2009 decrease in real GDP primarily reflected negative contributions from nonresidential fixed investment, exports, private inventory
investment, residential fixed investment, and personal consumption expenditures that were partly offset by positive contributions from
federal government spending.

17 Part of the contents of the economic outlook section of this valuation report are quoted from the Economic Outlook Update 4Q 2009 published by Business Valuation
Resources, LLC, reprinted with permission. The editors and Business Valuation Resources, LLC, while considering the contents to be accurate as of the date of
publication of the Update, take no responsibility for the information contained therein.

Page | 48

Fixed Investments

Business spending, also known as nonresidential fixed investment, grew 2.9% in the fourth quarter. This is the first quarterly growth since
the second quarter of 2008. Business spending decreased 5.9% in the third quarter and 9.6% in the second quarter. Business spending
declined by 17.9% in 2009, after growing 1.6% and 6.2% in 2008 and 2007, respectively.

Business spending on structures (nonresidential structures) decreased 15.4% in the fourth quarter and 18.4% in the previous quarter. This is
the sixth consecutive quarterly decline. Business expenditures on equipment and software increased at an annual rate of 13.3% in the fourth
quarter—the largest increase since the first the first quarter of 2006.

Consumer Prices and Inflation Rates

Inflationary pressures were relatively tame during the fourth quarter of 2009. The Federal Open Market Committee (FOMC) stated in their
most recent release that they expect inflation to “remain subdued for some time.”

According to the U.S. Department of Commerce, the price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 2.1% in the fourth quarter. The price index for gross domestic purchases measures prices paid by U.S. residents. In the third
quarter, the index increased 1.3%. Excluding food and energy prices, the price index for gross domestic purchases increased by 1.2% in the
fourth quarter, compared with an increase of 0.3% in the third quarter.

Consumer spending, also known as personal consumption, continued to rise this quarter. Consumer spending increased 2.0% in the fourth
quarter after growing 2.8% in the third. Consumer spending declined 0.6% in 2009, after dropping 0.2% in 2008 and increasing 2.6% in
2007. Consumer spending on durable goods—items meant to last three or more years—decreased 0.9% in the fourth quarter after growing
20.4% in the third. The large increase in durable goods purchases last quarter largely reflected motor vehicle purchases under the Cash for
Clunkers program. Consumer spending on durable goods declined 4.0% in 2009, after decreasing 4.5% in 2008 and increasing 4.3% in 2007.

Energy Prices

As reported by the Energy Information Administration (EIA), the spot price for a barrel of West Texas Intermediate (WTI) crude oil was
$79.39 at the end of the fourth quarter, an increase from $70.46 per barrel at the end of the third quarter and $69.82 at the end of the second.
The regular retail gas price (conventional areas) was $2.56 per gallon at the end of the fourth quarter, compared with $2.43 per gallon at the
end of the third quarter and $2.59 per gallon at the end of the second. At their current prices, WTI crude oil and retail gas prices are
significantly higher then they were one year ago when the EIA reported that, at the end of the fourth quarter of 2008, the United States spot
price for a barrel of WTI crude oil was $44.60 and the regular retail gas price (conventional areas) was $1.59 per gallon.

Page | 49

Interest Rates

The Federal Open Market Committee (FOMC) met two times during the fourth quarter of 2009, issuing two statements on their target for the
federal funds rate. The federal funds rate is the interest rate at which a commercial bank lends immediately available funds in balances at
the Federal Reserve to another commercial bank.

At their first scheduled meeting this quarter (November 4), the FOMC decided to keep the target for the federal funds rate unchanged at a
range of 0% to 0.25%. The press release stated that the information received by the FOMC since their last meeting suggested that economic
activity continued to pick up, though conditions in financial markets were roughly unchanged. They noted that activity in the housing sector
has increased. Although household spending appeared to be increasing, the FOMC found that it is still constrained by ongoing job losses,
sluggish income growth, lower housing wealth, and tight credit. Although businesses are still cutting back on fixed investment and staffing,
they are doing so at a slower pace. Further, businesses continued to make progress in bringing inventory stocks into better alignment with
sales. The Committee also expected inflation to remain subdued.

Unemployment

The U.S. Department of Labor reported that the unemployment rate continued to climb in the fourth quarter. Unemployment averaged 10.0%
during the fourth quarter, up from 9.7% in the third quarter. The number of unemployed persons averaged 15.406 million in the fourth
quarter, up from an average of 14.895 million last quarter. At the start of the recession in December 2007, the number of unemployed
persons was 7.7 million, and the unemployment rate was 5.0%.

Among the unemployed, the number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up, reaching 6.1
million. In December, 4 in 10 unemployed workers were jobless for 27 weeks or longer.

Stock Markets

Stocks continued to climb this quarter, with the major stock indexes ending the year with double-digit gains. December 31 marked the end of
what has been the worst calendar decade for stocks since the 1820s, when reliable stock-market records began, according to data compiled
by Yale University finance professor William Goetzmann. However, according to The Wall Street Journal, the rally from the stock market's
12-year low in March represents the strongest rebound since 1933. And it wasn't just big stocks that rallied. Encouraged by government
efforts to restart the financial system and stimulate the economy, investors who had fled from all but the very safest investments in 2008
dove back into the most volatile stocks and bonds, racking up big gains along the way, found The Wall Street Journal.

Page | 50

Going into 2010, the economy seems to be showing enough momentum that few investors fear a sudden dip back into recession, although
most still expect a slow recovery. The Wall Street Journal noted that the market continues to benefit from the Federal Reserve's pledge to
keep interest rates low for an "extended period" and the federal government's stimulus dollars that continue to pour into the economy. "We're
probably still only in the early stages of a potentially big economic recovery but I think it's probably not until well into next year [2010] that
investors begin to broadly recognize it," says Thomas Lee, U.S. equity strategist at J.P. Morgan Chase.

Bond Markets

Despite the stock market’s big gains in 2009, The Wall Street Journal reported that many individual investors remained skeptical. Between
March and the end of November, they pulled $13 billion out of U.S. stock mutual funds and poured $239 billion into bond funds, according
to Morningstar Inc. (although some of the money heading into bond funds reflected a shift out of money-market funds yielding essentially
zero).

The five-year Treasury ended the fourth quarter of 2009 with a yield of 2.69%, up from 2.31% at the end of the previous quarter. The 30-
day T-bill rate was at 0.04% at the end of the fourth quarter, down from 0.06% at the end of last quarter.

Economic Outlook

According to Consensus Economics, Inc., publisher of Consensus Forecasts - USA, the real GDP is forecasted to increase at a rate of 3.0% in
the first quarter of 2010, then at a rate of 3.0% in the second quarter of 2010 (percentage change from previous quarter, seasonally adjusted
annual rates). They forecast real GDP to grow 2.9% in 2010, 3.1% in 2011, and 3.3% in 2012 (average percentage change on previous
calendar year). In the long term, they predict real GDP to grow by an average annual rate of 2.6% between 2015 and 2019. Every month,
Consensus Economics surveys a panel of prominent U.S. economic and financial forecasters for their predictions on a range of variables
including future growth, inflation, current account and budget balances, and interest rates.

According to the survey, consumer prices will increase 2.2% in 2010, 1.9% in 2011, and 2.0% in 2012. In the long term, Consensus
Forecasts - USA forecasts consumer prices will grow at an average annual rate of 2.4% between 2015 and 2019. They forecast producer
prices to increase 2.7% in 2010 and 1.8% in 2011. They also expect real disposable personal income to grow 2.0% in 2010 and 2.4% in
2011.

Page | 51

Interest rates on three-month Treasury bills and 10-year Treasury bonds will rise over the next year, according to the forecasters of
Consensus Forecasts - USA. According to the survey, the three-month Treasury bill rate will rise to 0.2% by the end of April 2010, then to
1.0% by the end of January 2011. They forecast the yield on the 10-year Treasury bond will rise to 3.8% at the end of April 2010, then to
4.4% by the end of January 2011. According to the survey, the three-month Treasury rate will average 3.3% between the years 2011-2014,
and 4.2% between the years 2015-2019. The 10-year Treasury bond yield is expected to average 4.9% between the years 2011-2014, and
5.5% between the years 2015-2019.

The 32 participants in The Livingston Survey released their newest predictions in December. The forecasters, who are surveyed by the
Federal Reserve Bank of Philadelphia twice a year, project real GDP to grow at an annual rate of 2.6% between 4Q 2009 and 2Q 2010. They
then expect GDP to increase at an annual rate of 3.0% between 2Q 2010 and 4Q 2010.

The Survey also noted that forecasts for the unemployment rate have been revised upward for 2010 and are expected to remain relatively
high through the end of next year. The forecasters expect the unemployment rate will rise to 10.3% by June 2010, up from their previous
estimate of 9.8%. They expect unemployment to drop slightly to 9.9% by December 2010.

The forecasters in The Livingston Survey have increased their predictions for consumer price (CPI) inflation. They expect CPI inflation to
average 2.2% in 2010, up from the previous estimate of 1.7%. They predict CPI inflation will be 1.8% in 2011. Inflation (as measured by
the consumer price index) is predicted to average 2.4% over the next 10 years, slightly lower than the forecast of 2.5% reported in the prior
16 surveys, and thus representing the first change in expected inflation since the survey of December 2001. The Survey estimates producer
price (PPI) inflation will average 2.4% in 2010—up from the previous estimate of 1.3%—before averaging 2.2% in 2011.

The forecasters from the Survey have increased their previous projections for future S&P 500 values. They expect the S&P to rise to 1,155
by June 30, 2010 before climbing to 1,197 by December 31, 2010. They believe the S&P will end 2011 at 1,250.

Page | 52

Internet Protocol Television

Internet Protocol television (IPTV) is a system through which internet television services are delivered using the architecture and
networking methods of the Internet Protocol Suite over a packet-switched network infrastructure, e.g., the Internet and broadband
Internet access networks, instead of being delivered through traditional radio frequency broadcast, satellite signal, and cable television
(CATV) formats.

IPTV services may be classified into three main groups: live television, time-shifted programming, and video on demand. It is
distinguished from general Internet-based or web-based multimedia services by its on-going standardization process (e.g., European
Telecommunications Standards Institute) and preferential deployment scenarios in subscriber-based telecommunications networks with
high-speed access channels into end-user premises via set-top boxes or other customer-premises equipment. 18

The “IPTV” phrase was coined in 1995 by the founders of Precept, who designed and built the first internet protocol video product.
Although IPTV was a major technological achievement its progress was held back by the lack of widespread consumer access to high
speed broadband. Now that Broadband is more prevalent, IPTV is gaining traction and the future prospects for the technology are
extremely promising.

According to research from Informa Telecoms & Media, the global IPTV market reached 29.7 million subscribers at the end of 2009,
which is up from 19.4 million at the end of 2008. However, widespread adoption of the technology is still slow, and is highly
concentrated in France, the United States, China, and South Korea.

IPTV has only 5% of the multichannel television market and less than 2% penetration of the world’s households. IPTV has gained
market share in markets where one or more competing forms of multichannel television are absent or weak such as Iceland, Qatar
Cyprus, Slovenia, Croatia, Estonia, Montenegro, and Greece. 19

Although IPTV is only a small portion of the multichannel television market, it is clear that this is a high growth area. There are a
number of reasons that consumers are choosing IPTV services over traditional offerings such as cable and satellite. Consumers are
interested in less expensive service offerings, bundled services, new offerings, etc. These are broken down in the table below:

18 www.wikipedia.com

19 IPTV Gaining Traction Slowly But Surely, James Middleton, March 23, 2010 www.telecoms.com

Page | 54

is obtaining the on-demand rights for the content. The extent to which the content is monetized (advertising, subscription, sponsorship,
etc.) will impact the degree to which content owners are willing to release content.20

An IPTV Global Forecast published by the Multimedia Research Group in May, 2009 indicated that the number of global IPTV
subscribers will grow from 26.7 million in 2009 to 81 million in 2013, which equates to a compound annual growth rate of 32%. The
forecast continues to say that the size of the global IPTV market is $6.7 billion in terms of service revenue, which will grow to $19.9
billion by 2013, equating to a compound annual growth rate of 31%.

Another forecast of the IPTV market, is the Cisco Visual Networking Index Forecast 2008-2013. This is a broader forecast that takes
into account various types of internet activity, but includes discrete projections for the IPTV market. The following bullet points
indicate some highlights from the Cisco forecast:

• The sum of all forms of video (TV, video on demand, Internet, and P2P) will account for over 91 percent of global consumer
traffic by 2013.

• Internet video alone will account for over 60 percent of all consumer Internet traffic in 2013.

• In 2013, Internet video will be nearly 700 times the U.S. Internet backbone in 2000. It would take well over half a million years
to watch all the online video that will cross the network each month in 2013. Internet video will generate over 18 exabytes per
month in 2013.

• Video communications traffic growth is accelerating. Though still a small fraction of overall Internet traffic, video over instant
messaging and video calling are experiencing high growth. Video communications traffic will increase tenfold from 2008 to
2013.

• Real-time video is growing in importance. By 2013, Internet TV will be over 4 percent of consumer Internet traffic, and ambient
video will be 8 percent of consumer Internet traffic. Live TV has gained substantial ground in the past few years: globally, P2P
TV is now slightly over 7 percent of overall P2P traffic at over 200 petabytes per month.

• Video-on-demand (VoD) traffic will double every two years through 2013. Consumer IPTV and CATV traffic will grow at a 53
percent CAGR between 2008 and 2013, compared to a CAGR of 40 percent for consumer Internet traffic.

20 IPTV and the Digital Home, 2009 Parks & Associates

Page | 57

Global Mobile Highlights

• Globally, mobile data traffic will double every year through 2013, increasing 66x between 2008 and 2013. Mobile data traffic
will grow at a CAGR of 131 percent between 2008 and 2013, reaching over 2 exabytes per month by 2013.

• Almost 64 percent of the world's mobile data traffic will be video by 2013. Mobile video will grow at a CAGR of 150 percent

between 2008 and 2013.

• Mobile broadband handsets with higher than 3G speeds and laptop aircards will drive over 80 percent of global mobile traffic by
2013. A single high-end phone (such as an iPhone or Blackberry) generates more data traffic than 30 basic-feature cell phones.
A laptop aircard generates more data traffic than 450 basic-feature cell phones.

Page | 58

The following table shows a breakdown of consumer internet traffic by segment and geography, forecasted out to 2013. It is clear that
Internet Video to PC and Internet Video to TV are the two highest growth areas:

Consumer Internet Traffic, 2008-2013

2008

2009

2010

2011

2012

2013

CAGR 2008-2013

By Sub-Segment (PB per month)

Web/Email

1,239

1,595

2,040

2,610

3,377

3,965

26%

File Sharing

3,345

4,083

5,022

6,248

7,722

9,629

24%

Internet Gaming

135

166

217

239

39%

Internet Voice

103

129

152

174

183

190

13%

Internet Video Communications*

160

239

354

58%

Internet Video to PC*

1,112

2,431

4,268

6,906

9,630

12,442

62%

Internet Video to TV*

149

381

1,004

1,711

2,594

146%

Ambient Video

110

224

634

1,332

2,089

2,715

90%

By Geography (PB per month)

North America

1,279

1,881

2,807

4,357

5,839

7,213

41%

Western Europe

1,622

2,177

2,989

4,333

5,841

7,450

36%

Asia Pacific

2,487

3,707

5,382

7,570

10,306

13,311

40%

Japan

268

421

614

905

1,172

1,415

39%

Latin America

165

270

437

655

921

1,243

50%

Central Eastern Europe

163

242

397

619

843

1,153

48%

Middle East and Africa

100

162

246

343

56%

Total (PB per month)

Consumer Internet traffic

6,020

8,755

12,726

18,601

25,168

32,129

40%

Source: Cisco VNI, 2009

*Video Communications: includes PC-based video calling, webcam viewing, and web-based video monitoring *Internet Video
to PC: free or pay TV or VoD viewed on a PC, excludes P2P video file downloads *Internet Video to TV: free or pay TV or
VoD delivered via Internet but viewed on a TV screen using a STB or media gateway

Page | 59

The following table breaks down the consumer internet video to personal computer (in terms of petabytes), forecasted from 2008
through 2013.

"Internet Video to PC" refers to online video that is downloaded or “streamed” for viewing on a PC screen. It excludes peer-to-peer
downloads, and is distinct from Internet-delivery of video to a TV screen through a set-top box (STB) or equivalent device. Much of
the video viewed on PC is short-form content, and a large part of it is made up of free clips, episodes, and other content offered by
traditional content producers such as movie studios and television networks.

Consumer Internet Video to PC, 2008-2013

2008

2009

2010

2011

2012

2013

CAGR 2008-2013

By Geography (PB per month)

North America

246

579

1,063

1,830

2,345

2,744

62%

Western Europe

183

396

715

1,276

1,960

2,840

73%

Asia Pacific

608

1,263

2,095

3,126

4,382

5,585

56%

Japan

120

189

251

306

68%

Latin America

151

242

348

468

68%

Central Eastern Europe

189

259

374

90%

Middle East and Africa

124

101%

Total (PB per month)

Consumer Internet video to PC

1,112

2,431

4,268

6,906

9,630

12,442

62%

Source: Cisco VNI, 2009

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The following table breaks down the consumer internet video to television (in terms of petabytes), forecasted from 2008 through 2013.

"Internet Video to TV" includes video delivered via Internet to a TV screen, by way of an Internet-enabled set-top box or equivalent
device. Examples of devices now available include Microsoft's Xbox 360 and the Roku digital video player, through which users can
download film and television content.

Consumer Internet Video to TV, 2008-2013

2008

2009

2010

2011

2012

2013

CAGR 2008-2013

By Geography (PB per month)

North America

146

444

789

1,233

234%

Western Europe

217

371

553

124%

Asia Pacific

101

200

327

134%

Japan

183

252

330

106%

Latin America

232%

Central Eastern Europe

111

120%

Middle East and Africa

180%

Total (PB per month)

Consumer video to TV

149

381

1,004

1,711

2,594

146%

Source: Cisco VNI, 2009

According to the IPTV industry forecasts illustrated above, the IPTV market is poised for tremendous growth. Now that consumer
access to broadband is prevalent, acceptance of IPTV as a media source will continue to increase. NeuLion’s strategy is to leverage its
partnerships with high profile organizations such as the NFL, NHL, and NCAA to continue as a major player in the sports market.
Also, the Company should be able to continue its growth through its competitive advantage of providing end-to end service.

Page | 61

Valuation Methods

The approaches considered to develop a value for the Company in this engagement were:

■

The Asset Approach

o The asset approach, sometimes referred to as the “cost” approach, is a general way of determining a value indication of a
business, business ownership interest, or security using one or more methods based on the value of the assets net
liabilities. Each asset and liability of the business is valued separately and then summed up to produce the total value
of the business. This method is most commonly used for investment or holding companies that do not have ongoing
operations of their own. It may also be used for operating businesses that are not profitable or only marginally
profitable. Generally, this method is not the most appropriate method for valuing a profitable, operating business.

■

The Market Approach

o The market approach is a general way of determining a value indication of a business, business ownership interest,
security, or intangible asset by using one or more methods that compare the subject to similar businesses, business
ownership interests, securities, or intangible assets that have been sold. This approach, however, can be difficult to
utilize for small, closely held businesses because guideline and other market directed indicators are scarce and reliable
information can be difficult to obtain. Nonetheless, this approach can and should be used to a limited degree for private
businesses, when sufficient relevant market data exists.

■

The Income Approach

o The income approach is a general way of determining a value indication of a business, business ownership interest,
security, or intangible asset by using one or more methods to convert anticipated economic benefits into a present single
amount. This approach assumes that the investor could invest in a property with similar investment
characteristics, although not necessarily the same business. The computations under this approach generally determine
that the value of the business is equal to the expected future income or cash flows divided by a required rate of return
(which is based upon the relative risk of the investment).

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As indicated previously in this report, the three approaches of valuation considered are (1) the asset approach, (2) the income
approach, and (3) the market approach. We also investigated whether there were any other published industry methods for valuing this
type of business. The narrative that follows discusses our consideration of each approach and the method ultimately used to value the
Company.

As described above, the asset approach arrives at value by determining the fair market value of each individual asset and liability of
the Company and then accumulating the total value of the net assets.

An asset-based approach is most appropriate when valuing an investment or real estate holding company, or a business appraised on a
basis other than as a going concern. It is not normally used to value a profitable operating company because it does not consider the
ongoing earnings capacity of the Company. Accordingly, we did not use the asset approach to value NeuLion.

The market approach is an objective way to establish the fair market value of a business, when sufficient comparable market activity
can be identified and relevant financial information about the transactions can be obtained. When using the market approach, the
valuator identifies actual market transactions (referred to as “guidelines” or “comparables”), derives ratios from those transactions, and
then applies the ratios to the subject company to derive its fair market value. One method used under the market approach utilizes
valuation multiples based on information derived from minority shares of publicly traded guideline companies, while a second method
utilizes recent transactions involving the sale of companies similar in nature to the subject company. Both of these methods were
utilized in our analysis of NeuLion.

The following section of the report begins with a discussion of the Income Approach, which is followed by the guideline public
company method and transaction method under the market approach.

Income Approach

Discounted Cash Flow Method

A discussion of the Company’s projected financial performance, as presented in Schedule 11, was presented in a previous section of
this report. Additional adjustments were made to adjust NeuLion’s projected EBITDA to net cash flow, which represents the cash
available to debt and equity holders of the Company as detailed on Schedule 14.

Our analysis begins with pre-tax income, from which no income tax was deducted due to the Company’s NOL carryforward of $93
million that has accumulated since the Company’s inception. The Company has the option to apply its $93,170,139 NOL carryforward
against future income until it has been exhausted or upon expiration. The NOL carryforward does not begin to expire until 2026 ($198

Page | 64

thousand income tax allowance will expire in 2010, because the Company is not expected to generate a profit).21

Depreciation is added back based on the depreciation of its fixed assets, in addition to expected depreciation from future capital
expenditures. Amortization based on the current amount of intangible assets (trademarks and customer relationships) was also added
back according to estimates in the Company’s audited financial statements.

Next, Management’s estimate of capital expenditures was deducted from cash flow, representing additional assets that will be needed
to grow operations and replace fixed assets currently in use. The 2010 estimate was based on Management’s specific estimates, and
subsequent periods were estimated based on a percentage of revenue. It should be noted that the Company’s capital expenditures are
expected to be relatively low.

Finally, additions to the Company’s net working capital position were subtracted to estimate the additional working capital necessary
to fund the Company’s operations. *******. After this adjustment, the resulting projected cash flow represents the cash flow available

to debt and equity holders of the Company, which must be discounted back to present value based on the Company’s weighted average

cost of capital, which is discussed below.

We have calculated a discount rate using the build-up method. The components of the discount rate include a risk-free rate, an equity
risk premium, a small size premium, an industry premium, and a company specific risk premium.

The risk-free rate is the return that an investor would require, at a bare minimum, to invest in an extremely safe investment. In this
particular instance, the yield for 20-year Constant Maturity U.S. Treasury Bonds is used as an indication of the risk-free rate. This rate
as of March 31, 2009 is 4.55%. Added to the risk-free rate is an equity risk premium, which represents the premium that common
stockholders required in the public market place over investors in long-term government bonds. The appropriate equity risk premium
has been determined based on several different sources of data. One source, an ongoing study published by Morningstar known as
Ibbotson SBBI 2009 Valuation Yearbook (“SBBI”), indicates that the market expected equity risk premium of common stock returns
over long-term government bond returns for the period 1926 through 2008 is 5.73%, which is the supply-side equity risk premium. The
SBBI analyses make extensive use of the rate of return databases compiled by the Center for Research in Security Prices at the
University of Chicago, Booth School of Business.

Next, a small size premium of 5.81% was added for the risks associated with small companies that fall within the 10th decile of all
common stocks ranked by market capitalization. Additionally, a negative risk adjustment of (0.19%) was subtracted based on the

21 Valuation of the NOL benefit assumes there is no change of control.

Page | 65

industry premium for SIC 84, representing companies in the Cable and Other Pay Television Services as published by the SBBI 2009
Yearbook. The total of the equity risk premium, size premium, and negative industry premium is 11.35%.

The final component encompasses the subject company’s specific risk factors that have not already been captured in the previous
equity risk premiums. This risk premium takes into consideration the detailed analysis performed by the valuation analyst, including
factors such as the company’s management structure, the ability of the company to raise capital, and other unique risks relating to the
subject company. Based on our understanding of NeuLion, we estimate these specific risks to require an additional 4.00% return. This
specific company risk premium was based on consideration of the following factors:

• Competition: NeuLion’s competitive advantage is the end-to-end suite of services that it is able to offer its partners. However, the
Company does have significant competition in the industry, and it is likely that more players will enter the market due to
substantial growth forecasts for IPTV. This is seen as an additional risk factor in our analysis of company specific risk.

• Financial Strength: The Company’s has a reasonably healthy balance sheet as of the Valuation Date, but the working capital
position is a point of concern because the Company has burned a significant amount of cash in its development stages. The
Company will need to generate positive cash flow going forward in order to have sufficient working capital to support
operations. This is viewed as an additional risk factor in our analysis.

• Management Depth: The Company has put together a savvy management team that has a strong track record in the industry. As
previously mentioned, the Company is looking to add seasoned professionals to drive revenue growth, but NeuLion has
excellent leadership. This is seen as a neutral risk factor in our analysis.

• Profitability & Stability of Earnings: This is a significant risk factor because the Company has not yet generated positive cash flow
in its short operating history. Although the Company is forecasting positive cash flow in 2011, this factor is seen as an
additional risk factor in our analysis.

• Economic Factors: The global economic downturn had a negative impact on nearly every industry; however NeuLion was able to
increase its revenue each year from 2007 through 2009. Given the cautiously optimistic economic outlook, the economic
environment is viewed as a neutral risk factor in our analysis.

The sum of the components discussed above result in an after-tax cost of equity of 19.90%.

We estimated the Company’s cost of debt to be 5.36%, based on the Company’s estimated cost of borrowing and application of the
Company’s estimated income tax rate of 33%, which is the combined basic Canadian Federal and Provincial Statutory Tax Rate.

We then derived a weighted average cost of capital for the Company of 18.0% using these rates and a capital structure consisting of
10% debt to total capital.

Page | 66

The weighted average cost of capital derived above, is appropriate to use as a discount rate for converting projected future cash flows
to a present value. *******, with an additional terminal period which incorporates *******. Since the valuation date is March 31, 2010,

the negative cash flow projected to be realized during the first quarter of 2010 was added back, so that the projected period for 2010 runs

from April 1 to December 31. *******.

Additionally, we performed an analysis of the exit multiple that the Company would be able to achieve at the end of the discrete
forecast period based. Terminal year EBITDA was determined for low, middle, and high scenarios using a long term growth rate of
*******. The terminal year EBITDA figures were then multiplied by EBITDA exit multiples of 6x, 8x, and 10x EBITDA. The resulting
terminal values under each scenario were then discounted to present value.

After the addition of the Company’s equity interest in KyLinTV, and the present value of its Net Operating Loss carryforward, the
******* yielded a total value of invested capital under the low, middle, and high scenarios of *******, *******, and *******,

respectively. Since the Company has no interest bearing debt on its balance sheet, this is also the value of equity. This information is

summarized in the table below:

Terminal Value Range - EBITDA Multiples

Source / Comments

Derivation of Terminal Value

Low

Mid

High

Terminal Year EBITDA

*******

Terminal Year Exit Multiple

TERMINAL VALUE

Derivation of Value

Sum of Present Values of Cash Flow During Projection Period

Present Value of Terminal Value

Present Value of NOL

See Schedule 16.

Value of Equity Interest in KyLinTV

See Schedule 15.

Value of Total Invested Capital

- Interest Bearing Debt

VALUE OF EQUITY CAPITAL

VALUATION INDICATION:

Rounded to Nearest:

DISCOUNTED FUTURE CASH FLOW VALUATION

$5,000

Page | 67

Public Guideline Company Method

Under this method, the valuator attempts to locate publicly traded companies that are similar to the subject company in order to make a
comparison of value. To apply this method, we first asked Management if they were aware of any public companies that were either
competitors or otherwise similar to NeuLion. Management indicated that there were no true comparables. However, Management
used KIT Digital as a public guideline company for their annual impairment testing for financial reporting purposes. A description of
KIT Digital is contained in the Description of Guideline Public Companies section of this report.

We also conducted a computerized database search for publicly traded companies that might be considered comparable to the
Company. We conducted our computerized search looking for guideline companies using the Capital IQ database, based on the
following screening criteria:

• Company Type: Public

• Industry Classification: Telecommunications and/or Internet Protocol Television (IPTV)

Based on the above search criteria and screening of companies, we found a number of potential guideline companies that we presented
to Management. Ultimately, we determined that the following companies were most comparable to NeuLion:

Guideline Company

Ticker

Logo

Kit Digital, Inc.

KITD

Espial Group, Inc.

TSX:ESP

BigBand Networks, Inc.

BBND

SeaChange International Inc.

SEAC

DivX, Inc.

DIVX

Real Networks Inc.

RNWK

Akamai Technologies Inc.

AKAM

Page | 68

It is important to note that NeuLion has not generated positive net income; earnings before interest and taxes (“EBIT”); or earnings
before interest, taxes, depreciation, and amortization (“EBITDA”) in 2009, or any other year since its inception. Further, revenues
based off of book value and asset values are not meaningful indications of value in the technology sector. As a result, the only useful
guideline public company multiple is the invested capital to revenue multiple.

To determine the high end of the range of value for the guideline public company approach, we analyzed Akamai Technologies, Inc.
which reported an invested capital to revenue multiple of approximately 6.4. Based on our analysis of Akamai, we determined that it
was much larger and more profitable than NeuLion, so we made an adjustment to lower the invested capital to revenue multiple from
approximately 6.4 to 4.5. This also ended up being in the same range as the multiple for KIT Digital at 4.41. This adjusted invested
capital to revenue multiple was applied to NeuLion’s fiscal year end revenues of $28 million, resulting in a value of invested capital of
$126,421,547. The Company has no interest bearing debt as of March 31, 2009, so the resulting value of invested capital is equal to the
value of equity.

To determine the low end of the range of value for the guideline public company approach, we analyzed the average of all guideline
public companies’ invested capital to revenue multiples. In our analysis, we used the adjusted multiple of 4.5 for Akamai to calculate
this average invested capital to revenue multiple, which was determined to be 2.49. This was applied to NeuLion’s calendar year end
revenues of $28 million, resulting in a value of invested capital of $69,953,256. The Company has no interest bearing debt as of March
31, 2009, so the resulting value of invested capital is equal to the value of equity.

Next, a control premium was added to the value of operating equity to reflect the premium paid for a controlling ownership interest. To
determine this premium we used data from Mergerstat and their Broadcasting and Communications industry groups. Finally, the value
of NeuLions’s equity interest in KyLin TV was added to arrive at the adjusted value of equity of $92,025,000 for the low end of the
range, and $159,785,000 for the high end of the range. These calculations are shown in detail on the following page.

Page | 69

Invested Capital to Revenue

Derivation of Market Multiples

Low

High

Notes / Comments

Market Multiples

2.760

6.430

See Schedule 25.

- Adjustment

(0.270)

(1.929)

Market Multiples

2.49

4.50

Invested Capital to Revenue

Derivation of Value

Low

High

Adjusted Financial Measures

28,093,677

NeuLion 2009 Revenue.

x Market Multiple

2.49

4.50

See above.

Capitalized Value: Total Invested Capital

69,953,256

126,421,547

- Interest Bearing Debt

NeuLion has no interest bearing debt.

Value of Equity Capital

69,953,256

126,421,547

Rounded to Nearest:

Control Premium

20%

13,990,651

25,284,309

$1,000

VALUE OF EQUITY CAPITAL

83,943,907

151,705,856

+ Value of Equity Interest in KyLin TV

8,080,000

See Schedule 15.

Adjusted Value of Equity Capital

92,023,907

159,785,856

INDICATION OF VALUE:

Rounded to Nearest:

5,000

GUIDELINE COMPANY VALUATION

92,025,000

159,785,000

Page | 70

Merged and Acquired Company Method

The merged and acquired company method uses information derived from transactions involving the purchase or sale of similar
businesses. The type and quality of information relating to market transactions is not comprehensive. Private databases, as well as
other industry sources were researched. Information regarding selected transactions is then assembled, analyzed, and multiples are
determined using this data. Transaction announcements do not always provide sufficient information to be used in a valuation analysis.
Typically, a revenue or earnings multiple may be all that is available. These multiples are then applied to the corresponding data for the
Company to determine a market value.

We conducted a computerized database search of several databases for guideline transactions based on the following screening criteria:

• Transaction Type: Merger or Acquisition

• Industry Classification: Telecommunications and/or Internet Protocol Television (IPTV)

Based on the above search criteria and screening of companies, we found a number of potential transactions. However, due to the lack
of information and differences in scope of operations, the list of transactions was reduced to the following:

1. Permira Advisers Ltd. and News Corp. (NYSE: NWS.A) made an offer to acquire 28% of the series A common stock of NDS
Group plc (NASDAQGS: NNDS) for $1.026.4 billion in cash on June 27, 2008. A description of the target and the valuation
fundamentals are below.

a. NDS Group Ltd. develops and provides open end-to-end digital technology and services to digital pay-television
platform operators and content providers. It offers VideoGuard, a conditional access and digital rights management
technology that provides security solutions in PCs, mobile handsets, removable media, and portable media players; PC
Show, a solution that enables pay-TV and telecom operators to offer video entertainment services on PCs; VideoGuard
Express, a solution designed for entry-level satellite or cable operators; and RadioGuard, an in-band on-channel solution
that enables digital multicast and multi-channel broadcasting for HD radio. It also provides MediaHighway, a
middleware for set top boxes (STBs) and digital video recorders (DVRs) that enables a host of services for subscribers;
XTV, a DVR technology; electronic program guides(EPGs); advertising solutions that improve audience
measurement, addressability, and interactivity in zapping and fragmentation; home networking solutions; and Unified
Headend that enables operators to centrally control content delivery to multiple platforms over multiple networks. In
addition, it offers iTV interactive infrastructure and tools that enable customers to create revenue-generating interactive
TV applications, such as voting, shopping, and TV games. Further, it provides STB specification, verification, and

Page | 71

integration; systems integration and vendor management; interactive TV consulting; EPG design; and DVB service
information management services. It offers solutions for satellite, cable, IPTV, terrestrial, and mobile networks, as well
as hybrid systems, which combine broadcast and IP.

Implied Market Value of Invested Capital (“MVIC”)

3,665.85

($USDmm, Historical rate):

Implied Equity Value ($USDmm, Historical rate):

3,665.85

Implied MVIC/Revenues:

4.31

Implied MVIC/EBITDA:

17.1

Implied Equity Value/LTM Net Income:

22.90

Implied Equity Value/Book Value:

3.94

2. Amino Technologies Plc (AIM: AMO) acquired 100% of AssetHouse Technology Ltd. for £1.4 million (US$2.74 million) on a
debt-free basis, payable in cash on June 10, 2008. A description of the target and the valuation fundamentals are below.

a. AssetHouse Technology Limited designs, develops, and delivers digital proposition management solutions for on-
demand entertainment providers. It offers AssetFactory platform, an on-demand proposition management software
application that handles digital product life cycle from content acquisition, contract management, proposition
development, and promotion to delivery to the end customer. The company serves network operators, content
producers, Web TV firms, IPTV service providers, and broadcasters.

Implied MVIC ($USDmm, Historical rate):

2.74

Implied Equity Value ($USDmm, Historical rate):

2.74

Implied MVIC/Revenues:

3.50

3. Tsinghua Tongfang Co. Ltd. (SHSE: 600100) agreed to acquire a 22.82% stake in BesTV from Shanghai Tongwei Investment
Company for CNY 100 million (US$ 14.0 million) on February 27, 2008. A description of the target and the valuation
fundamentals are below.

Page | 72

a. BesTV Network Television Technology Development Co., Ltd., a media company, engages in the IPTV business in
China. The company was founded in 2005 and is based in China.

Implied MVIC ($USDmm, Historical rate):

61.34

Implied Equity Value ($USDmm, Historical rate):

61.34

Implied Enterprise Value/Revenues:

6.80

NeuLion has not generated positive net income; earnings before interest and taxes (“EBIT”); or earnings before interest, taxes,
depreciation, and amortization (“EBITDA”) in 2009, or any other year since its inception. Further, multiples of revenue were the only
multiples available for four of the five transactions. As a result, the only useful transaction multiple is the price to revenue multiple of
the transactions.

Based on our analysis of these three transactions, we developed a range of total invested capital to revenue multiples of 4.3 to 6.8.
When these figures are applied to NeuLion’s fiscal year end revenue of $28 million, the resulting values of invested capital are
$128,885,000 and $199,115,000. Because the Company has no interest bearing debt as of the Valuation Date, these values also
represent the value of operating equity. Finally, the value of the Company’s equity interest in KyLin TV was added to arrive at the
total value of equity, which was rounded to $128,885,000 for the low, and $199,115,000 for the high end of the range as shown in the
chart below.

Description

Invested Capital to Revenue

Notes / Comments

Low

High

Adjusted Financial Measure

28,093,677

NeuLion 2009 Revenue.

x Market Multiple

4.3

6.8

See Schedule 27.

Capitalized Value: Total Invested Capital

120,802,811

191,037,004

- Interest Bearing Debt

NeuLion has no interest bearing debt.

Value of Equity Capital

120,802,811

191,037,004

+ Value of Equity Interest in KyLin TV

8,080,000

See Schedule 15.

Adjusted Value of Equity Capital

128,882,811

199,117,004

INDICATION OF VALUE:

Rounded to Nearest:

MERGER AND ACQUISITION VALUATION

128,885,000

199,115,000

$5,000

Page | 73

CONCLUSION OF RANGE OF VALUE

As of the Valuation Date of March 31, 2010, the fair market value of the total invested capital of the NeuLion (the “Business Value”) is estimated
to be in the range of:

$104,900,000 to $157,100,000

This value is subject to the terms, conditions, analysis, limitations, and assumptions contained in this report. A summary of the range of Business
Value is shown in the chart and table below:

Range of Fair MarketValue of NeuLion, Inc as of March 31, 2010

Conclusion of Value

$104,900,00

$157,100,000

Market Transactions

Guideline Public Company

Discounted Cash Flow

$50,000

$90,000

$130,000

$170,000

$210,000

Range ($000's)

Indicated Values by Method

Low

High

Weight

Low

High

Income Approach: Discounted Future Cash Flow Valuation Method (See Schedule 14)

105,035,000

154,325,000

85.00%

89,279,750

131,176,250

Market Approach: Guideline Company Valuation Method (See Schedule 26)

92,025,000

159,785,000

10.00%

9,202,500

15,978,500

Market Approach: Merger and Acquisition Valuation Method (See Schedule 28)

128,885,000

199,115,000

5.00%

6,444,250

9,955,750

Weighted Range of Value

104,926,500

157,110,500

Rounded:

104,900,000

157,100,000

If this communication contains statements concerning taxation, those statements are provided for information purposes only and are
not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes
or regulation, nor do they resolve any tax issue in your favor. Upon request, we can provide you with express written tax advice after
necessary factual development and subject to such conditions and qualifications as we may deem appropriate in the circumstances.

Page | 74

VALUATION OF NEULION INC. (C CORPORATION) AS OF
MARCH 31, 2010

SCHEDULE

Reported Balance Sheets

As of December 31,

Line

Description

2009

2008

2007

ASSETS

Cash & Equivalents

12,957,679

27,323,021

608,464

Short Term Investments

Accounts Receivable

1,809,147

2,284,242

2,017,137

Tax Receivable

35,334

983,253

Other Receivable, Net

821,834

227,711

Inventories

928,592

347,600

323,500

Prepaid Expenses & Deposits

966,101

1,830,260

525,637

Due From Related Parties

246,992

324,059

188,855

Total Current Assets

17,765,679

33,320,146

3,663,593

Fixed Assets, Net (1)

5,754,255

6,474,989

2,281,667

Intangible Assets:

Customer Relationships

9,462,904

5,668,916

Trademarks

79,167

80,416

Goodwill

6,757,194

6,846,183

Other Assets

449,964

1,347,032

260,305

Investment in Affiliate

1,006,386

Deferred Direct Broadcast Operating Costs

TOTAL ASSETS

40,269,163

53,737,682

7,211,951

LIABILITIES

Accounts Payable

5,383,518

4,465,388

67,295

Accrued Expenses & Other Current Liabilities

5,822,385

7,595,116

830,371

Derivative Liability

1,389,300

Due to Related Parties

298,595

56,826

2,093,907

Deferred Revenue

3,907,510

3,091,993

429,246

Total Current Liabilities

16,801,308

15,209,323

3,420,819

Long-Term Deferred Revenue

469,191

638,510

544,199

Other Liabilities

728,330

876,271

Total Liabilities

17,998,829

16,724,104

3,965,018

SHAREHOLDERS' EQUITY

Common Stock

11,260,415

6,762,097

68,871

Paid-In Capital

55,023,567

56,500,258

17,580,329

Promissory Note Receivable

(209,250)

Accumulated Deficit

(43,804,398)

(26,039,527)

(14,402,267)

Total Equity

22,270,334

37,013,578

3,246,933

TOTAL LIABILITIES & EQUITY

40,269,163

53,737,682

7,211,951

Notes:

1. The 2008 financial statements include Jump TV after the date of the merger in October,
2008. (#) - See Schedule 2 for detail of indicated amounts.

Historical financial information derived from audited financial statements. UHY Advisors FLVS, Inc. has not audited, reviewed, or compiled the financial statement
information presented above and, accordingly, we do not express an opinion or any form of assurance on the information.

VALUATION OF NEULION INC. (C CORPORATION) AS OF
MARCH 31, 2010

SCHEDULE

Reported Common Size Balance Sheets

As of December 31,

Line

Description

2009

2008

2007

ASSETS

Cash & Equivalents

32.18%

50.85%

8.44%

Short Term Investments

Accounts Receivable

4.49%

4.25%

27.97%

Tax Receivable

0.09%

1.83%

Other Receivable, Net

2.04%

0.42%

Inventories

2.31%

0.65%

4.49%

Prepaid Expenses & Deposits

2.40%

3.41%

7.29%

Due From Related Parties

0.61%

0.60%

2.62%

Total Current Assets

44.12%

62.01%

50.81%

Fixed Assets, Net

14.29%

12.05%

31.64%

Intangible Assets:

Customer Relationships

23.50%

10.55%

Trademarks

0.20%

0.15%

Goodwill

16.78%

12.74%

Other Assets

1.12%

2.51%

3.61%

Investment in Affiliate

13.95%

Deferred Direct Broadcast Operating Costs

TOTAL ASSETS

100.00%

LIABILITIES

Accounts Payable

13.37%

8.31%

0.93%

Accrued Expenses & Other Current Liabilities

14.46%

14.13%

11.51%

Derivative Liability

3.45%

Due to Related Parties

0.74%

0.11%

29.03%

Deferred Revenue

9.70%

5.75%

5.95%

Total Current Liabilities

41.72%

28.30%

47.42%

Long-Term Deferred Revenue

1.17%

1.19%

7.55%

Other Liabilities

1.81%

1.63%

Total Liabilities

44.70%

31.12%

54.97%

SHAREHOLDERS' EQUITY

Common Stock

27.96%

12.58%

0.95%

Paid-In Capital

136.64%

105.14%

243.77%

Promissory Note Receivable

(0.52%)

(0.39%)

Accumulated Deficit

(108.78%)

(48.46%)

(199.70%)

Total Equity

55.30%

68.87%

45.02%

TOTAL LIABILITIES & EQUITY

100.00%

Sub-totals and totals may not foot due to rounding.

100.00%

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Reported Income Statements

Annualized

For the Years Ended December 31,

Growth Rates

Line

Description

2009

2008

2007

2008-2009

2007-2009

REVENUE

Service Revenue

26,464,400

9,542,689

1,284,142

177.33%

353.97%

Equipment Revenue

1,629,277

3,900,650

6,526,569

(58.23%)

(50.04%)

Total Revenues

28,093,677

13,443,339

7,810,711

108.98%

89.65%

COST OF REVENUE

Service Revenue

12,850,002

4,519,062

325,097

184.35%

71.01%

Equipment Revenue

1,537,150

3,120,087

5,179,157

(50.73%)

(45.52%)

Total Cost of Revenue

14,387,152

7,639,149

5,504,254

88.33%

61.67%

GROSS PROFIT / (LOSS)

13,706,525

5,804,190

2,306,457

136.15%

143.78%

COSTS AND EXPENSES

Selling, General and Administrative

28,767,049

14,221,347

4,210,357

102.28%

161.39%

Amortization

4,141,117

1,572,492

561,077

163.35%

171.67%

Impairment of Long-Lived Assets

1,036,993

(100.00%)

n/m

Total Operating Expenses

32,908,166

16,830,832

4,771,434

95.52%

162.62%

OPERATING LOSS

(19,201,641)

(11,026,642)

(2,464,977)

74.14%

179.10%

Other Income / (Expense)

Unrealized Loss on Derivate

(801,350)

n/m

Gain on Foreign Exchange

68,245

265,720

(74.32%)

n/m

Investment Income

293,825

130,048

33,161

125.94%

197.67%

Equity in Loss of Affiliate

(1,006,386)

(2,083,943)

(100.00%)

Total Other Income / (Expense)

(439,280)

(610,618)

(2,050,782)

(28.06%)

(53.72%)

NET LOSS

(19,640,921)

(11,637,260)

(4,515,759)

68.78%

108.55%

Notes:

1. The 2008 financial statements include the operations of Jump TV after the date of the merger in October, 2008.

Historical financial information provided to us by management and derived from audited financial statements. UHY Advisors FLVS, Inc. has not audited, reviewed, or compiled the
financial statement information presented above and, accordingly, we do not express an opinion or any form of assurance on the information.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Reported Common Size Income Statements

For the Years Ended December 31,

Line

Description

2009

2008

2007

REVENUE

Service Revenue

94.20%

70.98%

16.44%

Equipment Revenue

5.80%

29.02%

83.56%

Total Revenues

100.00%

COST OF REVENUE

Service Revenue

45.74%

33.62%

4.16%

Equipment Revenue

5.47%

23.21%

66.31%

Total Cost of Revenue

51.21%

56.82%

70.47%

GROSS PROFIT / (LOSS)

48.79%

43.18%

29.53%

COSTS AND EXPENSES

Selling, General and Administrative

102.40%

105.79%

53.90%

Amortization

14.74%

11.70%

7.18%

Impairment of Long-Lived Assets

7.71%

Total Operating Expenses

117.14%

125.20%

61.09%

OPERATING LOSS

(68.35%)

(82.02%)

(31.56%)

Other Income / (Expense)

Unrealized Loss on Derivate

(2.85%)

Gain on Foreign Exchange

0.24%

1.98%

Investment Income

1.05%

0.97%

0.42%

Equity in Loss of Affiliate

(7.49%)

(26.68%)

Total Other Income / (Expense)

(1.56%)

(4.54%)

(26.26%)

NET LOSS

(69.91%)

(86.57%)

Sub-totals and totals may not foot due to rounding.

(57.81%)

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Reported Cash Flow Statements

For the Years Ended December 31,

Line

Description

2009

2008

2007

OPERATING ACTIVITIES

Net Income / (Loss)

(19,640,921)

(11,637,260)

(4,515,759)

Depreciation and Amortization

4,141,117

1,572,492

561,077

Equity in Loss of Affiliate

1,006,386

2,083,943

Stock Based Compensation

1,167,789

1,848,906

Unrelized Loss on Derivatives

801,350

Impairment of Long Lived Assets

1,036,993

Accounts Receivable

848,375

1,943,307

(2,011,788)

Inventories

(580,992)

(24,100)

(323,500)

Prepaid Expenses & Other

1,832,496

191,621

(731,361)

Other Receivables

(701,145)

4,441

Taxes Receivable

966,367

37,398

Due From Related Parties

77,067

(135,204)

1,371,074

Accounts Payable

275,907

(306,999)

(176)

Accrued Liabilities

(1,364,330)

604,465

484,084

Deferred Revenue

510,383

244,846

921,195

Long-Term Liabilities

(267,941)

41,833

Due To Related Parties

241,769

(2,043,626)

2,076,205

Net Cash Flow from Operating Activities

(11,692,709)

(5,614,501)

(85,006)

INVESTING ACTIVIES

Capital Expenditures

(1,198,432)

(1,443,438)

(1,628,411)

Acquisition of INSINC, net of cash of $344,371

(1,561,905)

Acquisition of NeuLion, Inc.

21,738,421

Net Cash Flow from Investing Activities

(2,760,337)

20,294,983

(1,628,411)

FINANCING ACTIVITIES

Capital Contribuions

2,600,000

670,000

Private Placement - Charles Wang (AvantaLion LLC) & G. Scott Paterson

9,214,700

Proceeds from Exercise of Stock Options

87,704

219,375

Net Cash Flow from Financing Activities

87,704

12,034,075

670,000

NET CASH FLOW

(14,365,342)

26,714,557

(1,043,417)

Beginning Cash

27,323,021

608,464

1,651,881

ENDING CASH

12,957,679

27,323,021

$ 608,464

Historical financial information provided to us by management and derived from audited financial statements. UHY Advisors FLVS, Inc. has not audited, reviewed, or compiled the financial statement information presented
above and, accordingly, we do not express an opinion or any form of assurance on the information.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Key Reported Balance Sheet Ratios

As of December 31,

Line

Description

2009

2008

2007

Key Balance Sheet Figures

Total Assets

40,269,163

53,737,682

7,211,951

Inventory

928,592

347,600

323,500

Fixed Assets

5,754,255

6,474,989

2,281,667

Total Liabilities

17,998,829

16,724,104

3,965,018

Total Shareholders' Equity

22,270,334

37,013,578

3,246,933

Working Capital

964,371

18,110,823

242,774

Liquidity Ratios

Current Ratio

1.06

2.19

1.07

Activity Ratios

Average Asset Turnover

0.60

0.44

n/m

Average Inventory Turnover

22.55

22.77

n/m

Average A/R Turnover

13.73

6.25

n/m

Average Working Capital Turnover

2.95

1.46

n/m

Average Days A/R Outstanding

26.59

58.39

n/m

Average Days A/P Outstanding

124.93

108.29

n/m

Balance Sheet Leverage Ratios

Total Liabilities / Total Assets

0.45

0.31

0.55

Shareholders' Equity / Total Assets

0.55

0.69

0.45

Fixed Assets / Shareholders' Equity

0.26

0.17

0.70

Total Liabilities / Shareholders' Equity

0.81

0.45

1.22

VALUATION OF NEULION INC. (C CORPORATION) AS
OF MARCH 31, 2010

SCHEDULE9 ******* Projected Quarterly Revenue Detail for the Year Ended December 31, 20101

Common

Line

Description

Total 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Total 2010

Size

Service Revenue

Subscription Revenue

College Networks

*******

Dish Network

Pro Sports and Variety (WEB)

Sky Angel (STB)

International - B2B (STB)

Other2

INSINC

New Business - Sports (MLS, Other)

New Business - International B2B

Total Subscription Revenue

18,475,578

E-Commerce Revenue (includes advertising, merchandising, ticketing and auction revenue)

Total E-Commerce Revenue

3,949,858

Technology Services Revenue (includes site fees, set-up fees, transcoder and professional fees)

Total Technology Services Revenue

4,038,970

Total Service Revenue

26,464,406

Equipment Revenue

Total Equipment Revenue

1,629,275

Total Revenue

28,093,677

Notes:

1. Refer to schedule 9A for a detailed list of management assumptions.

2. Revenue from related parties including Talfazat, LATAM, INTL RoW, TV-Desi, Cycling TV, and WCQ.

VALUATION OF NEULION INC. (C CORPORATION) AS
OF MARCH 31, 2010

SCHEDULE

Projected Income Statements

Percentages represent annual growth rates

Reported

For the Years Ending December 31

Line

Description

12/31/2009

12/31/2010

12/31/2011

12/31/2012

12/31/2013

12/31/2014

(Per Schedule 9)

Net Revenues

*******

Cost of Revenues

GROSS PROFIT / (LOSS)

Operating Expenses

Depreciation

Amortization

PRE-TAX INCOME / (LOSS)

Income Tax Expense1

NET INCOME / (LOSS)

Memo

EBIT (earnings before interest and taxes)

EBITDA (EBIT + depreciation and amort.)

Breakdown of Sources of Revenue

Notes:

1. For the purposes of our analysis we have assumed that the Company will not pay income taxes as a result of having an income tax carryforward of approximately $93 million as of the Valuation Date to be applied to future earnings.

2. ******* forecasted revenue and cost of revenue were derived from the *******. Intangible Asset Valuation report as of October 31, 2009 prepared by Peter Ott & Associates and detailed in Schedule 13.

3. ******* subscriber revenue was forecast based on *******.

4. ******* cost of revenue for subscribers is based off of *******.

5. ******* cost of set top box revenue is based on *******.

6. Cost of ******* revenue is constant based on *******.

VALUATION OF NEULION INC. (C CORPORATION) AS
OF MARCH 31, 2010

SCHEDULE

INSINC Projected Income Statements1

Description

12/31/2010

12/31/2011

12/31/2012

12/31/2013

12/31/2014

Revenue

Existing Contract Revenue

*******

New Customer Revenue

Total Revenue

Cost of Sales

Existing Contract Cost of Sales

New Customer Cost of Sales

Total Cost of Sales

Gross Profit

Existing Contract Gross Profit

New Customer Gross Profit

Total Gross Profit

Operating Expenses

SG&A Costs

Operating Income

Income Tax Expense

Net Income

Notes:

1. This forecast was part of a valuation of ******* intangible assets as of October 31, 2009 as prepared by Peter Ott & Associates, Inc with input from Management.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Discounted Cash Flow Valuation Method

Projected Cash Flow to Total Invested Capital for the Years Ending December 31,

Source / Comments

Line

Description

12/31/2010

12/31/2011

12/31/2012

12/31/2013

12/31/2014

Pre-Tax Net Income

*******

See Schedule 11.

Income Taxes1

Depreciation

See Schedule 11.

Amortization

See Schedule 11.

Capital Expenditures2

Net Change in Working Capital3

PROJECTED CASH FLOW

Add Back 1st Qtr 2010 Loss4

4/1 - 12/31/2010

Present Value Factor5

PRESENT VALUE OF PROJECTED CASH FLOW (A)

Terminal Value Range - EBITDA Multiples

Source / Comments

Derivation of Terminal Value

Low

Mid

High

Terminal Year EBITDA

******* EBITDA plus *******

Terminal Year Exit Multiple

TERMINAL VALUE

Derivation of Value

Sum of Present Values of Cash Flow During Projection Period

Present Value of Terminal Value

Present Value of NOL

See Schedule 16.

Value of Equity Interest in KyLinTV

See Schedule 15.

Value of Total Invested Capital

- Interest Bearing Debt

VALUE OF EQUITY CAPITAL

VALUATION INDICATION:

Rounded to Nearest:

DISCOUNTED FUTURE CASH FLOW VALUATION

$5,000

Notes:

2. Capital Expenditures for the year ended December 31, 2010 were estimated based on *******.

3. Change in Net Working Capital for the year ended December 31, 2010 was estimated based on *******.

4. Since the Valuation Date is March 31, 2010, the Company's forecasted 1Q EBITDA was subtracted along with *******.

5. A majority of the Company's revenue is generated in the first and fourth quarters as a result of the different sports seasons. Accordingly, a mid-year discounted convention was used.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Calculation of Ownership Interest in KyLin TV

Line

Description

Calculations

Calculation of NeuLion's Ownership in KyLin TV1

Value of 15.1% Interest in KyLin TV, Inc. (non-marketable, non-controlling basis)

10,000,000

÷ 15.1% Owership Interest

15.10%

Implied 100% Equity Value (non-marketable, non-controlling basis)

66,225,166

x Ownership Percentage

12.20%

Value of NeuLion's Ownership (non-marketable, non-controlling basis)

8,079,470

Rounded to Nearest:

Value of NeuLion's Ownership (non-marketable, non-controlling basis)

8,080,000

$5,000

Notes:

1. On February 26, 2010, a group of investors invested $10.0 million in KyLinTV for 15.1% of its equity, which reduced NeuLion's equity interest in KyLinTV from 17.1% to 12.2%. Of the total $10.0 million
investment, $1.0 million was invested by AvantaLion LLC, a company controlled by the Chairman of the Board of Directors of the Company.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Calculation of Net Operating Loss Carryforward

NOL

Line

Description

Carryforward

Date of Expiration

Source

Amount of NOL

21,263,325

12/31/2026

NeuLion Audited 2009 Financial Statement as filed with the SEC.

Amount of NOL

25,544,598

12/31/2027

NeuLion Audited 2009 Financial Statement as filed with the SEC.

Amount of NOL

28,851,457

12/31/2028

NeuLion Audited 2009 Financial Statement as filed with the SEC.

Amount of NOL

17,510,759

12/31/2029

NeuLion Audited 2009 Financial Statement as filed with the SEC.

A: Total NOL Carryforward

93,170,139

NeuLion Audited 2009 Financial Statement as filed with the SEC.

Forecasted

Projection Year

Pre-Tax Income

2010

*******

2011

2012

2013

2014

B: Aggregate Income Over Discrete Forecast

A: Total NOL Carryforward

B: Aggregate Income Over Discrete Forecast

NOL Carryforward Balance - 2015 (A-B)

12/31/2015

12/30/2016

12/30/2017

NOL Carryforward Balance

- Pretax Income1

Remaining NOL (Prior Year NOL - Pretax Income)

33% Tax Rate x Pretax Income

Present Value Factor@ 18%2

Present Value

Total Present Value

Notes:

1. Pre-tax income from 2015 through 2019 was forecast to increase at a rate of 15% per year for the purposes of analyzing the NOL.

2. A midyear discounting convention was used.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Derivation of Discount Rate

Line

Derivation of Capitalization Rate and Factor

Source/Comments

Long-Term Government Bond Yield-to-Maturity

4.55%

Constant Maturity 20 year Treasuries as of 03/31/2010, per Federal Reserve Release H.15.

Ibbotson Common Stock Premium

5.73%

Average annual return premium of large capitalization stocks per SBBI 2009 Yearbook.

Small Capitalization Stock Premium

5.81%

Average annual return premium of small capitalization stocks (10th decile) per SBBI 2009 Yearbook.

Industry Adjustment

(0.19%)

Industry Adjustment - SIC Code 484, Cable and Other Pay Television Services per SBBI 2009 Yearbook.

+ Total Equity Premium

11.35%

+ Company Specific Risk Premium

4.00%

Based on Valuators assessment of specific company risks.

COST OF EQUITY

19.90%

Cost of Borrowing

8.00%

Estimated Marginal Cost of Borrowing.

- Tax Shield1

33.00%

(2.64%) Based on estimated tax rate.

COST OF DEBT

5.36%

% of Total

Type of Capital

Capital

Cost

Product

Equity

90%

19.90%

17.91%

Debt

10%

5.36%

0.54%

Based on industry capital structure and estimated debt capacity of the Company.

Weighted Average Cost of Capital

18.45%

Weighted Average Cost of Capital (rounded)

18.00%
Notes:

1. The income tax rate used is the combined basic Canadian federal and provincial statutory tax rates presented in the Company's audited financial statements as filed with the SEC.

VALUATION OF NEULION INC. (C CORPORATION) AS
OF MARCH 31, 2010

SCHEDULE

Guideline Company Information, Capitalization, and Fundamentals

Line

Description

NeuLion

Median

Average

High

Low

Company 1

Company 2

Company 3

Company 4

Company 5

Company 6

Company 7

Company Information

Ticker Symbol

KITD

TSX:ESP

BBND

SEAC

DIVX

RNWK

AKAM

Company Name

KIT digital,

Espial Group,

BigBand

SeaChange

DivX, Inc.

RealNetworks

Akamai

Exchange

NasdaqGM

TSX

NasdaqGM

NasdaqGS

Most Recent Quarter Available

12/31/2009

1/31/2010

3/31/2010

12/31/2009

3/31/2010

Fiscal Year End (Most Recent, Fully-Reported)

12/31/2009

1/31/2010

12/31/2009

Valuation Multiples

MVIC to Revenues - FYE

1.57

2.76

6.43

1.14

4.41

1.18

1.57

1.14

3.39

1.22

6.43

MVIC to Revenues - 3 yr avg

1.43

3.23

7.40

1.18

7.40

1.43

1.31

1.18

2.88

1.19

7.25

MVIC to Revenues - 5 yr avg

1.45

4.09

10.33

1.32

10.33

1.45

1.41

1.32

3.50

1.40

9.22

MVIC to Gross Profit - FYE

2.70

4.19

8.75

1.56

8.16

1.56

2.70

2.23

3.93

2.02

8.75

MVIC to Gross Profit - 3 yr avg

2.36

5.02

13.72

1.96

13.72

1.96

2.30

2.36

3.11

1.97

9.70

MVIC to Gross Profit - 5 yr avg

2.74

6.70

21.29

2.02

21.29

2.02

2.63

2.74

3.79

2.23

12.17

MVIC to EBITDA - FYE

4.63

(1.54)

68.92

(77.01)

68.92

(6.00)

n/m

15.25

(77.01)

(26.25)

15.87

MVIC to EBITDA - 3 yr avg

16.28

10.45

54.67

(28.41)

(17.19)

(2.36)

54.67

16.28

31.62

(28.41)

18.52

MVIC to EBITDA - 5 yr avg

24.92

13.86

72.29

(38.33)

(18.70)

(3.13)

72.29

31.87

28.13

(38.33)

24.92

MVIC to EBIT - FYE

(11.93)

(22.86)

63.57

(177.54)

(3.76)

(26.32)

63.57

(26.51)

(11.93)

22.46

MVIC to EBIT - 3 yr avg

(2.08)

15.59

78.12

(37.91)

(14.03)

(2.08)

(37.91)

69.89

78.12

(10.56)

25.68

MVIC to EBIT - 5 yr avg

(13.77)

(7.40)

45.42

(59.29)

(15.91)

(2.77)

(39.95)

(59.29)

45.42

(13.77)

34.45

MVIC to Total Assets - FYE

1.13

1.44

2.65

0.72

2.59

0.72

0.98

0.86

1.15

1.13

2.65

MVIC to Total Assets - 3 yr avg

0.97

1.71

4.48

0.68

4.48

0.68

0.97

0.96

1.19

0.77

2.95

MVIC to Total Assets - 5 yr avg

1.24

2.14

6.08

0.68

6.08

0.93

1.24

1.02

1.50

0.68

3.56

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Guideline Company Valuation Method

Invested Capital to Revenue

Derivation of Market Multiples

Low

High

Notes / Comments

Market Multiples

2.760

6.430

See Schedule 25.

- Adjustment1,2

(0.270)

(1.929)

Market Multiples

2.49

4.50

Invested Capital to Revenue

Derivation of Value

Low

High

Adjusted Financial Measures

28,093,677

NeuLion 2009 Revenue.

x Market Multiple

2.49

4.50

See above.

Capitalized Value: Total Invested Capital

69,953,256

126,421,547

- Interest Bearing Debt

NeuLion has no interest bearing debt.

Value of Equity Capital

69,953,256

126,421,547

Rounded to Nearest:

Control Premium3

20%

13,990,651

25,284,309

$1,000

VALUE OF EQUITY CAPITAL

83,943,907

151,705,856

+ Value of Equity Interest in KyLin TV

8,080,000

See Schedule 15.

Adjusted Value of Equity Capital

92,023,907

159,785,856

INDICATION OF VALUE:

Rounded to Nearest:

GUIDELINE COMPANY VALUATION

92,025,000

159,785,000

5,000

Notes:

1. The average of the guideline public companies was used to determine the lower level of the range. However an adjustment to the Akamai multiple was made due to it being much larger
than NeuLion.

2. The Akamai multiple was used to determine the high of the range. However an adjustment to the Akamai multiple was made due to it being much larger than NeuLion.

3. Review of Mergerstat control premiums for the Broadcasting and Communication Industry Groups.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Merger and Acquisition Analysis - Capital IQ

Figures in Millions (except multiples)

Market

Summary Financial Data

Multiple

Transaction

MVIC

MVIC to:

Line

Seller

Buyer

Date

Revenues

EBITDA

Price

Revenues

NDS Group plc (nka:NDS Group Ltd.)

Permira Advisers Ltd.; News Corp.

02/05/09

850.1

214.0

3,665.7

4.312

AssetHouse Technology Limited

Amino Technologies plc

06/10/08

0.8

2.7

3.500

BesTV Network Television Technology Development Co. Ltd.

Tsinghua Tongfang Co. Ltd.

2/27/2008*

9.0

61.3

6.800

Median

9.0

214.0

61.3

4.312

Average

286.6

214.0

1,243.2

4.871

High

850.1

214.0

3,665.7

6.800

Low

0.8

214.0

2.7

3.500

Notes:

*This transaction was announced on February 27, 2008, but no closing date was
available. EBITDA is defined as earnings before interest, taxes, depreciation, and
amortization. EBIT is defined as earnings before interest and taxes.

"n/a" reflects that information is not available.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Merger and Acquisition Valuation Method

Line

Description

Invested Capital to Revenue

Notes / Comments

Low

High

Adjusted Financial Measure

28,093,677

NeuLion 2009 Revenue.

x Market Multiple1

4.3

6.8

See Schedule 27.

Capitalized Value: Total Invested Capital

120,802,811

191,037,004

- Interest Bearing Debt

NeuLion has no interest bearing debt.

Value of Equity Capital

120,802,811

191,037,004

+ Value of Equity Interest in KyLin TV

8,080,000

See Schedule 15.

Adjusted Value of Equity Capital

128,882,811

199,117,004

INDICATION OF VALUE:

Rounded to Nearest:

MERGER AND ACQUISITION VALUATION

128,885,000

199,115,000

$5,000
Notes:

1. This range of multiples was developed based on the relatively limited amount of transaction activity in the IPTV industry.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Weighted Indication of Value and Conclusion of Value

Line

Indicated Values by Method

Low

High

Weight

Low

High

Income Approach: Discounted Future Cash Flow Valuation Method (See Schedule 14)

105,035,000

154,325,000

85.00%

89,279,750

131,176,250

Market Approach: Guideline Company Valuation Method (See Schedule 26)

92,025,000

159,785,000

10.00%

9,202,500

15,978,500

Market Approach: Merger and Acquisition Valuation Method (See Schedule 28)

128,885,000

199,115,000

5.00%

6,444,250

9,955,750

Weighted Range of Value

104,926,500

157,110,500

Rounded:

104,900,000

157,100,000

Conclusion of Value

Low

High

Weighted Range of Value

104,926,500

157,110,500

÷ Total Shares Issued and Outstanding

116,731,794

Equity Value Per Share Based on Outstanding Shares

0.90

1.35

Equity Value (per middle point)

104,926,500

157,110,500

Proceeds From Exercise of Securities in the Money

7,862,619

15,757,619

Equity Value of Subject Interest - Including Proceeds From Exercise of Dilutive Securities

112,789,119

172,868,119

Equity Value of Subject Interest - Rounded

112,789,000

172,868,000

÷ Total Shares Issued and Outstanding Including Dilutive Securities

130,423,682

136,923,682

Fully Diluted Range of Value Per Share

0.86

1.26

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Calculation of Proceeds From Sale of Dilutive Securities - Low

Summary of

Proceeds

Number of

from

Options

Number

Exercise

Retention

Number

Exercise

Line

Description

Exercise

Exercise Price Outstanding

Proceeds

Exercise Price

Outstanding

Proceeds

Fully Dilluted Shares1

116,731,794

0.47

4,428,022

2,081,170

0.64

182,500

116,800

0.58

50,000

29,000

0.70

111,642

78,149

Options In The Money2

7,694,522

4,087,470

0.60

2,646,500

1,587,900

0.80

21,500

17,200

0.64

30,000

19,200

Restricted Share Units

6,724

0.67

500,000

335,000

315,642

212,149

0.88

40,000

35,200

Stock Appreciation Rights

675,000

413,000

7,694,522

4,087,470

Warrants

5,000,000

3,150,000

Stock

Appreciation

Retention Warrants

315,642

212,149

Warrants

Number

Exercise

Rights

Number

Exercise

Exercise Price Outstanding

Proceeds

Exercise Price

Outstanding

Proceeds

Fully Dilluted Shares

130,423,682

7,862,619

0.63

5,000,000

3,150,000

0.60

475,000

285,000

[a] Assumes holders elect to receive SAR benefit in shares of Neulion

0.64

200,000

128,000

[b] There is no exercise price for restricted share units

5,000,000

3,150,000

675,000

413,000
Notes:

1. Based on 12/31/09 Listed Price.

2. Based on $0.91 Market Price.

VALUATION OF NEULION INC. (C CORPORATION)
AS OF MARCH 31, 2010

SCHEDULE

Calculation of Proceeds From Sale of Dilutive Securities - High

Summary of

Proceeds

Number of

from

Options

Number

Exercise

Retention

Number

Exercise

Line

Description

Exercise

Exercise Price Outstanding

Proceeds

Exercise Price

Outstanding

Proceeds

Fully Dilluted Shares1

116,731,794

0.47

4,428,022

2,081,170

0.64

182,500

116,800

0.58

50,000

29,000

0.70

111,642

78,149

Options In The Money2

7,694,522

4,087,470

0.60

2,646,500

1,587,900

0.80

21,500

17,200

0.64

30,000

19,200

Restricted Share Units

6,724

0.67

500,000

335,000

315,642

212,149

0.88

40,000

35,200

Stock Appreciation Rights

675,000

413,000

7,694,522

4,087,470

Stock

Warrants

11,500,000

11,045,000

Appreciation

Warrants

Number

Exercise

Rights

Number

Exercise

Retention Warrants

315,642

212,149

Exercise Price Outstanding

Proceeds

Exercise Price

Outstanding

Proceeds

Fully Dilluted Shares

136,923,682

15,757,619

0.63

5,000,000

3,150,000

0.60

475,000

285,000

1.19

5,500,000

6,545,000

0.64

200,000

128,000

[a] Assumes holders elect to receive SAR benefit in shares of Neulion

1.35

1,000,000

1,350,000

[b] There is no exercise price for restricted share units

675,000

413,000

11,500,000

11,045,000

Notes:

1. Based on 12/31/09 Listed Price.

2. Based on $1.36 Market Price.

NeuLion, Inc.

Summary of Securities Outstanding Under Stock Option and Stock-Based Compensation Plans

Security Class

Outstanding

Exercisable

Comments

Stock Options [a]

8,657,897

2,851,117 Exercise price range: $0.47 to $6.43

Wtd. avg. exercise price: $0.98

Restricted share units [b]

6,724

- Non-vested at 12/31/09

Stock appreciation rights [c]

1,675,000

1,229,551 Exercise price range: $0.60 to $4.00

Wtd. avg. exercise price: $2.63

Warrants [d]

17,697,500

17,624,198 Exercise price range: $0.63 to $6.23

Wtd. avg. exercise price: $1.07

Retention Warrants [e]

847,892

463,708 Exercise price range: $0.64 to $3.86

Wtd. avg. exercise price: $2.67

Potential Additional Shares

28,885,013

22,168,574

[e] Exercisable for 1 share per option. Average weighted remaining option life is 3.68 years.

[b] Represents the right to 1 share per vested restricted share unit. Units vest on a monthly basis.

[c] The holder may elect to receive cash compensation or to receive shares equal to the number of units

granted under the SARS plan, less the exercise price.

[d] Exercisable for 1 share per warrant. Average weighted remaining warrant life is 0.91 years.
[e] Exercisable for 1 share per warrant. Average weighted remaining warrant life is 2.87 years.

Below are descriptions of the Guideline Public Companies used in our analysis22:

■ KIT digital is a leading, global provider of on-demand, Internet Protocol (IP)-based video asset management solutions. KIT
VX, the company's end-to-end software platform, enables enterprise clients to acquire, manage and distribute video assets
across the three screens of today's world: the personal computer, mobile device, and IPTV-enabled television set. The
application of VX ranges from commercial video distribution to internal corporate deployments, including corporate
communications, human resources, training, security and surveillance. KIT digital's client base includes more than 600
enterprise customers across 30+ countries, including The Associated Press, Best Buy, Bristol-Myers Squibb, Disney-ABC,
General Motors, Google, IMG Worldwide, Intel, McDonald's, News Corp, Telefonica, the U.S. Department of Defense,
Verizon, and Vodafone. KIT digital maintains principal offices in Prague, Cologne, Dubai, London, Melbourne (Australia),
New York, Stockholm and Toronto.

■ Espial Group Inc. engages in the development and marketing of software solutions that enable the delivery of Internet
Protocol Television (IPTV). The company’s IPTV is a platform that facilitates the provision of digital television and other
video services with Internet like functionality over an Internet protocol enabled broadband network infrastructure. Its
products and services consists of Evo IPTV Service Platform that includes Evo Client Middleware, an IPTV middleware
and applications platform; Evo Server Middleware, a software that coordinates various IPTV components, such as VOD
and DRM servers, EPG data sources, and billing and other systems; and Evo Applications for Web based browser and
portal services, which comprise Evo Portal, Browser, BML Browser, and Skin Tones. The company’s products and services
also comprise Evo Future-Proof Framework that includes Evo Service Creation Environment, an intuitive software
environment to help design and develop Evo Applications; MediaBase video on demand products; IPTV services; and
legacy products, such as a suite of software for accessing in-room guest services, including browser and user interface
products to enable services, such as local hotel information, VOD, interactive games, Web mail, and Internet on TV. It has
operations in Europe, the Asia Pacific, and North America. Espial Group’s solutions enable communications service
providers, including telecommunications, cable TV, satellite TV, and Internet service providers to deploy IPTV services to
the subscribers. The company was founded in 1997 and is headquartered in Ottawa, Canada.

22 www.capitaliq.com

■ BigBand Networks, Inc. develops, markets, and sells network-based platforms in the United States and internationally. The
company’s network-based platforms enable cable operators and telecommunications companies to offer video services
across coaxial, fiber, and copper networks. Its digital simulcast product application enables service providers to create a
digital version of analog inputs, and deliver analog and digital video streams to subscribers. The company also offers
BigBand Broadband Multimedia-Service Router, a platform that is used for the real-time processing and switching of video;
BigBand Broadband Edge QAM, which converts digital video and data streams into quadrature amplitude
modulated RF carriers that transport video and data across cable networks to subscriber set top boxes and cable modems;
BigBand Media Services Platform, a chassis-based platform that enables service providers to offer personalized video
applications; and Converged Video Exchange, a control plane solution designed to manage various numbers of video
sessions, while optimizing network bandwidth utilization. In addition, it offers switched digital video solutions that enable
service providers to transmit video channels to subscribers only when the subscribers in a service group are in the process
of watching those channels; and broadcast video solutions, which enable digital media processing and transport
technologies for service providers. Further, the company provides an alternative solution to deliver IP video services to
home computers, IP set top boxes, and other IP consumer devices. BigBand Networks, Inc. sells its products in the United
States and Canada primarily through its direct sales force; and internationally through a combination of direct sales to
service providers and sales through independent resellers. The company was founded in 1998 and is headquartered in
Redwood City, California.

■ SeaChange International, Inc. develops, manufactures, and markets digital video systems worldwide. The company operates
in three segments: Software, Servers and Storage, and Media Services. The Software segment develops, sells, and supports
advertising, video on demand (VOD), middleware, and broadcast software. This segment also offers professional services,
installation, training, project management, product maintenance, technical support, and software development services. The
Servers and Storage segment develops VOD and broadcast servers. This segment also offers professional services,
installation, training, project management, product maintenance, and technical support. The Media Services segment
provides media content services, including video, television programming, and advertising content aggregation and
distribution. This segment specializes in aggregating content for video on demand and pay-per-view platforms, and
provides marketing, promotional, and production services to cable operators and telecommunications providers in Europe.
SeaChange International serves cable system operators, telecommunications companies, and broadcast television
companies. The company sells its products directly, as well as through independent agents and distributors. SeaChange
International, Inc. was founded in 1993 and is headquartered in Acton, Massachusetts.

■ DivX, Inc. creates products and provides services to enhance the consumers’ media experience. It primarily offers video
compression-decompression software library (codec), as well as consumer software, including the DivX Player application.
The company’s technologies enable users to compress, secure, distribute, and view digital video and participate in its digital
media ecosystem. It offers various consumer software product bundles, including DivX and DivX Pro for Windows and
Mac bundles. The company also provides DivX Mobile Player that allows users to playback DivX videos on their handsets
from various sources; and DivX Author for Windows operating system, which allows users to combine and edit multiple
videos into a single DivX video, add the features of the DivX format, and slideshows with videos, photos, and music. In
addition, it provides technology licensing for independent software vendors, consumer hardware device
manufacturers, content creators, and consumers. Further, the company offers certification programs to integrated circuit
manufacturers, original design manufacturers, original equipment manufacturers, and software vendors. Additionally, it
provides Open Video System, a hosted service that allows content creators to deliver DivX video content over the Internet.
The company markets its technologies to a range of integrated circuit manufacturers, original design manufacturers, original
equipment manufacturers, retailers, operators, and software developers. DivX, Inc. was incorporated in 2000 and is
headquartered in San Diego, California.

■ RealNetworks, Inc. provides network-delivered digital media products and services worldwide. It develops and markets
software products and services that enable the creation, distribution, and consumption of digital media, including audio and
video. The company operates in four segments: Technology Products and Solutions (TPS), Media Software and Services
(MSS), Games, and Music. The TPS segment primarily offers software-as-a-service offerings, which include ringback
tones, music-on-demand, video-on-demand, and messaging services, as well as system software license sales and
intellectual property licensing. This segment also licenses Helix server software that allows companies to broadcast live and
on-demand audio, video, and other multimedia programming to users over the Internet. The MSS segment offers
RealPlayer, a media player software, which includes features and services that enable consumers to discover, play,
download, manage, and edit digital video. The Games segment offers various casual games available through digital
downloads or online portals, social networks, and mobile devices. This segment also involves in game development,
publishing, licensing, and distribution. It distributes games principally in North America, Europe, and Latin America
through the company’s own Web sites, which are operated under the GameHouse, RealArcade, Zylom, and Atrativa brands,
and through Web sites owned or managed by third parties. In addition, this segment develops and distributes games for
other platforms, including mobile phones, other handheld devices, and videogame consoles. The Music segment offers
Rhapsody, a subscription and advertising-supported music service; Rhapsody.com, a free Web-based limited version digital
music service; and Rhapsody MP3 music store, where consumers purchase and download individual digital music tracks.
The company was founded in 1994 and is headquartered in Seattle, Washington.

■ Akamai Technologies, Inc. provides services for accelerating and improving the delivery of content and applications over the
Internet in the United States and internationally. The company offers Application Performance solutions that improve the
performance of dynamic applications used by enterprises to connect with their employees, suppliers, and customers. Its
Application Performance solutions include Web Application Accelerator, which enables enterprises to run various
applications; and IP Application Accelerator that is designed to address core Internet weaknesses to optimize the
performance and real-time sensitivity associated with IP-enabled applications delivered over Internet-related protocols. It
also provides Digital Asset solutions that enable enterprises to execute their large file management and distribution
strategies. The company’s Digital Asset solutions include Akamai Media Delivery solution that delivers media content on
behalf of its customers; and Electronic Software Delivery solution, which handles the distribution of software for its
customers. In addition, it offers Dynamic Site solutions, which accelerate business-to-consumer Websites that integrate
collaborative content and applications into their online architecture; Advertising Decision solutions that enable advertisers,
agencies, publishers, and networks to buy and sell advertising; and custom solutions to commercial and government
customers. Additionally, the company offers other solutions, such as EdgeControl tools that provide reporting and
management capabilities; network data feeds and Website analytics, which provide customers with real time data about the
performance of their content and applications over the Internet; and performance management services that help customers
better understand their Web operations with tools that measure various aspects of an application’s performance. Akamai
Technologies, Inc. was founded in 1998 and is headquartered in Cambridge, Massachusetts.

Several sources of information were used to complete this valuation. They include but are not limited to the following:

2009 NeuLion Form 10K as filed with the SEC.

2008 Jump TV Form 10K as filed with the SEC.

3. Audited Financial Statements for NeuLion for December 31, 2007 through December 31, 2009
4. *******

5. *******
6. Valuation of INSINC’s intangible assets as of October 31, 2009 as prepared by Peter Ott & Associates, Inc.

7. Valuation of Jump TV’s intangible assets as of October 20, 2008 as prepared by Peter Ott & Associates, Inc.

8. Proposed TransVideo Acquisition Executive Summary, Board Presentation dated March 16, 2010.

9. Discussion Materials- Executive Summary of Potential Transaction with NeuLion and Jump TV as prepared by Oppenheimer.

10. Management Prepared Goodwill Impairment Analysis, as of January 6, 2010.

11. Software License and Product Distribution Agreement between NeuLion and TransVideo dated September 29, 2006.
12. Information from the Company’s website www.neulion.com, as well as other industry and competitor websites.

13. Public company information and market transaction data from Capital I.Q.

14. Ibbotson 2009 SBBI Yearbook, Morningstar

15. 2009 Ibbotson Cost of Capital Yearbook, Morningstar
16. Federal Reserve Statistical Release H.15

17. U.S. Economic data obtained from National Economic Review - Business Valuation Resources, Inc.

18. Other internal schedules, reports, marketing materials and data provided by the management of NeuLion, Inc.

19. Conversations with various industry participants.

20. Various external industry and valuation resource materials.

In addition to the documentation detailed above, an interview with members of NeuLion management, including Art McCarthy, Roy
Riechbach, Chris Wagner, Charles Wang, and Nanci Li, was conducted during our site visit at the Company’s headquarters in
Plainview, New York.

This valuation report is subject to the following contingent and limiting Conditions:

1. Information, estimates, and opinions contained in this report are obtained from sources considered reliable; however, UHY Advisors
FLVS, Inc. has not independently verified such information and no liability for such sources is assumed by the valuation analysts
identified in this report. UHY Advisors FLVS, Inc. has not audited, reviewed, or compiled the financial information provided to us
and, accordingly, express no audit opinion or any other form of assurance on this information.

2. All facts and data set forth in the report are true and accurate to the best of the valuation analysts’ knowledge and belief. We have

not knowingly withheld or omitted anything from our report affecting our value estimate.

We assume that there are no hidden or unexpected conditions of the business that would adversely affect value, other than as

indicated in this report.

4. This valuation was performed as of the valuation date and for the purpose specifically stated in the report. The valuation is valid
only for the stated valuation date and for the stated specific purpose. The report may not be used for any other purpose. The
report and conclusion of value are not to be construed as investment advice in any manner whatsoever.

5. The various estimates of value presented in this report apply to this valuation only and may not be used out of the context presented
herein. Any other use of this report may lead the user to an incorrect conclusion for which UHY Advisors FLVS, Inc. assumes no
responsibility.

6. Possession of this report, or a copy thereof, does not carry with it the right of publication of all or part of any item nor may it be used
for any purpose without the previous written consent of the valuation analysts, and in any event only with proper authorization.
Authorized copies of this report will be signed in blue ink by a Managing Director and/or Principal of UHY Advisors FLVS, Inc.
Unsigned copies, or copies not signed in blue ink, should be considered to be incomplete.

No change of any item in this appraisal report shall be made by anyone other than UHY Advisors FLVS, Inc., and we shall have

no responsibility for any such unauthorized change.

8. Unless stated otherwise in this report, we express no opinion as to: 1) the tax consequences of any transaction that may result; 2) the
effect of the tax consequences of any net value received or to be received as a result of a transaction; and 3) the possible impact on
the value resulting from any need to effect a transaction to pay taxes.

9. This valuation and report were prepared for the users identified in this report. None of the contents of this valuation report shall be
conveyed to any third party or to the public through any means without the express written consent of UHY Advisors FLVS, Inc.

10. Our valuation opinion is necessarily based on the definition of value stated in the report. An actual transaction in the interests of
the business may be concluded at a higher value or lower value, depending on the circumstances surrounding the business, the
appraised business interest, and the motivations and knowledge of both the buyers and sellers at that time. UHY Advisors FLVS,
Inc. makes no guarantees about what value individual buyers and sellers may reach in an actual transaction.

11. No investigation of titles to property or of any claims on ownership of the property of the business by any individuals or company
has been undertaken. Unless otherwise stated in our report, title is assumed to be clear and free of encumbrances and as provided
to us.

12. We have relied on the representations of the owners, management, and other third parties concerning the value and useful condition
of all equipment, real estate, investments used in the business, and any other assets or liabilities, except as specifically stated
otherwise in this report. We have not attempted to confirm whether or not all assets of the business are free and clear of liens and
encumbrances or that the entity has good title to all assets.

13. Unless otherwise provided for in writing and agreed to by both parties in advance, the extent of the liability for the completeness or
accuracy of the data, opinions, comments, recommendations and conclusions shall not exceed the amount paid to UHY Advisors
FLVS, Inc. for professional fees, and then only to the party or parties for whom this report was originally prepared.

14. It should be specifically noted that the valuation assumes the business will be competently managed and maintained by financially
sound owners, throughout the expected period of ownership. This valuation engagement does not entail an evaluation of
management’s effectiveness, nor are we responsible for future marketing efforts and other management or ownership actions upon
which actual results will depend. The conclusion of value arrived at herein is based on the assumption that the current level of
management expertise and effectiveness would continue to be maintained, and that the character and integrity of the business
through any sale, reorganization, exchange, or diminution of the owners’ participation would not be materially or significantly
changed.

15. Valuation reports may contain prospective financial information, estimates, or opinions that represent the view of the business’
management and/or the valuation analysts about reasonable expectations at a particular point in time, but such information,
estimates, or opinions are not offered as predictions or as assurances that a particular level of income or profit will be achieved or
that specific events will occur. We do not provide assurance on the achievability of results forecasted by the business or its
representatives because events and circumstances frequently do not occur as expected; differences between actual and expected
results may be material; and achievement of the forecasted results is dependent on actions, plans, and assumptions of management.

16. Any decision to purchase, sell, or transfer any interest in the subject company shall be your sole responsibility, as well as the
structure to be utilized and the price to be accepted.

17. Public information and industry and statistical information have been obtained from sources we believe to be reliable. However,
we make no representation as to the accuracy or completeness of such information and have performed no procedures to
corroborate the information.

18. No opinion is intended to be expressed for matters that require legal or other specialized expertise, investigation, or knowledge
beyond that customarily employed by appraisers valuing businesses.

19. Neither all nor any part of the contents of this report should be disseminated to the public through advertising media, public
relations, news media, sales media, mail, direct transmittal, or any other means of communication, including but not limited to the
Securities Exchange Commission or other governmental agency or regulatory body, without the prior written consent and approval
of UHY Advisors FLVS, Inc.

20. UHY Advisors FLVS, Inc. does not consent to be “expertised” with respect to matters involving the Securities and Exchange
Commission or the Ontario Securities Commission. For purposes of this report, the foregoing sentence means that UHY Advisors
FLVS, Inc. shall not be referred to by name or anonymously in any filing or document. Should you breach this stipulation and
refer to UHY Advisors FLVS, Inc. by name or anonymously, you will amend such filing or document upon written request by
UHY Advisors FLVS, Inc.

21. It is assumed that there are no regulations of any government entity to control or restrict the use of the underlying assets of the
business, unless specifically referred to in the report, and that the underlying assets will not operate in violation of any applicable
government regulations, codes, ordinances, or statutes. Unless otherwise stated, no effort has been made to determine the possible
effect, if any, on the subject business due to future Federal, state, or local legislation, including any environmental or ecological
matters or interpretations thereof.

22. UHY Advisors FLVS, Inc. is not an environmental consulting firm nor audit firm, and it takes no responsibility for any actual or
potential environmental liabilities. Any person entitled to rely on this report, wishing to know whether such liabilities exist, or the
scope and their effect on the value of the property of the business, is encouraged to obtain a professional environmental assessment.
UHY Advisors FLVS, Inc. does not conduct or provide environmental assessments and has not performed one for the subject
property of the business.

23. UHY Advisors FLVS, Inc. has not determined independently whether the business is subject to any present or future liability
relating to environmental matters (including, but not limited to CERCLA/Superfund liability) nor the scope of any such liabilities.
UHY Advisors FLVS, Inc.’s valuation takes no such liabilities into account, except as they have been reported to us or by an
environmental consultant working for the business, and then only to the extent that the liability was reported to us in an actual or
estimated dollar amount. Such matters, if any, are noted in the report. To the extent such information has been reported to us, we
have relied on it without verification and UHY Advisors FLVS, Inc. offers no warranty or representation as to its accuracy or
completeness.

24. UHY Advisors FLVS, Inc. has not made a specific compliance survey or analysis of the subject property of the business to
determine whether it is subject to, or in compliance with, the American Disabilities Act of 1990, and this valuation does not
consider the effect, if any, of noncompliance.

We certify that, to the best of our knowledge and belief…

♦ The statements of fact contained in this report are true and correct, subject to the assumptions and conditions stated.

♦ The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our
personal, impartial, unbiased, and professional analyses, opinions, and conclusions.

♦ Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

♦ Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or

direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the

occurrence of a subsequent event directly related to the intended use of this appraisal.

♦ Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform
Standards of Professional Appraisal Practice, and the American Institute of Certified Public Accountants Statement on
Standards for Valuation Services.

♦ This report was prepared under the direction of Bruce L. Richman, CPA, ABV. Neither any of the professionals who worked on
this engagement, nor the managing directors of UHY Advisors FLVS, Inc., have any present or contemplated future interest in
NeuLion, Inc., any personal interest with respect to the parties involved, or any other interest that might prevent us from
performing an unbiased valuation.

♦ No one provided significant professional assistance to the signer of this report, except for Patrick Corden and James Kazmier.

Bruce L. Richman, CPA/ABV, CVA

Bruce L. Richman

BACKGROUND:

Since 1980, Mr. Richman has been actively involved in business valuations, mergers and acquisitions and other financial and tax consulting matters. He is a
Managing Director of UHY Advisors FLVS, Inc. In his current position, Mr. Richman is responsible for various corporate valuation projects, forensic/litigation
assignments, and consulting services in the United States and for U.S. clients internationally.

PROFESSIONAL EXPERIENCE:

Prior to joining UHY, Mr. Richman was the Managing Director at the Trenwith Valuation, LLC (a subsidiary of BDO) and until June 2004 was a Partner in the
Business Valuation Practice Group for BDO Seidman, LLP. Prior to joining BDO, Mr. Richman was the President of the Investigative Valuation Group, LLC.
Before that, he was a partner in a national CPA firm and was in involved with business valuations consulting services. In addition to the business valuation area,
Mr. Richman has extensive experience in the area of tax planning and compliance as well as the financial analysis and structuring of a wide variety of real estate
projects, including real estate syndications, due diligence, workouts, and the strategic planning for troubled real estate. Mr. Richman has directed hundreds of
engagements involving “going-concern” valuations. His valuation experience covers a full spectrum of industries from hospitality to manufacturing and private
equity groups. He has been involved in several major litigation support projects as an expert witness, having testified in numerous courts and arbitration panels.

The results from Mr. Richman’s valuation projects have been used for the following purposes, among others:

Income, gift, and estate taxes

Workouts and reorganizations

Litigation and expert testimony

Strategic planning

Lost profits & Shareholder disputes

Ownership succession & buy-sell agreements

Mergers and acquisitions

Corporate Financial Reporting

Matrimonial matters

Intellectual Property

Private equity groups

Hedge Funds

EDUCATIONAL BACKGROUND:

Mr. Richman received his Bachelor of Science in Business Administration from North Adams State College in 1978; a Masters of Science in Accounting from
The Ohio State University in 1980; and a Masters of Science in Taxation from Bentley College in 1994. In 2009, Mr. Richman earned an MBA from the J.L.
Kellogg Graduate School of Management at Northwestern University with a major in International Business. Bruce has also taken other specialized training in
Business Valuation.

AFFILIATIONS:

Mr. Richman is a Certified Public Accountant (CPA); an ABV - Accredited in Business Valuations by the AICPA; a Certified Valuation Analyst (CVA) and a
Certified Forensic Accountant. Mr. Richman is also a candidate for the ASA designation with the American Society of Appraisers, specializing in business
valuation. He is also a member of The Forensic CPA Society.

Mr. Richman has published various articles, manuals and books in the areas of business valuation and financial matters, and has been a speaker at various
professional associations. Mr. Richman has also been quoted in the Wall Street Journal and USA Today and has appeared on MSNBC and CNNfn.