**FORM      10-KSB**

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

| **Nevada**                                                                                         | **33-0766069**                                                           |
|----------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
| (State                or other jurisdiction of  incorporation                or organization) | (I.R.S.                Employer  Identification                No.) |
|                                                                                                    |                                                                     |
|                                                                                               |                                                                     |
| **2361                Campus Drive, Suite 101**                                                    |                                                                     |
| **Irvine,                California**                                                              | **92612**                                                                |
| (Address                of principal executive offices)                                            | (zip                code)                                                |

**(949)      833-9001**

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**ANNUAL      REPORT ON FORM 10-KSB**

**For      the Fiscal Year Ended December 31, 2006**

**TAB****LE OF CONTENTS [UPDATE]**

| **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 |

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**PART      I**

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

**OVERVIEW**

**Organizational/Historical      Background**

**Recent      Transaction/Developments**

**New      Business Plan**

----

**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***

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**PORTFOLIO**

**DISTRIBUTION**

**TRANSACTION      COSTS**

----

**ACCOUNTABILITY**

**BUSINESS      PRACTICE**

**CURRENT      PROJECTS**

***American      Cannibal***

***Rebel        Gucci***

**Employees**

| **ITE****M                2.** | **DESCRIPTION                OF PROPERTY** |
|--------------------------------|--------------------------------------------|

----

| **ITE****M                3.** | **LEGAL                PROCEEDINGS** |
|--------------------------------|--------------------------------------|

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

----

**PART      II**

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

|                                                         |   | High($) |   | Low                ($) |   |
|--------------------------------------------------------------|--------|---------|--------|------------------------|--------|
|                                                         |   |    |   |                   |   |
| **Fiscal                Year**                 **2005** |   |    |   |                   |   |
| First                Quarter                                 |   |    | 0.03   |                   |   | 0.03 |   |
| Second                Quarter                                |   |    | 0.01   |                   |   | 0.01 |   |
| Third                Quarter                                 |   |    | 0.01   |                   |   | 0.01 |   |
| Fourth                Quarter                                |   |    | 0.01   |                   |   | 0.01 |   |
|                                                         |   |    |   |                   |   |   |   |
| **Fiscal                Year**                 **2006** |   |    |   |                   |   |   |   |
| First                Quarter                                 |   |    | 0.011  |                   |   | 0.0035 |   |
| Second                Quarter                                |   |    | 0.021  |                   |   | 0.0021 |   |
| Third                Quarter                                 |   |    | 0.0055 |                   |   | 0.0021 |   |
| Fourth                Quarter                                |   |    | 0.003  |                   |   | 0.0012 |   |
|                                                         |   |    |   |                   |   |   |   |
| **Fiscal                Year**                 **2007** |   |    |   |                   |   |   |   |
| First                Quarter                                 |   |    | 0.0036 |                   |   | 0.0008 |   |
| Second                Quarter (1)                            |   |    | 0.001  |                   |   | 0.0007 |   |

**Dividends**

**DESCRIPTION      OF SECURITIES**

**COMMON      STOCK**

----

**PREFERRED      STOCK**

**OPTIONS**

**WARRANTS**

**CONVERTIBLE      SECURITIES**

|   | · | $700,000                was disbursed on June 8, 2004; |
|--------|--------|--------------------------------------------------------|

|   | · | $700,000                was disbursed on July 13, 2004; |
|--------|--------|---------------------------------------------------------|

|   | · | $600,000                was disbursed on July 20, 2004; |
|--------|--------|---------------------------------------------------------|

|   | · | $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. |

----

|   | · | $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. |

----

|   | · | $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. |

|   | · | $0.02;                or                                                                                                                                                                                                                    |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | 25%                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                                                                                                                                                                                                                    |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | 25%                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;               |

----

|   | · | 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**

----

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

**Critical      Accounting Policies and Estimates**

**Business      combinations**

**Stock-Based      Compensation**

----

----

**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*

**Manufacturing      Costs**

**Exploitation      Costs and Advertising**

*Reporting      on Advertising Costs*

**Recent      Accounting Pronouncements**

----

*Accounting      for Contingencies”. *

SFAS      159      permits entities to choose to measure many financial instruments, and certain      other items, at fair value. SFAS      159      applies to reporting periods beginning after November 15, 2007. The adoption      of      SFAS 159 is not expected to have a material impact on the Company’s financial      condition or results of operations.

**Results      of Operations**

----

**Revenues**

**Costs      And Expenses**

 

**Liquidity      And Capital Resources**

----

----

**Product      Research and Development**

**Acquisition      or Disposition of Plant and Equipment**

**Number      of Employees**

----

*Inflation*

**Risk      Factors**

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

**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.**

**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%                    |   | $                        | .00525  |                         | $      | .0001575                 |   |                | 10,871,771,429 |   |   | 3640 | % |
| 50%                    |   | $                        | .00035  |                         | $      | .000105                  |   |                | 16,307,657,143 |   |   | 5460 | % |
| 75%                    |   | $                        | .000175 |                         | $      | .0000525                 |   |                | 32,615,314,286 |   |   | 10920 | % |

----

**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.**

----

**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. |

**Trends,      Risks and Uncertainties**

----

| **I****TEM****7.** | **FINANCIAL                STATEMENTS** |
|--------------------|-----------------------------------------|

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**INDEX      TO FINANCIAL STATEMENTS**

|                                                                                                                                                                                                                                                      | Page                No                . |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|
| Report                of Registered Independent Certified Public Accounting Firm                                                                                                                                                                          | F-2                                     |
| Consolidated                Balance Sheets at December 31, 2006 and 2005                                                                                                                                                                        | F-3                                     |
| Consolidated                Statements of Losses for the years ended December 31, 2006 and 2005,                and                for the period July 29, 1997 (date of inception) to December 31,                2006                                   | F-4                                     |
| Consolidated                Statements of Deficiency in Stockholders’ Equity for the years ended                December 31, 2006 and 2005, and for the period July 29, 1997 (date                of                inception) to December 31, 2006 | F-5                - F-12               |
| Consolidated                Statements of Cash Flows for the years ended December 31, 2006 and                2005,                and for the period July 29, 1997 (date of inception) to December                31,                2005                | F-13                - F-15              |
| Notes                to Consolidated Financial Statements                                                                                                                                                                                                 | F-16                - F-34              |

----

----

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| **PACIFICAP                ENTERTAINMENT HOLDINGS, INC**                                                                                                                                                                   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                DEVELOPMENT STAGE COMPANY)**                                                                                                                                                                           |   |
| **CONSOLIDATED                BALANCE SHEETS**                                                                                                                                                                             |   |
| **DECEMBER                31, 2006 AND 2005**                                                                                                                                                                              |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |
|                                                                                                                                                                                                                       |   | 2006 |   | 2005 |   |
| ASSETS                                                                                                                                                                                                                     |   |   |   |   |   |
| Current                assets:                                                                                                                                                                                             |   |   |   |   |   |
| Cash                and cash equivalents                                                                                                                                                                                   |   | $ | - |   | $ | 422 |   |
| Total                current assets                                                                                                                                                                                        |   |   | - |   |   | 422 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Property                and equipment:                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Office                furniture, net of accumulated depreciation of $10,418 and $6,623                at                December 31, 2006 and 2005, respectively                                                           |   |   | 8,907 |   |   | 12,702 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Other                assets:                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Prepaid                expense                                                                                                                                                                                             |   |   | 59,938 |   |   | 152,872 |   |
| Capitalized                film costs                                                                                                                                                                                      |   |   | - |   |   | 750,000 |   |
| Financing                Costs, net of accumulated amortization and write off of $570,453                and                $317,794 at December 31, 2006 and 2005, respectively                                           |   |   | 264,837 |   |   | 417,496 |   |
| Total                other assets                                                                                                                                                                                          |   |   | 324,775 |   |   | 1,320,368 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Total                assets                                                                                                                                                                                                |   | $ | 333,682 |   | $ | 1,333,492 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| LIABILITIES                AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY                                                                                                                                                        |   |   |   |   |   |   |   |
| Current                liabilities:                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Cash                disbursed in excess of available funds                                                                                                                                                                 |   | $ | 250 |   | $ | - |   |
| Accounts                payable and accrued expenses                                                                                                                                                                       |   |   | 2,610,822 |   |   | 1,773,536 |   |
| Other                accrued liabilities                                                                                                                                                                                   |   |   | 380,000 |   |   | 380,000 |   |
| Notes                payable , current portion                                                                                                                                                                             |   |   | 3,526,645 |   |   | 2,230,145 |   |
| Advances                from related parties                                                                                                                                                                               |   |   | 222,090 |   |   | 358,119 |   |
| Other                advances                                                                                                                                                                                              |   |   | 194,362 |   |   | 65,000 |   |
| Total                current liabilities                                                                                                                                                                                   |   |   | 6,934,169 |   |   | 4,806,800 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Notes                payable, long-term portion                                                                                                                                                                            |   |   | 1,016,128 |   |   | 756,347 |   |
| Derivative                liability relating to convertible debentures                                                                                                                                                     |   |   | 18,700,966 |   |   | 5,811,478 |   |
| Warrant                liability relating to convertible debentures                                                                                                                                                        |   |   | 35,630 |   |   | 10,263 |   |
| Total                long term debt                                                                                                                                                                                        |   |   | 19,752,724 |   |   | 6,578,088 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Commitments                and contingencies                                                                                                                                                                               |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Total                liabilities                                                                                                                                                                                           |   |   | 26,686,893 |   |   | 11,384,888 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| (Deficiency                in) stockholders' equity:                                                                                                                                                                       |   |   |   |   |   |   |   |
| Preferred                stock, par value, $0.001 per share; 50,000,000 shares authorized;                none                issued and outstanding at December 31, 2006 and 2005                                         |   |   | - |   |   | - |   |
| Common                stock, par value, $0.001 per share; 300,000,000 shares authorized;                196,778,892 and 89,563,261 shares issued at December 31, 2006 and                2005,                respectively |   |   | 196,779 |   |   | 89,563 |   |
| Additional                paid-in-capital                                                                                                                                                                                  |   |   | 42,457,602 |   |   | 42,501,950 |   |
| Deficit                accumulated during development stage                                                                                                                                                                |   |   | (69,007,592 | ) |   | (52,642,909 | ) |
| Total                (deficiency in) stockholder's equity                                                                                                                                                                  |   |   | (26,353,211 | ) |   | (10,051,396 | ) |
| Total                liabilities and (deficiency in) stockholder's equity                                                                                                                                                  |   | $ | 333,682 |   | $ | 1,333,492 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                            |   |   |   |   |   |   |   |

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**PACIFICAP        ENTERTAINMENT HOLDINGS, INC**

**(A        DEVELOPMENT STAGE COMPANY)**

**CONSOLIDATED        STATEMENTS OF LOSSES**

|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|-------------|--------------------------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                                                                                                                |   | For                  the year ended December 31, |        |                  For                  the Period July 29, 1997 (Date of Inception) to |   |
|                                                                                                                                                                |   | 2006                                             |        | 2005                                                                                       |   | December                  31, 2006 |   |
| Costs                  and Expenses:                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |
| Selling,                  general and administrative                                                                                                                |   | $                                                | 1,645,143   |                                                                                       | $      | 1,623,838                          |   | $ | 16,494,137 |   |
| 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                                                                                                                                                        |   |                                             | 3,795       |                                                                                       |   | 4,941                              |   |   | 206,603 |   |
| Total                  operating expenses                                                                                                                           |   |                                             | 1,648,938   |                                                                                       |   | 1,628,779                          |   |   | 48,544,005 |   |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Loss                  from operations                                                                                                                               |   |                                             | (1,648,938  | )                                                                                          |   | (1,628,779                         | )      |   | (48,544,005 | ) |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Other                  income (expenses)                                                                                                                            |   |                                             | 282,247     |                                                                                       |   | -                                  |   |   | 397,005 |   |
| Interest                  income (expenses)                                                                                                                         |   |                                             | (2,713,138  | )                                                                                          |   | (2,533,968                         | )      |   | (7,409,257 | ) |
| Unrealized                  loss related to adjustment of derivative and warrant liability                  to fair                  value of underlying securities |   |                                             | (12,284,854 | )                                                                                          |   | (151,723                           | )      |   | (12,883,120 | ) |
| Total                  other income (expenses)                                                                                                                      |   |                                             | (14,715,745 | )                                                                                          |   | (2,685,691                         | )      |   | (19,895,372 | ) |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Loss                  from continuing operations, before income taxes and discontinued                  operations                                                  |   |                                             | (16,364,683 | )                                                                                          |   | (4,314,470                         | )      |   | (68,439,377 | ) |
| Provision                  for income taxes                                                                                                                         |   |                                             | -           |                                                                                       |   | -                                  |   |   | - |   |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Loss                  from continuing operations, before discontinued operations                                                                                    |   |                                             | (16,364,683 | )                                                                                          |   | (4,314,470                         | )      |   | (68,439,377 | ) |
| Loss                  from discontinued operations                                                                                                                  |   |                                             | -           |                                                                                       |   | -                                  |   |   | (352,905 | ) |
| Income                  (loss) on disposal of discontinued operations, net                                                                                          |   |                                             | -           |                                                                                       |   | -                                  |   |   | 78,973 |   |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Net                  loss                                                                                                                                           |   | $                                                | (16,364,683 | )                                                                                          | $      | (4,314,470                         | )      | $ | (68,713,309 | ) |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Cumulative                  effect of accounting change                                                                                                             |   |                                             | -           |                                                                                       |   | -                                  |   |   | (294,282 | ) |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Net                  loss applicable to common shares                                                                                                               |   | $                                                | (16,364,683 | )                                                                                          | $      | (4,314,470                         | )      | $ | (69,007,591 | ) |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Loss                  per common share-basic and assuming fully diluted                                                                                             |   | $                                                | (0.15       | )                                                                                          | $      | (0.07                              | )      |   |   |   |
| Continuing                  operations                                                                                                                              |   | $                                                | (0.15       | )                                                                                          | $      | (0.07                              | )      |   |   |   |
| Discontinued                  operations                                                                                                                            |   | $                                                | -           |                                                                                       | $      | -                                  |   |   |   |   |
|                                                                                                                                                                |   |                                             |        |                                                                                       |   |                               |   |   |   |   |
| Weighted                  average shares outstanding-basic and assuming dilution                                                                                    |   |                                             | 110,486,529 |                                                                                       |   | 66,158,104                         |   |   |   |   |

----

**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,      2006**

|                                                                                                                                                                                                                   |   | 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                $30.00 per 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 | ) |

----

**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,      2006**

|                                                                                                       |   | 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** | **)** |

----

**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,      2006**

|                                                                                                                                                                  |   | 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 | ) |

----

**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,      2006**

|                                                                                                                                                            |   | 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 | ) |

----

**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,      2006**

|                                                                                                                                         |   | 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 | ) |

----

**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,      2006**

|                                                                                                                                   |   | 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 $0.02 per share       |   |                            | -      |                        |   | -                            |   |                        | 4,582,106      |                                      |   | 4,582                                                       |   |   | 87,060         |   |   | - |   |   | 91,642 |   |
| Net                loss, as restated                                                                                                   |   |                            | -      |                        |   | -                            |   |                        | -              |                                      |   | -                                                           |   |   | -              |   |   | (4,946,614 | ) |   | (4,946,614 | ) |
| **Balance                at December 31, 2004**                                                                                        |   |                            | **-**  |                        |   | **-**                        |   |                        | **38,336,501** |                                      | **$**  | **38,337**                                                  |   | **$**  | **42,477,571** |   | **$** | (48,328,439 | ) | **$** | (5,812,531 | ) |

----

**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,      2006**

|                                                                                                                                |   | 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 | ) |

----

| **PACIFICAP                ENTERTAINMENT HOLDINGS, INC**                                                |   |
|---------------------------------------------------------------------------------------------------------|--------|
| **(A                DEVELOPMENT STAGE COMPANY)**                                                        |   |
| **STATEMENT                OF DEFICIENCY IN STOCKHOLDERS' EQUITY**                                      |   |
| **For                the period July 19, 1997 (Date of Inception) to December 31,                2006** |   |
|                                                                                                    |   | Preferred                Shares |   | Share                Amount |   | Common                Shares |   | Share                Amount |   | Common                Stock Subscription |   | Additional                Paid in Capital |   | Deficit                Accumulated during Development Stage |   | Treasury                Stock |   | Total |   |
| **Balance                forward**                                                                      |   |   | **-** |   | $  | **-** |   |   | **89,563,261** |   | $  | **89,563** |   | $  | **-** |   | $  | **42,501,950** |   | $  | **(52,642,909** | **)** | $  | **-** |   | $  | **(10,051,396** | **)** |
| Shares                issued in May 2006 as payment towards convertible debentures                      |   |   | - |   |   | - |   |   | 895,631 |   |   | 896 |   |   | - |   |   | 90 |   |   | - |   |   | - |   |   | 986 |   |
| Shares                issued in July 2006 as payment towards convertible debentures                     |   |   |   |   |   |   |   |   | 4,430,000 |   |   | 4,430 |   |   | - |   |   | 265 |   |   | - |   |   | - |   |   | 4,695 |   |
| Shares                issued in August 2006 as payment towards convertible debentures                   |   |   |   |   |   |   |   |   | 13,290,000 |   |   | 13,290 |   |   | - |   |   | 222 |   |   | - |   |   | - |   |   | 13,512 |   |
| Shares                issued in September 2006 as payment towards convertible debentures                |   |   |   |   |   |   |   |   | 13,290,000 |   |   | 13,290 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 13,290 |   |
| Shares                issued in October 2006 as payment towards convertible debentures                  |   |   |   |   |   |   |   |   | 22,150,000 |   |   | 22,150 |   |   | - |   |   | (8,985 | ) |   | - |   |   | - |   |   | 13,165 |   |
| Shares                issued in November 2006 as payment towards convertible debentures                 |   |   |   |   |   |   |   |   | 31,010,000 |   |   | 31,010 |   |   | - |   |   | (20,196 | ) |   | - |   |   | - |   |   | 10,814 |   |
| Shares                issued in December 2006 as payment towards convertible debentures                 |   |   |   |   |   |   |   |   | 22,150,000 |   |   | 22,150 |   |   | - |   |   | (15,744 | ) |   | - |   |   | - |   |   | 6,406 |   |
| Net                loss                                                                                 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (16,364,683 | ) |   | - |   |   | (16,364,683 | ) |
| **Balance                at December 31, 2006**                                                         |   |   | **-** |   | **$** | **-** |   |   | **196,778,892** |   | **$** | **196,779** |   | **$** | **-** |   | **$** | **42,457,602** |   | **$** | **(69,007,592** | **)** | **$** | **-** |   | **$** | **(26,353,211** | **)** |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| **PACIFICAP                  ENTERTAINMENT HOLDINGS, INC**                                                                                                          |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                  DEVELOPMENT STAGE COMPANY)**                                                                                                                  |   |
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS**                                                                                                          |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |
|                                                                                                                                                                |   | For                  the year ended December 31, |   | For                  the Period July 29, 1997(Date of Inception) to                  December 31, 2006 |   |
|                                                                                                                                                                |   | 2006 |   | 2005 |   |
| Cash                  flows from operating activities:                                                                                                              |   |   |   |   |   |   |   |
| Net                  loss for the period from continuing operations                                                                                                 |   | $ | (16,364,683 | ) | $ | (4,314,470 | ) | $ | (68,733,659 | ) |
| 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                                                                                                                                                        |   |   | 3,795 |   |   | 4,941 |   |   | 206,603 |   |
| Organization                  and acquisition costs expensed                                                                                                        |   |   | - |   |   | - |   |   | 11,553 |   |
| Common                  stock issued in exchange for services                                                                                                       |   |   | - |   |   | 3,400 |   |   | 8,530,733 |   |
| Non                  cash interest expense related to conversion and paydown of convertible                  debentures                                             |   |   | 62,868 |   |   | 72,744 |   |   | 542,752 |   |
| Common                  stock issued in exchange for previously incurred debt                                                                                       |   |   | - |   |   | - |   |   | 233,498 |   |
| Common                  stock issued in exchange for interest                                                                                                       |   |   | - |   |   | - |   |   | 45,906 |   |
| Common                  stock issued in exchange for expenses paid by shareholders                                                                                  |   |   | - |   |   | - |   |   | 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 |   |
| 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 |   |
| Accretion                  of convertible debentures                                                                                                                |   |   | 1,556,281 |   |   | 1,451,652 |   |   | 3,398,084 |   |
| Unrealized                  loss related to adjustment of derivative and warrant liability                  to fair                  value of underlying securities |   |   | 12,284,854 |   |   | 151,723 |   |   | 12,883,120 |   |
| Amortization                  and write off of financing costs                                                                                                      |   |   | 252,659 |   |   | 254,157 |   |   | 570,453 |   |
| Amortization                  of prepaid interest                                                                                                                   |   |   | 92,934 |   |   | 150,630 |   |   | 340,062 |   |
| Impairment                  of film library                                                                                                                         |   |   | - |   |   | - |   |   | 372,304 |   |
| Write-off                  of acquired asset                                                                                                                        |   |   | - |   |   | - |   |   | 5,000 |   |
| Write-off                  of un-collectable other receivable                                                                                                       |   |   | - |   |   | - |   |   | 30,000 |   |
| Gain                  from extinguishment of related party debt                                                                                                     |   |   | (232,247 | ) |   | - |   |   | (232,247 | ) |
| Debt                  forgiveness from creditors                                                                                                                    |   |   | - |   |   | - |   |   | (139,992 | ) |
| Write-off                  of capitalized production costs                                                                                                          |   |   | 750,000 |   |   | - |   |   | 900,273 |   |
| Write                  off of other investment previously paid with common stock                                                                                    |   |   | - |   |   | - |   |   | 62,500 |   |
| Expenses                  paid by principal shareholders                                                                                                            |   |   | - |   |   | - |   |   | 117,015 |   |
| (Increase)                  decrease in:                                                                                                                            |   |   |   |   |   |   |   |   |   |   |
| Prepaid                  expenses                                                                                                                                   |   |   | - |   |   | 4,502 |   |   | - |   |
| Capitalized                  film costs                                                                                                                             |   |   | - |   |   | (750,000 | ) |   | (750,000 | ) |
| Increase                  (decrease) in:                                                                                                                            |   |   |   |   |   |   |   |   |   |   |
| Cash                  disbursed in excess of available funds                                                                                                        |   |   | 250 |   |   | - |   |   | 250 |   |
| Accounts                  payable and accrued expenses, net                                                                                                         |   |   | 837,287 |   |   | 783,440 |   |   | 2,637,312 |   |
| Net                  cash (used in) operating activities                                                                                                            |   |   | (756,002 | ) |   | (2,187,281 | ) |   | (6,294,489 | ) |

----

|  **PACIFICAP                ENTERTAINMENT HOLDINGS, INC**                                                                             |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                DEVELOPMENT STAGE COMPANY)**                                                                                           |   |
| **CONSOLIDATED                STATEMENTS OF CASH FLOWS**                                                                                   |   |
|                                                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                                                       |   | For                the year ended December 31, |   | For                the Period July 29, 1997(Date of Inception) to                December 31, 2006 |   |
|                                                                                                                                       |   | 2006 |   | 2005 |   |
| Cash                flows from investing activities:                                                                                       |   |   |   |   |   |   |   |   |   |   |
| Acquisition                of film library and footage production costs                                                                    |   |   | - |   |   | - |   |   | (183,080 | ) |
| Acquisition                of office furniture                                                                                             |   |   | - |   |   | (8,844 | ) |   | (19,325 | ) |
| Cash                acquired in connection with acquisition                                                                                |   |   | - |   |   | - |   |   | 35,207 |   |
| Net                cash (used in) investing activities                                                                                     |   |   | - |   |   | (8,844 | ) |   | (167,198 | ) |
|                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| Cash                flows from financing activities:                                                                                       |   |   |   |   |   |   |   |   |   |   |
| Advances                from related parties, net of repayments                                                                            |   |   | 96,218 |   |   | 82,929 |   |   | 409,749 |   |
| Other                advances, net                                                                                                         |   |   | 129,362 |   |   | 20,000 |   |   | 194,362 |   |
| Proceeds                from issuance of notes payable, net of repayments                                                                  |   |   | - |   |   | (13,000 | ) |   | 1,240,665 |   |
| Proceeds                from issuance of long-term convertible debt, net of costs and fees                net of                repayments |   |   | 530,000 |   |   | 1,836,903 |   |   | 4,344,711 |   |
| Proceeds                from issuance of common stock                                                                                      |   |   | - |   |   | - |   |   | 272,200 |   |
| Net                cash provided by financing activities                                                                                   |   |   | 755,580 |   |   | 1,926,832 |   |   | 6,461,687 |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| Net                increase (decrease) in cash and equivalents                                                                             |   |   | (422 | ) |   | (269,293 | ) |   | - |   |
| Cash                and cash equivalents at the beginning of the period                                                                    |   |   | 422 |   |   | 269,715 |   |   | - |   |
| Cash                and cash equivalents at the end of the period                                                                          |   | $ | - |   | $ | 422 |   | $ | - |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| Supplemental                Disclosures of Cash Flow Information:                                                                          |   |   |   |   |   |   |   |   |   |   |
| Cash                paid during the period for interest                                                                                    |   | $ | - |   | $ | - |   | $ | 96,807 |   |
| Cash                paid during the period for taxes                                                                                       |   |   | - |   |   | - |   |   | - |   |
| Common                stock issued in exchange for services                                                                                |   |   | - |   |   | 3,400 |   |   | 8,530,733 |   |
| Common                stock issued in exchange for previously incurred debt                                                                |   |   | - |   |   | - |   |   | 233,498 |   |
| Common                stock issued in conversion of convertible debt                                                                       |   |   | 62,868 |   |   | 72,204 |   |   | 242,752 |   |
| Common                stock issued in exchange for interest expense                                                                        |   |   | - |   |   | - |   |   | 45,906 |   |
| Common                stock issued in exchange for accrued interest                                                                        |   |   | - |   |   | - |   |   | 146,617 |   |
| Common                stock issued in exchange for expenses paid by shareholders                                                           |   |   | - |   |   | - |   |   | 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 |   |
| 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 | ) |
| Gain                from extinguishment of related party debt                                                                              |   |   | (232,247 | ) |   | - |   |   | (612,247 | ) |
| Write                off of capitalized production costs                                                                                   |   |   | 750,000 |   |   | - |   |   | 900,273 |   |

----

| **PACIFICAP                ENTERTAINMENT HOLDINGS, INC**                                                                                              |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                DEVELOPMENT STAGE COMPANY)**                                                                                                      |   |
| **CONSOLIDATED                STATEMENTS OF CASH FLOWS**                                                                                              |   |
|                                                                                                                                                  |   |   |   |   |   |   |   |
|                                                                                                                                                  |   | For                the year ended December 31, |   | For                the Period July 29, 1997(Date of Inception) to                December 31, 2006 |   |
|                                                                                                                                                  |   | 2006 |   | 2005 |   |
| 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 |   |
| Common                stock issued in exchange for shareholder advances                                                                               |   |   | - |   |   | - |   |   | 45,500 |   |
| Proceeds                from convertible debentures held in escrow                                                                                    |   |   | - |   |   | 235,293 |   |   | - |   |
| Capitalized                financing costs in connection with issuance of long-term convertible                notes                payable           |   |   | 100,000 |   |   | - |   |   | 586,290 |   |
| Prepaid                interest expense in connection with issuance of long-term convertible                notes payable                             |   |   | - |   |   | - |   |   | 400,000 |   |
| Unrealized                loss on adjustment of derivative and warrant liability to fair value                of                underlying securities |   |   | 12,284,854 |   |   | 151,723 |   |   | 12,883,120 |   |
| 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                                                                                                          |   | $ | - |   | $ | - |   | $ | - |   |

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

**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. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

**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.                                                                                                                              |

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

*Capitalization      of Interest Cost*

*Reporting      on Advertising Costs*

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

|                                                                           |   |   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|
|                                                                           |   |        |   |
|                                                                           |   |   |   |   |   | December                31,  |   |
|                                                                           |   |   |   |   |   | 2005  |   |
| Net                loss                                                        |   |   |   |   | $ | (4,314,470 | ) |
| Deduct:                stock-based compensation expense, net of tax            |   |   |   |   |   | - |   |
|                                                                           |   |   |
| Pro                forma net loss                                              |   |   |   |   | $ | (4,314,470 | ) |
|                                                                           |   |   |
|                                                                           |   |   |   |   |   |   |   |
| Net                earning per common share — basic (and fully diluted): |   |   |   |   |   |   |   |
| As                reported                                                     |   |   |   |   | $ | (0.07 | ) |
| Deduct:                stock-based compensation expense, net of tax            |   |   |   |   |   | - |   |
|                                                                           |   |   |
| Pro                forma                                                       |   |   |   |   | $ | (0.07 | ) |
|                                                                           |   |   |

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

*Accounting      for Contingencies”. *

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

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

|                            |   | 2006   |      | 2005   |   |
|---------------------------------|--------|--------|-----------|--------|--------|
| Accrued                expenses |   | $      | 146,292   |   |   | 310,060 |   |
| Accrued                interest |   |   | 2,464,530 |   |   | 1,463,476 |   |
| Total                           |   | $      | 2,610,822 |   | $      | 1,773,536 |   |

**NOTE      C - CONVERTIBLE PROMISSORY NOTES PAYABLE**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2006                                                      | 2005                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|---------------------------------------------------------|
| 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) 30% 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. Subsequent                to                the date of the financial statements, the maturity date is extended                to                December 31, 2008. |        $1,457,247      |        $1,111,980    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |                                                    |
| 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) 30% 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.                                                                                                |         1,895,900 |         756,347 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                      |                                                    |
| Convertible                notes payable (“Third 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) 25% 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                                                                                                  |         48,630    |         -       |

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2006                                                   | 2005                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|---------------------------------------------------|
| Convertible                notes payable (“Fourth 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) 25% 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 |         22,831 |         - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 3,424,608                                              | 1,868,327                                         |
| Less                current maturities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (2,408,480)                                            | (1,111,980)                                       |
| Long                term portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $1,016,128                                             | $756,347                                          |

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

**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 year end and at the end of each                quarter. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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 $3,398,084 and $1,841,803 as of December 31, 2006 and                2005,                respectively. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

|                                                                                                                                                                 | 2006                  | 2005                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|-----------------------|
| Convertible                debentures                                                                                                                                | $3,424,608            | $1,868,327            |
| Warranty                liability                                                                                                                                    | 35,630                | 10,263                |
| Derivative                liability                                                                                                                                  | 18,700,966            | 5,811,478             |
|                                                                                                                                                                 | 22,161,204            | 7,690,068             |
| Cumulative                adjustment of derivative and warrant liability to fair                value                                                                |  (12,883,120)    |  (598,266)       |
| Cumulative                unrealized loss related to conversion of convertible debentures to                common                shares charged to interest expense |   (242,753) |   (179,884) |
| Cumulative                accretion of principal related to convertible debentures                                                                                   |  (3,398,084)     |  (1,841,803)     |
| Cumulative                pay down of convertible debentures                                                                                                         | (300,000)             | (300,000)             |
| Total                convertible debentures                                                                                                                          | $5,337,247            | $4,770,115            |

| Fiscal                  Year    |   | Amount |      |
|---------------------------------|--------|--------|-----------|
| 2007                            |   | $      | 2,857,247 |   |
| 2008                            |   |   | 1,850,000 |   |
| 2009                            |   |   | 630,000   |   |
| 2010                            |   |   | -         |   |
| 2011                  and after |   |   | -         |   |
|                            |   | $      | 5,337,247 |   |

**NOTE      D - NOTES PAYABLE**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2006                                                                                 | 2005                                                                                 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|
| 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                  |

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2006                                                               | 2005                                                               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|
| 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 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                                                          | 1,118,165                                                          |
| Less:                current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (1,118,165)                                                        | (1,118,165)                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $                -                                                 | $                -                                                 |

**NOTE      E - CAPITAL STOCK **

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

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

**NOTE      F - STOCK OPTIONS AND WARRANTS**

| 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                                     | 2.52 | $                0.24 | 2,000,000 | $                0.24 |
| $                0.02                      | 3,430,000                                     | 3.35 | 0.02 | 3,430,000 | 0.02 |
| $                0.01                      | 10,000,000                                    | 4.41 | 0.01 | 10,000,000 | 0.01 |
| $0.005                                     | 10,000,000                                    | 4.65 | 0.005 | 10,000,000 | 0.005 |
|                                       | 25,430,000                                    | 4.21 | $                0.03 | 25,430,000 | $                0.03 |

|                                            |   |  Number                of Shares |       | Weighted                Average Price Per Share |
|-------------------------------------------------|--------|---------------------------------------|------------|-------------------------------------------------|
| Outstanding                at January 1, 2005   |   |                                  | 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 |
| Granted                                         |   |                                  | 20,180,000 |                                            |   | 0.0075 |
| Exercised                                       |   |                                  | -          |                                            |   | - |
| Canceled                or expired              |   |                                  |       |                                            |   | - |
| Outstanding                at December 31, 2006 |   |                                  | 25,430,000 |                                            | $ | 0.04 |

**NOTE      G - RELATED PARTY TRANSACTIONS**

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

**NOTE      G - RELATED PARTY TRANSACTIONS (Continued)**

**NOTE      H - ASSET PURCHASE AGREEMENT**

**NOTE      I - LOSSES PER SHARE**

|                                                              |   |    2006 |        |    2005 |   |
|-------------------------------------------------------------------|--------|------------------------|-------------|------------------------|--------|
| Net                  income loss available to Common stockholders |   | $                      | (16,364,683 | )                      | $      | (4,314,470 | ) |
| Basic                  and diluted earning (loss) per share       |   | $                      | (0.15       | )                      | $      | (0.07 | ) |
| Continuing                  operations                            |   | $                      | (0.15       | )                      | $      | (0.07 | ) |
| Discontinued                  operations                          |   | $                      | -           |                   | $      | - |   |
| Weighted                  average common shares outstanding       |   |                   | 110,486,529 |                   |   | 66,158,104 |   |

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

**NOTE      J - INCOME TAXES**

| Non                current:                    |   |   |        |
|------------------------------------------------|--------|--------|-------------|
| Net                operating loss carryforward |   | $      | 24,152,000  |   |
| Valuation                allowance             |   |   | (24,152,000 | ) |
| Net                deferred tax asset          |   | $      | -           |   |

**NOTE      K - COMMITMENTS AND CONTINGENCIES**

----

**PACIFICAP      ENTERTAINMENT HOLDINGS, INC.**

**(A      development stage company)**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER      31, 2006 AND 2005**

**NOTE      L - GOING CONCERN MATTERS**

----

| **I****TEM****8.** | **CHANGES                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL                DISCLOSURE** |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| **I****TEM****8A -** | **CONTROLS                AND PROCEDURES** |
|----------------------|--------------------------------------------|

|   | a) | Item                8A — Controls and ProceduresEvaluation                of Disclosure Controls and Procedures The                Company maintains disclosure controls and procedures (as defined                in Rule                13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of                1934, as                amended) that are designed to ensure that information required to                be                disclosed in our periodic reports filed under the Exchange Act is                recorded, processed, summarized and reported within the time periods                specified in the SEC's rules and forms, and that such information                is                accumulated and communicated to our management, including our principal                executive/financial officer, to allow timely decisions regarding                required                disclosure. As                previously disclosed in a Current Report on Form 8-K , which we filed                on                February 26, 2007 , as a result of comments raised by the Division                of                Corporate Finance of the Securities and Exchange Commission (the                “Commission”), we determined that accounting errors were made in the                accounting for and disclosing our convertible debt instruments and                their embedded conversion features. Upon reviewing and updating our                accounting and disclosures of our convertible debt instruments ,                we                discovered our errors.  The                Company accounted for and disclosed the convertible promissory notes                as                conventional convertible debt. After further review, the Company                determined the conversion option embedded in the convertible notes                did not                meet the definition of a "conventional convertible debt instrument"                because of the option lacked a fixed conversion price. Therefore,                management re-evaluated the convertible notes and embedded conversion                feature under the guidelines of SFAS No. 133 and EITF Issue No. 00-19,                and                concluded that the embedded conversion option did not meet the SFAS                No.                133 paragraph 11(a) scope exception. Accordingly, management assessed                the                conversion feature against the additional criteria required for equity                classification included in paragraphs 12-32 of EITF Issue No. 00-19                and                determined that the number of shares to be delivered is not capped                and                therefore the Company did not have sufficient authorized and unissued                shares of its common stock to settle the obligation as of the date                of the                financial statements. As                a result of the above analysis , the Company concluded the embedded                conversion option: o                Does not meet the paragraph 11(a) scope exception in SFAS No.                133 o                Should be bifurcated from the host instrument ; and o                should be accounted for as a derivative liability under SFAS No.                133.  Accordingly,                the Company restated its financial statements for the year ended                December                31, 2004 and the quarterly periods ended March 31, 2005, June 30,                2005 and                September 30, 2005 filed with the SEC disclosing and accounting for                the                embedded conversion option as a derivative .  As                a result, we have determined that our disclosure controls were not                effective as of the end of the period covered by this report.  We                have implemented the following remedial measures to address the identified                material weaknesses.  ·  We                reviewed all convertible equity and debt securities to identify any                securities that may have embedded beneficial conversion features                 ·  We                have improved the supervision and training of our accounting staff                to                understand and implement accounting requirements , policies and procedures                applicable to the accounting and disclosure of convertible                securities.   |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | b) | **Changes                in internal controls**                .                 We regularly                review our system of internal control over financial reporting and                make                changes to our processes and systems to improve controls and increase                efficiency, while ensuring that we maintain an effective internal                control                environment. Changes may include such activities as implementing                new, more                efficient systems, consolidating activities, and migrating                processes.There                were no changes in our internal control over financial reporting                that                occurred during the period covered by this fiscal quarter that have                materially affected, or are reasonably likely to materially affect,                our                internal control over financial reporting. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **I****TEM****8B.** | **OTHER                INFORMATION** |
|---------------------|--------------------------------------|

----

**PART      III**

| **I****TEM****9** | **DIRECTORS                AND EXECUTIVE OFFICERS OF THE                REGISTRANT** |
|-------------------|--------------------------------------------------------------------------------------|

**Directors      and Executive Officers**

| Name                           | Age | Position                              |
|--------------------------------|-----|---------------------------------------|
| Mark                Schaftlein | 49  | President                and Director |

**Mark      Schaftlein**

**Limitation      of Liability of Directors**

**Election      of Directors and Officers.**

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

----

**Audit      Committee**

**Nominating      Committee**

**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**

----

| **I****TEM****10.** | **EXECUTIVE                COMPENSATION** |
|---------------------|-------------------------------------------|

**Termination      of Employment**

**Executive      Compensation**

The      following table sets forth the annual and long-term compensation paid to our      President and the other executive officers who earned more than $100,000 per      year at the end of the last completed fiscal year. We refer to all of these      officers collectively as our "named executive officers." 

**Summary      Compensation Table**

| Name                & Principal Position                               | Year   | Salary                ($) | Bonus                ($) | Stock                Awards($) | Option                Awards ($) | Non-Equity                Incentive Plan Compensation ($) | Change                in Pension Value and Non-Qualified Deferred Compensation Earnings                ($) | All                Other Compensation ($) | Total                ($) |
|----------------------------------------------------------------------------|--------|---------------------------|--------------------------|--------------------------------|----------------------------------|-----------------------------------------------------------|------------------------------------------------------------------------------------------------------------|-------------------------------------------|--------------------------|
| Mark                Schaftlein, President, Principal Executive Officer (1) | 2006   | -                         | -                        | -                              | -                                | -                                                         | -                                                                                                          | -                                         | 0                        |
|                                                                       |   |                      |                     |                           |                             |                                                      |                                                                                                       |                                      |                     |
| Edward                Litwak, Former President (2)                         | 2006   | $122,000                  | -                        | -                              | -                                | -                                                         | -                                                                                                          | -                                         | $122,000                 |

**Outstanding      Equity Awards at Fiscal Year-End Table. **

| Option                Awards   | Stock                Awards                                                                                                                                                  |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Name                      | Number                of                Securities                Underlying                Unexercised                Options                (#)                Exercisable | Number                of                Securities                Underlying                Unexercised                Options                (#)                Unexercisable | Equity                Incentive                Plan                Awards:                Number                of                Securities                Underlying Unexercised                Unearned                Options                (#) | Option                Exercise                Price                ($) | Option                Expiration                Date | Number                of                Shares or                Units of                Stock That                Have Not                Vested                (#) | Market                Value                of Shares                or Units                of Stock                That                Have Not                Vested                ($) | Equity                Incentive                Plan                Awards: Number                of                Unearned                Shares,                Units                or Other                Rights That                Have Not                Vested                (#) | Equity                Incentive Plan                Awards: Market                or Payout Value                of                Unearned                Shares,                Units                or Other                Rights                That                Have Not                Vested                ($) |
| Mark                Schaftlein |  -                                                                                                                                                                      |  - |  - |  - |  - |  - |  - |  - |  - |
|                           |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Ed                Litwak       |  -                                                                                                                                                                      |  - |  - |  - |  - |  - |  - |  - |  - |

----

**Employment      Agreements with Executive Officers **

*Ed      Litwak, Former President*

**Director      Compensation**

----

| **IT****EM****11.** | **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)     |
|                                      |   |                          |   |                            |                         |   |   |
| Mark                Schaftlein            |   | Common                Stock   |   |                            | 0                            |   |   | * |   |
|                                      |   |                          |   |                            |                         |   |   |   |   |   |
|                                      |   |                          |   |                            |                         |   |   |   |   |   |
|                                      |   |                          |   |                            |                         |   |   |   |   |   |
| All                Officers and Directors |   | Common                Stock   |   |                            | 0                            |   |   | * |   |
| As                a Group (1 persons)     |   |                          |   |                            |                         |   |   |   |   |   |
|                                      |   |                          |   |                            |                         |   |   |   |   |   |

| **I****TEM****12.** | **CERTAIN                RELATIONSHIPS AND RELATED                TRANSACTIONS** |
|---------------------|----------------------------------------------------------------------------------|

----

**PART      IV**

| **I****TEM****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.                                                                                                                                              |

----

| 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.                                                                                                                                                       |

----

| 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.                                                                                                                                                                                                                 |

----

| 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.                 |

----

| 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. |

----

| 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.                                                                                                                                                |

----

| 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.                                                                                                                                                                                                      |

----

| 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.                                                                                                                                                                                                                                            |

----

| 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.                                                                                                                                                                                                                                                                                                                                            |

----

| 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. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.102  | Securities                Purchase Agreement, dated as of June 1, 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,                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.103  | Secured                Convertible Note with AJW Offshore, Ltd., dated June 1,                2006.                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.104  | Secured                Convertible Note with AJW Partners, LLC, dated June 1,                2006.                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.105  | Secured                Convertible Note with AJW Qualified Partners, LLC, dated June 1,                2006.                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.106  | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                June                1, 2006.                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.107  | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated June 1,                2006.                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.108  | Common                Stock Purchase Warrant with AJW Partners, LLC, dated June 1,                2006.                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.109  | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated June                1,                2006.                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.110  | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                June 1, 2006,                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.111  | Registration                Rights Agreement, dated as of June 1, 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,.                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.112  | Securities                Purchase Agreement, dated as of August 28, 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.                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.113  | Secured                Convertible Note with AJW Offshore, Ltd., dated August 28,                2006.                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.114  | Secured                Convertible Note with AJW Partners, LLC, dated August 28,                2006.                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.115  | Secured                Convertible Note with AJW Qualified Partners, LLC, dated August 28,                2006.                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.116  | Secured                Convertible Note with New Millennium Capital Partners II, LLC, dated                August 28, 2006.                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.117  | Common                Stock Purchase Warrant with AJW Offshore, Ltd., dated August 28,                2006.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.118  | Common                Stock Purchase Warrant with AJW Partners, LLC, dated August 28,                2006.                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.119  | Common                Stock Purchase Warrant with AJW Qualified Partners, LLC, dated August                28,                2006.                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.120  | Common                Stock Purchase Warrant with New Millennium Capital Partners II, LLC,                dated                August 28, 2006,                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 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.                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.6   | Separation,                Release and Consulting Agreement by and between Pacificap Entertainment                Holdings, Inc. and Ed Litwak, dated January 19, 2007 ., filed as                an                exhibit to the Current Report on Form 8-K filed with the Commission                on                January 31, 2007 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).                                                                                                                                                                                                                                                                                                |

----

| **I****TEM****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**

----

**SIGN****ATURES**

|                                   |                                                                                                                                       |                                  |
|----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|
|                                   | PACIFICAP                ENTERTAINMENT HOLDINGS, INC.                                                                                      |
|                              |                                                                                                                                  |                             |
| Date: April              18, 2007 | By:                                                                                                                              | /s/ MARK              SCHAFTLEIN |
|                                   | Mark                Schaftlein                                                                                                             |
|                                   | President                (Principal Executive Officer), Director, Principal Financial Officer,                Principal Accounting Officer |

Pursuant      to the requirements of the Securities Exchange Act of 1934, this report has      been      signed below by the following persons on behalf of the registrant and in the      capacities and on the dates indicated.

| SIGNATURE                          | TITLE                                                  | DATE                                                    |
|------------------------------------|--------------------------------------------------------|---------------------------------------------------------|
|                               |                                                   |                                                    |   |
| /s/                MARK SCHAFTLEIN |                                                   | President                (Principal Executive           | April                18, 2007 |
| Mark                Schaftlein     | Officer),                Director, Principal Financial |                                                    |
|                               |                                                   | Officer                and Principal Accounting Officer |   |
|                               |                                                   |                                                    |   |
|                               |                                                   |                                                    |