----

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UNITED      STATES

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

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| PART                  1 - FINANCIAL INFORMATION                                                          |                                                |                                                                                                                                                                                                          |
|----------------------------------------------------------------------------------------------------------|-----------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Item                  1 - Financial Statements                                                           |                                                |                                                                                                                                                                                                          |
|                                                                                                     |                                                |                                                                                                                                                                                                          |
| NARROWSTEP                  INC. AND SUBSIDIARIES                                                        |                                                |                                                                                                                                                                                                          |
| CONDENSED                  CONSOLIDATED BALANCE                  SHEETS                                  |                                                |                                                                                                                                                                                                          |
|                                                                                                     | November                  30,                  2007 | February                  28,                  2007                                                                                                                                                           |
|                                                                                                     | (Unaudited)                                         |                                                                                                                                                                                                          |
|                                                                                                     | $                                                   | $                                                                                                                                                                                                             |
| Assets                                                                                                   |                                                |                                                                                                                                                                                                          |
| Current                  assets:                                                                         |                                                |                                                                                                                                                                                                          |
| Cash                  and cash                  equivalents                                              |  6,558,875                                     |  466,870                                                                                                                                                                                                 |
| Accounts                  receivable, net of                  allowance for doubtful accounts            |  1,261,836                                     |  1,403,779                                                                                                                                                                                               |
|    of                  $1,344,892                  and $940,534, respectively             |                                                |                                                                                                                                                                                                          |
| Prepaid                  expenses and other current                  assets                              |  458,308                                       |  332,192                                                                                                                                                                                                 |
| Total                  current                  assets                                                   |  8,279,019                                     |  2,202,841                                                                                                                                                                                               |
| Property                  and equipment,                  net                                            |  3,118,601                                     |  1,234,557                                                                                                                                                                                               |
| Software                  development costs,                  net                                        |  508,213                                       |  149,080                                                                                                                                                                                                 |
| Restricted                  cash – security                  deposit                               |  281,790                                       |                                   - |
| Total                  Assets                                                                            |  12,187,623                                    |  3,586,478                                                                                                                                                                                               |
|                                                                                                     |                                                |                                                                                                                                                                                                          |
| Liabilities                  and Stockholders'                  Equity                                   |                                                |                                                                                                                                                                                                          |
| Liabilities                                                                                              |                                                |                                                                                                                                                                                                          |
| Current                  liabilities:                                                                    |                                                |                                                                                                                                                                                                          |
| Unearned                  revenue                                                                        |  158,070                                       |  384,295                                                                                                                                                                                                 |
| Accounts                  payable                                                                        |  675,367                                       |  960,580                                                                                                                                                                                                 |
| Net                  obligations under capital                  leases, current                          |  162,320                                       |  88,110                                                                                                                                                                                                  |
| Accrued                  expenses and other current                  liabilities                         |  901,573                                       |  977,948                                                                                                                                                                                                 |
| Total                  current                  liabilities                                              |  1,897,330                                     |  2,410,933                                                                                                                                                                                               |
| Net                  obligations under capital                  leases, long-term                        |  186,246                                       |  135,470                                                                                                                                                                                                 |
| Other                  long term                  liabilities                                            |  6,237                                         |                                   - |
| Total                  Liabilities                                                                       |  2,089,813                                     |  2,546,403                                                                                                                                                                                               |
| Commitments                  and                  Contingencies                                          |                                                |                                                                                                                                                                                                          |
| Stockholders'                  Equity                                                                    |                                                |                                                                                                                                                                                                          |
| Common                  stock, $0.000001 par value                  450,000,000 shares authorized,       |  125                                           |  45                                                                                                                                                                                                      |
| 124,944,487  issued                  and                  outstanding at November 30, 2007 and |                                                |                                                                                                                                                                                                          |
| 45,348,974  issued                  and                  outstanding at February 28, 2007      |                                                |                                                                                                                                                                                                          |
| Additional                  paid-in                  capital                                             |  40,449,648                                    |  20,543,688                                                                                                                                                                                              |
| Accumulated                  deficit                                                                     | (                  30,529,123)                      | (                  19,555,533)                                                                                                                                                                                |
| Accumulated                  other comprehensive                  income                                 |  177,160                                       |  51,875                                                                                                                                                                                                  |
| Total                  Stockholders'                  Equity                                             |  10,097,810                                    |  1,040,075                                                                                                                                                                                               |
| Total                  Liabilities and                  Stockholders' Equity                             |  12,187,623                                    |  3,586,478                                                                                                                                                                                               |
|                                                                                                     |                                                |                                                                                                                                                                                                          |
| See                  Notes to Condensed                  Consolidated Financial Statements.              |                                                |                                                                                                                                                                                                          |

----

| NARROWSTEP                  INC. AND SUBSIDIARIES                                                  |                                                                                                                     |                                                                                                          |                               |                                                                                                          |                                                                                                          |
|----------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|------------------------------------|---------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|
| CONDENSED                  CONSOLIDATED STATEMENTS OF OPERATIONS                                   |                                                                                                                     |                                                                                                          |                               |                                                                                                          |
| AND                  COMPREHENSIVE LOSS (Unaudited)                                                |                                                                                                                     |                                                                                                          |                               |                                                                                                          |                                                                                                          |
|                                                                                               | Three                  Months Ended                                                                                      |                                                                                                          | Nine                  Months Ended |
|                                                                                               | November                  30, 2007                                                                                       | November                  30, 2006                                                                            |                               | November                  30, 2007                                                                            | November                  30, 2006                                                                            |
|                                                                                                    | $                                                                                                                        | $                                                                                                             |                               | $                                                                                                             | $                                                                                                             |
| Revenue                                                                                            |                                                                                                                     |                                                                                                          |                               |                                                                                                          |                                                                                                          |
| Narrowcasting                  and other                                                           | 1,735,539                                                                                                                | 1,163,968                                                                                                     |                               | 4,294,654                                                                                                     | 3,042,461                                                                                                     |
| Production                  services                                                               | (20,828)                                                                                                                 | 485,617                                                                                                       |                               | 296,707                                                                                                       | 1,320,014                                                                                                     |
| Total                  revenue                                                                     | 1,714,711                                                                                                                | 1,649,585                                                                                                     |                               | 4,591,361                                                                                                     | 4,362,475                                                                                                     |
| Costs                  and Expenses                                                                |                                                                                                                     |                                                                                                          |                               |                                                                                                          |                                                                                                          |
| Operating                                                                                          |               1,516,689                            |                  713,176 |                               |               4,104,004                 |               1,846,479                 |
| Selling,                  general and administrative                                               |               2,322,616                            |               2,161,159                 |                               |               8,417,442                 |               5,742,409                 |
| Research                  & development                                                        |                  716,406            |                  270,533 |                               |               2,298,454                 |                  810,683 |
| Total                  operating expenses                                                          | 4,555,711                                                                                                                | 3,144,868                                                                                                     |                               | 14,819,900                                                                                                    | 8,399,571                                                                                                     |
| Operating                  Loss                                                                    | (2,841,000)                                                                                                              | (1,495,283)                                                                                                   |                               | (10,228,539)                                                                                                  | (4,037,096)                                                                                                   |
| Interest                  income (expense), net                                                    | 54,674                                                                                                                   | 23,005                                                                                                        |                               | (724,249)                                                                                                     | 108,270                                                                                                       |
| Currency                  exchange income (loss)                                                   | (4,864)                                                                                                                  | (5,126)                                                                                                       |                               | (20,803)                                                                                                      | (3,970)                                                                                                       |
| Net                  Loss                                                                          | (2,791,190)                                                                                                              | (1,477,404)                                                                                                   |                               | (10,973,591)                                                                                                  | (3,932,796)                                                                                                   |
| Foreign                  currency translation                  adjustment                          |                    88,850 | 47,143                                                                                                        |                               |                  125,285 | 90,126                                                                                                        |
| Comprehensive                  Loss                                                                | (2,702,340)                                                                                                              | (1,430,261)                                                                                                   |                               | (10,848,306)                                                                                                  | (3,842,670)                                                                                                   |
|                                                                                               |                                                                                                                     |                                                                                                          |                               |                                                                                                          |                                                                                                          |
| Net                  Loss per Common Share - Basic                  and Diluted                    | (0.02)                                                                                                                   | (0.03)                                                                                                        |                               | (0.14)                                                                                                        | (0.09)                                                                                                        |
| Weighted-Average                  Number of Shares                  Outstanding, Basic and Diluted | 125,033,232                                                                                                              | 45,248,974                                                                                                    |                               | 79,247,649                                                                                                    | 45,214,292                                                                                                    |
|                                                                                               |                                                                                                                     |                                                                                                          |                               |                                                                                                          |                                                                                                          |
| See                  Notes to Condensed                  Consolidated Financial Statements.        |                                                                                                                     |                                                                                                          |                               |                                                                                                          |                                                                                                          |

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| NARROWSTEP                INC. AND                SUBSIDIARIES                                                 |                                                                                                                                                                                        |                                                                                                                                                                                        |
|----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| CONDENSED                CONSOLIDATED STATEMENTS                OF CASH FLOWS                                  |                                                                                                                                                                                        |                                                                                                                                                                                        |
| (Unaudited)                                                                                                    |                                                                                                                                                                                        |                                                                                                                                                                                        |
|                                                                                                           | Nine                Months                Ended                                                                                                                                             |
|                                                                                                           | November                30,                2007                                                                                                                                             | November                30,                2006                                                                                                                                             |
|                                                                                                           |     $                                                                                                                                                                   |            $                                                                                                                         |
| Cash                Flows from Operating                Activities                                             |                                                                                                                                                                                        |                                                                                                                                                                                        |
| Net                loss                                                                                        | (                10,973,591)                                                                                                                                                                | (                3,932,796)                                                                                                                                                                 |
| Adjustments                to reconcile net loss                to net cash used in operating activities:      |                                                                                                                                                                                        |
| Allowance                for doubtful                accounts                                                  |                       404,358                                                 |  188,975                                                                                                                                                                               |
| Depreciation                and                amortization                                                    |  676,603                                                                                                                                                                               |  407,647                                                                                                                                                                               |
| Stock-based                compensation                expense                                                 |  2,165,658                                                                                                                                                                             |  968,992                                                                                                                                                                               |
| Interest                on short-term                investment                                                |                                - | (                57,609)                                                                                                                                                                    |
| Fair                value of options and warrants                granted to third party suppliers              |                         19,625                                      |                                - |
| Interest                on debt                issuance                                                        |                       853,200                                                 |                                - |
| Changes                in net cash attributable                to changes in operating assets and liabilities: |                                                                                                                                                                                        |
| Accounts                receivable                                                                             | (                262,415)                                                                                                                                                                   | (                1,154,574)                                                                                                                                                                 |
| Prepaid                expenses and other current                assets                                        | (                126,116)                                                                                                                                                                   | (                156,073)                                                                                                                                                                   |
| Unearned                revenue                                                                                | (                226,225)                                                                                                                                                                   |                       101,575                                                 |
| Accounts                payable, accrued expenses                and other current liabilities                 | (                355,351)                                                                                                                                                                   |  166,188                                                                                                                                                                               |
| Net                Cash Used in Operating                Activities                                            | (                7,824,254)                                                                                                                                                                 | (                3,467,675)                                                                                                                                                                 |
| Cash                Flows from Investing                Activities                                             |                                                                                                                                                                                        |                                                                                                                                                                                        |
| Purchases                of property and                equipment                                              | (                2,177,084)                                                                                                                                                                 | (                808,131)                                                                                                                                                                   |
| Purchases                of restricted                cash-security deposit                                    | (                281,790)                                                                                                                                                                   |                                - |
| Payments                for software development                costs                                          | (                435,688)                                                                                                                                                                   | (                116,406)                                                                                                                                                                   |
| Proceeds                from short-term                investments                                             |                                - |  2,557,609                                                                                                                                                                             |
| Net                Cash Provided by (Used in)                Investing Activities                              | (                2,894,562)                                                                                                                                                                 |  1,633,072                                                                                                                                                                             |
| Cash                Flows from Financing                Activities                                             |                                                                                                                                                                                        |                                                                                                                                                                                        |
| Net                proceeds from issuance of                common stock                                       |                  10,094,920                                                                            |  1,363,333                                                                                                                                                                             |
| Proceeds                from exercise of stock                options and warrants                             |                                - |                           6,250                           |
| Retirement                of Narrowstep                shares                                                  | (                177,491)                                                                                                                                                                   |                                - |
| Payments                on capital                leases                                                       | (                71,716)                                                                                                                                                                    | (                54,755)                                                                                                                                                                    |
| Net                proceeds from issuance of debt                instrument                                    |                    6,950,130                                                                 |                                - |
| Net                Cash Provided by Financing                Activities                                        |  16,795,843                                                                                                                                                                            |  1,314,828                                                                                                                                                                             |
| Net                Increase (Decrease) in Cash                and Cash Equivalents                             |  6,077,027                                                                                                                                                                             | (                519,775)                                                                                                                                                                   |
| Effect                of exchange rates on change                in cash                                       |  14,978                                                                                                                                                                                |  42,450                                                                                                                                                                                |
| Cash                and cash equivalents at the                beginning of period                             |  466,870                                                                                                                                                                               |  2,232,854                                                                                                                                                                             |
| Cash                and Cash Equivalents at the                End of the Period                               |  6,558,875                                                                                                                                                                             |  1,755,529                                                                                                                                                                             |
|                                                                                                           |                                                                                                                                                                                        |                                                                                                                                                                                        |
| Supplemental                disclosure of                non-cash investing activities:                        |                                                                                                                                                                                        |                                                                                                                                                                                        |
| Property                and equipment acquired                under capital leases                             |                       196,702                                                 |                       195,426                                                 |
|                                                                                                           |                                                                                                                                                                                        |                                                                                                                                                                                        |
| Supplemental                disclosure of                non-cash financing activities:                        |                                                                                                                                                                                        |                                                                                                                                                                                        |
| Debt                converted to                equity                                                         |                    6,950,130                                                                 |                                - |
| Interest                on debt issuance paid out                with  common shares                 |                       853,200                                                 |                                - |
|                                                                                                           |                                                                                                                                                                                        |                                                                                                                                                                                        |
| See                Notes to Condensed                Consolidated Financial Statements.                        |                                                                                                                                                                                        |                                                                                                                                                                                        |

----

----

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Item        2.  Management’s Discussion and Analysis or Plan of        Operation.

|  (Unaudited)                               | Nine                  Months                  Ended                                                                      |
|-------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
|                                            | November                  30,                  2007                                                                      | November                  30,                  2006 | Percent |
|                                            |      $                                                                                          |      $ | Change |
| United                  States                  |                  671,467            |                  519,562 | 29% |
| Europe,                  Middle-East and Africa |               3,789,082                            |               3,622,617 | 5% |
| Asia                  Pacific                   |                  109,908            |                  201,108 | -45% |
| Internet                  Sales                 |                    20,904 |                    19,188 | 9% |
| Total                                           |               4,591,361                            |               4,362,475 | 5% |

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----

|                                                               | November                  30, 2007 |
|--------------------------------------------------------------------|------------------------------------|
|                                                               | $                                  |
| Amounts                  payable:                                  |                               |
| Within                  12 months                                  |  188,207                      |
| Between                  one and two years                         |  148,814                      |
| Between                  two and three years                       |  52,471                       |
| Total                  future commitment                           |  389,492                      |
| Less:                  finance charges allocated to future periods | (                  40,926)         |
| Present                  Value                                     |  348,566                      |

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|   | · | We                  did not record the stock-based                  compensation expense on certain stock options, issued to one of                  our                  directors, on a timely basis. As a result of this, our third quarter                  interim financial statements were                  misstated. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We                  did not record a sufficient                  allowance for bad debts related to a customer’s accounts receivable                  balance that was in question.                                                                                                                              |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                   |
|   | · | We                  were recording invoices billed                  to certain customers in such a manner that the result was to recognize                  revenues on a cash basis, which is not in accordance with accounting                  principals generally accepted in the United                  States. |

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| Nominee                          |   | For        |   | %    |   | Withheld*                               |   | %   |
|----------------------------------|--------|------------|--------|------|--------|-----------------------------------------|--------|-----|
| Rajan                    Chopra  |   | 95,597,629 |   | 95.1 |   |      4,919,510 |   | 4.9 |
| David                    McCourt |   | 95,426,769 |   | 94.9 |   |      5,090,370 |   | 5.4 |
| Iolo                    Jones    |   | 90,833,045 |   | 90.4 |   |      9,684,094 |   | 9.6 |

|                                                                                                                                                                                                                  | For        | %1For | Against   | %1                  Against | Abstain   | %1Abstain |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------|-----------|-----------------------------|-----------|-----------|
| Amend                  Certificate of Incorporation2                  to                  clarify certain provisions concerning the election                  of directors.                       | 95,590,119 | 76.3  | 3,661,181 | 2.9                         | 1,265,839 | 1.0       |

|   | 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 |

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|                                            |   | By:    | /s/              David McCourt               |   |
|-------------------------------------------------|--------|--------|----------------------------------------------|--------|
| Dated:  January              14, 2008 |   |   | David              McCourt                   |   |
|                                            |   |   | Interim              Chief Executive Officer |   |
|                                            |   |   |                                         |   |
|                                            |   |   |                                         |   |
|                                            |   | By:    | /s/              Lisa VanPatten              |   |
| Dated:  January              14, 2008 |   |   | Lisa              VanPatten                  |   |
|                                            |   |   | Chief              Financial Officer         |   |