UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X]   Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934

      For the quarterly period ended JUNE 30, 2005

[_]   Transition Report under 13 or 15(d) of the Securities Exchange Act of 1934

      For the transition period __________________ to


Commission File Number     0-50119
                           -------


                         IMAGE INNOVATIONS HOLDINGS INC.
                         -------------------------------
        (Exact name of small Business Issuer as specified in its charter)

          NEVADA                                                91-1898414
          ------                                                ----------
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                               Identification No.)


      432 PARK AVENUE SOUTH
           NEW YORK, NY                                            10022
           ------------                                            -----
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number, including area code:              (518) 589-9400
                                                             --------------

                                 NOT APPLICABLE
                                 --------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [_] No

As of August 17, 2005, there were 25,166,000 shares of common stock issued and
outstanding.

Transitional Small Business Disclosure Format (check one): Yes  [_]   No  [X]


<PAGE>

                         PART I - FINANCIAL INFORMATION


ITEM 1.           FINANCIAL STATEMENTS.


IMAGE INNOVATIONS HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                  June 30,    December 31,
                                                                                    2005          2004
                                                                                (Unaudited)
-----------------------------------------------------------------------------------------------------------
<S>                                                                             <C>            <C>
ASSETS

Current Assets
      Cash                                                                      $    12,939    $   297,011
      Accounts receivable net                                                     1,813,153      3,491,029
      Inventory                                                                   3,310,449      3,155,017
      Intangible assets                                                           1,044,409             --
      Other current assets                                                           20,000        147,283
-----------------------------------------------------------------------------------------------------------
      Total current assets                                                        6,200,950      7,090,340

Property and Equipment, Net                                                         372,793        411,166
-----------------------------------------------------------------------------------------------------------
Total Assets                                                                    $ 6,573,743    $ 7,501,506
===========================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
      Demand loan H.E. Capital S.A                                              $ 1,390,591    $ 1,085,541
      Promissory Note                                                               700,000        700,000
      Accounts Payable                                                            1,002,045        266,059
      Accrued Expenses                                                            1,165,410        167,940
-----------------------------------------------------------------------------------------------------------
      Total current liabilities                                                   4,258,046      2,219,540
-----------------------------------------------------------------------------------------------------------
Contingencies and Commitments

Stockholders' Equity
      Preferred Stock                                                                    --             --
        1,000,000 authorized preferred shares, par value $.01
        Nil shares issued and outstanding

      Common Stock                                                                   24,916         24,910
        50,000,000 authorized shares, par value $.001
        24,916,000 shares issued and outstanding (December 2004 - 24,910,000)

      Additional Paid in Capital                                                  6,922,393      6,878,295

      Accumulated Deficit                                                        (4,631,612)    (1,621,239)
-----------------------------------------------------------------------------------------------------------
      Total stockholders' equity                                                  2,315,697      5,281,966
-----------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                      $ 6,573,743    $ 7,501,506
===========================================================================================================
</TABLE>

         See notes to the Condensed Consolidated Financial Statements.

                                      F-1

<PAGE>

IMAGE INNOVATIONS HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                                            For the Three    For the Three    For the Six     For the Six
                                                             Months ended     Months ended    Months ended    Months ended
                                                            June 30, 2005    June 30, 2004    June 30, 2005   June 30, 2004
                                                             (Unaudited)     (Unaudited)      (Unaudited)     (Unaudited)
---------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>             <C>               <C>             <C>
      Revenues                                              $     48,115    $   738,357       $    512,617    $    919,325
---------------------------------------------------------------------------------------------------------------------------

      Cost of sales                                               33,829        453,121            208,558         570,833
---------------------------------------------------------------------------------------------------------------------------

      Gross Profit                                                14,286        285,236            304,059         348,492
---------------------------------------------------------------------------------------------------------------------------

      Expenses:
           Consulting Services                                 1,105,126        299,044          1,125,555         617,184
           Depreciation and amortization                          13,297         13,393             25,615          14,606
           General and administration                            731,038        135,798            807,096         197,477
           Interest                                               34,028         14,767             66,442          14,767
           Marketing and promotions                               25,000         50,359            105,796          57,955
           Payroll and compensation                              289,871        297,465            599,492         451,390
           Professional fees                                     235,693         46,954            522,929          78,200
           Travel and entertainment                               11,324         60,705             61,507         127,679
---------------------------------------------------------------------------------------------------------------------------

      Total Expenses                                           2,445,377        918,485          3,314,432       1,559,258
---------------------------------------------------------------------------------------------------------------------------

      Net Loss                                              $ (2,431,091)   $  (633,249)      $ (3,010,373)   $ (1,210,766)
===========================================================================================================================

      Loss Per Common Share:
      Basic and Diluted                                          $ (0.10)   $     (0.03)      $      (0.12)   $      (0.05)
      Weighted Average number of Common Shares
      Outstanding:
      Basic and Diluted                                       24,913,692     23,976,209         24,911,856      22,444,643
</TABLE>

         See notes to the Condensed Consolidated Financial Statements.

                                      F-2

<PAGE>

IMAGE INNOVATIONS HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Changes in Stockholders' Equity
From January 1, 2005 to June 30, 2005 (Unaudited)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                                            Number                       Additional        Accumulated         Stockholders'
                                       of Common Stock      Amount     Paid-In Capital       Deficit              Equity
-----------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>             <C>           <C>              <C>                    <C>
Balance January 1, 2005                    24,910,000      $ 24,910      $ 6,878,295      $ (1,621,239)          $ 5,281,966
-----------------------------------------------------------------------------------------------------------------------------

Common stock issued for services                6,000             6           29,392                                  29,398
Options issued for services                                                   14,706                                  14,706
Net Loss                                           --            --               --        (3,010,373)           (3,010,373)
-----------------------------------------------------------------------------------------------------------------------------
Balance June 30, 2005                      24,916,000      $ 24,916      $ 6,922,393      $ (4,631,612)          $ 2,315,697
=============================================================================================================================
</TABLE>

         See notes to the Condensed Consolidated Financial Statements.

                                      F-3

<PAGE>

IMAGE INNOVATIONS HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                                            For the Three   For the Three      For the Six     For the Six
                                                             Months ended    Months ended      Months ended    Months ended
                                                            June 30, 2005   June 30, 2004     June 30, 2005   June 30, 2004
                                                             (Unaudited)     (Unaudited)       (Unaudited)     (Unaudited)
---------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>             <C>              <C>             <C>
    Operating
    Activities
      Net Loss                                               $ (2,431,091)   $  (633,249)     $ (3,010,373)   $ (1,210,766)

      Adjustments to reconcile net loss to net cash
        used in operating activities:
            Depreciation and amortization                          13,297          2,409            25,615           3,622
            Allowance for doubtful accounts                       600,000              -           600,000              --
            Common stock and options issued for services           44,104        549,639            44,104         752,475
            Retirement of fixed assets                             23,137              -            23,137              --
            Changes in operating assets and liabilities
                 Decrease/(increase) in accounts receivable        34,819       (642,029)        1,077,876        (761,822)
                 Increase in inventory                           (140,296)      (288,588)         (155,432)       (277,350)
                 Increase/(decrease) in other assets              171,691       (324,796)         (917,126)       (543,654)
                 Increase in accounts payable                     534,859        149,194           735,986         252,985
                 Increase in accrued expenses                     866,419             --           997,470              --
---------------------------------------------------------------------------------------------------------------------------

           Net cash used in operating activities                 (283,061)    (1,187,420)         (578,743)     (1,784,510)
---------------------------------------------------------------------------------------------------------------------------

      Cash flows from investing activity -
           Purchase of property and equipment                        (851)       (12,812)          (10,379)        (53,617)
---------------------------------------------------------------------------------------------------------------------------

      Cash flows from financing activities:
           Proceeds from promissory note - net                    293,144        327,963           305,050         561,193
           Proceeds from demand notes                                            800,000                --         800,000
           Proceeds from sale of stock and warrants                                   --                --         275,000
---------------------------------------------------------------------------------------------------------------------------

           Net cash provided by financing activities              293,144      1,127,963           305,050       1,636,193
---------------------------------------------------------------------------------------------------------------------------

           Net increase in cash                                     9,232        (72,269)         (284,072)       (201,934)
---------------------------------------------------------------------------------------------------------------------------

           Cash at beginning of period                              3,707        143,446           297,011         273,111
---------------------------------------------------------------------------------------------------------------------------

           Cash at end of period                             $     12,939    $    71,177      $     12,939    $     71,177
---------------------------------------------------------------------------------------------------------------------------

     Non cash financing activities:
       Common stock issued for inventory                     $         --    $        --      $         --    $  3,015,279
       Common stock and options issued for services          $     44,104    $   549,639      $     44,104    $    752,475
       Common stock and warrants issued to settle debt       $         --    $        --      $         --    $    400,000
</TABLE>

         See notes to the Condensed Consolidated Financial Statements.

                                      F-4

<PAGE>

IMAGE INNOVATIONS HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements
For the three months and six months ended June 30, 2005 and 2004
--------------------------------------------------------------------------------

1.    Basis of Preparation and Presentation:

      The accompanying unaudited financial statements have been prepared in
      accordance with accounting principles generally accepted in the United
      States of America for interim financial information and the instructions
      to Form 10-QSB and Item 310(b) of Regulation S-B promulgated under the
      Securities Exchange Act of 1934. In the opinion of management, the
      unaudited financial statements have been prepared on the same basis as the
      annual financial statements and reflect all adjustments necessary to
      present fairly the financial position as of June 30, 2005 and the results
      of operations and cash flows for the three months and six months ended
      June 30, 2005 and 2004.

      Certain information and footnote disclosure normally included in financial
      statements prepared in accordance with accounting principles generally
      accepted in the United States of America have been condensed or omitted
      pursuant to the Securities and Exchange Commission's rules and
      regulations.

      The accompanying consolidated financial statements include the accounts of
      the Company and its wholly owned subsidiaries. All intercompany accounts
      and transactions have been eliminated in consolidation.

2.    Liquidity:

      The Company has sustained net operating losses over the past two years.
      During 2004 the Company exited the development stage. Management is
      continuing to develop its celebrity memorabilia business and is pursing
      additional capital to continue this endeavor. The Company anticipates
      issuing equity securities and or arranging additional debt financing to
      meet working capital requirements and to fund development costs in
      connection with this business. If the Company is unable to generate cash
      through the issuance of debt or equity, or is unable to collect its
      outstanding receivables, or sell its current inventory, it may be unable
      to meet its current obligations as they come due.

3.    Inventory

      Inventory is valued at the lower of cost or net realizable value and is
      determined on the first-in, first-out method. Inventory consists of
      finished goods and work in progress. The fine art celebrity memorabilia
      inventory is valued using job costing, and the Company commissions an
      annual year end appraisal of its inventory to validate the carrying value.
      At June 30, 2005 inventory consisted of approximately $3,215,000 in fine
      art celebrity memorabilia and approximately $95,000 in license products.

4.    Stock-based Compensation

      In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share
      Based Payment" ("SFAS 123(R)"). SFAS 123(R) requires all share-based
      payments to employees, including grants of employee stock options, to be
      recognized in the financial statements based on their fair values. The new
      standard allows for two transition alternatives, either the
      modified-prospective method or the modified-retrospective method. The
      Company has not selected a transition method or determined the impact that
      adopting SFAS 123(R) will have on its results of operations. On April 14,
      2005, the Securities and Exchange Commission announced that the effective
      date of SFAS 123R will be deferred until January 1, 2006, for calendar
      year companies. The Company anticipates adopting the prospective method of
      SFAS 123R in the first quarter of fiscal 2006. The effect of this
      pronouncement on the Company for the three and six month periods ended
      June 30, 2005 and 2004 is reflected in the tables below.


                                      F-5
<PAGE>

IMAGE INNOVATIONS HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements
For the three months and six months ended June 30, 2005 and 2004
--------------------------------------------------------------------------------

      The Company has elected to apply APB Opinion No 25, Accounting for Stock
      Issued to Employees, and related interpretations in accounting for its
      stock options and has adopted the disclosure-only provisions of SFAS 123.
      If the Company had elected to recognize compensation cost based on the
      fair value of the options granted at the grant date as prescribed by SFAS
      123, the Company's net loss and net loss per common share for the three
      and six month periods ended June 30, 2005 and 2004 would have been as
      follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                              Three months ended
                                                                      June 30, 2005        June 30, 2004
---------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                      <C>
Net loss for the period, as reported                                   $ (2,431,091)            (633,249)
Add: Stock based compensation included in net loss                           44,104                   --
Deduct: Total stock based employee compensation expense
  determined under fair value based methods for all awards                  (44,104)             (20,416)
---------------------------------------------------------------------------------------------------------
Pro forma net loss                                                     $ (2,431,091)        $   (653,665)
=========================================================================================================

Basic and diluted net loss per share as reported                       $      (0.10)        $      (0.03)

Pro forma basic and diluted net loss per share                         $      (0.10)        $      (0.03)
---------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                               Six months ended
                                                                      June 30, 2005         June 30, 2004
---------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                    <C>
Net loss for the period, as reported                                   $ (3,010,373)          (1,210,766)
Add: Stock based compensation included in net loss                           44,104                    0
Deduct: Total stock based employee compensation expense
  determined under fair value based methods for all awards                 (970,170)            (353,945)
---------------------------------------------------------------------------------------------------------
Pro forma net loss                                                     $ (3,936,439)        $ (1,564,711)
=========================================================================================================

Basic and diluted net loss per share as reported                       $      (0.12)        $      (0.05)

Pro forma basic and diluted net loss per share                         $      (0.16)        $      (0.07)
---------------------------------------------------------------------------------------------------------
</TABLE>

5.    Loss per Common Share

      Loss per common share is computed pursuant to SFAS No. 128, "Earnings Per
      Share." Basic loss per share is computed as net income (loss) available to
      common shareholders divided by the weighted average number of common
      shares outstanding for the period. Diluted earnings per share reflects the
      potential dilution that could occur from common shares issuable through
      stock options and warrants. In the three and six months ended June 30,
      2005, potential common stock issuable amounting to approximately 3,025,000
      shares has not been included in the computation of diluted loss per share
      for the three and six months ended June 30, 2005, as the effect would be
      antidilutive. In 2004 potential common stock issuable amounting to
      approximately 2,900,000 shares has not been included in the computation of
      diluted loss per share for the three and six months ended June 30, 2004,
      as the effect would be antidilutive as well.


                                      F-6
<PAGE>

IMAGE INNOVATIONS HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements
For the three months and six months ended June 30, 2005 and 2004
--------------------------------------------------------------------------------

6.    Reclassification

      For comparability, certain 2004 amounts have been reclassified, where
      appropriate, to conform to the financial presentation used in 2005.

7.    Promissory Note

      A promissory note in the principal amount of $800,000 was issued to a
      third party on April 27, 2004 and was due on October 27, 2004. The note
      bears interest monthly at the rate of 18% per annum. At June 30, 2005, the
      Company had repaid $100,000 of the principal amount. The remaining balance
      of $700,000 is past due, and the Company is negotiating repayment terms
      with the lender. The loan is secured by first lien against all the assets
      of the Company. The note is continuing to accrue interest at the rate of
      18% per annum. Accrued interest amounting to approx $89,000 is included in
      accrued expenses in the accompanying Balance Sheet.

8.    Commitments and Contingencies

      a)    On January 31, 2005 and February 8, 2005, the Company's former Chief
            Executive Officer, Alain Kardos, who resigned as a Director from the
            Company on February 3, 2004, filed actions in the Supreme Court of
            British Columbia, naming the Company, its subsidiaries and Derick
            Sinclair, the Company's Chief Financial Officer, as defendants. Mr.
            Kardos alleged (i) that the defendants wrongfully refused or
            neglected to return to him two certificates representing 700,000
            shares of the Company's common stock (the "Certificates",
            "Certificate", and "Shares", respectively) and (ii) that he was
            wrongfully dismissed from his position as an officer and employee of
            the Company and Image Innovations on October 21, 2004. Mr. Kardos
            seeks a declaration that the Shares and Certificates are his
            property; an injunction restraining and enjoining the defendants,
            and their directors, officers, employees, servants, agents and
            contractors, or others with knowledge of the injunction, from
            directly or through any other person, selling, disposing of or in
            way dealing with the Shares or Certificates without the consent of
            Mr. Kardos; an order for the delivery by the defendants to Mr.
            Kardos, of the Certificates; and damages for their detention and/or
            conversion. In respect of the wrongful termination action, Mr.
            Kardos seeks damages in respect of inadequate notice, an extended
            notice period, general and special damages and costs.

            The Company believes that Mr. Kardos' allegations are erroneous and
            that his claims are without merit. The Company intends to defend the
            actions vigorously, and has filed a Statement of Defense with the
            Supreme Court of British Columbia on March 4, 2005.

            On March 25, 2005, Mr. Kardos filed a third party complaint in the
            United States District Court for the District of Nevada, naming the
            Company, its subsidiaries and Derick Sinclair as third party
            defendants, with substantially the same claims and requested relief
            as described above.


                                      F-7
<PAGE>

IMAGE INNOVATIONS HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements
For the three months and six months ended June 30, 2005 and 2004
--------------------------------------------------------------------------------

      b)    Effective January 2005, the Company signed a three-year contract
            with NFL quarterback Peyton Manning. Pursuant to the agreement, the
            Company will commission portraits of Mr. Manning as well as have
            exclusive rights with respect to Mr. Manning's signature on specific
            memorabilia to be distributed by the Company and certain
            non-exclusive appearance rights. Under the agreement, the Company
            has agreed to pay Mr. Manning's company, Pey Dirt, Inc., royalties
            as specified in the agreement, subject to aggregate minimum royalty
            payments of $2.5 million over the term of the contract of which the
            first $1.25 million was paid in the first quarter of 2005. A second
            payment of $625,000 is due on December 20, 2005 for the 2006
            contract year and the final payment is due on December 20, 2006 for
            the 2007 contract year.

            The first payment of $1.25 million has been accounted for as an
            intangible asset net of $206,100 of expenses and capitalized costs
            as of June 30, 2005. Expenses and capitalized costs are allocated as
            Mr. Manning performs services, as required by the agreement.

9.    Significant Customers

      For the three months ended June 30, 2005 and 2004, one customer generated
      45% and 52% of the Company's revenues, respectively.

      The Company's top five customers represent 99.9% of the total accounts
      receivable at June 30, 2005.

10.   Related Party Transactions

      Image Sports & Entertainment, Inc. paid approximately $8,000 and $17,000
      respectively to an officer of the Company for rent of office space in
      Tannersville, New York, for the three and six months ended June 30, 2005.

      The Company had no other related party transactions.

11.   Subsequent events

      On July 13, 2005 the Company issued 250,000 restricted common shares
      valued at $4.40 a share to settle the dispute between the Company and
      Constellation Capital. On July 7, 2004, the Company entered into a
      consulting agreement with Constellation Capital Corp. ("Constellation"),
      whereby Constellation was to provide consulting services including
      corporate planning and marketing strategies, identifying and assisting
      with merger and acquisition opportunities, conducting market and research
      activities, and assisting with new business development activities. For
      these services, Constellation was to receive warrants to purchase a total
      of 2,500,000 shares of common stock at prices ranging from $3.50 to $4.50
      per share.

      The Company has included the value of these shares in consulting services
      in the accompanied statement of operations and in accrued expenses in the
      accompanying Balance Sheet.


                                      F-8
<PAGE>

IMAGE INNOVATIONS HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements
For the three months and six months ended June 30, 2005 and 2004
--------------------------------------------------------------------------------

      On July 13, 2005 the Company executed a tripartite agreement with
      Norwegian Cruise Lines ("Norwegian") and Fine Art Wholesalers, Inc ("Fine
      Art"). Under the terms of the agreement, Norwegian will provide Fine Art
      with exclusivity rights as its art auction full-service concessionaire on
      a fleet of 13 cruise ships. Image will serve as a guarantor of Fine Art's
      financial commitment to Norwegian. The Company has agreed to provide an $8
      million guarantee in the form of an irrevocable Letter of Credit to
      Norwegian. The Company entered into this agreement in contemplation of its
      proposed acquisition of Fine Art. There can be no assurance that the
      proposed acquisition will be consummated.

      The concession agreement provides a representation by Fine Art that the
      letter of credit be in place prior to the signing of the concession
      agreement. At this time, notwithstanding the execution of the agreement by
      all parties, the Company has not secured the letter of credit. The Company
      is continuing discussions with Norwegian and Fine Art with respect to the
      timing of the posting thereof, but there can be no assurance that it will
      be able to provide the letter of credit on a timely basis, if at all.

      On July 19, 2005 the Company signed an Exclusive Investment Banking
      Agreement with GunnAllen Financial Inc. The agreement provides that
      GunnAllen will assist Image in identifying sources of new equity
      financing, potential business combination transactions and other capital
      assistance. In July the Company paid GunnAllen $25,000 under the terms of
      the agreement.

      On July 25, 2005 the Company signed a Letter of Intent to acquire a 51%
      interest in the Livve Licensing Group, Inc. ("Livve"), a manufacturer of
      cause-related products and artifacts. Under the terms of the proposed
      transaction, Image will acquire 51% of the outstanding capital stock of
      Livve in exchange for $150,000 in cash and the issuance to the
      shareholders of Livve of shares of the Company's common stock having a
      value of $200,000. In addition to the consideration for the acquisition,
      Image will make available up to $200,000 in working capital, whether by
      loan, bank facility or letter of credit. On August 2, 2005 the Company
      loaned Livve $60,000 as part of this facility. There can be no assurance
      that the proposed acquisition will be consummated.

      On August 8, 2005 the Company signed a Letter of Intent to acquire Gold
      Solutions, Inc., a financial services start-up that plans to offer a range
      of novel monetary services to owners of gold, valuable collectible coins
      and other precious metals. Under the terms of the proposed transaction,
      Image will acquire all of the outstanding capital stock of Gold Solutions
      in exchange for the issuance to the shareholders of Gold Solutions of an
      aggregate of approximately 1,500,000 shares of the Company's common stock,
      subject to certain milestones and adjustments. There can be no assurance
      that the proposed acquisition will be consummated.


                                      F-9
<PAGE>

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

Cautionary Note Regarding Forward-Looking Statements

In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), Image Innovations Holdings
Inc. (the "Company") is hereby providing cautionary statements identifying
important factors that could cause our actual results to differ materially from
those projected in forward-looking statements (as such term is defined in the
Reform Act) made by or on behalf of the Company herein, in other filings made by
the Company with the Securities and Exchange Commission, in press releases or
other writings, or orally, whether in presentations, in response to questions or
otherwise. Any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions or future events or
performance (often, but not always, through the use of words or phrases such as
"will result," "are expected to," "anticipated," "plans," "intends," "will
continue," "estimated," and "projection") are not historical facts and may be
forward-looking; accordingly, such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual results
or performance of the Company to be materially different from any future results
or performance expressed or implied by such forward-looking statements. Such
known and unknown risks, uncertainties and other factors include, but are not
limited to, the following:

      (i)   history of operating losses;

      (ii)  competition in the marketplace;

      (iii) dependence on current management and future ability to obtain
            qualified management personnel;

      (iv)  risks associated with expansion into additional markets where the
            Company does not have a presence or significant market penetration;

      (v)   the effect of economic conditions in the United States generally on
            the Company's business;

      (vi)  the failure to manage growth properly and integrate acquired assets
            and operations successfully;

      (vii) the ability to secure outside financing at rates or on terms
            acceptable to the Company;

     (viii) other factors which are described in further detail in the Company's
            Annual Report on Form 10-KSB for the year ended December 31, 2004
            and in other filings by the Company with the Securities and Exchange
            Commission.

The Company cautions that the factors described above could cause actual results
or outcomes to differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company. Any forward-looking statement
speaks only as of the date on which such statement is made, and the Company
undertakes no obligation to update any forward-looking statement or statements
to reflect events or circumstances after the date on which such statement is
made or to reflect the occurrence of unanticipated events. New factors emerge
from time to time, and it is not possible for management to predict all of such
factors. Further, management cannot assess the impact of each such factor on the
business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking
statements.


                                       3
<PAGE>

Overview

Image Innovations Holdings Inc., a Nevada corporation (the "Company", "our",
"us" or "we"), is in the business of selling high- and medium-value sports and
entertainment celebrity artwork and collectibles, and has been in the business
of selling low-cost consumer items branded under license with the logos of
professional sport leagues and teams. The Company has three wholly-owned
subsidiaries (collectively referred to as "Image Group"), as follows:

o     Image Innovations Sports & Entertainment Inc., a Delaware corporation
      ("ISE"), sells celebrity artwork and collectibles through a targeted
      distribution network. ISE is becoming a recognized leader in the fast
      growing, multi-billion dollar industry of artwork collectibles. ISE has
      retained some of the most recognized names in the celebrity art world,
      including well-known artists, such as Carlo Beninati and Doug London, to
      create celebrity artwork for sale and distribution.

o     Image Innovations Inc., a Delaware corporation ("Image Innovations"), has
      been in the business of creating, sourcing and marketing a wide variety of
      relatively low-cost electronic products by endorsing them with the brand
      logos of sports teams and leagues and/or other recognized trademarks. This
      portion of our business has been substantially curtailed in 2005 and we
      are currently reviewing the same to determine the extent to which such
      business activities should be continued, if at all. In the event that we
      determine to continue these operations, it is likely that they will be
      consolidated into the operations of ISE.

o     Imaging Innovations Sports and Entertainment Inc. , a New York corporation
      ("Imaging"), was incorporated to acquire a warehouse and storage facility
      in Tannersville, New York, located near ISE's existing facility in
      Tannersville. Both ISE and Image Innovations operate their fulfillment
      centers from this facility. The facility is approximately 9,000 square
      feet.

Current Developments

Celebrity Endorsement Agreement

Effective January 2005, ISE signed a three-year contract with Peyton Manning, a
leading NFL quarterback, who ranks among the highest-achieving quarterbacks in
NFL history. Pursuant to the agreement, ISE will commission portraits of Mr.
Manning as well as have exclusive rights with respect to Mr. Manning's signature
on specific memorabilia to be distributed by ISE and certain non-exclusive
appearance rights. Under the agreement, ISE has agreed to pay Mr. Manning's
company, Pey Dirt, Inc., royalties as specified in the agreement, subject to
aggregate minimum royalty payments of $2.5 million, of which the first $1.25
million was paid in the first quarter of 2005.

Potential Acquisition of Art Company and Agreement with Cruise Ship Line

The Company has executed a letter of intent for the acquisition of Fine Art
Wholesalers, Inc. and its associated companies (collectively, "Fine Art"). Fine
Art is a privately-owned art company that supplies art for sale through the
cruise-line industry. The Company believes that the synergy between ISE and Fine
Art will have the potential to augment the revenue base of ISE, while Fine Art's
reputation will enhance the Image Group in the fields of art and sport. Although
negotiations for definitive documentation are proceeding, there can be no
assurance that this transaction will be consummated. Moreover, even in the event
that we execute definitive documentation in respect of the proposed acquisition
of Fine Art, consummation of the transaction will likely be subject to various
customary closing conditions.


                                       4
<PAGE>

In contemplation of the consummation of the transaction, we have entered into a
tripartite six-year concession agreement with Fine Art and Norwegian Cruise Line
("NCL"), pursuant to which Fine Art has been granted the exclusive right to
conduct art auctions on board NCL's thirteen passenger vessels. In accordance
with the concession agreement, we have agreed to guarantee Fine Art's financial
commitments to NCL and have agreed to provide an $8 million letter of credit in
support of the guarantee. The concession agreement provides a representation by
Fine Art that the letter of credit be in place prior to the signing of the
agreement. At this time, notwithstanding the execution of the agreement by all
parties, we have not secured the letter of credit. We are continuing discussions
with NCL and Fine Art with respect to the timing of the posting thereof, but
there can be no assurance that we will be able to provide the letter of credit
on a timely basis, if at all.

Title-4-Art and Title-4-Sports

The Image Group has conceived and developed a process to issue a registered
title to owners of fine art and memorabilia. The Image Group has received
approval from Norwegian Cruise Lines to register titles for all art and sports
memorabilia sold on their ships. The cruise line has estimated that it will
register approximately 150,000 titles with the Company in 2005. The proposed
cost to the purchaser of each title registration is expected to be approximately
$40. The Image Group intends to market this concept not only to the ships within
our own distribution network but to other channels retailing fine art and
memorabilia. There can be no assurance that an agreement with the cruise line
will be consummated on favorable terms to the Company, if at all.

Gold Solutions

We have entered into a Letter of Intent to acquire the outstanding share capital
of Gold Solutions, Inc. ("GSI"), a start-up company with an agreement with
MasterCard to provide credit cards to owners of gold bullion, gold coins and
gradable collectible coins. The consideration for the acquisition of GSI will be
the issuance of 1,500,000 shares of our common stock (as adjusted with respect
to certain targets), of which 1,000,000 will be issued at closing and the
balance on the performance of certain milestones. Although negotiations for
definitive documentation are proceeding, there can be no assurance that this
transaction will be consummated. Moreover, even in the event that we execute
definitive documentation in respect of the proposed acquisition of GSI,
consummation of the transaction will likely be subject to various customary
closing conditions.

Livve Licensing Group

We have entered into a Letter of Intent to acquire a 51% interest in the Livve
Licensing Group, Inc ("Livve"), a manufacturer of cause-related products and
artifacts. The consideration for the acquisition of the 51% interest will be
$150,000 in cash and $200,000 of shares of our common stock. There can be no
assurance that the proposed acquisition will be consummated.


                                       5
<PAGE>

Operating Results

Results of Operations for the Three and Six Months Ended June 30, 2005 as
Compared with the Three and Six Months Ended June 30, 2004

Revenue

Our revenue, gross margin and overhead expenses for the three and six month
periods ended June 30, 2005 are summarized as follows:

<TABLE>
<CAPTION>
                                   Three months   Three months    Six months      Six months
                                      ended          ended          ended           ended
                                  June 30, 2005  June 30, 2004   June 30, 2005   June 30, 2004
                                    ---------      ---------      ---------       ---------
<S>                                 <C>            <C>            <C>             <C>
Revenue ISE                         $  46,762      $ 712,575      $ 516,016       $ 886,690
Revenue Image Innovations               1,353         25,781         (3,399)         32,635
                                                                  ---------       ---------
Total Revenue                       $  48,115      $ 738,356      $ 512,617       $ 919,325

Gross Profit ISE                    $  13,367      $ 267,804        389,260         327,235
Gross Profit Image Innovations            919         17,431        (85,201)         21,257
                                    ---------      ---------      ---------       ---------
Total Gross Profit                  $  14,286      $ 285,235      $ 304,059       $ 348,492
</TABLE>

Revenue was $48,115 for the three months ended June 30, 2005 as compared with
$738,356 for the three months ended June 30, 2004. Revenue for the six months
ended June 30, 2005 was $512,617 as compared with $919,325 for the six months
ended June 30, 2004.

ISE produced revenue for the three months ended June 30, 2005 of $46,762, as
compared with revenue of $712,575 for the three months ended June 30, 2004, and
gross margins during such period of $13,367, as compared with gross margins of
$267,804 during the three months ended June 30, 2004. ISE's revenue for the six
months ended June 30, 2005 were $516,016, as compared with $886,690 for the six
months ended June 30, 2004. ISE's main market is the cruise line industry. The
decline in revenue from the relevant periods of 2004 to 2005 is principally
attributable to a temporary reduction in purchase orders with our principal
customers within that industry.

Image Innovations continues to be impacted by the defective shipment of helmet
radios as well as the cancellation of the NHL 2004-2005 season. Revenue for the
three months ended June 30, 2005 was $1,353 as compared with revenue of $25,781
for the three months ended June 30, 2004. Revenue for the six months ended June
30, 2005 was ($3,399) as compared with $32,635 for the six months ended June 30,
2004. Gross margins were $919 for the three months ended June 30, 2005 and
$17,431 for the same period in 2004. We reported negative revenue for the three
months ended March 31, 2005 when the defective radios were returned and we
issued credits for sales made in 2004. We considered repairing the radios and
have chosen to sell them as is and are negotiating with buyers apart from our
established customers. As a result of these and other factors, the business of
Image Innovations has been substantially curtailed in 2005 and we are currently
reviewing the same to determine the extent to which such business activities
should be continued, if at all. In the event that we determine to continue these
operations, it is likely that they will be consolidated into the operations of
ISE.

Expenses

We incurred total expenses of $2,445,377 for the three months ended June 30,
2005 compared with $918,485 for the same period in 2004. Total expenses were
$3,314,432 for the six months ended June 30, 2005 as compared with $1,559,258
for the six months ended June 30, 2004. The increased expenses as compared with
the comparable 2004 period are impacted by the $1.1 million settlement with
Constellation Capital Corp. ("Constellation") and a $600,000 doubtful debt
provision against ISE trade receivables.


                                       6
<PAGE>

On July 13, 2005 the Company issued 250,000 restricted common shares to settle
the dispute between the Company and Constellation Capital. On July 7, 2004, the
Company entered into a consulting agreement with Constellation, whereby
Constellation was to provide consulting services including corporate planning
and marketing strategies, identifying and assisting with merger and acquisition
opportunities, conducting market and research activities, and assisting with new
business development activities. For these services, Constellation was to
receive warrants to purchase a total of 2,500,000 shares of common stock at
prices ranging from $3.50 to $4.50 per share.

The Company established a bad debts provision of $600,000 for the fiscal quarter
ended June 30, 2005, as compared with no provision for bad debts for the quarter
ended June 30, 2004. ISE's trade receivables at June 30, 2005 were $2.4 million.
ISE's management is in contact with these customers and believes that the
accounts will be paid. Management is working on collecting the outstanding
balances but because of the age of these receivables management has decided to
reserve approximately 25% of the outstanding balance.

Our combined payroll and consulting expenses were $294,997 (excluding the $1.1
million Constellation settlement) for the three months ended June 30, 2005,
compared with $596,509 for the three months ended June 30, 2004. Payroll and
consulting expenses were $599,492 for the six months ended June 30, 2005 as
compared with $451,390 for the six months ended June 30, 2004. Our payroll and
consulting expenses decreased by $301,512 compared with the three months ended
June 30, 2004. In 2004, the Company incurred a one-time consulting fees related
to the establishment and development of its business. The Company has also
reduced operating expenses in Image Innovations by reducing staff and closing
the Vancouver office in response to lower revenues.

We incurred professional fees of $235,693 for the three months ended June 30,
2005, as compared with $46,954 for the three months ended June 30, 2004.
Professional fees were $522,929 for the six months ended June 30, 2005 as
compare with $78,200 for the six months ended June 30, 2004. The increase is
related to the continued development of the Company as we employ legal,
accounting and other professionals. Legal fees increased by approximately
$75,000 related to the preparation of legal agreements to transact the Company's
business, to prepare and file the documents required to comply with regulations
related to our status as a public company and to defend the Company against
lawsuits. Accounting fees increased by approximately $110,000 in connection with
the engagement of new auditors to comply with SEC requirements and the retention
of other certified public accountants to complement the Company's accounting
staff.

We incurred travel and entertainment expenses of $11,324 for the three months
ended June 30, 2005, compared with $60,705 for the three months ended June 30,
2004. Travel and entertainment expenses were $61,507 for the six months ended
June 30, 2005 as compared with $127,679 for the six months ended June 30, 2004.
Travel expenses were incurred in attending trade shows, establishing and
maintaining contacts for our distribution network, visiting customers, and
coordinating and attending the signings of our memorabilia and limited edition
fine art creations by celebrities and our artists. Travel in the second quarter
of 2005 was reduced in response to lower revenues.

Marketing and promotions expenses were $25,000 for the three months ended June
30, 2005, compared with $50,359 for the three months ended June 30, 2004.
Marketing and promotion expenses were $105,796 for the six months ended June 30,
2005 as compared with $57,955 for the six months ended June 30, 2004. In 2005,
ISE hosted events and participated in trade shows, the significant of which
related to events with Peyton Manning and the Art Expo held in New York. Lower
marketing expenses in Q2 are due to reduced marketing activity in the quarter.


                                       7
<PAGE>

We anticipate that our operating expenses will increase as we carry out our plan
of operations for continued growth.

Net Loss

We incurred a net loss of $2,431,091 for the three months ended June 30, 2005,
compared with a loss of $633,249 for the three months ended June 30, 2004.

Liquidity and Financial Condition

We had cash and cash equivalents of $12,939 as of June 30, 2005, compared with
$738,356 as of June 30, 2004.

We had working capital of approximately $1.9 million as of June 30, 2005,
compared with $3.4 million as of June 30, 2004. The approximately $1.5 million
decrease in working capital is attributable to an approximately $1.9 million
increase in accounts payable and accrued liabilities and an increase of $900,000
in notes payable offset by the increase in accounts receivable and intangible
assets of approximately $1.4 million related primarily to ISE receivables and
the remaining commitments paid for under the Peyton Manning contract.

We anticipate that we will require a minimum of $8 million over the next twelve
months in order to continue our operations as presently contemplated. Our
ability to generate revenue will depend on our ability to obtain financing to
fund our operations and our success in expanding our business. The Company is
currently in discussions with a number of sources with respect to potential
financing to fund our operations. These financing proposals include debt, equity
or a combination of the two, and we are actively pursuing these proposals.
However, there can be no assurance that any of these proposals will come to
fruition or that the required funding will be obtained in order to enable us to
carry out our continuing operations. In the event that we are unable to secure
adequate financing on acceptable terms, we may be compelled to cease or
significantly curtail our operations, or alternatively, seek protection in
bankruptcy.

Historically, the Company has been financed primarily by loans from related
parties. The planned expansion of the business will require a variety of
financing sources, including new equity capital, long-and short-term debt and
the provision of third-party bonding for the Company's operational performance
obligations. The cost of such financing will be determined in part by our stock
price and in part by third party assessment of our operating prospects.

The Company has sustained net operating losses over the past two years. During
2004 the Company exited the development stage. Management is continuing to
develop its celebrity memorabilia business and is pursing additional capital to
continue this endeavor. The Company anticipates issuing equity securities and or
arranging additional debt financing to meet working capital requirements and to
fund development costs in connection with this business. If the Company is
unable to generate cash the issuance of debt or equity, or is unable to collect
its outstanding receivables, or sell its current inventory, it may be unable to
meet its current obligations as they come due.

H.E. Capital S.A. ("H.E Capital") has been a major source of funding for the
Company to date. The Company has a loan agreement with H.E Capital for a
non-revolving secured $5 million dollar loan, bearing interest at 9% per annum
and due upon demand by H.E. Capital. As of June 30, 2005, $1.4 million was
outstanding under this loan agreement. Additionally, H.E Capital has invested
$1.5 million in the Company through a combination of conversion of debt and a
private placement.

The Company also issued a promissory note in the principal amount of $800,000 to
a third party on April 27, 2004, which note became due and payable on October
27, 2004. The note bears interest monthly at the rate of 18% per annum. At April
11, 2005, we had repaid $100,000 of the principal amount; the remaining $700,000
is past due and we are currently negotiating repayment terms with the lender.
The loan is secured by first lien against all the assets of the Company.


                                       8
<PAGE>

The Company operates subject to normal manufacturing financial profiles, except
that the nature of its product development requires it to build and accumulate
significant inventories. Similarly, its contractual arrangements with its sports
celebrities require it to make advance royalty payments in order to secure the
contracts. Its ability to retain new sports personalities is therefore subject
to the constraint as to the availability of funds.

As a young business with a limited history and a small equity capital base, the
Company has not yet been able to establish a high credit rating. As the
Company's operations grow in size and as new equity is introduced into the
business, we expect that we will be able to establish a higher credit rating,
although there can be no assurance that this will be achieved.

The Company has based its anticipated liquidity requirements on its operating
experience to date and on the business opportunities and negotiations in which
it is currently engaged. This liquidity requirement could be adversely affected
by various events outside the Company's control, such as an interruption in the
operations of the cruise line industry or the failure of, or any difficulties
suffered by, any of its customers. The Company intends to develop a spread of
distribution channels and customers to mitigate the effect on its liquidity of
any individual adverse factor.

Cash Flows

We used cash of $283,061 in operating activities during the three months ended
June 30, 2005, compared with $1,187,420 for the period ended June 30, 2004.

Loan Agreement

We entered into a loan agreement on April 27, 2004 with Coach Capital LLC
pursuant to which we borrowed $800,000 for a six-month term. Under the loan
agreement, we agreed to pay interest on the principal amount borrowed at the
rate of 10% per annum payable monthly for the first four months of the term and
at the rate of 18% per annum thereafter. We also agreed to pay a loan fee of
$8,000. Further, we have agreed to grant a first lien against our assets as well
as the assets of ISE, and have agreed not to grant any additional liens against
such assets without the prior written consent of Coach Capital. As of June 30,
2005, the Company had repaid $100,000 of the principal amount of such loan; the
remaining $700,000 was past due and the Company is negotiating repayment terms
with the lender. The Company is continuing to accruing interest at the rate of
18% per annum.

H.E. Capital

We have been largely dependent upon H.E. Capital S.A. ("H.E. Capital") to fund
the business of the Company to date. H.E. Capital entered into a loan agreement
with the Company dated January 14, 2003 ("the Loan Agreement") and has since
entered into various agreements amending and increasing the amount available to
be advanced under Loan Agreement to $5 million. Under the terms of the Loan
Agreement, the loans accrued interest at the rate of 9% per annum and are
repayable upon demand. The loans were secured by a general security agreement
granted by the Company against all of its assets. H.E. Capital consented to the
Coach Capital loan and its security interest is subordinated to the Coach
Capital security interest.

As of June 30, 2005 H.E. Capital had advanced $1,390,591 to the Company compared
with $336,897 at June 30, 2004. On March 25, 2004, we repaid $400,000 owing to
H.E. Capital at that time by the issuance of shares and share purchase warrants.
H.E. Capital agreed to cancel, surrender and forgive all interest accrued on the
indebtedness of $400,000 that was converted into shares and share purchase
warrants. On September 30, 2004, we repaid $900,000 owing to H.E. Capital when
H.E Capital exercised 600,000 of the warrants they acquired in December 2003, to
purchase common shares at $1.50. H.E. Capital agreed to cancel, surrender and
forgive all interest accrued on this indebtedness of $900,000 in payment of the
balance owed in relation to the exercise of the 600,000 warrants.


                                       9
<PAGE>

H.E. Capital shared common officers and directors with the Company from the date
of the Company's acquisition of Image Innovations Inc. until they resigned their
positions with the Company on February 24, 2004.

There is no assurance that H.E. Capital will advance any additional amounts to
us in order to continue to fund our business or that they will not demand
repayment.

Critical Accounting Policies

The Company's management makes a number of significant estimates, assumptions
and judgments in connection with the preparation of its financial statements.
See "Management's Discussion and Analysis or Plan of Operation - Critical
Accounting Policies" in our Form 10-KSB for the fiscal year ended December 31,
2004 for a detailed discussion of the estimates and judgments necessary in our
accounting for revenue recognition, inventory and stock-based transactions.

ITEM 3.  CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) as of the end of the period covered by this
report (the "Evaluation Date"). Based upon that evaluation, our management
concluded that our disclosure controls and procedures were not as effective as
they should be with respect to timely alerting management to material
information required to be included in our periodic SEC filings. Specifically,
our internal reporting processes and procedures did not ensure that full,
accurate and timely disclosure of matters required to be reported to the SEC in
our periodic filings were made. Nevertheless, our management has determined that
all matters required to be disclosed in this report have been reported. We are
in the process of diligently developing processes and procedures to assure full,
accurate and timely disclosure in the current fiscal year, with the expectation
of establishing effective disclosure controls and procedures as soon as
reasonably practicable.

                           PART II--OTHER INFORMATION

ITEM 6.  EXHIBITS

    Exhibit
     Number
-----------  -------------------------------------------------------------------
      10.1   Concession Agreement dated as of June 7, 2005 (executed July 13,
             2005) among the Registrant, Fine Art Wholesalers, Inc. and NCL
             (Bahamas) Ltd.

      31.1   Certification of Chief Executive Officer required by Rule 13a-14(a)
             or Rule 15d-14(a).

      31.2   Certification of Chief Financial Officer required by Rule 13a-14(a)
             or Rule 15d-14(a).

      32.1   Certification of Chief Executive Officer required by Rule 13a-14(b)
             or 18 U.S.C. 1350.

      32.2   Certification of Chief Financial Officer required by Rule 13a-14(b)
             or 18 U.S.C. 1350.
--------------------------------------------------------------------------------


                                       10
<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Securities and Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                      IMAGE INNOVATIONS HOLDINGS INC.


                                      By:      /s/ Michael Preston
                                               ---------------------------------
                                                   MICHAEL PRESTON
                                                   Chief Executive Officer


                                      By:      /s/ Derick Sinclair
                                               ---------------------------------
                                                   DERICK SINCLAIR
                                                   Chief Financial Officer


                                       11