UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549




Form
      10-QSB





(Mark
      One)





x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF


THE
      SECURITIES EXCHANGE ACT OF 1934


For
      the
      period ended September 30, 2005





o TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE


SECURITIES
      EXCHANGE ACT OF 1934


For
      the
      transition period from _______ to _______.





Commission
      File Number 0-09358





LIMELIGHT
      MEDIA GROUP, INC.


(Exact
      name of small business issuer as specified in its charter)





Nevada
            
            88-0441338(State
                or other jurisdiction of (incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)





1300
                North Northlake WaySeattle,
                WA 98103(Address
                of principal executive offices)(206)
                633-1852(Issuer's
                telephone number)N/A(Former
                Address of principal executive
                offices)











Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the preceding 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 o







Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Securities Exchange Act of 1934) Yes o No x







As
      of
      November 21, 2005, 246,628,494  shares
      of
      the issuer's common stock, $.001 par value per share, were
      outstanding.





Transitional
      Small Business Disclosure Format (check one): Yes o No x










*When
      used in this Report, the words "believes", "anticipates", "expects" and similar
      expressions are intended to identify forward-looking statements. Such statements
      are subject to certain risks and uncertainties that could cause actual results
      to differ materially from those projected.*





*Our
      business and results of operations are affected by a wide variety of factors
      that could materially and adversely affect our company and our actual results,
      including, but not limited to: (1) the availability of additional funds to
      enable us to successfully pursue our business plan; (2) the uncertainties
      related to the effectiveness of our technologies and the development of our
      products and services; (3) our ability to maintain, attract and integrate
      management personnel; (4) our ability to complete the development of our
      proposed services in a timely manner; (5) our ability to effectively market
      and
      sell our services to current and new customers; (6) our ability to negotiate
      and
      maintain suitable strategic licenses and corporate relationships; (7) the
      intensity of competition; and (8) general economic conditions. As a result
      of
      these and other factors, we may experience material fluctuations in future
      operating results on a quarterly or annual basis, which could materially and
      adversely affect our business, financial condition, operating results and stock
      price.*





*These
      forward-looking statements speak only as of the date hereof. We undertake no
      obligation to publicly release the results of any revisions to these
      forward-looking statements that may be made to reflect events or circumstances
      after the date hereof or to reflect the occurrence of unanticipated
      events.*


2


PART
      I.
      FINANCIAL INFORMATION





ITEM
      1.
      FINANCIAL STATEMENTS.




LIMELIGHT
                  MEDIA GROUP, INC.BALANCE
                  SHEETSEPTEMBER
                  30, 2005(UNAUDITED)ASSETSCurrent
                  assetsCash
              
              $
              --Accounts
                  receivable, net
              
              
              686,238Inventory
              
              
              342,880Prepaid
                  expenses and other current assets
              
              
              7,802Total
                  current assets
              
              
              1,036,920Fixed
                  assets, net
              
              
              1,204,522Deferred
                  loss on sale-leaseback transaction
              
              
              28,000Other
                  assets
              
              
              14,382Total
                  assets
              
              $
              2,283,824LIABILITIES
                  AND STOCKHOLDERS' DEFICITCurrent
                  liabilitiesBank
                  overdrafts
              
              $
              19,449Accounts
                  payable
              
              
              905,017Accrued
                  liabilities
              
              
              19,802Customer
                  deposits
              
              
              189,445Accrued
                  compensation
              
              
              244,500Due
                  to related parties
              
              
              602,429Lines
                  of credit
              
              
              229,370Convertible
                  loan payable
              
              
              10,000Notes
                  payable - current portion
              
              
              373,775Notes
                  payable - related parties
              
              
              1,083,965Capital
                  lease obligation - current portion
              
              
              7,674Other
                  liability for Ipoint Transaction
              
              
              262,500Other
                  liabilities
              
              
              212,613Total
                  current liabilities
              
              
              4,160,539Note
                  payable - long-term portion
              
              
              485,688Capital
                  lease obligation - long-term portion
              
              
              54,326Total
                  liabilities
              
              
              4,700,553Commitments
                  and contingencies
              
              
              --Stockholders'
                  deficitCommon
                  stock - $.001 par value, 250,000,000 shares authorized, 248,378,494
                  shares
                  issued and 246,749,665 shares outstanding
              
              
              246,750Additional
                  paid-in capital
              
              
              315,926Cash
                  equivalent credit paid in common stock
              
              
              (125,000
              )Accumulated
                  deficit
              
              
              (2,854,405
              )Total
                  stockholders' deficit
              
              
              (2,416,729
              )Total
                  liabilities and stockholders' deficit
              
              $
              2,283,824





See
          Accompanying Notes to Financial Statements
 3


LIMELIGHT
                  MEDIA GROUP, INC.STATEMENTS
                  OF OPERATIONS(UNAUDITED)For
                  the Three
              
              For
                  the Three
              
              For
                  the Nine
              
              For
                  the NineMonths
                  Ended
              
              Months
                  Ended
              
              Months
                  Ended
              
              Months
                  EndedSeptember
                  30, 2005
              
              September
                  30, 2004
              
              September
                  30, 2005
              
              September
                  30, 2004RevenuesEquipment
                  sales
              
              $
              1,268,839
              
              $
              1,879,168
              
              $
              3,152,876
              
              $
              3,428,662Management
                  fees
              
              
              117,216
              
              
              --
              
              
              117,216
              
              
              --Consulting
                  and design services
              
              
              36,726
              
              
              41,525
              
              
              60,017
              
              
              55,300Total
                  revenues
              
              
              1,422,781
              
              
              1,920,693
              
              
              3,330,109
              
              
              3,483,962Cost
                  of revenues
              
              
              984,457
              
              
              1,318,643
              
              
              2,296,031
              
              
              2,520,179Gross
                  profit
              
              
              438,324
              
              
              602,050
              
              
              1,034,078
              
              
              963,783General
                  and administrative expensesProfessional
                  and consulting
              
              
              313,883
              
              
              31,010
              
              
              373,139
              
              
              84,627Selling
                  and marketing
              
              
              21,072
              
              
              37,907
              
              
              89,214
              
              
              112,156Depreciation
              
              
              103,722
              
              
              3,952
              
              
              116,735
              
              
              9,880Wages
                  and salaries
              
              
              306,475
              
              
              170,126
              
              
              740,981
              
              
              527,070Rent
                  expense
              
              
              53,899
              
              
              15,744
              
              
              161,113
              
              
              123,483Other
                  general and administrative expenses
              
              
              354,903
              
              
              315,434
              
              
              431,977
              
              
              384,246Total
                  general and administrative expenses
              
              
              1,153,954
              
              
              574,173
              
              
              1,913,159
              
              
              1,241,462Income
                  (loss) from operations
              
              
              (715,630
              )
              
              27,877
              
              
              (879,081
              )
              
              (277,679
              )Other
                  income (expense)Other
                  income
              
              
              6,511
              
              
              (24,214
              )
              
              30,377
              
              
              5,608Interest
                  expense
              
              
              (112,348
              )
              
              (19,012
              )
              
              (133,557
              )
              
              (42,467
              )Income
                  (loss) before provision for income taxes
              
              
              (821,467
              )
              
              (15,349
              )
              
              (982,261
              )
              
              (314,538
              )Income
                  tax provisions
              
              
              --
              
              
              --
              
              
              --
              
              
              --Net
                  income (loss)
              
              $
              (821,467
              )
              $
              (15,349
              )
              $
              (982,261
              )
              $
              (314,538
              )Basic
                  earnings (loss) per common share
              
              $
              (0.00
              )
              $
              (0.00
              )
              $
              (0.01
              )
              $
              (0.00
              )Diluted
                  earnings (loss) per common share
              
              $
              (0.00
              )
              $
              (0.00
              )
              $
              (0.01
              )
              $
              (0.00
              )Basic
                  and Diluted weighted average common shares outstanding
              
              
              246,749,665
              
              
              78,768,542
              
              
              148,153,197
              
              
              78,768,542
 
 See
            Accompanying Notes to Financial Statements
 4


LIMELIGHT
                  MEDIA GROUP, INC.STATEMENT
                  OF STOCKHOLDERS' DEFICIT(UNAUDITED)Cash
              
              ReceivableEquivalent
              
              Related
                  toCommon
                  stock
              
              Additional
              
              Credit
                  Paid
              
              Issuance
              
              
              
              TotalNumber
              
              
              
              Paid-in
              
              in
                  Common
              
              of
                  Common
              
              Accumulated
              
              Stockholders'of
                  Shares
              
              Amount
              
              capital
              
              Stock
              
              Stock
              
              Deficit
              
              DeficitBalance,
                  December 31, 2004
              
              
              78,768,542
              
              $
              78,768
              
              $
              280,367
              
              $
              --
              
              $
              --
              
              $
              (844,179
              )
              $
              (485,044
              )Issuance
                  of common stock for accrued compensation
              
              
              20,173,766
              
              
              20,174
              
              
              248,172
              
              
              --
              
              
              --
              
              
              --
              
              
              268,346Issuance
                  of common stock for Ipoint Transaction
              
              
              6,057,692
              
              
              6,058
              
              
              481,442
              
              
              --
              
              
              --
              
              
              --
              
              
              487,500Issuance
                  of common stock for acquisition of Impart, Inc.
              
              
              138,829,665
              
              
              138,830
              
              
              (886,885
              )
              
              (125,000
              )
              
              (5,000
              )
              
              --
              
              
              (878,055
              )Note
                  payable - related parties assumed for acquisition ofassets
                  from Media SideStreet Support Corporation
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              (1,027,965
              )
              
              (1,027,965
              )Issuance
                  of common stock for services
              
              
              2,825,000
              
              
              2,825
              
              
              187,225
              
              
              --
              
              
              --
              
              
              --
              
              
              190,050Issuance
                  of common stock in satisfaction of due to related
                  parties
              
              
              95,000
              
              
              95
              
              
              5,605
              
              
              --
              
              
              --
              
              
              --
              
              
              5,700Proceeds
                    from receivable related to issuanceof common stock
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              5,000
              
              
              --
              
              
              5,000Net
                  loss
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              
              
              
              (982,261
              )
              
              (982,261
              )Balance,
                  September 30, 2005
              
              
              246,749,665
              
              $
              246,750
              
              $
              315,926
              
              $
              (125,000
              )
              $
              --
              
              $
              (2,854,405
              )
              $
              (2,416,729
              )
 
 See
            Accompanying Notes to Financial Statements
 5


LIMELIGHT
                  MEDIA GROUP, INC.STATEMENTS
                  OF CASH FLOWS(UNAUDITED)For
                  the Nine
              
              For
                  the NineMonths
                  Ended
              
              Months
                  EndedSeptember
                  30, 2005
              
              September
                  30, 2004Cash
                  flows from operating activities:Net
                  loss
              
              $
              (982,261
              )
              $
              (314,538
              )Adjustments
                  to reconcile net loss tonet
                  cash used by operating activities:Stock
                  based compensation
              
              
              190,050Depreciation
              
              
              116,735
              
              
              9,880Changes
                  in operating assets and liabilities net of acquired assetsand
                  liabilities due to reverse merger:Accounts
                  receivable
              
              
              281,733
              
              
              708Inventory
              
              
              11,716
              
              
              (29,596
              )Prepaid
                  expenses and other current assets
              
              
              2,600
              
              
              2,714Other
                  assets
              
              
              4,051
              
              
              --Accounts
                  payable
              
              
              (230,024
              )
              
              (59,063
              )Accrued
                  liabilities
              
              
              (34,447
              )
              
              (358,063
              )Customer
                  deposits
              
              
              61,819
              
              
              21,543Accrued
                  compensation
              
              
              244,500
              
              
              268,346Other
                  liabilities
              
              
              88,914
              
              
              --Net
                  cash used by operating activities
              
              
              (244,614
              )
              
              (458,069
              )Cash
                  flows from investing activities:Cash
                  acquired in reverse merger
              
              
              1,968
              
              
              --Purchase
                  of fixed assets
              
              
              (217,937
              )
              
              (3,196
              )Net
                  cash used by investing activities
              
              
              (215,969
              )
              
              (3,196
              )Cash
                  flows from financing activities:Proceeds
                  from sales-leaseback transaction
              
              
              62,000
              
              
              --Net
                  change in bank overdraft
              
              
              19,449
              
              
              (71,808
              )Change
                  in due to related parties
              
              
              133,174
              
              
              10,250Net
                  change in line of credit
              
              
              103,653
              
              
              160,598Proceeds
                  from notes payable
              
              
              70,000
              
              
              400,000Proceeds
                  from notes payable - related parties
              
              
              56,000
              
              
              --Principal
                  payments on notes payable
              
              
              (25,170
              )
              
              (6,076
              )Proceeds
                  from receivable related to issuance of common stock
              
              
              5,000
              
              
              --Net
                  cash provided by financing activities
              
              
              424,106
              
              
              492,964Net
                  change in cash
              
              
              (36,477
              )
              
              31,699Cash,
                  beginning of period
              
              
              36,477
              
              
              --Cash,
                  end of period
              
              $
              --
              
              $
              31,699Supplementary
                  cash flow information:Cash
                  payments for income taxes
              
              $
              --
              
              $
              --Cash
                  payments for interest
              
              $
              40,323
              
              $
              42,467
  See
            Accompanying Notes to Financial Statements
 6
 LIMELIGHT
                    MEDIA GROUP, INC.STATEMENTS
                    OF CASH FLOWS (CONTINUED)(UNAUDITED)For
                    the Nine
                
                For
                    the NineMonths
                    Ended
                
                Months
                    EndedSeptember
                    30, 2005
                
                September
                    30, 2004Schedule
                    of non-cash operating, investing and financing activities:Issuance
                    of common stock for accrued compensation
                
                $
                268,346
                
                $
                --Issuance
                    of common stock in satisfaction of due to related
                    parties
                
                $
                5,700
                
                $
                --Issuance
                    of common stock for acquisition of Impart, Inc.Limelight
                    Media Group, Inc. net assetsInventory
                
                $
                1,240
                
                $
                --Fixed
                    assets
                
                
                88,961
                
                
                --Other
                    assets
                
                
                13,700
                
                
                --Cash
                    equivalent credit paid in common stock
                
                
                125,000
                
                
                --Accounts
                    payable
                
                
                (359,770
                )
                
                --Accrued
                    liabilities
                
                
                (750
                )
                
                --Due
                    to related parties
                
                
                (464,705
                )
                
                --Notes
                    payable
                
                
                (25,000
                )
                
                --Convertible
                    loan payable
                
                
                (10,000
                )
                
                --Other
                    liabilities
                
                
                (123,699
                )
                
                --Receivable
                    related to issuance of common stock
                
                
                5,000Total
                    non-cash consideration related to Limelight
                
                $
                (750,023
                )
                $
                --Non-cash
                    consideration for fixed assets purchased inthe
                    iPoint TransactionAssumption
                    of note payable
                
                $
                250,000
                
                $
                --Assumption
                    of other liability
                
                
                262,500
                
                
                --Issuance
                    of common stock
                
                
                487,500
                
                
                --Total
                    non-cash consideration related to Ipoint
                
                $
                1,000,000
                
                $
                --Note
                    payable - related parties assumed for acquisition of assets
                    from Media Sidestreet Support Corporation
                
                $
                1,027,965
                
                $
                --


See
          Accompanying Notes to Financial Statements
 7


LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)


1.
              DESCRIPTION
                  OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
                  POLICIES
 
 Description
        of business -
        Limelight Media Group, Inc. (hereinafter referred to as the “Company” or
“Limelight”) sells dynamic media solutions consisting of monitors, computers,
        mounting systems, and associated technological hardware. Sales are made
        throughout the United States. While customers are in various industries,
        a
        significant portion of customers are in banking and retail.
 
 The
        Company has also developed a digital out-of-home media network. The network
        is
        centrally managed and is applicable over the growing digital signage industry
        in
        any location where a message needs real time display. The Company focuses
        on two
        general markets: point of decisions and captive audience. The Company is
        currently developing digital networks in multiple vertical markets. By
        diversifying the markets the Company may realize revenue from multiple sources.
 
 Limelight
        has developed a system to digitally distribute advertisements, marketing
        messages and entertainment video content via broadband connection for viewing
        in
        public locations, such as financial institutions, government buildings and
        mass
        transit locations, and in retail locations, such as grocery stores. The content
        management system facilitates digital video content to be transmitted in
        digital
        files, replacing the soon-to-be antiquated utilization of photographic slides,
        VCR tape and DVDs. Limelight has two types of clients, the “location partner,”
and the advertiser who wishes to reach the patrons that visit the location
        partners’ venues. A location partner can be a government agency, financial
        institution, theater owner, retail storeowner or whoever is charged with
        the
        marketing and management of a physical facility. Revenue may be derived from
        advertising sales, sponsorships, subscription agreements, equipment sales,
        maintenance and installation fees and content development fees. For the nine
        months ended September 30, 2005 and 2004, the Company’s primary source of
        revenue was derived from equipment sales.
 
 Limelight
        provides a turn-key solution for businesses desiring digital signage systems
        for
        information display. Limelight contacts high traffic businesses such as banks,
        mass transit, governmental buildings, movie theaters, malls, restaurants
        and
        retail stores to determine if a digitally managed captive audience network
        is
        desired. Limelight installs all necessary servers and displays for its
        customers. Depending on the agreement, Limelight may provide the equipment
        at no
        cost to the location partner and share in the revenue or the partner may
        purchase the equipment and pay a monthly fee to Limelight for sales and
        administration. The system is connected via a telephone line or broadband
        internet to Limelight’s video and content management servers. Limelight may
        provide the programming and marketing of the network space to potential
        advertisers. Advertising revenues may be used to offset the cost of installation
        and administration of the network and programming. The location partner may
        receive a portion of the revenue generated from advertising sales on a
        negotiated basis depending on their level of involvement in the payment of
        the
        system.
 
 The
        content is presented on single or multiple screens installed by the Company
        at
        the location. The displays are located in ideal locations to attract the
        attention of patrons who are entering and leaving the location.
 
 History -
        Multinet International Corporation, Inc. was incorporated on May 17, 1996
        in the
        State of Nevada. On September 26, 2001, the Company consummated an agreement
        to
        acquire all of the outstanding capital stock of Limelight Media Group, Inc.,
        a
        Nevada corporation, in exchange for 18,000,000 shares of Multinet’s common stock
        (“Limelight Transaction”). Prior
        to
        the Limelight Transaction, Multinet was a non-operating public company with
        no
        operations or assets and with 2,431,000 shares of common stock issued and
        outstanding; and Limelight Media Group, Inc. was a privately-held company
        with
        assets being used for the development of its video-streaming technology.
 
 Prior
        to
        the Limelight Transaction, Multinet International Corporation, Inc. operated
        a
        convenience store through Nikky D Corporation, a wholly-owned subsidiary.
        In
        September 2001, the Company divested itself of Nikky D Corporation. Multinet
        International Corporation, Inc. has accounted for this divestiture as a spin-off
        in accordance with Accounting Principles Board Statement No. 29. As a result
        of
        this divestiture, the Multinet became a non-operational public company.
  8
  LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)
  On
        June
        30, 2005, the Company formed a wholly owned subsidiary, Limelight Merger
        II
        Corp., a Washington corporation.
 
 On
        June
        30, 2005, through its wholly-owned subsidiary, Limelight Merger II Corp.,
        Limelight Media Group, Inc. consummated an agreement to acquire all of the
        outstanding capital stock of Impart, Inc. (“Impart”), a Washington corporation
        (“Impart Transaction”). Also, on June 30, 2005, concurrently with the Impart
        Transaction, Impart entered into an Agreement with Ipoint Networks, LLC,
        a
        Washington limited liability company (“Ipoint”), whereby Impart purchased the
        assets of Ipoint (“Ipoint Transaction”). The total consideration for these
        transactions was 162,500,000 shares (“Merger Consideration”) of Limelight’s
        common stock and a promissory note in the principal amount of $250,000.
 
 As
        Limelight Media Group, Inc. did not have a sufficient number of duly authorized
        shares on the date of the acquisition, the parties agreed to holdback 57,500,000
        shares (“Holdback Shares”) of the 162,500,000 shares to be issued to the former
        owners of Impart and Ipoint not later than ten days following the later of
        (i)
        the effective date of a merger by Limelight with and into a Delaware corporation
        to be formed by the Limelight or (ii) Limelight’s receipt of audited financial
        statements of Impart. Prior to the Impart Transaction, Limelight was a public
        company with nominal operations that had $105,868 in assets (including cash
        totaling $1,968); liabilities totaling $890,924, a cash equivalent credit
        valued
        at $125,000 previously purchased through the issuance of common stock, a
        receivable related to the issuance of common stock totaling $12,500 and
        141,628,494 shares of common stock issued and 138,829,665 shares outstanding.
        Impart was a privately-held company that sells dynamic media solutions
        consisting of monitors, computers, mounting systems, and associated
        technological hardware. The following table reflects the stock issued in
        relation to the Impart Transaction and Ipoint Transaction:
 
 Impart
              
              IpointTransaction
                  (1)
              
              Transaction
                  (2)
              
              TotalTotal
                  consideration
              
              
              153,125,000
              
              
              9,375,000
              
              
              162,500,000Holdback
                  shares
              
              
              (54,182,692
              )
              
              (3,317,308
              )
              
              (57,500,000
              )Total
                  Common Stock issuance
              
              
              98,942,308
              
              
              6,057,692
              
              
              105,000,000
 (1)
        The
        Impart Transaction is considered to be a capital transaction in substance,
        rather than a business combination. Inasmuch, the Impart Transaction is
        equivalent to the issuance of stock by a private company (Impart) for the
        net
        monetary assets of a public shell company (Limelight), accompanied by a
        recapitalization. Thus, the 98,942,308 shares (net of Holdback Shares) of
        common
        stock issued to the shareholders of Impart are retroactively applied. The
        accounting for the Impart Transaction is identical to that resulting from
        a
        reverse acquisition, except that neither goodwill nor other intangible assets
        will be recorded. Accordingly, these financial statements are the historical
        financial statements of Impart. Impart was incorporated on June 19, 1984
        in the
        State of Washington.
 
 (2)
        The
        Ipoint Transaction resulted in the acquisition of certain fixed assets in
        exchange for 6,057,692 shares (net of Holdback Shares) and a promissory note
        totaling $250,000. The note is unsecured, bearing interest at 8% per annum
        and
        is payable on the earlier of June 30, 2006 or the closing of a PIPE financing
        transaction by the Company.
 
 On
        June
        30, 2005, Impart entered into an Agreement with Media Sidestreet Support
        Corporation (“Media Sidestreet”) whereby Impart purchased the assets of Media
        Sidestreet in exchange for the issuance of notes in the aggregate principal
        amount of $1,027,965 to the owners of Media Sidestreet (“Media Sidestreet Asset
        Acquisition”). The notes are unsecured, with interest ranging from 6% to 10%
        (two notes include variable interest rates), and are payable on the earlier
        of
        June 30, 2006 or the closing of a PIPE financing transaction by the Company.
        Prior to the Impart Transaction, the majority owners of Impart were also
        owners
        in Media Sidestreet, thus a related party transaction.
 9
 LIMELIGHT
          MEDIA GROUP, INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 (UNAUDITED)
  Amended
        Articles of Incorporation - In
        October 2003, a Certificate of Amendment to the Articles of Incorporation
        changed the name of the Company to Limelight Media Group, Inc. During February
        2004, a Certificate of Amendment to the Articles of Incorporation increased
        the
        authorized shares of common stock from 25,000,000 to 100,000,000. During
        January
        2005, a Certificate of Amendment to the Articles of Incorporation increased
        the
        authorized shares of common stock from 100,000,000 to 250,000,000.
 
 Going
        concern - The
        accompanying financial statements have been prepared on a going concern basis,
        which contemplates the realization of assets and the satisfaction of liabilities
        in the normal course of business. The Company has incurred a net loss of
        approximately $982,000 and $315,000 for the nine months ended September 30,
        2005
        and 2004, respectively. The Company's current liabilities exceed its current
        assets by approximately $3,124,000 as of September 30, 2005. The Company’s net
        cash used from operating activities approximated $244,614 during the nine
        months
        ended September 30, 2005.
 
 These
        conditions give rise to substantial doubt about the Company's ability to
        continue as a going concern. The Company's management plan to obtain additional
        financing through a combination of equity and debt financing.
 
 The
        ability of the Company to continue as a going concern is dependent on additional
        sources of capital and the success of the Company's plan. The financial
        statements do not include any adjustments that might be necessary if the
        Company
        is unable to continue as a going concern.
 
 Use
        of
        estimates - The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States 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 revenue and expenses during the reporting
        period. Actual results could differ from those estimates.
 
 Inventory -
        Inventory is stated at the lower of cost or market. Cost is principally
        determined by using the average cost method. Inventory consists of raw materials
        as well as finished goods held for sale. The Company's management monitors
        the
        inventory for excess and obsolete items and makes necessary valuation
        adjustments when required.
 
 Fixed
        assets -
        Fixed
        assets are stated at cost less accumulated depreciation. Depreciation is
        provided principally on the straight-line method over the estimated useful
        lives
        of the assets, which are generally 3 to 10 years. The cost of repairs and
        maintenance is charged to expense as incurred. Expenditures for property
        betterments and renewals are capitalized. Upon sale or other disposition
        of a
        depreciable asset, cost and accumulated depreciation are removed from the
        accounts and any gain or loss is reflected in other income
        (expense).
 
 The
        Company periodically evaluates whether events and circumstances have occurred
        that may warrant revision of the estimated useful lives of fixed assets or
        whether the remaining balance of fixed assets should be evaluated for possible
        impairment. The Company uses an estimate of the related undiscounted cash
        flows
        over the remaining life of the fixed assets in measuring their
        recoverability.
 
 Fixed
        assets acquired through the Ipoint Asset Acquisition and the Media Sidestreet
        Asset Acquisition were recorded at a pro-rata reduction of their estimated
        fair
        value to the extent of the consideration given at the time of acquisition
        less
        accumulated depreciation from the time of acquisition.
  10
  LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)
  Fair
        value of financial instruments - The
        carrying amounts and estimated fair values of the Company’s financial
        instruments approximate their fair value due to the short-term
        nature.
 
 Earnings
        (loss) per share - Basic
        earnings (loss) per share exclude any dilutive effects of options, warrants
        and
        convertible securities. Basic earnings (loss) per share are computed using
        the
        weighted-average number of outstanding common shares during the applicable
        period. Diluted earnings per share is computed using the weighted average
        number
        of common and common stock equivalent shares outstanding during the period.
        Common stock equivalent shares are excluded from the computation if their
        effect
        is antidilutive.
 
 Income
        taxes - The
        Company accounts for its income taxes in accordance with Statement of Financial
        Accounting Standards No. 109, which requires recognition of deferred tax
        assets
        and liabilities for future tax consequences attributable to differences between
        the financial statement carrying amounts of existing assets and liabilities
        and
        their respective tax bases and tax credit carryforwards. Deferred tax assets
        and
        liabilities are measured using enacted tax rates expected to apply to taxable
        income in the years in which those temporary differences are expected to
        be
        recovered or settled. The effect on deferred tax assets and liabilities of
        a
        change in tax rates is recognized in income in the period that includes the
        enactment date.
 
 As
        of
        September 30, 2005, the Company has available net operating loss carryforwards
        that will expire in various periods through 2025. Such losses may not be
        fully
        deductible due to the significant amounts of non-cash service costs and the
        change in ownership rules under Section 382 of the Internal Revenue Code.
        The
        Company has established a valuation allowance for the full tax benefit of
        the
        operating loss carryovers due to the uncertainty regarding
        realization.
 
 Comprehensive
        loss - The
        Company has no components of other comprehensive loss. Accordingly, net loss
        equals comprehensive loss for all periods.
 
 Segment
        information - The
        Company discloses segment information in accordance with SFAS No. 131,
“Disclosures about Segments of an Enterprise and Related Information,” which
        uses the Management approach to determine reportable segments. The Company
        operates under one segment as of September 30, 2005.
 
 Advertising
        costs - The
        Company recognizes advertising expenses in accordance with Statement of Position
        93-7 “Reporting on Advertising Costs.” Accordingly, the Company expenses the
        costs of producing advertisements at the time production occurs, and expenses
        the costs of communicating advertisements in the period in which the advertising
        space or airtime is used. Advertising costs are charged to expense as incurred.
        Advertising expenses were $28,249 for the nine months ended September 30,
        2005.
 
 Research
        and development costs -
        Research and development costs are charged to expense when incurred. Costs
        incurred to internally develop software, including costs incurred during
        all
        phases of development, are charged to expense as incurred.
 
 Stock-based
        compensation - The
        Company applies Accounting Principles Board (“APB”) Opinion No. 25, “Accounting
        for Stock Issued to Employees, and Related Interpretations”, in accounting for
        stock options issued to employees. Under APB No. 25, employee compensation
        cost
        is recognized when estimated fair value of the underlying stock on date of
        the
        grant exceeds exercise price of the stock option. For stock options and warrants
        issued to non-employees, the Company applies SFAS No. 123, “Accounting for
        Stock-Based Compensation”. SFAS No 123 requires the recognition of compensation
        cost using a fair value based method whereby compensation cost is measured
        at
        the grant date based on the value of the award and is recognized over the
        service period, which is usually the vesting period. The Company uses the
        Black-Scholes pricing model to calculate the fair value of options and warrants
        issued to non-employees. Stock issued for compensation is valued using the
        market price of the stock on the date of the related agreement.
  11
  LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)
  The
        Company granted warrants to purchase an aggregate of 3,000,000 shares of
        the
        Company’s common stock to two directors of Limelight for services rendered prior
        to the Impart Transaction. As these financial statements are the historical
        financial statements of Impart, Inc., no valuation has been included. The
        Company granted no other warrants or options to employees for compensation
        for
        the nine months ended September 30, 2005 and 2004.
 
 Expenses
        of offering - The
        Company accounts for specific incremental costs directly to a proposed or
        actual
        offering of securities as a direct charge against the gross proceeds of the
        offering.
 
 Revenue
        recognition -
        Revenue from product sales are generally recognized when the Company’s products
        are shipped and/or the revenue is fully earned and ownership has passed to
        the
        customer. Revenue from design and installation contracts are recognized using
        the completed-contract method.
 
 New
        accounting pronouncements - In
        December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets,
        an
        amendment of APB No. 29, Accounting for Nonmonetary Transactions. SFAS 153
        requires exchanges of productive assets to be accounted for at fair value,
        rather than at carryover basis, unless (1) neither the asset received nor
        the
        asset surrendered has a fair value that is determinable within reasonable
        limits
        or (2) the transactions lack commercial substance. SFAS 153 is effective
        for
        nonmonetary asset exchanges occurring in fiscal periods beginning after June
        15,
        2005. The Company does not expect the adoption of this standard to have a
        material effect on its financial position, results of operations or cash
        flows.
 
 In
        December 2004, the FASB issued Statement 123 (revised 2004) which is a revision
        of FASB Statement No. 123, Accounting for Stock-Based Compensation. This
        Statement supersedes APB Opinion No. 25, Accounting for Stock Issued to
        Employees, and its related implementation guidance. This Statement establishes
        standards for the accounting for transactions in which an entity exchanges
        its
        equity instruments for goods or services. It also addresses transactions
        in
        which an entity incurs liabilities in exchange for goods or services that
        are
        based on the fair value of the entity's equity instruments or that may be
        settled by the issuance of those equity instruments. This Statement focuses
        primarily on accounting for transactions in which an entity obtains employee
        services in share-based payment transactions. This Statement requires a public
        entity to measure the cost of employee services received in exchange for
        an
        award of equity instruments based on the grant-date fair value of the award
        (with limited exceptions). That cost will be recognized over the period during
        which an employee is required to provide service in exchange for the award--the
        requisite service period (usually the vesting period). The Company files
        as a
        small business issuer and must meet the requirements of this Statement for
        accounting periods after December 15, 2005. The Company is evaluating SFAS
        123R
        and believes it may have a material effect on the Company’s financial
        statements.
 
 2.
              ASSET
                  ACQUISITIONS
 
 Ipoint
        Transaction - As
        discussed in Note 1, the Company purchased certain fixed assets in exchange
        for
        6,057,692 shares (net of Holdback Shares of 3,317,308) and a promissory note
        totaling $250,000. The note is unsecured, bearing interest at 8% per annum
        and
        is payable on the earlier of June 30, 2006 or the closing of a PIPE financing
        transaction by the Company. The Company estimated the fair value of the assets
        at approximately $2,456,000, including approximately $52,500 in computer
        equipment, $3,500 in office furniture and fixtures, and $2,400,000 in software
        to be used to manage and distribute the Company’s advertising network. The
        Company valued the assets at $1,000,000 which is based on the fair value
        of the
        promissory note of $250,000 and the fair value of the total shares of 9,375,000
        valued at $750,000. Due to the Holdback Shares, the Company allocated the
        $750,000 value of the shares between the actual stock issued, or $487,500
        and an
        other liability for Ipoint Transaction of $262,500. As the purchase price
        was
        lower than the estimated fair value, the Company allocated the $1,000,000
        purchase price on a pro rata basis over the assets.
  12
  LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)
  Media
        Sidestreet Asset Acquisition - As
        discussed in Note 1, Impart purchased the assets of Media Sidestreet in exchange
        for the issuance of notes in the aggregate principal amount of $1,027,965
        to the
        owners of Media Sidestreet (“Media Sidestreet Asset Acquisition”). The notes are
        unsecured, with interest ranging from 6% to 10% (two notes include variable
        interest rates), and are payable on the earlier of June 30, 2006 or the closing
        of a PIPE financing transaction by the Company. Prior to the Impart Transaction,
        the majority owners of Impart were also the majority owners in Media Sidestreet.
        The Company estimated the fair value of the assets at approximately $2,020,500,
        including approximately $249,500 in computer equipment, $21,000 in furniture
        and
        fixtures, and $1,750,000 in software to be used to manage and distribute
        the
        Company’s advertising network. Due to the common ownership between the entities,
        the Company recorded the value of the fixed assets at their historical costs
        as
        previously recorded on Media Sidestreet. At the time of the acquisition all
        assets on Media Sidestreet had been fully depreciated. Accordingly, the Company
        did not record the assets and the related notes payable has been reflected
        as an
        increase to accumulated deficit.
 
 3.
              ACCOUNTS
                  RECEIVABLE
 
 As
        of
        September 30, 2005 accounts receivable consists of trade receivables related
        to
        equipment sales and total $686,238, which is net of allowance for doubtful
        accounts of $35,988.
 
 4.
              INVENTORY
 
 Inventory
        totaling $342,880 consists of finished goods as of September 30,
        2005.
 
 5.
              FIXED
                  ASSETS
 
 Fixed
        assets consist of the following as of September 30, 2005:
 
 Computer
                  and other equipment
              
              $
              628,231Furniture
                  and fixtures
              
              
              71,206Software
              
              
              977,199Leasehold
                  equipment
              
              
              5,6131,682,249Less:
                  accumulated depreciation
              
              
              477,727Fixed
                  assets, net
              
              $
              1,204,522
 
 6.
              DUE
                  TO RELATED PARTIES
 
 Due
        to
        related parties totaling $602,429 as of September 30, 2005 consist of the
        following:
 
 Loan
                  payable to the Company’s CEO, secured by the Company’s assets bearing
                  interest at 9% per annum, payable in monthly installments of interest
                  only, due on demand
              
              $
              397,282Unreimbursed
                  expenses to the CEO, unsecured, bearing no interest and due on
                  demand
              
              
              117,925Unreimbursed
                  expenses to various stockholders, unsecured, bearing no interest
                  and due
                  on demand
              
              
              11,177Accrued
                  interest on related party loans
              
              
              76,045$
              602,429
 
  13
  LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)
  7.
              LINES
                  OF CREDIT
 
 As
        of
        September 30, 2005, lines of credit consist of the following:
 
 A
                  bank line of credit for borrowing up to $200,000, secured by the
                  Company’s
                  assets, bearing interest at 11% per annum payable in monthly installments
                  of interest only, matures December 2006
              
              $
              198,796A
                  Wells Fargo business line for borrowing up to$55,000, unsecured,
                  bearing
                  interest rate of 12.5%, payable in monthly installments of interest
                  only
              
              
              30,574$
              229,370
 
 8.
              CONVERTIBLE
                  LOANS PAYABLE
 
 In
        August
        2003, the Company borrowed $10,000, unsecured and bearing interest at 12%
        from
        an individual that matured during August 2004. As of September 30, 2005,
        the
        balance of $10,000 is in default and recorded as a current liability. The
        individual is entitled to convert all or a portion of the principal balance
        into
        shares of the Company’s common stock at a conversion price of $0.20 per share.
        Further, the individual has the option of receiving payment of accrued interest
        in cash or 50,000 shares of the Company’s common stock.
 
 9.
              NOTES
                  PAYABLE
 
 As
        discussed in Note 17, pending in the State Court of Cherokee County, Georgia
        filed September 9, 2002, D&D Management, Inc. is alleging it entered into a
        loan agreement with the Company during February 2002 for $54,000 which has
        not
        been repaid. The Company is defending on the basis that it issued D&D
        Management, Inc. 89,000 shares of the Company’s common stock in consideration of
        repayment and for settlement. D&D Management, Inc. is responding that the
        shares were issued for consulting services. The Company denies services were
        rendered and is pursuing settlement negotiations. The Company has recognized
        a
        liability of $25,000, based on management’s estimate of negotiated
        terms.
 
 As
        discussed in Note 1 and 2, On June 30, 2005, concurrently with the Impart
        Transaction, Impart entered into an Agreement with Ipoint whereby Impart
        purchased the assets of Ipoint in exchange for the issuance of a promissory
        note
        of $250,000 and 9,375,000 shares of the Company’s common stock valued at
        $750,000. The note is unsecured, bearing interest at 8% per annum and is
        payable
        on the earlier of June 30, 2006 or the closing of a PIPE financing transaction
        by the Company.
 
 During
        June 2005, the Company entered into a promissory note with an entity totaling
        $20,000. The note is unsecured, bearing interest at 8.5% per annum and payable
        in June 2006.
 
 During
        June 2005, the Company entered into a promissory note with an individual
        totaling $50,000. The note is unsecured, bearing interest at 8% per annum
        and
        payable in June 2006.
 
 During
        November 2004, the Company entered into a promissory note with a lending
        institution. The note is secured by the Company’s assets and bears interest at
        8.5% per annum. The note requires 24 monthly principal and interest payments
        of
        $6,000 beginning December 2004, with a final payment of $484,249 to be made
        in
        December 2006. As of September 30, 2005, the current portion on the note
        from
        October 1, 2005 through September 30, 2006 totals $28,775 and the long-term
        portion totals $485,688.
 
  14
  LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)
  10.
              NOTES
                  PAYABLE - RELATED PARTIES
 
 As
        discussed in Note 1, on June 30, 2005, concurrently with the Impart Transaction,
        Impart entered into an Agreement with Media Sidestreet whereby Impart purchased
        the assets of Media Sidestreet in exchange for the issuance of a promissory
        note
        in the aggregate principal amount of $1,027,965 to the owners of Media
        Sidestreet. The notes are unsecured, with interest ranging from 6% to 10%
        (two
        notes include variable interest rates), and are payable on the earlier of
        June
        30, 2006 or the closing of a PIPE financing transaction by the Company. Prior
        to
        the Impart Transaction, the majority owners of Impart were also owners in
        Media
        Sidestreet, thus a related party transaction.
 
 During
        April 2005, Limelight issued promissory notes to two Impart stockholders
        (prior
        to the Impart Transaction) whereby the Impart stockholders loaned Limelight
        $36,000 and $20,000 to pay for equipment purchased by Limelight from Impart.
        The
        notes are unsecured, bearing interest at 20% and 8.5% per annum, respectively,
        and are payable on maturity during April 2006. The two stockholders became
        officers of the Company concurrently with the Impart Transaction. As of
        September 30, 2005, the remaining balance of the two notes remain at
        $56,000.
 
 11.
              CASH
                  EQUIVALENT CREDIT PAID IN COMMON
                  STOCK
 
 Effective
        December 10, 2004, the Limelight completed the sale of 5,000,000 shares of
        its
        common stock, which had a fair market value at that time of approximately
        $125,000, to American Marketing Complex, Inc. (“AMC”). Payment for this purchase
        by AMC was in the form of cash equivalent credits (“Credits”) with a face value
        of $1,500,000, which the Company can use or sell to others for the purchase
        of
        merchandise and services. The face value is not necessarily indicative of
        the
        ultimate fair value or settlement value of the credits. The credits were
        valued
        at the fair market value of the shares issued by the Company at $125,000
        and
        classified as cash equivalent credits paid in common stock, which is a separate
        component of stockholders' deficiency in the accompanying balance sheet as
        of
        September 30, 2005. The cash equivalent credits paid in common stock will
        be
        offset as the trade credits are used.
 
 12.
              OTHER
                  LIABILITIES
 
 As
        of
        June 30, 2005, the individual paid the Company $30,699 of the total $150,000
        required under the Purchase Agreement. The Company rescinded all agreements
        with
        the individual as the individual did not pay the entire $150,000 as required
        by
        the Purchase Agreement and attempted to return the $30,699. The individual
        refused to accept the funds and filed a suit against the Company. The Company
        has recorded the $30,699 as an other liability.
 
 During
        August 2005, the Company agreed to settle this liability for 1,000,000 shares
        of
        common stock. As of September 30, 2005 the Company had not issued this
        stock.
 
 Clickplay,
        Inc. -
        During
        February 2002, Clickplay, Inc. filed suit on February 19, 2002 alleging claims
        against the Limelight for non-payment related to a consulting services
        agreement. A default judgment was entered in favor of Clickplay, Inc. against
        the Company. The Company’s management has determined that the liability will be
        paid and accordingly recorded $123,219 (including accrued interest of $30,219).
        The Company is attempting to negotiate payment terms with Clickplay,
        Inc.
 
 Lease
        Agreement - During
        July 2005 the Company entered into a lease agreement for the lease of certain
        equipment to be installed and used for advertising in certain store locations
        owned by a retail entity. The Company received $60,000 and is required to
        pay 48
        monthly principal and interest payments totaling $2,199. Subsequent to that
        agreement negotiations with the retail entity fell through whereby the Company
        did not have the locations to install the equipment. Accordingly, the Company
        did not purchase the equipment with the funds but continues to make the payments
        as required by the lease. The principal balance as of September 30, 2005
        totaled
        $58,695 and was recorded as an other liability. The Company is currently
        attempting to negotiate substitution of collateral for the
        liability.
 
 15
  LIMELIGHT
          MEDIA GROUP, INC.
 NOTES
          TO
          FINANCIAL STATEMENTS
 (UNAUDITED)
 13.
              EMPLOYMENT
                  AGREEMENTS
 
 Pursuant
        to the Impart Transaction, the Company entered into the following Employment
        Agreements on September 30, 2005:
 
 David
        V.
        Lott (Former President and Chief Financial Officer of Limelight) - David
        V. Lott
        was appointed as Chief Executive Officer for the term of three years from
        June
        30, 2005, subject to termination provisions. Mr. Lott will receive an annual
        base salary totaling $120,000 plus benefits.
 
 Laird
        Laabs (President of Impart) - Laird Laabs was appointed as President for
        the
        term of three years from June 30, 2005, subject to termination provisions.
        Mr.
        Laabs will receive an annual base salary totaling $120,000 plus
        benefits.
 
 Joseph
        Martinez - Joseph Martinez was appointed as Chairman and Chief Financial
        Officer
        for the term of three years from June 30, 2005, subject to termination
        provisions. Mr. Martinez will receive an annual base salary totaling $120,000
        plus benefits.
 
 Steven
        Corey - Steven Corey was appointed as Chief Strategy Officer for the term
        of
        three years from June 30, 2005, subject to termination provisions. Mr. Corey
        will receive an annual base salary totaling $120,000 plus benefits.
 
 Thomas
        Muniz - Thomas Muniz was appointed as Chief Operating Officer and Chief
        Technology Officer for the term of three years from June 30, 2005, subject
        to
        termination provisions. Mr. Muniz will receive an annual base salary totaling
        $120,000 plus benefits.
 
 14.
              LOCK-UP
                  AGREEMENTS
 
 Pursuant
        to the Impart Transaction, former Shareholders of Impart and David Lott of
        Limelight entered into a Lock-Up Agreement restricting the transfer, sale,
        assignment of their Limelight shares of common stock from June 30, 2005 through
        June 30, 2006 unless certain provisions are met.
  16
  LIMELIGHT
        MEDIA GROUP, INC.
 NOTES
        TO
        FINANCIAL STATEMENTS
 (UNAUDITED)
  15.
              COMMITMENTS
                  AND CONTINGENCIES
 
 Legal - As
        discussed in Note 9, pending in the State Court of Cherokee County, Georgia
        filed September 9, 2002, D&D Management, Inc. is alleging it entered into a
        loan agreement with the Company during February 2002 for $54,000 which has
        not
        been repaid. The Company is defending on the basis that it issued D&D
        Management, Inc. 89,000 shares of the Company’s common stock in consideration of
        repayment and for settlement. D&D Management, Inc. is responding that the
        shares were issued for consulting services. The Company denies services were
        rendered and is pursuing settlement negotiations. The Company has recognized
        a
        liability of $25,000, based on management’s estimate of negotiated
        terms.
 
 During
        January 2005 Dierbergs Markets, Inc. (“Dierbergs”) filed a complaint against
        Interactive Graphic Solutions, LLC and Limelight Media Group, Inc. According
        to
        the complaint, Dierbergs entered into a license agreement with Interactive
        Graphic Solutions, LLC ("IGS") pursuant to which IGS granted Dierbergs a
        license
        to use IGS's system of motion media equipment for the purpose of showing
        certain
        advertising in retail stores. Further, the complaint asserts that IGS failed
        to
        pay approximately $72,000 to Hanenkamp Electric Company for its services
        relating to the installation of IGS's media system and that such amount was
        paid
        by to Hanenkamp by Dierbergs. In August 2004, Limelight acquired substantially
        all of the assets of IGS, including the license agreement with the Dierbergs.
        Dierbergs was seeking damages from the defendants in amount equal to $72,000
        plus attorneys' fees, costs, expenses and pre-judgment and post-judgment
        interest. In February 2005, the Company filed a motion to dismiss on the
        basis
        that the Company was neither a party to the license agreement nor, as Dierbergs
        asserted in the complaint, a permitted assignee. Dierbergs dismissed the
        motion
        against Limelight during August 2005.
 
 Leased
        facilities - The
        Company operates from leased facilities under two noncancellable operating
        leases. The first lease (related to Limelight) calls for a base monthly rent
        of
        $3,237 increasing to $3,642 during June 2005 through May 2006. The second
        lease
        (related to Impart) calls for a base monthly rent of $15,000 through November
        30, 2018. The facility is owned by certain stockholders.
 
 Future
        minimum rental payments for the leased facilities as of September 30, 2005,
        are
        as follows:
 
 October
                  1, 2005 through December 31, 2005
              
              $
              55,9262005
              
              
              198,2102006
              
              
              180,0002007
              
              
              180,0002008
              
              
              180,0002009
              
              
              180,000Thereafter
              
              
              1,620,000$
              2,594,136
 
 16.
              SUBSEQUENT
                  EVENTS


17





ITEM
      2.
      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.








**General**





The
      following discussion and analysis of the financial condition and results of
      operations should be read in conjunction with our financial statements and
      notes
      appearing elsewhere in this Report. As a result of our acquisition of all of
      the
      outstanding capital stock of Impart, Inc., a Washington corporation (“Impart”),
      on June 30, 2005, as we previously reported on our Current Report on Form 8-K
      filed with the Securities and Exchange Commission (the “Commission”) on July 7,
      2005, upon which Impart was considered to be the acquirer for financial
      reporting purposes, our historical financial statements for any period prior
      to
      June 30, 2005 are those of Impart.





**Recent
      Developments**





As
      previously reported on our Current Report on Form 8-K filed with the Commission
      on October 28, 2005, we purchased the from Marlin Capital Partners II, LLC
      (doing business as InTransit Media) (“MCP”) an exclusive option to purchase the
      assets of MCP used in its digital advertising services business.





As
      previously reported on our Current Report on Form 8-K filed with the Commission
      on November 4, 2005, we issued to certain stockholders promissory notes in
      the
      aggregate total amount of $4.6 million on November 4, 2005, in lieu of the
      issuance of additional shares of our common stock required to be issued under
      the Agreement and Plan of Merger, dated as of June 30, 2005 by and among Impart,
      our company and Limelight Merger II Corp., a Washington corporation. All
      payments of principal and interest under such promissory notes are due on or
      before November 4, 2007.








**Results
      of Operations - Three months ended September 30, 2005 compared to the three
      months ended September 30, 2004.**





***Revenue.***  For the
      three months ended September 30, 2005, we had revenues of $1,422,781 as compared
      to $1,920,693 for the three months ended September 30, 2004, representing a
      decrease of $497,912, or 25.9%. Our revenues are derived primarily from a
      combination of (i) the recurring fees we receive for managing our customers’
digital signage networks that we sell and/or operate, (ii) the sale price of
      hardware components and software products used in our proprietary digital
      signage network and (iii) the fees we received in connection with the delivery
      of consulting, maintenance and other digital signage services to our
      customers.  The
      decrease in our revenues for the three months ended September 30, 2005 as
      compared to the comparable period in 2004 was primarily due to a shift in our
      long-term business strategy and, to a lesser extent, our inability to service
      and invoice a significant customer located in Louisiana, Texas and other
      southern locations due to the effects of hurricanes Katrina and Rita during
      the
      quarter. Historically, one component of our Impart business has been the sale
      and distribution of brackets and fixtures to support the deployment of plasma
      screens and LCD screens. Recently, however, we have reduced our emphasis on
      being a distributor of these products and have shifted our primary focus to
      a
      more full service digital media offering. Our revenue models now include, in
      addition to integration and equipment sales, subscription and management
      services, revenues from third party advertising and marketing and content
      management with development services. We believe this vertical and horizontal
      integration will equate to a one-stop operation where clients do not need to
      secure services from another vendor. We believe that these offerings will
      position our company as a full service digital media
      solution.


***Cost
      of Revenue.*** For the
      three months ended September 30, 2005, the cost of sales was $984,457 as
      compared to $1,318,643 for the three months ended September 30, 2004,
      representing a decrease of $334,186, or 25.3%.  The
      decrease was primarily the result of the decrease in the revenues outlined
      above. With such a decrease in revenue, the cost of revenue similarly
      decreased. We have also experienced a reduction in the cost of
      plasma screens, LCD screens and other network digital components that we sell
      to
      our customers under our “turn-key” (or “full integration”) model. In this model,
      we purchase standard, off-the-shelf hardware components that we integrate and
      custom configure before deployment to our customers and we earn a profit on
      the
      difference between the sale price and our cost, in addition to the fees we
      receive for integrating, installing and operating the customer’s digital signage
      network.


18


***General
      and Administrative Expenses.*** For the
      three months ended September 30, 2005, we incurred general and administrative
      expenses of $1,153,954 as compared to $574,173 for three months ended September
      30, 2004, an increase of $579,781, or 101%. This increase was primarily
      attributable to an increase of $282,873, or 912.2%, in the amount of
      professional and consulting fees we paid for services, to $313,883 for the
      three
      months ended September 30, 2005 from $31,010 for the three months ended
      September 30, 2004. Such dramatically increased professional and consulting
      fees
      resulted primarily from legal and accounting expenses incurred in connection
      with our acquisition of Impart and related filings with the Commission pursuant
      to the Securities and Exchange Act of 1934. In addition, we incurred
      depreciation expense of $103,722 for the three months ended September 30, 2005
      as compared to $3,952 for the three months ended September 30, 2004, an increase
      of $99,770, or 2,924.5%. Such increase in depreciation expense was attributed
      to
      additional hardware components and other equipment we have purchased for use
      in
      our digital signage network. We also incurred a substantial increase in wages
      and salaries paid, resulting in an overall increase of $136,349, or 80.1%,
      to
      $306,475 for the three months ended September 30, 2005 from $170,126 for the
      three months ended September 30, 2004. Wage and salary expenses increased
      primarily due to additional graphics and programming personnel supporting the
      certain product lines who are now employed by our company as a result of the
      acquisition of iPoint Technologies, Inc. (“iPoint”).





***Interest
      Expense.*** Interest
      expense was $112,348 for the three months ended September 30, 2005, as compared
      to $19,012 for the three months ended September 30, 2004, resulting in an
      increase of $93,336, or 490.9%. This increase was primarily due to interest
      accrued on promissory notes issued in connection with the acquisitions of iPoint
      and Media Side Street Corporation (“Media Side Street”).





***Net
      Income (Loss).*** For the
      reasons described above, we had a net loss of $821,467 for the three months
      ended September 30, 2005 as compared to a net loss of $15,349 for the three
      months ended September 30, 2004.








**Results
      of Operations - Nine months ended September 30, 2005 compared to nine months
      ended September 30, 2004.**





***Revenue.***  For the
      nine months ended September 30, 2005, we had revenues of $3,330,109 as compared
      to $3,483,962 for the nine months ended September 30, 2004, representing a
      decrease of $153,853 or 4.4%. This decrease was primarily due to the reasons
      set
      forth above.





***Cost
      of Revenue.*** For the
      nine months ended September 30, 2005, the cost of sales was $2,296,031 as
      compared to $2,520,179 for the nine months ended September 30, 2004,
      representing a decrease of $224,148, or 8.9%. This decrease was primarily due
      to
      the reasons set forth above.





***General
      and Administrative Expenses.*** For the
      nine months ended September 30, 2005, we incurred general and administrative
      expenses of $1,913,159 as compared to $1,241,462 for nine months ended September
      30, 2004, an increase of $671,697, or 54.1%. This increase was primarily
      attributable to (i) an increase of $288,512, or 340.9%, in the amount of
      professional and consulting fees we paid for services rendered, to $373,139
      for
      the nine months ended September 30, 2005 from $84,627 for the nine months ended
      September 30, 2004; (ii) an increase of $106,855, or 1,081.5%, in depreciation
      expense, to $116,735 for the nine months ended September 30, 2005 from $9,880
      for the nine months ended September 30, 2004; and (iii) an increase of $213,911,
      or 40.6%, in the amount of wages and salaries we paid, to $740,981 for the
      nine
      months ended September 30, 2005 from $527,070 for the nine months ended
      September 30, 2004. These increases were primarily due to the reasons set forth
      above.


19


***Interest
      Expense.*** Interest
      expense was $133,557 for the nine months ended September 30, 2005, as compared
      to $42,467 for the nine months ended September 30, 2004, resulting in an
      increase of $91,090, or 214.5%. This increase was primarily due to the reasons
      set forth above.





***Net
      Income (Loss).*** For the
      reasons described above, we incurred a net loss of $982,261 for the nine months
      ended September 30, 2005 as compared to a net loss of $314,538 for the nine
      months ended September 30, 2004.








**Liquidity
      and Capital Resources**





At
      September 30, 2005, we had a cash
      balance of $0. Since 2002, our principal sources of liquidity have been the
      revenue from operations, the issuance of debt and equity securities, primarily
      to related parties, and borrowings from lending institutions. Our current cash
      levels, together with the cash flows we generate from operating activities,
      are
      not sufficient to enable us to continue our operations at current levels. We
      believe that anticipated cash flows from recent and near-term scheduled
      deployments of our digital signage network will allow us to “break-even”
during the first quarter of 2006. As a result, we intend to seek additional
      capital through the sale of shares of our common stock to institutional
      investors or other ‘accredited investors’ in private placements in order to
      obtain sufficient working capital to sustain operations until such time as
      we
      are cash flow positive and to allow us to pay off our existing credit facility.
      In the event that our operations do not generate sufficient cash flow, or we
      cannot obtain additional funds if and when needed, we may be forced to curtail
      or cease our activities, which would likely result in the loss to
      investors of all or a substantial portion of their investment.





We
      are
      currently in preliminary discussions with an institutional investor to obtain
      debt or equity financing in the amount of $3 million to $5 million. We
      anticipate that the closing of such financing will be contingent upon, among
      other conditions, the recapitalization of our company through a reverse stock
      split, a decrease in our number of authorized but unissued shares of common
      stock and the creation of a class of “blank check” preferred stock. In September
      2005, our board of directors and the holders of more than 50% of our outstanding
      shares of common stock approved a proposal to (i) change our corporate name
      to
“Impart Media Group, Inc.”; (ii) effect a reverse stock split, pursuant to which
      every twenty (20) shares of our outstanding common stock would be exchanged
      for
      one new share of common stock; (iii) decrease the number of authorized shares
      of
      our common stock; and (iv) authorize 25,000,000 shares of “blank check”
preferred stock.





We
      intend
      to effect such a recapitalization in December 2005. There can be no assurance
      that we will be able to consummate the proposed financing transaction, or that
      any such transaction will be consummated on terms favorable to
      us.


20


Even
      if
      we successfully obtain such financing, we will still require additional capital
      to execute our growth strategy of expanding our digital signage network and
      acquiring other digital signage companies that we believe are financially
      accretive with our company, of which there can be no assurance.





At
      September 30, 2005, we had liquid assets of $1,036,920, consisting of accounts
      receivable derived from operations in the amount of $694,040 and inventory
      in
      the amount of $342,880. Long-term assets of $1,204,522 consisted primarily
      of
      computer servers, software and video display equipment used in operations.





Our
      working capital deficit was $3,123,619 as of September 30, 2005 for the reasons
      described above.





During
      the nine months ended September 30, 2005, we used net cash of $244,614 in
      operating activities.





During
      the nine months ended September 30, 2005, we used net cash of $215,969 in
      investing activities, primarily for the purchase of digital signage hardware
      inventory and for the purchase of proprietary software from iPoint and Media
      Side Street.





Financing
      activities, consisting primarily of borrowings under a line of credit and loans
      by certain of our officers and directors, provided net cash of $424,106 during
      the nine months ended September 30, 2005.







ITEM
      3.
      CONTROLS AND PROCEDURES.





DISCLOSURE
      CONTROLS AND PROCEDURES. Our management, with the participation of our chief
      executive officer and chief financial officer, has evaluated the effectiveness
      of our disclosure controls and procedures (as such term is defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
      (the "Exchange Act")) as of the end of the period covered by this Report. Based
      on such evaluation, our chief executive officer and chief financial officer
      have
      concluded that, as of the end of such period, our disclosure controls and
      procedures are effective in recording, processing, summarizing and reporting,
      on
      a timely basis, information required to be disclosed by us in the reports that
      we file or submits under the Exchange Act.





INTERNAL
      CONTROL OVER FINANCIAL REPORTING. There have not been any changes in our
      internal control over financial reporting (as such term is defined in Rules
      13a-15(f) and 15d-15(f) under the Exchange Act) during the period
      covered by this Report that
      have materially affected, or are reasonably likely to materially affect, our
      internal control over financial reporting.


PART
      II.
      OTHER INFORMATION





ITEM
      1.
      LEGAL PROCEEDINGS





During
      the fiscal quarter ended September 30, 2005, we entered into negotiations with
      Clickplay, Inc. to reach an agreement regarding satisfaction of amounts payable
      as a result of a default judgment entered against us in February, 2002. The
      amount of such default judgment was $123,219 (including accrued interest of
      $30,219).


21


ITEM
      2.
      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.





In
      the
      quarter ended September 30, 2005, we issued an aggregate of 2,800,000 shares
      of
      our common stock to two consulting firms for services rendered, which services
      were valued at $188,000 in the aggregate. Such shares were issued in reliance
      upon the exemption from registration provided by Section 4(2) of the Securities
      Act of 1933, as amended, on the basis that such issuance did not involve a
      public offering, no underwriter fees or commissions were paid in connection
      with
      such issuance and such persons were ‘accredited investors’ as defined in
      Regulation D under the Securities Act of 1933, as amended.





In
      the
      quarter ended September 30, 2005, we issued an aggregate of 25,000 shares of
      our
      common stock to two investors in a private placement for an aggregate purchase
      price of $2,050, or $.082 per share. Such shares were issued in reliance upon
      the exemption from registration provided by Section 4(2) of the Securities
      Act
      of 1933, as amended, on the basis that such issuance did not involve a public
      offering and such persons were ‘accredited investors’ as defined in Regulation D
      under the Securities Act of 1933, as amended.











ITEM
      6.
      EXHIBITS.





The
      exhibits required by this item are listed on the Exhibit Index attached
      hereto.


22


SIGNATURES





In
      accordance with the requirements of the Exchange Act, the registrant has caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.








Dated:
                November 23, 2005
            
            LIMELIGHT
                MEDIA GROUP, INC.By:
            /s/David
                V. LottDavid
                V. LottChief
                Executive Officer(principal
                executive officer)By:
            /s/Joseph
                MartinezJoseph
                MartinezChief
                Financial Officer(principal
                financial officer)





23


**EXHIBIT
      INDEX**








31.1
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted
                pursuant
                to Section 302 of the Sarbanes-Oxley Act of
                2002.





31.2
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted
                pursuant
                to Section 302 of the Sarbanes-Oxley Act of
                2002.





32.1
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted
                pursuant
                to Section 906 of the Sarbanes-Oxley Act of
                2002.





32.2
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted
                pursuant
                to Section 906 of the Sarbanes-Oxley Act of
                2002.