<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB/A

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2006

    [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT

               FOR THE TRANSITION PERIOD FROM ________ TO________

                        COMMISSION FILE NUMBER 333-108632

                                 NARROWSTEP INC.
             (Exact name of registrant as specified in its charter)

            DELAWARE                                              33-1010941
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                        116 VILLAGE BOULEVARD, SUITE 200
                          PRINCETON, NEW JERSEY 08540
                    (Address of principal executive offices)

                                 (609) 951-2221
               (Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

[_] Yes [X] No

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

[_] Yes [X] No

    APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS

                                 Not applicable

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of the issuer's common stock as of November 30,
2006: 45,248,974 shares of common stock.

<PAGE>

                                EXPLANATORY NOTE

This Amendment No. 1 on Form-10QSB (the "Amended Report") amends the original
Quarterly Report on Form 10-QSB of Narrowstep Inc. for the fiscal quarter ended
November 30, 2006, filed with the Securities and Exchange Commission (the "SEC")
on January 16, 2007 (the "Original Report"), to restate certain stock option
expenses that were inadvertently misstated.

We hereby amend our Original Report by deleting the text and numbers of such
items affected by the misstatement in their entirety and replacing them with the
information provided below under the respective headings. The Amended Report
does not affect any other items in our Original Report. As a result of this
amendment, we are also filing the certifications pursuant to Section 302 and
Section 906 of the Sarbanes-Oxley Act of 2002 as exhibits to this Amended
Report.

Except as otherwise expressly stated for the items amended in this Amended
Report, this Amended Report continues to speak as of the date of the Original
Report and we have not updated the disclosure contained herein to reflect events
that have occurred since the filing of the Original Report. Accordingly, this
Amended Report should be read in conjunction with our Original Report and our
other filings made with the SEC subsequent to the filing of the Original Report.

PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

NARROWSTEP INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
(Unaudited)
--------------------------------------------------------------------------------------------------------------------
                                                                      Three months ended        Nine months ended
                                                                         November 30,              November 30,
--------------------------------------------------------------------------------------------------------------------
                                                                      2006         2005         2006         2005
                                                                        $            $            $            $
--------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>          <C>          <C>
OPERATING REVENUE
   Narrowcasting and other                                          1,163,968      539,692    3,042,461    1,023,458
   Production services                                                485,617      239,045    1,320,014      865,516
--------------------------------------------------------------------------------------------------------------------
Total revenue                                                       1,649,585      778,737    4,362,475    1,888,974
--------------------------------------------------------------------------------------------------------------------
COSTS OF REVENUE
   Direct costs                                                       511,691      430,371    1,442,282    1,234,258
   Software amortization                                               31,555       30,646       97,404       95,377
--------------------------------------------------------------------------------------------------------------------
Total costs of revenue                                                543,246      461,017    1,539,686    1,329,635
--------------------------------------------------------------------------------------------------------------------
GROSS PROFIT                                                        1,106,339      317,720    2,822,789      559,339
--------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
   Selling, general and administrative                              2,601,622    1,723,608    6,859,885    3,919,999
--------------------------------------------------------------------------------------------------------------------
Total operating expenses                                            2,601,622    1,723,608    6,859,885    3,919,999
--------------------------------------------------------------------------------------------------------------------
OPERATING LOSS                                                     (1,495,283)  (1,405,888)  (4,037,096)  (3,360,660)
   Other income (expense), net                                         23,005          199      108,270          549
   Currency exchange income (loss)                                     (5,126)      16,502       (3,970)      (6,388)
--------------------------------------------------------------------------------------------------------------------
NET LOSS                                                           (1,477,404)  (1,389,187)  (3,932,796)  (3,366,499)
====================================================================================================================
   Foreign currency translation adjustment                             47,143       (3,991)      90,126      (23,972)
--------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE LOSS                                                 (1,430,261)  (1,393,178)  (3,842,670)  (3,390,471)
====================================================================================================================
NET LOSS PER COMMON SHARE - BASIC AND DILUTED                           (0.03)       (0.04)       (0.08)       (0.11)
WEIGHTED-AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED   45,248,974   32,673,022   45,214,292   31,814,258
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                                                               2

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                      November 30, 2006   February 28, 2006
                                                                         (Unaudited)
                                                                              $                   $
-----------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                 <C>
ASSETS
   Current assets:
   Cash and cash equivalents                                               1,755,529           2,232,854
   Short-term investments                                                         --           2,500,000
   Accounts receivable, net of allowance for doubtful accounts of          1,383,992             418,394
   $390,690 on  November 30, 2006 and $201,715 at February 28, 2006
   Prepaid expenses and other current assets                                 291,615             135,542
-----------------------------------------------------------------------------------------------------------
Total current assets                                                       3,431,136           5,286,790
-----------------------------------------------------------------------------------------------------------
   Property and equipment, net                                             1,050,944             289,148
   Software development costs, net                                           176,101             146,166
   Goodwill                                                                1,157,581           1,157,581
   Intangible assets, net                                                     81,435             113,173
-----------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                               5,897,197           6,992,858
===========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
   Current liabilities:
   Unearned revenue                                                          278,203             176,628
   Accounts payable                                                          471,120             504,919
   Net obligations under capital leases, current                              85,649              58,113
   Accrued expenses and other current liabilities                            624,091             424,104
-----------------------------------------------------------------------------------------------------------
   Total current liabilities                                               1,459,063           1,163,764
   Net obligations under capital leases - long-term                          157,133              43,997
-----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                          1,616,196           1,207,761
-----------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
   Common stock, $0.000001 par value 450,000,000 shares authorized,               45                  45
   45,248,974 (unaudited) issued and outstanding at November 30,
   2006 and 45,136,474 issued and outstanding at February 28, 2006
   Additional paid-in capital                                             20,639,945          19,711,371
   Stock subscription receivable                                                  --          (1,410,000)
   Accumulated deficit                                                   (16,426,855)        (12,494,059)
   Accumulated other comprehensive income (loss)                              67,866             (22,260)
-----------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY                                                 4,281,001           5,785,097
-----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 5,897,197           6,992,858
===========================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                                                               3

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
(Unaudited)
-----------------------------------------------------------------------------------------------
                                                                           Nine months ended
                                                                             November 30,
-----------------------------------------------------------------------------------------------
                                                                          2006          2005
                                                                            $             $
-----------------------------------------------------------------------------------------------
<S>                                                                    <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                            (3,932,796)   (3,366,499)
   Adjustments to reconcile net loss to net cash used in operating
      activities:
   Depreciation and amortization                                          407,647       379,719
   Loss on disposal of property and equipment                                  --         5,484
   Stock-based compensation expense                                       968,992     1,047,100
   Interest on short-term investment                                      (57,609)           --
   Changes in net cash attributable to changes in operating assets
      and liabilities:
   Accounts receivable, net                                              (965,599)       38,208
   Prepaid expenses and other current assets                             (156,073)       23,284
   Unearned revenue                                                       101,575            --
   Accounts payable, accrued expenses and other current liabilities       166,188       227,320
-----------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                  (3,467,675)   (1,645,384)
-----------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of property and equipment                                   (808,131)     (111,666)
   Payments for software development costs                               (116,406)      (81,235)
   Proceeds from short-term investments                                 2,557,609            --
-----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                     1,633,072      (192,901)
-----------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net proceeds from issuance of common stock                           1,363,333     2,152,342
   Proceeds from exercise of stock options                                  6,250            --
   Payments on capital leases                                             (54,755)      (92,845)
-----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                               1,314,828     2,059,497
-----------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                     (519,775)      221,212
Effect of exchange rates on change in cash                                 42,450        28,935
Cash and cash equivalents at the beginning of period                    2,232,854        58,791
-----------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD                          1,755,529       308,938
===============================================================================================
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
   Property and equipment acquired under capital leases                   195,426
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                                                               4

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1. PREPARATION OF INTERIM FINANCIAL STATEMENTS

     BASIS OF PRESENTATION. Throughout this document, Narrowstep Inc. is
     referred to as "Narrowstep," "we" or the "Company." The condensed
     consolidated financial statements have been prepared pursuant to the rules
     and regulations of the Securities and Exchange Commission ("SEC") that
     permit reduced disclosure for interim periods. We believe that these
     condensed consolidated financial statements include all adjustments
     (consisting only of normal recurring accruals) necessary to present fairly
     the results for the interim periods shown. The results for the interim
     periods are not necessarily indicative of the results of any other interim
     period or for the full year. The reader is referred to the audited
     consolidated financial statements and notes thereto for the year ended
     February 28, 2006 filed as part of Narrowstep Inc. and Subsidiaries
     (collectively, the "Company") Form 10-KSB for such year.

     PRINCIPLES OF CONSOLIDATION. The condensed consolidated financial
     statements include the accounts of the Company and its wholly-owned
     subsidiaries. Our subsidiaries operate in the TV over the Internet services
     industry both domestically and internationally providing production and
     distribution services and equipment. All intercompany transactions have
     been eliminated in consolidation.

     USE OF ESTIMATES. The preparation of the interim condensed consolidated
     financial statements 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 condensed
     consolidated financial statements and the reported amounts of revenue and
     expenses during the reporting periods. Actual results could differ from
     those estimates.

NOTE 2. LIQUIDITY AND MANAGEMENT'S PLAN

     The Company has incurred net losses and negative cash flow from operations
     since inception. The Company, historically, has financed its operations
     primarily through private equity financing. The Company had working capital
     of $1,972,073 and cash on hand of $1,755,529 at November 30, 2006. The
     Company currently does not have the liquidity or financing available to
     fund its operations for the next 12 months without additional capital being
     raised or financing being acquired. The Company's management team has
     developed a strategic business plan and is actively pursuing various
     financing options. Management's operating plan includes (a) increasing
     revenue by expanding its customer base with its superior video technology.
     (b) further investing in the Telvos technology in order to enhance it's
     product offering and customer experience and (c) to scale the business
     operations in preparation for substantial market growth.

NOTE 3. STOCK-BASED COMPENSATION

     In December 2003, the Board of Directors adopted the Narrowstep Inc. 2004
     Stock Plan (the "Incentive Plan"). Effective March 1, 2006, the Company
     adopted the fair-value recognition provisions of Statement of Financial
     Accounting Standards ("SFAS") No. 123 revised, "Accounting for Stock-Based
     Compensation" (SFAS No. 123R) to expense stock-based compensation. Prior to
     the adoption of SFAS No. 123R, the Company accounted for stock options
     granted under the Incentive Plan under the recognition and measurement
     principles of Accounting Principles Board No. 25, "Accounting for Stock
     Issued to Employees" ("APB No. 25"), and related interpretations. The
     Company adopted SFAS No. 123R using the modified prospective method and,
     accordingly, financial statement amounts for prior periods presented in
     this Form 10-QSB have not been restated to reflect the fair value method of
     recognizing compensation cost relating to stock options. The fair value of
     each option award is estimated on the date of grant using the Black-Scholes
     option-pricing model.

     There was approximately $154,000 and $969,000 of compensation cost related
     to stock options recognized in operating results (included in selling,
     general and administrative expenses) in the three and nine months ended
     November 30, 2006. No tax benefit has been recognized with respect to this
     expense as we have determined in our evaluation of our tax assets that it
     is more likely than not that we will not realize any benefit and have
     provided full valuation allowances.

     The fair value of options and warrants at their date of grant was estimated
     using the Black-Scholes option-pricing model with the following
     weighted-average assumptions:

                    ------------------------------------------
                    Expected life in years                  2
                    Risk-free interest rate     4.72% to 5.12%
                    Volatility                             75%
                    Dividend yield                        Nil
                    ------------------------------------------


                                                                               5

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

     The following table illustrates the effect on net loss and loss per common
     share if the Company had applied the fair value recognition provisions of
     SFAS No. 123R for the three and nine months ended November 30, 2005:

<TABLE>
<CAPTION>
            (Unaudited)
            --------------------------------------------------------------------------------------------------------
                                                                              Three months ended   Nine months ended
                                                                                  November 30,        November 30,
                                                                                     2005                 2005
                                                                                       $                    $
            --------------------------------------------------------------------------------------------------------
            <S>                                                                   <C>                 <C>
            Net loss as reported                                                  (1,389,187)         (3,366,499)

            Add: Stock-based employee compensation included in reported net loss     644,248           1,047,100

            Less: Pro forma stock based compensation expense                        (537,243)         (2,009,629)
            --------------------------------------------------------------------------------------------------------
            Pro forma net loss                                                    (1,282,182)         (4,329,028)
            --------------------------------------------------------------------------------------------------------
            Basic and diluted loss per common share as reported                        (0.04)              (0.11)
            Pro forma basic and diluted loss per common share                          (0.04)              (0.14)
            Weighted-average common shares outstanding                            32,673,022          31,814,258
</TABLE>

NOTE 4. SEGMENT INFORMATION

     The Company complies with the reporting requirements of SFAS No. 131
     "Disclosures about Segments of an Enterprise and Related Information." Our
     segments are strategic business units that offer different products and
     services and are managed accordingly. We analyze our various operating
     segments based on segment income, depreciation, interest income (expense),
     and other income (expense). The operating loss by segment does not include
     various corporate expenses. The second chart reconciles the operating loss
     by segment to the operating loss in the consolidated results.

     Narrowstep Inc. manages its business as two main segments, "Narrowcasting",
     which is the provision of television channels to niche audiences globally,
     and "Production Services", which is the production of specialized
     programming, including sailing and extreme sport activities.

     Summarized information by segment for the three and nine months ended
     November 30, 2006 and 2005 is as follows (unaudited):

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                         Three months ended                                    Nine months ended
                               ------------------------------------------------- -------------------------------------------------
                                   November 30, 2006         November 30, 2005      November 30, 2006         November 30, 2005

                               Narrowcasting Production Narrowcasting Production Narrowcasting Production Narrowcasting Production
                                 and other    Services    and other    Services    and other    Services    and other    Services
                                     $           $            $           $            $            $           $            $
-------------------------------------------------------------------------------- -------------------------------------------------
<S>                              <C>          <C>         <C>          <C>        <C>          <C>         <C>           <C>
REVENUE BY SEGMENT

   Revenues from external
   customers                     1,163,968     485,617     539,692      239,045    3,042,461   1,320,014    1,023,458     865,516
-------------------------------------------------------------------------------- ------------------------------------------------

TOTAL REVENUE BY SEGMENT         1,163,968     485,617     539,692      239,045    3,042,461   1,320,014    1,023,458     865,516
-------------------------------------------------------------------------------- ------------------------------------------------
Depreciation and amortization     (128,333)    (17,608)    (83,222)      (3,956)    (344,533)    (35,376)    (245,922)   (102,060)
Interest expense                    (3,731)         --      (1,591)      (3,332)      (8,002)       (152)      (7,296)     (5,796)
Interest income                     26,333         402          29          170      116,022         402           35         514
-------------------------------------------------------------------------------- ------------------------------------------------

OPERATING LOSS BY SEGMENT         (829,774)   (211,861)   (463,547)    (109,082)  (1,712,667)   (501,100)  (1,281,562)   (253,516)
================================================================================ ================================================

PROPERTY, EQUIPMENT AND
SOFTWARE DEVELOPMENT             1,134,606      92,439     300,639       66,211    1,134,606      92,439      300,639      66,211
</TABLE>


                                                                               6

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

     Reconciliation of summarized information by segment to consolidated
     reported losses from operations is as follows:

<TABLE>
<CAPTION>
           -------------------------------------------------------------------------------------------------
                                                              Three months ended        Nine months ended
                                                                 November 30,              November 30,
           -------------------------------------------------------------------------------------------------
                                                              2006         2005         2006         2005
                                                                $            $            $            $
           -------------------------------------------------------------------------------------------------
           <S>                                             <C>            <C>        <C>          <C>
           Total reportable segments                       (1,041,635)    (572,629)  (2,213,767)  (1,535,078)

           Unallocated corporate expenses                    (288,573)    (178,433)    (822,599)    (746,745)

           Stock-based  compensation charges                 (154,495)    (644,248)    (968,992)  (1,047,100)

           Amortization of intangible assets acquired in
           acquisition of Sportshow Television, Ltd.          (10,580)     (10,578)     (31,738)     (31,737)
           -------------------------------------------------------------------------------------------------

           TOTAL REPORTED CONSOLIDATED LOSSES FROM
           OPERATIONS                                      (1,495,283)  (1,405,888)  (4,037,096)  (3,360,660)
           =================================================================================================
</TABLE>

NOTE 5. RELATED PARTY TRANSACTIONS

     Options granted to directors. The Company has granted to both David
     McCourt and Jack Whyte, members of the board of directors, options to
     purchase 300,000 shares at an exercise price of $0.67 per share. These
     options were granted and vested on June 7, 2006 and are exercisable
     until June 27, 2011. The Company has granted to Rajan Chopra, a member
     of the board of directors, options to purchase 300,000 shares at an
     exercise price of $0.80 per share. These options were granted and vested
     on September 28, 2006 and are exercisable until September 28, 2016.

     TRANSACTIONS WITH COMPANIES IN WHICH SHAREHOLDERS HOLD AN INTEREST.
     Narrowstep Ltd. has developed a channel for LTR Consultancy. John
     Goedegebuure, a founder and shareholder of Narrowstep Inc., is the Managing
     Director and a shareholder of LTR Consultancy. For the years ended February
     28, 2006 and 2005, LTR Consultancy was billed $71,422 and $46,325,
     respectively, for services provided. These bills were not paid as of
     February 28, 2006 and accordingly the associated revenue was not
     recognized. In the year ended February 28, 2006, LTR Consultancy earned
     re-seller commissions of $9,752. This commission was settled by a reduction
     in the amount receivable from LTR Consultancy as at February 28, 2006, in
     the amount of $9,752. The net amount receivable from LTR Consultancy as at
     February 28, 2006 was $112,655. This amount was provided for in the
     allowance for doubtful accounts.

     In the quarter ended May 31, 2006, LTR Consultancy paid Narrowstep Ltd in
     full and this was recognized as revenue in the quarter ended May 31, 2006.
     Total revenue from LTR Consultancy in the period was $123,315 of which
     $3,931 was included in receivables as of May 31, 2006. In the quarter ended
     August 31, 2006, total revenue from LTR Consultancy was $22,948. The full
     amount is included in receivables as of August 31, 2006. In the quarter
     ended November 30, 2006, total revenue from LTR Consultancy was $17,442.
     The balance remaining in receivables as of November 30, 2006 is $34,816.

     Pursuant to an Investor Relations Agreement with the Company, LTR
     Consultancy earned fees for investor relations services of $5,537 and
     $38,382, respectively, for the three and nine months ended November 30,
     2006. Of these fees, $5,851 was unpaid as of November 30, 2006.

     Shelly Palmer, a director of the Company, is the owner of a consulting
     company, SLP Productions Inc. Pursuant to an unwritten agreement between
     the parties, in each of the quarters ended November 30, 2006, August 31,
     2006, and May 31, 2006, SLP Productions billed the Company $9,000 for
     consultancy services. Consultancy fees and expenses of $6,000 were unpaid
     as of November 30, 2006.

     On December 2, 2005, the Company entered into a consultancy agreement with
     Roger L. Werner Jr. Pursuant to this agreement, on May 23, 2006, Mr. Werner
     was granted options to purchase 30,000 shares at an exercise price of $0.75
     per share, for consultancy services for the year ended February 28, 2006.
     Mr. Werner became a shareholder of the Company on February 22, 2006 and a
     director of the Company on March 28, 2006. Mr. Werner is entitled to a
     further option grant to purchase 20,000 shares, with an exercise price
     equal to the market price on the date of grant, for consultancy services
     provided in the three months ended May 31, 2006.


                                                                               7

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

     On May 30, 2006, the Company entered into an advisory agreement with
     Granahan McCourt Advisors, LLC. David C McCourt is the beneficial owner
     of Granahan McCourt Advisors, LLC and Granahan McCourt Capital, LLC, a
     shareholder in the Company. Pursuant to this agreement, Granahan McCourt
     Advisors, LLC was issued 100,000 shares of common stock on May 30, 2006
     and received warrants to purchase 6,000 shares, with an exercise price
     equal to $0.95 per share. Mr. McCourt became a director of the Company
     on June 27, 2006 and was named as interim Chief Executive Officer in
     December 2006. The Company paid Granahan McCourt Advisors, LLC $80,000
     for consulting services and $9,000 to cover out of pocket expenses for
     fiscal year ending February 28, 2007. Mr. McCourt voluntarily terminated
     the advisory agreement once he became interim CEO and forfeited the
     remaining balance in the contract.

     COMMISSION PAID TO SHAREHOLDERS. During the nine months ended November 30,
     2006, the Company paid commissions of $150,000 to certain shareholders for
     raising funds during the quarter ended May 31, 2006 compared with $328,124
     during the nine months ended November 30, 2005. There is no outstanding
     payable in connection with these commissions as of November 30, 2006.

NOTE 6. CONCENTRATIONS

     For the three months ended November 30, 2006, the largest three customers
     in the aggregate accounted for $405,074, or 25% of revenues compared with
     $422,197, or 54% of revenues, for the three months ended November 30, 2005.
     For the nine months ended November 30, 2006, the largest three customers
     accounted for $891,543, or 20% of revenues, compared with $757,995, or 40%
     of revenues, for the nine months ended November 30, 2005. The accounts
     receivable balance for the largest three customers was $307,179 as of
     November 30, 2006 and $87,092 as of November 30, 2005.

NOTE 7. RECLASSIFICATION

     Direct costs of revenue of $197,581 and $538,305 for the three and nine
     months ended November 30, 2005, respectively, include salary and
     depreciation costs previously classified as selling, general and
     administrative costs in the Company's Quarterly Report on Form 10-QSB filed
     with the SEC on January 12, 2006.

NOTE 8. SUBSEQUENT EVENT

     On January 02, 2007, the Company removed Cliff Webb as Chief Operating
     Officer of the Company.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
--------------------------------------------------------------------------------

For ease of reading, Narrowstep Inc. is referred to as "Narrowstep," "we" or the
"Company" throughout this document and the names of the particular subsidiaries
providing the services generally have been omitted. Narrowstep is a holding
company whose subsidiaries operate in the TV over the Internet services industry
both domestically and internationally providing production and distribution
services and equipment. You should read this discussion in conjunction with the
condensed consolidated financial statements, accompanying notes and management's
discussion and analysis of financial condition and results of operations
included in our Annual Report on Form 10-KSB for the year ended February 28,
2006.

CONSOLIDATED REVENUES increased $870,848, or 112%, for the three months ended
November 30, 2006 and $2,473,501, or 131%, for the nine months ended November
30, 2006. The increase is due to growth in both business segments as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------   -------------------------------------------------
                                         Three months ended                                  Nine months ended
                          ------------------------------------------------   -------------------------------------------------
                          November 30, 2006   November 30, 2005              November 30, 2006   November 30, 2005
                               Revenues           Revenues        Increase        Revenues            Revenues        Increase
                              $          %       $           %        $          $          %        $          %        $
--------------------------------------------------------------------------   -------------------------------------------------
<S>                       <C>           <C>   <C>           <C>    <C>       <C>           <C>   <C>           <C>   <C>
Narrowcasting and other   1,163,968      71%  539,692        69%   624,276   3,042,461      70%  1,023,458      54%  2,019,003

Production services         485,617      29%  239,045        31%   246,572   1,320,014      30%    865,516      46%    454,498
--------------------------------------------------------------------------   -------------------------------------------------

Total                     1,649,585     100%  778,737       100%   870,848   4,362,475     100%  1,888,974     100%  2,473,501
--------------------------------------------------------------------------   -------------------------------------------------
</TABLE>

NARROWCASTING AND OTHER REVENUES increased $624,276, or 116%, for the three
months ended November 30, 2006 as compared to the three months ended November
30, 2005 and $2,019,003, or 197% for the nine months ended November 30, 2006 as
compared to the nine months ended November 30, 2005. This increase in
narrowcasting revenues resulted primarily from an increased number of customers
paying recurring license fees. Narrowcasting revenues also include one-time
implementation fees, which will continue to contribute to revenue as more
customers are added.


                                                                               8

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - CONTINUED
--------------------------------------------------------------------------------

PRODUCTION SERVICES REVENUES increased $246,572, or 103%, for the three months
ended November 30, 2006 as compared to the three months ended November 30, 2005
and $454,498, or 53%, for the nine months ended November 30, 2006 as compared to
the nine months ended November 30, 2005. This increase in production services
revenues resulted primarily from revenues from new customers added over the past
year and sales of previously recorded programming. This business remains
seasonal in nature and dependent on one-time assignments, such that revenues in
the first nine months of the fiscal year, while encouraging, are not necessarily
indicative of the likely revenues for the full year.

As we have previously stated, we believe that narrowcasting revenues will
continue to increase as a percentage of total revenues as a result of the faster
growth of narrowcasting revenues and the Company's focus on that business
segment.

GEOGRAPHICAL DISTRIBUTION OF CONSOLIDATED REVENUES:

<TABLE>
<CAPTION>
        --------------------------------------------------------------   -------------------------------
                                               Three months ended               Nine months ended
                                                   November 30,                    November 30,
                                         -----------------------------   -------------------------------
                                            2006       2005    Percent      2006        2005     Percent
                                              $         $       Change       $           $        Change
        --------------------------------------------------------------   -------------------------------
<S>                                      <C>         <C>        <C>      <C>         <C>          <C>
        United States                      198,917    66,627     199%      519,562     276,899      88%

        Europe, Middle-East and Africa   1,308,689   691,333      89%    3,622,617   1,583,742     129%

        Asia Pacific                       141,242     2,669    5192%      201,108       5,259    3724%

        Internet Sales                         737    18,108     -96%       19,188      23,074     -17%
        --------------------------------------------------------------   -------------------------------

        Total                            1,649,585   778,737     112%    4,362,475   1,888,974     131%
        ==============================================================   ===============================
</TABLE>

CONSOLIDATED COSTS AND EXPENSES increased $960,243, or 44%, for the three months
ended November 30, 2006 as compared to the three months ended November 30, 2005
and $3,149,937, or 60%, for the nine months ended November 30, 2006 as compared
to the nine months ended November 30, 2005 as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------  ------------------------------------------------
                                                Three months ended                               Nine months ended
                                 -----------------------------------------------  ------------------------------------------------
                                 November 30, 2006  November 30, 2005  Inc (Dec)  November 30, 2006  November 30, 2005  Inc (Dec)
                                     $          %       $          %       $          $          %       $          %       $
--------------------------------------------------------------------------------  ------------------------------------------------
<S>                              <C>           <C>   <C>          <C>   <C>       <C>           <C>   <C>          <C>   <C>
TOTAL COSTS AND EXPENSES
   Direct costs of revenue         511,691      16%    430,371     20%    81,320  1,442,282      17%  1,234,258     25%    208,024
   Sales and Marketing             556,680      18%    157,633      7%   399,047  1,296,572      16%    336,461      6%    960,111
   Software amortization            31,555       1%     30,647      1%       908     97,404       1%     95,377      2%      2,027
   General, administrative, and
      other                      1,879,867      60%    911,148     42%   968,719  4,562,583      54%  2,504,701     48%  2,057,882
   Stock compensation expense      154,495       5%    644,248     29%  (489,753)   968,992      12%  1,047,100     20%    (78,108)
   Amortization of intangibles      10,580       0%     10,578      1%         2     31,738       0%     31,737      1%          1
--------------------------------------------------------------------------------  ------------------------------------------------
TOTAL                            3,144,868     100%  2,184,625    100%   960,243  8,399,571     100%  5,249,634    100%  3,149,937
--------------------------------------------------------------------------------  ------------------------------------------------
</TABLE>

DIRECT COSTS OF REVENUE, including the cost of bandwidth, direct labor,
sub-contracted labor, consulting fees and depreciation, were $511,691 for the
three months ended November 30, 2006, an increase of 19%, compared to the three
months ended November 30, 2005 and $1,442,282 for the nine months ended November
30, 2006, an increase of 17%, compared to the nine months ended November 30,
2005, primarily due to higher bandwidth costs, commensurate with the additional
channels in operation, offset in part by a reduction in production costs as a
percent of revenue.

Direct costs of revenue as a percentage of total revenue declined to 31% for the
quarter ended November 30, 2006 from 55% for the comparable period of 2005, and
declined to 33% for the nine months ended November 30, 2006 from 65% for the
comparable period in 2005. This is due primarily to the growth of the higher
margin Narrowcasting business which accounted for 71% of total revenue in the
quarter ended November 30, 2006, compared to 69% in the quarter ended November
30, 2005 and increased to 70% for the nine months ended November 30, 2006 from
54% for the comparable period in 2005.


                                                                               9

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - CONTINUED
-------------------------------------------------------------------------------

SALES AND MARKETING expenses, including employee compensation and related costs
for personnel engaged in marketing, customer service and sales and sales support
functions, as well as direct advertising, public relations and promotional
expenditures, were $556,680 for the three months ended November 30, 2006, an
increase of 253%, compared to the three months ended November 30, 2005 and
$1,296,572 for the nine months ended November 30, 2006, an increase of 285%
compared to the nine months ended November 30, 2005. This increase is primarily
due to increased marketing efforts and increased sales and marketing staffing.

GENERAL, ADMINISTRATIVE AND OTHER expenses, including employee compensation and
related costs for personnel engaged in administrative functions, legal and
accounting fees, amortization and depreciation and other items, were $1,879,867
for the quarter ended November 30, 2006, an increase of approximately $968,719,
or 106%, compared to the quarter ended November 30, 2005 and were $4,562,583, an
increase of $2,057,882, or 82%, for the nine months ended November 30, 2006. The
increase resulted primarily from an increase in the number of employees, as we
continue to expand and scale-up our operations, including additional executive
officers, together with increases in other items including insurance, investor
relations services, travel, and recruitment costs. Overall the Company's staff
level grew from 34 at February 28, 2006 to 49 at November 30, 2006.

As a percentage of total revenue, general administrative and other expenses
decreased to 114% of total revenue for the quarter ended November 30, 2006,
compared to 117% for the same period of 2005 and decreased to 105% of total
revenue for the nine months ended November 30, 2006, compared to 133% for the
comparable period in 2005. The breakdown of general, administrative and other
expenses is as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------  -----------------------------------------------
                                               Three months ended                               Nine months ended
                    -----------------------------------------------------------  -----------------------------------------------
                                November 30, 2006  November 30, 2005             November 30, 2006  November 30, 2005
                                      $       %        $       %      Inc (Dec)        $       %         $         %   Inc (Dec)
-------------------------------------------------------------------------------  -----------------------------------------------
<S>                               <C>        <C>    <C>      <C>       <C>         <C>        <C>   <C>          <C>   <C>
TOTAL GENERAL, ADMINISTRATIVE
   AND OTHER
   Wages and salaries               706,916   38%   315,213   34%      391,703     1,668,962   37%    882,187     35%    786,775
   Legal, accounting and audit      288,573   15%   205,414   23%       83,159       822,599   18%    806,784     32%     15,815
   Depreciation                      23,566    1%   (24,979)  -3%       48,545        55,363    1%     19,237      1%     36,126
   Other                            860,812   46%   415,500   46%      445,312     2,015,659   44%    796,493     32%  1,219,166
-------------------------------------------------------------------------------  -----------------------------------------------
TOTAL                             1,879,867  100%   911,148  100%      968,719     4,562,583  100%  2,504,701    100%  2,057,882
===============================================================================  ===============================================
</TABLE>

STOCK BASED COMPENSATION EXPENSE We recorded non-cash charges of approximately
$154,000, or a decrease of 76%, for the quarter ended November 30, 2006 as
compared to the quarter ended November 30, 2005 and approximately $969,000, or a
decrease of 7%, for the nine months ended November 30, 2006 as compared to the
nine months ended November 30, 2005. The quarter ended November 30, 2006
included a charge of approximately $33,785 relating to stock options granted to
employees, the fair value of which is required to be expensed over their vesting
periods following the implementation of SFAS No.123R. We also granted options to
employees and directors and made payments in shares and warrants to third
parties for services rendered.

SOFTWARE DEVELOPMENT EXPENSES consist primarily of compensation and related
costs for personnel responsible for the development of new products and
services, as well as significant improvements to existing products and services.
We currently capitalize our development costs and amortize a portion of them
each year. During the quarter ended November 30, 2006, we capitalized
approximately $37,000 of software development and amortized approximately
$32,000, compared to $4,000 and $30,000, respectively, for the quarter ended
November 30, 2005. For the nine months ended November 30, 2006, approximately
$116,000 of software development was capitalized and approximately $97,000 was
amortized, as compared to $81,000 and $95,000, respectively, for the nine months
ended November 30, 2005.

INCOME TAXES We have not generated any taxable income to date, and therefore
have not had to pay any income tax or make any provision for income tax since
our inception. The Company's net operating loss carryforward, at the expected
tax rates for its operations, includes approximately $6,436,889 deductible
against future taxable income generated in the United Kingdom, which will remain
in place until utilized and approximately $4,602,122 deductible against future
taxable income generated in the United States, which will remain available until
utilized or begin to expire at various dates through February 28, 2025.


                                                                              10

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - CONTINUED
-------------------------------------------------------------------------------

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

We had $1,755,529 in cash and cash equivalents available at November 30, 2006
and available bank overdraft facilities of $58,500. Cash was used to meet the
needs of the business including, but not limited to, payment of operating
expenses, funding capital expenditures and, debt repayments. We discuss many of
these factors in detail below.

We have financed our operations from inception through private equity financing.
From inception through November 30, 2006, we sold an aggregate of 45,248,974
shares of our common stock for gross proceeds of approximately $14.8 million. In
addition, we have granted options and issued shares in lieu of cash in payment
to third parties for services rendered and in connection with the acquisition of
Sportshows Television, Ltd. To a lesser extent, we have also used capital leases
to fund some of our equipment acquisitions. We have incurred significant losses
since our inception and, at November 30, 2006, had an accumulated deficit of
approximately $16.4 million.

Our current ratio (current assets divided by current liabilities) relates to our
ability to pay our short-term debts as they become due. At November 30, 2006,
our current ratio was 2.4, compared to 4.5 at February 28, 2006. Our current
ratio fluctuates primarily as we use cash to develop our business and raise
additional funds from private equity financing from time to time.

As mentioned in Note 2 of the financial statements, the Company currently does
not have the liquidity or financing available to it to fund its operations for
the next 12 months without additional capital being raised or financing being
acquired. The management team has developed a strategic business plan and is
actively pursuing various financing options. As the management team addresses
its liquidity shortage, the Company is attempting to improve its liquidity
position by evaluating ongoing operating expenses, increasing its effort to
collect outstanding receivables and continuing to focus on increasing sales.

NET CASH USED IN OPERATING ACTIVITIES was approximately $3,467,675 for the nine
months ended November 30, 2006 and approximately $1,645,384 for the nine months
ended November 30, 2005. The increase in cash used in operations was due
primarily to a significant increase in accounts receivable commensurate with the
increase in revenues, as well as a higher level of prepaid expenses.

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES was approximately $1,633,072
of cash generated for the nine months ended November 30, 2006 and net cash used
in investing activities was approximately $192,901 of cash utilized for the nine
months ended November 30, 2005. The decrease in cash used was due to proceeds
from short term investments offset by capital investment in our network.

NET CASH PROVIDED BY FINANCING ACTIVITIES was approximately $1,314,828 for the
nine months ended November 30, 2006, resulting primarily from the receipt of
subscriptions for shares outstanding at February 28, 2006 and approximately
$2,059,497 for the nine months ended November 30, 2005, resulting primarily from
the issuance of capital stock to our investors to support our operations.

As of November 30, 2006, our principal capital commitments consisted of
obligations outstanding under capital leases as shown in the table below:

          -------------------------------------------------------------
                                                      Nine Months Ended

                                                      November 30, 2006
                                                         (unaudited)
                                                              $
          -------------------------------------------------------------
          Amounts payable:
          Within 12 months                                      103,523
          Between one and two years                             103,523
          Between two and three years                            66,480
          -------------------------------------------------------------
          Total future commitment                               273,526
          Less: finance charges allocated to future
          periods                                               (30,744)
          -------------------------------------------------------------
          Present Value                                         242,782
          =============================================================


                                                                              11

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - CONTINUED
-------------------------------------------------------------------------------

Our cash and cash equivalents as of November 30, 2006 were approximately $1.8
million and we had bank overdraft facilities of $58,500 as of that date. An
overdraft facility is a line of credit arrangement, negotiated with a bank and
usually reviewable on an annual basis, whereby the bank's customer is permitted
to take its checking account into a debit balance on a pre-agreed interest basis
up to an agreed amount. Amounts utilized under overdraft facilities are payable
on demand. At November 30, 2006 and February 28, 2006, the overdraft facilities
consisted of approximately $19,500 and $70,000, respectively, with Barclays Bank
PLC and $39,000 and $34,000, respectively, with National Westminster Bank PLC
(NatWest). Neither facility was utilized on November 30, 2006 or February 28,
2006. The interest rate on the Barclays facility is 5.25% above Barclays'
variable base rate (which base rate was 4.5% per annum as of November 30, 2006).
The interest rate on the NatWest facility is 4.5% above NatWest's variable base
rate (which base rate was 4.5% per annum as of November 30, 2006). The Barclays
overdraft facility was renewed on March 20, 2006. The NatWest overdraft facility
was renewed on May 31, 2006.

OFF BALANCE SHEET ARRANGEMENTS We have no off-balance sheet arrangements that
have had or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.


                                                                              12

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

ITEM 3. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company's management,
with the participation of the Company's chief executive officer and chief
financial officer, evaluated the effectiveness of the Company's disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on such
evaluation, our chief executive officer and chief financial officer have
concluded that our disclosure controls and procedures were effective as of
November 30, 2006 to ensure that the information required to be disclosed by us
in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms.

There have not been any changes in the Company's internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act)
during the last fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

We will be documenting and testing our internal control procedures in order to
satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.
Pursuant to Section 404, beginning with our fiscal year ending February 29,
2008, we will be required to include in our annual report on Form 10-KSB a
management assessment of the effectiveness of our internal controls over
financial reporting. For the fiscal year ending February 28, 2009, a report by
our independent registered public accounting firm will be included addressing
these assessments. We are exposed to increased costs associated with complying
with these requirements, and will be spending management time and resources to
document and test our internal controls in anticipation of Section 404 reporting
requirements. In addition, we cannot assure you that we will not in the future
identify material weaknesses or significant deficiencies in our internal
controls over financial reporting that we have not discovered to date.

If we are not able to complete testing of all of our internal controls, or if
during the course of our testing we identify deficiencies that we are not able
to remediate in time, we and/or our independent registered public accounting
firm may not be able to complete our/its respective assessments before the
deadline for compliance with the requirements of Section 404 of the
Sarbanes-Oxley Act. If we fail to timely complete our evaluation and testing in
order to allow for the assessment by our management, or if our independent
registered public accounting firm cannot timely attest to our management's
assessment, we could be subject to regulatory scrutiny and a loss of public
confidence in our internal controls, which could harm our business and our stock
price. Further, if our independent registered public accounting firm is not
satisfied with our internal controls over financial reporting or with the level
at which they are documented, designed, operated or reviewed, it may decline to
attest to management's assessment or may issue a qualified report identifying a
material weakness in our internal controls. This could result in significant
additional expenditures responding to the Section 404 internal control audit, a
diversion of management attention and a decline in our stock price.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
----------------------------------------------------

This report contains forward-looking statements including, without limitation,
in the discussion under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Any and all statements contained
in this report that are not statements of historical fact may be deemed
forward-looking statements. Terms such as may, might, would, should, could,
project, estimate, pro forma, predict, potential, strategy, anticipate, attempt,
develop, plan, help, believe, continue, intend, expect, future, and similar
terms and terms of similar import (including the negative of any of the
foregoing) may be intended to identify forward-looking statements. However, not
all forward-looking statements may contain one or more of these identifying
terms. Forward-looking statements in this report may include, without
limitation, statements regarding (i) a projection of revenues, income (including
income/loss), earnings (including earnings/loss) per share, capital
expenditures, dividends, capital structure, or other financial items, (ii) the
plans and objectives of management for future operations, including plans or
objectives relating to our products or services, (iii) our future financial
performance, including any such statement contained in a discussion and analysis
of financial condition by management or in the results of operations included
pursuant to the rules and regulations of the Securities and Exchange Commission,
and (iv) the assumptions underlying or relating to any statement described in
subparagraphs (i), (ii), or (iii).

The forward-looking statements are not meant to predict or guarantee actual
results, performance, events, or circumstances and may not be realized because
they are based upon our current projections, plans, objectives, beliefs,
expectations, estimates, and assumptions and are subject to a number of risks
and uncertainties and other influences, many of which we have no control over.
Actual results and the timing of certain events and circumstances may differ
materially from those described by the forward-looking statements as a result of
these risks and uncertainties. Factors that may influence or contribute to the
inaccuracy of the forward-looking statements or cause actual results to differ
materially from expected or desired results may include, without limitation, our
inability to obtain adequate financing, insufficient cash flows and resulting
illiquidity, our dependence upon significant customers, our inability to expand
our business, government regulations, increased competition, changing customer
preferences, stock illiquidity, failure to implement our business plans or
strategies, and ineffectiveness of our marketing program and our acquisition
opportunities. A description of some of the risks and uncertainties that could
cause our actual results to differ materially from those described by the
forward-looking statements in this report appears under the caption "Risk
Factors" and


                                                                              13

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

elsewhere in the most recent Registration Statement on Form SB-2 and Form 10-KSB
that we have filed with the Securities and Exchange Commission.

Because of the risks and uncertainties related to these factors and the
forward-looking statements, readers are cautioned not to place undue reliance on
the forward-looking statements. We disclaim any obligation to update these
forward-looking statements or to announce publicly the results of any revisions
to any of the forward-looking statements contained in this report to reflect any
new information or future events or circumstances or otherwise unless required
to do so under applicable federal securities laws.

Readers should read this report and the following discussion and analysis in
conjunction with the financial statements and the related notes contained in
this report and the other documents we file from time to time with the
Securities and Exchange Commission.

PART II - OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
------------------------------------------------------------

A total of 100,000 shares of common stock were granted to Granahan McCourt
Advisors, LLC on May 30, 2006 pursuant to an investor relations agreement with
Narrowstep Inc. of the same date. The issuance was made in reliance on Section
4(2) of the Securities Act.

ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.

On September 28, 2006, the Board of Directors (the "Board") of the Company
approved the following:

(a) an increase in the number of directors which shall constitute the whole
Board from nine (9) directors to ten (10) directors. The newly created
directorship shall be for one additional Class III Director; and

(b) the appointment of Rajan Chopra as a Class III director of the Company to
fill the vacancy resulting from the increase of the Board from nine (9)
directors to ten (10) directors. Mr. Chopra will serve on the Board's audit
committee.

On October 20, 2006, Peter Siddall resigned as Chairman of the Board and
Director of Narrowstep Inc.

On December 1, 2006, Stephen Beaumont was removed as President and Chief
Executive Officer of Narrowstep Inc. and the Company approved the appointment of
David C. McCourt as Interim Chief Executive Officer and Chairman of the Board of
the Company. Mr. McCourt has been a director of the Company since June 27, 2006.

On December 7, 2006, the Board of Directors of the Company approved the
appointment of Lisa VanPatten as Chief Financial Officer of the Company,
replacing Jill Thoerle, who served as the Company's Interim Chief Financial
Officer since July 2006.

On January 2, 2007, Clifford Webb was removed as the Chief Operating Officer of
Narrowstep, Inc.


                                                                              14

<PAGE>

NARROWSTEP INC. AND SUBSIDIARIES

ITEM 6. EXHIBITS
----------------

     EXHIBIT 31.1   CERTIFICATION FILED PURSUANT TO EXCHANGE ACT RULES
                    13a-14 AND 15d-14 AS ADOPTED PURSUANT TO SECTION 302 OF
                    THE SARBANES-OXLEY ACT OF 2002

     EXHIBIT 31.2   CERTIFICATION FILED PURSUANT TO EXCHANGE ACT RULES
                    13a-14 AND 15d-14 AS ADOPTED PURSUANT TO SECTION 302 OF
                    THE SARBANES-OXLEY ACT OF 2002

     EXHIBIT 32.1   CERTIFICATION OF CHIEF EXECUTIVE OFFICER FURNISHED
                    PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
                    TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     EXHIBIT 32.2   CERTIFICATION OF CHIEF FINANCIAL OFFICER FURNISHED
                    PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
                    TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


                                                                              15

<PAGE>

                                   SIGNATURES
                                   ----------

Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

                                 NARROWSTEP INC.


                                        By: /s/ David McCourt
                                            ------------------------------------
 Dated: June 20, 2007                       David McCourt
                                            Chief Executive Officer and Chief
                                            Operating Officer


                                        By: /s/ Lisa VanPatten
                                            ------------------------------------
 Dated: June 20, 2007                       Lisa VanPatten
                                            Chief Financial Officer


                                                                              16