NEXT
1 INTERACTIVE, INC.

    


    

    


    Private
Placement Offering Memorandum

    


    September
25, 2009

    


    CONFIDENTIAL

    


    THIS
DOCUMENT CONTAINS PROPRIETARY AND CONFIDENTIAL INFORMATION

    AND
IS NOT TO BE DISCLOSED TO THIRD PARTIES OR COPIED WITHOUT NEXT 1

    INTERACTIVE,
INC.’S WRITTEN CONSENT.

    


    Next
1 Interactive, Inc.

    2400
N Commerce Parkway

    Suite
105

    Weston,
FL 33326

    (954)
888-9779

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Offering
Overview

    September
25, 2009

    


    
      
        
          
            
              
                	
                        Issuer:

                      	
                        Next
      1 Interactive, Inc. (NXOI.BB)

                      
	 
      	 
      
	
                        Offering:

                      	
                        Offering
      of Units comprised of shares of common stock, par value $.0001 per share
      (“Common Stock”) and warrant (“Warrants”) to purchase common
      stock.

                      
	 
      	 
      
	
                        Type
      of Security:

                      	
                        Each
      Unit is comprised of one (1) share of Common Stock and one (1)
      Warrant.

                      
	 
      	 
      
	
                        Amount:

                      	
                        Minimum
      $250,000 – Maximum $1,500,000

                      
	 
      	 
      
	
                        Minimum
      Investment:

                      	
                        $25,000

                      
	 
      	 
      
	
                        Purchase
      Price:

                      	
                        The
      Purchase Price of the Unit shall be set at $1.00.

                      
	
                        Eligible
      Investors:

                      	
                        Accredited
      Investors and Qualified Institutional Investors only.

                      
	 
      	 
      
	
                        Use
      of Proceeds:

                      	
                        We
      expect to use the proceeds from the sale of the Units to fund internal
      growth and working capital needs.

                      
	 
      	 
      
	
                        Warrants:

                      	
                        The
      Warrants shall be exercisable at $2.00 per share.  The Warrants
      shall expire three (3) years from the date of issuance.

                      
	 
      	 
      
	
                        Protection
      Against Dilution:

                      	
                        The
      Warrant Number is subject to adjustment from time to time upon the
      occurrence of the following events

                      
	 
      	 
      
	 
      	
                        (1)Adjustment
      for change in capital stock;

                      
	 
      	 
      
	 
      	
                        (2)If
      the Company pays a dividend or makes a distribution on its Common Stock in
      shares of its Common Stock;

                      
	 
      	 
      
	 
      	
                        (3)subdivides
      or reclassifies its outstanding shares of Common Stock into a greater
      number of shares;

                      
	 
      	 
      
	 
      	
                        (4)combines
      or reclassifies its outstanding shares of Common Stock into a smaller
      number of shares;

                      
	 
      	 
      
	 
      	
                        (5)makes
      a distribution on its Common Stock in shares of capital stock other than
      Common Stock; or

                      
	 
      	 
      
	 
      	
                        (6)issues
      by reclassification of its Common Stock any shares of its capital
      stock.

                      
	 
      	 
      
	 
      	
                        Then
      the Warrant number in effect immediately prior to such action shall be
      proportionately adjusted so that the holder may receive the aggregate
      number and kind of shares of capital stock of the Company or other capital
      stock which such holder would have owned immediately following such
      action.

                      


              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        	
                                                                                Registration:

                                                                              	
                                                                                The
      Company will grant to the Investor piggyback registration rights for the
      Common Stock issued in the Offering and for the Common Stock underlying
      the Warrants.

                                                                              
	 
      	 
      
	
                                                                                Right
      of First Offer:

                                                                              	
                                                                                The
      Investor shall have a right of first offer to purchase a proportionate
      amount of any equity or equity linked secuirities issued in a private
      placement within 12 months of the closing date.  Such right of
      first offer shall include customary exceptions including issuances
      involving strategic partnerships, acquisitions, public secndary offerings,
      employee and director stock option issuances, issuances to non-affiliates
      for non-cash transactions and similar
issuances.

                                                                              


                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CONFIDENTIAL
PRIVATE PLACEMENT MEMORANDUM

     

    Offering:   Shares
of Common Stock and Warrants to purchase Common Stock as a Unit

    September
25, 2009

    


    
      
        

      

    

    


    This
confidential private placement memorandum together with the attached appendices
(the “Memorandum”)
is being furnished by Next 1 Interactive, Inc. (“Next 1” or
the “Company”)
solely for use by prospective investors in connection with their consideration
of a purchase of a Minimum of $250,000 and a Maximum $1,500,000 of
Units.  Each Unit is comprised of one (1) share of Common
Stock  and one (1) Warrant.

    


    Jurisdictional
Notices

    


    NASAA
Uniform Legend

    


    In making
an investment decision investors must rely on their own examination of us and
the terms of the offering, including the merits and risks involved. The
securities have not been recommended by any federal or state securities
commission or regulatory authority.  Furthermore, the foregoing
authorities have not confirmed the accuracy or determined the adequacy of this
document.  Any representation to the contrary is a criminal offense.
These securities are subject to restrictions on transferability and resale and
may not be transferred or resold except as permitted under the Securities Act,
and the applicable state securities laws, pursuant to registration or
exemption.  Investors should be aware that they will be required to
bear the financial risks of this investment for an indefinite period of
time.

     

    THE
SECURITIES OFFERED FOR PURCHASE HEREUNDER INVOLVE A HIGH DEGREE OF RISK AND
SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD A COMPLETE LOSS OF HIS, HER
OR ITS INVESTMENT.  INVESTORS SHOULD CONSIDER THE INFORMATION UNDER
“RISK FACTORS” AND ELSEWHERE IN THIS MEMORANDUM IN DECIDING WHETHER TO PURCHASE
THE SHARES OF COMMON STOCK OFFERED HEREBY.

    


    THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
THE SECURITIES LAWS OF ANY STATE, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
LAWS.

    


    THIS
MEMORANDUM AND THE OTHER MATERIALS PERTAINING TO THIS OFFERING HAVE NEITHER BEEN
FILED WITH, NOR REVIEWED BY, THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION NOR HAVE SUCH MATERIALS BEEN REVIEWED BY THE SECURITIES AUTHORITIES
OF ANY STATE.  FURTHERMORE, THE COMMON STOCK HAS NOT BEEN RECOMMENDED
BY ANY OF THE FOREGOING AUTHORITIES.  ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

     

    
      
        
        

      

      
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    THIS
MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL TO, OR A SOLICITATION OF AN
OFFER TO BUY THE SECURITIES FROM, ANY PERSON OTHER THAN THE PERSON TO WHOM THIS
MEMORANDUM WAS DELIVERED BY OR ON OUR BEHALF.  THIS MEMORANDUM IS NOT
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT
AUTHORIZED.  WE RESERVE THE RIGHT TO WITHDRAW THIS OFFERING AT ANY
TIME.

    


    THE
SHARES OF COMMON STOCK OFFERED HEREBY MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED
BY THE PURCHASER IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR
AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL MUST BE ACCEPTABLE TO THE
COMPANY, TO THE EFFECT THAT REGISTRATION AND QUALIFICATION IS NOT REQUIRED (SEE
“RESTRICTIONS ON TRANSFER OF SECURITIES”).  AS A RESULT, IN
DETERMINING WHETHER TO INVEST IN THE COMMON STOCK, AN INVESTOR SHOULD CONSIDER,
AMONG OTHER FACTORS, WHETHER HE, SHE OR IT IS WILLING TO HOLD THE SECURITIES FOR
AN INDEFINITE PERIOD OF TIME.

    


    THE
SHARES OF COMMON STOCK ARE OFFERED BY Next 1, SUBJECT TO PRIOR SALE, ALLOTMENT,
ACCEPTANCE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE
OFFER.  ANY MODIFICATION TO THE OFFERING WILL BE MADE BY MEANS OF AN
AMENDMENT TO THIS MEMORANDUM.  Next 1 RESERVES THE RIGHT TO WITHDRAW
OR CANCEL THE OFFER WITHOUT NOTICE, AND TO REJECT ANY ORDERS, IN WHOLE OR IN
PART, FOR THE PURCHASE OF ANY OF THE SHARES OF COMMON STOCK.

    


    NOTICE
TO RESIDENTS OF ALL STATES:

     

    THIS
MEMORANDUM WILL NOT BE DISTRIBUTED TO, NOR WILL AN OFFER, SOLICITATION OR SALE
BE MADE TO, ANY PERSON UNLESS THE COMPANY HAS REASONABLE GROUNDS TO BELIEVE, AND
DOES BELIEVE, IMMEDIATELY PRIOR TO MAKING THE OFFER, SOLICITATION OR SALE, THAT
SUCH PERSON EITHER ALONE OR TOGETHER WITH ONE OR MORE OF THEIR PROFESSIONAL
ADVISORS (IF ANY) HAS SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
MATTERS THAT SUCH PERSON IS CAPABLE OF EVALUATING THE RISKS AND MERITS OF
PURCHASING OUR COMMON STOCK, AND THAT SUCH PERSON IS ABLE TO BEAR THE ENTIRE
ECONOMIC RISK OF THAT INVESTMENT.  THE COMMON STOCK OFFERED HEREBY MAY
NOT BE RESOLD OR OTHERWISE TRANSFERRED BY THE PURCHASER IN THE ABSENCE OF
QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
COUNSEL, WHICH OPINION OF COUNSEL MUST BE ACCEPTABLE TO THE COMPANY, TO THE
EFFECT THAT SUCH QUALIFICATION IS NOT REQUIRED (SEE “RESTRICTIONS ON TRANSFER OF
SECURITIES”).  IN DETERMINING WHETHER TO INVEST IN THE SHARES OF
COMMON STOCK, AN INVESTOR SHOULD CONSIDER AMONG OTHER FACTORS, WHETHER HE, SHE
OR IT IS WILLING TO HOLD THE COMMON STOCK FOR AN INDEFINITE PERIOD OF
TIME.

     

    FOR
CALIFORNIA RESIDENTS:

    


    THE SALE
OF THE UNITS AND THE UNDERLYING COMMON STOCK, WARRANTS AND SECURITIES OFFERED
HEREBY HAVE NOT BEEN QUALIFIED WITH THE CALIFORNIA COMMISSIONER OF CORPORATIONS,
AND THE ISSUANCE OF SUCH SECURITIES OR PAYMENT OR RECEIPT OF ANY CONSIDERATION
THEREOF IS UNLAWFUL UNLESS AN EXEMPTION FROM QUALIFICATION IS
PERFECTED.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    FOR
ILLINOIS RESIDENTS:

    


    THE UNITS
AND THE UNDERLYING COMMON STOCK, WARRANTS AND SECURITIES OFFERED HEREBY HAVE NOT
BEEN REGISTERED UNDER SECTION 5 OF THE ILLINOIS SECURITY ACT.  THEY
MAY NOT BE RESOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY
UNLESS SUBSEQUENTLY REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.

    


    FOR
NEW YORK RESIDENTS:

    


    THIS
OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS
ISSUANCE AND USE.  THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING.  ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

    


    FOR
TEXAS RESIDENTS:

    


    THE UNITS
AND THE UNDERLYING COMMON STOCK, WARRANTS AND SECURITIES OFFERED HEREBY HAVE NOT
BEEN REGISTERED UNDER APPLICABLE SECURITIES LAWS OF TEXAS, AND, THEREFORE,
CANNOT BE RESOLD OR TRANSFERRED UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR
UNLESS AN EXEMPTION FROM REGISTRATION EXISTS

    


    FOR
FLORIDA RESIDENTS:

    


    PURSUANT
TO THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT, WHEN SALES ARE MADE TO
FIVE OR MORE PERSONS IN THE STATE OF FLORIDA, EACH PERSON WHO ACCEPTS THIS OFFER
TO PURCHASE SECURITIES HAS THE RIGHT TO VOID HIS ACCEPTANCE WITHOUT INCURRING
ANY LIABILITY TO THE SELLER OR ANY OTHER PERSON WITHIN THREE (3) DAYS AFTER THE
DELIVERY OF HIS SUBSCRIPTION AGREEMENT AND THE PAYMENT OF THE PURCHASE PRICE, IN
WHICH CASE ALL FUNDS SHALL BE REFUNDED WITHOUT INTEREST OR
DEDUCTION.  TO ACCOMPLISH THIS WITHDRAWAL, IT IS SUFFICIENT TO SEND A
LETTER OR TELEGRAM TO THE COMPANY AT THE ADDRESS SET FORTH IN THIS MEMORANDUM
STATING HIS INTENT TO WITHDRAW.  THE LETTER OR TELEGRAM MUST BE
POSTMARKED OR SENT PRIOR TO THE END OF THE AFOREMENTIONED THIRD BUSINESS
DAY.  IF THE REQUEST IS MADE ORALLY, IN PERSON OR BY TELEPHONE TO AN
OFFICER OF THE COMPANY, A WRITTEN CONFIRMATION THAT THE REQUEST HAS BEEN
RECEIVED SHOULD BE REQUESTED AND OBTAINED.

    

      
        

      

    

     

    
      
        
        

      

      
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    CONFIDENTIAL
PRIVATE PLACEMENT MEMORANDUM

    


    Next
1 Interactive, Inc. 

      
        

      

    

    We are
furnishing this Memorandum solely for use by prospective investors in connection
with their consideration of a purchase of the Units.

    


    We have
prepared this Memorandum on the basis of data and information believed to be
accurate and reliable, but we make no representation or warranty and none should
be implied as to the accuracy or completeness of information contained in this
Memorandum.  The recipient shall be entitled to rely solely on the
representations and warranties made to it by the Company in any final purchase
agreement or financing documents.

    


    We are
furnishing this Memorandum solely for the consideration of prospective investors
pursuant to and in accordance with Regulation D under the Securities Act of
1933, as amended (the “Securities
Act”) in connection with the purchase of the Units.

    


    This
Memorandum does not contain all of the information that would normally appear in
a current prospectus for an offering registered under the Securities Act of
1933.  We will furnish additional information to interested offerees
on request.  Upon the closing of this Offering, we will require
purchasers of the Units to acknowledge that they have requested and received all
information necessary to make an informed decision to purchase the
Units.

    


    We are
subject to the reporting obligations of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). These obligations include filing an annual report
under cover of Form 10K, with audited financial statements, unaudited quarterly
reports on Form 10-Q and the requisite proxy statements with regard to annual
stockholder meetings. Any prospective investor may read and copy any materials
the Company files with the Securities and Exchange Commission (the “SEC”) at the
SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0030. The SEC maintains an Internet site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC.

    


    No person
has been authorized to make any representation or give any information with
respect to the Company or the Units, except the information contained herein and
additional information furnished by the Company on request.  This
Memorandum presents information with respect to the Company as of the date
hereof.  We do not intend to update or otherwise revise this
Memorandum following its distribution, and recipients of this Memorandum should
not expect us to do so.  Recipients will have to conduct an
independent investigation and evaluation of the Company.

    


    We are
not providing any investment advice or recommendation with respect to any
purchase of the Units.  Offerees are not to construe the contents of
this Memorandum or any prior or subsequent communications from the Company, or
any of its respective officers, directors, employees or representatives, as
legal or tax advice or as information necessarily applicable to an offeree’s
particular financial situation.  Each offeree must make his, her or
its own decision about whether or not to invest and should consult his, her or
its own financial advisor, legal counsel and accountant as to tax and related
matters concerning a purchase of the Units.

     

    
      Confidential
and Proprietary Information.

      Not to be
copied or distributed without the prior written consent of Next 1 Interactive,
Inc.

    

     

    
      
        
        

      

      
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    To the
extent this Memorandum contains prospective financial information, the Company
believes it to be reliable and based upon reasonable
assumptions.  Projections are based on estimates that are inherently
subject to significant economic and competitive uncertainties and contingencies,
all of which are difficult to predict and many of which are beyond the Company’s
control.  Such projections are inherently imprecise, and there can be
no assurance that the projected results will be realized or that actual results
will not be significantly higher or lower than those projected.  The
projections were not prepared with a view toward complying with published
guidelines of the United States Securities and Exchange Commission or any state
securities commission, or the guidelines established by the American Institute
of Certified Public Accountants regarding projections.  Furthermore,
the projections were prepared by our management without the assistance of, or
review by, independent accountants.  The inclusion of such projections
should not be regarded as a representation by us that the projected results will
be achieved.  Actual results will differ from the projections and
these differences may be material and adverse.  We do not assume any
responsibility for the accuracy or validity of prospective financial
information.

    


    Each
recipient of this Memorandum agrees by accepting this Memorandum that the
information contained herein and in all related and ancillary documents is not
to be used for any purpose other than in connection with his, her, or its
consideration of the invitation to further investigate an investment, that such
information is of a confidential nature and that the recipient will treat it in
a confidential manner, and that he, she or it will not, directly or indirectly,
disclose or permit his, her or its affiliates or representatives to disclose any
such information to any other person or reproduce this Memorandum, in whole or
in part, without our prior written consent.  Each recipient of this
Memorandum further agrees that this confidentiality obligation shall apply to
any non-public information relating to the Company which is provided to such
recipient subsequent to the delivery of this Memorandum.

    


    *           *           *

    


    Inquiries
relating to the Units should be directed to the following
individual:

    


    
      
        	 
      	
                William
      Kerby

              	 
      
	 
      	
                Chief
      Executive Officer

              	 
      
	 
      	
                Next
      1 Interactive, Inc.

              	 
      
	 
      	
                2400
      N Commerce Parkway

              	 
      
	 
      	
                Suite
      105

              	 
      
	 
      	
                Weston,
      FL 33326

              	 
      
	 
      	
                (954)
      888-9779

              	 
      


      

    

    


    Prospective
investors who do not wish to pursue a purchase of the Units are required to
return this Memorandum (and all copies) at their earliest convenience, but no
later than 15 days after their receipt of the Memorandum, to the Chief Executive
Officer of the Company at the address set forth above.

     

    
      
        
        

      

      
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    AVAILABILITY
OF ADDITIONAL INFORMATION

    


    This
Memorandum contains only limited information.  Other information about
us is available at our executive offices.  Recipients of this
Memorandum may have access to information with respect to the Company and its
activities to the extent that we possess such information or can acquire it
without unreasonable effort or expense.  Recipients of this Memorandum
or their representatives may also, at any time (during normal business hours)
prior to the sale of the Units, ask questions with respect to the terms and
conditions of the Offering and request additional information necessary to
verify the information contained in this Memorandum.  We will provide
answers to such questions and provide such information to the extent such
answers and information are possessed by us or can be obtained by us without
unreasonable effort or expense.

     

    SUITABILITY
STANDARDS

     

    The
offer, sale and issuance of shares of Units are being made pursuant to an
exemption from registration under the Securities Act and applicable state
securities laws.  Accordingly, we are offering the Units to those
persons subject to strict standards of suitability.

     

    At the
time of purchase, we will require each investor to make certain representations
to us, including confirming their understanding of the nature of the risks of
the investment and their agreement to abide by the restrictions on transfer
described earlier in this Memorandum.

     

    In
addition, investors may have to satisfy additional standards imposed by the laws
of such investor’s state or country of residence or
domicile.  Investors considering an investment in the Units should
carefully review this Memorandum to determine if such an investment is
compatible with their own investment objectives.

    


    IF WE ARE INCORRECT IN OUR ASSUMPTION
AS TO THE SUITABILITY FOR A PARTICULAR INVESTOR, THEN THE DELIVERY OF THIS
MEMORANDUM TO SUCH INVESTOR SHALL NOT BE DEEMED TO BE AN OFFER, AND THIS
MEMORANDUM AND ITS ACCOMPANYING MATERIALS MUST BE RETURNED IMMEDIATELY TO
US.

     

    
      
        
        

      

      
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    TABLE OF
CONTENTS

    


    
      
        
          	 
      	
                  Page

                
	 
      	 
      
	
                  BUSINESS
      SUMMARY

                	
                  8

                
	 
      	 
      
	
                  SUMMARY
      OF TERMS

                	
                  15

                
	 
      	 
      
	
                  RISK
      FACTORS

                	
                  17

                
	 
      	 
      
	
                  USE
      OF PROCEEDS

                	
                  24

                
	 
      	 
      
	
                  MANAGEMENT

                	
                  24

                
	 
      	 
      
	
                  DESCRIPTION
      OF OUR CAPITAL STOCK

                	
                  26

                
	 
      	 
      
	
                  RELATED
      PARTY TRANSACTIONS

                	
                  27

                
	 
      	 
      
	
                  OTHER
      TRANSACTIONS

                	
                  28

                
	 
      	 
      
	
                  APPENDICES

                	
                   

                
	 
      	 
      
	
                  Appendix
      A     Subscription
    Agreement

                	 
      
	
                  Appendix
      B      Form of
Warrant

                	 
      
	
                  Appendix
      C      Business Plan, dated August
      14, 2009

                	 
      


        

      

    

     

    
      
        
        

      

      
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    BUSINESS
SUMMARY

    


    This
summary is qualified by more detailed information appearing in our Business Plan
attached as Appendix
A, which contains a more detailed description of our
business.

    


    The
Company

     

    Next 1
purchased the key operating assets of Extraordinary Vacations Group, which was
formed in June 2004 through the takeover of Cruise and Vacation Shoppes, a
consortium of nearly 200 leisure-oriented travel agencies. In September 2006,
the company acquired Maupintours Extraordinary Vacations (also known as
Maupintour), an upscale tour operator specializing in luxury escorted and fully
inclusive independent tours worldwide.

     

    The
Company also owns The Travel Magazine, a substantial library of travel-oriented
television shows and other video.  Combining the email databases of
these acquisitions, the Company has an opt-in email list of over two million
travelers.

     

    In
January 2008, the Company recognized the changing landscape in the media and
travel arenas and made the decision to redirect its efforts into a media based
business that could exploit many of its key travel relationships. This change in
direction would allow the Company the opportunity to move from the traditionally
low margin travel business (four to six percent margins) to a much higher media
advertising and referral model (fifty percent margins). In April 2008, the
Company completed the takeover of Brands on Demand media business and went on to
develop unique marketing tools for the travel industry. At the same time the
Company began working with the principals of Loop Networks on new opportunities
with VOD. This ultimately led to the purchase of both Loop and Home Preview
Channel.

     

    In June
of 2008 the Company launched NextTrip.com, a travel-oriented Web site, with an
emphasis on travel video, and in August 2008, launched NextTrip Radio, an
Internet radio station that focuses on the travel industry.

     

    On
October 9, 2008, the Company completed a reverse merger with a public company,
Maximus Exploration Corp., trading on the OTCBB exchange under the symbol
MXEX.

     

    MXEX
Board of Directors resigned with the merger of Extraordinary Vacations USA and
approved the name change to Next 1 Interactive, Inc.  Next 1’s Board
became the new Board of Directors of the merged entity.  Next 1
amended the Articles of Incorporation to change the name of the Corporation and
applied to NASDAQ to receive a new trading symbol, NXOI.

     

    
      PRODUCTS
& SERVICES

    

     

    Next 1 is
comprised of three distinct categories:

     

    
      	
            	
              ·

            	
              Linear
      24/7 Interactive TV Network

            


    

     

    
      	
            	
              ·

            	
              Video
      On Demand  channels for
Travel

            


    

     

    
      	
            	
              ·

            	
              Video
      on Demand channels for Real Estate

            


    

     

    
      
        
        

      

      
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    Linear
Television

    


    Pursuant
to the acquisition of the Home Preview Channel (the original Real Estate
Channel) the Company secured permission from the cable operators (Comcast and
Time Warner) to re-brand it as the Resort and Residence Channel (R&R). Next
1 concentrated on the Travel and Home arenas because advertising statistics
consistently show that consumers are most passionate about their home(s) and
their vacation(s). R&R plans to re-launch on both the traditional linear and
VOD /IPTV networks in fall 2009.  The R&R cable television network
is currently distributed into 1.6 million homes in Houston and Detroit by
Comcast, the nation’s largest cable operator.  The new format changes will
allow for significant expansion of the network starting with DirecTV, Verizon’s
FIOS Network and AT&T. This expansion will put R&R into nearly 25
million households before years end. The launch of the new network will include
the introduction of the Extraordinary Vacation Shopping program – a first of its
kind for vacation shopping on a TV network. The Vacation Shopping show will be
supported by the Company’s Web property www.nextrip.com and
hyper targeted advertising campaigns

    


    The
Company’s greatest opportunity lies within the shift from traditional “linear”
TV to Interactive TV (Video on Demand and/or fully Interactive TV). The VOD
marketplace is the largest with Comcast, distributing VOD content for Real
Estate to approximately 14 million of the 33 million VOD cable
subscribers.

    


    Video
on Demand Expansion Model

    


    Next 1 is
looking to establish exclusivity in real estate VOD channels with Comcast and
preferred positioning for travel content.  Additionally, the Company
is expecting to be a “first mover” in the travel and real estate arenas with
other VOD providers.  If successful, the Company could capture a
national footprint in both the real estate and travel areas for VOD and IPTV,
drawing comparisons to the uniqueness of The Weather Channel.

    


    Video-on-demand
is steadily increasing in popularity and will occupy well over a third of
Americans' TV-viewing time by 2012, according to research done by information
solutions company Pike & Fischer. The report examines the shift in TV
viewing from scheduled broadcasts to shows that can be viewed at any time. The
firm says that as viewers' preferences change over the next several years,
advertisers' focus will change as well.

    


    According
to Pike & Fischer, the majority of US households will watch some form of video-on-demand
through cable, satellite, or fiber-optic lines within the next five years. But
Americans won't be adding video-on-demand shows on top of their regular TV
viewing—the firm predicts that the average monthly time spent watching
television will remain relatively stable. Instead, the proportion of time spent
watching video-on-demand shows will grow, from 8.5 percent in 2007 to 38 percent
in 2012. "That translates into nearly two hours of VOD viewing per day," writes
the firm.

    


    A report
published in August by The Diffusion Group appears to support Pike &
Fischer's data. It stated that although only about 12 percent of people who rent
movies regularly reported using video-on-demand services, non-traditional rental
services (such as video-on-demand) were growing in popularity. Download services
like iTunes, Unbox, or Xbox Live Video, on the other hand, have only made a
"negligible impact" on rental behavior thus far.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    But what
does this mean for advertisers, who will no longer be able to bank on certain
demographics watching shows on specific days and times? The shift from live
broadcast to time-shifted television viewing has scared some advertisers in
recent years, not only because time-specific ads lose their relevancy (that sale
on Saturday isn't so important when it happened last Saturday), but because
of many viewers' fondness for skipping ads. But Pike & Fischer's director of
Broadband Advisory Services, Scott Sleek, says that this shouldn't be the case.
"Video on demand will enable more targeted advertising, based on user profiles
and viewing habits—the same way sites like Amazon.com operate today," Sleek said
in a statement. "That will make television an appealing marketing platform for
advertisers."

    


    The
Resort and Residence  Channel provides the Company with a path to
enter both the linear TV and VOD market place and to capitalize on the
advertising, while earning commission overrides and fees on both home sales and
travel bookings.

    


    Real Estate VOD –
HomesTVonDemand

    


    The Real
Estate VOD solution is a “game changing” model.  Next 1’s VOD solution
will allow the consumer to select “on demand” from over eight million
listings.   Furthermore, many of the listings will have high
quality video home tours created by the company’s proprietary technology that
creates video from still images and sound and music.  This is all
available through a controlled and regulated TV environment that is free from
viruses, bandwidth issues and spam.

    


    Next 1’s
VOD solution for real estate has been in development with Comcast for nearly a
year and is expected to be ready for market test by the fourth quarter of
2009.  The solution allows customers to view all real estate listings,
obtain additional information and request an agent to provide information using
their remote control.  When a request for agent assistance is placed
by the viewer Next 1 is entitled to earn up to 35% of any commission sale as a
referral fee from the selling agent. As the VOD marketplace develops, the
Company plans to use its linear TV channels to cross promote both its real
estate and travel web sites, as well as its VOD/FOD solutions. The VOD
marketplace for Comcast is currently in 15 million households and is planned to
reach all 33 million households by the end of 2010.

    


    Brian Roberts CEO of Comcast
commented on the state of technology and what Comcast’s near-term plans are
using a growing digital spectrum

    


    “We want consumers
to connect to Comcast for their digital needs...to do what you want, when you
want.  Out of a total digital spectrum will come what we call “Project
Infinity,” which is unlimited on-demand stated Brian
Roberts.

    


    Leaders
in this arena will move quickly to control key market segments that address both
consumers’ and advertisers’ needs to provide and receive relevant content in an
“on demand” world.  Next 1 is well positioned to capitalize on its two
vertical centers of expertise- Real Estate and Travel in this new video
marketplace.

    


    Travel VOD – Extraordinary
Vacations on Demand

    


    Additionally,
the Company has been developing a new VOD and Free on Demand (FOD) solutions for
travel.  Next 1 believes that VOD is a unique opportunity to
participate in a “game changing solution” and capture a significant new market
segment.

    


    Key new
interactive solutions for the network will include specialty programming such as
the deployment of its Extraordinary Vacations Shopping
Mall – a “video centric, response driven, T-commerce travel platform”.
This vacation shopping solution is a first of its kind and is being deployed in
conjunction with a significant expansion of the Resort and Residence TV
network.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    The
Company’s model for the vacation shopping business includes revenue from the
sale of production, air time, proprietary applications, affinity networks and
lead generation directed to the travel supplier, in exchange for a referral fee.
This model allows for aggressive revenue expansion without the need for
significant additional employees or outsourcing of a large call
center.

    


    Just like
the Weather Channel became the singularly trusted source for weather, Next 1
believes a similar opportunity exists for both real estate and travel as
consumers begin to shift towards access interactive solutions being provided by
VOD/FOD.

    


    Next 1
will offer these media platforms and it will expand its television awareness by
launching into new marketplaces; the Company’s Cable and Satellite TV Channel
audiences will expand from its current 1.6 million homes to over 35 million
homes as it introduces the new Resort and Residence Channel.  The
company will also use this distribution to drive consumers to its mobile and web
properties as well as taking advantage of the commerce afforded through the
interactive capabilities of the network.

    


    Resort
and Residence:

    


    Next 1
acquired the Home Preview Channel (HPC) in the fall of 2008. HPC was the
original real estate channel on TV first airing in 1997. While the model was
ingenious for its time, the current trend is shifting toward  a
time-shifting interactive “on demand” environment highlighted the need to
enhance the format and re-branded it as the Resort and Residence Channel
(R&R).

    


    The
Company’s “Resort and Residence Channel” branding gives it the ability to expand
the platform beyond real estate and include travel and lifestyle components.
This broadens the focus of the network on two key areas consumers are passionate
about – their home and their vacation. One of the first key changes in format
includes the introduction of the Extraordinary Vacation Shopping Solution.  

    


    The new
format changes and introduction of interactive TV solutions will allow for
significant expansion of the network starting in October of this year. This
expansion will put R&R into over thirty five million households with
significant expansion opportunities.  In addition to growth around its
current business model of TV, R&R provides the basis for Next 1 to enter the
travel and real estate vertical marketplace and secure multiple levels of
revenue from traditional and interactive advertising and lead generating and
sales commissions.

    


    With the
ever-increasing penetration of broadband (high speed internet) in U.S. homes,
PDAs, phones, iPods, and with the expansion of other digital platforms,
consumers are now in control of where, when, and how they access content and
information in all of its forms.  Advertisers are at the early stages
of figuring out how they should best operate in this new non-linear environment
and the traditional linear Cable TV platform, which holds both new challenges
and new opportunities for advertising agencies, the brands they represent, and
the publishers who strive to deliver audiences for their
advertising.

    


    The term
interactive media best reflects the critical changes that have occurred in the
past years.  As a result, a traditional linear medium that is
targeted, such as cable, radio and print (which have historically been broadly
distributed to audiences, in mass, through the one-way broadcast model) are not
scrambling as the major shift to interactive, on-demand media accelerates
audience fragmentation.

    


    Specifically,
video programming and targeted magazine content available for consumption has
been surpassed by user demand, opening up a huge window of opportunity for the
Company which has content assets, multiple platforms and proprietary
technology.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Since
consumers now have thousands of entertainment choices, large marketing budgets
must now be spent both on linear and non-linear, targeted platforms including
on-demand video and interactive TV, that attract consumers who can become the
brand ambassadors of today’s sharing-oriented media landscape. Both, non-linear
and linear marketing is the Company’s area of expertise in two of the largest
passion categories - travel and real estate.

    


    The
Internet Marketplace: 

    


    Internet
ad revenues grew 26 percent in 2007 versus 2006, to now represent approximately
ten percent of all advertising spending in the U.S. across all media, up from
nearly zero, ten years ago. 

    


    The rich
media interactive marketplace is on a phenomenal growth curve. Online video ad
revenues were reported at just over $371 million in 2007, and spending hit $1.3
billion in 2008, up from zero just a few years ago; in 2010, online video ad
spending will still comprise under four percent of all Internet advertising,
which is projected to reach $36.2 billion in 2010.  The out-year growth
potential is staggering, as more and more advertisers embrace video, because
technology now allows it on the Internet.

    


    Next 1
positioned itself in this marketplace in April 2008 through the purchase of
“Brands on Demand.”  Through this purchase the Company was able to
develop several new media solutions and relationships to offer to its
advertisers. Solutions, all customized to the right audience,
include:

    


    
      	
               
      

            	
              ·

            	
              A
      hybrid web property that is both a niche portal and social
      network

            


    

    
      	
               
      

            	
              ·

            	
              Customized
      micro sites built for clients called
Showcases

            


    

    
      	
               
      

            	
              ·

            	
              Social
      networking tools within the site as well as “brand/fan page development
      for clients on My Space, FaceBook, Twitter and other dynamic communities
      that can opt in repeatedly for targeted
offers.

            


    

    
      	
               
      

            	
              ·

            	
              Customized
      applications for both the web and mobile
  platforms.

            


    

    
      	
               
      

            	
              ·

            	
              Video
      advertising to hyper targeted audiences - empowered with pre-roll,
      overlay, post roll, pop under
messaging

            


    

    
      	
               
      

            	
              ·

            	
              E-commerce,
      M-commerce and T-commerce
applications

            


    

    


    By
designing targeted solutions for real estate and travel audiences utilizing its
TV, web and Mobile platforms along with its content, licenses and expertise the
company is positioned to dramatically accelerate revenues.  Given the
Company’s legacy travel assets, the travel sector was the focus of the first
such effort.

    


     i) NextTrip
Connections was launched in the fall and in spite of a difficult market
environment the company has signed 6 customers and has several pending the
launch of R&R network...  This white label solution is a
“turn-key” travel section will link to the host website with their branding and
design colors, but will actually be hosted and maintained by Next
1.

    


     The
Company expects that many affinity sites (Cruise Shoppe Agencies) will accept
the NextTrip Connections affiliate program as it is a no cost solution and
further allows the affinity member to participate in all advertising and Travel
commission revenues generated from their viewers. Content and services which may
be provided to Affiliated sites include an ad-neutral (editorial only) “best of
the best” services directory highlighting other travel sites (“Expert Directory”
and “Search”), the Company video player, a “Travel Deals” section, a travel “tip
of the day”, access to Next Trip Radio, community features (“Community Share”),
a complete booking engine (“Dynamic Booking”), and custom travel planning
(“Concierge Services”).  While NextTrip.com will have a more robust
set of content and services, the white label Affiliates will be able to offer
their users a one-stop shop for all things related to travel.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    The
Offering

    


    We will
receive proceeds from the sale of the Units to fund operations as detailed in
the Business Plan.  Jessup & Lamont Securities Corporation will
serve as Next 1’s placement agent on a “best efforts” basis.

    


    Competition

    


    Competition
for media advertising comes from many established travel sites and certain
aspiring travel networks.  Sites like travel.com, travelchannel.com,
expedia.com and many others still run on Web 1.0 technologies, and seem
narrowly-focused on their own core functionality, such as fare searches and
ticket sales.  Additionally, these sites do not offer the
comprehensive solutions Next 1 has put together, including the launch of the
Extraordinary Vacations Shopping Mall on the companies’ TV network.

    


    Other
travel and Home focused ad networks exist, including sub offerings of Adify,
Adconion and Fox Media; in the Internet’s world of co-opetition, Next 1 has
already worked with these and other ad networks to leverage higher cpms for its
ad inventory.

    


    Competitive
Advantage

    


    The
Company’s history, management team, proprietary technology and relationships
afford it key competitive advantages in the rich media ad sales
marketplace.

     

    §       Next
1 controls its own digital network and will have access into 35 million
households on traditional linear TV. This massive distribution will enhance all
other media platforms and services controlled by the company

    


    §       Next
1 owns proprietary technology allowing it to introduce game changing solutions
for interactive TV and Video on Demand solutions

    


    §       Next
1 is an early mover in the VOD arena through relationships and ownership of
proprietary technology. This will allow for operation of a new real estate model
for the emerging VOD network.

    


    §       Next
1 owns and/or controls nearly 3,000 hours of video content representing over 400
travel, cruise and golf destinations around the world.

    


    §       Next
1 is positioned to generate over millions of video views by utilizing its
network to drive consumers to its web properties and through distribution of
video assets with partnering publishers.

    


    §       Next
1’s long-standing relationships with major travel industry suppliers and
advertisers position it to be a first mover with its Extraordinary Vacations
Shopping Mall for linear TV, Travel VOD and NextTrip website.

    


    §       Next
1 is a first mover in new VOD real estate and travel solutions. These will be
enhanced with the use of rich media, video, web radio, interactive TV, and both
T and E-commerce solutions.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    §       Next
1’s unique digital media platforms with travel and home verticals provide a
valuable proposition for publishers, advertisers and consumers.

    


    §       Next
1 is a first mover bringing together rich media, video, Web radio, interactive
TV, showcases, search and ecommerce solutions and has combined these
characteristics a unique digital media platforms to offer an increased value
proposition to consumers, publishers and advertisers.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    SUMMARY
OF TERMS

    


    UNITS

     

    This term
sheet summarizes the principal terms and conditions of the Units that Next 1 is
offering to sell in connection with this Offering.

    
      
         

        
          

        

      

    

    


    
      
        
          
            	
                    Issuer:

                  	 
      	
                    Next
      1 Interactive, Inc. (NXOI.BB)

                  
	 
      	 
      	 
      
	
                    Offering:

                  	 
      	
                    Offering
      of Units comprised of shares of common stock, par value $.0001 per share
      (“Common Stock”) and warrant (“Warrants”) to purchase common
      stock.

                  
	 
      	 
      	 
      
	
                    Type
      of Security:

                  	 
      	
                    Each
      Unit is comprised of one (1) share of Common Stock and one
      half one (1) Warrant.

                  
	 
      	 
      	 
      
	
                    Amount:

                  	 
      	
                    Minimum
      $250,000 – Maximum $1,500,000

                  
	 
      	 
      	 
      
	
                    Minimum
      Investment:

                  	 
      	
                    $25,000

                  
	 
      	 
      	 
      
	
                    Purchase
      Price:

                  	 
      	
                    The
      Purchase Price of the Unit shall $1.00

                  
	 
      	 
      	 
      
	
                    Eligible
      Investors:

                  	 
      	
                    Accredited
      Investors and Qualified Institutional Investors only.

                  
	 
      	 
      	 
      
	
                    Use
      of Proceeds:

                  	 
      	
                    We
      expect to use the proceeds from the sale of the Units to fund internal
      growth and working capital needs.

                  
	 
      	 
      	 
      
	
                    Warrants:

                  	 
      	
                    The
      Warrants shall be exercisable at $2.00 per share.  The Warrants
      shall expire three (3) years from the date of issuance.

                  
	 
      	 
      	 
      
	
                    Protection
      Against Dilution:

                  	 
      	
                    The
      Warrant Number is subject to adjustment from time to time upon the
      occurrence of the following events

                  
	 
      	 
      	 
      
	 
      	 
      	
                    (1)Adjustment
      for change in capital stock;

                  
	 
      	 
      	 
      
	 
      	 
      	
                    (2)If
      the Company pays a dividend or makes a distribution on its Common Stock in
      shares of its Common Stock;

                  
	 
      	 
      	 
      
	 
      	 
      	
                    (3)subdivides
      or reclassifies its outstanding shares of Common Stock into a greater
      number of shares;

                  
	 
      	 
      	 
      
	 
      	 
      	
                    (4)combines
      or reclassifies its outstanding shares of Common Stock into a smaller
      number of shares;

                  
	 
      	 
      	 
      
	 
      	 
      	
                    (5)makes
      a distribution on its Common Stock in shares of capital stock other than
      Common Stock; or

                  


          

        

      

    

     

    
      
         


      

      
        15

        
          

        

      

      
         


      

    

    


    
      
        	 
      	 
      	
                (6)issues
      by reclassification of its Common Stock any shares of its capital
      stock.

              
	 
      	 
      	 
      
	 
      	 
      	
                Then
      the Warrant number in effect immediately prior to such action shall be
      proportionately adjusted so that the holder may receive the aggregate
      number and kind of shares of capital stock of the Company or other capital
      stock which such holder would have owned immediately following such
      action.

              
	 
      	 
      	 
      
	
                Registration:

              	 
      	
                The
      Company will grant to the Investor piggyback registration rights for the
      Common Stock issued in the Offering and for the Common Stock underlying
      the Warrants.

              
	 
      	 
      	 
      
	
                Right
      of First Offer:

              	
                  

              	
                The
      Investor shall have a right of first offer to purchase a proportionate
      amount of any equity or equity linked secuirities issued in a private
      placement within 12 months of the closing date.  Such right of
      first offer shall include customary excepitons including issuances
      involving strategic partnerships, acquisitions, public secndary offerings,
      employee and director stock option issuances, issuances to non-affiliates
      for non-cash transactions and similar
issuances.

              


      

    


    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    RISK
FACTORS

    


    Our
business is subject to a variety of risks and special
considerations.  As a result, prospective investors should carefully
consider the risks described below and the other information in this Memorandum
before deciding to invest in the Units.

    


    This
Memorandum also contains certain forward-looking statements that involve risks
and uncertainties.  These statements relate to our future plans,
objectives, expectations and intentions.  These statements may be
identified by the use of words such as “expects,” “anticipates,” “intends,”
“plans” and other, similar expressions.  Our actual results may differ
materially from those discussed in these statements.  Factors that
could contribute to such differences include, but are not limited to, those
discussed below and elsewhere in this Memorandum.

    


    Risks Associated with our
Company and our Industry

    


    We
have a limited operating history and we anticipate that we will have operating
losses in the foreseeable future.

    


    We cannot
assure you that we will ever achieve profitable operations or generate
significant revenues.  Our future operating results depend on many
factors, including demand for our products, the level of competition, and the
ability of our officers to manage our business and growth.  As a
result of our limited operating history and the emerging nature of the market in
which we will compete, we anticipate that we will have operating losses until
such time as we can develop a substantial and stable revenue base.

    


    Because
of losses incurred by us to date and our general financial condition, we
received a going concern qualification in the audit report from our Independent
Registered Public Accounting Firm for the most recent fiscal year that raises
substantial doubt about our ability to continue to operate as a going
concern.

    


    At
February 28, 2009, we had $18,801 cash on hand. The accompanying consolidated
financial statements have been prepared assuming the Company will continue as a
going concern. As discussed in Note 2 to the consolidated financial statements
included in this Annual Report, the Company had an accumulated deficit of
$6,081,214 and a working capital deficit of $1,582,950 at February 28, 2009, net
losses for the year ended February 28, 2009 of $1,843,567 and cash used in
operations during the year ended February 28, 2009 of $1,705,759. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern.

    


    We
will need additional capital which may not be available on commercially
acceptable terms, if at all.

    


    We have
very limited financial resources.  We currently have a monthly cash
requirement of approximately $350,000, exclusive of capital expenditures. We
will need to raise substantial additional capital to continue the national
launch of Home and Away Channel (the Network) beyond the third quarter of 2009
and provide substantial working capital for the development of national
advertising relationships, increases in operating costs resulting from
additional staff and office space until such time as we begin to generate
revenues sufficient to fund ongoing operations.  We believe that in
the aggregate, we will need as much as approximately $10 million to $15 million
to complete the launch of the Network, repay debt obligations, provide capital
expenditures for additional equipment, payment obligations under charter
affiliation agreements, office space and systems for managing the business, and
cover other operating costs until advertising and e-commerce revenues begin to
offset our operating costs.   Our failure to obtain additional
capital to finance our working capital needs on acceptable terms, or at all,
will negatively impact our business, financial condition and
liquidity.  In addition, as of February 28, 2009 we had $1.1 million
of principal debt outstanding that will become due at various dates in the near
future.  We currently do not have the resources to satisfy these
obligations, and our inability to do so could have a material adverse effect on
our business and ability to continue as a going concern.


    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    If
we continue to experience liquidity issues and are unable to generate revenue,
we may be unable to repay our outstanding debt when due and may be forced to
seek protection under the federal bankruptcy laws.

    


    We have
experienced liquidity issues since our inception due to, among other reasons,
our limited ability to raise adequate capital on acceptable terms.  We
have historically relied upon the issuance of promissory notes that are
convertible into shares of our common stock to fund our operations and currently
anticipate that we will need to continue to issue promissory notes to fund our
operations and repay our outstanding debt for the foreseeable
future.  At February 28, 2009, we had $2.6 million of debt
outstanding, including $0.9 million of promissory notes
outstanding.    If we are unable to issue additional
promissory notes or secure other forms of financing, we will have to evaluate
alternative actions to reduce our operating expenses and conserve
cash.  

    


    Moreover,
as a result of our liquidity issues, we have experienced delays in the repayment
of promissory notes upon maturity and the payment of trade receivables to
vendors and others when due.  Our failure to pay vendors and others
may continue to result in litigation, as well as interest and late charges,
which will increase our cost of operations.  If in the future, holders
of promissory notes demand repayment of principal and accrued interest instead
of electing to convert to common stock and we are unable to repay our debt when
due or resolve issues with existing promissory note holders, we may be forced to
refinance these notes on terms less favorable to us than the existing
notes.

    


    Our
business revenue generation model is unproven and could fail.

    


    Our
revenue model is new and evolving, and we cannot be certain that it will be
successful.  The potential profitability of this business model is
unproven and there can be no assurance that we can achieve profitable
operations.  Our ability to generate revenues depends, among other
things, on our ability to launch our television network and sign recording
artists.  Accordingly, we cannot assure you that our business model
will be successful or that we can sustain revenue growth, or achieve or sustain
profitability.

    


    Our
success is dependent upon our senior management team and our ability to hire and
retain qualified employees.

    


    We
believe that our success is substantially dependent upon: (1) our ability to
retain and motivate our senior management team and other key employees; and (2)
our ability to identify, attract, hire, train, retain and motivate other
qualified personnel.  The development of our business and operations
is dependent upon the efforts and talents of our executive officers, whose
extensive experience and contacts within the industries in which we wish to
compete are a critical component of our business strategy.  We cannot
assure you that we will be successful in retaining the services of any of the
members of our senior management team or other key personnel, or in hiring
qualified technical, managerial, marketing and administrative
personnel.  We do not have "key person" life insurance policies on any
of our key personnel, so in the event of a tragic incident we would find
ourselves in a very precarious position without the financial ability or
management skill to overcome it.  If we do not succeed in retaining
our employees and in attracting new employees, our business could suffer
significantly.


    
      
         


      

      
        18

        
          

        

      

      
         


      

    

    


    We
may be unable to implement our business and growth strategy.

    


    Our
growth strategy and ability to generate revenues and profits is dependent upon
our ability to:  (1) develop and provide new services and products;
(2) establish and maintain sales and distribution channels, including the launch
of our television network; (3) develop new business opportunities; (4) maintain
our existing clients and develop the organization and systems to support these
clients; (5) establish financial and management systems; (6) attract, retain and
hire highly skilled management and consultants; (7) obtain adequate financing on
acceptable terms to fund our growth strategy; (8) develop and expand our client
and customer bases; and (9) negotiate agreements on terms that will permit us to
generate adequate profit margins.  Our failure with respect to any or
all of these factors could impair our ability to successfully implement our
growth strategy, which could have a material adverse effect on our results of
operations and financial condition.

    


    We
intend to launch new products in a volatile market and we may be
unsuccessful.

    


    We intend
to launch new products, which include a television network featuring a vacation
shopping program and VOD for real estate and travel related
products.  The travel market and the television industry are volatile
marketplaces and we may not be able to successfully penetrate and develop either
sector.  We cannot assure you that we will be able to maintain the
airwave space necessary to carry and successfully launch a new television
network.  We will be successful only if consumers establish a loyalty
to our network and purchase the products and services advertised on the
network.  We will have no control over consumer reaction to our
network or product offerings.  If we are not successful in building a
strong and loyal consumer following, we may not be able to generate sufficient
sales to achieve profitability.

    


    We
do not have the ability to control the volatility of sales.

    


    Our
business is dependent on selling our products in a volatile consumer-oriented
marketplace.  The retail consumer industry, by its nature, is very
volatile and sensitive to numerous economic factors, including competition,
market conditions and general economic conditions.  None of these
conditions are within our control.  There can be no assurance that we
will have stable or growing sales of our record company products and advertising
space on our television network, and maintain profitability in the volatile
consumer marketplace.

    


    We
may not be able to purchase and/or license assets that are critical to our
business.

    


    We intend
to purchase and/or license archived video and travel collection libraries to
fulfill the programming needs of the Network.  The acquisition or
licensure of these assets is critical to accomplishing our business
plan.  We cannot assure you that we will be successful in obtaining
these assets or that if we do acquire them, that we will be able to do so at a
reasonable cost.  Our failure to purchase and/or license these
libraries at a reasonable cost would have a material adverse effect on our
business, results of operations and financial condition.


    
      
         


      

      
        19

        
          

        

      

      
         


      

    

    


    We
enter into charter affiliation agreements with companies that will broadcast
Home and Away Channel. If we do not maintain good working relationships with
these companies, or perform as required under these agreements, it could
adversely affect our business.

    


    The
charter affiliation agreements establish complex relationships between these
companies and us. We intend to spend a significant amount of time and effort to
maintain our relationships with these companies and address the issues that from
time to time may arise from these complex relationships.  These
companies could decide not to renew their agreements at the end of their
respective terms. Additionally, if we do not perform as required under these
agreements or if we breach these agreements, these companies could seek to
terminate their agreements prior to the end of their respective terms or seek
damages from us. Loss of these existing charter affiliation agreements, would
adversely affect our ability to launch the Network as well as our ability to
implement our business plan.

    


    Additionally,
the companies that we have charter affiliation agreements are subject to FCC
jurisdiction under the Communications Act of 1934, as amended.  FCC
rules, among other things, govern the term, renewal and transfer of radio and
television broadcasting licenses and limit concentrations of broadcasting
control inconsistent with the public interest.  If these companies do
not maintain their radio and television broadcasting licenses, our business
could be substantially harmed.

    


    Our
failure to develop advertising revenues could adversely impact our
business.

    


    We intend
to generate a significant portion of our revenue from our television network,
Home and Away Channel, through sales of advertising time.  We may not
be able to obtain long-term commitments from advertisers due to the start-up
nature of our business.  Advertisers generally may cancel, reduce or
postpone orders without penalty.  Cancellations, reductions or delays
in purchases of advertising could occur as a result of a strike, or a general
economic downturn in one or more industries or in one or more geographic
areas.  If we are unable to generate significant revenue from
advertising, it will have a material adverse effect on our business, financial
condition and results of operations.

    


    We
may not be able to maintain our client relationships that we have
developed.

    


    Our
clients are, and will be, comprised primarily of travel agencies, cruise lines,
real estate agents and  brokers, and national
advertisers.  This clientele is fragmented and requires a great deal
of servicing to maintain strong relationships.  Our ability to
maintain client loyalty will be dependent upon our ability to successfully
market and distribute their products.  We cannot assure you that we
will be successful in maintaining relationships with our artists.  Our
inability to maintain these relationships could have a material adverse effect
on our business, results of operations and financial condition.

    


    We
may encounter intense competition from substantially larger and better financed
companies.

    


    Our
success will depend upon our ability to penetrate the consumer market for media
oriented products and establish a television network with sufficient ratings to
cover the costs associated with operating the network and provide a return to
our investors.  Our television network and travel company will compete
with more established entities with greater financial resources, longer
operating histories and more recognition in the market place than we
do.  It is also possible that previously unidentified competitors may
enter the market place and decrease our chance of acquiring the requisite market
share.  Our future success will depend upon our ability to penetrate
the market quickly and efficiently.  Our ability to respond to
competitive product offerings and the evolving demands of the marketplace will
play a key role in our success.  Our failure to develop, maintain and
continually improve our distribution process could prevent us from attaining
sufficient market share.  If we are unable to respond and compete in
these markets, it will have a material adverse effect on our business, results
of operations and financial condition.


    
      
         


      

      
        20

        
          

        

      

      
         


      

    


    We
may not be able to adequately manage future growth.

     

    If we are
successful in developing our business plan, the anticipated future growth of the
business could place a significant strain on our managerial, operational and
financial resources. We cannot assure you that management would effectively
manage significant growth in our business.  If we are successful in
executing our business plan and achieve our anticipated growth, such success
will place significant demands on our management, as well as on our
administrative, operational and financial resources.  For us to manage
our growth and satisfy the greater financial, disclosure and internal control
requirements that arise with exiting the development stage and becoming fully
operational, we must:

     

    
      	
              · 

            	
              upgrade
      our operational, financial, accounting and management information systems,
      which would include the purchase of new accounting and human resources
      software;

            


    

    


    
      	
              · 

            	
              identify
      and hire an adequate number of operating, accounting and administrative
      personnel and other qualified
employees;

            


    

    


    
      	
              · 

            	
              manage
      new employees and integrate them into our
  culture;

            


    

    


    
      	
              · 

            	
              incorporate
      effectively the components of any businesses or assets that we may acquire
      in our effort to achieve or support
growth;

            


    

    


    
      	
              · 

            	
              closely
      monitor the actions of our music company distributors and broadcast
      entities which air The Tube and manage the contractual relationships we
      have with them; and

            


    

    


    
      	
              · 

            	
              develop
      and improve financial and disclosure processes to satisfy the reporting
      requirements of the SEC, including Section 404 of the Sarbanes-Oxley Act
      of 2002, and the National Association of Securities Dealers,
      Inc.

            


    

    


    The
failure to adequately manage any growth would adversely affect our business
operations and financial results.

    


    Mr.
Kerby owns approximately 71% of our voting securities which gives him control of
our Company.

    


    Mr. Kerby
also owns 2,610,951 shares of common stock and 504,762 shares of Series A
Preferred Stock each having the voting equivalency of 100 votes per Series A
preferred Stock.  This  gives him voting rights equivalent
to 53,087,251 shares of common stock, representing approximately 71%of the total
votes.  Such control by Mr. Kerby of our voting securities gives him
control of our electing our directors and appointing management and can delay or
prevent possible mergers or deals and suppress the market value of our common
stock.

    


    We
may be unable to adequately react to market changes.

    


    Our
success is partially dependent upon our ability to develop our market and change
our business model as may be necessary to react to changing market
conditions.  Our ability to modify or change our business model to fit
the needs of a changing market place is critical to our success, and our
inability to do so could have a material adverse effect on our business,
liquidity and financial condition.


    
      
         


      

      
        21

        
          

        

      

      
         


      

    


    There
are potential conflicts of interests and agreements that are not subject to
arm’s length negotiations.

     

    There may
be conflicts of interest between our management and our non-management
stockholders.

     

    Conflicts
of interest create the risk that management may have an incentive to act
adversely to the interests of other investors. A conflict of interest may arise
between our management’s personal pecuniary interest and its fiduciary duty to
our stockholders. Further, our management’s own pecuniary interest may at some
point compromise its fiduciary duty to our stockholders. In addition, our
officers and directors are currently involved with other blank check companies
and conflicts in the pursuit of business combinations with such other blank
check companies with which they and other members of our management are, and may
be the future be, affiliated with may arise. If we and the other blank check
companies that our officers and directors are affiliated with desire to take
advantage of the same opportunity, then those officers and directors that are
affiliated with both companies would abstain from voting upon the opportunity.
In the event of identical officers and directors, the officers and directors
will arbitrarily determine the Registrant that will be entitled to proceed with
the proposed transaction.

    


    Risks Associated with this
Offering and Our Shares of Common Stock

    


    We have broad discretion in
determining how to use the proceeds from this Offering and we cannot assure you
that we will be successful in spending the proceeds in ways which increase our
profitability or market value, or otherwise yield favorable
returns.

    


    We plan
to utilize net proceeds of this Offering in the manner described in this
Memorandum under “Use of Proceeds.” Nevertheless, we will have broad discretion
in determining specific expenditures.  You will be entrusting your
funds to our management, upon whose judgment you must depend, with limited
information concerning the purposes to which the funds will ultimately be
applied. We may not be successful in spending the proceeds of this Offering,
whether in our existing operations or as part of our expansion plans, in ways
which increase our profitability or market value, or otherwise yield favorable
returns.

    


    Our
shares of Common Stock are very thinly traded, and the price may not reflect our
value and there can be no assurance that there will be an active market for our
shares of Common Stock either now or in the future.

    


    Our
shares of Common Stock are very thinly traded, and the price if traded may not
reflect our value. There can be no assurance that there will be an active market
for our shares of Common Stock either now or in the future. The market liquidity
will be dependent on the perception of our operating business and any steps that
our management might take to bring us to the awareness of investors. There can
be no assurance given that there will be any awareness generated. Consequently,
investors may not be able to liquidate their investment or liquidate it at a
price that reflects the value of the business. If a more active market should
develop, the price may be highly volatile. Because there may be a low price for
our shares of common stock, many brokerage firms may not be willing to effect
transactions in the securities. Even if an investor finds a broker willing to
effect a transaction in the shares of our common stock, the combination of
brokerage commissions, transfer fees, taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such shares of common stock as collateral for any
loans.


    
      
         


      

      
        22

        
          

        

      

      
         


      

    


    The
shares of Common Stock and the shares of Common Stock underlying the Warrants
included in the Units sold in this offering are “restricted securities” and may
not be resold unless they are registered under the securities act or unless an
exemption from registration is available.

    


    The
shares of Common Stock and the Warrants included in the Units sold in this
Offering are “restricted securities” and may not be resold unless they are
registered under the Securities Act or unless an exemption from registration is
available. The shares of Common Stock and the shares of common stock to be
issued upon the exercise of Warrants will be “restricted securities” as such
term is defined in Rule 144 under the Securities Act.  Accordingly,
they may not be resold unless they are registered under the Securities Act and
applicable state securities laws or unless exemptions from such registration
requirements are available.  Any such exemption must be established to
our satisfaction, and we are not obligated to supply shareholders with
information necessary to make exempt sales.  Under the terms of this
Offering, Investors are granted registration rights and we have agreed to file a
registration statement to register our shares of Common Stock and the shares of
Common Stock underlying the Warrants simultaneously with the closing of this
Offering.  However, even if a registration statement is filed with the
SEC, there is no guarantee that the SEC will permit such registration to become
effective.  Investors must be prepared to bear the economic risk of
investment for an indefinite period of time.   See “Transfer of
Securities.”

    


    The
offering price bears no relationship to our assets, net worth, book value per
share or net income or loss, as applicable

    


    The
Offering price of the Units, the price per share of the shares of Common Stock
and the exercise price for the Warrants included in this Offering are not based
on any objective criteria. The offering price of the Units, the price per share
of the shares of Common Stock and the exercise price of the Warrants were
determined by negotiations between us and the Placement Agent, and were not
based on any objective criteria of value and bear no relationship to our assets,
net worth, book value per share or net income or loss, as
applicable.

    


    There
can be no assurance that the price of our shares of common stock will meet or
exceed the exercise price of the warrants during the exercise period or at any
time thereafter.

    


    Unless
the price of our shares of Common Stock equals or exceeds the exercise price of
the Warrants at the time of such exercise, an Investor may not be able to
exercise his Warrants profitably.  There can be no assurance that the
price of our shares of Common Stock will meet or exceed the exercise price of
the Warrants during the exercise period or at any time
thereafter.  Accordingly, should an Investor choose to exercise the
Warrants, the value of our shares of Common Stock purchased upon such exercise
may be less than the Warrant exercise price the Investor pays. The Warrant may
be worthless and expire unexercised if the price of our shares of Common Stock
does not exceed the Warrant exercise price.


    
      
         


      

      
        23

        
          

        

      

      
         


      

    


    USE
OF PROCEEDS

     

    We expect
to use the proceeds of this Offering to fund the Company’s internal growth and
working capital needs.

    


    MANAGEMENT

    


    Officers,
Directors, and Management

    


    Set forth below is certain information
regarding the executive officers and directors of the
Company.  Additional information regarding the history and
qualifications of each such individual is set forth in the Company’s Business
Plan attached as Appendix
C.

    


    
      
        	
                Name

              	 
      	
                Age

              	 
      	
                Position

              
	
                James Whyte

              	 
      	
                62

              	 
      	
                Chairman
      of the Board of Directors

              
	
                William
      Kerby

              	 
      	
                52

              	 
      	
                Chief Executive Officer and Vice
      Chairman (Principal Executive Officer)

              
	
                Richard
      Sokolowski

              	 
      	
                56

              	 
      	
                Chief
      Financial Officer

              
	
                Anthony
      Byron

              	
                  

              	
                55

              	
                  

              	
                Chief
      Operations Officer

              


      

    

    


    Jim Whyte, Chairman

    


    Mr. Whyte
has 38 years experience in both the travel and real estate industry serving
first as an employee, then an owner and entrepreneur.  In the travel
industry, Mr. Whyte gained experience in the airline, hotel, rental car, tour
operator, retail travel, and travel magazine market segments.  He has
owned and operated various hotels, marinas, travel agencies, apartment
buildings, marketing and printing companies.  He also worked for the
Hawaii Visitor Bureau and White House Commission Tourism &
Travel.

    


    Bill Kerby, Vice Chairman and
CEO

    


    Mr. Kerby
is Founder of Next 1 Interactive.  He has served as Chairman, CEO and
Founder of Extraordinary Vacations.  He is an Entrepreneur and CEO
with 18 years in Media and Travel Industry and 10 years in financial
industry.  Mr. Kerby is Founder of TravelByUs, a NASDAQ small cap
company, with 21 travel subsidiaries.  He is also Founder of Leisure
Canada, which includes 210 agencies, international tour operations and
magazines.  Mr. Kerby also Owned the Master Franchise for Thrifty Car
Rental in British Columbia.

    


    Anthony Byron, Chief Operating
Officer

    


    Mr. Byron
has been an Entrepreneur for 34 years in the travel, hospitality and
motivational industries.  Over the course of his career, he has owned
and operated incentive travel and event marketing companies, retail and
corporate travel agencies and wholesale tour operators.  He is
currently CEO and majority shareholder of Meridican Incentive Consultants in
Toronto, Canada and also Meridican USA, LLC located in Weston,
Florida.


    
      
         


      

      
        24

        
          

        

      

      
         


      

    

    


    Richard Sokolowski - Chief Financial
Officer

    


    Mr.
Sokolowski brings over 25 years of experience in various industries and
positions including finance, information technology and project management,
operations and SEC reporting, including Sarbanes-Oxley compliance.  He
spent the past 11 years with Memry Corporation, most recently as Vice President
- Corporate Controller.

    


    Wendy Borow Johnson – President, R&R and Vice President Media,
Next 1

    


    Ms.
Borow-Johnson has spent over 25 years in the Media industry, holding such
positions as Senior Vice President of  NBC Cable, on air reporter and
program host for ABC and Lifetime, SVP of DMBB advertising, Managing Director of
McCann Erickson,  President of Healthy Living Channel, SVP of
Marketing Source Media Interactive Channel,  President  -
Brand Management, Beyond Commerce/Boomj  Inc.

    


    Tom Armstrong - VP Sales and
Marketing

    


    Mr.
Armstrong brings over 20 years travel industry experience, as VP of SeaMiles
Visa/Parkwest Galleries.  He also served as Director of International
Voyager Media – Onboard Media partner of Princess Cruises, Holland America
Lines, Norwegian Cruise Line and others.

    


    Shawn Tubman – VP
Travel

    


    Mr.
Tubman has over 22 years in the cruise industry including the position of VP
Sales for Norwegian Cruise Lines, and 6 years as President of Cruise
Shoppes.  He also serves on the Advisory Board of CLIA; the marketing
arm of the cruise line industry

    


    Don David - VP Real Estate
VOD

    


    Mr. David
has been a senior executive in various industries over the past 30 years, and is
the co-founder of Loop Networks and former President of the Home Preview
Channel.

    


    Kevin Cuddihy – VOD
Development Consultant

    


    Mr.
Cuddihy is the former Vice President of Sales for Comcast’s Searchlight Division
heading up the Video on Demand project – including Monster.com and
Vehix.com.  He was responsible for advertising sales with over 4,500
employees reporting to him.


    
      
         


      

      
        25

        
          

        

      

      
         


      

    

    


    DESCRIPTION
OF OUR CAPITAL STOCK

    


    Our
authorized capital stock currently consists of 200,000,000 shares of Common
Stock, with a par value of $0.00001 per share, of which 27,264,727 shares are
issued and outstanding.  We are authorized to issue 100,000,000 shares
of “blank check” preferred stock.  Currently we have designated a
Series A 10% Cumulative Convertible Preferred Stock consisting of 3,000,000
shares (the “Series A Preferred Stock”). The holders of record of shares of
Series A Preferred Stock are entitled to vote on all matters submitted to a vote
of our shareholders of and is entitled to one hundred (100) votes for each share
of Series A Preferred Stock. On October 14, 2008, we issued an aggregate of
504,763 shares of Series A Preferred Stock to William Kerby, the Company’s Chief
Executive Officer. Mr. Kerby also owns 2,610,951 shares of common stock, which,
together with his Series A Preferred Stock, gives him voting rights equivalent
to 53,087,251 shares of common stock, representing approximately
71%  of the total votes.

    


    The
following table sets forth certain information regarding the beneficial
ownership of our common stock and Series A Preferred Stock as of the date of
this Offering by (i) each Named Executive Officer, (ii) each member of our Board
of Directors, (iii) each person deemed to be the beneficial owner of more than
five percent (5%) of any class of our common stock, and (iv) all of our
executive officers and directors as a group. Unless otherwise indicated, each
person named in the following table is assumed to have sole voting power and
investment power with respect to all shares of our common stock listed as owned
by such person. The address of each person is deemed to be the address of the
issuer unless otherwise noted.

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Title of Class

                            	 	
                              Name of 

                              Beneficial Owner

                            	 	
                              Amount and Nature

                              of Beneficial Owner

                            	 	 	
                              Percent of Class(1)

                            	 
	 
      	 	 
      	 	
                            	 	 	
                            	 
	
                              Common
      Stock

                            	 	
                                James
      Whyte

                            	 	 	1,674,000 	 	 	 	6.1	%
	
                              Series
      A Preferred Stock

                            	 	
                              Chairman
      of the Board

                            	 	 	0 	 	 	 	— 	 
	 
      	 	
                                 

                            	 	 	 	 	 	 	 	 
	
                              Common
      Stock

                            	 	
                                William
      Kerby

                            	 	 	2,610,951 	 	 	 	9.5	%
	
                              Preferred
      Stock

                            	 	
                              CEO
      & Vice Chairman

                            	 	 	504,762 	(3)	 	 	100	%
	 
      	 	
                                 

                            	 	 	 	 	 	 	 	 
	
                              Common
      Stock

                            	 	
                               
      Richard Sokolowski

                            	 	 	0 	 	 	 	— 	 
	
                              Series
      A Preferred Stock

                            	 	
                              Chief
      Financial Officer

                            	 	 	0 	 	 	 	— 	 
	 
      	 	
                               
       

                            	 	 	 	 	 	 	 	 
	
                              Common
      Stock

                            	 	
                               
      Anthony Byron

                            	 	 	711,134	(2) 	 	 	2.5	%
	
                              Series
      A Preferred Stock

                            	 	
                              Chief
      Operating Officer and Director

                            	 	 	0 	 	 	 	— 	 
	 
      	 	
                               
       

                            	 	 	 	 	 	 	 	 
	
                              Common
      Stock

                            	 	
                               
      All Officers and Directors as a group

                            	 	 	4,993,240 	 	 	 	18.3	%
	
                              Series
      A Preferred Stock

                            	 	
                              (4
      persons)

                            	 	 	504,762 	(3)	 	 	100	%


                    

                  

                

              

            

          

        

      

    

     

    
      	
               
      

            	
              (1)

            	
              The percentage of common stock
      held by each listed
      person is based on 27,264,727 shares of common stock
      issued and outstanding. The percentage of Series A
      Preferred Stock held by each person is based on 504,762 shares of Series A
      Preferred Stock
      issued and outstanding. Pursuant to Rule 13d-3
      promulgated under the Exchange Act, any securities not outstanding which
      are subject to warrants, rights or conversion privileges exercisable
      within 60 days are deemed to be outstanding for purposes of computing the
      percentage of outstanding securities of the class owned by such person but
      are not deemed to be outstanding for the purposes of computing the
      percentage of any other
person.

            


    

    


    
      	
               
      

            	
              (2)

            	
              Anthony Byron holds 700,617
      shares individually, and his spouse Liana Byron owns 10,517. Due to this
      relationship, Anthony Byron beneficially owns 711,134 shares of common
      stock of the Company.

            


    

     

    
      
         


      

      
        26

        
          

        

      

      
         


      

    

    


    
      	
               
      

            	
              (3)

            	
              Having the voting equivalency of
      100 votes per share (50,476,200
votes).

            


    

    


    RELATED-PARTY
TRANSACTIONS

    


    The
Company leases certain telephone and communications equipment through a lease
agreement with a related party. The lease requires monthly payments of $5,078
including interest at approximately 18.6% per year. The lease expires on June
30, 2011. Interest expense paid on the capital lease was $19,091 and $31,116
during the ended February 28, 2009 and February 29, 2008,
respectively.

    


    The
Company has a note payable with a director and officer for approximately
$272,643.  The loan bears interest at 18 % per year and matures and
has no stated maturity date. Interest expense on the loan was approximately
$20,000 for the each of the years ended February 28, 2009 and February 29,
2008.

    


    The
Company leases certain telephone and communications equipment through a lease
agreement with a related party. The lease requires monthly payments of $5,078
including interest at approximately 18.6% per year. The lease expires on June
30, 2011. Interest expense paid on the capital lease was $19,091 and $31,116
during the ended February 28, 2009 and February 29, 2008,
respectively.

    


    Employment
Agreements

    


    William Kerby has an employment
agreement, dated October 15, 2006, with the Company. Pursuant to this employment
agreement, Mr. Kerby is employed as the Company’s Chief Executive Officer at an
annual base salary of $300,000 in cash and Company common stock.  He
may also, as determined by the Board of Directors, receive a year-end
performance bonus. The initial term of the agreement commenced June 1, 2002 and
terminated June 1, 2008, with an automatic renewal for a period of four years.
Upon termination of the second term, the Agreement shall be automatically
renewed for successive periods of four years each subject to the same terms and
conditions, unless modified or terminated by one or both parties in accordance
with the Agreement.

    


    Anthony
Byron has a consulting agreement, dated August 15, 2008, with the Company.
Pursuant to this agreement, Mr. Byron is employed as the Company’s Chief
Operating Officer at an annual base salary of $240,000 in cash ($20,000 per
month), $12,500 of which shall payable in cash the remaining in stock at $0.01
per share, upon the shorter of (i) 180 days after the date of employment, (ii)
the Company obtaining profitability for a 60 day period at any time during the
first 180 days of employment, or (iii) the Company obtaining an underwritten
financing of $1,000,000.  Mr. Byron  may also receive a year-end
performance bonus to be determined by the Board.  Mr. Byron’s initial
term as COO commenced on August 4, 2008 and terminates August 4, 2012. Upon the
termination of the initial term, the Agreement shall be automatically renewed
for successive periods of one year each subject to the same terms and
conditions, unless modified or terminated by one or both parties in accordance
with the Agreement.

    


    Pursuant
to an employment agreement, dated July 6, 2009, Mr. Richard Sokolowski was
appointed as the Company’s Chief Financial Officer and Principal Financial
Officer. The initial term of the Employment Agreement is for a period of
three years with a minimum base salary of no less than $150,000 per year of
employment.  Mr. Sokolowski will also be eligible for a discretionary
cash bonus that may be set by the Company’s board of directors from time to
time.  In addition, Mr Sokolowski will be eligible for a stock bonus
of up to 25,000 shares of the Company’s common stock; the common stock bonus
issued will be based on the effectiveness of the systems and financial controls
implemented by Mr. Sokolowski, which will be reviewed at the 90 day and 180 day
anniversary of Mr Sokolowski’s employment respectively.


    
      
         


      

      
        27

        
          

        

      

      
         


      

    

    


    OTHER
TRANSACTIONS

    


    Legal
proceedings

    


    We are
currently not involved in any litigation that we believe could have a material
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of our company or any of our
subsidiaries, threatened against or affecting our company, our common stock, any
of our subsidiaries or of our companies or our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision could have a
material adverse effect.


    
      
         


      

      
        28

        
          

        

      

      
         


      

    


    APPENDIX
A

    


    FORM OF SUBSCRIPTION
AGREEMENT

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    APPENDIX
B

    


    FORM OF
WARRANT


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    APPENDIX
C

    


    BUSINESS
PLAN