UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 10-QSB


(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
    1934

            For the quarterly period ended June 30, 2004

[ ]  Transition report under Section 13 or 15(d) of the Exchange Act

   For the transition period from _______________________ to ________________

                         Commission File Number 0-25659
                                                -------

                                 ROO GROUP, INC.
                                 ---------------
        (Exact name of small business issuer as specified in its charter)

            DELAWARE                                         11-3447894
            --------                                         ----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                  62 WHITE STREET, SUITE 3A, NEW YORK, NY 10013
                  ---------------------------------------------
                    (Address of principal executive offices)

                                 (646) 352- 0260
                                 ---------------
                (Issuer's telephone number, including area code)

                           VIRILITEC INDUSTRIES, INC.
                           --------------------------
                                  (Former Name)

                            All Correspondence to:
                             Arthur S. Marcus, Esq.
                 Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP
                           101 E. 52 Street, 9th Floor
                            New York, New York 10022
                                 (212) 752-9700

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
                                                                  Yes [X] No [ ]

The number of shares outstanding of each of the issuer's classes of common
stock, as of August 9, 2004 was 179,851,804.

Transitional Small Business Disclosure Format (check one):        Yes [ ] No [X]


<PAGE>


                                 ROO GROUP, INC.

                                TABLE OF CONTENTS

                                                                            Page

PART I
FINANCIAL INFORMATION

Item 1.     Financial Statements                                              1
Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                        13
Item 3.     Controls and Procedures                                          16

PART II
OTHER INFORMATION

Item 1      Legal Proceedings                                                17
Item 2      Changes in Securities and Small Business
            Issuer Purchases of Equity Securities                            17
Item 3      Defaults upon Senior Securities                                  18
Item 4      Submission of Matters to a Vote of Security Holders              18
Item 5      Other Information                                                18
Item 6      Exhibits and Reports on Form 8-K                                 19






<PAGE>



PART I
FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

                        ROO GROUP, INC. AND SUBSIDIARIES
                          [A Development Stage Company]
                 CONSOLIDATED BALANCE SHEET AS AT JUNE 30, 2004
                                   [Unaudited]
<TABLE>
<S>                    <C>                                                                   <C>
ASSETS

Current Assets

                       Cash and cash equivalents                                             $        156,335
                       Accounts receivable                                                            860,057
                       Other Debtors and Prepayments                                                  105,030
                                                                                             ----------------
                          Total current assets                                                      1,121,422

Non Current Assets

                       Fixed Assets                                                                   327,384
                       Content                                                                        144,733
                       Deferred Tax Assets                                                             17,104
                       Intangible Asset                                                               622,969
                       Goodwill                                                                     1,990,413
                                                                                             ----------------
                            Total non current assets                                                3,102,603
                                                                                             ----------------
                          Total assets                                                              4,224,025
                                                                                             ================

                 LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

Current Liabilities

                       Accounts payable                                                               560,667
                       Capital Leases                                                                  43,150
                       Accrued Expenses                                                               247,747
                       Stockholder loans payable                                                      513,241
                       Related Party Loans                                                            163,212
                       Income Tax Payable                                                              63,444
                       Deferred Payment Reality Shares                                                144,456
                       Provision Employee Benefits                                                     43,893
                       Other current liabilities                                                      215,695
                                                                                             ----------------
                              Total current liabilities                                             1,995,505
                                                                                             ----------------
Non Current Liabilities

                       Capital Leases                                                                113,357
                       Minority Interest                                                               5,162
                                                                                             ----------------
                                                                                                     118,519
                                                                                             ----------------
Stockholder's Equity (Deficit)

                       Common Stock, $.0001 par value: authorized 500,000,000 shares;
                          issued and outstanding 179,851,804                                           17,985
                       Paid-in capital                                                              4,379,265
                       (Deficit) accumulated during development stage                              (2,263,141)
                       Accumulated other comprehensive (loss)                                         (24,108)
                                                                                             ----------------
                          Total stockholder's equity (deficit)                                      2,110,001
                                                                                             ----------------
                          Total liabilities and stockholder's equity
                          (deficit)                                                          $      4,224,025
                                                                                             ================
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.







                                       1
<PAGE>



                        ROO GROUP, INC. AND SUBSIDIARIES
                          [A Development Stage Company]
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   [Unaudited]

<TABLE>
<CAPTION>
                                                                                                                     Cumulative
                                                                                                                     period from
                                                                                                                    March 30,2001
                                         Three months          Three months      Six months        Six months         (date of
                                            ended                 ended            ended              ended          inception)
                                        June 30, 2004          June 30 2003    June 30, 2004      June 30, 2003   to June 30,2004
                                      --------------------------------------------------------------------------------------------
<S>                                      <C>                     <C>             <C>                <C>              <C>
Revenue                                  $1,140,972              $124,932        $1,149,474         $127,840         $1,299,253
                                      --------------------------------------------------------------------------------------------

Expenses:

Operating Expenses                          789,754                                 789,754                             789,754
Research and Development                     83,371                59,934           146,001          101,902            513,726
Sales and Marketing                         115,558                31,623           168,061           60,367            435,658
General and Administration                  501,477                12,100           591,160           39,421          1,167,849

                                      --------------------------------------------------------------------------------------------
Total Expenses                            1,490,160               103,657         1,694,976          201,690          2,906,987
                                      --------------------------------------------------------------------------------------------

Income(Loss) from Operations               (349,188)               21,275          (545,502)         (73,850)        (1,607,734)
Non Cash Cost of Capital                                                           (433,747)                           (433,747)
Cost of Capital                             (72,530)                                (72,530)                            (72,530)
Interest Income                                 729                                     774                                 803
Interest Expense - Related Party            (13,088)              (16,211)          (25,525)         (31,009)          (129,596)
Interest Expense - Other                    (24,546)                                (29,498)                            (15,866)
                                      --------------------------------------------------------------------------------------------
(Loss) before Income Taxes                 (458,623)                5,064        (1,106,028)        (104,859)        (2,258,670)

Income Taxes                                  3,094                                   3,094                               3,094

Income (Loss) before minority
Interest                                   (461,717)                5,064        (1,109,122)        (104,859)        (2,261,764)

Minority Interest                             1,377                                   1,377                               1,377

                                      --------------------------------------------------------------------------------------------
Net Income (Loss)                         $(463,094)               $5,064       $(1,110,499)       $(104,859)       $(2,263,141)
                                      ============================================================================================

Net Income (loss) per common Share          $ --                   $   --            $(0.01)           $  --             $(0.02)
                                      ============================================================================================

Basic and Diluted                           $ --                   $   --            $(0.01)           $  --             $(0.02)
                                      ============================================================================================

Average common shares outstanding       173,178,796           148,000,000       165,569,265      148,000,000
                                      ============================================================================================


Comprehensive Income:

Net Income (Loss)                         $(463,094)               $5,064       $(1,110,499)       $(104,859)       $(2,263,141)
Foreign Currency Translation                (11,063)                 (756)          (11,170)          (2,176)           (24,108)

                                      --------------------------------------------------------------------------------------------
Comprehensive Income (Loss)               $(474,157)               $4,308       $(1,121,669)       $(107,035)       $(2,287,249)
                                      ============================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.


                                       2
<PAGE>


                        ROO GROUP, INC. AND SUBSIDIARIES
                         [A Development Stage Company]
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                  [Unaudited]


 <TABLE>
<CAPTION>
                                                                                   (Deficit)       Accumulated
                                                                        Other     Accumulated        Other              Total
                                                                     Additional      During       Comprehensive     Stockholders'
                                           Common         Stock        Paid-in    Development        Income            Equity
                                            Stock       Par Value      Capital       Stage           (Loss)           (Deficit)
                                     -------------------------------------------------------------------------------------------
<S>                                      <C>             <C>           <C>         <C>            <C>                   <C>
Recapitalization as a result of          148,000,000     $14,800       $394,308    $      --      $        --           $409,108
merger (1)

Net loss for period from
March 30, 2001 (date of inception)
to December 31, 2001                              --          --             --     (184,209)              --           (184,209)
                                     -------------------------------------------------------------------------------------------
Balance - December 31, 2001              148,000,000      14,800        394,308     (184,209)              --            224,899

Net Loss for year ended
December 31, 2002                                 --          --             --     (389,620)              --           (389,620)

Foreign currency translation
adjustment                                        --          --             --           --             (982)              (982)
                                      -------------------------------------------------------------------------------------------
Balance - December 2002                  148,000,000      14,800        394,308     (573,829)            (982)          (165,703)

Equity of shell in merger
transaction                                9,669,130         967           (967)          --               --                 --

Net (Loss) for the year
ended December 31, 2003                           --          --             --     (578,813)              --           (578,813)

Foreign currency translation
adjustment                                        --          --             --           --          (11,956)           (11,956)
                                     -------------------------------------------------------------------------------------------
Balance December 31, 2003                157,669,130      15,767        393,341   (1,152,642)         (12,938)          (756,472)

Stock issued to Gersten, Savage
Kaplowitz, Wolf & Marcus, LLP
February 18, 2004                            148,200          15         14,805           --               --             14,820

Grant stock options for services                                        347,232                                          347,232

Stock issued in private placement
March 3, 2004                                954,547          95        141,420           --               --            141,515

Net (Loss) for quarter ended
March 31,2004                                                                       (647,405)                           (647,405)

Foreign currency translation
adjustment                                                                                               (107)              (107)
                                      -------------------------------------------------------------------------------------------
Balance March 31, 2004                   158,771,877      15,877        896,798   (1,800,047)         (13,045)          (900,417)

Stock issued for Marketing Services
April 19,2004                              5,000,000         500        449,500                                          450,000

Shares issued for purchase of
80% of Reality Group Pty Ltd               8,360,000         836      2,507,164                                        2,508,000
April 30, 2004

Stock issued in private placements         4,720,833         472        414,528                                          415,000
April, 2004 including 325,000
shares issued as non cash placement
fees

Stock issued in private placements
in May 2004, including 75,000 shares
issued as non cash placement fees            974,996          97        134,903                                          135,000

Stock issued to Gersten, Savage
Kaplowitz, Wolf & Marcus LLP
May 26, 2004.                                 37,765           4          7,549                                            7,553

Stock issued for purchase of
Undercover Media Pty Ltd
Business June 1, 2004                      1,000,000         100        149,900                                          150,000

Stock issued in private placements
in June 2004                                 986,333          99        130,201                                          130,300


Deferred marketing expenses                                           (311,278)                                         (311,278)

Net (Loss) for quarter ended
June 30, 2004                                                                       (463,094)                           (463,094)

Foreign currency translation
adjustment                                                                                            (11,063)           (11,063)
                                     -------------------------------------------------------------------------------------------
                                         179,851,804     $17,985     $4,379,265  $(2,263,141)        $(24,108)        $2,110,001
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.





                                       3
<PAGE>


                        ROO GROUP, INC. AND SUBSIDIARIES
                         [A Development Stage Company]
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  [Unaudited]


<TABLE>
<CAPTION>
                                                                 -------------------------------------------------
                                                                                                     Cumulative
                                                                                                        period
                                                                                                    May 2001 (date
                                                                   Six months      Six months             of
                                                                      ended           ended         inception) to
                                                                  June 30, 2004   June 30, 2003     June 30, 2004
                                                                 -------------------------------------------------
<S>                                                                 <C>              <C>              <C>
Operating activities:

Net Income/(Loss)                                                    $(1,110,499)     $(104,859)      $(2,263,141)
                                                                 -------------------------------------------------

Adjustments to reconcile net (loss) to net cash provided
(used) by operating activities:
Depreciation                                                              20,688          1,902            28,267
Amortization of intangible asset                                          27,085                           27,085
Non cash cost of capital                                                 433,747                          433,747
Non cash legal expenses                                                    7,553                            7,553
Non cash marketing expenses                                              138,722                          138,722

Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable                                                      (81,273)       (1,371)           (86,249)
Other assets                                                               7,088                            7,088

Increase (decrease) in:
Accounts payable                                                        (172,980)        8,755              1,178
Accrued Expenses                                                         125,762                          125,762
Income Tax payable                                                          (970)                            (970)
Accrued Employee Benefits                                                   (302)                            (302)
Other liabilities                                                        170,342         17,828           223,515
                                                                 -------------------------------------------------
Total adjustments                                                        675,462         27,114           905,396
                                                                 -------------------------------------------------

                                                                 -------------------------------------------------
Net cash provided (used) by operating activities                        (435,037)      (77,745)        (1,357,745)
                                                                 -------------------------------------------------

Investing activities:
Purchase of equipment                                                    (19,205)       (1,842)           (42,960)
Net cash received in acquisition                                          30,374                           30,374
                                                                 -------------------------------------------------
Net cash provided (used) by investing activities                          11,169        (1,842)           (12,586)
                                                                 -------------------------------------------------
Financing activities:
Capital contribution                                                     750,120                        1,159,228
Bank Overdraft                                                           (42,596)                         (42,598)
(Decrease) in related party loans                                        (68,021)                         (68,021)
Increase in stockholder loan                                              87,981        234,526         1,183,947
(Decrease) in stockholder loan                                           (88,641)     (156,260)          (670,443)
Note payable                                                             (62,500)
(Decrease) in capital leases                                              (5,085)                          (5,085)
                                                                 -------------------------------------------------
Net cash provided by financing activities                                571,258         78,266         1,557,028
                                                                 -------------------------------------------------

Effect of exchange rate changes on cash                                  (17,426)       (1,234)          (30,362)
                                                                 -------------------------------------------------

Net increase in cash and cash equivalents                                129,964        (2,555)        156,335.00
Cash and cash equivalents at beginning of periods                         26,371        11,427                 --
                                                                 -------------------------------------------------
Cash and cash equivalents at end of periods                             $156,335         $8,872       $156,335.00
                                                                 =================================================
</TABLE>

For the six months ended June 30, 2004 and 2003, the Company paid $0 for taxes
and $55,023 for interest and $0 for taxes and $31,009 for interest,
respectively.

The accompanying notes are an integral part of these consolidated financial
statements




                                       4
<PAGE>



NOTES TO CONSODLIATED FINANCIAL STATEMENTS [UNAUDITED]

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of ROO Group, Inc.
have been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-QSB and Item
310(b) of Regulation S-B. Accordingly, they do not include all information and
footnotes required by general accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary in order to make the interim financial
statements not misleading have been included. Results for the three and six
months ended June 30, 2004 are not necessarily indicative of the results that
may be expected for the year ended December 31, 2004. These interim consolidated
financial statements should be read in conjunction with the consolidated
financial statements and footnotes thereto of the Company and management's
discussion and analysis of financial condition and results of operations
included in the Company's annual report on Form 10-KSB for the year ended
December 31, 2003.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of ROO Group, Inc.,
its wholly owned subsidiary ROO Media Corporation and its 80% subsidiary Reality
Group Pty. Ltd. ("Reality"). Included in the consolidation with ROO Media are
ROO Media's wholly owned subsidiary ROO Media (Australia) Pty Ltd. and ROO Media
(Australia) Pty Ltd.'s wholly owned subsidiary Undercover Media Pty Ltd.
("Undercover"), its 76%-owned subsidiary ROO Media Europe Pty Ltd, and its
94%-owned subsidiary ROO Broadcasting Limited. The acquisition of Reality closed
on April 30, 2004 and Reality's activities for the period from May 1, 2004 to
June 30, 2004 have been included in the consolidated statements. The asset
acquisition of Undercover was completed on June 1, 2004 and the activities of
Undercover for the period from June 1, 2004 to June 30, 2004 have been included
in the consolidated statements. All material intercompany accounts and
transactions have been eliminated.

(B) Management estimates

The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Certain amounts included in the financial statements are
estimated based on currently available information and management's judgment as
to the outcome of future conditions and circumstances. Changes in the status of
certain facts or circumstances could result in material changes to the estimates
used in the preparation of financial statements and actual results could differ
from the estimates and assumptions. Every effort is made to ensure the integrity
of such estimates.

(C) Foreign Currency Translation

Assets and liabilities of ROO Group's foreign subsidiaries are translated at
current exchange rates and related revenues and expenses are translated at
average exchange rates in affect during the period. Resulting translation
adjustments are recorded as a component of accumulated comprehensive income
(loss) in stockholders' equity.




                                       5
<PAGE>


(D) Revenue Recognition

Revenues are derived principally from professional services, digital media
management and advertising. Revenue is recognized when service has been
provided.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements filed with the SEC. SAB 101 outlines the basic criteria that must be
met to recognize revenue and provide guidance for disclosures related to revenue
recognition policies. Management believes that ROO Group's revenue recognition
practices are in conformity with the guidelines of SAB 101.

(E) Earnings (Loss) Per Share Calculation:

Net loss per share is based on the weighted average number of shares outstanding
reflecting the shares issued in the merger as outstanding for all periods
presented.

Earnings (Loss) per common share are calculated under the provisions of
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share," which establishes standards for computing and presenting earnings per
share. SFAS No. 128 requires ROO Group to report both basic earnings (loss) per
share, which is based on the weighted average number of common shares
outstanding during the period, and diluted earnings (loss) per share, which is
based on the weighted average number of common shares outstanding plus all
potential dilutive common shares outstanding. Options and warrants are not
considered in calculating diluted earnings (loss) per share since considering
such items would have an anti-dilutive effect.

(F) Stock Options and Similar Equity Instruments

The Company has adopted the disclosure requirements of SFAS No. 123, "Accounting
for Stock-Based  Compensation," for stock options and similar equity instruments
(collectively "Options") issued to employees and directors, however, the Company
will  continue to apply the  intrinsic  value  based  method of  accounting  for
options issued to employees  prescribed by Accounting  Principles  Board ("APB")
Opinion No. 25,  "Accounting for Stock Issued to Employees" rather than the fair
value based method of  accounting  prescribed  by SFAS No. 123. SFAS No.123 also
applies to  transactions  in which an entity  issues its equity  instruments  to
acquire  goods and  services  from  non-employees.  Those  transactions  must be
accounted for based on the fair value of the consideration  received or the fair
value of the equity instruments issued, whichever is more reliably measurable.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of options. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.

(G) Non Cash Cost of Capital

During the six month periods ended June 30, 2004 and 2003, non cash cost of
capital included options issued for capital raising services which were valued
using the Black-Scholes method totaling $347,232 and $-0-, respectively.





                                       6
<PAGE>


NOTE 3 ACQUISITIONS

(i) On April 30, 2004 the Company completed the acquisition of 80% of the
outstanding ordinary shares (the "Shares") of The Reality Group Pty Ltd.
("Reality"). Reality is a provider of integrated communication solutions,
including direct marketing, internet advertising and sales promotion.

The consideration for the Shares was the issuance of an aggregate of eight
million three hundred and sixty thousand (8,360,000) shares of common stock, par
value $.0001 per share, of ROO Group, Inc. to the Reality shareholders, pro rata
based on the Reality shareholders' ownership interest in Reality. As additional
consideration for the Shares, ROO Group, Inc. agreed to pay an aggregate of
US$144,456 ($200,000 Australian Dollars) to the Reality shareholders on or
before September 30, 2004, to be divided proportionally to each Reality
shareholder based on the Reality shareholder's current ownership percentage in
Reality. The shares were valued at time of issue at $0.30 per share as this was
the price that the Company guaranteed the closing market price of the Company's
common stock would be one year from the date of the closing of the Reality
acquisition and, together with the deferred cash payment, placed a value on the
Reality acquisition of $2,652,456. Unless the trading price of the Company's
common stock is at least $0.30 per share for a period of twelve months
commencing one year from the closing of the Reality acquisition, the Company
will be required to pay the difference between the closing share price per share
and $0.30 per share (a) in cash, (b) by returning a number of shares in Reality
to the original Reality shareholders on a pro rata basis based upon an agreed
valuation of the Reality ordinary shares or (c) with the agreement of the
Reality shareholders, by issuing additional common shares of ROO Group, Inc.
proportionately to the Reality shareholders.

The operations of Reality during the period from May 1, 2004 to June 30, 2004
have been included in the consolidated statements.

The following table summarizes the estimated fair values of the assets acquired
and liabilities assumed at the date of acquisition (April 30, 2004).

Current assets                              $  961,780
Property, Plant and Equipment                  326,532
Deferred Tax assets                             13,108
Intangible Asset - Customer List               650,054
Goodwill                                     1,990,413
                                            ----------
Total assets acquired                        3,941,887
                                            ==========
Current liabilities                          1,160,326
Non current liabilities                        123,943
Minority interest                                5,162
                                            ----------
Total liabilities assumed                    1,289,431
                                            ==========
Net assets acquired                         $2,652,456
                                            ==========

(ii) On June 1, 2004 the Company completed the acquisition of the business and
business assets of Undercover Media Pty Ltd. ("Undercover"). Included in the
purchase is the WWW.UNDERCOVER.COM.AU website, which currently serves
approximately 500,000 visitors per month with 55% from the USA, 18% from Europe,
7% from Asia and 20% from other countries around the world. The Undercover
website, through its relationship with HMV, exemplifies the link between music
content and the sale of music; the user




                                       7
<PAGE>


reads the article or interview and can then click through and purchase the
artist's CD from HMV's web site.

The consideration for the business was one million (1,000,000) shares of common
stock, par value $.0001 per share, of ROO Group, Inc. In determining a fair
value for the cost of the acquisition of Undercover, the Company considered the
effects of price fluctuations in the common stock during the period prior to
negotiations through the period subsequent to the closing of the acquisition,
quantities traded, issue costs and the like. The Company considers the fair
value for the stock issued to be $0.15 per share.

The estimated fair value of the assets acquired was $150,000 for music, audio,
video and photographic content acquired. There were no liabilities assumed in
the acquisition.

The operations of the business of Undercover for the period from June 1, 2004 to
June 30, 2004 have been included in the consolidated statements.

Selected unaudited pro forma combined results of operations for the three months
and six months ended June 30, 2004, assuming the Reality and Undercover
acquisitions occurred on January 1, 2004 using actual unaudited figures from
each entity prior to acquisition, are presented as follows:

                                  Three months ended   Six months ended
                                     June 30,2004       June 30, 2004
                                  ---------------------------------------
Total revenues                        $1,556,574          $2,604,940
Net (Loss)                             ($466,902)        ($1,055,257)
Net (loss) per common and
common equivalent share                  $ --                  ($.01)



NOTE 4 - LEASES

The Company is a party to a number of noncancelable lease agreements primarily
involving office premises and computer equipment. Computer equipment leases are
generally for 3-year periods and the lease of office premises is for a 4-year
period ending April 2006. The office premises lease has a renewal option for an
additional 3-year term.

The following is a schedule of future minimum payments under capital leases and
operating leases and obligations under capital leases (present value of future
minimum rentals) as of June 30, 2004.
<TABLE>
<CAPTION>
      Periods January to December
      unless stated otherwise                   Capital               Operating             Total
      ---------------------------------------------------------------------------------------------
<S>                                            <C>                   <C>                 <C>
      July to December 2004                    $  20,814             $    77,093         $   97,907
      2005                                        51,110                 148,387            199,497
      2006                                        43,833                  52,687             96,520
      2007                                        29,223                   8,617             37,840
      2008                                        29,485                   3,290             32,775
      2009                                         --                      --                 --

      2010 and thereafter                          --                      --                 --
      ---------------------------------------------------------------------------------------------
      Total minimum lease payments              174,465              $  290,074          $  464,539
                                                                     ==============================
      Less amount representing interest          17,958
                                              ------------
      Total obligations under capital leases   $156,507
                                              ============
</TABLE>
Rent expense amounted to $26,980 and $3,835 for the three months ended June 30,
2004 and 2003, respectively, and $29,271 and $3,835 for the six months ended
June 30, 2004 and 2003, respectively.




                                       8
<PAGE>


NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2004 consists of the following:

<TABLE>
<CAPTION>
                                        Plant and                       Motor
                                        Equipment                      Vehicles
                         Plant and       Capital        Motor          Capital      Computer      Other
                         Equipment        Lease       Vehicles          Lease       Software     Equipment      Total
                       -------------------------------------------------------------------------------------------------
<S>                      <C>             <C>           <C>             <C>          <C>          <C>           <C>
Cost                     $188,762        $26,028       $6,733          $190,409     $59,068      $115,996      $586,996
Accumulated
Depreciation              (79,808)       (18,564)      (3,257)          (62,921)    (34,268)      (60,794)     (259,612)

                       -------------------------------------------------------------------------------------------------
Net                      $108,954         $7,464       $3,476          $127,488     $24,800       $55,202      $327,384
                       =================================================================================================

 Estimated useful life   20 years        4 years    6-8 years         6-8 years     4 years     4-8 years
</TABLE>

Depreciation expense (including amortization of capital lease assets) amounts to
$18,501 and $983 for the three months ended June 30, 2004 and 2003,
respectively, and $20,688 and $1,902 for the six months ended June 30, 2004 and
2003, respectively.

NOTE 6 - INCOME TAXES

The provision (benefit) for income taxes consisted of the following:

<TABLE>
<CAPTION>
                                        Three months       Six months                          Six months
                                            ended            ended       Three months ended       ended
                                        June 30,2004      June 30,2004      June 30,2003      June 30,2003
                                      ---------------------------------------------------------------------
<S>                                        <C>                <C>             <C>                 <C>
Current
    Federal tax expense                    $5,589             $5,589          $     --            $    --
Non-current
    Federal tax expense                     2,495              2,495                --                 --
                                      ------------------------------------------------------ --------------
                                           $3,094             $3,094          $     --            $    --
                                      =====================================================================
</TABLE>

The reconciliation of reported income tax expense to the amount of income tax
expense that would result from applying domestic federal tax rates to pretax
income is as follows:
<TABLE>
<S>                                        <C>                <C>             <C>                 <C>
Statutory federal income tax                 $903               $903          $     --            $    --
Other (non allowable deductions)            2,191              2,191                --                 --
                                      ------------------------------------------------------ --------------
                                           $3,094             $3,094          $     --            $    --
                                      =====================================================================
</TABLE>
The components of deferred tax assets and liabilities were as follows:
<TABLE>
<S>                                        <C>                <C>             <C>                 <C>
Deferred tax assets:
Provision accounts                        $13,168            $13,168          $     --            $    --
Depreciation                                 (261)              (261)               --                 --
Other liabilities                           4,107              4,107                --                 --

                                      ------------------------------------------------------ --------------
                                          $17,014            $17,014          $     --            $    --
                                      =====================================================================
</TABLE>





                                       9
<PAGE>


NOTE 7 - GOODWILL AND INTANGIBLE ASSETS

Goodwill of $1,990,413 represents the excess of acquisition costs over the fair
value of net assets of the Reality acquisition. The Company's policy is to
regularly review goodwill to determine if it has been permanently impaired by
adverse conditions which might affect Reality.

At June 30, 2004 intangible assets include the following:

                  Customer Lists           $   650,054
                  Less Amortization            (27,085)
                                           -----------
                                           $   622,969
                                           ===========

The customer lists are being amortized over a 4-year period on a straight line
basis. We estimate that the aggregate annual amortization expense for each of
the next 4 years will be $162,510.

NOTE 8 - STOCK ISSUANCES

During the three months ended June 30, 2004, the Company issued shares of its
common stock in a private placement conducted by the Company. The Company relied
upon the exemption from registration provided by Section 4(2) of the Securities
Act. The Company determined that the fair value, based on market conditions, was
cash received for the common stock.

         During April 2004 the Company issued 4,720,833 shares of common stock,
including 325,000 shares issued as compensation for non cash placement fees
netted against proceeds of shares. The stock issued for cash was issued at three
price levels that were determined based on changing market conditions - 333,333
shares were issued at $0.075 per share, 812,500 shares were issued at $0.08 per
share and 3,250,000 shares were issued at $0.10 per share.

         During May 2004 the Company issued 974,996 shares of common stock,
including 75,000 shares issued as compensation for non cash placement fees
netted against proceeds of shares. The stock issued for cash was issued at $0.15
per share.






                                       10
<PAGE>

         During June 2004 the Company issued 986,333 shares of common stock. The
stock issued for cash was issued at two price levels that were determined based
on changing market conditions - 353,000 shares were issued at $0.10 per share
and 633,333 shares were issued at $0.15 per share.

During the three months ended June 30, 2004, the Company also issued shares of
its common stock as consideration for its strategic acquisitions of Reality
Group Pty Ltd. and Undercover Media Pty. Ltd. See Note 3 - Acquisitions.

In addition, during the three months ended June 30, 2004, the Company issued
shares of its common stock as consideration for services provided to the
Company.

         In April 2004, the Company authorized the issuance of 5,000,000 shares
of its common stock to an entity for marketing services provided or to be
provided until December 31, 2004.

         In May 2004, the Company authorized the issuance of 37,765 shares of
its common stock to Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP, its
corporate and securities counsel, as payment for outstanding legal fees.

COST OF CAPITAL

         During the six months ended June 30, 2004, a company associated with a
director of a subsidiary of the Company received a cash payment equivalent to
10% of the cash received from the issuances of common stock from private
placements during the period.

NOTE 9 - STOCK OPTION PLAN

On April 1, 2004 the Board of Directors of ROO Group, Inc. adopted ROO Group,
Inc.'s 2004 Stock Option Plan (the "Plan"). Pursuant to the Plan, which expires
on April 1, 2014, incentive stock options or non-qualified options to purchase
an aggregate of 50,000,000 shares of common stock may be issued. Of that amount,
options to acquire 13,450,000 shares of common stock have been issued to
officers, directors, employees and consultants of ROO Group at prices ranging
from $0.115 to $0.16 per share. The balance of options to acquire 36,550,000
shares issuable under the Plan have not been issued or committed for issuance.

The Plan is administered by the Board of Directors of ROO Group (the "Board") or
by a committee to which administration of the Plan, or of part of the Plan, may
be delegated by the Board (in either case, the "Administrator"). Options granted
under the Plan are not generally transferable by the optionee except by will,
the laws of descent and distribution or pursuant to a qualified domestic
relations order, and are exercisable during the lifetime of the optionee only by
such optionee. Options granted under the Plan vest in such increments as is
determined by the Administrator. To the extent that options are vested, they
must be exercised within a maximum of three months of the end of optionee's
status as an employee, director or consultant, or within a maximum of 12 months
after such optionee's termination by death or disability, but in no event later
than the expiration of the option term. The exercise price of all stock options
granted under the Plan shall be determined by the Administrator. With respect to
any participant who owns stock possessing more than 10% of the voting power of
all classes of ROO Group's outstanding capital stock, the exercise price of any
incentive stock option granted must equal at least 110% of the fair market value
on the grant date.

If the compensation cost for the stock-based employee compensation plans had
been determined based on fair values of awards on the grant date, estimated
using the Black-Scholes option pricing model, which would be consistent with the
method described in SFAS No. 123, the Company's reported net (loss) and (loss)
per share would have been reduced to the pro forma amounts shown below:





                                       11
<PAGE>


<TABLE>
<CAPTION>
                                                                                    Six months
                                                              Six months ended         ended
                                                               June 30, 2004       June 30, 2003
                                                            --------------------- ----------------
<S>                                                              <C>                <C>
Net (Loss) as reported                                           (1,110,499)        (104,859)
Deduct: Amount by which stock-based employee
       compensation as determined under fair value
       based method for all awards exceeds the
       compensation as determined under the intrinsic
       value method                                              (1,026,876)              --

Pro Forma Net (Loss)                                             (2,137,375)        (104,859)

Basic and Diluted (Loss) Per Share as Reported                        (0.01)              --

Pro Forma Basic and Diluted (Loss) Per Share                          (0.01)              --
</TABLE>

In December 2002, the Financial Accounting Standards Board issued SFAS No. 148,
"Accounting for Stock-Based Compensation - Transaction and Disclosure - An
Amendment of SFAS No. 123." This Statement provides alternative accounting for
stock-based employee compensation and requires prominent disclosures in both
annual and interim financial statements about the method used in reporting
results. The Company has elected not to adopt the recognition and measurement
provisions of SFAS No. 123 and continues to account for its stock-based employee
compensation plans under APB Opinion No. 25 and related interpretations and,
therefore, the transaction provisions will not have an impact on the Company's
financial position or results of operations. The required expanded interim
disclosures are provided above.






                                       12
<PAGE>


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATION
         -----------------------------------------------------------------------

Set forth below is a discussion of the financial condition and results of
operations for the three months and six months ended June 31, 2004 and 2003. The
following discussion should be read in conjunction with the information set
forth in the consolidated financial statements and the related notes thereto
appearing elsewhere in this quarterly report.

Certain statements contained herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Because such statements include risks and uncertainties, actual results may
differ materially from those expressed or implied by such forward-looking
statements as a result of certain factors, including, but not limited to, risks
associated with the integration of businesses following an acquisition,
competitors with broader product lines and greater resources, emergence into new
markets, the termination of any of our significant contracts, our inability to
maintain working capital requirements to fund future operations, or our
inability to attract and retain highly qualified management, technical and sales
personnel.

We operate as a digital media company in the business of providing products and
solutions to a global base of clients enabling the broadcast of topical video
content from their Internet websites. We specialize in providing the technology
and content required for video to be played on computers via the Internet as
well as emerging broadcasting platforms such as set top boxes and wireless
devices (i.e., mobile phones and PDAs). Our core activities include the
aggregation of video content, media management, online advertising, hosting, and
content delivery.

RESULTS OF OPERATIONS

On April 30, 2004, we purchased 80% of the issued and outstanding ordinary
shares (the "Shares") of Reality Group Pty Ltd. ("Reality") from the
shareholders of Reality. Reality's financial results for the period from May 1,
2004 to June 30, 2004 have been included in the consolidated statements.

On June 1, 2004 we, through our wholly owned subsidiary ROO Media Corporation,
completed the acquisition of the business and business assets of Undercover
Media Pty Ltd. ("Undercover"). Undercover's financial results for the period
from June 1, 2004 to June 30, 2004 have been included in the consolidated
statements.

THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE AND SIX
MONTHS ENDED JUNE 30 2003.

NET REVENUES

Total net revenues increased by $1,016,040 from $124,932 for the three months
ended June 30, 2003 to $1,140,972 for the three months ended June30, 2004, an
increase of 813%. Total net revenues increased by $1,021,634 from $127,840 for
the six months ended June 30, 2003 to $1,149,474 for the six months ended June
30, 2004, an increase of 799%. The increase over both periods reflect the
inclusion of the Reality revenues from the date of acquisition.

OPERATING EXPENSES

OPERATIONS. Operating expenses have been included for the first time in the
period ended June 30, 2004. The operating expenses for the three and six months
ended June 30, 2004 were $789,754 and $789,754, respectively. The primary reason
for the inclusion of operating expenses as a separate category stems from the





                                       13
<PAGE>


inclusion of the Reality operations since the date of acquisition. These
expenses are primarily the costs directly associated with the generation of
revenues. It also reflects the change from development of products to selling
these products in our other operating areas.

RESEARCH AND DEVELOPMENT. Research and development expenses consist primarily of
salaries and related personnel costs, consulting fees associated with product
development, and costs of technology acquired from third parties to incorporate
into products currently under development. Research and development expenses
were $83,371 for the three months ended June 30, 2004, an increase of 39.1% from
$59,934 for the three months ended June 30, 2003. For the six months ended June
30, 2004, research and development expenses were $146,001, an increase of 43.3%
from $101,902 for the six months ended June 30, 2003. The increase in expenses
was due primarily to the increase in activities to bring our products to market.

SALES AND MARKETING. Sales and marketing expenses consist primarily of expenses
for advertising sales and marketing consultants, expenditures for advertising,
and promotional activities and expenses to bring our products to market. These
expenses increased by $83,935 from $31,623 for the three months ended June 30,
2003 to $115,558 for the three months ended June 30, 2004, an increase of
265.4%. In the six months ended June 30, 2004 these expenses were $168,061, an
increase of 178.4% from $60,367 in the six months ended June 30, 2003. This
increase was due primarily to the inclusion of the Reality revenues from the
date of acquisition.

We believe that additional sales and marketing personnel and programs are
required to remain competitive. Therefore, we expect that our sales and
marketing expenses will continue to increase in absolute dollars for the
foreseeable future.

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist
primarily of expenses for management, finance and administrative personnel,
legal, accounting, and consulting fees, and facilities costs. These expenses
increased by $489,377 from $12,100 for the three months ended June 30, 2003 to
$501,477 for the three months ended June 30, 2004, an increase of 4,044%. The
general and administrative expenses increased from $39,421 in the six months
ended June 30, 2003 to $591,160 in the six months ended June 30, 2004, an
increase of $551,739 or 1,400%. This increase was due primarily to providing
administrative support to the increased activity of operations and the inclusion
of the Reality general and administrative expenses since acquisition in the
consolidated statements.

INTEREST INCOME. Interest income totaled $729 in the three months ended June 30,
2004 and $774 in the six months ended June 30, 2004. Other than in the foregoing
periods, we did receive interest income.

INTEREST EXPENSE, RELATED PARTY

Interest expense, related party, includes interest charges on our indebtedness
to Robert Petty, our Chief Executive Officer. The expense decreased by $3,123,
from $16,211 for the three months ended June 30, 2003 to $13,088 for the three
months ended June 30, 2004, a decrease of 19.3%. In the six months ended June
30, 2004, this expense decreased to $25,525 from $31,009 for the six months
ended June 30, 2003, a decrease of $5,484 or 17.7%. This decrease was due to a
reduction in the amount of the debt outstanding.

NET LOSS FROM OPERATIONS

Net loss from operations was $(349,188) for the three months ended June 30,
2004, compared to a net income of $21,275 for the three months ended June 30,
2003. Net loss from operations for the six months ended June 30, 2004 was
$545,502, compared to a net loss of $73,850 for the six months ended June 30,
2003, an increase of 639%. The net loss is due to the increase in activities to
develop products for future revenue generation and the increase in
administrative expenses to support these activities.




                                       14
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

From ROO Media Corporation's inception through June 30, 2004, we have financed
our activities through funding from a loan facility from Robert Petty, our Chief
Executive Officer, and through private placements.

Net cash used in operating activities was $435,037 for the six months ended June
30, 2004, compared to $77,745 for the six months ended June 30, 2003, an
increase of 460%. The increase in net cash used in operating activities is
primarily the result of our net operating losses.

Net cash used in investing activities was $1,842 for the six months ended June
30, 2003, compared to net cash used in investing activities for the six months
ended June 30, 2004 of $19,205. The increase in net cash used in investing
activities is primarily the result of a purchase of fixed assets.

Net cash provided by investing activities in the six months ended June 30, 2004,
was $30,374 compared to net cash provided by investing activities for the six
months ended June 30, 2003 of $0. The increase in net cash provided by investing
activities arose from the net cash received in the Reality acquisition.

Net cash provided by financing activities was $571,258 for the six months ended
June 30, 2004 compared to $78,266 for the six months ended June 30, 2003. The
increase in net cash provided by financing activities was primarily due to the
proceeds from private placements.

As of June30, 2004, we had a working capital deficiency of approximately
$874,083. Our cash balance as of June 30, 2004 of $156,335 is, in management's
opinion, not sufficient to ensure our continued operation and the payment of
debts until our business is profitable and generating sufficient cash flow to
meet our liquidity requirements, of which there can be no assurance. We do not
expect additions to property and equipment to be material in the near future.

We conduct our operations in primary functional currencies: the United States
dollar, the British pound, the Euro and the Australian dollar. Historically,
neither fluctuations in foreign exchange rates nor changes in foreign economic
conditions have had a significant impact on our financial condition or results
of operations. We currently do not hedge any of our foreign currency exposures
and are therefore subject to the risk of exchange rate fluctuations. We invoice
our international customers primarily in U.S. dollars, except in Europe, the
United Kingdom and Australia, where we invoice our customers primarily in euros,
pounds and Australian dollars, respectively. We are exposed to foreign exchange
rate fluctuations as the financial results of foreign subsidiaries are
translated into U.S. dollars in consolidation and as our foreign currency
consumer receipts are converted into U.S. dollars. Our exposure to foreign
exchange rate fluctuations also arises from payables and receivables to and from
our foreign subsidiaries, vendors and customers. Foreign exchange rate
fluctuations did not have a material impact on our financial results in the
three months ended June 30, 2004 and 2003.

We anticipate that our liquidity needs over the next 12 months will require
additional financings. If cash generated from operations is insufficient to
satisfy our liquidity requirements, we may seek to sell additional equity or
debt securities or obtain a credit facility. The sale of additional equity or
convertible debt securities could result in additional dilution to our
stockholders. The incurrence of indebtedness would result in increased fixed
obligations and could result in operating covenants that would restrict our
operations. We cannot assure you that financing will be available in amounts or
on terms acceptable to us, if at all.





                                       15
<PAGE>


GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming
that we will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. We
have incurred net operating losses of approximately $545,502 for the six months
ended June 30, 2004, compared to $73,850 for the six months ended June 30, 2003.
Additionally, as of June 30, 2004, we had a net working capital deficiency of
approximately $874,083 and negative cash flows from operating activities of
approximately $435,037. Since ROO Media's inception, we have incurred losses,
had an accumulated deficit, and have experienced negative cash flows from
operations. The expansion and development of our business may require additional
capital. This condition raises substantial doubt about our ability to continue
as a going concern. Our management expects cash flows from operating activities
to improve in the fourth quarter of fiscal 2004, primarily as a result of an
increase in sales, and plans to raise capital through various methods to achieve
their business plans, although there can be no assurance thereof. The
accompanying consolidated financial statements do not include any adjustments
that might be necessary should we be unable to continue as a going concern. If
we fail to generate positive cash flows or obtain additional capital when
required, we may have to modify, delay or abandon some or all of our business
and expansion plans.

OFF-BALANCE SHEET ARRANGEMENTS

None.

Item 3.  CONTROLS AND PROCEDURES
         -----------------------

With the participation of management, our Chief Executive Officer and Chief
Financial Officer evaluated our disclosure controls and procedures within the 90
days preceding the filing date of this quarterly report. Based upon this
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective in ensuring that
material information required to be disclosed is included in the reports that we
file with the Securities and Exchange Commission.

There were no significant changes in our internal control over financial
reporting to the knowledge of our management, or in other factors that have
materially affected or are reasonably likely to materially affect these internal
controls over financial reporting subsequent to the evaluation date.





                                       16
<PAGE>


PART II
OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS
         -----------------

Not applicable.

Item 2.  CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
         SECURITIES
         -------------------------------------------------------------------

SALES THROUGH PRIVATE PLACEMENTS
--------------------------------

During the three months ended June 30, 2004, we issued shares of our common
stock, par value $.0001 per share, to investors in a private placement conducted
by us. In issuing such securities, we relied upon the exemption from
registration provided by Section 4(2) of the Securities Act.

         During April 2004 we issued 4,720,833 shares of common stock, including
325,000 shares issued as compensation for non cash placement fees netted against
proceeds of shares. The stock issued for cash was issued at three price levels
that were determined based on changing market conditions - 333,333 shares were
issued at $0.075 per share, 812,500 shares were issued at $0.08 per share and
3,250,000 shares were issued at $0.10 per share.

         During May 2004 we issued 974,996 shares of common stock, including
75,000 shares issued as compensation for non cash placement fees netted against
proceeds of shares. The stock issued for cash was issued at $0.15 per share.

         During June 2004 we issued 986,333 shares of common stock. The stock
issued for cash was issued at two price levels that were determined based on
changing market conditions - 353,000 shares were issued at $0.10 per share and
633,333 shares were issued at $0.15 per share.

SALES THROUGH ACQUISITIONS
--------------------------

During the three months ended June 30, 2004, we issued shares of our common
stock as consideration for strategic acquisitions. In issuing these securities,
we relied upon the exemption from registration provided by Section 4(2) of the
Securities Act.

         On April 30, 2004 we completed the acquisition of 80% of the
outstanding ordinary shares (the "Shares") of The Reality Group Pty Ltd.
("Reality"). The consideration for the Shares was the issuance of an aggregate
of eight million three hundred and sixty thousand (8,360,000) shares of our
common stock, par value $.0001 per share, to the Reality shareholders pro rata
based on the Reality shareholders' ownership interest in Reality. The shares
were valued at time of issue at $0.30 per share as this was the price that we
guaranteed the closing market price of our common stock would be one year from
the date of the closing of the Reality acquisition.

         On June 1, 2004 we completed the acquisition of the business and
business assets of Undercover Media Pty Ltd. ("Undercover"). The consideration
for the business was one million (1,000,000) shares of our common stock, par
value $.0001 per share. In determining a fair value for the cost of the
acquisition of Undercover, we considered the effects of price fluctuations in
the common stock during the period prior to negotiations through the period
subsequent to the closing of the acquisition, quantities traded, issue costs and
the like. We consider the fair value for the stock issued to be $0.15 per share.





                                       17
<PAGE>

SALES IN CONSIDERATION FOR THE PERFORMANCE OF SERVICES
------------------------------------------------------

During the three months ended June 30, 2004, we issued shares of our common
stock as consideration for services provided to us. In issuing such securities,
we relied upon the exemption from registration provided by Section 4(2) of the
Securities Act based on the fact that the transaction involved only one party,
and thus was not a public offering.

         In April 2004 we authorized the issuance of 5,000,000 shares of our
common stock to Vertex Capital Corporation for marketing services provided or to
be provided until December 31, 2004.

         In May 2004 we authorized the issuance of 37,765 shares of our common
stock to Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP, our corporate and
securities counsel, as payment for outstanding legal fees.

ISSUANCES OF STOCK OPTIONS
--------------------------

         In April 2004, we issued an aggregate of 9.7 million incentive stock
options to four individuals, comprised of our Chief Executive Officer, Chief
Financial Officer and two employees. Of the 9.7 million options, we issued 6
million to our Chief Executive Officer Robert Petty. Such options vest on May 8,
2004, expire on May 8, 2006 and are exercisable at $.1265 per share. Three
million of the 9.7 million options were issued to our Chief Financial Officer
Robin Smyth. Such options vest on May 8, 2004, expire on May 8, 2006 and are
exercisable at $.1265 per share. The remaining 700,00 options were issued to two
employees. These options vest pursuant to the respective stock option
agreements, expire on April 8, 2006 and are exercisable at $0.115 per share. In
addition, we issued 3 million nonqualified stock options to a director of one of
our subsidiaries. Such options vest pursuant to the respective stock option
agreements, expire on April 8, 2006 and are exercisable at $0.115 per share.

         In June 2004, we issued an aggregate of 750,000 incentive stock
options to 5 individuals, each of whom are employees. These options vest
pursuant to the respective stock option agreements, expire on June 29, 2006 and
are exercisable at $0.16 per share.

Item 3.  DEFAULT UPON SENIOR SECURITIES
         ------------------------------

Not applicable

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

Not applicable.

Item 5.  OTHER INFORMATION
         -----------------

Not applicable




                                       18
<PAGE>

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

(a)      Exhibits

2.1      Stock Purchase Agreement, dated as of March 11, 2004, by and among ROO
         Group, Inc., a corporation formed under the laws of the State of
         Delaware, and the shareholders of Reality Group Pty Ltd., a company
         formed under the laws of Australia (3)

2.2      Asset Purchase Agreement, dated as of May 26, 2004, by and among ROO
         Group, Inc., a corporation formed under the laws of the State of
         Delaware, Undercover Holdings Pty Ltd., a Victorian Australian
         corporation, and Undercover Media Pty Ltd, a Victorian Australian
         corporation (4)


3.1      Certificate of Incorporation (2)

3.2      Bylaws (2)

10.1     Employment Agreement between ROO Group, Inc. and Robert Petty, CEO of
         ROO Group, Inc. (1)

10.2     Employment Agreement between ROO Group, Inc. and Robin Smyth, CFO of
         ROO Group, Inc. (1)

10.3     Option Agreement between ROO Group, Inc. and Robert Petty, CEO of ROO
         Group, Inc. (1)

10.4     Option Agreement between ROO Group, Inc. and Robin Smyth, CFO of ROO
         Group, Inc. (1)

31.1     Rule 13a-14(a)/15d-14(a) Certification.(1)

32.1     Section 1350 Certifications (1) +

-------------
(1) Filed herewith.

(2) Incorporated by reference from the Form 10-SB filed with the Securities and
Exchange Commission on March 29, 1999.

(3) Incorporated by reference from the Form 8-K filed with the Securities and
Exchange Commission on May 17, 2004.

(4) Incorporated by reference from the Form 8-K filed with the Securities and
Exchange Commission on June 16, 2004.

+ The Exhibit attached to this Form 10-QSB shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") or otherwise subject to liability under that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as expressly set forth by specific
reference in such filing.

(b) Reports on Form 8-K

         Form 8-K/A filed with the Commission on July 14, 2004 containing
consolidated financials statements in Item 7 for the Reality Group Pty Ltd.
acquisition

         Form 8-K filed with the Commission on June 16, 2004 containing in Item
2 the Undercover Media Pty Ltd. acquisition

         Form 8-K filed with the Commission on May 17, 2004 containing in Item 2
the Reality Group Pty Ltd. acquisition





                                       19
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         ROO GROUP, INC.
                                         --------------------------------------
                                         (Registrant)

Date:  August 16, 2004                   /s/ Robert Petty
                                         --------------------------------------
                                         Name: Robert Petty
                                         Title: Chief Executive Officer






                                       20