----

----

**FORM      10-KSB**

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

| **Nevada**                                              | **33-0766069**                     |
|---------------------------------------------------------|------------------------------------|
| (State                or other jurisdiction of          | (I.R.S.                Employer    |
| incorporation                or organization)           | Identification                No.) |
|                                                    |                               |
| **9150                Wilshire Boulevard, Suite 242**   |                               |
| **Beverly                Hills, California**            | **90212**                          |
| (Address                of principal executive offices) | (zip                code)          |

**(310)      550-5800**

----

----

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**ANNUAL      REPORT ON FORM 10-KSB**

**For      the Fiscal Year Ended December 31, 2005**

**TABLE      OF CONTENTS**

| **PART                  I**   |                                       | Page                                                                                                                          |
|-------------------------------|--------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
|                          | Item    1.             | Business                                                                                                                      | 1 |
|                          | Item                     2. | Properties                                                                                                                    | 5 |
|                          | Item                     3. | Legal                  Proceedings                                                                                            | 5 |
|                          | Item                     4. | Submission                  of Matters to a Vote of Security                  Holders                                         | 5 |
|                          |                                       |                                                                                                                          |   |
| **PART                  II**  |                                       |                                                                                                                          |
|                          | Item                     5. | Market                  for Registrant’s Common Equity and Related Stockholder                  Matters                 |  6 |
|                          | Item                     6. | Management’s                  Discussion and Analysis of Financial Condition and                  Results Of Operations | 10 |
|                          | Item                     7. | Financial                  Statements                                                                                         | 21 |
|                          | Item                     8. | Changes                  in and Disagreements with Accountants on Auditing and                  Financial Disclosure          | 22 |
|                          | Item                  8A.                  | Controls                  and Procedures                                                                                      | 22 |
|                          | Item                  8B.                  | Other                  Information                                                                                            | 22 |
|                          |                                       |                                                                                                                          |   |
| **PART                  III** |                                       |                                                                                                                          |
|                          | Item                     9. | Directors                  and Executive Officers of the                  Registrant                                          | 23 |
|                          | Item                  10.                  | Executive                  Compensation                                                                                       | 26 |
|                          | Item                  11.                  | Security                  Ownership of Certain Beneficial Owners and                  Management                              | 29 |
|                          | Item                  12.                  | Certain                  Relationships and Related                  Transactions                                              | 28 |
|                          |                                       |                                                                                                                          |   |
| **PART                  IV**  |                                       |                                                                                                                          |
|                          | Item                  13.                  | Exhibits                                                                                                                      | 29 |
|                          | Item                  14.                  | Principal                  Accountant Fees and Services                                                                       | 39 |
|                          |                                       |                                                                                                                          |   |
|                          | Signatures                                 |                                                                                                                          | 40 |

----

Table            of Contents

**PART      I**

| **ITEM                1.** | **DESCRIPTION                OF BUSINESS** |
|----------------------------|--------------------------------------------|

**OVERVIEW      **

**Organizational/Historical      Background **

**Recent      Transaction**

**New      Business Plan**

----

Table            of Contents

**FILM      FINANCE**

*Traditional      Film Finance*

|   | · | In                an “equity pre-sale” deal, for example, a producer circles investors prior                to the making of a film and equity investors pay all costs. P&A                (distribution) expenses are usually financed by the distributor,                but are                recouped in fist position pushing all risk to the                investors. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                a “rights pre-sale” deal, a producer offers the film to foreign (usually)                or other distributors who agree to purchase some of the distribution                rights upon completion of the film. If approximately 1.3 to 1.5 times                the                cost of the film can be pre-sold, a production lender loans the funds                to                produce the picture, subject to the credit-worthiness of the obligated                distributors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                a “studio-output” (financing) deal, the owner of a script enters an                agreement with a studio that likes the concept. The studio manages                production, funds production and, almost always retains all proceeds                generated from the film. The script owner can often receive a moderate                fee                and a “net” profit participation typically around 5%. This net profit                participation, after allocation of studio overhead, is rarely, if                ever,                paid. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                a “first look” (financing) deal, a studio enters into a contract                relationship with a filmmaker or star agreeing to pay overhead and                development expenses in exchange for a priority position to produce                and                distribute that person’s films. If the studio rejects a project, the                filmmaker or star may present the project to other                studios. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***The      New World of Co-Financing***

----

Table            of Contents

**PORTFOLIO**

**DISTRIBUTION**

**TRANSACTION      COSTS**

----

Table            of Contents

**ACCOUNTABILITY**

**BUSINESS      PRACTICE**

**CURRENT      PROJECTS**

***Americal      Cannibal***

***Rebel      Gucci***

----

Table            of Contents

**Employees**

| **ITEM                2.** | **DESCRIPTION                OF PROPERTY** |
|----------------------------|--------------------------------------------|

| **ITEM                3.** | **LEGAL                PROCEEDINGS** |
|----------------------------|--------------------------------------|

| **ITEM                4.** | **SUBMISSION                OF MATTERS TO A VOTE OF SECURITY                HOLDERS** |
|----------------------------|---------------------------------------------------------------------------------------|

----

Table            of Contents

**PART      II**

| **ITEM                5.** | **MARKET                FOR COMMON EQUITY AND RELATED STOCKHOLDER                MATTERS** |
|----------------------------|--------------------------------------------------------------------------------------------|

|                                         |   | High($) |   | Low                ($) |   |
|----------------------------------------------|--------|---------|--------|------------------------|--------|
|                                         |   |    |   |                   |   |
| **Fiscal                Year** **2004** |   |    |   |                   |   |
| First                Quarter                 |   |    | 1.18   |                   |   | 0.03 |   |
| Second                Quarter                |   |    | 0.48   |                   |   | 0.12 |   |
| Third                Quarter                 |   |    | 0.34   |                   |   | 0.01 |   |
| Fourth                Quarter                |   |    | 0.06   |                   |   | 0.01 |   |
|                                         |   |    |   |                   |   |   |   |
| **Fiscal                Year** **2005** |   |    |   |                   |   |   |   |
| First                Quarter                 |   |    | 0.03   |                   |   | 0.01 |   |
| Second                Quarter                |   |    | 0.01   |                   |   | 0.01 |   |
| Third                Quarter                 |   |    | 0.01   |                   |   | 0.01 |   |
| Fourth                Quarter                |   |    | 0.01   |                   |   | 0.01 |   |
|                                         |   |    |   |                   |   |   |   |
| **Fiscal                Year** **2006** |   |    |   |                   |   |   |   |
| First                Quarter                 |   |    | 0.03   |                   |   | 0.01 |   |
| Second                Quarter (1)            |   |    | 0.01   |                   |   | 0.01 |   |

**Dividends**

**DESCRIPTION      OF SECURITIES**

**COMMON      STOCK **

----

Table            of Contents

**PREFERRED      STOCK **

**OPTIONS      **

**WARRANTS      **

**CONVERTIBLE      SECURITIES **

|   | · | $1,400,000                was disbursed on December 17, 2004; |
|--------|--------|---------------------------------------------------------------|

|   | · | $900,000                was disbursed on June 1, 2005; |
|--------|--------|--------------------------------------------------------|

|   | · | $150,000                was disbursed on July 1, 2005; |
|--------|--------|--------------------------------------------------------|

|   | · | $170,000                was disbursed on August 1, 2005;                and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | $180,000                was disbursed on September 1, 2005. |
|--------|--------|-------------------------------------------------------------|

|   | · | $0.35;                or |
|--------|--------|--------------------------|

|   | · | 30%                of the average of the three lowest intraday trading prices for the                common                stock on a principal market for the 20 trading days before but not                including the conversion date. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

|   | · | $0.02;                or |
|--------|--------|--------------------------|

|   | · | 30%                of the average of the three lowest intraday trading prices for the                common                stock on a principal market for the 20 trading days before but not                including the conversion date. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $0.02;                or |
|--------|--------|--------------------------|

|   | · | 30%                of the average of the three lowest intraday trading prices for the                common                stock on a principal market for the 20 trading days before but not                including the conversion date. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Penny      Stock Regulation**

|   | · | A                description of the nature and level of risk in the market for penny                stocks                in both public offerings and secondary                trading; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                description of the broker’s or dealer’s duties to the customer and of the                rights and remedies available to the customer with respect to violation                to                such duties or other requirements of securities’                laws; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                brief, clear, narrative description of a dealer market, including“bid”                and “ask” prices for penny stocks and the significance of the spread                between the “bid” and “ask” price; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

|   | · | A                toll-free telephone number for inquiries on disciplinary                actions; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Definitions                of significant terms in the disclosure document or in the conduct                of                trading in penny stocks; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Such                other information and in such form (including language, type, size                and                format), as the Securities and Exchange Commission shall require                by rule                or regulation. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                bid and offer quotations for the penny                stock; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | The                compensation of the broker-dealer and its salesperson in the                transaction; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | The                number of shares to which such bid and ask prices apply, or other                comparable information relating to the depth and liquidity of the                market                for such stock; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Monthly                account statements showing the market value of each penny stock held                in                the customer’s account. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Recent      Sales of Unregistered Securities**

----

Table            of Contents

| **ITEM                6.** | **MANAGEMENT'S                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF                OPERATIONS.** |
|----------------------------|--------------------------------------------------------------------------------------------------------------------------|

**Critical      Accounting Policies and Estimates **

**Business      combinations**

**Stock-Based      Compensation**

----

Table            of Contents

**Revenue        Recognition**

|   | · | Persuasive                  evidence of a sale or licensing arrangement with a customer                  exists; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | The                  film is complete and, in accordance with the terms of the arrangement,                  has                  been delivered or is available for immediate and unconditional                  delivery; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  license period of the arrangement has begun and the customer can                  begin its                  exploitation, exhibition, or sale; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  arrangement fee is fixed or determinable;                  and |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Collection                  of the arrangement fee is reasonably                  assured. |
|--------|--------|--------------------------------------------------------------------------------------------|

**Capitalized        Film Costs**

*Capitalization        of Interest Cost*

----

Table                of Contents

**Manufacturing          Costs**

**Exploitation          Costs and Advertising**

*Reporting          on Advertising Costs*

**Recent      Accounting Pronouncements**

**Results      of Operations**

**Revenues**

**Costs      And Expenses**

----

Table            of Contents

**Liquidity        And Capital Resources**

----

Table            of Contents

----

Table            of Contents

**Product      Research and Development**

**Acquisition      or Disposition of Plant and Equipment**

**Number      of Employees**

**Risk      Factors**

**Risks      Relating to Our Business**
**:      **

**We      are Currently in Default under the Securities Purchase Agreements and Secured      Convertible Notes and the Investors Have the Right to Take Possession of all      Our      Goods, Inventory, Contractual Rights and General Intangibles, Receivables,      Documents, Instruments, Chattel Paper, and Intellectual      Property.**

----

Table            of Contents

**We      Have a History Of Losses Which May Continue, Which May Negatively Impact Our      Ability to Achieve Our Business Objectives.**

**If      We Are Unable to Obtain Additional Funding Our Business Operations Will be      Harmed and If We Do Obtain Additional Financing Our Then Existing Shareholders      May Suffer Substantial Dilution.**

**Our      Independent Registered Public Accounting Firm Have Expressed Substantial Doubt      About Our Ability to Continue As a Going Concern, Which May Hinder Our Ability      to Obtain Future Financing.**

**If      We Are Unable to Retain the Services of Messrs. Litwak and Riley or If We Are      Unable to Successfully Recruit Qualified Managerial and Sales Personnel Having      Experience in Business, We May Not Be Able to Continue Our Operations.**

----

Table            of Contents

**Many      Of Our Competitors Are Larger and Have Greater Financial and Other Resources      Than We Do and Those Advantages Could Make It Difficult For Us to Compete With      Them.**

**Our      Trademark and Other Intellectual Property Rights May not be Adequately Protected      Outside the United States, Resulting in Loss of Revenue.**

**Risks      Relating to Our Current Financing Arrangement**
**:      **

**There      Are a Large Number of Shares Underlying Our Secured Convertible Notes, and      Warrants That May be Available for Future Sale and the Sale of These Shares      May      Depress the Market Price of Our Common Stock.**

**The      Continuously Adjustable Conversion Price Feature of Our Secured Convertible      Notes Could Require Us to Issue a Substantially Greater Number of Shares, Which      Will Cause Dilution to Our Existing Stockholders. **

|                   |   |                     |   |                         |   | Number                   |   | %                of |          |
|------------------------|--------|--------------------------|--------|------------------------------|--------|--------------------------|--------|---------------------|---------------|
| %                Below |   | Price                Per |   | With                Discount |   | of                Shares |   | Outstanding         |          |
| Market                 |   | Share                    |   | at                70%        |   | Issuable                 |   | Stock               |          |
|                   |   |                     |   |                         |   |                     |   |                |          |
| 25%                    |   | $                        | .0045  |                         | $      | .00135                   |   |                | 1,941,658,519 |   |   | 95.55 | % |
| 50%                    |   | $                        | .003   |                         | $      | .0009                    |   |                | 2,912,487,778 |   |   | 96.99 | % |
| 75%                    |   | $                        | .0015  |                         | $      | .00045                   |   |                | 5,824,975,556 |   |   | 98.47 | % |

----

Table            of Contents

**The      Continuously Adjustable Conversion Price feature of our Secured Convertible      Notes May Encourage Investors to Make Short Sales in Our Common Stock, Which      Could Have a Depressive Effect on the Price of Our Common Stock.**

**The      Issuance of Shares Upon Conversion of the Secured Convertible Notes and Exercise      of Outstanding Warrants May Cause Immediate and Substantial Dilution to Our      Existing Stockholders.**

**In      The Event That Our Stock Price Declines, The Shares Of Common Stock Allocated      For Conversion Of The Secured Convertible Notes and Registered Pursuant To      **
**a      Registration Statement May Not Be Adequate And We May Be Required to File A      Subsequent Registration Statement Covering Additional Shares. If The Shares      We      Have Allocated And Are Registering on a Registration Statement Are Not Adequate      And We Are Required To File An Additional Registration Statement, We May Incur      Substantial Costs In Connection Therewith.**

** **

**If      We Are Required for any Reason to Repay Our Outstanding Secured Convertible      Notes, We Would Be Required to Deplete Our Working Capital, If Available, Or      Raise Additional Funds. Our Failure to Repay the Secured Convertible Notes,      If      Required, Could Result in Legal Action Against Us, Which Could Require the      Sale      of Substantial Assets.**

----

Table            of Contents

**Risks      Relating to Our Common Stock**
**:      **

**If      We Fail to Remain Current on Our Reporting Requirements, We Could be Removed      From the OTC Bulletin Board Which Would Limit the Ability of Broker-Dealers      to      Sell Our Securities and the Ability of Stockholders to Sell Their Securities      in      the Secondary Market.**

**Our      Common Stock is Subject to the “Penny Stock” Rules of the SEC and the Trading      Market in Our Securities is Limited, Which Makes Transactions in Our Stock      Cumbersome and May Reduce the Value of an Investment in Our Stock.**

|   | · | that                a broker or dealer approve a person's account for transactions in                penny                stocks; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                broker or dealer receive from the investor a written agreement to                the                transaction, setting forth the identity and quantity of the penny                stock to                be purchased. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | obtain                financial information and investment experience objectives of the                person;                and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | make                a reasonable determination that the transactions in penny stocks                are                suitable for that person and the person has sufficient knowledge                and                experience in financial matters to be capable of evaluating the risks                of                transactions in penny stocks. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | sets                forth the basis on which the broker or dealer made the suitability                determination; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | that                the broker or dealer received a signed, written agreement from the                investor prior to the transaction. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

**Trends,      Risks and Uncertainties**

----

Table            of Contents

| **ITEM                7.** | **FINANCIAL                STATEMENTS** |
|----------------------------|-----------------------------------------|

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**INDEX      TO FINANCIAL STATEMENTS **

|                                                                                                                                                                                                                                                      | Page                No.    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|
| Report                of Registered Independent Certified Public Accounting Firm                                                                                                                                                                          | F-1                        |
| Consolidated                Balance Sheets at December 31, 2005 and 2004                                                                                                                                                                        | F-2                        |
| Consolidated                Statements of Losses for the years ended December 31, 2005 and 2004,                and                for the period July 29, 1997 (date of inception) to December 31,                2005                                   | F-3                        |
| Consolidated                Statements of Deficiency in Stockholders’ Equity for the years ended                December 31, 2005 and 2004, and for the period July 29, 1997 (date                of                inception) to December 31, 2005 | F-4                - F-10  |
| Consolidated                Statements of Cash Flows for the years ended December 31, 2005 and                2004,                and for the period July 29, 1997 (date of inception) to December                31,                2005                | F-11                - F-12 |
| Notes                to Consolidated Financial Statements                                                                                                                                                                                                 | F-13                - F-33 |

----

Table            of Contents

**RUSSELL      BEDFORD STEFANOU MIRCHANDANI LLP**

**Certified      Public Accountants**

**REPORT      OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING      FIRM**

|   | /s/   | RUSSELL                BEDFORD STEFANOU MIRCHANDANI LLP |   |
|--------|-----------------|---------------------------------------------------------|--------|
|   |            | Russell                Bedford Stefanou Mirchandani LLP |   |
|   |            | Certified                Public Accounting Firm         |   |

----

Table            of Contents

| **PACIFICAP                ENTERTAINMENT HOLDINGS, INC**                                                                                                                                                                  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                DEVELOPMENT STAGE COMPANY)**                                                                                                                                                                          |   |
| **CONSOLIDATED                BALANCE SHEETS**                                                                                                                                                                            |   |
|                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                      |   | December                31, |   |
|                                                                                                                                                                                                                      |   | 2005 |   | 2004 |   |
| ASSETS                                                                                                                                                                                                                    |   |   |   | (As                restated- see Note K) |   |
| Current                assets:                                                                                                                                                                                            |   |   |   |   |   |
| Cash                and cash equivalents                                                                                                                                                                                  |   | $ | 422 |   | $ | 269,715 |   |
| Total                current assets                                                                                                                                                                                       |   |   | 422 |   |   | 269,715 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Property                and equipment:                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Office                furniture, net of accumulated depreciation of $6,623 and $1,682 at                December 31, 2005 and 2004, respectively                                                                          |   |   | 12,702 |   |   | 8,799 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Other                assets:                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Capitalized              film costs (Note A)                                                                                                                                                                              |   |   | 750,000 |   |   | - |   |
| Prepaid                interest                                                                                                                                                                                           |   |   | 152,872 |   |   | 303,502 |   |
| Financing                Costs, net of accumulated amortization and write off of $322,221                and                $63,637 at December 31, 2005 and 2004, respectively                                           |   |   | 417,496 |   |   | 422,653 |   |
| Restricted                cash                                                                                                                                                                                            |   |   | - |   |   | 235,903 |   |
| Other                                                                                                                                                                                                                     |   |   | - |   |   | 4,502 |   |
| Total                other assets                                                                                                                                                                                         |   |   | 1,320,368 |   |   | 966,560 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Total                assets                                                                                                                                                                                               |   | $ | 1,333,492 |   | $ | 1,245,074 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| LIABILITIES                AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY                                                                                                                                                       |   |   |   |   |   |   |   |
| Current                liabilities:                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Accounts                payable and accrued expenses                                                                                                                                                                      |   | $ | 1,773,536 |   | $ | 989,556 |   |
| Other                accrued liabilities                                                                                                                                                                                  |   |   | 380,000 |   |   | 380,000 |   |
| Notes                payable , current portion                                                                                                                                                                            |   |   | 2,230,145 |   |   | 1,131,165 |   |
| Advances                from related parties                                                                                                                                                                              |   |   | 358,119 |   |   | 275,190 |   |
| Other                advances                                                                                                                                                                                             |   |   | 65,000 |   |   | 45,000 |   |
| Total                current liabilities                                                                                                                                                                                  |   |   | 4,806,800 |   |   | 2,820,911 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Notes                payable, long-term portion                                                                                                                                                                           |   |   | 756,347 |   |   | 390,151 |   |
| Derivative                liability relating to convertible debentures                                                                                                                                                    |   |   | 5,811,478 |   |   | 3,801,741 |   |
| Warrant                liability relating to convertible debentures                                                                                                                                                       |   |   | 10,263 |   |   | 44,802 |   |
| Total                long term debt                                                                                                                                                                                       |   |   | 6,578,088 |   |   | 4,236,694 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Total                liabilities                                                                                                                                                                                          |   |   | 11,384,888 |   |   | 7,057,605 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Commitments                and contingencies                                                                                                                                                                              |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| (Deficiency                in) stockholders' equity:                                                                                                                                                                      |   |   |   |   |   |   |   |
| Preferred                stock, par value, $0.001 per share; 50,000,000 shares authorized;                none                issued and outstanding at December 31, 2005 and December 31,                2004            |   |   | - |   |   | - |   |
| Common                stock, par value, $0.001 per share; 300,000,000 shares authorized;                89,563,261 and 38,336,501 shares issued at December 31, 2005 and                2004,                respectively |   |   | 89,563 |   |   | 38,337 |   |
| Additional                paid-in-capital                                                                                                                                                                                 |   |   | 42,501,950 |   |   | 42,477,571 |   |
| Deficit                accumulated during development stage                                                                                                                                                               |   |   | (52,642,909 | ) |   | (48,328,439 | ) |
| Total                (deficiency in) stockholders equity                                                                                                                                                                  |   |   | (10,051,396 | ) |   | (5,812,531 | ) |
| Total                liabilities and (deficiency in) stockholders’ equity                                                                                                                                           |   | $ | 1,333,492 |   | $ | 1,245,074 |   |

----

Table            of Contents

| **PACIFICAP                ENTERTAINMENT HOLDINGS, INC**                                                                                                             |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                DEVELOPMENT STAGE COMPANY)**                                                                                                                     |   |
| **CONSOLIDATED                STATEMENTS OF LOSS**                                                                                                                   |   |
|                                                                                                                                                                 |   |
|                                                                                                                                                                 |   | For                the Year ended December 31, |   | For                the Period July 29, 1997 (Date of Inception) to December 31, 2005 |   |
|                                                                                                                                                                 |   | 2005 |   | 2004 |   |
|                                                                                                                                                                 |   |   |   | (As                restated - see Note K) |   |
| Costs                and Expenses:                                                                                                                                   |   |   |   |   |   |   |   |
| Selling,                general and administrative                                                                                                                   |   | $ | 1,623,838 |   | $ | 3,112,184 |   | $ | 14,848,995 |   |
| Acquisition                of Pacificap Entertainment Holdings, Inc. (Note B)                                                                                        |   |   | - |   |   | - |   |   | 29,160,000 |   |
| Acquisition                of Cineports.com, Inc.                                                                                                                    |   |   | - |   |   | - |   |   | 2,248,461 |   |
| Impairment                of film library                                                                                                                            |   |   | - |   |   | - |   |   | 372,304 |   |
| Impairment                of investment                                                                                                                              |   |   | - |   |   | - |   |   | 62,500 |   |
| Depreciation                                                                                                                                                         |   |   | 4,941 |   |   | 662 |   |   | 202,808 |   |
| Total                operating expenses                                                                                                                              |   |   | 1,628,779 |   |   | 3,112,846 |   |   | 46,845,068 |   |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Loss                from operations                                                                                                                                  |   |   | (1,628,779 | ) |   | (3,112,846 | ) |   | (46,895,068 | ) |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Other                income (expenses):                                                                                                                              |   |   |   |   |   |   |   |   |   |   |
| Other                income (expenses)                                                                                                                               |   |   | - |   |   | - |   |   | 114,758 |   |
| Interest                income (expenses)                                                                                                                            |   |   | (2,533,968 | ) |   | (1,387,225 | ) |   | (4,696,119 | ) |
| Unrealized                gain (loss) related to adjustment of derivative and warrant liability                to                fair value of underlying securities |   |   | (151,723 | ) |   | (446,543 | ) |   | (598,266 | ) |
| Total                other (expenses)                                                                                                                                |   |   | (2,685,691 | ) |   | (1,833,768 | ) |   | (5,179,627 | ) |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations, before income taxes and discontinued                operations                                                       |   |   | (4,314,470 | ) |   | (4,946,614 | ) |   | (52,074,695 | ) |
| Provision                for income taxes                                                                                                                            |   |   | - |   |   | - |   |   | - |   |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations, before discontinued operations                                                                                       |   |   | (4,314,470 | ) |   | (4,946,614 | ) |   | (52,074,695 | ) |
| Loss                from discontinued operations                                                                                                                     |   |   | - |   |   |   |   |   | (352,905 | ) |
| Income                on disposal of discontinued operations, net                                                                                                    |   |   | - |   |   | - |   |   | 78,973 |   |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                                                                                              |   | $ | (4,314,470 | ) | $ | (4,946,614 | ) | $ | (52,348,627 | ) |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Cumulative                effect of accounting change                                                                                                                |   |   | - |   |   | - |   |   | (294,282 | ) |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Net                loss applicable to common shares                                                                                                                  |   | $ | (4,314,470 | ) | $ | (4,946,614 | ) | $ | (52,642,909 | ) |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Loss                per common share (basic and assuming dilution)                                                                                                   |   | $ | (0.07 | ) | $ | (0.19 | ) |   |   |   |
| Continuing                operations                                                                                                                                 |   | $ | (0.07 | ) | $ | (0.19 | ) |   |   |   |
| Discontinued                operations                                                                                                                               |   | $ | - |   | $ | - |   |   |   |   |
|                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding                                                                                                                   |   |   | 66,158,104 |   |   | 26,130,548 |   |   |   |   |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY**

**FOR      THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31,      2005**

|                                                                                                                                                                                                                   |   | Preferred                Shares |        | Stock                Amount |   | Common                Shares |   | Stock                Amount |        | Common                Stock subscription |   | Additional                Paid in Capital |   | Deficit                Accumulated During Development Stage |   | Treasury                Stock |   | Total       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|-----------------------------|--------|------------------------------|--------|-----------------------------|-------------|------------------------------------------|--------|-------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------|--------|-------------|--------|
| Shares                issued at date of inception (July 29, 1997) to founders in exchange                for                contribution of organization costs valued at $27.38 per shares, as                restated |   |                            | -           |                        | $      | -                            |   |                        | 422         |                                     | $      | 1                                         |   | $                                                           | -      |                          | $      | 11,552      |   | $ | - |   | $ | - |   | $ | 11,553 |   |
| Net                Loss                                                                                                                                                                                                |   |                            | -           |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | - |   |   | - |   |   | - |   |
| **Balance                at December 31, 1997**                                                                                                                                                                        |   |                            | **-**       |                        | **$**  | **-**                        |   |                        | **422**     |                                     | **$**  | **1**                                     |   | **$**                                                       | **-**  |                          | **$**  | **11,552**  |   | **$** | **-** |   | **$** | **-** |   | **$** | **11,553** |   |
| Shares                issued December 22, 1998 to consultants in exchange for services                valued at                $.054 per shares                                                                        |   |                            | -           |                        |   | -                            |   |                        | 37,083      |                                     |   | 37                                        |   |                                                        | -      |                          |   | 1,965       |   |   | - |   |   | - |   |   | 2,002 |   |
| Shares                issued December 22, 1998 to President in exchange for debt valued                at $.054                per shares                                                                              |   |                            | -           |                        |   | -                            |   |                        | 277,778     |                                     |   | 278                                       |   |                                                        | -      |                          |   | 14,722      |   |   | - |   |   | - |   |   | 15,000 |   |
| Operating                expenses incurred by principal shareholder                                                                                                                                                    |   |                            | -           |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | 8,925       |   |   | - |   |   | - |   |   | 8,925 |   |
| Net                loss                                                                                                                                                                                                |   |                            | -           |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | (212,773 | ) |   | - |   |   | (212,773 | ) |
| **Balance                at December 31, 1998**                                                                                                                                                                        |   |                            | **-**       |                        | **$**  | **-**                        |   |                        | **315,283** |                                     | **$**  | **316**                                   |   | **$**                                                       | **-**  |                          | **$**  | **37,164**  |   | **$** | **(212,773** | **)** | **$** | **-** |   | **$** | **(175,293** | **)** |
| Shares                issued on April 13, 1999 for cash in connection with private placement                at                $30.08 per share                                                                         |   |                            | -           |                        |   | -                            |   |                        | 133         |                                     |   | -                                         |   |                                                        | -      |                          |   | 4,000       |   |   | - |   |   | - |   |   | 4,000 |   |
| Shares                issued on April 13, 1999 to consultants in exchange for services                valued at                $30.00per share                                                                         |   |                            | -           |                        |   | -                            |   |                        | 6,000       |                                     |   | 6                                         |   |                                                        | -      |                          |   | 179,994     |   |   | - |   |   | - |   |   | 180,000 |   |
| Shares                issued May 28, 1999 in exchange for services valued at $.001 per                share                                                                                                            |   |                            | 855,000     |                        |   | 855                          |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | - |   |   | - |   |   | 855 |   |
| Contribution                of shares to treasury on September 30, 1999 by principal                shareholder                                                                                                        |   |                            | -           |                        |   | -                            |   |                        | (94,048     | )                                        |   | -                                         |   |                                                        | -      |                          |   | 94          |   |   | - |   |   | (94 | ) |   | - |   |
| Shares                issued on November 12, 1999 for cash in connection with private placement                at $3.00 per share                                                                                      |   |                            | -           |                        |   | -                            |   |                        | 33,333      |                                     |   | 33                                        |   |                                                        | -      |                          |   | 99,967      |   |   | - |   |   | - |   |   | 100,000 |   |
| Release                of shares held in treasury and acquisition of Cavalcade of Sports                Network,                Inc on December 16, 1999                                                               |   |                            | -           |                        |   | -                            |   |                        | 94,048      |                                     |   | -                                         |   |                                                        | -      |                          |   | 282,050     |   |   | - |   |   | 94 |   |   | 282,144 |   |
| Operating                expenses incurred by principal shareholder                                                                                                                                                    |   |                            | -           |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | 6,000       |   |   | - |   |   | - |   |   | 6,000 |   |
| Net                Loss                                                                                                                                                                                                |   |                            | -           |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | (438,045 | ) |   | - |   |   | (438,045 | ) |
| **Balance                at December 31, 1999**                                                                                                                                                                        |   |                            | **855,000** |                        | **$**  | **855**                      |   |                        | **354,749** |                                     | **$**  | **355**                                   |   | **$**                                                       | **-**  |                          | **$**  | **609,269** |   | **$** | **(650,818** | **)** | **$** | **-** |   | **$** | **(40,339** | **)** |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY      (Continued)**

**FOR      THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31,      2005**

|                                                                                                       |   | Preferred                Shares |        | Stock                Amount |   | Common                Shares |   | Stock                Amount |        | Common                Stock Subscription |   | Additional                Paid in Capital |   | Deficit                Accumulated During Development Stage |   | Treasury                Stock |   | Total       |   |
|------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|-----------------------------|--------|------------------------------|--------|-----------------------------|-------------|------------------------------------------|--------|-------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------|--------|-------------|--------|
| **Balance                Forward**                                                                         |   |                            | **855,000** |                        | **$**  | **855**                      |   |                        | **354,749** |                                     | **$**  | **355**                                   |   | **$**                                                       | **-**  |                          | **$**  | **609,269** |   | **$** | **(650,818** | **) ** | **$** | **-** |   | **$** | **(40,339** | **)** |
| Shares                issued in March 2000 in exchange for debt at $37.50 per                share         |   |                            | -           |                        |   | -                            |   |                        | 2,060       |                                     |   | 2                                         |   |                                                        | -      |                          |   | 77,245      |   |   | - |   |   | - |   |   | 77,247 |   |
| Shares                issued March 28, 2000 in exchange for services at $37.50 per                share    |   |                            | -           |                        |   | -                            |   |                        | 70          |                                     |   | -                                         |   |                                                        | -      |                          |   | 2,625       |   |   | - |   |   | - |   |   | 2,625 |   |
| Shares                issued April 27, 2000 in exchange for services at $37.50 per                share    |   |                            | -           |                        |   | -                            |   |                        | 250         |                                     |   | -                                         |   |                                                        | -      |                          |   | 9,375       |   |   | - |   |   | - |   |   | 9,375 |   |
| Shares                issued May 8, 2000 in exchange for services at $37.50 per                share       |   |                            | -           |                        |   | -                            |   |                        | 417         |                                     |   | 1                                         |   |                                                        | -      |                          |   | 15,624      |   |   | - |   |   | - |   |   | 15,625 |   |
| Shares                issued May 17, 2000 in exchange for services at 37.50 per                share       |   |                            | -           |                        |   | -                            |   |                        | 833         |                                     |   | 1                                         |   |                                                        | -      |                          |   | 31,249      |   |   | - |   |   | - |   |   | 31,250 |   |
| Shares                issued June 2000 in exchange for debt at $37.59 per share                            |   |                            | -           |                        |   | -                            |   |                        | 133         |                                     |   | -                                         |   |                                                        | -      |                          |   | 5,000       |   |   | - |   |   | - |   |   | 5,000 |   |
| Shares                issued June 2000 in exchange for services at $37.46 per                share         |   |                            | -           |                        |   | -                            |   |                        | 589         |                                     |   | 1                                         |   |                                                        | -      |                          |   | 22,082      |   |   | - |   |   | - |   |   | 22,083 |   |
| Shares                issued July 25, 2000 in exchange for debt at $37.88 per                share         |   |                            | -           |                        |   | -                            |   |                        | 33          |                                     |   | -                                         |   |                                                        | -      |                          |   | 1,250       |   |   | - |   |   | - |   |   | 1,250 |   |
| Shares                issued August 2000, in exchange for services at $37.50 per                share      |   |                            | -           |                        |   | -                            |   |                        | 2,167       |                                     |   | 2                                         |   |                                                        | -      |                          |   | 81,248      |   |   | - |   |   | - |   |   | 81,250 |   |
| Conversion                of preferred stock on September 18, 2000                                         |   |                            | (855,000    | )                           |   | (855                         | )      |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | - |   |   | - |   |   | (855 | ) |
| Shares                issued October 13, 2000, in exchange for services at $37.86 per                share |   |                            | -           |                        |   | -                            |   |                        | 35          |                                     |   | -                                         |   |                                                        | -      |                          |   | 1,325       |   |   | - |   |   | - |   |   | 1,325 |   |
| Shares                issued October 30, 2000 in exchange for services at $37.48 per                share  |   |                            | -           |                        |   | -                            |   |                        | 667         |                                     |   | 1                                         |   |                                                        | -      |                          |   | 24,999      |   |   | - |   |   | - |   |   | 25,000 |   |
| Shares                issued November 9, 2000 in exchange for services at $37.65 per                share  |   |                            | -           |                        |   | -                            |   |                        | 83          |                                     |   | -                                         |   |                                                        | -      |                          |   | 3,125       |   |   | - |   |   | - |   |   | 3,125 |   |
| Shares                issued December 1, 2000 in exchange for services at $36.76 per                share  |   |                            | -           |                        |   | -                            |   |                        | 17          |                                     |   | -                                         |   |                                                        | -      |                          |   | 625         |   |   | - |   |   | - |   |   | 625 |   |
| Operating                expenses incurred by principal shareholder                                        |   |                            | -           |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | 6,000       |   |   | - |   |   | - |   |   | 6,000 |   |
| Net                Loss                                                                                    |   |                            | -           |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | (856,968 | ) |   | - |   |   | (856,968 | ) |
| **Balance                at December 31, 2000**                                                            |   |                            | **-**       |                        | **$**  | **-**                        |   |                        | **362,103** |                                     | **$**  | **363**                                   |   | **$**                                                       | **-**  |                          | **$**  | **891,041** |   | **$** | **(1,507,786** | **)** | **$** | **-** |   | **$** | **(616,382** | **)** |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY      (Continued)**

**FOR      THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31,      2005**

|                                                                                                                                                                  |   | Preferred                Shares |   | Stock                Amount |   | Common                Shares |   | Stock                Amount |        | Common                Stock Subscription |   | Additional                Paid in Capital |   | Deficit                Accumulated During Development Stage |   | Treasury                Stock |   | Total       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|-----------------------------|--------|------------------------------|--------|-----------------------------|-------------|------------------------------------------|--------|-------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------|--------|-------------|--------|
| **Balance                Forward**                                                                                                                                    |   |                            | **-**  |                        | **$**  | **-**                        |   |                        | **362,103** |                                     | **$**  | **363**                                   |   | **$**                                                       | **-**  |                          | **$**  | **891,041** |   | **$** | **(1,507,786** | **) ** | **$** | **-** |   | **$** | **(616,382** | **)** |
| Shares                issued in January 2001, in exchange for services at $37.50 per                share                                                             |   |                            | -      |                        |   | -                            |   |                        | 6,667       |                                     |   | 7                                         |   |                                                        | -      |                          |   | 249,993     |   |   | - |   |   | - |   |   | 250,000 |   |
| Shares                issued in April 2001, in exchange for services at $37.50 per                share                                                               |   |                            | -      |                        |   | -                            |   |                        | 4,000       |                                     |   | 4                                         |   |                                                        | -      |                          |   | 149,996     |   |   | - |   |   | - |   |   | 150,000 |   |
| Shares                issued in April 2001, in exchange for advances from officers at $37.50                per                share                                  |   |                            | -      |                        |   | -                            |   |                        | 3,333       |                                     |   | 3                                         |   |                                                        | -      |                          |   | 124,997     |   |   |   |   |   |   |   |   | 125,000 |   |
| Shares                issued in 2001, in exchange for services at $37.50 per                share                                                                     |   |                            | -      |                        |   | -                            |   |                        | 2,500       |                                     |   | 3                                         |   |                                                        | -      |                          |   | 93,747      |   |   | - |   |   | - |   |   | 93,750 |   |
| Shares                issued in 2001, in exchange for services at $37.50 per                share                                                                     |   |                            | -      |                        |   | -                            |   |                        | 1,000       |                                     |   | 1                                         |   |                                                        | -      |                          |   | 37,499      |   |   | - |   |   | - |   |   | 37,500 |   |
| Fractional                shares                                                                                                                                      |   |                            | -      |                        |   | -                            |   |                        | (5          | )                                        |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | - |   |   | - |   |   | - |   |
| Shares                canceled in November 2001, for services that were not performed and                shares                were previously issued in October 2001 |   |                            | -      |                        |   | -                            |   |                        | (667        | )                                        |   | (1                                        | )      |                                                        | -      |                          |   | (24,999     | )      |   | - |   |   | - |   |   | (25,000 | ) |
| Shares                issued in December 2001, to board of directors members for services                at                37.50 per share                            |   |                            | -      |                        |   | -                            |   |                        | 2,100       |                                     |   | 2                                         |   |                                                        | -      |                          |   | 78,748      |   |   | - |   |   | - |   |   | 78,750 |   |
| Operating                expenses incurred by principal shareholder                                                                                                   |   |                            | -      |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | 6,000       |   |   | - |   |   | - |   |   | 6,000 |   |
| Net                loss                                                                                                                                               |   |                            | -      |                        |   | -                            |   |                        | -           |                                     |   | -                                         |   |                                                        | -      |                          |   | -           |   |   | (1,257,584 | ) |   | - |   |   | (1,257,584 | ) |
| **Balance                at December 31, 2001**                                                                                                                       |   |                            | -      |                        | $      | -                            |   |                        | 381,031     |                                     | $      | 382                                       |   | $                                                           | -      |                          | $      | 1,607,022   |   | $ | (2,765,370 | ) | $ | - |   | $ | (1,157,966 | ) |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY      (Continued)**

**FOR      THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31,      2005**

|                                                                                                                                                            |   | Preferred                Shares |   | Stock                Amount |   | Common                Shares |   | Stock                Amount |        | Additional                Paid in Capital |   | Deficit                Accumulated During Development Stage |   | Treasury                Stock |          | Total  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|-----------------------------|--------|------------------------------|--------|-----------------------------|-------------|-------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------|---------------|--------|--------|
| **Balance                Forward**                                                                                                                              |   |                            | **-**  |                        | **$**  | **-**                        |   |                        | **381,031** |                                      | **$**  | **382**                                                     |   | **$**                         | **1,607,022** |   | **$**  | **(2,765,370** | **) ** | **$** | **-** |   | **$** | **(1,157,966** | **)** |
| Shares                issued in January 2002, in exchange for investment at $37.50 per                share                                                     |   |                            | -      |                        |   | -                            |   |                        | 1,667       |                                      |   | 2                                                           |   |                          | 62,498        |   |   | - |   |   | - |   |   | 62,500 |   |
| Shares                issued in March 2002, in exchange for services at $37.50 per                share                                                         |   |                            | -      |                        |   | -                            |   |                        | 8,333       |                                      |   | 8                                                           |   |                          | 312,492       |   |   | - |   |   | - |   |   | 312,500 |   |
| Shares                issued in June 2002, in exchange for services at approximately $40.15                per                share                             |   |                            | -      |                        |   | -                            |   |                        | 18,890      |                                      |   | 19                                                          |   |                          | 758,356       |   |   | - |   |   | - |   |   | 758,375 |   |
| Shares                issued in June 2002, in exchange for debts at $37.50 per                share                                                             |   |                            | -      |                        |   | -                            |   |                        | 2,667       |                                      |   | 2                                                           |   |                          | 99,998        |   |   | - |   |   | - |   |   | 100,000 |   |
| Shares                issued in July 2002, in exchange for services at $10.84 per                share                                                          |   |                            | -      |                        |   | -                            |   |                        | 717         |                                      |   | 1                                                           |   |                          | 7,769         |   |   | - |   |   | - |   |   | 7,770 |   |
| Shares                issued in July 2002, in connection with acquisition of Cineports.com,                Inc.                at approximately $7.50 per share |   |                            | -      |                        |   | -                            |   |                        | 159,653     |                                      |   | 160                                                         |   |                          | 1,197,237     |   |   | - |   |   | - |   |   | 1,197,397 |   |
| Shares                issued in August 2002, in exchange for services at approximately                $10.84                per share                           |   |                            | -      |                        |   | -                            |   |                        | 2,133       |                                      |   | 2                                                           |   |                          | 23,127        |   |   | - |   |   | - |   |   | 23,129 |   |
| Shares                issued in September 2002, in exchange for services at approximately                $10.84                per share                        |   |                            | -      |                        |   | -                            |   |                        | 10,000      |                                      |   | 10                                                          |   |                          | 108,410       |   |   | - |   |   | - |   |   | 108,420 |   |
| Shares                issued in October 2002, in exchange for services at approximately                $11.69                per share                          |   |                            | -      |                        |   | -                            |   |                        | 4,000       |                                      |   | 4                                                           |   |                          | 46,736        |   |   | - |   |   | - |   |   | 46,740 |   |
| Shares                issued in October 2002 for cash in connection with private placement                at                $6.94 per share                     |   |                            | -      |                        |   | -                            |   |                        | 18,018      |                                      |   | 18                                                          |   |                          | 124,982       |   |   | - |   |   | - |   |   | 125,000 |   |
| Shares                issued in October 2002, in exchange for interest at approximately                $11.68                per share                          |   |                            | -      |                        |   | -                            |   |                        | 507         |                                      |   | -                                                           |   |                          | 5,920         |   |   | - |   |   | - |   |   | 5,920 |   |
| Shares                issued in November 2002, in exchange for services at approximately                $8.70                per share                          |   |                            | -      |                        |   | -                            |   |                        | 1,667       |                                      |   | 2                                                           |   |                          | 14,498        |   |   | - |   |   | - |   |   | 14,500 |   |
| Shares                issued in November 2002 for cash in connection with private placement                at                $10.20 per share                   |   |                            | -      |                        |   | -                            |   |                        | 1,000       |                                      |   | 1                                                           |   |                          | 10,199        |   |   | - |   |   | - |   |   | 10,200 |   |
| Shares                issued in November 2002 for cash in connection with private placement                at                $7.50 per share                    |   |                            | -      |                        |   | -                            |   |                        | 4,000       |                                      |   | 4                                                           |   |                          | 29,996        |   |   | - |   |   | - |   |   | 30,000 |   |
| Shares                issued in November 2002, in exchange for debts at $37.49 per                share                                                         |   |                            | -      |                        |   | -                            |   |                        | 867         |                                      |   | 1                                                           |   |                          | 32,499        |   |   | - |   |   | - |   |   | 32,500 |   |
| Shares                issued in November 2002, in exchange for interest at $37.56 per                share                                                      |   |                            | -      |                        |   | -                            |   |                        | 217         |                                      |   | -                                                           |   |                          | 8,150         |   |   | - |   |   | - |   |   | 8,150 |   |
| Shares                issued in December 2002, in exchange for services at approximately                $12.26                per share                         |   |                            | -      |                        |   | -                            |   |                        | 9,333       |                                      |   | 9                                                           |   |                          | 114,371       |   |   | - |   |   | - |   |   | 114,380 |   |
| Warrants                issued in connection with acquisition of Cineports                                                                                      |   |                            | -      |                        |   | -                            |   |                        | -           |                                      |   | -                                                           |   |                          | 1,051,065     |   |   | - |   |   | - |   |   | 1,051,065 |   |
| Options                issued in exchange for services rendered                                                                                                 |   |                            | -      |                        |   | -                            |   |                        | -           |                                      |   | -                                                           |   |                          | 661,365       |   |   | - |   |   | - |   |   | 661,365 |   |
| Net                loss                                                                                                                                         |   |                            | -      |                        |   | -                            |   |                        | -           |                                      |   | -                                                           |   |                          | -             |   |   | (5,210,614 | ) |   | - |   |   | (5,210,614 | ) |
| **Balance                at December 31, 2002**                                                                                                                 |   |                            | **-**  |                        | **$**  | **-**                        |   |                        | **624,700** |                                      | **$**  | **625**                                                     |   | **$**                         | **6,276,690** |   | **$**  | **(7,975,984** | **)** | **$** | **-** |   | **$** | **(1,698,669** | **)** |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY      (Continued)**

**FOR      THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31,      2005**

|                                                                                                                                         |   | Preferred                Shares |   | Share                Amount |   | Common                Shares         |   | Share                Amount |           | Additional                Paid in Capital |   | Deficit                Accumulated during Development Stage |   | Treasury                Stock |           | Total  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|-----------------------------|--------|--------------------------------------|--------|-----------------------------|----------------|-------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------|----------------|--------|--------|
| **Balance                forward**                                                                                                           |   |                            | **-**  |                        | **$**  | **-**                                |   |                        | **624,700**    |                                      | **$**  | **625**                                                     |   | **$**                         | **6,276,690**  |   | **$**  | **(7,975,984** | **) ** | **$** | **-** |   | **$** | **(1,698,669** | **)** |
| Shares                issued in January 2003 in exchange for services at approximately                $4.63 per                share         |   |                            | -      |                        |   | -                                    |   |                        | 56,300         |                                      |   | 56                                                          |   |                          | 260,434        |   |   | - |   |   | - |   |   | 260,490 |   |
| Shares                issued in February 2003 in exchange for services at $2.10 per                share                                     |   |                            | -      |                        |   | -                                    |   |                        | 36,683         |                                      |   | 37                                                          |   |                          | 77,000         |   |   | - |   |   | - |   |   | 77,037 |   |
| Shares                issued in February 2003 for cash in connection with private placement                at                $1.20 per share |   |                            | -      |                        |   | -                                    |   |                        | 6,667          |                                      |   | 6                                                           |   |                          | 7,994          |   |   | - |   |   | - |   |   | 8,000 |   |
| Shares                issued in February 2003 in exchange for services at $1.50 per                share                                     |   |                            | -      |                        |   | -                                    |   |                        | 6,667          |                                      |   | 6                                                           |   |                          | 9,994          |   |   | - |   |   | - |   |   | 10,000 |   |
| Shares                issued in April, 2003 in exchange for services at $.90 per                share                                        |   |                            | -      |                        |   | -                                    |   |                        | 14,000         |                                      |   | 14                                                          |   |                          | 12,586         |   |   | - |   |   | - |   |   | 12,600 |   |
| Shares                issued in April 2003 in exchange for expenses paid by shareholders                at $.90                per share     |   |                            | -      |                        |   | -                                    |   |                        | 22,222         |                                      |   | 22                                                          |   |                          | 19,978         |   |   | - |   |   | - |   |   | 20,000 |   |
| Shares                issued in April 2003 in exchange for financing expenses at $.90 per                share                               |   |                            | -      |                        |   | -                                    |   |                        | 22,960         |                                      |   | 23                                                          |   |                          | 20,641         |   |   | - |   |   | - |   |   | 20,664 |   |
| Shares                issued in April 2003 for cash in connection with private placement                at                $1.20 per share    |   |                            | -      |                        |   | -                                    |   |                        | 4,333          |                                      |   | 4                                                           |   |                          | 4,996          |   |   | - |   |   | - |   |   | 5,000 |   |
| Shares                issued in May 2003 in exchange for financing expenses at $1.65 per                share                                |   |                            | -      |                        |   | -                                    |   |                        | 2,591          |                                      |   | 3                                                           |   |                          | 4,272          |   |   | - |   |   | - |   |   | 4,275 |   |
| Shares                issued in May 2003 in exchange for services at $1.50 per                share                                          |   |                            | -      |                        |   | -                                    |   |                        | 17,667         |                                      |   | 18                                                          |   |                          | 25,882         |   |   | - |   |   | - |   |   | 25,900 |   |
| Shares                issued in May 2003 for cash in connection with private placement                at $.90                per share       |   |                            | -      |                        |   | -                                    |   |                        | 16,667         |                                      |   | 17                                                          |   |                          | 14,983         |   |   | - |   |   | - |   |   | 15,000 |   |
| Shares                issued in May 2003 in exchange for expenses paid by shareholders                at $.90                per share       |   |                            | -      |                        |   | -                                    |   |                        | 22,167         |                                      |   | 22                                                          |   |                          | 19,978         |   |   | - |   |   | - |   |   | 20,000 |   |
| Shares                issued in July 2003 in exchange for services at $2.10 per                share                                         |   |                            | -      |                        |   | -                                    |   |                        | 13,850         |                                      |   | 14                                                          |   |                          | 29,006         |   |   | - |   |   | - |   |   | 29,020 |   |
| Shares                issued in July 2003 in exchange for debts at $.70 per                share                                             |   |                            | -      |                        |   | -                                    |   |                        | 14,334         |                                      |   | 14                                                          |   |                          | 9,986          |   |   | - |   |   | - |   |   | 10,000 |   |
| Shares                issued in July 2003 in exchange for financing expenses at $3.60 per                share                               |   |                            | -      |                        |   | -                                    |   |                        | 37,487         |                                      |   | 38                                                          |   |                          | 134,915        |   |   | - |   |   | - |   |   | 134,953 |   |
| Shares                issued in August 2003 in exchange for services at $3.14 per                share                                       |   |                            | -      |                        |   | -                                    |   |                        | 37,667         |                                      |   | 38                                                          |   |                          | 117,762        |   |   | - |   |   | - |   |   | 117,800 |   |
| Shares                issued in August 2003 in exchange for debts at $.81 per                share                                           |   |                            | -      |                        |   | -                                    |   |                        | 43,667         |                                      |   | 44                                                          |   |                          | 35,456         |   |   | - |   |   | - |   |   | 35,500 |   |
| Shares                issued in September 2003 in exchange for services at $1.80 per                share                                    |   |                            | -      |                        |   | -                                    |   |                        | 264,916        |                                      |   | 265                                                         |   |                          | 280,085        |   |   | - |   |   | - |   |   | 280,350 |   |
| Fractional                shares issued in September 2003 due to rounding resulted from reverse                stock split                   |   |                            | -      |                        |   | -                                    |   |                        | 1,210          |                                      |   | 1                                                           |   |                          | (1             | )      |   | - |   |   | - |   |   | - |   |
| Shares                issued in October 2003 in exchange for financing expenses at $2.00                per                share             |   |                            | -      |                        |   | -                                    |   |                        | 50,000         |                                      |   | 50                                                          |   |                          | 99,950         |   |   | - |   |   | - |   |   | 100,000 |   |
| Shares                issued in October 2003 in exchange for services at $1.59 per                share                                      |   |                            | -      |                        |   | -                                    |   |                        | 2,405,000      |                                      |   | 2,405                                                       |   |                          | 3,826,895      |   |   | - |   |   | - |   |   | 3,829,300 |   |
| Shares                issued in November 2003 in exchange for services at $1.18 per                share                                     |   |                            | -      |                        |   | -                                    |   |                        | 43,000         |                                      |   | 43                                                          |   |                          | 50,707         |   |   | - |   |   | - |   |   | 50,750 |   |
| Shares                issued in November 2003 in exchange for interest expenses at $1.25                per                share             |   |                            | -      |                        |   | -                                    |   |                        | 10,000         |                                      |   | 10                                                          |   |                          | 12,490         |   |   | - |   |   | - |   |   | 12,500 |   |
| Shares                issued in November 2003 in exchange for financing expenses at $1.75                per                share            |   |                            | -      |                        |   | -                                    |   |                        | 14,000         |                                      |   | 14                                                          |   |                          | 24,486         |   |   | - |   |   | - |   |   | 24,500 |   |
| Shares                issued in December 2003 in exchange for services at $1.28 per                share                                     |   |                            | -      |                        |   | -                                    |   |                        | 29,500         |                                      |   | 29                                                          |   |                          | 37,871         |   |   | - |   |   | - |   |   | 37,900 |   |
| Shares                issued in connection with acquisition of Pacificap                                                                     |   |                            | -      |                        |   | -                                    |   |                        | 18,000,000     |                                      |   | 18,000                                                      |   |                          | 29,142,000     |   |   | - |   |   | - |   |   | 29,160,000 |   |
| Net                loss                                                                                                                      |   |                            | -      |                        |   | -                                    |   |                        | -              |                                      |   | -                                                           |   |                          | -              |   |   | (35,405,841 | ) |   | - |   |   | (35,405,841 | ) |
| **Balance                at December 31, 2003**                                                                                              |   |                            | **-**  |                        | $      |        |   |                        | **21,818,255** |                                      | **$**  | **21,818**                                                  |   |                          | **40,557,036** |   | **$**  | **(43,381,825** | **)** | **$** | **-** |   | **$** | **(2,802,971** | **)** |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY      (continued)**

**FOR      THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31,      2005**

|                                                                                                                                   |   | Preferred                Shares |   | Share                Amount |   | Common                Shares |   | Share                Amount |           | Additional                Paid in Capital |   | Deficit                Accumulated during Development Stage |   | Total  |           |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|-----------------------------|--------|------------------------------|--------|-----------------------------|----------------|-------------------------------------------|--------|-------------------------------------------------------------|--------|--------|----------------|
| **Balance                forward**                                                                                                     |   |                            | -      |                        | $      | -                            |   |                        | 21,818,255     |                                      | $      | 21,818                                                      |   | $      | 40,557,036     |   | $ | (43,381,825 | )  | $ | (2,802,971 | ) |
| Shares                issued in January, 2004 in exchange for interest expense at approximately                $1.01 per share         |   |                            | -      |                        |   | -                            |   |                        | 145,166        |                                      |   | 145                                                         |   |   | 146,473        |   |   | - |   |   | 146,618 |   |
| Shares                issued in January, 2004 in exchange for services at approximately                $1.01                per share  |   |                            | -      |                        |   | -                            |   |                        | 125,000        |                                      |   | 125                                                         |   |   | 126,125        |   |   | - |   |   | 126,250 |   |
| Shares                issued in February, 2004 in exchange for services at approximately                $0.66                per share |   |                            | -      |                        |   | -                            |   |                        | 687,886        |                                      |   | 688                                                         |   |   | 453,178        |   |   | - |   |   | 453,866 |   |
| Shares                issued in March, 2004 in exchange for services at approximately $0.52                per                share    |   |                            | -      |                        |   | -                            |   |                        | 293,250        |                                      |   | 293                                                         |   |   | 151,637        |   |   | - |   |   | 151,930 |   |
| Shares                issued in April, 2004 in exchange for services at approximately $0.40                per                share    |   |                            | -      |                        |   | -                            |   |                        | 440,000        |                                      |   | 440                                                         |   |   | 175,560        |   |   | - |   |   | 176,000 |   |
| Shares                issued in April, 2004 in exchange for services at approximately $0.39                per                share    |   |                            | -      |                        |   | -                            |   |                        | 175,000        |                                      |   | 175                                                         |   |   | 68,075         |   |   | - |   |   | 68,250 |   |
| Shares                issued in May, 2004 in exchange for services at approximately $0.34                per                share      |   |                            | -      |                        |   | -                            |   |                        | 75,000         |                                      |   | 75                                                          |   |   | 25,425         |   |   | - |   |   | 25,500 |   |
| Shares                issued in May, 2004 in exchange for services at approximately $0.30                per                share      |   |                            | -      |                        |   | -                            |   |                        | 10,000         |                                      |   | 10                                                          |   |   | 2,990          |   |   | - |   |   | 3,000 |   |
| Shares                issued in May, 2004 in exchange for services at approximately $0.24                per                share      |   |                            | -      |                        |   | -                            |   |                        | 400,000        |                                      |   | 400                                                         |   |   | 95,600         |   |   | - |   |   | 96,000 |   |
| Shares                issued in May, 2004 in exchange for services at approximately $0.25                per                share      |   |                            | -      |                        |   | -                            |   |                        | 285,000        |                                      |   | 285                                                         |   |   | 70,965         |   |   | - |   |   | 71,250 |   |
| Shares                issued in June, 2004 in exchange for settlement of interest at                approximately $0.30 per share      |   |                            | -      |                        |   | -                            |   |                        | 10,000         |                                      |   | 10                                                          |   |   | 2,990          |   |   | - |   |   | 3,000 |   |
| Shares                issued in July, 2004 in exchange for services at approximately $0.28                per                share     |   |                            | -      |                        |   | -                            |   |                        | 1,038,538      |                                      |   | 1,039                                                       |   |   | 289,750        |   |   | - |   |   | 290,789 |   |
| Shares                issued in July, 2004 in exchange for settlement of interest at                approximately $0.28 per share      |   |                            | -      |                        |   | -                            |   |                        | 44,275         |                                      |   | 45                                                          |   |   | 12,355         |   |   | - |   |   | 12,400 |   |
| Shares                issued in July, 2004 in exchange for services at approximately $0.22                per                share     |   |                            | -      |                        |   | -                            |   |                        | 250,000        |                                      |   | 250                                                         |   |   | 54,750         |   |   | - |   |   | 55,000 |   |
| Shares                issued in July, 2004 in exchange for services at approximately $0.28                per                share     |   |                            | -      |                        |   | -                            |   |                        | 100,000        |                                      |   | 100                                                         |   |   | 27,900         |   |   | - |   |   | 28,000 |   |
| Shares                issued in July, 2004 as payment towards convertible debentures                                                   |   |                            | -      |                        |   | -                            |   |                        | 1,100,000      |                                      |   | 1,100                                                       |   |   | 75,900         |   |   | - |   |   | 77,000 |   |
| Shares                issued in August. 2004 in exchange for services at approximately                $0.02 per                share   |   |                            | -      |                        |   | -                            |   |                        | 250,000        |                                      |   | 250                                                         |   |   | 4,750          |   |   | - |   |   | 5,000 |   |
| Shares                issued in September, 2004 as payment towards convertible                debentures                               |   |                            | -      |                        |   | -                            |   |                        | 1,100,000      |                                      |   | 1,100                                                       |   |   | 6,490          |   |   | - |   |   | 7,590 |   |
| Shares                issued in October, 2004 as payment towards convertible                debentures                                 |   |                            | -      |                        |   | -                            |   |                        | 1,100,000      |                                      |   | 1,100                                                       |   |   | 4,950          |   |   | - |   |   | 6,050 |   |
| Shares                issued in November, 2004 as payment towards convertible                debentures                                |   |                            | -      |                        |   | -                            |   |                        | 1,100,000      |                                      |   | 1,100                                                       |   |   | 4,730          |   |   | - |   |   | 5,830 |   |
| Shares                issued in December, 2004 as payment towards convertible                debentures                                |   |                            | -      |                        |   | -                            |   |                        | 2,200,000      |                                      |   | 2,200                                                       |   |   | 13,750         |   |   | - |   |   | 15,950 |   |
| Shares                issued in December, 2004 in exchange for services at approximately                $0.02                per share |   |                            | -      |                        |   | -                            |   |                        | 810,000        |                                      |   | 810                                                         |   |   | 15,390         |   |   | - |   |   | 16,200 |   |
| Shares                issued in December, 2004 in exchange for interest at approximately                $0.02                per share |   |                            | -      |                        |   | -                            |   |                        | 197,025        |                                      |   | 197                                                         |   |   | 3,742          |   |   | - |   |   | 3,939 |   |
| Shares                issued in December, 2004 in exchange for acquisition costs at                approximately $0.02 per share       |   |                            | -      |                        |   | -                            |   |                        | 4,582,106      |                                      |   | 4,582                                                       |   |   | 87,060         |   |   | - |   |   | 91,642 |   |
| Net                loss, as restated (Note K)                                                                                          |   |                            | -      |                        |   | -                            |   |                        | -              |                                      |   | -                                                           |   |   | -              |   |   | (4,946,614 | ) |   | (4,946,614 | ) |
| **Balance                at December 31, 2004**                                                                                        |   |                            | **-**  |                        |   | **-**                        |   |                        | **38,336,501** |                                      | **$**  | **38,337**                                                  |   | **$**  | **42,477,571** |   | **$** | (48,328,439 | ) | **$** | (5,812,531 | ) |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY      (continued)**

**FOR      THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31,      2005**

|                                                                                                                                |   | Preferred                Shares |   | Share                Amount |   | Common                Shares |   | Share                Amount |           | Additional                Paid in Capital |   | Deficit                Accumulated during Development Stage |   | Total  |           |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|-----------------------------|--------|------------------------------|--------|-----------------------------|----------------|-------------------------------------------|--------|-------------------------------------------------------------|--------|--------|----------------|
| **Balance                forward**                                                                                                  |   |                            | **-**  |                        |   | **-**                        |   |                        | **38,336,501** |                                      | **$**  | **38,337**                                                  |   | **$**  | **42,477,571** |   | **$** | **(48,328,439** | **) ** | **$** | **(5,812,531** | **)** |
| Shares                issued in January, 2005 as payment towards convertible debentures                                             |   |                            | -      |                        |   | -                            |   |                        | 2,200,000      |                                      |   | 2,200                                                       |   |   | 9,900          |   |   | - |   |   | 12,100 |   |
| Shares                issued in February, 2005 as payment towards convertible                debentures                             |   |                            | -      |                        |   | -                            |   |                        | 3,300,000      |                                      |   | 3,300                                                       |   |   | 13,200         |   |   | - |   |   | 16,500 |   |
| Shares                issued in March, 2005 in exchange for services at approximately $0.01                per                share |   |                            | -      |                        |   | -                            |   |                        | 340,000        |                                      |   | 340                                                         |   |   | 3,060          |   |   | - |   |   | 3,400 |   |
| Shares                issued in March, 2005 as payment towards convertible debentures                                               |   |                            | -      |                        |   | -                            |   |                        | 2,200,000      |                                      |   | 2,200                                                       |   |   | 7,700          |   |   | - |   |   | 9,900 |   |
| Shares                issued in April, 2005 as payment towards convertible                debentures                                |   |                            | -      |                        |   | -                            |   |                        | 1,900,000      |                                      |   | 1,900                                                       |   |   | 3,420          |   |   | - |   |   | 5,320 |   |
| Shares                issued in May, 2005 as payment towards convertible debentures                                                 |   |                            | -      |                        |   | -                            |   |                        | 10,000,000     |                                      |   | 10,000                                                      |   |   | 1,600          |   |   | - |   |   | 11,600 |   |
| Shares                issued in June, 2005 as payment towards convertible debentures                                                |   |                            | -      |                        |   | -                            |   |                        | 19,500,000     |                                      |   | 19,500                                                      |   |   | (7,692         | ) |   | - |   |   | 11,808 |   |
| Shares                issued in July 2005 as payment towards convertible debentures                                                 |   |                            | -      |                        |   | -                            |   |                        | 10,900,000     |                                      |   | 10,900                                                      |   |   | (6,506         | ) |   | - |   |   | 4,394 |   |
| Shares                issued in December 2005 as payment towards convertible                debentures                              |   |                            | -      |                        |   | -                            |   |                        | 886,760        |                                      |   | 886                                                         |   |   | (303           | ) |   | - |   |   | 583 |   |
| Net                Loss                                                                                                             |   |                            | -      |                        |   | -                            |   |                        | -              |                                      |   | -                                                           |   |   | -              |   |   | (4,314,470 | ) |   | (4,314,470 | ) |
| **Balance                at December 31, 2005**                                                                                     |   |                            | **-**  |                        | **$**  | **-**                        |   |                        | **89,563,261** |                                      | **$**  | **89,563**                                                  |   | **$**  | **42,501,950** |   | **$** | **(52,642,909** | **)** | **$** | **(10,051,396** | **)** |

----

Table            of Contents

| **PACIFICAP                ENTERTAINMENT HOLDINGS, INC**                                                                                                                      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                DEVELOPMENT STAGE COMPANY)**                                                                                                                              |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                                                            |   |
|                                                                                                                                                                          |   |   |   |   |   |   |   |
|                                                                                                                                                                          |   | For                the Year ended December 31, |   | For                the Period July 29, 1997(Date of Inception) to                December 31, 2005 |   |
|                                                                                                                                                                          |   | 2005 |   | 2004 |   |
|                                                                                                                                                                          |   |   |   | (As                restated - see Note K) |   |
| Cash                flows from operating activities:                                                                                                                          |   |   |   |   |   |   |   |
| Net                loss for the period from continuing operations                                                                                                             |   | $ | (4,314,470 | ) | $ | (4,946,614 | ) | $ | (52,642,909 | ) |
| Loss                from discontinued operations                                                                                                                              |   |   | - |   |   | - |   |   | (352,905 | ) |
| Disposal                of business segment, net                                                                                                                              |   |   | - |   |   | - |   |   | 78,974 |   |
| Adjustments                to reconcile net losses to net cash (used in) operating                activities:                                                                 |   |   |   |   |   |   |   |   |   |   |
| Cumulative                effect of accounting change                                                                                                                         |   |   | - |   |   | - |   |   | 294,282 |   |
| Depreciation                                                                                                                                                                  |   |   | 4,941 |   |   | 662 |   |   | 202,808 |   |
| Organization                and acquisition costs expensed                                                                                                                    |   |   | - |   |   | - |   |   | 11,553 |   |
| Common                stock issued in exchange for services                                                                                                                   |   |   | 3,400 |   |   | 1,439,537 |   |   | 8,530,733 |   |
| Cumulative                unrealized loss related to conversion of convertible debentures to                common                shares charged to interest expense          |   |   | 72,744 |   |   | 107,140 |   |   | 179,884 |   |
| Cumulative                pay down of convertible debentures                                                                                                                  |   |   | - |   |   | 300,000 |   |   | 300,000 |   |
| Common                stock issued in exchange for previously incurred debt                                                                                                   |   |   | - |   |   | - |   |   | 233,498 |   |
| Common                stock issued in exchange for interest                                                                                                                   |   |   | - |   |   | 19,336 |   |   | 45,906 |   |
| Common                stock issued in exchange for expenses paid by shareholders                                                                                              |   |   | - |   |   | 127,500 |   |   | 192,500 |   |
| Common                stock issued in connections with acquisition of Pacificap                                                                                               |   |   | - |   |   | - |   |   | 29,160,000 |   |
| Common                stock issued in connection with acquisition of Battleship VFX,                Inc.                                                                      |   |   | - |   |   | 91,642 |   |   | 91,642 |   |
| Common                stock issued in exchange for financing expenses                                                                                                         |   |   | - |   |   | - |   |   | 284,392 |   |
| Common                stock issued in connection with acquisition of Cineports                                                                                                |   |   | - |   |   | - |   |   | 1,197,396 |   |
| Warrants                issued in connection with acquisition of Cineports                                                                                                    |   |   | - |   |   | - |   |   | 1,051,065 |   |
| Stock                options issued in exchange for services rendered                                                                                                         |   |   | - |   |   | - |   |   | 661,365 |   |
| Preferred                stock issued in exchange for services                                                                                                                |   |   | - |   |   | - |   |   | 855 |   |
| Conversion                of preferred stock                                                                                                                                  |   |   | - |   |   | - |   |   | (855 | ) |
| Reverse                of notes payable liability in dispute                                                                                                                  |   |   | - |   |   | 15,280 |   |   | 15,280 |   |
| Accretion                of convertible debentures                                                                                                                            |   |   | 1,451,652 |   |   | 390,151 |   |   | 1,841,803 |   |
| Unrealized                loss related to adjustment of derivative and warrant liability to                fair                value of underlying securities                 |   |   | 151,723 |   |   | 446,543 |   |   | 598,266 |   |
| Amortization                and write off of financing costs                                                                                                                  |   |   | 254,157 |   |   | 63,637 |   |   | 317,794 |   |
| Amortization                of prepaid interest                                                                                                                               |   |   | 150,630 |   |   | 96,498 |   |   | 247,128 |   |
| Impairment                of film library                                                                                                                                     |   |   | - |   |   | - |   |   | 372,304 |   |
| Write-off                of acquired asset                                                                                                                                    |   |   | - |   |   | - |   |   | 5,000 |   |
| Write-off                of un-collectable other receivable                                                                                                                   |   |   | - |   |   | - |   |   | 30,000 |   |
| Debt                forgiveness from creditors                                                                                                                                |   |   | - |   |   | - |   |   | (139,992 | ) |
| Write-off                of capitalized production costs                                                                                                                      |   |   | - |   |   | - |   |   | 150,273 |   |
| Write                off of other investment previously paid with common stock                                                                                                |   |   | - |   |   | - |   |   | 62,500 |   |
| Expenses                paid by principal shareholders                                                                                                                        |   |   | - |   |   | - |   |   | 117,015 |   |
| (Increase)                decrease in:                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| Capitalized              film costs                                                                                                                                           |   |   | (750,000 | )  |   | - |   |   | (750,000 | )  |
| Prepaid                expenses                                                                                                                                               |   |   | 4,502 |   |   | (4,502 | ) |   | - |   |
| Other                receivable                                                                                                                                               |   |   | - |   |   | - |   |   | (30,000 | ) |
| Increase                (decrease) in:                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| Cash                disbursed in excess of available funds                                                                                                                    |   |   | - |   |   | - |   |   | - |   |
| Accounts                payable and accrued expenses, net                                                                                                                     |   |   | 783,440 |   |   | 157,037 |   |   | 1,830,027 |   |
| Net                cash (used in) operating activities                                                                                                                        |   |   | (2,187,281 | ) |   | (1,696,153 | ) |   | (5,538,487 | ) |
|                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Cash                flows from investing activities:                                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Acquisition                of film library and footage production costs                                                                                                       |   |   | - |   |   | - |   |   | (183,080 | ) |
| Acquisition                of office furniture                                                                                                                                |   |   | (8,844 | ) |   | (8,791 | ) |   | (19,325 | ) |
| Cash                acquired in connection with acquisition                                                                                                                   |   |   | - |   |   | - |   |   | 35,207 |   |
| Net                cash (used in) investing activities                                                                                                                        |   |   | (8,844 | ) |   | (8,791 | ) |   | (167,198 | ) |
|                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Cash                flows from financing activities:                                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Advances                from related parties, net of repayments                                                                                                               |   |   | 82,929 |   |   | 10,789 |   |   | 313,531 |   |
| Other                advances, net                                                                                                                                            |   |   | 20,000 |   |   | - |   |   | 65,000 |   |
| Proceeds                from issuance of notes payable, net of repayments                                                                                                     |   |   | (13,000 | ) |   | (15,000 | ) |   | 1,240,665 |   |
| Proceeds                from issuance of long-term convertible debt, net of costs , fees                and                restrictive cash held in escrow; net of repayments |   |   | 1,836,903 |   |   | 1,977,808 |   |   | 3,814,711 |   |
| Proceeds                from issuance of common stock                                                                                                                         |   |   | - |   |   | - |   |   | 272,200 |   |
| Net                cash provided by financing activities                                                                                                                      |   |   | 1,926,832 |   |   | 1,973,597 |   |   | 5,706,107 |   |
|                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Net                increase (decrease) in cash and equivalents                                                                                                                |   |   | (269,293 | ) |   | 268,653 |   |   | 422 |   |
| Cash                and cash equivalents at the beginning of the period                                                                                                       |   |   | 269,715 |   |   | 1,062 |   |   | - |   |
| Cash                and cash equivalents at the end of the period                                                                                                             |   | $ | 422 |   | $ | 269,715 |   | $ | 422 |   |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS (Continued)**

| Supplemental                Disclosures of Cash Flow Information:                                                                                     |   |   |    |   |   |      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|-----------|--------|
| Cash                paid during the period for interest                                                                                               |   | $      | -       |   | $      | 96,807    |   | $ | 96,807 |   |
| Cash                paid during the period for taxes                                                                                                  |   |   | -       |   |   | -         |   |   | - |   |
| Common                stock issued in exchange for services                                                                                           |   |   | 3,400   |   |   | 1,439,537 |   |   | 8,530,733 |   |
|                                                                                                                                                  |   |   |    |   |   |      |   |   |   |   |
| Common                stock issued in exchange for previously incurred debt                                                                           |   |   | -       |   |   | -         |   |   | 233,498 |   |
| Common                stock issued in conversion of convertible debt                                                                                  |   |   | 72,204  |   |   | 107,140   |   |   | 179,344 |   |
| Common                stock issued in exchange for interest expense                                                                                   |   |   | -       |   |   | 19,336    |   |   | 45,906 |   |
| Common                stock issued in exchange for accrued interest                                                                                   |   |   | -       |   |   | 146,617   |   |   | 146,617 |   |
|                                                                                                                                                  |   |   |    |   |   |      |   |   |   |   |
| Common                stock issued in exchange for expenses paid by shareholders                                                                      |   |   | -       |   |   | 127,500   |   |   | 192,500 |   |
|                                                                                                                                                  |   |   |    |   |   |      |   |   |   |   |
| Common                stock issued in connections with acquisition of Pacificap                                                                       |   |   | -       |   |   | -         |   |   | 29,160,000 |   |
| Common                stock issued in connection with acquisition of Battleship VFX,                Inc.                                              |   |   | -       |   |   | 91,642    |   |   | 91,642 |   |
| Common                stock issued in exchange for financing expenses                                                                                 |   |   | -       |   |   | -         |   |   | 284,392 |   |
|                                                                                                                                                  |   |   |    |   |   |      |   |   |   |   |
| Common                stock issued in connection with acquisition of Cineports                                                                        |   |   | -       |   |   | -         |   |   | 1,197,396 |   |
| Warrants                issued in connection with acquisition of Cineports                                                                            |   |   | -       |   |   | -         |   |   | 1,051,065 |   |
| Stock                options issued in exchange for services rendered                                                                                 |   |   | -       |   |   | -         |   |   | 661,365 |   |
| Preferred                stock issued in exchange for services                                                                                        |   |   | -       |   |   | -         |   |   | 855 |   |
| Conversion                of preferred stock                                                                                                          |   |   | -       |   |   | -         |   |   | (855 | ) |
| Write                off of acquired asset                                                                                                            |   |   | -       |   |   | -         |   |   | 5,000 |   |
| Write                off of un-collectable other receivable                                                                                           |   |   | -       |   |   | -         |   |   | 30,000 |   |
| Debt                forgiveness from creditors                                                                                                        |   |   | -       |   |   | -         |   |   | (139,992 | ) |
| Write                off of capitalized production costs                                                                                              |   |   | -       |   |   | -         |   |   | 150,273 |   |
|                                                                                                                                                  |   |   |    |   |   |      |   |   |   |   |
| Write                off of other investment previously paid with common stock                                                                        |   |   | -       |   |   | -         |   |   | 62,500 |   |
| Impairment                of film library                                                                                                             |   |   | -       |   |   | -         |   |   | 372,304 |   |
| Expenses                paid by principal shareholders                                                                                                |   |   | -       |   |   | -         |   |   | 117,015 |   |
| Proceeds                from convertible debentures held in escrow                                                                                    |   |   | 235,293 |   |   | (235,293  | )      |   | - |   |
| Common                stock issued in exchange for shareholder advances                                                                               |   |   | -       |   |   | -         |   |   | 45,500 |   |
| Capitalized                financing costs in connection with issuance of long-term convertible                notes                payable           |   |   | -       |   |   | 486,290   |   |   | 486,290 |   |
| Prepaid                interest expense in connection with issuance of long-term convertible                notes payable                             |   |   | -       |   |   | 400,000   |   |   | 400,000 |   |
| Unrealized                loss on adjustment of derivative and warrant liability to fair value                of                underlying securities |   |   | 151,723 |   |   | 446,543   |   |   | 598,266 |   |
| Acquisition:                                                                                                                                          |   |   |    |   |   |      |   |   |   |   |
| Assets                acquired                                                                                                                        |   |   | -       |   |   | -         |   |   | 379,704 |   |
| Goodwill                                                                                                                                              |   |   | -       |   |   | -         |   |   | 490,467 |   |
| Liabilities                assumed                                                                                                                    |   |   | -       |   |   | -         |   |   | (588,027 | ) |
| Common                stock Issued                                                                                                                    |   |   | -       |   |   | -         |   |   | (282,144 | ) |
| Net                cash paid for acquisition                                                                                                          |   | $      | -       |   | $      | -         |   | $ | - |   |
| Liabilities                disposed of in disposition of business, net                                                                                |   | $      | -       |   | $      | -         |   | $ | 79,374 |   |
| Net                cash received in disposition of business                                                                                           |   | $      | -       |   | $      | -         |   | $ | - |   |
| Acquisition                of Pacificap:                                                                                                              |   |   |    |   |   |      |   |   |   |   |
| Assets                acquired                                                                                                                        |   |   | -       |   |   | -         |   |   | - |   |
| Liabilities                assumed                                                                                                                    |   |   | -       |   |   | -         |   |   | - |   |
| Acquisition                costs                                                                                                                      |   |   | -       |   |   | -         |   |   | 29,160,000 |   |
| Common                stock issued                                                                                                                    |   |   | -       |   |   | -         |   |   | (29,160,000 | ) |
| Net                cash paid for acquisition                                                                                                          |   | $      | -       |   | $      | -         |   | $ | - |   |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      A-SUMMARY OF ACCOUNTING POLICIES**

|   | · | Changed                the Company’s name to Pacificap Entertainment Holdings, Inc. from                Cavalcade of Sports Media, Inc. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Focused                the Company’s efforts on developing a film financing and marketing company                modeled to restructure the risk profile of film production, while                maximizing the ancillary profits from marketing, merchandising and                licensing. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company’s Board of Directors affected a one for thirty reverse stock                split. * *All                references in the consolidated financial statements and notes to                financial                statements, numbers of shares and share amounts have been restated                to                reflect the reverse split. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      A-SUMMARY OF ACCOUNTING POLICIES (Continued)**

|   | · | Persuasive                  evidence of a sale or licensing arrangement with a customer                  exists. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | The                  film is complete and, in accordance with the terms of the arrangement,                  has                  been delivered or is available for immediate and unconditional                  delivery. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  license period of the arrangement has begun and the customer can                  begin its                  exploitation, exhibition, or sale. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  arrangement fee is fixed or                  determinable. |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Collection                  of the arrangement fee is reasonably                  assured. |
|--------|--------|--------------------------------------------------------------------------------------------|

*Capitalization        of Interest Cost*

----

Table                of Contents

**PACIFICAP            ENTERTAINMENT HOLDINGS, INC.**

**(A            development stage company)**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER            31, 2005 AND 2004**

**NOTE            A-SUMMARY OF ACCOUNTING POLICIES            (Continued)**

*Reporting        on Advertising Costs*

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      A-SUMMARY OF ACCOUNTING POLICIES (Continued)**

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      A-SUMMARY OF ACCOUNTING POLICIES (Continued)**

**NOTE      B - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES**

|                            |   | 2005   |      | 2004   |   |
|---------------------------------|--------|--------|-----------|--------|--------|
| Accrued                expenses |   | $      | 310,060   |   |   | 160,591 |   |
| Accrued                interest |   |   | 1,463,476 |   |   | 828,965 |   |
| Total                           |   | $      | 1,773,536 |   | $      | 989,556 |   |

----

Table            of Contents

**NOTE      C - CONVERTIBLE PROMISSORY NOTES PAYABLE**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2005        | 2004     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|----------|
| Convertible                  notes payable (“First Convertible Notes”); interest rate 10% per annum,;                  due two years from the date of the note; note holder has the option                  to                  convert unpaid note principal to the Company’s common stock at the lower                  of (i) $0.35 or (ii) 60% of the average of the three lowest intraday                  trading prices for the common stock on a principal market for the                  twenty                  days before, but not including conversion date. The Company granted                  the                  note holder a security interest in substantially all of the Company’s                  assets and intellectual property and registration rights.                                                                                           | $1,111,980  | $372,251 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |        |     |
| Convertible                  notes payable (“Second Convertible Notes”); interest rate 10% per annum                  (default interest 15% per annum); due three years from the date                  of the                  note; note holder has the option to convert unpaid note principal                  the                  Company’s common stock at the lower of (i) $0.02 or (ii) 60% of the                  average of the three lowest intraday trading prices for the common                  stock                  on a principal market for the twenty trading days before but not                  including                  conversion date. The Company granted the note holder a security                  interest                  in substantially all of the Company’s assets and intellectual property and                  registration rights. | 756,347     | 17,900   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 1,868,327   | 390,151  |
| Less:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |        |     |
| Current                  maturities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (1,111,980) | -        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |        |     |
| Long                  term portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $756,347    | $390,151 |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      C - CONVERTIBLE PROMISSORY NOTES PAYABLE (Continued)**

|   | · | The                Company allocated the proceeds received between convertible debt                and                detachable warrants based upon the relative fair market values on                the                dates the proceeds were received. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Subsequent                to the initial recording, the increase in the fair value of the detachable                warrants, determined under the Black-Scholes option pricing formula                and                the increase in the intrinsic value of the embedded derivative in                the                conversion feature of the convertible debentures are accrued as                adjustments to the liabilities at December 31, 2005 and 2004,                respectively. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                expense relating to the increase in the fair value of the Company’s stock                reflected in the change in the fair value of the warrants and derivatives                (noted above) is included as an other comprehensive income item of                an                unrealized gain or loss arising from convertible financing on the                Company’s balance sheet. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Accreted                principal of $1,841,803 and $390,151 as of December 31, 2005 and                2004,                respectively. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      C - CONVERTIBLE PROMISSORY NOTES PAYABLE (Continued)**

|                                                                                                                                                                       | 2005        | 2004       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|------------|
| Convertible                  debentures                                                                                                                                    | $1,868,327  | $390,151   |
| Warranty                  liability                                                                                                                                        | 10,263      | 44,802     |
| Derivative                  liability                                                                                                                                      | 5,811,478   | 3,801,741  |
|                                                                                                                                                                       | 7,690,068   | 4,236,694  |
| Cumulative                  adjustment of derivative and warrant liability to fair                  value                                                                  | (598,266)   | (446,543)  |
| Cumulative                  unrealized loss related to conversion of convertible debentures                  to common                  shares charged to interest expense | (179,884)   | (107,140)  |
| Cumulative                  accretion of principal related to convertible debentures                                                                                       | (1,841,803) | (390,151)  |
| Cumulative                  pay down of convertible debentures                                                                                                             | (300,000)   | (300,000)  |
| Total                  convertible debentures                                                                                                                              | $4,770,115  | $2,992,860 |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      D - NOTES PAYABLE**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2005   |       | 2004   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|
| 12                  % convertible subordinated payable, unsecured and due December                  31, 2000;                  Noteholder has the option to convert unpaid note principal together                  with                  accrued and unpaid interest to the Company’s common stock thirty (30) days                  following the effectiveness of the registration of the Company’s common                  stock under the Securities Act of 1933 at a rate of $1.25 per share.                  In                  the event the unpaid principal amount of the notes, together with                  any                  accrued and unpaid interest, are not converted, or paid in full                  by                  December 31, 2000, then interest accrues at 18% per annum until                  paid in                  full. The Company is in default under the terms of the Note Agreements.                  (a) |   | $      | 467,000    |   | $      | 467,000 |   |
| 12                  % convertible subordinated payable, unsecured and due December                  31, 2001;                  Noteholder has the option to convert unpaid note principal together                  with                  accrued and unpaid interest to the Company’s common stock thirty (30) days                  following the effectiveness of the registration of the Company’s common                  stock under the Securities Act of 1933 at a rate of $1.25 per share.                  In                  the event the unpaid principal amount of the notes, together with                  any                  accrued and unpaid interest, are not converted, or paid in full                  by                  December 31, 2001, then interest accrues at 18% per annum until                  paid in                  full. The Company is in default under the terms of the Note                  Agreements.     |   |   | 342,500    |   |   | 342,500 |   |
| 12                  % convertible subordinated payable, unsecured and due December                  31, 2002;                  Noteholder has the option to convert unpaid note principal together                  with                  accrued and unpaid interest to the Company’s common stock thirty (30) days                  following the effectiveness of the registration of the Company’s common                  stock under the Securities Act of 1933 at a rate of $1.25 per share.                  In                  the event the unpaid principal amount of the notes, together with                  any                  accrued and unpaid interest, are not converted, or paid in full                  by                  December 31, 2002, then interest accrues at 18% per annum until                  paid in                  full. The Company is in default under the terms of the Note                  Agreements.     |   |   | 31,250     |   |   | 31,250 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |       |   |   |   |   |
| Note                  payable on demand to accredited investor; interest payable monthly                  at 18%                  per annum; unsecured; guaranteed by the Company’s                  President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 52,415     |   |   | 52,415 |   |
| Note                  payable on demand to accredited investor; interest payable monthly                  at 18%                  per annum; unsecured; guaranteed by the Company’s                  President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 100,000    |   |   | 100,000 |   |
| Note                  payable in monthly installments of interest only at 4% per annum;                  guaranteed by Company shareholder; maturity date of the loan is                  July 28,                  2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | -          |   |   | 13,000 |   |
| Note                  payable on demand to an investor; interest payable monthly at 10%                  per                  annum; unsecured                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 75,000     |   |   | 75,000 |   |
| Note                  payable on demand to an investor; interest payable monthly at 10%                  per                  annum; unsecured                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 50,000     |   |   | 50,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 1,118,165  |   |   | 1,131,165 |   |
| Less:                  current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | (1,118,165 | )      |   | (1,131,165 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $      | -          |   | $      | - |   |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      D - NOTES PAYABLE (Continued)**

**NOTE      E - CAPITAL STOCK **

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      E - CAPITAL STOCK (Continued)**

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      E - CAPITAL STOCK (Continued)**

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      E - CAPITAL STOCK (Continued)**

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      E - CAPITAL STOCK (Continued)**

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      F - STOCK OPTIONS AND WARRANTS**

|                                            |   |  Number                of Options |    | Weighted                Average Price                Per Share |   |
|-------------------------------------------------|--------|----------------------------------------|---------|----------------------------------------------------------------|--------|
| Outstanding                at January 1, 2004   |   |                                   | 16,666  |                                                           | $      | 81.00 |   |
| Granted                                         |   |                                   | -       |                                                           |   | - |   |
| Exercised                                       |   |                                   | -       |                                                           |   | - |   |
| Canceled                or expired              |   |                                   | (16,666 | )                                                              |   | 81.00 |   |
| Outstanding                at December 31, 2004 |   |                                   | -       |                                                           |   | - |   |
| Granted                                         |   |                                   | -       |                                                           |   | - |   |
| Exercised                                       |   |                                   | -       |                                                           |   | - |   |
| Canceled                or expired              |   |                                   | -       |                                                           |   | - |   |
| Outstanding                at December 31, 2005 |   |                                   | -       |                                                           | $      | - |   |

| Warrants                  Outstanding        |   | Warrants                  Exercisable           |   |
|----------------------------------------------|--------|-------------------------------------------------|--------|
|   Exercise                  Prices |   |   Number                  Outstanding |   | Weighted                  Average Remaining                  Contractual                  Life                  (Years) |   | Weighed                  Average                  Exercise                  Price |   |   Number                  Exercisable |   | Weighted                  Average                  Exercise                  Price |   |
| $                                            | 0.24   |                                            |   | 2,000,000 |   |   | 3.52 |   | $ | 0.24 |   |   | 2,000,000 |   | $ | 0.24 |   |
| $                                            | 0.02   |                                            |   | 3,250,000 |   |   | 4.31 |   |   | 0.02 |   |   | 3,250,000 |   |   | 0.02 |   |
|                                         |   |                                            |   | 5,250,000 |   |   | 4.01 |   | $ | 0.10 |   |   | 5,250,000 |   | $ | 0.10 |   |

|                                            |   |  Number                of Shares |      | Weighted                Average Price                Per Share |   |
|-------------------------------------------------|--------|---------------------------------------|-----------|----------------------------------------------------------------|--------|
| Outstanding                at January 1, 2004   |   |                                  | 206,091   |                                                           |   | 36.00 |   |
| Granted                                         |   |                                  | 3,400,000 |                                                           |   | 0.15 |   |
| Exercised                                       |   |                                  | -         |                                                           |   | - |   |
| Canceled                or expired              |   |                                  | (206,091  | )                                                              |   | 36.00 |   |
| Outstanding                at December 31, 2004 |   |                                  | 3,400,000 |                                                           | $      | 0.15 |   |
| Granted                                         |   |                                  | 1,850,000 |                                                           |   | 0.02 |   |
| Exercised                                       |   |                                  | -         |                                                           |   | - |   |
| Canceled                or expired              |   |                                  |      |                                                           |   | - |   |
| Outstanding                at December 31, 2005 |   |                                  | 5,250,000 |                                                           | $      | 0.10 |   |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      G - RELATED PARTY TRANSACTIONS**

**NOTE      H - LOSSES PER SHARE**

|                                                              |   |    2005 |       |    2004 |   |
|-------------------------------------------------------------------|--------|------------------------|------------|------------------------|--------|
| Net                  income loss available to Common stockholders |   | $                      | (4,314,470 | )                      | $      | (4,946,614 | ) |
| Basic                  and diluted earning (loss) per share       |   | $                      | (0.07      | )                      | $      | (0.19 | ) |
| Continuing                  operations                            |   | $                      | (0.07      | )                      | $      | (0.19 | ) |
| Discontinued                  operations                          |   | $                      | -          |                   | $      | - |   |
| Weighted                  average common shares outstanding       |   |                   | 66,158,104 |                   |   | 26,130,648 |   |

**NOTE      I - INCOME TAXES**

| Non                current:                    |   |   |        |
|------------------------------------------------|--------|--------|-------------|
| Net                operating loss carryforward |   | $      | 18,410,000  |   |
| Valuation                allowance             |   |   | (18,410,000 | ) |
| Net                deferred tax asset          |   | $      | -           |   |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      J - COMMITMENTS AND CONTINGENCIES**

| 2006   |   | $      | 54,024  |   |
|--------|--------|--------|---------|--------|
| 2007   |   |   | 54,024  |   |
| 2008   |   |   | 45,020  |   |
|   |   | $      | 153,068 |   |

** **
** **

**NOTE      K- RESTATEMENT**

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

|   | · | The                convertible promissory notes and attached warrants had originally                been                accounted for in accordance with Emerging Issues Task Force Issue                98-5,                Accounting for Convertible Securities with a Beneficial Conversion                Features or Contingently Adjustable Conversion Ratios ("EITF 98-5")                and in                accordance with Emerging Issues Task Force Issue 00-27, Application                of                Issue No. 98-5 to Certain Convertible Instruments ("EITF - 0027").                In                review of accounting standards, it was determined that the transaction                needs also to be accounted for in accordance with Statements of Financial                Accounting Standards 133, Accounting for Derivative Instruments and                Hedging Activities (“SFAS 133”). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase                the Company’s reported net loss for the year ended December 31, 2004 by                $323,000 from $(4,623,614) to                $(4,946,614). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase                the loss per share by $.01 from $(.18) to $(.19) per                share. |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | Increase                the deficiency accumulated during the development stage by $323,000                from                $(48,005,439) to $(48,328,439). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Decrease                net convertible note by $213,111 from $603,262 to $390,151 (see Note                C). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Increase                derivative liability relating to convertible debentures $3,801,741                from $0                to $3,801,741. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase                warrant liability relating to convertible debentures $44,802 from                $0 to                $44,802. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Decrease                additional paid in capital by $3,310,432 from $45,788,003 to                $42,477,571. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | The                restatements had no net effect on the total cash using in operating                activities and total cash provided by financing activities. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      K- RESTATEMENT (Continued)**

**Pacificap      Entertainment Holdings, Inc.**

**(A      Development Stage Company)**

**Consolidated      Balance Sheet**

**December      31, 2004**

|                                                                   |   | As                Reported |        | Adjustment |   | Restated   |   |
|------------------------------------------------------------------------|--------|----------------------------|-------------|------------|--------|------------|--------|
| **ASSETS**                                                             |   |                       |        |       |   |       |   |
| CURRENT                ASSETS:                                         |   |                       |        |       |   |       |   |
| Cash                and equivalents                                    |   | $                          | 269,715     |       |   |       |   | $ | 269,715 |   |
| Total                current assets                                    |   |                       | 269,715     |       |   |       |   |   | 269,715 |   |
|                                                                   |   |                       |        |       |   |       |   |   |   |   |
| PROPERTY                AND EQUIPMENT                                  |   |                       | 8,799       |       |   |       |   |   | 8,799 |   |
|                                                                   |   |                       |        |       |   |       |   |   |   |   |
| OTHER                ASSETS:                                           |   |                       |        |       |   |       |   |   |   |   |
| Prepaid                interest                                        |   |                       | 303,502     |       |   |       |   |   | 303,502 |   |
| Financing                costs, net of amortization                    |   |                       | 422,653     |       |   |       |   |   | 422,653 |   |
| Restricted                cash                                         |   |                       | 235,903     |       |   |       |   |   | 235,903 |   |
| Other                                                                  |   |                       | 4,502       |       |   |       |   |   | 4,502 |   |
|                                                                   |   |                       | 966,560     |       |   |       |   |   | 966,560 |   |
|                                                                   |   |                       |        |       |   |       |   |   |   |   |
|                                                                   |   | $                          | 1,245,074   |       |   |       |   | $ | 1,245,074 |   |
|                                                                   |   |                       |        |       |   |       |   |   |   |   |
| **LIABILITIES                AND DEFICIENCY IN STOCKHOLDERS' EQUITY**  |   |                       |        |       |   |       |   |   |   |   |
| CURRENT                LIABILITIES:                                    |   |                       |        |       |   |       |   |   |   |   |
| Accounts                payable and accrued expenses                   |   | $                          | 989,556     |       |   |       |   | $ | 989,556 |   |
| Other                accrued liabilities                               |   |                       | 380,000     |       |   |       |   |   | 380,000 |   |
| Notes                payable, current portion                          |   |                       | 1,131,165   |       |   |       |   |   | 1,131,165 |   |
| Advances                from related parties                           |   |                       | 275,190     |       |   |       |   |   | 275,190 |   |
| Other                advances                                          |   |                       | 45,000      |       |   |       |   |   | 45,000 |   |
| Total                current liabilities                               |   |                       | 2,820,911   |       |   |       |   |   | 2,820,911 |   |
|                                                                   |   |                       |        |       |   |       |   |   |   |   |
| Notes                payable, long-term portion, net of debt discount  |   |                       | 603,262     |       |   | (213,111   | )      |   | 390,151 |   |
| Derivative                liability relating to convertible debentures |   |                       | -           |       |   | 3,801,741  |   |   | 3,801,741 |   |
| Warrant                liability relating to convertible debentures    |   |                       |        |       |   | 44,802     |   |   | 44,802 |   |
|                                                                   |   |                       |        |       |   |       |   |   |   |   |
| COMMITMENTS                AND CONTINGENCIES                           |   |                       | -           |       |   |       |   |   | - |   |
|                                                                   |   |                       |        |       |   |       |   |   |   |   |
| DEFICIENCY                IN STOCKHOLDERS’ EQUITY                |   |                       |        |       |   |       |   |   |   |   |
| Preferred                stock                                         |   |                       | -           |       |   |       |   |   | - |   |
| Common                stock                                            |   |                       | 38,337      |       |   |       |   |   | 38,337 |   |
| Additional                paid-in-capital                              |   |                       | 45,788,003  |       |   | (3,310,432 | )      |   | 42,477,571 |   |
| Accumulated                deficit during development stage            |   |                       | (48,005,439 | )          |   | (323,000   | )      |   | (48,328,439 | ) |
| Deficiency                in stockholders’ equity                |   |                       | (2,179,099  | )          |   | (3,633,432 | )      |   | (5,812,531 | ) |
|                                                                   |   | $                          | 1,245,074   |       |   |       |   | $ | 1,245,074 |   |

----

Table            of Contents

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2005 AND 2004**

**NOTE      K- RESTATEMENT (Continued)**

**Pacificap      Entertainment Holdings, Inc.**

**(A      Development Stage Company)**

**Consolidated      Statement of Losses**

**For      the Year Ended December 31, 2004**

|                                                                                                                                                          |   | As                Reported |       | Adjustments |   | Restated   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|-------------|--------|------------|--------|
| Costs                and Expenses:                                                                                                                            |   |                       |       |        |   |       |   |
| Selling,                General and Administrative                                                                                                            |   | $                          | 3,112,184  |        |   |       |   | $ | 3,112,184 |   |
| Depreciation                                                                                                                                                  |   |                       | 662        |        |   |       |   |   | 662 |   |
| Total                Operating Expense                                                                                                                        |   |                       | 3,112,846  |        |   |       |   |   | 3,112,846 |   |
|                                                                                                                                                          |   |                       |       |        |   |       |   |   |   |   |
| Loss                from Operations                                                                                                                           |   |                       | (3,112,846 | )           |   |       |   |   | (3,112,846 | ) |
|                                                                                                                                                          |   |                       |       |        |   |       |   |   |   |   |
| Unrealized                loss related to adjustment of derivative and warrant liability to                fair                value of underlying securities |   |                       | -          |        |   | (446,543   | )      |   | (446,543 | ) |
| Interest                Income (Expense)                                                                                                                      |   |                       | (1,510,768 | )           |   | 123,543    |   |   | (1,387,225 | ) |
| Provision                for Income Tax                                                                                                                       |   |                       | -          |        |   |       |   |   | - |   |
|                                                                                                                                                          |   |                       |       |        |   |       |   |   |   |   |
| Net                Loss                                                                                                                                       |   | $                          | (4,623,614 | )           |   | (323,000   | )      | $ | (4,946,614 | ) |
|                                                                                                                                                          |   |                       |       |        |   |       |   |   |   |   |
| Loss                per common share (basic and assuming dilution)                                                                                            |   | $                          | (0.18      | )           | $      | 0.01       |   | $ | (0.19 | ) |
| Weighted                average common shares outstanding                                                                                                     |   |                       | 26,130,548 |        |   | 26,130,548 |   |   | 26,130,548 |   |

**NOTE      L - GOING CONCERN MATTERS**

**NOTE        M - SUBSEQUENT EVENTS**

----

Table            of Contents

| **ITEM8.** | **CHANGES                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL                DISCLOSURE** |
|------------|------------------------------------------------------------------------------------------------------------------------|

| **ITEM              8A -** | **CONTROLS                AND PROCEDURES** |
|----------------------------|--------------------------------------------|

|   | a) | **Evaluation                of Disclosure Controls and Procedures**.                As of December 31, 2005, the Company’s management carried out an                evaluation, under the supervision of the Company’s Chief Executive Officer                and Chief Financial Officer of the effectiveness of the design and                operation of the Company’s system of disclosure controls and procedures                pursuant to the Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e)                under the Exchange Act).  Based upon that evaluation, the Chief                Executive Officer and Chief Financial Officer concluded that the                Company’s                disclosure controls and procedures were effective, as of the date                of their                evaluation, for the purposes of recording, processing, summarizing                and                timely reporting material information required to be disclosed in                reports                filed by the Company under the Securities Exchange Act of                1934. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | **Changes                in internal controls**.                There were no changes in internal controls over financial reporting                that                occurred during the period covered by this report that has materially                affected, or is likely to materially effect, the Company’s internal                control over financial reporting. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **ITEM                8B.** | **OTHER                INFORMATION** |
|-----------------------------|--------------------------------------|

----

Table            of Contents

**PART      III**

| **ITEM                9** | **DIRECTORS                AND EXECUTIVE OFFICERS OF THE                REGISTRANT** |
|---------------------------|--------------------------------------------------------------------------------------|

**Directors      and Executive Officers**

| Name                            | Age | Position                                                                  |
|---------------------------------|-----|---------------------------------------------------------------------------|
| Edward                E. Litwak | 63  | President,                Chief Financial Officer, Treasurer and Director |
| Michael                Riley    | 53  | Chairman                of the Board of Directors                         |
| Robert                Stulman   | 68  | Secretary                                                                 |
| Donald                P. Parson | 68  | Independent                Director                                       |

**Edward      E. Litwak **

**Michael      Riley**

**Robert      Stulman **

**Donald      P. Parson**

----

Table            of Contents

**Limitation      of Liability of Directors**

**Election      of Directors and Officers.**

**Section      16(a) Beneficial Ownership Reporting Compliance**

**Audit      Committee **

**Nominating      Committee**

----

Table            of Contents

**Code      of Conduct **

|   | (1) | Honest                and ethical conduct, including the ethical handling of actual or                apparent                conflicts of interest between personal and professional                relationships; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Full,                fair, accurate, timely and understandable disclosure in reports and                documents that are filed with, or submitted to, the Commission and                in                other public communications made by an                issuer; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Compliance                with applicable governmental laws, rules and                regulations; |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (4) | The                prompt internal reporting of violations of the code to an appropriate                person or persons identified in the code;                and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Accountability                for adherence to the code. |
|--------|-----|----------------------------------------------------------|

**Compensation      Committee **

----

Table            of Contents

| **ITEM                10.** | **EXECUTIVE                COMPENSATION** |
|-----------------------------|-------------------------------------------|

**Termination      of Employment**

**Executive      Compensation**

|                                 |   |   |   |   |    |   |   | Other                     |   |       |   |    |   |    |   |                     |   |
|--------------------------------------|--------|--------|--------|--------|---------|--------|--------|---------------------------|--------|------------|--------|---------|--------|---------|--------|--------------------------|--------|
|                                 |   |   |   |   |    |   |   | Annual                    |   | Restricted |   | Options |   | LTIP    |   |                     |   |
| Name                & Principal  |   |   |   | Salary |    | Bonus  |   | Compen-                   |   | Stock      |   | SARs    |   | Payouts |   | All                Other |   |
| Position                             |   | Year   |   | ($)    |    | ($)    |   | sation                ($) |   | Awards($)  |   | (#)     |   | ($)     |   | Compensation             |   |
| Edward                Litwak         |   | 2005   |   |   | 120,000 |   |   | 0                         |   |       | 0      |    |   | -       |   |                     | -      |   |   | - |   |   | - |   |
| President                            |   | 2004   |   |   | 120,000 |   |   | 20,000                    |   |       | 0      |    |   | -       |   |                     | -      |   |   | - |   |   | - |   |
|                                 |   | 2003   |   |   | 40,000  |   |   | 0                         |   |       | 0      |    |   | -       |   |                     | -      |   |   | - |   |   | - |   |
| Michael                Riley         |   | 2005   |   |   | 120,000 |   |   | 0                         |   |       | 0      |    |   | -       |   |                     | -      |   |   | - |   |   | - |   |
| Chairman                of the Board |   | 2004   |   |   | 120,000 |   |   | 20,000                    |   |       | 0      |    |   | -       |   |                     | -      |   |   | - |   |   | - |   |
|                                 |   | 2003   |   |   | 40,000  |   |   | 0                         |   |       | 0      |    |   | -       |   |                     | -      |   |   | - |   |   | - |   |

**Option/SAR      Grants in Last Fiscal Year**

**Stock      Option Plans **

**Employment      Agreements**

*Ed      Litwak *

----

Table            of Contents

| **ITEM11.** | **SECURITY                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                MANAGEMENT** |
|-------------|--------------------------------------------------------------------------------------------------|

| NAME                  AND ADDRESS           |   |                            |   | NUMBER                  OF        | PERCENTAGE                  OF |
|---------------------------------------------|--------|---------------------------------|--------|-----------------------------------|--------------------------------|
| OF                  OWNER                   |   | TITLE                  OF CLASS |   | SHARES                  OWNED (1) | CLASS                  (2)     |
|                                        |   |                            |   |                              |                           |   |   |
| Edward                  E. Litwak           |   | Common                  Stock   |   |                              | 1,214,043                      |  (3) |   | 1.34 | % |
| 12868                  Via Latina           |   |                            |   |                              |                           |   |   |   |   |   |
| Del                  Mar, California 92014  |   |                            |   |                              |                           |   |   |   |   |   |
|                                        |   |                            |   |                              |                           |   |   |   |   |   |
| Michael                  Riley              |   | Common                  Stock   |   |                              | 4,000,000                      |  (4) |   | 4.42 | % |
| 12868                  Via Latina           |   |                            |   |                              |                           |   |   |   |   |   |
| Del                  Mar, California 92014  |   |                            |   |                              |                           |   |   |   |   |   |
|                                        |   |                            |   |                              |                           |   |   |   |   |   |
| Robert                  Stulman             |   | Common                  Stock   |   |                              | 40,000                         |   |   | * |   |
| 12868                  Via Latina           |   |                            |   |                              |                           |   |   |   |   |   |
| Del                  Mar, California 92014  |   |                            |   |                              |                           |   |   |   |   |   |
|                                        |   |                            |   |                              |                           |   |   |   |   |   |
| Donald                  P. Parson           |   | Common                  Stock   |   |                              | 12,500                         |   |   | * |   |
| 12868                  Via Latina           |   |                            |   |                              |                           |   |   |   |   |   |
| Del                  Mar, California 92014  |   |                            |   |                              |                           |   |   |   |   |   |
|                                        |   |                            |   |                              |                           |   |   |   |   |   |
| All                  Officers and Directors |   | Common                  Stock   |   |                              | 5,266,543                      |  (3)(4) |   | 5.82 | % |
| As                  a Group (4 persons)     |   |                            |   |                              |                           |   |   |   |   |   |
|                                        |   |                            |   |                              |                           |   |   |   |   |   |
| Bill                  Curtis                |   | Common                  Stock   |   |                              | 7,000,000                      |  (5) |   | 7.74 | % |
| 3411                  Scottsdale Circle     |   |                            |   |                              |                           |   |   |   |   |   |
| Naperville,                  Illinois 60564 |   |                            |   |                              |                           |   |   |   |   |   |

----

Table            of Contents

| **ITEM                12.** | **CERTAIN                RELATIONSHIPS AND RELATED                TRANSACTIONS** |
|-----------------------------|----------------------------------------------------------------------------------|

----

Table            of Contents

**PART      IV**

| **ITEM                13.** | **EXHIBITS** |
|-----------------------------|--------------|

| Exhibit                No. | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.1                        | Certificate                of Incorporation of Tren Property Corp., filed July 29, 1997 in Delaware,                filed as an exhibit to the registration statement on Form 10-SB filed                with                the Commission on March 20, 2001 and incorporated herein by                reference.                                                                                                                                                                                     |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.2                        | Articles                of Incorporation of Gemma Global, Inc., filed July 22, 1997 in Nevada,                filed as an exhibit to the registration statement on Form 10-SB filed                with                the Commission on March 20, 2001 and incorporated herein by                reference.                                                                                                                                                                                           |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.3                        | Reorganization                Agreement between Tren Property Corp. and Edward E. Litwak, dated                January                1, 1998, filed as an exhibit to the registration statement on Form                10-SB                filed with the Commission on March 20, 2001 and incorporated herein                by                reference.                                                                                                                                           |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.4                        | Certificate                of Amendment to the Certificate of Incorporation of Tren Property                Corp.,                changing its corporate name to Gemma Global, Inc. and increasing                capital                structure, filed February 23, 1998 in Delaware, filed as an exhibit                to the                registration statement on Form 10-SB filed with the Commission on                March                20, 2001 and incorporated herein by reference. |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.5                        | Certificate                of Ownership and Merger of Gemma Global, Inc. (a Nevada Corporation)                with                and into Tren Property Corp. (a Delaware Corporation), filed February                23,                1998 in Delaware, filed as an exhibit to the registration statement                on                Form 10-SB filed with the Commission on March 20, 2001 and incorporated                herein by reference.                                            |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.6                        | Articles/Certificate                of Merger of Gemma Global, Inc. (a Nevada Corporation) with and into                Gemma                Global, Inc. formerly Tren Property Corp. (a Delaware Corporation)                filed                March 4, 1998 in Nevada, filed as an exhibit to the registration                statement                on Form 10-SB filed with the Commission on March 20, 2001 and incorporated                herein by reference.                            |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.7                        | Articles                of Incorporation of Gemma Global, Inc., filed March 5, 1998 in Nevada,                filed as an exhibit to the registration statement on Form 10-SB filed                with                the Commission on March 20, 2001 and incorporated herein by                reference.                                                                                                                                                                                           |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.8                        | Articles/Certificate                of Merger (re-domestication) of Gemma Global, Inc. (Delaware) with                and                into Gemma Global, Inc. (Nevada) filed April 21, 1998, filed as an                exhibit                to the registration statement on Form 10-SB filed with the Commission                on                March 20, 2001 and incorporated herein by reference.                                                                                          |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.9                        | Articles                of Amendment to the Articles of Incorporation of Gemma Global, Inc.,                changing name to Pioneer2000, Inc. and increasing capital structure,                filed                March 4, 1999 in Nevada, filed as an exhibit to the registration                statement                on Form 10-SB filed with the Commission on March 20, 2001 and incorporated                herein by reference.                                                           |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.10                       | Certificate                of Incorporation of Cavalcade of Sports Network, Inc., filed June                22, 1998                in New York, filed as an exhibit to the registration statement on                Form                10-SB filed with the Commission on March 20, 2001 and incorporated                herein                by reference.                                                                                                                                         |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.11                       | Articles                of Incorporation of Global Group International, Inc., filed March                23, 1999                in Nevada, filed as an exhibit to the registration statement on Form                10-SB                filed with the Commission on March 20, 2001 and incorporated herein                by                reference.                                                                                                                                              |

----

Table            of Contents

| 3.12         | Certificate                of Designation, Powers, Preferences and Rights of 1999-Global Group                Series                of Convertible Preferred Stock, filed December 14, 1999 in Nevada,                filed                as an exhibit to the registration statement on Form 10-SB filed with                the                Commission on March 20, 2001 and incorporated herein by                reference.                    |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.13         | Articles                of Amendment, filed December 17, 1999 in Nevada, filed as an exhibit                to                the registration statement on Form 10-SB filed with the Commission                on                March 20, 2001 and incorporated herein by reference.                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.14         | Articles                of Merger of Cavalcade of Sports Network, Inc. (New York) with and                into                Cavalcade of Sports Media, Inc. (Nevada), filed December 22, 1999                in                Nevada, filed as an exhibit to the registration statement on Form                10-SB                filed with the Commission on March 20, 2001 and incorporated herein                by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.15         | Certificate                of Merger of Cavalcade of Sports Network, Inc. with and into Cavalcade                of                Sports Media, Inc., filed December 30, 1999 in New York, filed as                an                exhibit to the registration statement on Form 10-SB filed with the                Commission on March 20, 2001 and incorporated herein by                reference.                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.16         | Bylaws                of the Registrant, filed as an exhibit to the registration statement                on                Form 10-SB filed with the Commission on March 20, 2001 and incorporated                herein by reference.                                                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.17         | Articles                of Incorporation of Sports Broadcasting Network, Inc., filed November                25,                2002, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.18         | Articles                of Amendment, filed July 16, 2003 in Nevada, filed as an exhibit                to the                current report on Form 8-K filed with the Commission on July 23,                2003 and                incorporated herein by reference.                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.19         | Exchange                Agreement with Pacificap Entertainment Holdings Inc., filed as an                exhibit                to the current report on Form 8-K filed with the Commission on September                24, 2003 and incorporated herein by reference.                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.20         | Short                Form Articles of Merger filed October 23, 2003, in Nevada , filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.1          | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated June 10, 2004,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.2          | Common                Stock Purchase Warrant with AJW Partners, LLC, dated June 10, 2004,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.3          | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated June                10,                2004, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                          |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.4          | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                June 10, 2004, filed as an exhibit to the registration statement                on Form                SB-2 filed with the Commission on July 8, 2004 and incorporated herein                by                reference.                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.5          | Secured                Convertible Note with AJW Offshore, Ltd., dated June 10, 2004, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                                                       |

----

Table            of Contents

| 4.6          | Secured                Convertible Note with AJW Partners, LLC, dated June 10, 2004, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                                                                                                                                     |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.7          | Secured                Convertible Note with AJW Qualified Partners, LLC, dated June 10,                2004,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on July 8, 2004 and incorporated herein by                reference.                                                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.8          | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                June                10, 2004, filed as an exhibit to the registration statement on Form                SB-2                filed with the Commission on July 8, 2004 and incorporated herein                by                reference.                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.9          | Securities                Purchase Agreement, dated as of June 10, 2004, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on July 8, 2004 and incorporated herein by                reference.                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.10         | Security                Agreement, dated as of June 10, 2004, by and among Pacificap Entertainment                Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners, LLC, AJW                Offshore, Ltd. and New Millennium Capital Partners II, LLC, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on July 8, 2004 and incorporated herein by                reference.                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.11         | Intellectual                Property Security Agreement, dated as of June 10, 2004, by and among                Pacificap Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified                Partners, LLC, AJW Offshore, Ltd. and New Millennium Capital Partners                II,                LLC, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on July 8, 2004 and incorporated herein by                reference.                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.12         | Registration                Rights Agreement, dated as of June 10, 2004, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on July 8, 2004 and incorporated herein by                reference.                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.13         | Guaranty                and Pledge Agreement, dated as of June 10, 2004, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd., New Millennium Capital Partners II, LLC                and                Michael Riley, filed as an exhibit to the registration statement                on Form                SB-2 filed with the Commission on July 8, 2004 and incorporated herein                by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.14         | Guaranty                and Pledge Agreement, dated as of June 10, 2004, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd., New Millennium Capital Partners II, LLC                and                Edward Litwak, filed as an exhibit to the registration statement                on Form                SB-2 filed with the Commission on July 8, 2004 and incorporated herein                by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.15         | Secured                Convertible Note with AJW Offshore, Ltd., dated July 13, 2004, filed                as an                exhibit to the annual report on Form 10-KSB filed with the Commission                on                April 20, 2005 and incorporated herein by reference.                                                                                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.16         | Secured                Convertible Note with AJW Partners, LLC, dated July 13, 2004, filed                as an                exhibit to the annual report on Form 10-KSB filed with the Commission                on                April 20, 2005 and incorporated herein by reference.                                                                                                                                                                                                                                          |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.17         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated July 13,                2004,                filed as an exhibit to the annual report on Form 10-KSB filed with                the                Commission on April 20, 2005 and incorporated herein by                reference.                                                                                                                                                                                                                 |

----

Table            of Contents

| 4.18         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                July                13, 2004, filed as an exhibit to the annual report on Form 10-KSB                filed                with the Commission on April 20, 2005 and incorporated herein by                reference.      |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                 |
| 4.19         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated July 13, 2004,                filed                as an exhibit to the annual report on Form 10-KSB filed with the                Commission on April 20, 2005 and incorporated herein by                reference.                                     |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.20         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated July 13, 2004,                filed                as an exhibit to the annual report on Form 10-KSB filed with the                Commission on April 20, 2005 and incorporated herein by                reference.                                      |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.21         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated July                13,                2004, filed as an exhibit to the annual report on Form 10-KSB filed                with                the Commission on April 20, 2005 and incorporated herein by                reference.             |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.22         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                July 13, 2004, filed as an exhibit to the annual report on Form 10-KSB                filed with the Commission on April 20, 2005 and incorporated herein                by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.23         | Secured                Convertible Note with AJW Offshore, Ltd., dated July 20, 2004, filed                as an                exhibit to the annual report on Form 10-KSB filed with the Commission                on                April 20, 2005 and incorporated herein by reference.                                          |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.24         | Secured                Convertible Note with AJW Partners, LLC, dated July 20, 2004, filed                as an                exhibit to the annual report on Form 10-KSB filed with the Commission                on                April 20, 2005 and incorporated herein by reference.                                           |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.25         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated July 20,                2004,                filed as an exhibit to the annual report on Form 10-KSB filed with                the                Commission on April 20, 2005 and incorporated herein by                reference.                  |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.26         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                July                20, 2004, filed as an exhibit to the annual report on Form 10-KSB                filed                with the Commission on April 20, 2005 and incorporated herein by                reference.      |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.27         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated July 20, 2004,                filed                as an exhibit to the annual report on Form 10-KSB filed with the                Commission on April 20, 2005 and incorporated herein by                reference.                                     |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.28         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated July 20, 2004,                filed                as an exhibit to the annual report on Form 10-KSB filed with the                Commission on April 20, 2005 and incorporated herein by                reference.                                      |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.29         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated July                20,                2004, filed as an exhibit to the annual report on Form 10-KSB filed                with                the Commission on April 20, 2005 and incorporated herein by                reference.             |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.30         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                July 20, 2004, filed as an exhibit to the annual report on Form 10-KSB                filed with the Commission on April 20, 2005 and incorporated herein                by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                 |
| 4.31         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated December 17,                2004,                filed as an exhibit to the current report on Form 8-K filed with                the                Commission on December 23, 2004 and incorporated herein by                reference.                 |

----

Table            of Contents

| 4.32         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated December 17,                2004,                filed as an exhibit to the current report on Form 8-K filed with                the                Commission on December 23, 2004 and incorporated herein by                reference.                                                                                                                                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.33         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated December                17, 2004, filed as an exhibit to the current report on Form 8-K filed                with                the Commission on December 23, 2004 and incorporated herein by                reference.                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.34         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                December 17, 2004, filed as an exhibit to the current report on Form                8-K                filed with the Commission on December 23, 2004 and incorporated herein                by                reference.                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.35         | Secured                Convertible Note with AJW Offshore, Ltd., dated December 17, 2004,                filed                as an exhibit to the current report on Form 8-K filed with the Commission                on December 23, 2004 and incorporated herein by                reference.                                                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.36         | Secured                Convertible Note with AJW Partners, LLC, dated December 17, 2004,                filed as                an exhibit to the current report on Form 8-K filed with the Commission                on                December 23, 2004 and incorporated herein by reference.                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.37         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated December                17,                2004, filed as an exhibit to the current report on Form 8-K filed                with the                Commission on December 23, 2004 and incorporated herein by                reference.                                                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.38         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                December 17, 2004, filed as an exhibit to the current report on Form                8-K                filed with the Commission on December 23, 2004 and incorporated herein                by                reference.                                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.39         | Securities                Purchase Agreement, dated as of December 17, 2004, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the current report on Form 8-K filed with the Commission                on December 23, 2004 and incorporated herein by                reference.                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.40         | Security                Agreement, dated as of December 17, 2004, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the current report on Form 8-K filed with the Commission                on December 23, 2004 and incorporated herein by                reference.                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.41         | Intellectual                Property Security Agreement, dated as of December 17, 2004, by and                among                Pacificap Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified                Partners, LLC, AJW Offshore, Ltd. and New Millennium Capital Partners                II,                LLC, filed as an exhibit to the current report on Form 8-K filed                with the                Commission on December 23, 2004 and incorporated herein by                reference.     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.42         | Registration                Rights Agreement, dated as of December 17, 2004, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the current report on Form 8-K filed with the Commission                on December 23, 2004 and incorporated herein by                reference.                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.43         | Guaranty                and Pledge Agreement, dated as of December 17, 2004, by and among                Pacificap Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified                Partners, LLC, AJW Offshore, Ltd., New Millennium Capital Partners                II, LLC                and Michael Riley, filed as an exhibit to the current report on Form                8-K                filed with the Commission on December 23, 2004 and incorporated herein                by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.44         | Guaranty                and Pledge Agreement, dated as of December 17, 2004, by and among                Pacificap Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified                Partners, LLC, AJW Offshore, Ltd., New Millennium Capital Partners                II, LLC                and Edward Litwak, filed as an exhibit to the current report on Form                8-K                filed with the Commission on December 23, 2004 and incorporated herein                by                reference. |

----

Table            of Contents

| 4.45         | Secured                Convertible Note with AJW Offshore, Ltd., dated June 1, 2005, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                   |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.46         | Secured                Convertible Note with AJW Partners, LLC, dated June 1, 2005, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.47         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated June 1,                2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.48         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                June                1, 2005, filed as an exhibit to the registration statement on Form                SB-2                filed with the Commission on January 31, 2006 and incorporated herein                by                reference.                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.49         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated June 1, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.50         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated June 1, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.51         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated June                1,                2005, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.52         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                June 1, 2005, filed as an exhibit to the registration statement on                Form                SB-2 filed with the Commission on January 31, 2006 and incorporated                herein                by reference.                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.53         | Amended                Security Agreement, dated as of June 1, 2005, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.54         | Secured                Convertible Note with AJW Offshore, Ltd., dated July 1, 2005, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.55         | Secured                Convertible Note with AJW Partners, LLC, dated July 1, 2005, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.56         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated July 1,                2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.57         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                July                1, 2005, filed as an exhibit to the registration statement on Form                SB-2                filed with the Commission on January 31, 2006 and incorporated herein                by                reference.                                                                                                                                                |

----

Table            of Contents

| 4.58         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated July 1, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                            |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.59         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated July 1, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                             |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.60         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated July                1,                2005, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.61         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                July 1, 2005, filed as an exhibit to the registration statement on                Form                SB-2 filed with the Commission on January 31, 2006 and incorporated                herein                by reference.                                                                                                                                                                                                        |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.62         | Amendment                No. 2 to the Securities Purchase Agreement, dated as of December                17, 2004,                by and among Pacificap Entertainment Holdings, Inc., AJW Partners,                LLC,                AJW Qualified Partners, LLC, AJW Offshore, Ltd. and New Millennium                Capital                Partners II, LLC, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.63         | Secured                Convertible Note with AJW Offshore, Ltd., dated August 1, 2005, filed                as                an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.64         | Secured                Convertible Note with AJW Partners, LLC, dated August 1, 2005, filed                as an                exhibit to the registration statement on Form SB-2 filed with the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.65         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated August 1,                2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.66         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                August 1, 2005, filed as an exhibit to the registration statement                on Form                SB-2 filed with the Commission on January 31, 2006 and incorporated                herein                by reference.                                                                                                                                                                                                                          |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.67         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated August 1, 2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.68         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated August 1, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.69         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated August                1,                2005, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.70         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                August 1, 2005, filed as an exhibit to the registration statement                on Form                SB-2 filed with the Commission on January 31, 2006 and incorporated                herein                by reference.                                                                                                                                                                                                      |

----

Table            of Contents

| 4.71         | Amendment                No. 3 to the Securities Purchase Agreement, dated as of December                17, 2004,                by and among Pacificap Entertainment Holdings, Inc., AJW Partners,                LLC,                AJW Qualified Partners, LLC, AJW Offshore, Ltd. and New Millennium                Capital                Partners II, LLC, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference. |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.72         | Secured                Convertible Note with AJW Offshore, Ltd., dated September 1, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.73         | Secured                Convertible Note with AJW Partners, LLC, dated September 1, 2005,                filed as                an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                             |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.74         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated September                1,                2005, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.75         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                September 1, 2005, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference.                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.76         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated September 1,                2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.77         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated September 1,                2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                        |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.78         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated September                1, 2005, filed as an exhibit to the registration statement on Form                SB-2                filed with the Commission on January 31, 2006 and incorporated herein                by                reference.                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.79         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                September 1, 2005, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference.                                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.80         | Amendment                No. 4 to the Securities Purchase Agreement, dated as of December                17, 2004,                by and among Pacificap Entertainment Holdings, Inc., AJW Partners,                LLC,                AJW Qualified Partners, LLC, AJW Offshore, Ltd. and New Millennium                Capital                Partners II, LLC, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.81         | Securities                Purchase Agreement, dated as of September 19, 2005, by and among                Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.82         | Secured                Convertible Note with AJW Offshore, Ltd., dated September 19, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.83         | Secured                Convertible Note with AJW Partners, LLC, dated September 19, 2005,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                            |

----

Table            of Contents

| 4.84         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated September                19,                2005, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                                                                                                          |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.85         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                September 19, 2005, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference.                                                                                                                                                                                                                                                                                                                                             |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.86         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated September 19,                2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.87         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated September 19,                2005,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.88         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated September                19, 2005, filed as an exhibit to the registration statement on Form                SB-2                filed with the Commission on January 31, 2006 and incorporated herein                by                reference.                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.89         | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                September 19, 2005, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference.                                                                                                                                                                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.90         | Registration                Rights Agreement, dated as of September 19, 2005, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                             |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.91         | Amendment                to the secured convertible notes, issued on June 10, 2004, July 13,                2004,                July 20, 2004, December 17, 2004, June 1, 2005, July 1, 2005, August                1,                2005, September 1, 2005 and September 19, 2005 by us to AJW Partners,                LLC,                AJW Qualified Partners, LLC, AJW Offshore, Ltd. and New Millennium                Capital                Partners II, LLC, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.92         | Securities                Purchase Agreement, dated as of January 23, 2006, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.93         | Secured                Convertible Note with AJW Offshore, Ltd., dated January 23, 2006,                filed as                an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.94         | Secured                Convertible Note with AJW Partners, LLC, dated January 23, 2006,                filed as                an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.95         | Secured                Convertible Note with AJW Qualified Partners, LLC, dated January                23, 2006,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                                                                                                                                                                            |

----

Table            of Contents

| 4.96         | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                January 23, 2006, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference.                                                                                                                                                                                 |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ____________ |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.97         | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated January 23,                2006,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.98         | Common                Stock Purchase Warrant with AJW Partners, LLC, dated January 23,                2006,                filed as an exhibit to the registration statement on Form SB-2 filed                with                the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.99         | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated January                23,                2006, filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.100        | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                January 23, 2006, filed as an exhibit to the registration statement                on                Form SB-2 filed with the Commission on January 31, 2006 and incorporated                herein by reference.                                                                                                                                                             |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.101        | Registration                Rights Agreement, dated as of January 23, 2006, by and among Pacificap                Entertainment Holdings, Inc., AJW Partners, LLC, AJW Qualified Partners,                LLC, AJW Offshore, Ltd. and New Millennium Capital Partners II, LLC,                filed                as an exhibit to the registration statement on Form SB-2 filed with                the                Commission on January 31, 2006 and incorporated herein by                reference. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1         | Indemnification                Agreement with Edward E. Litwak, filed as an exhibit to the registration                statement on Form 10-SB filed with the Commission on March 20, 2001                and                incorporated herein by reference.                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2         | Indemnification                Agreement with Don Parson, filed as an exhibit to the registration                statement on Form 10-SB filed with the Commission on March 20, 2001                and                incorporated herein by reference.                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.3         | Indemnification                Agreement with Michael Riley, filed as an exhibit to the annual report                on                Form 10-KSB filed with the Commission on May 11, 2004 and incorporated                herein by reference.                                                                                                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.4         | Employment                Agreement with Ed Litwak, filed as an exhibit to the annual report                on Form                10-KSB filed with the Commission on May 11, 2004 and incorporated                herein                by reference.                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.5         | Asset                Purchase Agreement, dated as of December 22, 2005, by and between                Pacificap Entertainment Holidngs, Inc. and Collectible Concepts Group,                Inc., filed as an exhibit to the registration statement on Form SB-2                filed                with the Commission on January 31, 2006 and incorporated herein by                reference.                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 14.1         | Code                of Ethics, filed as an exhibit to the annual report on Form 10-KSB                filed                with the Commission on May 11, 2004 and incorporated herein by                reference.                                                                                                                                                                                                                                                                                          |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.1         | Certification                of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),                promulgated under the Securities and Exchange Act of 1934, as                amended.                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2         | Certification                of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a),                promulgated under the Securities and Exchange Act of 1934, as                amended.                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.1         | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002 (Chief Executive                Officer).                                                                                                                                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.2         | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002 (Chief Financial                Officer).                                                                                                                                                                                                                                                                                                |

----

Table            of Contents

| **ITEM                14.** | **PRINCIPAL                ACCOUNTANT FEES AND                SERVICES** |
|-----------------------------|--------------------------------------------------------------------------|

**Audit      Fees**

**Audit-Related      Fees**

**Tax      Fees**

**All      Other Fees**

**Policy      On Audit Committee Pre-Approval Of Audit And Permissible Non-Audit Services      Of      Independent Auditors**

----

Table            of Contents

**SIGNATURES**

|                               | PACIFICAP                ENTERTAINMENT HOLDINGS, INC.                                                                                      |
|------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                                       |   |
|                               |                                                                                                                                       |   |
| Dated:                May 19, 2006 | By:                                                                                                                                   | /s/                EDWARD LITWAK |   |
|                               | Edward                Litwak                                                                                                               |
|                               | President                (Principal Executive Officer), Director, Principal Financial Officer,                Principal Accounting Officer |

| SIGNATURE                        | TITLE                                                  | DATE                                                    |
|----------------------------------|--------------------------------------------------------|---------------------------------------------------------|
|                             |                                                   |                                                    |   |
| /s/                EDWARD LITWAK |                                                   | President                (Principal Executive           | May                19, 2006 |
| Edward                Litwak     | Officer),                Director, Principal Financial |                                                    |
|                             |                                                   | Officer                and Principal Accounting Officer |   |
|                             |                                                   |                                                    |   |
| /s/                MICHAEL RILEY |                                                   | Chairman                of the Board of Directors       | May                19, 2006 |
| Michael                Riley     |                                                   |                                                    |
|                             |                                                   |                                                    |   |
|                             |                                                   |                                                    |   |
|                             |                                                   | Director                                                | May                19, 2006 |
| Donald                Parson     |                                                   |                                                    |

----