UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                        For the Fiscal Year June 30, 2004

                         Commission File Number: 0-29249


                                   ONTV, Inc.
                     -------------------------------------
                 (Name of Small Business Issuer in Its Charter)

              Delaware                                   16-1499611
      -------------------------             ----------------------------------
       (State of Incorporation)            (IRS Employer Identification Number)


                2444 Innovation Way, Bldg 10, Rochester, NY 14624
               -------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


                                 (585) 295-8601
                          ---------------------------
                           (Issuer's Telephone Number)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

                      Class A Common Stock, par value $.001
                        -------------------------------
                                (Title of Class)

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. [X] Yes [ ] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of the Form 10-KSB
or any amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year:  $3,934,584

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of September
30, 2004 was $474,417

As of September 30, 2004 the Company had 23,720,861 outstanding shares of Class
A common stock.

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

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

                                TABLE OF CONTENTS

ITEM                                  PART I

1.   Description of Business
2.   Business Properties
3.   Legal Proceedings
4. Submission of Matters to a Vote of Security Holders

                                     PART II

5. Market for the Registrant's Common Equity and Related Stockholder Matters 6
Management's Discussion and Analysis of Financial Condition and Results of
Operations 7. Financial Statements 8. Changes In and Disagreements With
Accountants on Accounting and Financial Disclosure 8a. Controls and Procedures

                                    PART III

9.   Directors, Executive Officers, Promoters and Control Persons; Compliance
     With Section 16(a) of the Exchange Act.
10.  Executive Compensation
11.  Security Ownership of Certain Beneficial Owners and Management 12. Certain
     Relationships and Related Transactions
13.  Exhibits and Reports on Form 8 K 14. Principal Accountant Fees and Services

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     This  Report  contains  "forward-looking"  statements  regarding  potential
future  events and  developments  affecting  the business of the Company.  These
forward  looking  statements  involve  risks and  uncertainties  and are usually
accompanied by words such as "believes,"  "anticipates," "plans," "expects," and
similar  expressions.  Our actual  results  could differ  materially  from those
expressed or implied by such  forward-looking  statements as a result of certain
factors,  including  the risk  factors  described  above and  elsewhere  in this
Report.  Such  statements  relate to, among other things,  (i)  competition  for
customers  for products and  services;  (ii) the  uncertainty  of  developing or
obtaining  rights to new  products  that will be  accepted by the market and the
timing of the  introduction  of new products into the market;  (iii) the limited
market  life of the  Company's  products;  and (iv) other  statements  about the
Company or the direct response industry.

THE COMPANY'S ABILITY TO PREDICT RESULTS OR THE EFFECTS OF ANY PENDING EVENTS ON
THE COMPANY'S OPERATING RESULTS IS INHERENTLY SUBJECT TO VARIOUS RISKS AND
UNCERTAINTIES, INCLUDING COMPETITION FOR PRODUCTS, CUSTOMERS, AND MEDIA ACCESS,
THE UNCERTAINTY OF DEVELOPING OR OBTAINING RIGHTS TO NEW PRODUCTS THAT WILL BE
ACCEPTED BY THE MARKET, THE LIMITED MARKET LIFE OF THE COMPANY'S PRODUCTS, AND
THE EFFECTS OF GOVERNMENT REGULATIONS. SEE MANAGEMENT'S DISCUSSION AND ANALYSIS.


                                       2
<PAGE>



                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS

ONTV, Inc., formerly known as LA Group, Inc. (the Company) was incorporated in
the state of Delaware on February 29, 1996, in order to create an entity with
which to form a reverse merger with a public, non-reporting, company, Kent Toys,
Inc. Through a series of transactions, Kent merged with the Company on 3/15/96.
Upon completion of this transaction, the Company became public and all Kent
stock was then canceled.

On June 1, 1998, the Company acquired What A Product, Inc., an Arizona
corporation, which was involved in the design, manufacturing, sales and
marketing of products through electronic retailing, primarily through QVC
Television.

On January 6, 1999, the Company formed a wholly owned subsidiary, Seen On TV.
Seen On TV, Inc. markets and sells products on the Internet to the general
public, which as of September 30, 2003 was the Company's principal business.
Unless otherwise indicated all references to the Company include the operations
of Seen On TV, Inc.

On January 14, 2000, the Company purchased the domain name, AsSeenOnTV.com. The
Company uses this domain name for its website.

In March 2000, the Company amended its Certificate of Incorporation to change
its name from LA Group, Inc. to ONTV, Inc.

Prior to March 2001 the Company was involved in the design and marketing of
websites for other businesses. In March 2001 the Company agreed to terminate the
agreement with the major customer for this segment when the customer, in a cost
cutting move, made the decision to bring management of the website in-house.

The Company operates the websites "SeenOnTV.Com" and "AsSeenOnTV.com". These are
destination websites offering "as seen on tv" products direct to the consumer
via the Internet. Each website currently derives income from buying at
distributor prices and selling products to wholesale and retail customers. The
Company's management has over thirteen years of experience in the direct
response television industry and maintains a wide range of relationships with
many direct response television marketing companies as well as major
manufacturers who provide products to the direct response industry.

Consumer products, which the Company markets through Seen On TV, Inc., include a
wide variety of categories, i.e.: health, beauty, weight loss, kitchen, sporting
goods, and household appliances, etc. Products sold by Seen On TV, Inc. include,
but are not limited to:  Pasta Pro,  The Firm Body  Sculpting  System with Fanny
Lifter,  Rock-N-Roll  Scooter,  Flathose,  Smoke Away, Perfect pancake,  Emerson
Switchboard,  Sewing Genie, Vinyl Leather Repair,  IGIA Instant Cover, IGIA Pore
Cleanser,  IGIA Electro-Sage 8, IGIA Laser Vac, Super SlimDown Now, PestOffense,
Aero Mattress Topper, Wrap & Snap Curling Systems,  AirCore, Cell Phone Internal
Antenna,  Space Bag, Versa Wrench,  IGIA Wonder Forms, IGIA Therma-Spa,  Marvins
Magic,  Nads,  Tap Light,  IGIA Platinum Nail,  Epil Stop & Spray,  Steam Buggy,
Steam Bullet, Oxiclean,  Orangeglow, Shelf Master, True Motion Lures, ORB, Ginsu
Knives,  Hygionic Tooth Brushes,  Steamin Iron, IGIA CelluLift,  Nathan's Grill,


                                       3
<PAGE>

George Foreman Grilling Machine,  FlavorWave Oven, Instagone,  Iron Wonder, IGIA
Epielle,  Pro Trim Paint  Roller,  PVA Mop,  Quick-n-Brite,  Safety Can,  Silver
Lighting,  Sweet Simplicity,  Cable Flex, Orbitrek,  Ab Slide, Simoniz Car Wash,
Flowbee, Thundersticks, and Ab Rocker.

The Company purchases products from a multitude of vendors. These venders
include, but are not limited to: Media Group, Reliant Interactive Media, On-Tel
Products Corp., Orange Glo International, Inc., Cava, Homedics, Thane, Ronco
Inventions, Salco International, Salton, and Tactica International. The Company
relies, to a large extent, on rapid order fulfillment from these and other
vendors. The Company has no long-term contracts or arrangements with any of its
vendors that guarantee the availability of merchandise, the continuation of
particular payment terms or the extension of credit limits. There can be no
assurance that the Company's current vendors will continue to sell merchandise
to the Company on current terms or that the Company will be able to establish
new, or extend current, vendor relationships to ensure acquisition of
merchandise in a timely and efficient manner and on acceptable commercial terms.
If the Company were unable to develop and maintain relationships with vendors
that would allow it to obtain sufficient quantities of merchandise on acceptable
commercial terms, its business, prospects, financial condition and results of
operations would be materially affected in an adverse manner.

The Company competes with a number of other companies that provide electronic
retailing. This competition takes place between the companies that offer
products for sale to end users over the Internet. The competitors try to select
products to sell which will be the most desirable to the customer. Each
competitor attempts to purchase those products at the price which will enable
the competitor to offer the product at the best price to the customer. In
addition, each competitor tries to market the products to the most customers in
order to increase market share. The competitors are trying to attract the
customer that is looking for specific "as seen on tv" products. One way this is
done is by reliance upon the various Internet search engines, in order to
achieve high rankings for those customers to find a competitor's website. The
Company cannot control those search engines, nor are the search engines under
government control. Some of these competitors may have greater financial,
technical, and marketing resources than the Company has. This may allow them to
devote greater resources to the development and promotion of their products and
services. In addition, some of these competitors may offer a broader base of
products and services that may attract consumers to their websites. This could
result in reduced market penetration for the Company's products and services. In
addition, because the barriers to entry are low, new competitors may emerge and
rapidly acquire market share.

On June 2, 2000, the Company formed a subsidiary, Net e-Vantage, Inc. (Net e),
to acquire product lines, services and major brand names through direct
manufacturer relationships and authorized distributors. In May 2001 the Company
sold a majority of its interest in Net e for $365,000 which was payable by means
of a promissory note due in May 2002. The sale resulted in a gain of $365,000.
As of June 30, 2002, no payments had been received on the note and Net e was
insolvent. Accordingly, the note was deemed uncollectible and the note
receivable balance was expensed, net of a tax benefit of $55,100, under
Discontinued Operations on the Company's Statements of Operations.

The Company has not spent any amounts on research and development.  Although the
Company  uses the logo "As Seen On TV" for  advertising  purposes,  neither  the
Company,  nor any other  entity,  has a trade mark on this term. It is merely an
descriptive  term with which  customers  may  identify.  However,  the Company's

                                       4
<PAGE>

website,  AsSeenOnTV.com  is  exclusive  to the  Company.  It is the  belief  of
management that the website name represents an advertising tool for the Company.

The Company has not been involved in any bankruptcy, receivership, or similar
proceeding. Additionally, the Company has not incurred any environmental
expenses.

As of September 30, 2004, the Company employed nine full-time and three
part-time persons in its Rochester, New York office. The Company's employees are
not represented by labor unions. The Company believes relations with its
employees are good.

ITEM 2.   PROPERTIES

In May 2002, the Company entered into a five-year lease for office and warehouse
space at 2444 Innovation Way, Bldg 10, Rochester, New York 14624. During June
2002, the Company relocated its corporate headquarters, along with its
fulfillment and warehouse operations into this facility. Under terms of the
lease, the Company is obligated by a five-year lease with an unrelated entity,
commencing June 1, 2002 with a monthly rent of $6,667 and ending September 30,
2007. This newly constructed facility is anticipated to provide ample space for
operations and growth during the term of the lease.

In July 2004 the lease agreement was amended to increase the monthly rent by
$1,000 to a total of $7,667, for the use of additional warehouse space. All
other terms in the original lease agreement remain in effect.

ITEM 3.   LEGAL PROCEEDINGS

In December 2001, the Company initiated a lawsuit against Airborne Express,
seeking damages of $2,000,000 to recover losses to the Company resulting from
delivery services that were allegedly supplied by Airborne as a shipper of the
Company's products. In its lawsuit the Company claims that Airborne failed to
timely deliver products to the Company's customers and failed to implement a
package tracking system it had designed for the Company. Losses to the Company
may have occurred due to duplicate shipments and consulting time expenses, as
well as damage to the Company's reputation.

In January 2002, Airborne filed a counter claim against the Company in the
amount of $20,000 to recover charges for delivery services that may have been
provided. Although the Company intends to challenge Airborne's claim, the
amounts claimed by Airborne have been reflected on the Company's financial
statements.

As of September 30, 2004 the Company's litigation with Airborne is still
pending.

See Note I to the Company's financial statements for information regarding other
civil actions involving the Company.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None


                                       5
<PAGE>


                                     PART II

ITEM 5.  MARKET  FOR THE  REGISTRANT'S  COMMON  EQUITY AND  RELATED  STOCKHOLDER
         MATTERS

The Common Stock of the Company, trading under the symbol of "ONTV", is quoted
on the NASD's Over The Counter Bulletin Board ("OTCBB"). The following
information is provided, based upon quotations supplied by YAHOO!FINANCE.

Quarter Ended                        Low Bid           High Bid
-------------                        -------           --------

September 30, 2002                     .05               .08

December 31, 2002                      .03               .05

March 31, 2003                         .03               .04

June 30, 2003                          .03               .04

September 30, 2003                     .03               .04

December 31, 2003                      .01               .03

March 31, 2004                         .01               .04

June 30, 2004                          .02               .03

The foregoing price information is based upon inter-dealer prices, without
retail mark-up, mark down or commission, and may not represent actual
transactions.

As of September 30, 2004, there were 23,720,861 shares of common stock
outstanding, held by 1024 shareholders of record.

The Company has not declared or paid any cash dividends on our common stock
since inception. We intend to retain any future earnings to finance the
operation and expansion of our business and do not anticipate paying any cash
dividends in the foreseeable future.

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The  statements  contained  in this Annual  Report on Form 10-KSB  which are not
historical facts, including (without limitation) in particular,  statements made
in this Item and in "Item 1 - Business", may contain forward-looking  statements
that are subject to important  factors that could cause actual results to differ
materially  from  those in the  forward-looking  statement,  including  (without
limitation)  product demand;  the effect of economic  conditions;  the impact of
competitive  services,  products  and  pricing;  product  supply  restraints  or
difficulties;   industry  regulation;  the  continued  availability  of  capital


                                       6
<PAGE>

resources and financing and other risks set forth or incorporated  herein and in
the Company's  Securities and Exchange Commission filings.  The Company does not
undertake to update any forward-looking  statement that may be made from time to
time by or on behalf of the Company.

                              RESULTS OF OPERATIONS

Revenue for the fiscal year ended June 30, 2004 was $3,934,584, an increase of
approximately 53% over fiscal year 2003 revenue of $2,579,301. This improvement
is primarily the result of increases realized in the Seen On TV, Inc.
subsidiary, and the resultant increase in sales due to the expanded product
line.

Cost of goods sold, as a percentage of revenue, was 66% for the fiscal year
ending June 30, 2004, as compared with 59% for the fiscal year ended June 30,
2003. Management believes that the current percentages are in line with future
expectations.

Operating expenses, as a percentage of revenue, were 44% for the fiscal year
ended June 30, 2004, as compared with 54% for the prior year. This improvement
in this percentage during the current operating period is primarily the result
of higher sales volume. Management believes that although additional staff and
operating expenses may be necessary to support growth, this operating expense
ratio should remain fairly constant in future reporting periods as anticipated
increased revenues are realized.

                               IMPACT OF INFLATION

Management believes inflation has not had a material effect on the Company's
operations or on its financial condition. The Company believes that it will be
able to offset any future effects of inflation. The Company does not purchase,
by contract, any product for resale. The Company sells products on an individual
basis. Management therefore believes that any increase in costs to the Company
can be immediately passed on to the customer. Although inflation could have an
impact on the volume of sales, the Company could combat this by adjusting
product mix, or by the change of product offered for sale.

                         LIQUIDITY AND CAPITAL RESOURCES

At the end of fiscal year 2004, working capital was $(130,497), a decrease of
$134,403 over the prior fiscal year. The decrease in working capital was
primarily due to an increase in payables in connection with the increase in
professional fees. Cash flows from operating activities increased to $76,090 for
the current fiscal year, from $35,863 in the year ending June 30, 2003. This
increase resulted from the previously described increase in revenue.

On January 14, 2000, the Company purchased,  at a total cost of $5,000,000,  the
domain name,  AsSeenOnTV.com.  Consideration for the acquisition included a cash
payment of $25,000 and a non-interest-bearing  promissory note of $4,975,000. On
October 13, 2000,  the purchase  contract  was  renegotiated,  with the purchase
price  decreased to $2,800,000,  and the resultant  note payable  decreased to a
balance of $2,455,000.  The entire note balance had been classified as a current
liability in prior reporting  periods,  however with the restructure of the note
agreement,  only  $60,000 is now a current  liability  due  within  the  current
operating cycle, with the balance being reflected as a long term liability.  The
renegotiated  note payable requires monthly payments of a minimum of $5,000,  or
5% of monthly gross sales,  until October 2005, at which time,  the Company will


                                       7
<PAGE>

have 45 days to pay the remaining  balance in full.  The domain name is the only
collateral  for  the  renegotiated  note.  Should  the  Company  default  on the
renegotiated  note,  the domain name would  revert  back to the seller,  and the
Company would forfeit all stock and cash paid to date.

On June 2, 2000, the Company formed a subsidiary, Net e-Vantage, Inc. (Net e),
to acquire product lines, services and major brand names through direct
manufacturer relationships and authorized distributors. In May 2001, the company
sold a majority of its interest in Net e for $365,000 which was payable by means
of a promissory note due in May 2002. The sale resulted in a gain of $365,000.
As of June 30, 2002, no payments had been received on the note and Net e was
insolvent. Accordingly, the note was deemed uncollectible and the note
receivable balance was expensed, net of a tax benefit of $55,100, under
Discontinued Operations on the Statements of Operations.

Traditionally, in the electronic retailing business, retailers may expect to see
an significant increase in sales during the last several weeks of a calendar
year, caused by holiday shopping. The Company notes that in the fiscal year
ended June 30, 2004, sales orders received during the holiday period comprised
20% of the orders received over the entire fiscal year.

Management believes that income generated from operations may be sufficient to
finance the potential growth of the sales of the business. Working capital
requirements, primarily related to increased inventory needs, may increase as a
result of the alliances entered into by the Company. The Company may seek
financing with a traditional lender in order to fund this growth. Such financing
may include secured lines of credit, or debenture bonds. There can be no
assurance that financing will be available in amounts or on terms acceptable to
the Company, if at all.

ITEM 7.   FINANCIAL STATEMENTS

The financial statements of the Company are attached.

ITEM 8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

None.

ITEM 8a. CONTROLS AND PROCEDURES.

Based on the evaluation of the Company's disclosure controls and procedures by
Daniel Fasano, the Company's Chief Executive and Financial Officer, as of a date
prior to the filing of this annual report, such officer has concluded that the
Company's disclosure controls and procedures are effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits under the Securities and Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported, within the time period specified
by the Securities and Exchange Commission's rules and forms.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, and as a result, no corrective actions with regard to
significant deficiencies and material weaknesses were required.


                                       8
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

Executive Officers and Directors

Name                    Age    Position With the Company

Daniel M. Fasano        43     Chairman, Chief Executive Officer, and President


DANIEL M. FASANO, of Rochester,  New York, has served as CEO and Director of the
Company since February 1996.  Since February 2001,  upon the  resignation of the
previous  office  holder,  Mr. Fasano has also served as President.  He has over
thirteen years  experience in the Direct Response  Industry.  Mr. Fasano was the
first to successfully market, in a retail setting,  products  traditionally sold
exclusively  on television.  During this period,  Mr. Fasano was an officer in a
Direct  Response  cosmetics and skin care company  involved in the production of
infomercials. Mr. Fasano attended Rochester Institute of Technology.

Frank T. Costanzo resigned as a director of the Company in September 2003.

Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended,  requires
directors,  executive  officers  and 10%  holders of the  Company's  outstanding
common  stock to file with the SEC  reports of their  ownership  and  changes in
ownership  held by such persons.  During the fiscal year ended June 30, 2004 the
Company is not aware that any person did not file  reports  which were  required
within  time  periods  specified  by the rules of the  Securities  and  Exchange
Commission.

ITEM 10.  EXECUTIVE COMPENSATION

The  following  table  provides  certain  summary  information  for fiscal  2002
concerning  compensation  paid  or  accrued  by us to Mr.  Fasano  for  services
rendered in all  capacities to the Company.  No other  executive  officer of the
Company was paid an annual  salary and bonus in excess of  $100,000  during such
period.


                                                             Other Annual
Name and              Year      Salary ($)                 Compensation ($)
Principal Position   Ending       (1)          Bonus             (2)
------------------  -------     ----------   --------      ---------------


Daniel M. Fasano     6/30/04    162,500        -0-            12,000
                     6/30/03    150,000        -0-            12,000
                     6/30/02    137,500        -0-            12,000

(1)  Mr.  Fasano  has  agreed to defer  part of his  salary  until such time the
     Company's  cash  position  will allow for the payment of his salary.  As of
     June 30, 2004 the salary owed to Mr. Fasano was $350,500.


                                       9
<PAGE>

(2)  These  amounts are payments for the business use of Mr.  Fasano's  personal
     vehicle.

On January 1, 2000, Daniel M. Fasano entered into a new five-year employment
agreement with the Company, expiring December 31, 2005. This agreement carried
an annual base salary of $125,000 for the first year, to be increased by $12,500
per year for each of the remaining four years of the agreement. Mr. Fasano
agreed to defer the first annual increase due January 1, 2001 to January 1,
2002. The agreement also provides for incentive compensation based upon certain
increases to the Company's revenues, a Stock Option Plan which will allow Mr.
Fasano to purchase stock based on the trading price of the stock reaching
specific targets, and a provision for the payment of termination benefits should
the Company undergo a sale or transfer of ownership. Under this agreement, Mr.
Fasano is subject to a non-compete, nondisclosure, and assignment of invention
provisions.

The Company does not have any outstanding stock options. The Company did not
grant any stock options during the past three fiscal years.

The Company does not have an audit or a compensation committee. The Company does
not have a director serving as a financial expert. Dan Fassano, the only
director of the Company, is not independent as that term is defined in Section
121(A) of the Listing Standards of the American Stock Exchange.

The Company has not adopted a Code of Ethics applicable to its officers. The
Company does not believe it needs a Code of Ethics since the Company has only
one officer and director.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table  sets  forth  certain  information   regarding  beneficial
ownership of the  Company's  Common  Stock as of September  30, 2004 by (i) each
person  who is  known  by the  Company  based on the  records  of the  Company's
transfer  agent and relevant  documents  filed with the SEC to own  beneficially
more than 5% of the outstanding  shares of the Company's Common Stock, (ii) each
officer and director of the Company, and (iii) all officers and directors of the
Company as a group.

    Name                          Amount and Nature of      Percent of Common
and Address                     Beneficial Ownership (1)     Stock Outstanding
---------------                 ------------------------    -------------------

Daniel M. Fasano                       3,879,166                   16.5%
  244 Innovation Way, Bldg 10,
  Rochester, NY 14624

Daniel J. Fasano                       3,000,000                   12.7%
  13 Fox Tail Lane
  Rochester, NY 14624

Conrad Promotions, LLC                 2,500,000                   10.6%
  15034 North 40th Place
  Phoenix, AZ 85032


                                       10
<PAGE>

Emanuel Tarboti                        1,500,000 (2)                6.4%
  P.O. Box 1767
  Rancho Santa Fe, CA 92067

Frank T. Costanzo                      2,703,834                   11.5%
  651 W. Mountain Vista Drive
  Phoenix, AZ  85045

All Directors and Executive Officers
  as a group (1 person)                3,879,166                   16.5%


(1)  Except as indicated in the footnotes to this table, the persons named in
     the table have sole voting and investment power with respect to all shares
     of Common Stock shown as beneficially owned by them, subject to community
     property laws where applicable.

(2)  Voting rights pertaining to Mr. Torbati's shares are exercised by the
     Company.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Daniel M. Fasano, an officer, director and principal shareholder of the
Company, controls Web Marketing FX and Boo Boo Marketing, LLC. See Note H to the
Company's financial statements for information pertaining to transactions
between the Company and these entities.

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8 K

(a) EXHIBITS:

Exhibit
 Number      Description of Exhibit

  3 (i)      Articles of Incorporation (1)
  3 (ii)     By-laws (1)
  4          Form of Common Stock Certificate (1)
 10.1        Employment Contract of Daniel M. Fasano (1)
 31          Certifications under section 302 of the Sarbanes-Oxley Act of 2002
 32          Certifications pursuant to 18 U.S.C. section 1350, as adopted
                pursuant to section 906 of the Sarbanes-Oxley Act of 2002

(1)  Incorporated by reference to the same Exhibits filed as part of the
     Company's Form 10-SB.

         (b) REPORTS ON FORM 8-K

     The Company did not file any reports on Form 8-K during the year ended June
30, 2004.


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<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees billed to the Company and its
subsidiaries for the years ended June 30, 2004 and June 30, 2003 by Rotenberg &
Co., LLP, the Company's independent auditors:


                                  Year Ended June 30,
                                 2004              2003
                                 ----              ----

       Audit Fees             $ 15,500          $ 16,750
       Audit-Related Fees     $    -0-          $    -0-
       Tax Fees               $  2,000          $  6,960
       All Other Fees         $    -0-          $    -0-


Audit fees represent  amounts billed for professional  services rendered for the
audit of the  Company's  annual  financial  statements  and the  reviews  of the
financial statements included in the Company's Forms 10-QSB for the fiscal year.
The Company does not have an Audit  Committee.  The Company's Board of Directors
has not adopted any polices or  procedures  for the  pre-approval  of  non-audit
services.  The Company's Board of Directors has considered the role of Rotenberg
& Co., LLP in providing audit, audit-related and tax services to the Company and
its  subsidiaries  and has  concluded  that such  services are  compatible  with
Rotenberg & Co., LLP's role as the Company's independent auditor.


                                       12
<PAGE>



                            ONTV, INC. & SUBSIDIARIES
                            (A DELAWARE CORPORATION)
                               Rochester, New York

                        --------------------------------
                                FINANCIAL REPORTS
                                       AT
                                  JUNE 30, 2004
                        --------------------------------


<PAGE>


ONTV, INC. & SUBSIDIARIES
(A Delaware Corporation)
Rochester, New York


TABLE OF CONTENTS
------------------------------------------------------------------------------


Report of Independent Registered Public Accounting Firm              1

Consolidated Balance Sheets at June 30, 2004 and 2003                2

Consolidated Statements of Changes in Stockholders'
   Equity for the Years Ended June 30, 2004 and 2003                 3

Consolidated Statements of Operations for the Years
   Ended June 30, 2004 and 2003                                      4

Consolidated Statements of Cash Flows for the Years
   Ended June 30, 2004 and 2003                                      5

Notes to Consolidated Financial Statements                         6-12




<PAGE>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
  and Stockholders
ONTV, Inc. & Subsidiaries
(A Delaware Corporation)
Rochester, New York


     We have audited the accompanying  consolidated balance sheets of ONTV, Inc.
&  Subsidiaries  as of June 30,  2004 and  2003,  and the  related  consolidated
statements of operations,  changes in stockholders'  equity,  and cash flows for
each of the two years in the period  ended  June 30,  2004.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall consolidated financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects, the financial position of ONTV, Inc. &
Subsidiaries as of June 30, 2004 and 2003, and the results of its operations and
its cash flows for each of the two years in the period ended June 30,  2004,  in
conformity with accounting principles generally accepted in the United States of
America.



Rochester, New York
  August 25, 2004


<PAGE>

                            ONTV, INC. & SUBSIDIARIES
                            (A DELAWARE CORPORATION)
                               Rochester, New York

                           CONSOLIDATED BALANCE SHEETS

                                                               June 30,
                                                     ------------------------
ASSETS                                               2004               2003

Current Assets
Cash and Cash Equivalents                      $    33,004          $  46,374
Inventory                                          236,571            249,987
                                                ----------          ---------
Total Current Assets                               269,575            296,361

Property and Equipment - Net of
Accumulated Depreciation                            70,552             61,753

Other Assets
Accounts Receivable - Related Party                 37,850             37,850
Deposits                                             6,667              6,667
Due from Officer                                    82,193             82,193
Intangible Assets - Net of Accumulated
   Amortization                                  2,462,531          2,718,338
Investments in Affiliates                          106,738            106,378
                                               -----------        -----------
Total Assets                                   $ 3,036,106        $ 3,309,540
                                               ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts Payable and Accrued Expenses          $   296,029          $ 175,935
Accounts Payable - Related Parties                  39,300             55,300
Debt - Due Within One Year                          64,743             61,220
                                               -----------         ----------
Total Current Liabilities                          400,072            292,455

Other Liabilities
Accrued Expenses - Related Parties                 350,500            219,000
Debt - Due After One Year                        2,243,748          2,256,248
                                               -----------        -----------
Total Liabilities                                2,994,320          2,767,703
                                               -----------        -----------

Stockholders' Equity
Common Stock:  $.001 Par; 100,000,000 Shares
  Authorized, 23,720,861 Shares Issued; and
  23,593,361 Shares Outstanding                     23,721             23,721
Additional Paid-In Capital                       1,052,099          1,052,099
Accumulated Deficit                             (1,014,825)          (514,774)
                                                ----------         ----------
                                                    60,995            561,046

Less: Stock Held in Trust                            1,500              1,500
  Treasury Stock - 127,500 Shares at Cost           17,709             17,709
                                                ----------         ----------
Total Stockholders' Equity                          41,786            541,837
                                                ----------         ----------

Total Liabilities and Stockholders' Equity     $ 3,036,106        $ 3,309,540
                                               ===========        ===========


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


                                       2
<PAGE>


ONTV, INC. & SUBSIDIARIES
(A DELAWARE CORPORATION)
Rochester, New York


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<S>                            <C>        <C>           <C>            <C>         <C>           <C>          <C>
----------------------------------------------------------------------------------------------------------------------------------
                                           Common       Additional                                               Total
                              Number        Stock        Paid-In     Accumulated   Stock Held    Treasury     Stockholders'
                             of Shares   ($0.001 Par)    Capital       Deficit      in Trust       Stock         Equity
----------------------------------------------------------------------------------------------------------------------------------
Balance - June 30, 2002     23,720,861     $ 23,721    $ 1,052,099    $(196,910)     $(1,500)    $(17,709)     $ 859,701

Net Loss                            --           --             --     (317,864)          --           --       (317,864)
---------------------------------------------------------------------------------------------------------------------------------

Balance - June 30, 2003     23,720,861       23,721      1,052,099     (514,774)      (1,500)     (17,709)       541,837

Net Loss                            --           --             --     (500,051)          --           --       (500,051)
---------------------------------------------------------------------------------------------------------------------------------

Balance - June 30, 2004     23,720,861     $ 23,721    $ 1,052,099  $(1,014,825)     $(1,500)    $(17,709)     $  41,786
=================================================================================================================================
</TABLE>








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


                                       3
<PAGE>

ONTV, INC. & SUBSIDIARIES
(A DELAWARE CORPORATION)
Rochester, New York


CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------------

Years Ended June 30,                                  2004            2003
----------------------------------------------------------------------------

Revenues, Net of Returns                          $ 3,934,584    $ 2,579,301

Cost of Goods Sold                                  2,607,950      1,518,046
----------------------------------------------------------------------------

Gross Profit                                        1,326,634      1,061,255
----------------------------------------------------------------------------

Expenses
Advertising                                           436,168       254,368
Amortization                                          214,593       212,967
Depreciation                                           14,992        12,591
Interest                                                2,026            20
Legal and Accounting                                  154,412        53,800
Payroll and Payroll Taxes                             401,865       397,228
Other Expenses                                        510,230       460,253
----------------------------------------------------------------------------

Total Expenses                                      1,734,286     1,391,227
----------------------------------------------------------------------------

Loss Before Other Income and (Expenses)
  and Provision for Income Taxes                     (407,652)     (329,972)

Other Income and (Expenses)
Other Income                                            5,147        13,475
Equity in Income of Unconsolidated Investments            360         1,070
Loss from Impairment of Marketing Rights              (97,906)           --
----------------------------------------------------------------------------

Loss Before Provision for Income Taxes               (500,051)     (315,427)

Provision for Income Taxes                                 --         2,437
----------------------------------------------------------------------------

Net Loss                                           $ (500,051)   $ (317,864)
=============================================================================-

EARNINGS PER SHARE
----------------------------------------------------------------------------

Weighted Average Number of Common Shares
  Outstanding - Basic and Diluted                  23,593,361    23,593,361

Net Loss Per Common Share - Basic and Diluted     $     (0.02)  $     (0.01)
============================================================================


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


                                       4
<PAGE>


ONTV, INC. & SUBSIDIARIES
(A DELAWARE CORPORATION)
Rochester, New York


CONSOLIDATED STATEMENTS OF CASH FLOWS

------------------------------------------------------------------------------

Years Ended June 30,                                    2004            2003
------------------------------------------------------------------------------

Cash Flows from Operating Activities

Net Loss                                           $(500,051)      $(317,864)

Adjustments to Reconcile Net Loss
  To Net Cash Flows from Operating Activities:
Amortization                                         214,593         212,967
Depreciation                                          14,992          12,591
Equity in Income of Unconsolidated Investments          (360)         (1,070)
Loss from Impairment of Marketing Rights              97,906              --

Changes in Assets and Liabilities:
Inventory                                             13,416         (72,573)
Accounts Payable and Accrued Expenses                120,094          50,012
Accounts Payable - Related Parties                   (16,000)         52,800
Accrued Expenses - Related Parties                   131,500          99,000
------------------------------------------------------------------------------

Net Cash Flows From Operating Activities              76,090          35,863
------------------------------------------------------------------------------

Cash Flows from Investing Activities
Acquisition of Property and Equipment                (23,791)         (9,162)
Capitalized Website Development Costs                (56,692)        (54,220)
------------------------------------------------------------------------------

Net Cash Flows from Investing Activities             (80,483)        (63,382)
------------------------------------------------------------------------------

Cash Flows from Financing Activities
Advances to Officer                                       --          (3,092)
Advances from Line of Credit, Net                      3,523           1,220
Repayment of Debt                                    (12,500)        (21,149)
------------------------------------------------------------------------------

Net Cash Flows from Financing Activities              (8,977)        (23,021)
------------------------------------------------------------------------------

Net Change in Cash and Cash Equivalents              (13,370)        (50,540)

Cash and Cash Equivalents - Beginning of Year         46,374          96,914
------------------------------------------------------------------------------

Cash and Cash Equivalents - End of Year             $ 33,004        $ 46,374
------------------------------------------------------------------------------

Supplemental Disclosures
------------------------------------------------------------------------------

Interest Paid                                        $  2,026         $    20
Income Taxes Paid                                    $     --         $ 2,437
------------------------------------------------------------------------------

                                       5
<PAGE>


ONTV, INC. & SUBSIDIARIES
(A Delaware Corporation)
Rochester, New York

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


Note A - Nature of Operations

        ONTV, Inc. (the "Company") was formed on February 29, 1996 under the
        laws of the State of Delaware. The Company has since merged with other
        companies as well as acquired the stock of other companies. The Company
        is authorized to issue 100,000,000 shares of common stock $.001 par
        value. The Company is also authorized to issue 5,000,000 shares of
        preferred stock. There were no preferred shares issued or outstanding at
        June 30, 2004. The structure of common stock consists of 80,000,000
        shares of Class A common stock and 20,000,000 shares of Class B common
        stock. The Company is primarily engaged in retail sales of general
        merchandise and consumer goods.

        Principles of Consolidation

        The consolidated financial statements include the accounts of ONTV, Inc.
        and its wholly owned subsidiaries. All significant intercompany balances
        and transactions have been eliminated in consolidation.

Note B - Summary of Significant Accounting Policies

        Method of Accounting

        The Company maintains its books and prepares its financial statements on
        the accrual basis of accounting.

        Cash and Cash Equivalents

        Cash and cash equivalents include time deposits, certificates of
        deposit, and all highly liquid debt instruments with original maturities
        of three months or less. The Company maintains cash and cash equivalents
        at financial institutions, which periodically may exceed federally
        insured amounts.

        Inventory

        Inventory consists of merchandise held for resale and is stated at the
        lower of cost or market using the first-in, first-out method.

        Property, Equipment and Depreciation

        Property and equipment are stated at cost, less accumulated depreciation
        computed using the straight line method over estimated useful lives as
        follows:

                  Computer Equipment                             7 Years
                  Leasehold Improvements                         5 Years
                  Office Furniture and Equipment                 7 Years
                  Warehouse Equipment                            7 Years


                                       6
<PAGE>

ONTV, INC. & SUBSIDIARIES
(A Delaware Corporation)
Rochester, New York


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


Note B - Summary of Significant Accounting Policies - continued

        Maintenance and repairs are charged to expense. The cost of assets
        retired or otherwise disposed of and related accumulated depreciation
        are removed from the accounts.

        Due from Officer

        The amount due from officer consists of short-term advances, bears no
        interest, and contains no formal repayment terms. During the year ended
        June 30, 2004 and 2003, the Company made advances to officer of $-0- and
        $3,092, respectively.

        Website Development

        The Company capitalizes website development activity which adds
        additional functionalities or features in accordance with Statement of
        Position 98-1 and EITF 00-2. The Company is amortizing the cost of such
        website development using the straight line method over 5 - 10 years.

        Domain Name

        The Company acquired the exclusive rights to the domain name "As Seen on
        TV" during the year ended June 30, 2000. The domain name became
        operational during the first quarter of the year ended June 30, 2002.
        The cost is amortized using the straight-line method over 15 years.

        Impairment of Marketing Rights

        The Company has an alliance and marketing agreement with Coastal Sales
        Associates ("CSA") (an unrelated party) which grants the Company
        exclusive marketing rights via the Internet and digital cable television
        to products owned by CSA.

        The Company has adopted Statement of Financial Accounting Standards No.
        144, "Accounting for the Impairment or Disposal of Long-Lived Assets."
        Under the provisions of this statement, the Company has evaluated its
        long-lived assets for financial impairment, and will continue to
        evaluate them as events or changes in circumstances indicate that the
        carrying amount of such assets may not be fully recoverable.

        The Company evaluates the recoverability of long-lived assets not held
        for sale by measuring the carrying amount of the assets against the
        estimated discounted future cash flows associated with them. At the time
        such evaluations indicate that the future discounted cash flows of
        certain long-lived assets are not sufficient to recover the carrying
        value of such assets, the assets are adjusted to their fair values.
        Based on these evaluations, the Company has determined that the full
        value of the marketing rights in connection with the alliance and
        marketing agreement with CSA are impaired. As such, the Company has
        charged operations during the year ended June 30, 2004. There



                                       7
<PAGE>


ONTV, INC. & SUBSIDIARIES
(A Delaware Corporation)
Rochester, New York


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


Note B - Summary of Significant Accounting Policies - continued

        were no additional adjustments to the carrying value of the remaining
        long-lived assets for the years ended June 30, 2004 and 2003.

        Trademarks

        Trademarks are carried at cost and are amortized using the straight-line
        method over the estimated useful lives of 10 years from the date the
        Company acquired the trademark.

        Investments In Affiliates

        The Company has a 20% investment in two companies. The investment is
        accounted for under the equity method. Under the equity method the
        Company records its pro rata share of income or loss of the investee as
        part of the investors net income with a corresponding adjustment to the
        carrying value of the investment. Dividends received from the investee
        are also recorded as an adjustment to the carrying value of the
        investment.

        Revenue Recognition

        Revenue from product sales are recognized when both the goods are
        shipped and the customer's right of return has expired.

        Advertising Expenses

        Advertising expenses are charged against operations during the period
        incurred, except for direct-response advertising costs, which are
        capitalized and amortized over periods not exceeding one year.
        Advertising expenses charged against operations were $436,168 and
        $254,368 for the years ended June 30, 2004 and 2003, respectively. The
        Company did not incur any direct-response advertising costs during the
        years ended June 30, 2004 and 2003.

        Provision for Income Taxes

        The Company accounts for income taxes in accordance with SFAS No. 109,
        Accounting for Income Taxes, using the asset and liability approach,
        which requires recognition of deferred tax liabilities and assets for
        the expected future tax consequences of temporary differences between
        the carrying amounts and the tax basis of such assets and liabilities.
        This method utilizes enacted statutory tax rates in effect for the year
        in which the temporary differences are expected to reverse and gives
        immediate effect to changes in income tax rates upon enactment. Deferred
        tax assets are recognized, net of any valuation allowance, for temporary
        differences and net operating loss and tax credit carry forwards.
        Deferred income tax expense represents the change in net deferred assets
        and liability balances. There were no material deferred tax assets or
        liabilities at June 30, 2004 and 2003.


                                       8
<PAGE>


ONTV, INC. & SUBSIDIARIES
(A Delaware Corporation)
Rochester, New York


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


Note B - Summary of Significant Accounting Policies - continued

        Deferred income taxes result from temporary differences between the
        basis of assets and liabilities recognized for differences between the
        financial statement and tax basis thereon, and for the expected future
        tax benefits to be derived from net operating losses and tax credit
        carry forwards. A valuation allowance is recorded to reflect the
        likelihood of realization of deferred tax assets.

        Net Income (Loss) Per Common Share

        Net income (loss) per common share is computed in accordance with SFAS
        No. 128, "Earnings Per Share." Basic Earnings Per Share is calculated by
        dividing income (loss) available to common stockholders by the weighted
        average number of common shares outstanding for each period. Diluted
        Earnings per share is the same as Basic Earnings Per Share since no
        common stock equivalents were outstanding for the years ended June 30,
        2004 and 2003.

        Concentrations of Credit Risk

        Financial instruments, which potentially expose the Company to
        significant concentrations of credit risk, consist principally of bank
        deposits, which may at times exceed federally insured limits. The
        Company had no cash balances that exceeded insured limits at June 30,
        2004 or 2003. Cash is placed primarily in high quality short term
        interest bearing financial instruments. There were no significant
        customers for the fiscal years ended June 30, 2004 and 2003. The Company
        periodically monitors the credit worthiness of its customers to which it
        grants credit terms in the ordinary course of business. The Company does
        not foresee a credit risk with these receivables and accordingly no
        allowance for doubtful accounts has been recorded.

        Use of Estimates

        The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect the reported
        amounts of assets and liabilities and 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. Actual
        results can differ from those estimates.

        Reclassifications

        Certain amounts in the prior year consolidated financial statements have
        been reclassified to conform with the current year presentation. The
        reclassifications made to the prior year have no impact on the net
        income/(loss), or overall presentation of the consolidated financial
        statements.


                                       9
<PAGE>


ONTV, INC. & SUBSIDIARIES
(A Delaware Corporation)
Rochester, New York


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


Note C - Property and Equipment

        Property and equipment consisted of the following:

        ---------------------------------------------------------------------
        June 30,                                         2004          2003
        ---------------------------------------------------------------------

        Computer Equipment                           $ 38,001      $ 15,177
        Leasehold Improvements                         13,255        13,255
        Office Furniture and Equipment                 46,342        46,342
        Warehouse Equipment                            13,414        12,446
        ---------------------------------------------------------------------
                                                    $ 111,012      $ 87,220
        Less:  Accumulated Depreciation                40,460        25,467
        ---------------------------------------------------------------------

        Net Property and Equipment                   $ 70,552      $ 61,753
        ---------------------------------------------------------------------

Note D - Intangible Assets

        Intangible assets consisted of the following:

        ---------------------------------------------------------------------
        June 30,                                         2004          2003
        ---------------------------------------------------------------------

        Website Development and Domain Name       $ 3,054,547   $ 2,997,854
        Marketing Rights                               97,906        97,906
        Trademarks                                     15,382        15,382
        Other                                           3,575         3,575
        ---------------------------------------------------------------------
                                                  $ 3,171,410   $ 3,114,717
        Less: Accumulated Amortization                610,973       396,379
        Less: Impairment Loss on Marketing Rights      97,906            --
        ---------------------------------------------------------------------

        Net Intangible Assets                     $ 2,462,531   $ 2,718,338
        ---------------------------------------------------------------------

        Estimated annual amortization expense for the five years succeeding June
        30, 2004 are as follows:

          2005          2006           2007           2008           2009
----------------------------------------------------------------------------

      $ 216,722     $ 210,596      $ 210,596      $ 209,828      $ 209,058


Note E - Investments In Affiliates - At Equity

        Investments in affiliates, in which the company owns between 20% and 50%
        ownership consists of the following at June 30:



                                       10
<PAGE>


ONTV, INC. & SUBSIDIARIES
(A DELAWARE CORPORATION)
Rochester, New York


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


Note E -          Investments In Affiliates - At Equity - continued

        ------------------------------------------------------------------------
                                         Tirk Enterprises,     What-A-Limited,
                                                Inc.                Inc.
        2003
        ------------------------------------------------------------------------

        Balance, Beginning of Year            $ 67,160             $ 38,148
        Income From Investee                     1,070                   --
        ------------------------------------------------------------------------

        Investment in Affiliates              $ 68,230             $ 38,148
        ------------------------------------------------------------------------

        ------------------------------------------------------------------------
                                        Tirk Enterprises,      What-A-Limited,
                                              Inc.                  Inc.
        2004
        ------------------------------------------------------------------------

        Balance, Beginning of Year            $ 68,230             $ 38,148
        Income From Investee                       360                   --
        ------------------------------------------------------------------------

        Investment in Affiliates              $ 68,590             $ 38,148
        ------------------------------------------------------------------------

        The carrying amount of the investment approximates the ownership
        percentage in the net assets for the periods presented.

Note F - Debt

        The Company has a line of credit with Key Bank, NA for $10,000 with
        interest at the prime rate plus three percent. The balance was $4,743
        and $1,220 at June 30, 2004 and 2003, respectively.

        In January 2000, the Company entered into an agreement with an unrelated
        entity to acquire the domain name "As Seen on TV.com". In October 2000,
        the Company renegotiated the purchase price to $2,800,000 in exchange
        for 2,500,000 shares of ONTV, Inc. common stock. The note payable
        requires monthly payments of a minimum of $5,000 or 5% of monthly gross
        sales until October 2005, at which time, the Company will have 45 days
        to pay the remaining balance in full. The domain name is the only
        collateral on the note. Should the Company default on the note, the
        domain name could revert back to the seller, and the Company would
        forfeit all stock and cash paid to date. The balance of the note at
        June 30, 2004 and 2003 was $2,303,748 and $2,316,248, respectively. As
        of June 30, 2004, the Company was delinquent in making their required
        monthly payments and is in negotiations with the note holder to
        restructure the terms of the outstanding balance on the note payable.
        Management expects to retain ownership of the domain name as a result of
        the negotiations.


                                       11
<PAGE>

ONTV, INC. & SUBSIDIARIES
(A DELAWARE CORPORATION)
Rochester, New York


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


Note F - Debt - continued

        In June 2000, ONTV, Inc. entered into a loan agreement with an unrelated
        entity in the amount of $250,000. This note is for working capital and
        is secured by a promissory note and 1,500,000 shares of common stock.
        These shares are issued and are being held in trust by the Company at
        June 30, 2004 and 2003. All rights associated with these shares remain
        with ONTV, Inc. The note was due in full on May 16, 2002 together with
        accrued interest. The note was in default at June 30, 2002 and remains
        in default at June 30, 2004. Concurrent with the sale of the Company's
        equity interest in its former subsidiary Net e-Vantage, Inc. on May 16,
        2001, this note became the obligation of Net e-Vantage, Inc. ONTV, Inc.
        continues to guarantee the note and maintains the 1,500,000 shares of
        ONTV, Inc. common stock as collateral in trust, worth approximately
        $30,000 on June 30, 2004. The lender and Net e-Vantage, Inc. are
        currently renegotiating new payment terms.

Note G - Leases

        During June 2002, the Company entered into a five-year building lease
        with an unrelated entity, with monthly rent of $6,667. On July 1, 2004,
        the lease was amended for the use of additional space in the building,
        with an increase in the monthly rent of $1,000. All other terms and
        conditions of the original lease remain in force. Future minimum lease
        payments for the five years succeeding June 30, 2004 are as follows:

             2005         2006           2007         2008         Total
         -----------------------------------------------------------------

          $ 92,000     $ 92,000       $ 92,000     $ 23,000      $ 299,000

        Rent expense for the years ended June 30, 2004 and 2003 was $80,240 and
        $73,357, respectively.

Note H - Related Party Transactions

        Related party transactions consisted of transactions with Web Marketing
        FX and the Company. The owner of Web Marketing FX is also a principal
        shareholder of the Company. The net receivable balance was $37,850 at
        June 30, 2004 and 2003. Web Marketing FX provided online access services
        to the Company in the amount of $117,400 and $87,100 for the years ended
        June 30, 2004 and 2003, respectively.

        Related party transactions also consisted of transactions between Boo
        Boo Marketing, LLC and the Company. The owners of Boo Boo Marketing, LLC
        are also principal shareholders of the Company. Boo Boo Marketing, LLC
        provided merchandise for resale to the Company in the amount of $79,200
        and $144,300 for the years ended June 30, 2004 and 2003, respectively.
        The accounts payable balance was $39,300 and $55,300 at June 30, 2004
        and 2003, respectively.



                                       12
<PAGE>



ONTV, INC. & SUBSIDIARIES
(A DELAWARE CORPORATION)
Rochester, New York


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


Note H - Related Party Transactions - continued

        The Company's President has agreed to defer part of his salary until
        such time the Company's cash position will allow for payment of his full
        salary. As of June 30, 2004 and 2003, the accrued salary balance was
        $350,500 and $219,000, respectively.

Note I - Contingencies

        The Company has filed a lawsuit against one of its vendor for breach of
        contract for failing to provide proper services. The vendor has filed a
        counterclaim against the Company for breach of contract for failing to
        pay invoices for services rendered. The Company intends to defend its
        position, but due to this case still be in the discovery stage, no
        estimate of possible gain or loss can be made, and accordingly, no
        provision for possible gain or loss has been made in the accompanying
        financial statements.

        The Company is currently involved in four additional litigation actions
        as the defendant. Based on the progress made and status of all four
        cases currently, no estimate of possible gain or loss can be made.
        Accordingly, no provision for possible gain or loss has been made in the
        accompanying financial statements.











                                       13
<PAGE>



                                   SIGNATURES


In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant has
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized on the 12th day of October 2004.

                                  ONTV, INC.


                                  By  /s/ Daniel M. Fasano
                                     -----------------------------------------
                                     Daniel M. Fasano, Chief Executive and
                                     Financial Officer

Pursuant to the requirements of the Securities Act of l934, this Report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.


                                     Title                    Date

/s/ Daniel M. Fasano
-----------------------
Daniel M. Fasano                    Director             October 12, 2004