UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                     ______________________________________

                                  FORM 10-QSB/A
                                 AMENDMENT NO. 1
                     ______________________________________


          |X|    AMENDMENT TO QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

                                       OR

          |_|    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                        Commission file number 000-30451


                        NEWPORT INTERNATIONAL GROUP, INC.
        (Exact name of small business issuer as specified in its charter)


                  DELAWARE                               23-3030650
        (State or other jurisdiction                   (IRS Employer
             of incorporation)                       Identification No.)


            73061 EL PASEO, SUITE 202 PALM DESERT         92260
           (Address of principal executive offices)    (Zip Code)


                                 (760) 779-0251
                 Issuer's telephone number, including area code


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

Transitional Small Business Disclosure Format:  Yes |_|   No |X|

The total number of shares of the issuer's common stock, $.001 par value,
outstanding at April 30, 2005 was 26,978,304

<PAGE>

                   EXPLANATORY NOTE REGARDING AMENDMENT NO. 1

We are amending this Form 10-QSB for the three months ended March 31, 2005 to
restate our unaudited consolidated balance sheet at March 31, 2005. We
determined that the restricted investment in marketable securities should have
been presented as an asset and we have previously restated our audited financial
statements for the year ended December 31, 2004. Please see Note 3 Restatement
contained in the Notes to Consolidated Financial Statements (unaudited)
appearing later in this Form 10-QSB/A which further describes the effect of this
restatement.

The Items of this Form 10-QSB/A for the three months ended March 31, 2005 which
are amended and restated are as follows: Part I Financial Information, Item 1
Financial Statements, Consolidated Balance Sheet as of March 31, 2005
(unaudited) and Notes to Consolidated Financial Statements as of March 31, 2005
(Unaudited)and Item 3, Controls and Procedures. Further, Part II Other
Information, Item 6 Exhibits of this 10-QSB/A includes currently dated
certificates from the Company's Chief Executive Officer and Principal Accounting
and Financial Officer in Exhibits 31.1, 31.2 and 32.1.

The remaining Items contained in this Form 10-QSB/A consist of all other Items
originally contained in our Form 10-QSB for the three months ended March 31,
2005 as filed on May 11, 2005. This Form 10-QSB/A does not reflect events
occurring after the filing of the original Form 10-QSB, nor modify or update
those disclosures in any way other than as required to reflect the effects of
the restatement.

When used in this quarterly report, the terms "Newport," "we," and "us" refers
to Newport International Group, Inc., a Delaware corporation, and its
subsidiaries, Grass Roots Communications, Inc., a Delaware corporation ("Grass
Roots") and Spare Back-Up, Inc., a Delaware corporation ("Spare").


           CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

CERTAIN STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-QSB CONTAIN OR MAY
CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS WERE BASED ON VARIOUS FACTORS AND WERE DERIVED
UTILIZING NUMEROUS ASSUMPTIONS AND OTHER FACTORS THAT COULD CAUSE OUR ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS. THESE
FACTORS INCLUDE, BUT ARE NOT LIMITED TO, ECONOMIC, POLITICAL AND MARKET
CONDITIONS AND FLUCTUATIONS, GOVERNMENT AND INDUSTRY REGULATION, INTEREST RATE
RISK, U.S. AND GLOBAL COMPETITION, AND OTHER FACTORS. MOST OF THESE FACTORS ARE
DIFFICULT TO PREDICT ACCURATELY AND ARE GENERALLY BEYOND OUR CONTROL. YOU SHOULD
CONSIDER THE AREAS OF RISK DESCRIBED IN CONNECTION WITH ANY FORWARD-LOOKING
STATEMENTS THAT MAY BE MADE HEREIN. READERS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF
THIS REPORT. READERS SHOULD CAREFULLY REVIEW THIS ANNUAL REPORT IN ITS ENTIRETY,
INCLUDING BUT NOT LIMITED TO OUR FINANCIAL STATEMENTS AND THE NOTES THERETO AND
THE RISKS DESCRIBED IN "ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION." EXCEPT FOR OUR ONGOING OBLIGATIONS TO DISCLOSE MATERIAL INFORMATION
UNDER THE FEDERAL SECURITIES LAWS, WE UNDERTAKE NO OBLIGATION TO RELEASE
PUBLICLY ANY REVISIONS TO ANY FORWARD-LOOKING STATEMENTS, TO REPORT EVENTS OR TO
REPORT THE OCCURRENCE OF UNANTICIPATED EVENTS.

                                       -2-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.


                              INDEX TO FORM 10-QSB



PART I - FINANCIAL INFORMATION

     Item 1. Financial Statements (Unaudited)

       Historical Financial Statements (Unaudited)

         Consolidated Balance Sheet (Unaudited)................................4

         Consolidated Statements of Operations (Unaudited).....................5

         Consolidated Statements of Cash Flows (Unaudited)...................6-7

         Notes to Consolidated Financial Statements (Unaudited).............8-22

     Item 3. Controls and Procedures..........................................23


PART II - OTHER INFORMATION

     Item 6. Exhibits.........................................................23

     Signatures...............................................................24


                                       -3-
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL INFORMATION

                        NEWPORT INTERNATIONAL GROUP, INC.
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 2005
                                   (Unaudited)

                                     ASSETS
Current Assets:
  Cash ..........................................................  $    743,901
  Deposit .......................................................        25,000
  Note receivable ...............................................        88,000
                                                                   ------------
     Total current assets .......................................       856,901

  Investment in equity securities ...............................       912,501
  Restricted investment in marketable securities ................       912,501
  Property and equipment, net of accumulated depreciation
   of $47,352 ...................................................       183,625
  Deferred financing costs, net of accumulated amortization
   of $257,897 ..................................................       234,963
  Other assets ..................................................        36,301
                                                                   ------------

     Total assets ...............................................  $  3,136,792
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
  Accounts payable and accrued expenses .........................  $    363,860
  Current portion of capitalized lease obligations ..............         4,139
  8% Convertible promissory notes, net of debt discount
   of $1,734,093 ................................................             -
  Accrued interest on convertible promissory notes ..............        34,967
  Due to stockholder ............................................        15,000
                                                                   ------------

     Total current liabilities ..................................       417,966

  12.5% Convertible promissory notes, net of debt discount
   of $575,000 ..................................................             -
  Capitalized lease obligations, net of current portion .........        10,805
  Other liabilities .............................................         6,426
                                                                   ------------

     Total liabilities ..........................................       435,197

  Common stock subject to put ...................................     5,000,000

Stockholders' Deficit:
  Preferred stock; $.0001 par value, 5,000,000 shares authorized,
   none issued and outstanding ..................................             -
  Common stock; $.001 par value, 150,000,000 shares authorized,
    26,927,183 issued and outstanding ...........................        26,927
  Additional paid-in capital ....................................    34,138,817
  Accumulated other comprehensive loss ..........................    (9,998,526)
  Accumulated deficit ...........................................   (21,465,623)
  Common stock subject to put ...................................    (5,000,000)
                                                                   ------------

     Total stockholders' deficit ................................    (2,298,405)
                                                                   ------------

     Total liabilities and stockholders' deficit ................  $  3,136,792
                                                                   ============

                 See Notes to Consolidated Financial Statements.

                                       -4-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE THREE-MONTH PERIODS ENDED MARCH 31,
                                   (Unaudited)

                                                        2005            2004
                                                    ------------    -----------

Revenues ........................................   $      3,846    $         -
                                                    ------------    -----------

Operating expenses:
  Research and development ......................        240,083        193,028
  Sales, general and administrative .............      1,048,494        914,529
                                                    ------------    -----------

     Total operating expenses ...................      1,288,577      1,107,557
                                                    ------------    -----------

     Operating loss .............................     (1,284,731)    (1,107,557)
                                                    ------------    -----------

  Other expenses ................................       (172,929)             -
  Other income ..................................          4,800              -
  Interest expense ..............................       (313,368)    (4,326,719)
                                                    ------------    -----------
  Total other expenses, net .....................       (481,497)    (4,326,719)

Net loss ........................................   $ (1,766,228)   $(5,434,276)
                                                    ============    ===========

Basic and diluted net loss per common share .....   $      (0.07)   $     (0.64)
                                                    ============    ===========

Basic and diluted weighted average common
shares outstanding ..............................     26,789,103      8,473,752
                                                    ============    ===========

                 See Notes to Consolidated Financial Statements.

                                       -5-
<PAGE>
<TABLE>
                                NEWPORT INTERNATIONAL GROUP, INC.
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                           For the three-month periods ended March, 31,
                                           (Unaudited)

<CAPTION>
                                                                           2005          2004
                                                                       -----------   -----------
<S>                                                                    <C>           <C>
Cash flows from operating activities:
Net loss ............................................................  $(1,766,228)  $(5,434,276)
Adjustments to reconcile net loss to net cash
 used in operating activities:
  Amortization of debt discount .....................................      197,429       788,886
  Fair value of shares issued in connection with the settlement
   of pre-merger obligations ........................................            -     3,482,382
  Fair value of shares of common stock isued in
  payment of interest on promissory notes ...........................       34,967             -
  Fair value of shares issued in connection with the failure
   to timely file the registration statement ........................      132,851             -
  Depreciation ......................................................       19,228        11,353
  Amortization of deferred financing costs ..........................       60,222        26,176
  Fair value of stock options issued to employees
   and consultants for services rendered ............................       83,600       494,672
  Common stock issued to consultants for services
   rendered .........................................................       13,440             -
Changes in operating assets and liabilities
  Due from related party ............................................            -        18,500
  Prepaid expenses and other current assets .........................            -         4,000
  Accounts payable and accrued expenses .............................       16,641      (144,423)
  Accrued interest on note receivable ...............................       (1,800)            -
  Other long-term liability .........................................            -         6,426
  Accrued interest on convertible promissory notes ..................       (2,708)       34,999
                                                                       -----------   -----------

Net cash used in operating activities ...............................   (1,212,358)     (711,305)
                                                                       -----------   -----------

Cash flows from investing activities:
  Cash acquired from merger .........................................            -        16,196
  Proceeds from disposition of marketable securities ................       68,925
  Purchases of property and equipment ...............................      (92,199)            -
                                                                       -----------   -----------

Net cash (used in) provided by investing activities .................      (23,274)       16,196
                                                                       -----------   -----------

Cash flows from financing activities:
  Principal repayments on lease obligations .........................       (2,553)            -
  Proceeds from issuance of convertible promissory notes ............      575,000     1,025,989
  Proceeds from exercise of stock options ...........................          313             -
  Payments of convertible promissory notes ..........................     (265,000)            -
  Payments of deferred financing costs ..............................            -      (139,092)
  Payments of notes payable .........................................            -      (250,000)
                                                                       -----------   -----------

Net cash provided by financing activities ...........................      307,760       636,897
                                                                       -----------   -----------

Decrease in cash ....................................................     (927,872)      (58,212)

Cash, beginning of period ...........................................    1,671,773        80,702
                                                                       -----------   -----------

Cash, end of period .................................................  $   743,901   $    22,490
                                                                       ===========   ===========
                                                                              (continued)
                         See Notes to Consolidated Financial Statements.

                                               -6-
</TABLE>
<PAGE>
<TABLE>
                                NEWPORT INTERNATIONAL GROUP, INC.
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                           For the three-month periods ended March, 31,
                                           (Unaudited)
                                           (continued)
<CAPTION>
                                                                           2005          2004
                                                                       -----------   -----------
<S>                                                                    <C>           <C>
Supplemental disclosures of cash flow information:
  Cash paid during the year for interest ............................  $     3,601   $         -
                                                                       ===========   ===========

  Cash paid during the year for taxes ...............................  $         -   $         -
                                                                       ===========   ===========

Supplemental schedule of non-cash financing and investing activities:

Fair value of warrants issued in connection with the issuance of the
convertible notes and corresponding debt discount ...................  $   170,070   $   494,672
                                                                       ===========   ===========

Fair value of warrants issued to placement agent in connection with
the issuance of the convertible notes and corresponding increase in
deferred financing costs ............................................  $         -   $    51,101
                                                                       ===========   ===========

Fair value of repricing of warrants issued to placement agent in
connection with the issuance of the 8% convertible notes and
corresponding increase in deferred financing costs ..................  $   140,149   $         -
                                                                       ===========   ===========

Fair value of repricing of warrants and beneficial conversion feature
issued in connection with the issuance of the 8% convertible notes
and corresponding debt discount .....................................  $ 1,154,635   $         -
                                                                       ===========   ===========

Beneficial feature resulting from issuance of convertible promissory
notes and corresponding debt discount ...............................  $   404,930   $   588,983
                                                                       ===========   ===========

Fair value of issuance of common stock in connection with the
setllement of pre-merger obligations ................................  $         -   $   544,368
                                                                       ===========   ===========

Fair value of shares issued to partially satisfy convertible
promissory notes ....................................................  $    48,750   $         -
                                                                       ===========   ===========

                         See Notes to Consolidated Financial Statements.

                                               -7-
</TABLE>
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND GOING CONCERN

Newport International Group, Inc. (the "Company") was a development stage
company incorporated in Delaware in December 1999. During February 2004, the
Company acquired GrassRoots Communications, Inc. ("GrassRoots"). The Company
sells web-based conferencing services to business professionals, small office
and home office companies, and small to medium sized businesses. The Company's
product centers on web-based collaborative tools for small-business
professionals and features document and application sharing in a collaborative
environment. Included in the web-conferencing is the ability to communicate with
participants using voice over Internet and video viewing. The product also
includes the ability to collaborate via a whiteboard application to annotate
drawings and pictures.

The acquisition of GrassRoots was treated as a reverse acquisition for financial
reporting purposes. As such, our financial statements have been prepared as
GrassRoots as the acquiror. The results of operations discussed below represent
the operations of GrassRoots through February 9, 2004. The results of operations
subsequent to that date reflect the consolidated operations of GrassRoots and
the Company.

The accompanying financial statements have been prepared on a going concern
basis. The Company has generated minimal revenue since its inception on June 12,
2002, has incurred net losses of approximately $21 million. The Company's
ability to continue as a going concern is dependent upon its ability to obtain
the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due, to fund possible
future acquisitions, and to generate profitable operations in the future.
Management plans to continue to provide for its capital requirements by issuing
additional equity securities and debt. The outcome of these matters cannot be
predicted at this time and there are no assurances that if achieved, the Company
will have sufficient funds to execute its business plan or generate positive
operating results.

These matters, among others, raise substantial doubt about the ability of the
Company to continue as a going concern. These financial statements do not
include any adjustments to the amounts and classification of assets and
liabilities that may be necessary should the Company be unable to continue as a
going concern.

                                       -8-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Significant estimates made by management include, but are not
limited to, the valuation of stock-based instruments granted to noteholders and
consultants. Actual results will differ from these estimates.

LOSS PER SHARE

Loss per share is based on the weighted average number of common shares
outstanding. The outstanding warrants and stock options amounting to 4,448,343
and 6,954,333, respectively, as of March 31, 2005, are excluded from the loss
per share computation due to their antidilutive effect.

RISKS AND UNCERTAINTIES

The Company maintains its cash and cash equivalent accounts in financial
institutions. Accounts at these institutions are insured by the Federal Deposit
Insurance Corporation ("FDIC") up to $100,000. During 2005, the Company has
reached bank balances exceeding the FDIC insurance limit. To reduce its risk
associated with the failure of such financial institutions, the Company
evaluates at least annually the rating of the financial institutions in which it
holds deposits.

                                       -9-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of the Company's cash and cash equivalents, accounts
payable and accrued expenses and due to stockholder approximate their estimated
fair values due to the short-term maturities of those financial instruments. The
carrying amount of the convertible notes approximates the estimated fair value
for these financial instruments as management believes that such convertible
notes constitute substantially all of the Company's debt and the interest
payable on the convertible notes approximates the Company's incremental
borrowing rate.

INVESTMENT IN EQUITY SECURITIES

The Company holds 6,484,840 shares of a United Kingdom Corporation (the
"Investee") pursuant to a stock-exchange agreement whereby the Company issued
5,882,352 of its shares of common stock in exchange for the Investee's stock. At
the time of issuance, the Company recorded the cost of the investment at the
market value of the shares exchanged of approximately $11.8 million.

The Company holds 3,242,420 shares of the Investee in an escrow account which
may not be released without the the Investee's permission until July 2006. If
the average of the closing bid prices per share of the Company's common stock
during the 10 trading days immediately preceding July 30, 2006 ("Average Closing
Bid Price") is below $2.01, the Investee will repurchase a proportion of the its
shares held in escrow at a price of $0.02 per share. The proportion to be
repurchased is computed using the difference between $2.01 and the Average
Closing Bid Price as the numerator and $2.01 as the denominator. Until these
shares are released from escrow, the Company accounts for the value attributable
to such shares as restricted investment in marketable securities and is
presented as an asset.

The Company holds 3,242,420 shares of the Investee as collateral for the
Company's possible obligation to repurchase 2,500,000 shares it has issued in a
private placement during November 2004.

The decrease in the carrying and the fair value of this investment of
approximately $10 million as of March 31, 2005 has been recorded as other
comprehensive loss in stockholders' deficit.

COMPREHENSIVE LOSS

Comprehensive loss is defined as a change in equity during the period from
transactions and other events and circumstances from non-owner resources.
Included in this category is the change resulting from the difference between
the carrying value and the market value of the restricted investment in equity
securities amounting to approximately $10.0 million as of March 31, 2005.

                                      -10-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SOFTWARE DEVELOPMENT COSTS

Costs incurred in the research and development of software products are expensed
as incurred until technological feasibility has been established. After
technological feasibility is established, any additional costs are capitalized
in accordance with SFAS No. 86, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO
BE SOLD, LEASED OR OTHERWISE MARKETED. The Company believes that the current
process for developing software is essentially completed concurrently with the
establishment of technological feasibility; accordingly, no software development
costs have been capitalized as of March 31,2005.

PROPERTY AND EQUIPMENT

Property and equipment, which primarily consists of office equipment and
computer software, are recorded at cost and are depreciated on a straight-line
basis over their estimated useful lives of three to five years. Maintenance and
repairs are charged to expense as incurred. Significant renewals and betterments
are capitalized. At the retirement or other disposition of property and
equipment, the cost and accumulated depreciation are removed from the accounts
and any resulting gain or loss is reflected in other income (expense) in the
accompanying statements of operations.

DEFERRED FINANCING COSTS

Deferred financing costs represent costs incurred in connection with the
issuance of the convertible promissory notes. Deferred financing costs are being
amortized over the terms of the related debt agreements, which range between one
to two years.

STOCK-BASED COMPENSATION

Stock-based awards to non-employees are accounted for using the fair value
method in accordance with SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION,
and EITF Issue No. 96-18, ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE ISSUED TO
OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN CONJUNCTION WITH SELLING GOODS OR
SERVICES. All transactions in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the

                                      -11-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more reliably measurable.

In December 2002, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 148, ACCOUNTING FOR STOCK-BASED COMPENSATION-TRANSITION AND DISCLOSURE,
effective for fiscal years ending after December 15, 2002. SFAS No. 148 amends
SFAS No. 123 to provide alternative methods of transition to the fair value
method of accounting for stock-based employee compensation. SFAS No. 148 also
amends the disclosure provisions of SFAS No. 123 to require disclosure in the
summary of significant accounting policies of the effects of an entity's
accounting policy with respect to stock-based employee compensation on reported
net income and earnings per share in annual and interim financial statements.
SFAS No. 148 does not amend SFAS No. 123 to require companies to account for
their employee stock-based awards using the fair value method. The disclosure
provisions are required for all companies with stock-based employee
compensation, regardless of whether they utilize the fair value method of
accounting described in SFAS No. 123 or the intrinsic value method described in
Accounting Principles Board ("APB") Opinion No. 25, ACCOUNTING FOR STOCK ISSUED
TO EMPLOYEES.

The Company has adopted the disclosure requirements of SFAS No. 148 effective
January 1, 2003. The adoption of this standard did not have a significant impact
on the Company's financial condition or operating results.

The Company accounts for stock-based awards to employees using the intrinsic
value method in accordance with APB Opinion No. 25. As permitted by SFAS No.
123, as amended by SFAS No. 148, the Company has chosen to continue to account
for its employee stock-based compensation plans under APB Opinion No. 25 and
provide the expanded disclosures specified in SFAS No. 123, as amended by SFAS
No. 148. Had employee stock based compensation cost been determined using the
fair value method the Company's net loss for the respective three-month period
ended March 31 would have been adjusted to the proforma amounts indicated below:

                                      -12-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                                                          2005          2004
                                                      -----------   -----------

Net loss as reported ...............................  $(1,766,228)  $(5,434,276)
Add:
  Stock-based compensation expense included in
   reported net loss, net of related tax effects ...       74,000       227,406
Deduct:
  Total stock-based compensation expense
   under fair value based method for all awards,
   net of related tax effects ......................     (144,025)     (414,174)
                                                      -----------   -----------

Pro forma net loss .................................  $(1,836,253)  $(5,621,044)
                                                      ===========   ===========

The pro forma amounts reflected above may not be representative of future
disclosures since the estimated fair value of stock options is amortized to
expense as the options vest and additional options may be granted in future
years.

The fair value of the options granted during the three-month period ended March
31, 2005 and 2004 was determined using the Black-Scholes option-pricing model
with the following assumptions: risk-free interest of 3.32 and3.0%,
respectively; stock volatility of .86 and .42, respectively; no dividends; and
estimated life of 36 months.

INCOME TAXES

Income taxes are accounted for in accordance with SFAS No. 109, ACCOUNTING FOR
INCOME TAXES. SFAS No. 109 requires the recognition of deferred tax assets and
liabilities to reflect the future tax consequences of events that have been
recognized in the Company's financial statements or tax returns. Measurement of
the deferred items is based on enacted tax laws. In the event the future
consequences of differences between financial reporting bases and tax bases of

                                      -13-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Company's assets and liabilities result in a deferred tax asset, SFAS No. 109
requires an evaluation of the probability of being able to realize the future
benefits indicated by such assets. A valuation allowance related to a deferred
tax asset is recorded when it is more likely than not that some or all of the
deferred tax asset will not be realized.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS 123 (revised 2004) "Share-Based Payment".
This Statement requires that the cost resulting from all share-based
transactions be recorded in the financial statements. The Statement establishes
fair value as the measurement objective in accounting for share-based payment
arrangements and requires all entities to apply a fair-value-based measurement
in accounting for share-based payment transactions with employees. The Statement
also establishes fair value as the measurement objective for transactions in
which an entity acquires goods or services from non-employees in share-based
payment transactions. The Statement replaces SFAS 123 "Accounting for
Stock-Based Compensation" and supersedes APB Opinion No. 25 "Accounting for
Stock Issued to Employees". The provisions of this Statement will be effective
for the Company beginning with its fiscal year ending 2005. The Company is
currently evaluating the impact this new Standard will have on its financial
position, results of operations or cash flows.

NOTE 3 - RESTATEMENT OF FINANCIAL STATEMENTS

As a result of a normal periodic review of its financial statements by the staff
of the Securities and Exchange Commission, and after reviewing certain
accounting principles we have applied in previously issued financial statements,
management has determined, on September 27, 2005, that the Company's restricted
investment in marketable securities should have been classified as an asset.
Previously, the Company presented its restricted investment in marketable
securities as an element of the stockholders' deficit. Consequently, management
is restating its interim financial statements as of March 31, 2005 and for the
interim period then ended. The change in presentation of the Company's
restricted investment in marketable securities has for effect to increase the
assets and decrease the stockholders' deficit by $912,501 March 31, 2005. The
change in presentation of the Company's restricted investment in marketable
securities does not have any impact on the Company's consolidated statement of
operations, earnings per share, and consolidated statement of cash flows for
interim period ended March 31, 2005.

NOTE 4 - NOTE RECEIVABLE

During 2005, the Company has invested $85,000 in a note issued by a U.S.
publicly-traded company. The note is secured by substantially all assets of the
issuer. The note bears interest at 7% and matures in April 2005. The Company has
received the principal and accrued interest in April 2005. Accrued interest of
$3,000 as of March 31, 2005 is included in the note receivable in the
accompanying balance sheet.

NOTE 5 - MARKETABLE SECURITIES

During the three-month period ended March 31, 2005, the Company sold marketable
equity securities for approximately $69,000, which amounted to its carrying
value at December 31, 2004.

                                      -14-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - CONVERTIBLE PROMISSORY NOTES

Convertible promissory notes consist of the following as of March 31, 2005:


8% Convertible promissory notes, bearing interest at 8% per
annum, maturing on March 1, 2006. Interest payable March 31, 2004
and every quarter thereafter either in cash or common stock.
Interest paid in common stock is convertible using the 10-day
average closing bid of the stock prior to the end of the quarter.
Each occurrence of interest not paid within 30 days following the
end of each quarter causes a reduction of 10% in the conversion
price of the promissory notes and the exercise price of the
related warrants. The promissory notes are convertible at any
time at the option of the holder, into shares of common stock at
a rate of $0.375 ................................................   $ 1,734,093
Less:  unamortized discount .....................................    (1,734,093)
                                                                    -----------
Convertible promissory notes-short-term .........................   $         -
                                                                    ===========

12.5% Convertible promissory notes, bearing interest at 12.5% per
annum, maturing March 31, 2007. Interest payable June 30, 2005
and every quarter thereafter either in cash or common stock.
Interest paid in common stock is convertible using the 5-day
average closing price of the stock prior to the end of the
quarter. Each occurrence of interest not paid within 30 days
following the end of each quarter causes a reduction of 10% in
the conversion price of the promissory notes and the exercise
price of the related warrants. The promissory notes are
convertible into shares of common stock at a rate of $0.375 .....   $   575,000
Less: unamortized discount ......................................      (575,000)
                                                                    -----------
Convertible promissory notes-long- term .........................   $         -
                                                                    ===========

In connection with the issuance of the 8% convertible promissory notes, the
Company issued 1,501,875 warrants to purchase common stock of the Company at an
exercise price of $1.25 per share during 2004. The warrants are exercisable for
a period of five

                                      -15-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - CONVERTIBLE PROMISSORY NOTES (CONTINUED)

years. The fair value of the warrants at the date of issuance of approximately
$366,000 has been recorded as a debt discount. The debt discount is amortized
over two years using the imputed interest rate method.

The rates for the 8% convertible promissory notes interest accrued as of March
31, 2005 amounted to $0.68 per share. The Company issued 18,719 shares in
connection with the payment of interest on the 8% convertible promissory notes
during the three-month period ended March 31, 2005. The fair value of such
shares amounted to approximately $35,000. Furthermore, the Company issued 51,121
shares in April 2005 in connection with the payment of accrued interest of
$34,967 as of March 31, 2005.

During the three-month ended March 31, 2005, the Company satisfied the remaining
10% Convertible Promissory Notes amounting to $325,000 by paying $265,000 and
issuing 75,000 shares of common stock. The fair value of the shares of common
stock amounted to $48,750.

During the three-month period ended March 31, 2005 and March 31, 2004, the
Company received $575,000 and $1,126,335 in consideration for the issuance of
the 12.5% and 8% convertible promissory notes, respectively. One of the 12.5%
convertible promissory notes, amounting to $275,000, was issued to one of the
Company's employee who is also the fiancee of the Company's chief executive
officer.

In the event the Company issues any shares of its common stock or issues any
options, warrants, convertible preferred stock or convertible debt issuable or
convertible into common stock of the Company at an exercise price or conversion
price per share less than $0.75 per share within two years following the closing
of the 8% Convertible Promissory Notes , then the exercise price of the warrants
issued pursuant to the Follow-on Financing will reset to such lower price.
Effective March 31, 2005, the exercise price of such warrants are $0.375

The Company has the right to call all of the 8% Convertible promissory notes
warrants, if the stock underlying the warrants has been registered (and that
registration statement is still effective), the lock-up restriction, as defined,
on the common stock has been lifted, and after the lock-up restriction has been
lifted, the stock maintains a closing bid price above $3.00 for 15 business
days. The Company may redeem the warrants for $0.01 if not exercised within 30
days of the call notification.

                                      -16-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - CONVERTIBLE PROMISSORY NOTES (CONTINUED)

In connection with the issuance of the 8% Convertible Promissory Notes, the
Company paid approximately $139,000 and issued 425,000 warrants to the placement
agent during the three-month period ended March 31, 2004. One of the Company's
directors is one of the Managing Directors of the placement agent. The warrants
issued to the placement agent were valued at approximately $51,000. The Company
has recorded the placement agent fee in deferred financing costs as of March 31,
2005 and amortizes these costs over one to two years, which corresponds to the
respective terms of the Convertible Promissory Notes.

Amortization of the debt discount and amortization of the deferred financing
costs amounted to approximately $257,000 and $815,000, respectively, during the
three-month period ended March 31, 2005 and 2004, respectively, and are included
in interest expense in the accompanying consolidated statements of operations.

Accrued interest on the Convertible Promissory Notes amounted to approximately
$38,000 as of March 31, 2005.

In accordance with EITF Issue No.00-27,"Application of Issue No. 98-5,
Accounting for convertible securities with beneficial conversion features of
contingently adjustable conversion ratios, to certain convertible instruments",
the Company recorded a beneficial conversion feature related to the Convertible
promissory notes. Under the terms of these notes, the intrinsic value of the
beneficial conversion feature was calculated assuming that the conversion date
was the same as the issue date. During the three-month period ended March 31,
2005 and 2004, the beneficial conversion feature amounted to approximately
$405,000 and $589,000. This beneficial conversion feature is reflected in the
accompanying consolidated financial statements as additional paid-in capital and
corresponding debt discount.

NOTE 6 - COMMON STOCK SUBJECT TO PUT

Pursuant to a private placement of shares of common stock finalized in November
2004, the investors have the right to have the Company reacquire all or a
portion of 2,000,000 and 2,500,000 shares purchased at a price of $1.25 and
$1.00 per share, respectively, in the event the average price per share is less
than $1.25 and $1.00, respectively, for a period of ten consecutive trading days
during an option period commencing eight months after the effective date of the
Company's registration statement and extending for a period of thirty-six months
thereafter. Such puts, valued at $5,000,000 at December 31, 2004, are accounted
as temporary equity in the accompanying balance sheet.

                                      -17-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - STOCKHOLDERS' DEFICIT

ISSUANCE OF COMMON STOCK PURSUANT TO A SETTLEMENT OF DEBT

During February 2004, pursuant to a notification of default by the holder, the
Company settled its outstanding notes to a stockholder, its affiliated entity
and other participants. In connection with the settlement of all debt (the
$370,000 convertible debenture and the $10,000 loan along with the related
accrued loan premium of $100,000 and accrued interest of $158,368 due to a
stockholder, and the loan of $100,000 along with the accrued loan premium of
$50,000 and accrued interest of $6,000 to an affiliated entity), the Company
disbursed $250,000 in cash and 1,365,000 shares of common stock, and 530,000
shares of common stock were returned to the Company for cancellation, which
generated an interest expense of approximately $3.5 million during the
three-month period ended March 31, 2004.

ISSUANCE OF COMMON STOCK PURSUANT TO SERVICES PERFORMED

During February 2005, the Company issued 28,000 shares of common stock to
vendors for services performed. The fair value of such shares amounted to
approximately $13,000 and has been recorded as selling general and
administrative expenses.

ISSUANCE OF COMMON STOCK PURSUANT TO THE PAYMENT OF INTEREST ON THE CONVERTIBLE
DEBT

The Company issued 18,719 shares in connection with the payment of interest on
the 8% convertible promissory notes during the three-month period ended March
31, 2005. The fair value of such shares amounted to approximately $35,000.
Furthermore, the Company issued 51,121 shares in April 2005 in connection with
the payment of accrued interest of $34,967 as of March 31, 2005.

ISSUANCE OF COMMON STOCK PURSUANT TO FAILURE TO TIMELY FILE REGISTRATION
STATEMENT

During the three-month period ended March 31, 2005, the Company issued 92,903
shares of common stock pursuant to its failure to timely file its registration
statement. The fair value of such shares amounted to approximately $133,000 and
is included in other expenses in the accompanying statement of operations.

                                      -18-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - STOCK OPTIONS AND WARRANTS

Warrants

During the three-month period ended March 31, 2005, the Company issued 536,667
warrants in connection with the issuance of the 12.5% Convertible Promissory
Notes, of which 256,667 warrants were issued to one of the Company's employees
who is also the fiancee of the Company's chief executive officer. The exercise
price of the warrants is $0.375 per underlying share of common stock. The
warrants expire in March 2010. The fair value of the warrants amounted to
approximately $170,000 and has been recorded as an increase in debt discount and
a corresponding increase in additional-paid-in capital.

The issuance of the 12.5% Convertible Promissory Notes triggered an adjustment
in the exercise price of the following warrants

      o  2,621,875 warrants issued to the holders of the 8% Convertible
         Promissory Notes. The exercise price of such warrants has been
         decreased from a range of $0.75- $1.25 to $0.375. The fair values of
         the decrease of the exercise price of the warrants and the beneficial
         conversion feature of approximately $452,000 and $702,000 were recorded
         as increases in debt discount and as increases in additional paid-in
         capital

      o  425,000 warrants issued to the placement agent of the 8% Convertible
         Promissory Notes. The exercise price of such warrants has been
         decreased from a range of $0.75- $1.25 to $0.375. The fair value of the
         decrease of the exercise price of the warrants of approximately
         $140,000 was recorded as an increase in deferred financing costs and as
         an increase in additional paid-in capital

      o  562,500 warrants issued to shareholders in connection with the private
         placement closed in November 2004. The exercise price of such warrants
         has been decreased from a range of $1.55-1.60 to $1.49.

During the three-month period ended March 31, 2004, the Company issued 1,366,875
warrants in connection with the issuance of the 8% Convertible Promissory Notes.
The exercise price of the warrants is $0.375 per underlying share of common
stock. The warrants expire in March 2009. The fair value of the warrants
amounted to approximately $495,000 and has been recorded as an increase in debt
discount and a corresponding increase in additional-paid-in capital.

                                      -19-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - STOCK OPTIONS AND WARRANTS (CONTINUED)

The Company used the following assumption to value the warrants issued during
the three-month period ended March 31, 2005 and 2004: risk-free interest rate:
3.32% and 3.0%, respectively; volatility of 86% and 42%, respectively; estimated
life of 5 years; and no dividend expected during the term.

Stock Options

In 2002, the Company adopted the 2002 Stock Plan under which stock awards or
options to acquire shares of the Company's common stock may be granted to
employees and non-employees of the Company. The Company has authorized
12,000,000 shares of the Company's common stock for grant under the 2002 Plan.
The 2002 Plan is administered by the Board of Directors and permits the issuance
of options for the purchase of up to the number of available shares outstanding.
Options granted under the 2002 Plan vest in accordance with the terms
established by the Company's stock option committee and generally terminates ten
years after the date of issuance.

The Company granted 10,000 and 200,000 options during the three-month period
ended March 31, 2005 and 2004, respectively, to purchase common stock to
non-employees for services performed. The exercise prices of such options ranged
amounted to $1.62 and $2.40 for options granted during the three-month period
ended March 31, 2005 and 2004, respectively. As a result, the Company recorded
consulting expense of approximately $9,600 and $80,000 during the three-month
period ended March 31, 2005 and 2004, respectively, in accordance with SFAS
No.123. Such consulting expenses are included in selling, general, and
administrative expenses in the accompanying statement of operations.

The fair value of the options granted during the three-month period ended March
31, 2005 and 2004 was determined using the Black-Scholes option-pricing model
with the following assumptions: risk-free interest of 3.32% and 3.0%,
respectively; stock volatility of 86% and 42%, respectively; no dividends; and
estimated life of 36 months;

The Company issued 370,000 and 29,000 options with below market exercise prices
during the three-month period ended March 31, 2005 and 2004, respectively. The
issuance of such options to employees resulted in compensation expense pursuant
to APB Opinion No. 25 amounting to approximately $74,000 and $41,000 during the
three-month period ended March 31, 2005 and 2004, respectively.

                                      -20-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - COMMITMENTS AND CONTINGENCIES

LITIGATION

On January 6, 2003, the Company entered into a stock purchase agreement (the
"Agreement") with Focus Focus.com, Inc. ("Focus Focus") to purchase all of the
issued and outstanding capital stock of Focus Focus for cash of $150,000 and
promissory notes payable for $1,560,000. In May 2003, the Company received a
letter from counsel for the former owners of Focus Focus advising the Company
that it was in breach of the Agreement and promissory notes for failing to make
scheduled monthly payments. Shortly thereafter, the Company returned the
acquired assets and the Focus Focus stock to the former owners of Focus Focus.

In connection with the Agreement, the Company entered into three-month
consulting agreements with the former owners of Focus Focus to perform certain
consulting services for the Company. As consideration for the services rendered,
the Company granted options to purchase 500,000 shares of the Company's common
stock, which had an exercise price of $0.02 per share, and vested immediately.
The Company contends that the former owners of Focus Focus did not perform under
these consulting agreements, and accordingly, cancelled the options and recorded
no consulting expense in the 2004 and 2003 accompanying financial statements,
respectively.

No litigation has been filed by either party. However, in December 2004, the
Company has received notice from the counsel of the former owners of Focus Focus
that they are entitled to the options initially granted by the Company. The
Company believes that this claim is without merit.

The Company may become involved in certain legal proceedings and claims which
arise in the normal course of business. Management does not believe that the
outcome of any such matter will have a material effect on the Company's
financial position or results of operations.

                                      -21-
<PAGE>
                        NEWPORT INTERNATIONAL GROUP, INC.
                                 MARCH 31, 2005
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

POTENTIAL REGISTRATION PENALTIES

In connection with its recently completed private placement, the Company may
have to issue additional shares if it fails to meet certain deadlines, such as
not filing a registration statement or if its registration is not effective
within 45 days and 135 days of the final closing date, respectively. The final
closing date was November 2, 2004. The additional shares of common stock to be
issued amount to 45,000 per month after the failure of meeting such deadlines,
until the registration statement is filed or effective.

During the three-month ended March 31, 2005, the Company issued 92,903 shares of
its common stock pursuant to its failure for filing a registration statement
within the time prescribed by its recently completed private placement.

CLAIM BY INVESTORS IN PRIVATE PLACEMENT

In March 2005, a representative of the investors in the private placement closed
in November 2004 informed the Company that the put option related to 2,500,000
shares had been amended to allow the investors to exercise their put option
commencing on the effective date of the Company's registration statement and not
eight months after the registration statement became effective. The Company
maintains that it has not agreed to the alleged amendment. The Company intends
to vigorously defend its position in the event the investors insist that the put
option commences immediately upon the effective date of the registration
statement.

NOTE 10 - SUBSEQUENT EVENTS

The Company issued 51,121 shares in April 2005 in connection with the payment of
accrued interest on the 8% Convertible Promissory Notes of $34,967 as of March
31, 2005.

                                      -22-
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

Our principal executive officer and principal financial officer evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended) as of the end of the period covered by this report. Based on this
evaluation, the Company's principal executive officer and principal financial
officer have concluded that the Company's controls and procedures are effective
in providing reasonable assurance that the information required to be disclosed
in this report has been recorded, processed, summarized and reported as of the
end of the period covered by this report.

During the period covered by this report, there have not been any significant
changes in our internal controls or, to our knowledge, in other factors that
could significantly affect our internal controls.

On September 29, 2005, the Company announced that it was restating its
consolidated balance sheet and statements of stockholders' deficit as of and for
the year ended December 31, 2004 and for the first two quarters of 2005 to
correct the presentation of its restricted investment in marketable securities.
Previously, the Company presented its restricted investment in marketable
securities as an element of the stockholders' deficit. As a result of a normal
periodic review of its financial statements by the staff of the Securities and
Exchange Commission, and after reviewing certain accounting principles we have
applied in previously issued financial statements, management has determined, on
September 27, 2005, that the Company's restricted investment in marketable
securities should have been classified as an asset. The change in presentation
of the Company's restricted investment in marketable securities has for effect
to increase the assets and decrease the stockholders' deficit by $912,501 as of
March 31, 2005. The change in presentation of the Company's restricted
investment in marketable securities does not have any impact on the Company's
consolidated statement of operations, earnings per share, and consolidated
statement of cash flows for the interim period ended March 31, 2005. Please
refer to Note 3 to the accompanying consolidated financial statements for
additional information.

As a result of the restatement of its consolidated balance sheets and statements
of stockholders' deficit, the Company determined that there was a significant
deficiency in its internal control over financial reporting as of March 31, 2005
related to its presentation on its balance sheet of its restricted investment in
marketable securities. The Company determined that such significant deficiency
did not rise to the level of a material weakness in its internal control over
financial reporting. Because the Company corrected its presentation of its
restricted investment in marketable securities, the Company believes that it
corrected this significant deficiency.


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      a. Exhibits

         31.1  Certificate of Chief Executive Officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002

         31.2  Certificate of Chief Financial Officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002

         32.1  Certification of Chief Executive Officer and Chief Financial
               Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


                                      -23-
<PAGE>

                                    SIGNATURE

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, the registrant caused this report to be signed on its behalf by the
undersigned and duly authorized


                NEWPORT INTERNATIONAL GROUP, INC.



      By:               /s/ Cery B. Perle                    September 29, 2005
          ---------------------------------------------      ------------------
                          Cery B. Perle                            Date
          President, Chief Executive Officer & Director
                 (Principal executive officer and
                   principal financial officer)


                                      -24-