Table of Contents

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UnitedStatesSecurities and ExchangeCommission

Washington, D.C.20549

FORM 10-QSB

QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGEACT OF 1934

For the quarterly period endedSeptember  30,  2006

Commission File Number0-25563

CKRUSH,INC.

(Name of small business issuer in itscharter)

|                                                              |  |  |                                        |
|--------------------------------------------------------------|--|--|----------------------------------------|
| Delaware                                                     |  |  | 65-0648808                             |
| (Stateor other jurisdiction of incorporation ororganization) |  |  | (I.R.S.Employer Identification Number) |
|                                                              |

336West 37th StreetNew York, NY10018

(Address & Zip code ofprincipal executive offices)

(212)564-1111

(Issuer's telephonenumber)

1414 Avenue of Americas,Suite 406NewYork, NY 10019

(Former name, formeraddress and former fiscal year, if changed since lastreport)

Check whether the issuer (1) filed allreports required to be filed by Section 13 or 15(d) of the Exchange Actduring the last 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days. Yes     No 

APPLICABLE ONLY TO CORPORATEISSUERS

State the number of shares outstanding ofeach of the issuer's classes of common equity, as of the latestpracticable date:

As of November  10,2006, there were 84,936,089 outstanding shares of common stock, parvalue $0.01 pershare.

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CKRUSH,INC. AND SUBSIDIARIES

INDEXTOFORM10-QSB

|        |  |  |                                                                                                                          |  |  |      |  |        |  |
|--------|--|--|--------------------------------------------------------------------------------------------------------------------------|--|--|------|--|--------|--|
|   |  |  |                                                                                                                     |  |  | Page |
| PARTI  |  |  | FINANCIALINFORMATION                                                                                                     |  |  |      |  |   |  |
| Item1. |  |  | FinancialStatements                                                                                                      |  |  |      |  | 1      |  |
|   |  |  | Condensed ConsolidatedBalance Sheet at September 30, 2006(Unaudited)                                                     |  |  |      |  | 1      |  |
|   |  |  | Condensed ConsolidatedStatement of Operations for the three and nine months endedSeptember 30, 2006 and 2005(Unaudited)  |  |  |      |  | 2      |  |
|   |  |  | Condensed ConsolidatedStatement of Stockholders’ Deficiency for the nine months endedSeptember 30, 2006(Unaudited) |  |  |      |  | 3      |  |
|   |  |  | Condensed ConsolidatedStatement of Cash Flows for the nine months ended September30, 2006 and 2005(Unaudited)            |  |  |      |  | 4      |  |
|   |  |  | Notes to CondensedConsolidated FinancialStatements                                                                       |  |  |      |  | 5      |  |
| Item2. |  |  | Management's Discussion and Analysis or Plan ofOperation                                                                 |  |  |      |  | 20     |  |
| Item3. |  |  | Controls andProcedures                                                                                                   |  |  |      |  | 25     |  |
| PARTII |  |  | OTHERINFORMATION                                                                                                         |  |  |      |  |   |  |
| Item1. |  |  | LegalProceedings                                                                                                         |  |  |      |  | 27     |  |
| Item2. |  |  | Unregistered Sales of Equity Securities and Use ofProceeds                                                               |  |  |      |  | 28     |  |
| Item3. |  |  | Defaults Upon SeniorSecurities                                                                                           |  |  |      |  | 28     |  |
| Item4. |  |  | Submission of Matters to a Vote of SecurityHolders                                                                       |  |  |      |  | 28     |  |
| Item5. |  |  | OtherInformation                                                                                                         |  |  |      |  | 28     |  |
| Item6. |  |  | Exhibits                                                                                                                 |  |  |      |  | 29     |  |
|   |  |  | SIGNATURES                                                                                                               |  |  |      |  |   |  |
|   |  |  | CERTIFICATIONS                                                                                                           |  |  |      |  |   |  |
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Table of Contents

PARTI — FINANCIAL INFORMATION

|              |                      |
|--------------|----------------------|
| Item1.  | FINANCIAL STATEMENTS |

CKRUSH, INC. ANDSUBSIDIARIESCONDENSED CONSOLIDATED BALANCESHEET

|                                                                                                                                                        |  |  |                  |   |             |                  |  |  |  |   |             |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|------------------|---|-------------|------------------|--|--|--|---|-------------|---|
|                                                                                                                                                   |  |  | September30,2006 |   |             | December 31,2005 |
|                                                                                                                                                   |  |  | (unaudited)      |   |             |             |
| Assets                                                                                                                                                 |  |  |                  |   |        |                  |  |  |  |   |        |   |
| Cash                                                                                                                                                   |  |  |                  | $ | 693,171     |                  |  |  |  | $ | 57,533      |   |
| Accountsreceivable                                                                                                                                |  |  |                  |   | 1,178,428   |                  |  |  |  |   | 15,431      |   |
| Prepaidexpenses and otherassets                                                                                                                   |  |  |                  |   | 115,872     |                  |  |  |  |   | 143,955     |   |
| Filmcosts                                                                                                                                         |  |  |                  |   | 1,940,967   |                  |  |  |  |   | 3,998,746   |   |
| Assetsheld for sale to formerpresident                                                                                                                 |  |  |                  |   | —     |                  |  |  |  |   | 213,559     |   |
| Propertyand equipment –net                                                                                                                       |  |  |                  |   | 98,098      |                  |  |  |  |   | 18,962      |   |
| Cash –restricted                                                                                                                                 |  |  |                  |   | 50,243      |                  |  |  |  |   | 150,000     |   |
| TotalAssets                                                                                                                                            |  |  |                  | $ | 4,076,779   |                  |  |  |  | $ | 4,598,186   |   |
| Liabilitiesand Stockholders'Deficiency                                                                                                                 |  |  |                  |   |        |                  |  |  |  |   |        |   |
| Accounts payableand accruedexpenses                                                                                                                    |  |  |                  | $ | 5,768,501   |                  |  |  |  | $ | 4,900,440   |   |
| Accruedlitigation and judgmentspayable                                                                                                                 |  |  |                  |   | 2,486,915   |                  |  |  |  |   | 2,135,103   |   |
| Notesand loans payable, including accruedinterest                                                                                                      |  |  |                  |   | 2,627,145   |                  |  |  |  |   | 2,671,231   |   |
| Deferredsettlement with relatedparty                                                                                                                   |  |  |                  |   | —     |                  |  |  |  |   | 1,478,845   |   |
| Due torelatedparties                                                                                                                                   |  |  |                  |   | 374,192     |                  |  |  |  |   | 606,939     |   |
| Deferredrevenues                                                                                                                                       |  |  |                  |   | 225,000     |                  |  |  |  |   | —     |   |
| Participationpayables                                                                                                                                  |  |  |                  |   | 400,000     |                  |  |  |  |   | 400,000     |   |
| TotalLiabilities                                                                                                                                       |  |  |                  |   | 11,881,753  |                  |  |  |  |   | 12,192,558  |   |
| MinorityInterest                                                                                                                                       |  |  |                  |   | 5,960,870   |                  |  |  |  |   | 4,708,130   |   |
| Commitments,Contingencies and OtherMatters                                                                                                             |  |  |                  |   |        |                  |  |  |  |   |        |   |
| Stockholders'Deficiency                                                                                                                                |  |  |                  |   |        |                  |  |  |  |   |        |   |
| Series D, $.01 parvalue, authorized 399,752 shares, 399,752 shares issued andoutstanding (liquidation preference of$2,430,000)                         |  |  |                  |   | 3,998       |                  |  |  |  |   | 3,998       |   |
| Series E,$.01 par value, authorized 14,000 shares, 1,000 and 1,388 sharesissued and outstanding (liquidation preference of $360,000 and$459,986)  |  |  |                  |   | 10          |                  |  |  |  |   | 14          |   |
| Commonstock, $.01 par value, authorized 100,000,000 shares 84,152,756and 70,994,163 shares issued andoutstanding                                       |  |  |                  |   | 841,528     |                  |  |  |  |   | 709,942     |   |
| Additionalpaid-incapital                                                                                                                               |  |  |                  |   | 50,957,782  |                  |  |  |  |   | 40,872,945  |   |
| Accumulateddeficit                                                                                                                                     |  |  |                  |   | (60,448,328 | )                |  |  |  |   | (48,363,005 | ) |
| Deferredcompensation                                                                                                                                   |  |  |                  |   | (5,035,834  | )                |  |  |  |   | (5,441,396  | ) |
| Treasurystock, at cost – 104,784 shares of commonstock                                                                                           |  |  |                  |   | (85,000     | )                |  |  |  |   | (85,000     | ) |
| TotalStockholders'Deficiency                                                                                                                           |  |  |                  |   | (13,765,844 | )                |  |  |  |   | (12,302,502 | ) |
| TotalLiabilities and Stockholders'Deficiency                                                                                                           |  |  |                  | $ | 4,076,779   |                  |  |  |  | $ | 4,598,186   |   |
|                                                                                                                                                        |

Seenotes to condensed consolidated financialstatements

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Table of Contents

CKRUSH, INC. ANDSUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OFOPERATIONS

|                                                                        |  |  |                               |   |             |                             |  |  |      |   |             |      |  |  |  |  |              |   |  |  |  |   |             |   |
|------------------------------------------------------------------------|--|--|-------------------------------|---|-------------|-----------------------------|--|--|------|---|-------------|------|--|--|--|--|--------------|---|--|--|--|---|-------------|---|
|                                                                   |  |  | Threemonths endedSeptember 30 |   |             | Nine monthsendedSeptember30 |
|                                                                   |  |  | 2006                          |   |             | 2005                        |  |  | 2006 |   |             | 2005 |
| Netrevenues                                                            |  |  |                               | $ | 1,539,845   |                             |  |  |      | $ | 100,475     |      |  |  |  |  | 1,615,315    |   |  |  |  | $ | 405,682     |   |
| Operatingcosts andexpenses                                             |  |  |                               |   |        |                             |  |  |      |   |        |      |  |  |  |  |         |   |  |  |  |   |        |   |
| Costof revenues                                                        |  |  |                               |   | 2,923,903   |                             |  |  |      |   | 112,358     |      |  |  |  |  | 2,993,459    |   |  |  |  |   | 319,672     |   |
| Selling,general andadministrative                                      |  |  |                               |   | 3,177,753   |                             |  |  |      |   | 1,406,846   |      |  |  |  |  | 11,393,798   |   |  |  |  |   | 4,139,275   |   |
| Depreciationand amortization                                           |  |  |                               |   | 6,029       |                             |  |  |      |   | 77,421      |      |  |  |  |  | 24,980       |   |  |  |  |   | 314,007     |   |
| Impairmentcharge                                                       |  |  |                               |   | 35,000      |                             |  |  |      |   |        |      |  |  |  |  | 112,000      |   |  |  |  |   |        |   |
| Settlmentcosts                                                         |  |  |                               |   | 184,675     |                             |  |  |      |   |        |      |  |  |  |  | 371,092      |   |  |  |  |   |        |   |
| Gainon sale of exclusive promotionagreements                           |  |  |                               |   | —     |                             |  |  |      |   |        |      |  |  |  |  | (21,852      | ) |  |  |  |   |        |   |
|                                                                   |  |  |                               |   | 6,327,360   |                             |  |  |      |   | 1,596,625   |      |  |  |  |  | 14,873,477   |   |  |  |  |   | 4,772,954   |   |
| Lossfromoperations                                                     |  |  |                               |   | (4,787,515  | )                           |  |  |      |   | (1,496,150  | )    |  |  |  |  | (13,258,162  | ) |  |  |  |   | (4,367,272  | ) |
| Otherincome(expenses)                                                  |  |  |                               |   |        |                             |  |  |      |   |        |      |  |  |  |  |         |   |  |  |  |   |        |   |
| Interestexpense                                                        |  |  |                               |   | (43,136     | )                           |  |  |      |   | (113,451    | )    |  |  |  |  | (411,996     | ) |  |  |  |   | (353,581    | ) |
| Interestexpense – relatedparties                                 |  |  |                               |   |        |                             |  |  |      |   | (76,195     | )    |  |  |  |  |         |   |  |  |  |   | (186,153    | ) |
| Financingcosts paid in common stock andwarrants                        |  |  |                               |   | —     |                             |  |  |      |   | —     |      |  |  |  |  | (33,000      | ) |  |  |  |   | (154,000    | ) |
| Gainon settlement with relatedparty                                    |  |  |                               |   | —     |                             |  |  |      |   | —     |      |  |  |  |  | 1,478,845    |   |  |  |  |   |        |   |
| Other                                                                  |  |  |                               |   | 25,112      |                             |  |  |      |   |        |      |  |  |  |  | 25,112       |   |  |  |  |   |        |   |
| Minorityinterest                                                       |  |  |                               |   | 41,550      |                             |  |  |      |   | —     |      |  |  |  |  | 113,878      |   |  |  |  |   |        |   |
|                                                                   |  |  |                               |   | 23,526      |                             |  |  |      |   | (189,646    | )    |  |  |  |  | 1,172,839    |   |  |  |  |   | (693,734    | ) |
| Netloss                                                                |  |  |                               |   | ($4,763,989 | )                           |  |  |      |   | ($1,685,796 | )    |  |  |  |  | ($12,085,323 | ) |  |  |  |   | ($5,061,006 | ) |
| Netloss per common share(basic anddiluted)                             |  |  |                               |   | ($0.06      | )                           |  |  |      |   | ($0.03      | )    |  |  |  |  | ($0.15       | ) |  |  |  |   | ($0.08      | ) |
| Weightedaverage number of common shares outstanding (basic anddiluted) |  |  |                               |   | 84,900,916  |                             |  |  |      |   | 62,592,733  |      |  |  |  |  | 78,140,917   |   |  |  |  |   | 60,651,935  |   |
|                                                                        |

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Table of Contents

CKRUSH,INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OFSTOCKHOLDERS'DEFICIENCY

|                                                                                  |  |  |                |  |         |                     |  |  |                         |   |        |                    |  |  |                      |  |        |               |  |  |                              |   |        |        |  |  |  |  |            |  |  |  |  |   |         |  |  |  |  |   |            |   |  |  |  |  |              |   |  |  |  |  |             |   |  |  |  |  |          |   |  |  |  |  |          |   |  |  |  |  |              |   |
|----------------------------------------------------------------------------------|--|--|----------------|--|---------|---------------------|--|--|-------------------------|---|--------|--------------------|--|--|----------------------|--|--------|---------------|--|--|------------------------------|---|--------|--------|--|--|--|--|------------|--|--|--|--|---|---------|--|--|--|--|---|------------|---|--|--|--|--|--------------|---|--|--|--|--|-------------|---|--|--|--|--|----------|---|--|--|--|--|----------|---|--|--|--|--|--------------|---|
|                                                                             |  |  | PreferredStock |  |         | CommonStock         |  |  | AdditionalPaidinCapital |   |        | AccumulatedDeficit |  |  | DeferredCompensation |  |        | TreasuryStock |  |  | TotalStockholders'Deficiency |
|                                                                             |  |  | SeriesD        |  |         | Convertible SeriesE |  |  |                    |   |        |               |
|                                                                             |  |  | Shares         |  |         | Amount              |  |  | Shares                  |   |        | Amount             |  |  | Shares               |  |        | Amount        |  |  | Shares                       |   |        | Amount |
| Balance,December 31, 2005                                                        |  |  |                |  | 399,752 |                     |  |  |                         | $ | 3,998  |                    |  |  |                      |  | 1,388  |               |  |  |                              | $ | 14     |        |  |  |  |  | 70,994,163 |  |  |  |  | $ | 709,942 |  |  |  |  | $ | 40,872,945 |   |  |  |  |  | ($48,363,005 | ) |  |  |  |  | ($5,441,396 | ) |  |  |  |  | (104,784 | ) |  |  |  |  | ($85,000 | ) |  |  |  |  | ($12,302,502 | ) |
| Issuanceof common stock in connection with conversion of Series E PreferredStock |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  | (388   | )             |  |  |                              |   | (4     | )      |  |  |  |  | 387,778    |  |  |  |  |   | 3,878   |  |  |  |  |   | (3,874     | ) |  |  |  |  |         |   |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | —      |   |
| conversionof notes and loanspayable                                              |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  | 4,105,190  |  |  |  |  |   | 41,052  |  |  |  |  |   | 975,668    |   |  |  |  |  |         |   |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | 1,016,720    |   |
| privateplacements                                                                |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  | 6,665,625  |  |  |  |  |   | 66,656  |  |  |  |  |   | 886,054    |   |  |  |  |  |         |   |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | 952,710      |   |
| exerciseof stockoptions                                                          |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  | 2,000,000  |  |  |  |  |   | 20,000  |  |  |  |  |   | (20,000    | ) |  |  |  |  |         |   |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | —      |   |
| Issuanceof stock options to directors andofficers                                |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   | 6,717,000  |   |  |  |  |  |         |   |  |  |  |  | (2,277,000  | ) |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | 4,440,000    |   |
| Amortizationof deferredcompensation                                              |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   |       |   |  |  |  |  |         |   |  |  |  |  | 4,025,333   |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | 4,025,333    |   |
| Issuanceof warrants in connectionwith                                            |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   |       |   |  |  |  |  |         |   |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  |         |   |
| debtconversion                                                                   |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   | 11,500     |   |  |  |  |  |         |   |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | 11,500       |   |
| contractforservices                                                              |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   | 1,400,000  |   |  |  |  |  |         |   |  |  |  |  | (1,400,000  | ) |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | —      |   |
| Write-offdeferred signingbonus                                                   |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   |       |   |  |  |  |  |         |   |  |  |  |  | 57,229      |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | 57,229       |   |
| Beneficialconversion featture of convertible notespayable                        |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   | 118,489    |   |  |  |  |  |         |   |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | 118,489      |   |
| Netloss                                                                          |  |  |                |  |    |                     |  |  |                         |   |   |                    |  |  |                      |  |   |               |  |  |                              |   |   |        |  |  |  |  |       |  |  |  |  |   |    |  |  |  |  |   |       |   |  |  |  |  | (12,085,323  | ) |  |  |  |  |        |   |  |  |  |  |     |   |  |  |  |  |     |   |  |  |  |  | (12,085,323  | ) |
| Balance,September  30,  2006                                                     |  |  |                |  | 399,752 |                     |  |  |                         | $ | 3,998  |                    |  |  |                      |  | 1,000  |               |  |  |                              | $ | 10     |        |  |  |  |  | 84,152,756 |  |  |  |  | $ | 841,528 |  |  |  |  | $ | 50,957,782 |   |  |  |  |  | ($60,448,328 | ) |  |  |  |  | ($5,035,834 | ) |  |  |  |  | (104,784 | ) |  |  |  |  | ($85,000 | ) |  |  |  |  | ($13,765,844 | ) |
|                                                                                  |

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Table of Contents

CKRUSH,INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASHFLOWS

|                                                                                                           |  |  |                              |   |             |      |   |           |  |   |            |   |
|-----------------------------------------------------------------------------------------------------------|--|--|------------------------------|---|-------------|------|---|-----------|--|---|------------|---|
|                                                                                                      |  |  | Ninemonths ended September30 |
|                                                                                                      |  |  | 2006                         |   |             | 2005 |
| CashFlows From OperatingActivities                                                                        |  |  |                              |   |        |      |   |           |  |   |       |   |
| Netloss                                                                                                   |  |  |                              | $ | (12,085,323 | )    |   |           |  | $ | (5,061,007 | ) |
| Adjustmentsto reconcile net loss to net cash used in operatingactivities:                                 |  |  |                              |   |        |      |   |           |  |   |       |   |
| Depreciationandamortization                                                                               |  |  |                              |   | 24,980      |      |   |           |  |   | 314,008    |   |
| Amortizationof debtdiscount                                                                               |  |  |                              |   | 132,422     |      |   |           |  |   |       |   |
| Accruedsettlementcosts                                                                                    |  |  |                              |   | 371,092     |      |   |           |  |   |       |   |
| Gain on saleof promotionalrights                                                                          |  |  |                              |   | (21,852     | )    |   |           |  |   |       |   |
| Minorityinterest                                                                                          |  |  |                              |   | (113,878    | )    |   |           |  |   |       |   |
| Gain onsettlement with relatedparty                                                                       |  |  |                              |   | (1,478,845  | )    |   |           |  |   |       |   |
| Compensatoryelement of stock and warrant issuances for selling, general andadministrativeexpenses         |  |  |                              |   | 8,465,333   |      |   |           |  |   | 1,869,555  |   |
| Financingcosts paid in stocks andwarrants                                                                 |  |  |                              |   | 33,000      |      |   |           |  |   | 154,000    |   |
| (Increase)decrease in operatingassets:                                                                    |  |  |                              |   |        |      |   |           |  |   |       |   |
| Accountsreceivable                                                                                        |  |  |                              |   | (1,162,997  | )    |   |           |  |   | 78,330     |   |
| Filmcosts                                                                                                 |  |  |                              |   | 2,057,779   |      |   |           |  |   | (3,516,481 | ) |
| Prepaidexpenses and otherassets                                                                           |  |  |                              |   | (51,461     | )    |   |           |  |   | (117,991   | ) |
| Restrictedcash                                                                                            |  |  |                              |   | 99,757      |      |   |           |  |   |       |   |
| Increase(decrease) in operatingliabilities:                                                               |  |  |                              |   |        |      |   |           |  |   |       |   |
| Accountspayable and accruedexpenses                                                                       |  |  |                              |   | 824,287     |      |   |           |  |   | 722,111    |   |
| Accruedlitigation and judgments payable                                                                   |  |  |                              |   | (55,776     | )    |   |           |  |   | (56,792    | ) |
| Notes andloans payable – accruedinterest                                                            |  |  |                              |   | 149,447     |      |   |           |  |   |       |   |
| Deferredrevenues                                                                                          |  |  |                              |   | 225,000     |      |   |           |  |   |       |   |
| NetCash Used In OperatingActivities                                                                       |  |  |                              |   | (2,587,037  | )    |   |           |  |   | (5,614,267 | ) |
| CashFlows From InvestingActivities                                                                        |  |  |                              |   |        |      |   |           |  |   |       |   |
| Purchases ofproperty andequipment                                                                         |  |  |                              |   | (88,491     | )    |   |           |  |   | (27,129    | ) |
| Proceedsfrom sale of promotionalagreement                                                                 |  |  |                              |   | 140,000     |      |   |           |  |   |       |   |
| Proceeds fromsale of assets to formerpresident                                                            |  |  |                              |   | 213,559     |      |   |           |  |   |       |   |
| Investment inmovierights                                                                                  |  |  |                              |   |        |      |   |           |  |   | (13,535    | ) |
| NetCash Used In InvestingActivities                                                                       |  |  |                              |   | 265,068     |      |   |           |  |   | (40,664    | ) |
| CashFlows From FinancingActivities                                                                        |  |  |                              |   |        |      |   |           |  |   |       |   |
| Advancesfrom stockholders and related parties –net                                                  |  |  |                              |   |        |      |   |           |  |   |       |   |
| Proceeds fromissuance of:                                                                                 |  |  |                              |   |        |      |   |           |  |   |       |   |
| preferredstock                                                                                            |  |  |                              |   |        |      |   |           |  |   | 634,800    |   |
| commonstock                                                                                               |  |  |                              |   | 952,710     |      |   |           |  |   | 250,401    |   |
| productioninterests (minorityinterests)                                                                   |  |  |                              |   | 1,775,394   |      |   |           |  |   | 4,547,853  |   |
| notesand loans payable –other                                                                       |  |  |                              |   | 1,110,000   |      |   |           |  |   | 766,526    |   |
| notesand loans payable – relatedparties                                                             |  |  |                              |   | 69,346      |      |   |           |  |   |       |   |
| convertibledebt                                                                                           |  |  |                              |   |        |      |   |           |  |   |       |   |
| Payment to related party– deferredsettlement                                                        |  |  |                              |   | (257,000    | )    |   |           |  |   |       |   |
| Repayment ofproductioninterests                                                                           |  |  |                              |   | (450,000    | )    |   |           |  |   |       |   |
| Repayment ofnotes and loans payable –other                                                          |  |  |                              |   | (197,750    | )    |   |           |  |   | (455,006   | ) |
| Repaymentof notes and loans payable – related parties –net                                    |  |  |                              |   | (45,093     | )    |   |           |  |   | (30,320    | ) |
| NetCash Provided From FinancingActivities                                                                 |  |  |                              |   | 2,957,607   |      |   |           |  |   | 5,714,254  |   |
| NetIncrease(Decrease) InCash                                                                              |  |  |                              |   | 635,638     |      |   |           |  |   | 59,323     |   |
| Cash –Beginning ofPeriod                                                                            |  |  |                              |   | 57,533      |      |   |           |  |   | 219,299    |   |
| Cash– End ofPeriod                                                                                  |  |  |                              | $ | 693,171     |      |   |           |  | $ | 278,622    |   |
| SupplementalDisclosures:                                                                                  |  |  |                              |   |        |      |   |           |  |   |       |   |
| Cashpaid during the periodfor:                                                                            |  |  |                              |   |        |      |   |           |  |   |       |   |
| Interest                                                                                                  |  |  |                              | $ | 16,750      |      |   |           |  | $ | 68,499     |   |
| Non-cashinvesting and financingactivities:                                                                |  |  |                              |   |        |      |   |           |  |   |       |   |
| Issuance ofcommon stock and warrants in connection with: conversion of notesand loanspayable              |  |  | $1,016,720                   |   |             |      | $ | 898,849   |  |
| conversionSeries E preferredstock                                                                         |  |  | 3,878                        |   |             |      |   |      |  |
| cashlessexercise of warrants                                                                              |  |  |                         |   |             |      |   |      |  |
| deferredcompensation                                                                                      |  |  | 2,000,000                    |   |             |      |   | 7,610,000 |  |
| accruedexpenses                                                                                           |  |  |                         |   |             |      |   | 494,779   |  |
| Issuance ofpreferred E upon release of funds fromescrow                                                   |  |  |                         |   |             |      |   | 199,064   |  |
| Increasein minority interest and issuance of warrants and new note payable uponconversion of notespayable |  |  | 140,500                      |   |             |      |   |      |  |
|                                                                                                           |

See notes tocondensed consolidated financialstatements

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CKRUSH,INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

Note1.    Description of Business

Ckrush, Inc. and subsidiariesthe (‘‘Company’’) is a cutting edgeentertainment and digital media group of companies seeking tocapitalize on the global convergence of the traditional entertainmentindustry and the ‘‘participatory popculture’’ revolution of online communities and digitaltechnology. The Company produces feature films, sports programs andother content that target young adults, a highly coveted entertainmentindustry demographic. The Company’s‘‘LiveMansion.com’’ is a fully interactivesocial network fostering democratically created content. TheCompany’s feature film comedies include ‘‘ArtieLange’s Beer League’’, National Lampoon’s‘‘TV the Movie’’ and NationalLampoon's ‘‘Pledge This’’. Inaddition, the Company promotes and distributes televised sports eventsand other programming through pay-per-view, video-on-demand and otherretail channels.

Note 2.    Basis of Presentation

TheCompany has incurred net losses of $12.1  million during the ninemonths ended September  30,  2006 and $7.7  millionand $12.4  million during the years ended December31,  2005 and 2004, respectively. In addition, the Company is notin compliance with the payment terms for $2.1  million of itsoutstanding notes and loans payable including unpaid interest. Further,the Company had a stockholders' deficiency of $13.8million at September  30,  2006. Historically, the Companyhas successfully obtained external financing through short-termborrowings and private placements of equity and convertible debt andthus, the Company hopes to remedy these defaults through additionalborrowings, conversion of existing debt to equity, ownershipcontributions, and/or renegotiation of existing terms and conditions ofthe notes and loans payable in default. However, if the Company isunable to cure these defaults, it may significantly impede our abilityto raise additional funds and/or to conduct normal businessoperations.

The Company is also taking actions to addressliquidity in the followingways:

|  |                    |                                                                                                         |
|--|--------------------|---------------------------------------------------------------------------------------------------------|
|  | •   | developing additionalsources of debt and equity financing to satisfy our current operatingrequirements; |

|  |                    |                                                                                                                                                                                                        |
|--|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •   | entering into newinitiatives related to our social networking siteLiveMansion.com as well as initiatives to develop, produce anddistribute film properties and other sports and entertainmentprojects; |

|  |                    |                                                                            |
|--|--------------------|----------------------------------------------------------------------------|
|  | •   | continuing to pursuethe promotion of selective premium level boxingevents; |

|  |                    |                                                                         |
|--|--------------------|-------------------------------------------------------------------------|
|  | •   | pursuing productionpartnerships and joint ventures to fund projects;and |

|  |                    |                                                                                          |
|--|--------------------|------------------------------------------------------------------------------------------|
|  | •   | continuing to negotiate withexisting creditors to convert their indebtedness intoequity. |

There can be no assurance that sufficient funds requiredduring the next year or thereafter will be generated from operations orthat funds will be available from external sources such as debt orequity financings or other potential sources. The lack of additionalcapital resulting from the Company’s inability to generate cashflow from operations or to raise capital from external sources wouldforce the Company to substantially curtail or cease operations andwould, therefore, have a material adverse effect on the Company'sbusiness. Furthermore, there can be no assurance that any such requiredfunds, if available, will be available on attractive terms or that theywill not have a significant dilutive effect on the Company’sexisting stockholders.

These factors raise substantial doubtabout the Company’s ability to continue as a going concern andthe accompanying condensed consolidated financial statements do notinclude any adjustments related to the recoverability or classificationof asset carrying amounts or the amounts and classification ofliabilities that may result should the Company be unable to continue asa going concern.

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CKRUSH, INC. ANDSUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS— (continued)(Unaudited)

The accompanying interim consolidated financial statements of theCompany are unaudited, but in the opinion of management, reflect alladjustments, consisting of normal recurring accruals, necessary for afair presentation of the results for the interim period. Accordingly,they do not include all information and notes required by generallyaccepted accounting principles for complete financial statements. Theresults of operations for interim periods are not necessarilyindicative of results to be expected for the entire fiscal year or anyother period. These interim consolidated financial statements should beread in conjunction with the Company's consolidated financialstatements and notes for the year ended December  31,  2005filed on Form 10-KSB on April  12,  2006.

Note3.    Summary of Significant Accounting Policies

RevenueRecognition

Media entertainment revenue includes revenues fromthe sale or licensing of films and is recognized upon meeting allrecognition requirements of Statement of Position (SOP) 00-2‘‘Accounting by Producers or Distributors ofFilms’’. Revenue from the theatrical release of featurefilms is recognized at the time of exhibition based on theCompany’s participation in box office receipts. Revenue from thesale of digital video disks (‘‘DVDs’’) inthe retail market, net of an allowance for estimated returns and otherallowances, is recognized on the later of shipment to the customer or‘‘street date’’ (when it is available forsale by the customer). Under revenue sharing arrangements, rentalrevenue is recognized when the Company is entitled to receipts and suchreceipts are determinable. Revenue from sales to internationalterritories is recognized when access to the feature has been grantedor delivery has occurred, as required under the sales contract, and theright to exploit the feature film has commenced.

Sportsentertainment revenue, principally promotional fight revenue, iscomprised of box office ticket sales, site fee income, sponsorships andendorsements. Fight revenue is recognized in full on the date of theevent.

The Company is evaluating potential revenue sourcesrelated to its internet activities and the appropriate revenuerecognition policies for such activities. However, as of September 30,2006, the Company has not generated revenues from suchactivities.

Investment in Films

Investment in filmsincludes the unamortized costs of completed films which have beenproduced by the Company or for which the Company has acquireddistribution rights, films in progress and in development and homevideo product inventory. For films produced by the Company, capitalizedcosts include all direct production and financing costs, capitalizedinterest and production overhead. For acquired films, capitalized costsconsist of minimum guarantee payments to acquire the distributionrights. Costs of producing films are amortized using theindividual-film-forecast method, whereby costs are amortized andparticipation and residual costs are accrued in the proportion thatcurrent year’s revenue bears to management’s estimate ofultimate revenue at the beginning of the current year expected to berecognized from the exploitation, exhibition or sale of the films.Ultimate revenue includes estimates over a period not to exceed tenyears following the date of initial release. Investment in films andtelevision programs is stated at the lower of amortized cost orestimated fair value on an individual film basis. The valuation ofinvestment in films is reviewed on a title-by-title basis, when anevent or change in circumstances indicates that the fair value of afilm is less than its unamortized cost. The fair value of the film isdetermined using management’s future revenue and cost estimatesand a discounted cash flow approach. Additional amortization isrecorded in the amount by which the unamortized costs exceed theestimated fair value of the film. Estimates of future revenue involvemeasurement uncertainty and it is therefore possible that reductions inthe carrying value of investment in films and television programs maybe required as a consequence of changes in 

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CKRUSH, INC. ANDSUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS— (continued)(Unaudited)

management’s future revenue estimates.Films in progress include the accumulated costs of productions, whichhave not yet been completed by the Company. Films in developmentinclude costs of acquiring film rights to books, stage plays ororiginal screenplays and costs to adapt such projects. Such costs arecapitalized and, upon commencement of production, are transferred toproduction costs. Projects in development are written off at theearlier of the date they are determined not to be recoverable or whenabandoned, or three years from the date of the initialinvestment.

Impairment of Long-Lived Assets

In accordancewith Statement of Financial Accounting Standards(‘‘SFAS’’) No. 144,‘‘Accounting for the Impairment or Disposal of Long-LivedAssets’’, the Company continually monitors events andchanges in circumstances that could indicate carrying amounts oflong-lived assets may not be recoverable. An impairment loss isrecognized when expected cash flows are less than the assets'carrying value. Accordingly, when indicators of impairment are present,we evaluate the carrying value of such assets in relation to theoperating performance and future discounted cash flows of theunderlying business. Our policy is to record an impairment loss when itis determined that the carrying amount of the asset may not berecoverable, and accordingly, the Company recorded impairment chargesof $35,000 and $112,000 for the three and nine months ended September30, 2006, respectively, related to investments in filmproperties.

Social Network Internet Website DevelopmentCosts

The Company’s LiveMansion.com site iscomprised of various features, which contribute to the site’soverall functionality. The Company will capitalize costs incurred forthe production of computer software that generates the functionalityonce technological feasibility is established and it is determined thatsuch costs should be recoverable against future revenues. Costsincurred for a product prior to the determination that the product istechnologically feasible (research and development costs), as well asmaintenance costs for established products, are expensed as incurred.As of September  30,  2006, the Company has not capitalizedany costs incurred for LiveMansion.com.

IncomeTaxes

The Company accounts for income taxes under the asset andliability method using SFAS No. 109, ‘‘Accounting forIncome Taxes.’’ Deferred tax assets and liabilities arerecognized for the future tax consequences attributable to differencesbetween the financial statement carrying amounts of existing assets andliabilities and their respective tax bases and operating loss and taxcredit carry-forwards. Deferred tax assets and liabilities are measuredusing enacted tax rates expected to apply to taxable income in theyears in which those temporary differences are expected to be recoveredor settled. The effect on deferred tax assets and liabilities of achange in tax rates is recognized in income in the period that includesthe enactment date.

The tax effects of temporary differences thatgave rise to the deferred tax assets and deferred tax liabilities areprimarily attributable to net operating loss carry-forwards. Since theCompany has a history of losses, a full valuation allowance has beenestablished. In addition, utilization of net operating losscarry-forwards are subject to a substantial annual limitation due tothe ‘‘change in ownership’’ provisions ofthe Internal Revenue Code. The annual limitation may result in theexpiration of net operating loss carry-forwards beforeutilization.

Loss per share

Loss per common share isbased upon the weighted average number of common shares outstandingduring the year. Diluted loss per common share is the same as basicloss per share, as the effect of potentially dilutive securities(options — 31,849,000 (2006) and 299,000 (2005) and warrants— 30,693,986 (2006) and 22,151,374 (2005)) areanti-dilutive.

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CKRUSH, INC. ANDSUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS— (continued)(Unaudited)

Use of Estimates

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assetsand liabilities and disclosure of contingent assets and liabilities atthe date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results coulddiffer from those estimates. Significant estimates relate to ultimaterevenue and costs for investment in films, provision for doubtfulaccounts, income taxes and accruals for contingent liabilities; andimpairment assessments for investment in films and other projects,property and equipment, and intangible assets. Actual results coulddiffer from such estimates.

Reclassifications

Certainitems in these consolidated financial statements have been reclassifiedto conform to the current period presentation.

Recently IssuedAccounting Pronouncements

Effective January  1,2006, the Company adopted Statement of Financial Accounting StandardsNo. 123 (revised 2004) (‘‘SFAS 123(R)’’),‘‘Share-Based Payment,’’ which revisedStatement of Financial Accounting Standards 123 (‘‘SFAS123’’), ‘‘Accounting for Stock-BasedCompensation.’’ Refer to Note 4 to the unauditedcondensed consolidated financial statements for further information.There were no other accounting policies adopted during 2006 that had amaterial effect on the Company’s consolidated financialcondition and results of operations.

Note 4.    Stock-BasedCompensation

Effective January  1,  2006, theCompany adopted ‘‘SFAS 123(R)’’, whichrequires all share-based payment transactions with employees, includinggrants of employee stock options, to be recognized as compensationexpense over the requisite service period based on their relative fairvalues. Prior to the adoption of SFAS 123(R), stock-based compensationexpense related to employee stock options was not recognized in thestatement of operations if the exercise price was at least equal to themarket value of the common stock on the grant date, in accordance withAccounting Principles Board Opinion No. 25, ‘‘Accountingfor Stock Issued to Employees.’’ Prior to January1,  2006, the Company followed the disclosure-only provisionsunder SFAS 123.

The Company has elected to use the ModifiedProspective Application (‘‘MPA’’) methodfor implementing SFAS 123(R). Under the MPA method, prior periods arenot restated and new awards are valued and accounted for prospectivelyupon adoption. In February and in June  2006, options wereawarded to officers and members of the Board of Directors of theCompany (see Note 13). As a result of these awards and theimplementation of SFAS 123(R) the Company recorded compensation expenseof $1.9  million and $4.4  million for the three and ninemonths ended September  30,  2006, respectively. The fairvalue of the options at the dates of grant were calculated using theBlack-Scholes fair value based method using the following assumptions(expected life — 3 years; interest rate — 4.58% to5.07%; annual rate of dividends — 0%; andvolatility — 67% and 123%). As of January1,  2005, all outstanding employee options were vested thereforethere would have been no impact on compensation cost for theCompany's stock option during the 2005 period utilizing the fairvalue method set forth in SFAS 123 (R).

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CKRUSH, INC. ANDSUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS— (continued)(Unaudited)

Options outstanding and exercisable byprice range as of September  30,  2006 were asfollows:

|                  |  |  |                    |  |            |                                                   |  |  |                                |  |     |        |  |  |                              |   |      |  |  |  |  |  |            |  |  |  |  |   |      |  |
|------------------|--|--|--------------------|--|------------|---------------------------------------------------|--|--|--------------------------------|--|-----|--------|--|--|------------------------------|---|------|--|--|--|--|--|------------|--|--|--|--|---|------|--|
|             |  |  | OutstandingOptions |  |            | ExercisableOptions                                |
| Rangeof          |  |  | Number             |  |            | WeightedAverage Remaining ContractualLife inyears |  |  | Weighted Average ExercisePrice |  |     | Number |  |  | WeightedAverageExercisePrice |
| $0.10            |  |  |                    |  | 19,800,000 |                                                   |  |  |                                |  | 9.7 |        |  |  |                              | $ | 0.10 |  |  |  |  |  | 19,800,000 |  |  |  |  | $ | .10  |  |
| $0.20–0.26 |  |  |                    |  | 2,275,000  |                                                   |  |  |                                |  | 9.3 |        |  |  |                              |   | 0.20 |  |  |  |  |  | 845,702    |  |  |  |  |   | .20  |  |
| $0.30–0.38 |  |  |                    |  | 9,550,000  |                                                   |  |  |                                |  | 9.7 |        |  |  |                              |   | 0.30 |  |  |  |  |  | 841,666    |  |  |  |  |   | .30  |  |
| $1.02–1.44 |  |  |                    |  | 224,000    |                                                   |  |  |                                |  | .9  |        |  |  |                              |   | 1.35 |  |  |  |  |  | 224,000    |  |  |  |  |   | 1.35 |  |
|             |  |  |                    |  | 31,849000  |                                                   |  |  |                                |  | 9.6 |        |  |  |                              | $ | 0.17 |  |  |  |  |  | 21,711,368 |  |  |  |  | $ | 0.13 |  |
|                  |

Note5.    Film Costs and Minority Interests

Film costs consistof:

|               |  |  |  |   |           |  |
|---------------|--|--|--|---|-----------|--|
| Inprogress    |  |  |  | $ | 1,756,520 |  |
| Indevelopment |  |  |  |   | 184,447   |  |
|          |  |  |  | $ | 1,940,967 |  |
|               |

OnJune  27,  2005, the Company entered into a joint ventureoperating agreement for the purpose of arranging, developing andproducing film, television, music, publishing and related properties tobe acquired by the joint venture including certain propertiescontributed by the other joint venture partner. The Company is to makecapital contributions of $748,000 over a 2 year period, of which theCompany contributed $373,000 through September  30,  2006.In accordance with the joint venture operating agreement, the Companyobtained the right to prevail in major decisions, as defined, until theCompany has received its maximum preferred return (as defined below).The Company may elect to renew the operating agreement beyond itsinitial term of 2 years for 5 consecutive 1-year renewal periods bymaking additional annual contributions increasing by 5% eachyear. Net income is allocated as follows: (i) 85% to the Companyuntil the Company aggregate capital contributions plus 20% hasbeen recouped (‘‘minimum preferredreturn’’); (ii) 60% to the Company until theCompany’s has received its minimum preferred return plus$500,000 (the ‘‘maximum preferredreturn’’); and (iii) 50% to the Company after itreceives the maximum preferred return. In addition, the Company has theright of first refusal to provide or to arrange for financing for eachproject or property pursued or developed by the jointventure.

During 2005, through a private placement offering two ofthe Company’s subsidiaries sold and issued an aggregate ofapproximately 84 units of revenue participation rights(‘‘RPRs’’) in film projects for anaggregate purchase price of approximately $4.7  millionrepresenting a minority ownership interests in the subsidiaries. TheCompany sold an additional 2.22 RPR units for $ 762,000, net ofplacement fees, during the nine months ended September30,  2006. To the extent of available cash flow from theCompany’s subsidiaries, the RPRs entitle the investors to areturn of 100% of their respective purchase price plus a20% preferred return. In addition, the Company guaranteed therepayment of one investor’s investment of $2.7  million inthe RPR’s and related 20% preferred return. The investorhas the right to enforce the guaranty at any time commencing inJune  2007, or earlier under certain circumstances. The Companyalso granted the investor a security interest in the Company’srights and interests in the related film projects and to escrow amaximum of 9,000,000 shares of its common stock as further security forrepayment of the obligation.

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In August  2006, the holders of theRPR units were repaid $450,000 as a result of the receipt of an advancefrom the domestic distributor of one of the film projects.

InJuly  2006, the Company announced that it would produce‘‘LiveMansion: The Movie’’ which will becast online by members of the LiveMansion.com social networkingcommunity. To assist in the financing of the movie, the Company soldminority ownership interests for which to the extent of available cashflow from the film, the investors are entitled to a return of100% of the purchase price plus a 20% preferred return.The Company received approximately $1  million, net of expensesfor the interests sold. The Company is permitted to use the proceedsfrom the sale of minority interests for working capital purposes priorto use for production of the film. As of September 30, 2006, theCompany utilized approximately $200,000 for working capitalneeds.

Note 6.    Accrued Litigation and JudgmentsPayable

Designscape

In April  2005Designscape, Inc. filed an action in New York State Supreme Courtagainst the Company and certain former officers of the Company,alleging breach of contract and misrepresentations with respect to analleged oral agreement to provide goods and services in connection withthe production and staging of a television series and seekingapproximately $550,000 and unspecified damages. In September2006, the Company and Designscape agreed to settle the matter. OnSeptember  18,  2006, the Company agreed to pay Designscape$300,000 in installments through March  31,  2009 withinterest at 9% accumulating on unpaid balance fromSeptember  25,  2005 payable on September  30,2009. On September  25,  2006, in accordance with theagreement, the Company made the first requirement payment of$10,000.

Dewayne Layfield

In April  2005,Dewayne Layfield, a holder of a note payable from a subsidiary of theCompany, arising from a previous settlement agreement, instituted asecond arbitration proceeding against the Company seeking to recover$172,000 plus attorneys' fees and costs. The Company answered,seeking a declaration that the Company had no further obligation due tobreaches of the related agreement. The Company also filed acounterclaim seeking to recover amounts previously paid related to theprevious agreement. In April  2006, the Company paid $31,000 tothe holder to reduce the outstanding principal. In September2006, the Company and Layfield entered into a settlement agreement inwhich the Company agreed to pay Layfield $170,000 in four payments fromOctober  2006 through August  7,  2007. If theCompany does not make the scheduled payments the Company will beobligated to pay Layfield $200,000 less payments made under thisagreement. The Company made the first payment of $50,000 which was dueon October  9,  2006, in accordance with the agreement.

Shane Mosley

In November  2005, the Companyentered into a second settlement agreement related to the sharing ofprofits with Shane Mosley, a boxer, and agreed to pay $565,000 toMosley in installments representing 60% of the net profits fromany boxing events promoted or co-promoted by the Company (retroactivelyto September  2005) until the outstanding sum, plus accruedinterest, is paid in full. In addition, the Company is entitled to a$100,000 credit against the above settlement amount, contingent uponthe transfer and assignment of the Company's rights to the MosleyVideo Library. Amounts unpaid by December  31,  2008 areimmediately due and payable.

First Equity

InJune  2005, First Equity Capital Corporation filed an actionagainst the Company in state court in Florida, alleging that theCompany breached an unsigned agreement pursuant to which the Company

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CKRUSH, INC. ANDSUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS— (continued)(Unaudited)

allegedly hired First Equity to providecertain services. First Equity alleges that the Company is obligated topay First Equity $1.5  million and to issue First Equity up to4,000,000 registered shares of our common stock. The Company has filedan answer denying any liability to First Equity and raising numerousaffirmative defenses. The Company is in the process of taking discoveryin this matter and intends to vigorously defend.

NationalSports Partners

In May  2003, National SportsPartners, the owner of Fox Sports Net Broadcast Service, commenced anaction in California against us to collect approximately $239,000 foradvertising time and production fees and costs for airing boxing eventson Fox, plus interest, costs and attorney fees. In August  2004,the Company reached an agreement with NSP in which NSP agreed toforbear from further action against us in exchange for full paymentover time of $239,000, plus deferred interest. As of September30,  2006 the Company had only paid $65,000.

J.P.Morgan Chase & Company

On January  13,2004, J.P. Morgan Chase & Company(‘‘Chase’’) obtained a judgment in theamount of $95,000 against the Company's former President and theCompany in connection with the Company's default on anoutstanding note. In May  2004, Chase agreed to allow the Companyto pay the outstanding principal amount, plus interest at 4% perannum, in 60 monthly payments of $2,000 each, in exchange forforbearance on any additional efforts to collect upon the unsatisfiedportion of the balance. The balance on this obligation atSeptember  30,  2006 amounted to $76,000. The Company isnot in compliance with the terms set forth in the forbearanceagreement.

Other

There are other matters inwhich the Company has entered into settlements in prior years for whichthe Company has not made the required payments.

In connectionwith the Company's settlement, in December 2005, of an actionagainst the Company, and certain officers and an employee, the Companyagreed to retain the services of an independent consultant to analyzethe Company's system of internal controls and accounting andfinancial reporting processes, report to the audit committee, andoversee the implementation of improved processes in these areas. Inaddition, the Company agreed to establish an escrow account in theamount of $150,000 to fund the services of the independent consultant.The court approved settlement further required that the fund bemaintained at $150,000 throughout the consulting period. The consultanthas been paid for services as rendered from the escrow account howeverthe Company has not replenished the fund. The Company believes that theescrow balance as of September 30, 2006 is sufficient to cover theservices still to be rendered although less than the amount required bythe settlement agreement.

In the opinion of management, on theadvice of counsel, the Company has made adequate provision forpotential liabilities, if any, arising from litigation settlements andother claims arising from the above matters. As of September30,  2006, the Company had accrued $2.5  million, withrespect to such matters. However, the costs and other effects ofpending or future litigation, governmental investigations, legal andadministrative cases and proceedings (whether civil or criminal),settlements, judgments and investigations, claims and changes in thosematters (including those matters described above), and developments orassertions by or against the Company relating to contractual rightsrelated to boxers and the promotion of boxing events, intellectualproperty rights and intellectual property licenses, could have amaterial adverse effect on the Company's business, financialcondition and operating results.

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Note 7.    Notes and LoansPayable

Notes and loan payable includes accrued interest (atrates ranging from none to 23%) of $416,000. During the ninemonths ended September  30,  2006, the Company borrowed$1,110,000 under short-term arrangements with various individuals. Inconnection with the issuance of the notes, the Company paid fees of$136,000 which was included in ‘‘interestexpense’’ in the condensed consolidated statements ofoperations for the nine months ended September  30,  2006.Also in connection with the issuance of these notes and relatedwarrants, the Company recorded imputed discount of $118,000 whichrepresents the fair value of the beneficial conversion feature of thebelow market conversion rate using the Black-Scholes pricing model. Thebeneficial conversion feature was recorded pursuant to Emerging IssuesTask Force (‘‘EITF’’) 00-27: Application ofEITF No. 98-5, ‘‘Accounting for Convertible Securitieswith Beneficial Conversion Features or Contingently AdjustableConversion Ratios,’’ to certain convertible instruments.In accordance with EITF 02-27, the Company evaluated the value of thebeneficial conversion feature and recorded this amount as a reductionto the carrying amount of the convertible debt and as an addition topaid-in capital. Included in ‘‘interestexpense’’ is $96,000 for amortization of the discount forthe nine months ended September  30,  2006.

Duringthe nine months ended September  30,  2006, the holders of$1,017,000 of notes payable, including accrued interest, allowed theCompany to convert the indebtedness into 4,105,190 shares of commonstock. In addition a note holder with principal and interest past dueof $156,000 exchanged the obligation for one RPR unit in theCompany’s film projects, a warrant to purchase 50,000 shares ofcommon stock at $0.10 per share, a new $80,000 note payable and $16,000in cash.

The Company is not in compliance with the payment termsfor $2.1  million of the notes and loans payable including unpaidinterest.

Note 8.    Settlement with Related Party

OnNovember  1,  2005, the Company entered into an agreementwith Livingston Investments, LLC(‘‘Livingston’’) and the Mackin CharitableRemainder Trust (the ‘‘Mackin Trust’’) tosettle certain obligations aggregating $1,533,000, including accruedinterest, as well as sums due and/or payable in the future by theCompany to Livingston ($1,562,000 based upon the present value of theobligation) pursuant to a certain ten year consulting agreement.Pursuant to the agreement, the Company paid the following amounts andissued the following securities insettlement:

|  |                    |                                                                                                                                                                            |
|--|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •   | $400,000 in cash ininstallments, of which $143,000 was paid in November  2005 andthe balance was paid in April  2006 in connection with thetransaction described in Note9; |

|  |                    |                                                                                                                                                                      |
|--|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •   | ten (10) year warrants topurchase an aggregate of 7,500,000 shares, exercisable at $0.10 pershare, 1,500,000 of which vest on an annual basis commencing in 2006;and |

|  |                    |                                |
|--|--------------------|--------------------------------|
|  | •   | 800,000 shares of commonstock. |

In addition, the Company granted to an affiliate ofLivingston the exclusive right to license the electronic media rightsto the boxing libraries owned by the Company throughout the world(excluding the United States) for a three (3) year period. The assetsand obligations related to this license was transferred to theCompany's former President in connection with the transactiondescribed in Note 9.

The shares of common stock issued and theshares of common stock underlying the warrants have piggy-backregistration rights, as well as on demand registration rights in theevent that the holder has not been able to utilize such piggy-backregistration rights by February  10,  2007. The warrantsalso provide that they may be exercised on a cashlessbasis.

Livingston and the Mackin Trust as a part of thesettlement also agreed to pay the Company an amount equal to theproceeds from the sale, if any, by another affiliate of Livingston of66,658 shares 

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of the capital stock in M.P.I. Media PartnersInternational BV, a Netherlands company engaged in television rightsmanagement as well as sponsorship and advertising rightsmanagement.

As a result of making the final payment inApril  2006, the Company recognized a gain of $1.5  millionin the accompanying consolidated statement of operations for the ninemonths ended September  30,  2006.

Note9.    Transactions with former President

In April2006, the Company entered into 3 agreements with Cedric Kushner, theCompany’s former President which provides, among other matters,the following:

|  |              |                                                                                                                                                                                                                                                                                                                                                                                      |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Repayment terms for theCompany’s indebtedness owed to Kushner of $263,000 were modifiedto provide for interest at 5%, quarterly payments of $10,000,plus amounts equivalent to a pro rata portion of amounts paid tocertain other Company’s creditors, plus 50% of netrevenue up to $100,000 from a promotional agreement, with the unpaidbalance due December  31,2008; |

|  |              |                                                                                                                                                                                                                                 |
|--|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | The Company indemnified Kushnerfor any liability resulting from his service as a director or officer,subject to the limitations of the Delaware corporate statute, and forany Company obligations that he guaranteedpersonally; |

|  |              |                                                                                                                         |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------|
|  | •  | The Company subleased itsheadquarters to a entity owned by Kushner, at the same rent payable byCompany to the landlord; |

|  |              |                                                                                               |
|--|--------------|-----------------------------------------------------------------------------------------------|
|  | •  | The Companytransferred its rights to its library of boxing videos to Kushner for$250,000; and |

|  |              |                                                                                                                                                                                                                               |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Kushner will consult withCkrush with respect to the promotion of David Tua, a boxer, in exchangefor 50% of the net proceeds earned from the Tua exclusivepromotion agreement, after first repaying $400,000 owed toinvestors. |

The assets which are subject to this agreement,principally furniture and fixtures and the library rights, wereclassified as ‘‘Assets held for Sale’’ inthe consolidated financial statements at December  31,2005. The Company utilized the proceeds of this transaction to pay theamount due in connection with the deferred settlement with a relatedparty (see Note 8).

Also in April  2006, the Company sold2,937,500 shares of common stock for $376,000 to an entity which alsopurchased a substantial portion of Kushner’s shares of theCompany’s common stock and 1,171,875 shares for $150,000pursuant to a private placement. The Company’s new Presidentalso purchased all of Kushner’s shares of Series D preferred(339,788.66 shares) after the Company’s Board of Directorsremoved the liquidation preference contained in the originaldesignation.

Note 10.    Related PartyTransactions

Due to related parties at September30,  2006 includes Company obligations for advances made by itsformer President (see Note 9) on the Company’s behalf of$266,000. The advances are unsecured, have no specific terms,conditions or maturities. In addition, the Company’s Presidentis due $108,000 including accrued interest.

The Company enteredinto a consulting agreement with an entity co-owned by theCompany’s new President for certain general business and boxingpromotion related consulting services which commenced on January1,  2003 and continues through April  30,  2008. Ascompensation the Company issued 700,000 shares of its common stockvalued at $560,000 which was recorded as deferred compensation in 2003.Amortization expense related to this agreement of $84,000 was chargedto operations in each of the nine month periods ended September30,  2006 and 2005. The entity also 

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advanced $272,000 and $511,000 for paymentsto the Company’s trade and other vendors during the nine monthsended September  30,  2006 and 2005, respectively, all ofwhich was repaid during each period. The entity was also compensated$64,000 and $153,000 for assistance in connection with certainfinancing transactions during the nine months ended September30,  2006 and 2005, respectively. The Company, this entity andanother consultant to the Company have a profit participation in acertain boxer.

Note 11.    Stockholders'Deficiency

Series E Convertible Preferred Stock

In 2006,the holders of 278 shares of the Series E preferred stock convertedtheir preferred shares into 277,778 shares of commonstock.

Common Stock

In 2006, the Company issued 4,105,190shares of common stock in connection with the conversion of outstandingnotes and accrued interest aggregating approximately$1,017,000.

During 2006, the Company sold 6,665,625 shares ofcommon stock, in private placements at prices ranging from $.12 to $.20per share together with warrants to purchase 800,000 shares of commonstock at prices ranging from 10¢ to 30¢ per share.

TheCompany has outstanding stock options, warrants, convertible securitiesand other contingent obligations, all of which could require theCompany to issue common stock in a number which exceeds the authorizedamount as of September  30,  2006. The Company intends tocall a meeting of its shareholders, as soon as it is practical, toapprove an increase in the number of authorize commonshares.

Warrants

A summary of warrant activity for thenine months ended September  30,  2006 and 2005 is asfollows:

|                                    |  |  |                   |  |            |                              |  |  |                  |   |     |                              |  |  |  |  |            |   |  |  |  |   |      |  |
|------------------------------------|--|--|-------------------|--|------------|------------------------------|--|--|------------------|---|-----|------------------------------|--|--|--|--|------------|---|--|--|--|---|------|--|
|                               |  |  | 2006              |  |            | 2005                         |
|                               |  |  | Numberof Warrants |  |            | WeightedAverageExercisePrice |  |  | NumberofWarrants |   |     | WeightedAverageExercisePrice |
| Balance – beginning ofperiod |  |  |                   |  | 30,051,373 |                              |  |  |                  | $ | .26 |                              |  |  |  |  | 9,823,113  |   |  |  |  | $ | .61  |  |
| Issued                             |  |  |                   |  | 5,800,000  |                              |  |  |                  |   | .17 |                              |  |  |  |  | 12,945,000 |   |  |  |  |   | .10  |  |
| Exercised                          |  |  |                   |  | (2,500,000 | )                            |  |  |                  |   | .10 |                              |  |  |  |  | (333,332   | ) |  |  |  |   | .19  |  |
| Expired                            |  |  |                   |  | (2,657,388 | )                            |  |  |                  |   | .33 |                              |  |  |  |  | (283,408   | ) |  |  |  |   | 5.00 |  |
| Balance– end ofperiod        |  |  |                   |  | 30,693,986 |                              |  |  |                  | $ | .27 |                              |  |  |  |  | 22,151,374 |   |  |  |  | $ | .39  |  |
|                                    |

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Stock Options

Stock option shareactivity and weighted average exercise price under these plans for thenine months ended September30, 2006 is asfollows:

|                            |  |  |                  |  |            |                              |  |  |  |   |      |  |
|----------------------------|--|--|------------------|--|------------|------------------------------|--|--|--|---|------|--|
|                       |  |  | Numberof Options |  |            | WeightedAverageExercisePrice |
| Balance, January  1,2006   |  |  |                  |  | 299,000    |                              |  |  |  | $ | 1.09 |  |
| Granted in2006             |  |  |                  |  | 31,550,000 |                              |  |  |  |   | .17  |  |
| Balance,September  30,2006 |  |  |                  |  | 31,849,000 |                              |  |  |  | $ | .17  |  |
|                            |

OnApril  24,  2006, the Company engaged an investor relationsfirm to provide marketing and financial public relation services. Theinitial term of the agreement is 12 months with a monthly fee of$12,500. In addition, the firm was issued warrants to purchase 5million (5,000,000) shares of common stock at an exercise price of $.15per share. The warrants were immediately exercisable and expire onApril  24,  2009. In August  2006, the Company andthe investor relations firm agreed to terminate the agreement. The fairvalue of the warrants ($1.4 million) was charged to expense during thenine months ended September 30, 2006 and was calculated utilizing theBlack-Scholes fair value based method.

Note 12.    SegmentData

SFAS No. 131 ‘‘Disclosures About Segments ofan Enterprise and Related Information’’ requires theCompany to make certain disclosures about each reportable segment. TheCompany’s reportable segments are determined based on thedistinct nature of their operations and each segment is a strategicbusiness unit that offers different products and services and ismanaged separately. SFAS No. 131 defines operating segments ascomponents of an enterprise about which separate financial informationis available that is evaluated regularly by the chief operatingdecision maker in deciding how to allocate resources and in assessingperformance.

The Company has two reportable segments: mediaentertainment and sports entertainment. The media entertainment segmentconsists of development and production of digital and filmed contentfor global distribution to all media platforms including feature films,DVD titles, television programming and other similar products. Thesports entertainment segment consists of promotion of professionalboxers and boxing events.

In July  2006, we formed a newdivision known as Ckrush Digital Media to focus on the convergence ofentertainment and digital technologies and to capitalize on the growthof new media and the participatory pop culture of online communitiesand digital technologies. In the same month, as its first initiative,Ckrush Digital Media launched LiveMansion.com, an online socialnetworking website created to harness the burgeoning influence ofyouth-oriented online communities and to capitalize on cross-marketingopportunities. The Company’s media entertainment segment alsoincludes the Company’s internet activities.

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Segmented information by business is asfollows:    

|                                                                                                   |  |  |                                |   |             |       |  |  |        |   |            |       |  |  |       |   |         |        |  |  |  |   |            |   |  |  |  |   |          |   |  |  |  |   |         |   |
|---------------------------------------------------------------------------------------------------|--|--|--------------------------------|---|-------------|-------|--|--|--------|---|------------|-------|--|--|-------|---|---------|--------|--|--|--|---|------------|---|--|--|--|---|----------|---|--|--|--|---|---------|---|
|                                                                                              |  |  | Ninemonths ended September  30 |
|                                                                                              |  |  | 2006                           |   |             | 2005  |
|                                                                                              |  |  | Total                          |   |             | Media |  |  | Sports |   |            | Total |  |  | Media |   |         | Sports |
| Netrevenues                                                                                       |  |  |                                | $ | 1,615,315   |       |  |  |        | $ | 1,615,315  |       |  |  |       | $ | — |        |  |  |  | $ | 405,682    |   |  |  |  | $ | 77,101   |   |  |  |  | $ | 328,581 |   |
| Operatingcosts andrevenues                                                                        |  |  |                                |   |        |       |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  |   |       |   |  |  |  |   |     |   |  |  |  |   |    |   |
| Costofrevenues                                                                                    |  |  |                                |   | 2,993,459   |       |  |  |        |   | 2,993,459  |       |  |  |       |   | — |        |  |  |  |   | 319,672    |   |  |  |  |   | 29,115   |   |  |  |  |   | 290,557 |   |
| Depreciationandamortization                                                                       |  |  |                                |   | 24,980      |       |  |  |        |   | 9,355      |       |  |  |       |   | 15,625  |        |  |  |  |   | 314,007    |   |  |  |  |   | 181,955  |   |  |  |  |   | 132,052 |   |
| Impairmentcharges                                                                                 |  |  |                                |   | 112,000     |       |  |  |        |   | 112,000    |       |  |  |       |   | — |        |  |  |  |   | —    |   |  |  |  |   | —  |   |  |  |  |   | — |   |
| Gainon sale of exclusiveagreements                                                                |  |  |                                |   | (21,852     | )     |  |  |        |   | —    |       |  |  |       |   | (21,852 | )      |  |  |  |   | —    |   |  |  |  |   | —  |   |  |  |  |   | — |   |
|                                                                                              |  |  |                                |   | 3,108,587   |       |  |  |        |   | 3,114,814  |       |  |  |       |   | (6,227  | )      |  |  |  |   | 633,679    |   |  |  |  |   | 211,070  |   |  |  |  |   | 422,609 |   |
| Segmentprofit/(loss)                                                                              |  |  |                                |   | (1,493,272  | )     |  |  |        | $ | (1,499,499 | )     |  |  |       | $ | 6,227   |        |  |  |  |   | (227,997   | ) |  |  |  | $ | (133,969 | ) |  |  |  | $ | (94,028 | ) |
| Less:Corporate selling, general andadministrative                                                 |  |  |                                |   | 2,923,673   |       |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  |   | 2,269,719  |   |  |  |  |   |     |   |  |  |  |   |    |   |
| Settlementcosts                                                                                   |  |  |                                |   | 371,092     |       |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  |   | —    |   |  |  |  |   |     |   |  |  |  |   |    |   |
| Compensatoryelement of stock and warrant issuances for selling, general andadministrativeexpenses |  |  |                                |   | 8,470,125   |       |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  |   | 1,869,556  |   |  |  |  |   |     |   |  |  |  |   |    |   |
| Interestexpense                                                                                   |  |  |                                |   | 411,996     |       |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  |   | 539,734    |   |  |  |  |   |     |   |  |  |  |   |    |   |
| Financingcosts paid in stocks andwarrants                                                         |  |  |                                |   | 33,000      |       |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  |   | 154,000    |   |  |  |  |   |     |   |  |  |  |   |    |   |
| Other                                                                                             |  |  |                                |   | (1,617,835  | )     |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  |   | —    |   |  |  |  |   |     |   |  |  |  |   |    |   |
| Netloss                                                                                           |  |  |                                | $ | (12,085,323 | )     |  |  |        |   |       |       |  |  |       |   |    |        |  |  |  | $ | (5,061,006 | ) |  |  |  |   |     |   |  |  |  |   |    |   |
|                                                                                                   |

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|                                                                                                   |  |  |                                 |   |             |       |  |  |        |   |             |        |  |  |       |   |                                 |        |  |  |  |   |         |   |  |  |  |   |         |  |  |  |  |   |          |   |
|---------------------------------------------------------------------------------------------------|--|--|---------------------------------|---|-------------|-------|--|--|--------|---|-------------|--------|--|--|-------|---|---------------------------------|--------|--|--|--|---|---------|---|--|--|--|---|---------|--|--|--|--|---|----------|---|
|                                                                                              |  |  | Threemonths ended September  30 |
|                                                                                              |  |  | 2006                            |   |             | 2005  |
|                                                                                              |  |  | Total                           |   |             | Media |  |  | Sports |   |             | Total  |  |  | Media |   |                                 | Sports |
| Netrevenues                                                                                       |  |  |                                 | $ | 1,539,845   |       |  |  |        | $ | 1,539,845   |        |  |  |       | $ |     — |        |  |  |  | $ | 100,475 |   |  |  |  | $ | 47,712  |  |  |  |  | $ | 52,769   |   |
| Operatingcosts andrevenues                                                                        |  |  |                                 |   |        |       |  |  |        |   |        |        |  |  |       |   |                            |        |  |  |  |   |    |   |  |  |  |   |    |  |  |  |  |   |     |   |
| Costofrevenues                                                                                    |  |  |                                 |   | 2,923,903   |       |  |  |        |   | 2,923,903   |        |  |  |       |   | —                         |        |  |  |  |   | 112,358 |   |  |  |  |   | — |  |  |  |  |   | 112,358  |   |
| Depreciationandamortization                                                                       |  |  |                                 |   | 6,029       |       |  |  |        |   | 6,029       |        |  |  |       |   |                            |        |  |  |  |   | 77,421  |   |  |  |  |   | 41,596  |  |  |  |  |   | 35,825   |   |
| Impairmentcharges                                                                                 |  |  |                                 |   | 35,000      |       |  |  |        |   | 35,000      |        |  |  |       |   | —                         |        |  |  |  |   | — |   |  |  |  |   |    |  |  |  |  |   |     |   |
|                                                                                              |  |  |                                 |   | 2,964,932   |       |  |  |        |   | 2,964,932   |        |  |  |       |   | —                         |        |  |  |  |   | 189,779 |   |  |  |  | $ | 41,596  |  |  |  |  | $ | 148,183  |   |
| Segmentprofit/(loss)                                                                              |  |  |                                 |   | (1,425,087  | )     |  |  |        |   | ($1,425,087 | )      |  |  |       | $ | —                         |        |  |  |  |   | (89,304 | ) |  |  |  | $ | 6,116   |  |  |  |  |   | ($95,420 | ) |
| Less:Corporate selling, general andadministrative                                                 |  |  |                                 |   | 1,981,663   |       |  |  |   |   |             |   |  |  |       |   | 759,679                         |        |  |  |  |   |    |   |  |  |  |   |    |  |
| Settlementcosts                                                                                   |  |  |                                 |   | 184,675     |       |  |  |   |   |             |   |  |  |       |   | —                         |        |  |  |  |   |    |   |  |  |  |   |    |  |
| Compensatoryelement of stock and warrant issuances for selling, general andadministrativeexpenses |  |  |                                 |   | 2,168,042   |       |  |  |   |   |             |   |  |  |       |   | 647,167                         |        |  |  |  |   |    |   |  |  |  |   |    |  |
| Interestexpense                                                                                   |  |  |                                 |   | 43,136      |       |  |  |   |   |             |   |  |  |       |   | 189,646                         |        |  |  |  |   |    |   |  |  |  |   |    |  |
| Financingcosts paid in stocks andwarrants                                                         |  |  |                                 |   | —     |       |  |  |   |   |             |   |  |  |       |   | —                         |        |  |  |  |   |    |   |  |  |  |   |    |  |
| Other                                                                                             |  |  |                                 |   | (66,662     | )     |  |  |   |   |             |   |  |  |       |   | —                         |        |  |  |  |   |    |   |  |  |  |   |    |  |
| Netloss                                                                                           |  |  |                                 |   | ($4,763,989 | )     |  |  |   |   |             |   |  |  |       |   | ($1,685,796                     | )      |  |  |  |   |    |   |  |  |  |   |    |  |
|                                                                                                   |

Note13.    Other Matters

In February  2006, the Companyassigned its exclusive promotional agreement with a boxer to a thirdparty for $140,000. As a result of this transaction the Companyrecorded a gain of approximately $22,000. In addition, if the boxerwins a major bout during the term of the agreement, the Company isentitled to an additional payment of $250,000. In November 2006, theboxer won a major bout.

In June  2004, the Company andother parties entered into an agreement to form and become members ofPledge This Holdings, LLC (‘‘PTH’’). PTHwas formed to finance, produce and distribute a feature-length motionpicture.  In order to induce a group of investors toinvest in and make other accommodations to PTH, as well as in partialconsideration of its then 22.5% membership interest in PTH, theCompany entered into an agreement to guarantee the repayment of theinvestors’ then investment of $1  million if not recoupedon or before June  30,  2005 and to pay interest on theinvestment at the rate of 12%. As further consideration, theCompany issued 1,000,000 shares of its common stock, fair valued at$510,000. In connection with PTH obtaining additional financing, in2005, the Company’s membership interest was reduced to10% and another investor agreed to participate in the guaranteeof the aforementioned $1  million investment to a maximum of80%. As of September  30,  2006, the investors havebeen repaid $100,000 and are entitled to take the following actionuntil such time as they have been fully repaid: (i) take control of thefilm property of PHL; and (ii) seize the Company's interest inPHL.  If this were to occur, our revenues, profits, results ofoperations, financial condition and future prospects would bematerially and adversely affected. On November 9, 2006 the investorswere repaid $450,000 and we expect to pay the remaining $450,000 inJanuary  2007. The repayments are funded from the minimumguarantees payable by the film’s domesticdistributor.

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CKRUSH, INC. ANDSUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS— (continued)(Unaudited)

James DiLorenzo, a consultant to theCompany and former officer, originally had a 7% membershipinterest in PTH which was relinquished in connection with obtaining ofadditional financing for PTH. Also, an affiliate of LivingstonInvestments, LLC, a related party of the Company, has a 10%membership interest in PTH.

Note 14.    EmploymentAgreements

In June  2006, the Company’s Board ofDirectors approved the Company entering into employment agreements withits executive officers (other than its Chief Financial Officer —see below), an employee and a consultant. The agreements each providefor a three-year term with automatic renewals, subject to eitherparty's right not to renew and also provided for option grants.The Company will pay the President a base salary of $200,000 and theCEO $175,000 for the first year of the agreement, subject to annualincreases not less than 10% of the prior year's basesalary, and a discretionary bonus. The Company granted the Presidentoptions to purchase 10,500,000 shares of common stock, of which8,000,000 are exercisable at $.10 per share and are fully vested forpast services. The balance of 2,500,000 will have an exercise price of$.30 per share and vest at the rate of 69,444 shares per month overthree-year term. The CEO was granted options to purchase 3,000,000shares, of which 1,000,000 are exercisable at $.10 per share and arefully vested for past services; the balance of 2,000,000 will have anexercise price of $.30 per share and vest at the rate of 55,555 sharesper month over three-year term. In the event of a change of controlwhile the executives are employed, the Company will pay each an amountthat, after deducting federal and state income and payroll withholdingtaxes, would equal three (3) times their then-base salary. In addition,the Board of Directors established a compensation program for theindependent members of the Board. The members who are not employed bythe Company will receive an annual retainer of $6,000 and options topurchase 100,000 shares of the Company’s common stock at $.10per share, vested immediately, except the Chair of the Audit Committeewhose annual retainer is $12,000 and options to purchase 250,000 sharesof the Company’s common stock at $.10 per share. The optionsawarded are subject to shareholder approval for an increase in thenumber of authorized common shares and, as applicable, a qualifiedoption plan.

On February  13,  2006, the Companyentered into an employment agreement with its Executive Vice President— Chief Financial Officer. The agreement provides for athree-year term with automatic renewals, subject to eitherparty's right not to renew. The Company will pay a base salary of$175,000 for the first year of the agreement, subject to annualincreases not less than 10% of the prior year's basesalary, and a discretionary bonus. The Company granted options topurchase 3,000,000 shares of our common stock to the executive, ofwhich 750,000 are exercisable at $.10 per share and are fully vested.The balance of 2,250,000 will be qualified, subject to shareholderapproval, have an exercise price of $.20 per share and vest at the rateof 62,500 shares per month over the initial three-year term. In theevent of a change of control while the executive is employed, theCompany will pay him an amount that, after deducting federal and stateincome and payroll withholding taxes, would equal three (3) times histhen-base salary. The Company is also obligated to maintain in escrowan amount equal to 3 months of the executive’s salary until theCompany obtains $3  million of additional equity. The Company hasnot escrowed such amount.

Note 15.    SubsequentEvents

On October 12, 2006, the Company engaged Joe Abrams, as aconsultant to assist in defining and communicating the Company'smessage; identifying strategic areas of growth and potentialacquisition candidates; introducing potential business developmentpartners and capital sources; assisting with negotiations and duediligence principally related to our internet initiatives; and suchother matters as we agree upon with him. The agreement is for a term of17 months. The Company agreed to issue him fully vested warrants topurchase 117,647 shares of common stock per month over the term of the

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CKRUSH, INC. ANDSUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS— (continued)(Unaudited)

agreement, for an aggregate of 2,000,000shares. The exercise price of the warrants is $.10 per share, and thewarrants will be exercisable through October 11, 2011. Joe Abrams willalso get a fee equal to 5% of the net revenue generated from hisintroductions. The grant of the warrants will be accelerated in certaincircumstances specified in the consulting agreement.

During theperiod from October 1 through November 13, 2006, the Company sold433,333 shares of common stock for $65,000 and sold 350,000 shares ofcommon stock with warrants to purchase 175,000 shares of common stockat $.30 per share for$70,000.

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|              |                                                          |
|--------------|----------------------------------------------------------|
| Item2.  | MANAGEMENT'S DISCUSSION AND ANALYSIS ORPLAN OF OPERATION |

Safe HarborStatement Regarding Forward-Looking Statements

Managementbelieves certain statements in this Form 10-QSB may constitute‘‘forward-looking statements’’ within themeaning of Section 27A of the Securities Act of 1933 and Section 21E ofthe Securities Exchange Act of 1934. Forward-looking statements includeall statements that do not relate solely to historical or currentfacts, and can be identified by the use of words such as‘‘may,’’‘‘should,’’‘‘estimate,’’‘‘expect,’’‘‘anticipate,’’‘‘intend,’’‘‘believe,’’‘‘predict,’’‘‘potential,’’ or words of similar import.Forward-looking statements are necessarily based on estimates andassumptions that are inherently subject to significant business,economic and competitive uncertainties and risks, many of which aresubject to change. These uncertainties and risks include, but are notlimited to, economic, regulatory or competitive conditions; theadequacy of the our reserves for; our ability to maintain an effectivesystem of internal controls over financial reporting; marketfluctuations and changes in interest rate; the ability of oursubsidiaries to implement their business plans and strategies; and ourability to obtain additional capital in the future. As a consequence,current plans, anticipated actions and future financial condition andresults may differ from those expressed in any forward-lookingstatements made by or on behalf of us. Additionally, forward-lookingstatements speak only as of the date they are made, and we undertake noobligation to release publicly the results of any future revisions orupdates we may make to forward-looking statements to reflect newinformation or circumstances after the date hereof or to reflect theoccurrence of future events.

OVERVIEW

We are a cuttingedge entertainment and digital media group of companies seeking tocapitalize on the global convergence of the traditional entertainmentindustry and the ‘‘participatory popculture’’ revolution of online communities and digitaltechnology. We produce feature films, sports programs and other contentthat target young adults, a highly coveted entertainment industrydemographic. Our ‘‘LiveMansion.com’’ is afully interactive social network fostering democratically createdcontent. Our feature film comedies include ‘‘ArtieLange’s Beer League’’, National Lampoon’s‘‘TV the Movie’’ and NationalLampoon's ‘‘Pledge This’’. Inaddition, we promote and distribute televised sports events and otherprogramming through pay-per-view, video-on-demand and other retailchannels.

We are headquartered in New YorkCity.

Reportable Segments

We have two reportablesegments: media entertainment and sports entertainment. The mediasegment consists primarily of projects that we currently produce orwill produce or co produce such as feature films, DVD titles,television programming and other similar products, as well as ourinternet activities. The sports segment produces boxing events andpromotes professional boxers.

Critical AccountingPolicies

The accompanying discussion and analysis of ourfinancial condition and results of operations are based upon ourconsolidated financial statements, which have been prepared inaccordance with accounting principles generally accepted in the UnitedStates of America (‘‘US GAAP’’). Thepreparation of these consolidated financial statements requires us tomake estimates and judgments that affect the reported amounts ofassets, liabilities, revenues and expenses, and related disclosure ofcontingent assets and liabilities. These estimates form the basis formaking judgments about the carrying values of assets and liabilitiesthat are not readily apparent from other sources. We base our estimatesand judgments on historical experience and all available information.However, future events are subject to change, and the best estimatesand judgments routinely require adjustment. US GAAP requires us to makeestimates and judgments in several areas, including those related torecording various accruals (such as incentive compensation andrestructuring costs), income taxes, the useful lives of long-livedassets, such as property and equipment and intangible assets, andpotential losses from contingencies and litigation. We believe thepolicies discussed below are the most critical to our consolidatedfinancial statements because they are affected significantly bymanagement's judgments, assumptions andestimates.

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RevenueRecognition

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Media entertainment revenueincludes revenues from the sale or licensing of films and is recognizedupon meeting all recognition requirements of Statement of Position(SOP) 00-2 ‘‘Accounting by Producers or Distributors ofFilms’’. Revenue from the theatrical release of featurefilms is recognized at the time of exhibition based on theCompany’s participation in box office receipts. Revenue from thesale of digital video disks (‘‘DVDs’’) inthe retail market, net of an allowance for estimated returns and otherallowances, is recognized on the later of shipment to the customer or‘‘street date’’ (when it is available forsale by the customer). Under revenue sharing arrangements, rentalrevenue is recognized when the Company is entitled to receipts and suchreceipts are determinable. Revenue from sales to internationalterritories is recognized when access to the feature has been grantedor delivery has occurred, as required under the sales contract, and theright to exploit the feature film hascommenced |

|  |              |                                                                                                                                                                                              |
|--|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Fight revenue, promotionalfight revenue is comprised of box office ticket sales, site fee income,sponsorships and endorsements. Fight revenue is recognized in full onthe date of the event. |

|  |              |                                                                                                                                                                                                                                                 |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | We are evaluatingpotential revenue sources related to our internet activities and theappropriate revenue recognition policies for such activities. However,as of September 30, 2006, we have not generated revenues from itsinternet endeavors. |

Impairment of Long-Lived Assets

Inaccordance with Statement of Financial Accounting Standards(‘‘SFAS’’) No. 144,‘‘Accounting for the Impairment or Disposal of Long-LivedAssets’’, we continually monitor events and changes incircumstances that could indicate carrying amounts of long-lived assetsmay not be recoverable. An impairment loss is recognized when expectedcash flows are less than the assets' carrying value. Accordingly,when indicators of impairment are present, we evaluate the carryingvalue of such assets in relation to the operating performance andfuture discounted cash flows of the underlying business. Our policy isto record an impairment loss when it is determined that the carryingamount of the asset may not be recoverable, and accordingly, werecorded an impairment charge of $35,000 and $112,000 for the three andnine months ended September 30, 2006, respectively related toinvestments in film properties.

Intangible Assets

As acreator and distributor of sports and entertainment copyrights, we havea significant and growing number of intangible assets, includingtrademarks and contractual relationships. In accordance with accountingprinciples generally accepted in the United States of America, we donot recognize the fair value of internally generated intangible assets.Costs incurred to create and produce a copyrighted product, are eitherexpensed as incurred, or capitalized as tangible assets, as in the caseof inventorial product costs. However, accounting recognition is notgiven to any increasing asset value that may be associated with thecollection of the underlying copyrighted material.

Intangiblesare being amortized over their estimated useful lives ranging from 5 to10 years, utilizing the straight-line method. Video and televisionlibraries amortized over their estimated useful lives of 5 years,utilizing the straight-line method. As of September  30,2006, all intangibles which were being amortized were either fullyamortized and/or were transferred in connection with the sale to theformer president. See Note  9 to the Consolidated FinancialStatements.

Income Taxes

We utilize the asset andliability method to account for income taxes whereby deferred taxassets and liabilities are recognized to reflect the future taxconsequences attributable to temporary differences between thefinancial reporting basis of existing assets and liabilities and theirrespective tax losses. Deferred tax assets and liabilities are measuredusing enacted tax rates expected to be recovered andsettled.

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We have provided a 100% valuationallowance for the deferred tax assets, because the ultimaterealizations of those assets are uncertain. Utilization of netoperating loss carry-forwards are subject to a substantial annuallimitation due to the ‘‘change inownership’’ provisions of the Internal Revenue Code. Theannual limitation may result in the expiration of net operating losscarry-forwards before utilization.

COMPARISON OF THE THREEMONTHS ENDED SEPTEMBER 30, 2006 AND SEPTEMBER  30,2005

The following represents a comparison of segmentoperating results for the three months ended September30,  2006 and2005.

|                                |  |  |      |   |            |   |  |  |      |  |         |    |  |  |  |   |         |   |  |  |  |  |        |    |
|--------------------------------|--|--|------|---|------------|---|--|--|------|--|---------|----|--|--|--|---|---------|---|--|--|--|--|--------|----|
|                           |  |  | 2006 |   |            | % |  |  | 2005 |  |         | %  |
| Netrevenues                    |  |  |      |   |       |   |  |  |      |  |    |    |  |  |  |   |    |   |  |  |  |  |   |    |
| Media                          |  |  |      | $ | 1,539,845  |   |  |  |      |  | 100.0   | %  |  |  |  | $ | 47,712  |   |  |  |  |  | 47.5   | %  |
| Sports                         |  |  |      |   | —    |   |  |  |      |  | — |    |  |  |  |   | 52,763  |   |  |  |  |  | 52.5   |    |
|                           |  |  |      |   | 1,539,845  |   |  |  |      |  | 100.0   |    |  |  |  |   | 100,475 |   |  |  |  |  | 100.0  |    |
| Costof revenues and othercosts |  |  |      |   |       |   |  |  |      |  |    |    |  |  |  |   |    |   |  |  |  |  |   |    |
| Media                          |  |  |      |   | 2,964,932  |   |  |  |      |  | 192.5   |    |  |  |  |   | 41,596  |   |  |  |  |  | 41.4   |    |
| Sports                         |  |  |      |   | —    |   |  |  |      |  | — |    |  |  |  |   | 148,183 |   |  |  |  |  | 147.5  |    |
|                           |  |  |      |   | 2,964,932  |   |  |  |      |  | 192.5   |    |  |  |  |   | 189,779 |   |  |  |  |  | 188.9  |    |
| Segmentprofit/(loss)           |  |  |      |   |       |   |  |  |      |  |    |    |  |  |  |   |    |   |  |  |  |  |   |    |
| Media                          |  |  |      |   | (1,425,087 | ) |  |  |      |  | (92.5   | )  |  |  |  |   | 6,116   |   |  |  |  |  | 6.1    |    |
| Sports                         |  |  |      |   | —    |   |  |  |      |  |    |    |  |  |  |   | (95,420 | ) |  |  |  |  | (95.0  | )  |
|                           |  |  |      | $ | (1,425,087 | ) |  |  |      |  | (92.5   | )% |  |  |  | $ | (89,304 | ) |  |  |  |  | (88.9  | )% |
|                                |

Netrevenues increased by $1.4  million to $1.5  million forthe three months ended September  30,  2006 from $100,000in the prior year period. The 2006 net revenues were derived totallyfrom the media segment and reflect the reduction of our involvement inthe promotion of boxing. Our net revenues for the 2006 quarter wereprincipally derived from the minimum guarantee due for the release of‘‘Artie Lange’s BeerLeague’’.

Cost of revenues which relate to theproduction costs for filmed products and boxing events increased by$2.8  million, to $2.9  million for the quarter endedSeptember  30,  2006, compared to $112,000 incurred in theprior year period. During the 2006 quarter, all costs previouslyincurred and deferred as film project costs related to Beer League filmwere charged to cost of revenues based upon the individual filmforecast model. Other segment allocated costs include depreciation andamortization and impairment charges aggregating $41,000 in 2006, and$90,000 in 2005, respectively.

Our segment operating resultsresulted in a loss of $1.4  million in the 2006 quarter ascompared to a $89,000 loss for the prior year period. The increase inthe operating loss in 2006 was attributable to the release of the BeerLeague film project.

Selling, general and administrativeexpenses increased $1.8  million to $3.2  million for thequarter ended September  30,  2006, from $1.4million in the prior year period. The increase is principallyattributable to the charge of $234,000 resulting from theimplementation of FASB 123 (R) and an increase in non-cash compensationcharges related to stock compensation issued for consulting services of$1.3  million.

Financing costs including interest discountamortization decreased $147,000 in the three months endedSeptember  30,  2006 as compared to the prior year periodas a result of issuing equity in 2006, for which the costs of which arecharged directly to equity, in lieu of indebtedness for which the costsare amortized to expense.

Other income items in the quarter of$67,000 principally relate to the minority interest in the Identityprojects.

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COMPARISON OF THE NINE MONTHS ENDEDSEPTEMBER 30, 2006 AND SEPTEMBER 30, 2005

Thefollowing represents a comparison of segment operating results for thenine months ended September  30,  2006 and2005.

|                                |  |  |      |   |             |   |  |  |      |  |         |    |  |  |  |   |           |   |  |  |  |  |        |    |
|--------------------------------|--|--|------|---|-------------|---|--|--|------|--|---------|----|--|--|--|---|-----------|---|--|--|--|--|--------|----|
|                           |  |  | 2006 |   |             | % |  |  | 2005 |  |         | %  |
| Netrevenues                    |  |  |      |   |        |   |  |  |      |  |    |    |  |  |  |   |      |   |  |  |  |  |   |    |
| Media                          |  |  |      | $ | 1,615,315   |   |  |  |      |  | 100.0   | %  |  |  |  | $ | 77,101    |   |  |  |  |  | 19.0   | %  |
| Sports                         |  |  |      |   | —     |   |  |  |      |  | — |    |  |  |  |   | 328,581   |   |  |  |  |  | 81.0   |    |
|                           |  |  |      |   | 1,615,315   |   |  |  |      |  | 100.0   |    |  |  |  |   | 405,682   |   |  |  |  |  | 100.0  |    |
| Costof revenues and othercosts |  |  |      |   |        |   |  |  |      |  |    |    |  |  |  |   |      |   |  |  |  |  |   |    |
| Media                          |  |  |      |   | 3,114,814   |   |  |  |      |  | 192.8   |    |  |  |  |   | 211,070   |   |  |  |  |  | 52.0   |    |
| Sports                         |  |  |      |   | (6,227      | ) |  |  |      |  | (0.4    | )  |  |  |  |   | 422,609   |   |  |  |  |  | 105.2  |    |
|                           |  |  |      |   | 3,108,587   |   |  |  |      |  | 192.4   |    |  |  |  |   | 633,679   |   |  |  |  |  | 156.2  |    |
| Segmentprofit                  |  |  |      |   |        |   |  |  |      |  |    |    |  |  |  |   |      |   |  |  |  |  |   |    |
| Media                          |  |  |      |   | (1,499,499  | ) |  |  |      |  | (92.8   | )  |  |  |  |   | (133,969  | ) |  |  |  |  | (33.0  | )  |
| Sports                         |  |  |      |   | 6,227       |   |  |  |      |  | 0.4     |    |  |  |  |   | (94,028   | ) |  |  |  |  | (23.2  | )  |
|                           |  |  |      |   | ($1,493,272 | ) |  |  |      |  | (92.4   | )% |  |  |  |   | ($227,997 | ) |  |  |  |  | (56.2  | )% |
|                                |

Netrevenues increased by $1.2  million to $1.6  million forthe nine months ended September  30,  2006 from $406,000 inthe prior year period. The 2006 net revenues were derived totally fromthe media segment and reflect the reduction of our involvement in thepromotion of boxing. Our net revenues for the 2006 period wereprincipally derived from the minimum guarantee due for the release of‘‘Artie Lange’s BeerLeague’’.

Cost of revenues which relate to theproduction costs for filmed products and boxing events increased by$2.7  million, to $3.0  million for the nine months endedSeptember  30,  2006, compared to $320,000 incurred in theprior year period. During the 2006 quarter, all costs previouslyincurred and deferred as film project costs related to Beer League filmwere charged to cost of revenues based upon the film forecast model.Other segment allocated costs include depreciation and amortization andimpairment charges aggregating $137,000 in 2006, and $314,000 in 2005,respectively.

Our segment operating results resulted in a loss$1.5  million in the 2006 period as compared to a loss of$228,000 for the prior year period. The increase in the operating lossin 2006 was attributable to the release of the Beer League filmproject.

Selling, general and administrative expenses increased$7.3  million to $11.4  million for the nine months endedSeptember  30,  2006, from $4.1  million in the prioryear period. The increase is principally attributable to the charge of$4.0  million resulting from the implementation of FASB 123 (R)and an increase in non-cash compensation charges related to stockcompensation issued for consulting services of $2.5  million.

Financing costs including interest discount amortization and feesexclusive of charges for fair market valuations of our securitiesissued in lieu of cash payments for financing activities werecomparable. There was no issuance of securities as payment forfinancing in the last two quarters of 2006 resulting in a reduction insuch charges for the current nine months as compared to the prior yearperiod.

Other income items in the 2006 period of $1.6million principally relates to the gain from the settlement withrelated party.

Off-Balance Sheet Arrangements

We had nooff-balance sheet arrangements. Additionally, we review ourrelationships with other entities to identify whether it is the primarybeneficiary of a variable interest entity. If the determination is madethat we are the primary beneficiary, then the entity is consolidated in

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accordance with Financial AccountingStandards Board (‘‘FASB’’) InterpretationNo. (‘‘FIN’’) 46‘‘Consolidation of Variable InterestEntities’’. Investments in which we exercise significantinfluence, but do not control, are accounted for using the equitymethod of accounting. Investments in which there is no significantinfluence are accounted for using the cost method ofaccounting.

LIQUIDITY AND CAPITAL RESOURCES

We incurrednet losses of $12.1  million during the nine months endedSeptember  30,  2006 and $7.7  million and$12.4  million during the year ended December  31,2005 and 2004, respectively. In addition, we are not in compliance withthe payment terms for $2.1  million of our outstanding notes andloans payable including unpaid interest. Further, we had astockholders' deficiency of $13.8  million atSeptember  30,  2006. Historically, we have successfullyobtained external financing through short-term borrowings and privateplacements of equity and convertible debt and thus, we hope to remedythese defaults through additional borrowings, conversion of existingdebt to equity, ownership contributions, and/or renegotiation ofexisting terms and conditions of the notes and loans payable indefault. However, if we are unable to cure these defaults, it maysignificantly impede our ability to raise additional funds and/or toconduct normal business operations.

We have also taking actionsto address liquidity in the followingways:

|  |              |                                                                                                         |
|--|--------------|---------------------------------------------------------------------------------------------------------|
|  | •  | developing additional sources ofdebt and equity financing to satisfy our current operatingrequirements; |

|  |              |                                                                                                                                                                                                          |
|--|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | entering into newinitiatives related to our social networking site LiveMasnsion.com aswell as initiatives to develop, produce and distribute film propertiesand other sports and entertainment projects; |

|  |              |                                                                            |
|--|--------------|----------------------------------------------------------------------------|
|  | •  | continuing to pursue the promotion ofselective premium level boxingevents; |

|  |              |                                                                         |
|--|--------------|-------------------------------------------------------------------------|
|  | •  | pursuing production partnershipsand joint ventures to fund projects;and |

|  |              |                                                                                          |
|--|--------------|------------------------------------------------------------------------------------------|
|  | •  | continuing to negotiate withexisting creditors to convert their indebtedness intoequity. |

There can be no assurance that sufficient funds requiredduring the next year or thereafter will be generated from operations orthat funds will be available from external sources such as debt orequity financings or other potential sources. The lack of additionalcapital resulting from our inability to generate cash flow fromoperations or to raise capital from external sources would force us tosubstantially curtail or cease operations and would, therefore, have amaterial adverse effect on its business. Furthermore, there can be noassurance that any such required funds, if available, will be availableon attractive terms or that they will not have a significant dilutiveeffect on our existing stockholders.

These factors raisesubstantial doubt about our ability to continue as a going concern andthe accompanying consolidated financial statements do not include anyadjustments related to the recoverability or classification of assetcarrying amounts or the amounts and classification of liabilities thatmay result should we be unable to continue as a goingconcern.

Commitments and Contingencies

Inconnection with both our sports and media operations, we guaranteedcertain investors and other participants in our projects the return oftheir investments and in some cases a preferred return. In addition toamounts included in minority interests and/or participation payables(aggregating $5.7  million) we have guaranteed a $900,000investment, along with a co-guarantor.

We are of the opinion,based upon advice of counsel, that we have made adequate provision forpotential liabilities, if any, arising from litigation settlements andother claims described in Part II Item 1 – Legal Proceedings. Asof September  30,  2006, we had accrued approximately$2.5  million, with respect to such matters. However, the costsand other effects of pending or future litigation, governmentalinvestigations, legal and administrative cases and proceedings (whethercivil or criminal), settlements, judgments and investigations, claimsand changes in those matters (including 

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those matters described above), anddevelopments or assertions by or against us relating to contractualrights related to boxers and the promotion of boxing events,intellectual property rights and intellectual property licenses, couldhave a material adverse effect on our business, financial condition andoperating results.

Cash Flows

At September30,  2006, our cash position was $693,000, exclusive of arestricted deposit required by our consent decree with the SEC to coverthe cost of a special consultant, as compared to the $50,000 balance atyear end 2005.

Operating Cash Flows.    Our principaloperating source of cash during the nine months ended September30,  2006 was net revenues from the minimum guarantee related tothe film Beer League .  Our principal operating uses ofcash related to production costs for films. For the nine months endedSeptember  30,  2006, we used cash of $2.6  millionin operating activities principally to fund our operating loss of$4.8  million, exclusive of net non cash items of $7.4million, increase in receivables of $1.2  million, theacquisition of film costs of $804,000 and prepaid expenses and otherassets of $51,000. Cash from operations was principally provided by therelease of film costs ($2.9  million), increase in amounts duefor payables and other accruals ($769,000), increase in deferredrevenues ($225,000) and cash from escrow ($100,000).

InvestingCash Flows.    Cash provided from investing activities for thenine months ended September  30,  2006 was related toproceeds from sale of promotional agreement and assets to formerpresident of $357,000 and cash used was for the acquisition offurnishings for our new executive offices of$88,000.

Financing Cash Flows.    Net cash generatedfrom financing activities for the nine months ended September30,  2006 was $2,958,000 which consisted of net proceeds ofshort-term borrowings, net of repayments of indebtedness of $936,000,sales of common stock which netted $953,000 and sales of productioninterests (minority interests) of $1,775,000, net of financingcosts.

EFFECT OF RECENTLY ISSUED ACCOUNTINGPRONOUNCEMENTS

Effective January  1,  2006, theCompany adopted Statement of Financial Accounting Standards No. 123(revised 2004) (‘‘SFAS 123(R)’’),‘‘Share-Based Payment,’’ which revisedStatement of Financial Accounting Standards 123 (‘‘SFAS123’’), ‘‘Accounting for Stock-BasedCompensation.’’ Refer to Note 4 to the unauditedcondensed consolidated financial statements for further information.There were no other accounting policies adopted during the firstquarter of 2006 that had a material effect on the Company’sfinancial condition and results of operations.

|              |                         |
|--------------|-------------------------|
| Item3.  | CONTROLS AND PROCEDURES |

As ofSeptember  30,  2006, the end of the period covered by thisQuarterly Report, the Company carried out an evaluation, under thesupervision and with the participation of our management, including ourChief Executive Officer and Chief Financial Officer, of theeffectiveness of the design and operation of our disclosure controlsand procedures pursuant to Securities and Exchange Act Rule 13a-15 and15d-15.

A control system, no matter how well conceived andoperated, can provide only reasonable assurance that the objectives ofthe control system are met. We do not expect that our disclosurecontrols and procedures can detect or prevent all misstatements.Further, the design of a control system must reflect that there areresource constraints, and the benefits of controls must be consideredrelative to their costs. Because of the inherent limitations inall control systems, no evaluation of controls can provide absoluteassurance that all control issues have been detected. Theseinherent limitations include the realities that judgments indecision-making can be faulty, and that breakdown can occur because ofsimple error or mistake. The design of any system of controlsalso is based in part upon certain assumptions about the likelihood offuture events, and there can be no assurance that any design willsucceed in achieving its stated goals under all potential futureconditions. Over time, 

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controls may become inadequate because ofchanges in conditions, or the degree of compliance with the policies orprocedures may deteriorate. Because of the inherent limitationsin a control system, misstatements may occur and not bedetected. At this time, management has determined that ourdisclosure controls and procedures may not be sufficient, especiallydue to the limited number of Company employees, i) to ensure that dataerrors, control problems, or acts of fraud are detected and ii) toconfirm that appropriate corrective actions, including processimprovements, are undertaken in a timely manner. As a result, we haveconcluded that our current system of disclosure controls and proceduresrequires further enhancements to ensure that they are effective inrecording, processing, summarizing, and reporting, on a timely basis,information required to be disclosed by us in the reports that we fileor submit under the Exchange Act.

Our management considered thefollowing deficiencies to be material weaknesses in the effectivenessof our disclosure controls. A ‘‘materialweakness’’ is a reported condition in which the design oroperation of one or more of the specific disclosure control componentshas a defect or defects that could have a material adverse effect onthe our ability to record, process, summarize and report financial datain our financial statements in a timelymanner:

|  |              |                                                                                                                                                                                                                                       |
|--|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Maintaining sufficient personnelwith an appropriate level of accounting knowledge, experience andtraining in the application of generally accepted accounting principles(GAAP) commensurate with our financial reportingrequirements; |

|  |              |                                                             |
|--|--------------|-------------------------------------------------------------|
|  | •  | Maintaining adequatesegregation of duties in keyfunctions;. |

|  |              |                                                                       |
|--|--------------|-----------------------------------------------------------------------|
|  | •  | Adequately documentingcertain transactions and manual journalentries; |

|  |              |                                              |
|--|--------------|----------------------------------------------|
|  | •  | Adhering to a comprehensiveclosing calendar; |

|  |              |                                                                                                                                                                    |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Failing to have amanagement committee in place to handle decisions relating to theCompany’s operations, including review of quarterly and annualfilings; and |

|  |              |                                                                |
|--|--------------|----------------------------------------------------------------|
|  | •  | Maintaining formal internalaccounting and disclosure controls. |

Management has initiallyresponded to the deficiencies in our disclosure controls by performingadditional accounting, financial analysis, and managerial reviewprocedures in order to ensure that the financial information containedin our Quarterly Report on Form 10-QSB was reliable. Detailedvalidation work was performed by our personnel with respect to all ofour balance sheet account balances in order to verify the financialinformation and to substantiate the disclosures contained in ourQuarterly Report on Form 10-QSB. Additional analysis was also performedon income statement amounts and compared to prior year amounts forreasonableness.

As a result of a settlement with the SEC, we haveretained consultants to assist in the assessment of our internalaccounting and disclosure controls and to make recommendations fortimely corrective actions and hired the CEO and CFO in February2006. In addition, a majority of our Board of Directors, asreconstituted in March  2006, consists of members independent ofmanagement. We also instituted an Audit Committee at thattime.

Together with the consultants, management will review anddocument our disclosure controls and procedures, including our internalcontrols and procedures for financial reporting and will report itsprogress and findings to the Audit Committee. We will focus on a numberof areas that we will endeavor to improve, including the segregation ofduties in key functions; the creation of formal accounting controls,policies and procedures; the hiring of additional management and staffexperienced in financial reporting; as well as finalizing documentationof our accounting and disclosure internal controls and procedures.Further, management continues to look for methods to ensure that oursystems evolve with our business and to improve our overall system ofcontrol.

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PARTII — OTHER INFORMATION

|              |                  |
|--------------|------------------|
| Item1.  | LEGALPROCEEDINGS |

Designscape

In April  2005Designscape, Inc. filed an action in New York State Supreme Courtagainst us and certain former officers of the Company, alleging breachof contract and misrepresentations with respect to an alleged oralagreement to provide goods and services in connection with theproduction and staging of a television series and seeking approximately$550,000 and unspecified damages. In September  2006, Designscapeand we agreed to settle the matter. On September  18,2006, we agreed to pay Designscape $300,000 in installments throughMarch  31,  2009 with interest at 9% accumulating onunpaid balance from September  25,  2006 payable onSeptember  30,  2009. On September  25,  2006,in accordance with the agreement, we made the first requirement paymentof $10,000.

Dewayne Layfield

In April2005, Dewayne Layfield, a holder of a note payable from one of oursubsidiaries, arising from a previous settlement agreement, instituteda second arbitration proceeding against us seeking to recover $172,000plus attorneys' fees and costs. We answered, seeking adeclaration that we had no further obligation to due to breaches of therelated agreement. We also filed a counterclaim seeking to recoveramounts previously paid related to the previous agreement. InApril  2006, we paid $31,000 to the holder to reduce theoutstanding principal. In September  2006, we and Layfieldentered into a settlement agreement in which we agreed to pay Layfield$170,000 in four payments from October  2006 throughAugust  7,  2007. If we do not make the scheduled paymentswe will be obligated to pay Layfield $200,000 less payments made underthis agreement. We made the first payment of $50,000 which was due onOctober  9,  2006, in accordance with theagreement.

Shane Mosley

In November  2005,we entered into a second settlement agreement related to the sharing ofprofits with Shane Mosley, a boxer, and agreed to pay $565,000 toMosley in installments representing 60% of the net profits fromany boxing events promoted or co-promoted by us (retroactively toSeptember  2005) until the outstanding sum, plus accruedinterest, is paid in full. In addition, we are entitled to a $100,000credit against the above settlement amount, contingent upon thetransfer and assignment of our rights to the Mosley Video Library.Amounts unpaid by December  31,  2008 shall be immediatelydue and payable. Our former President personally guaranteed ourobligation.

First Equity

In June  2005,First Equity Capital Corporation filed an action against us in statecourt in Florida, alleging that we breached an unsigned agreementpursuant to which we allegedly hired First Equity to provide certainservices. First Equity alleges that we are obligated to pay FirstEquity $1.5  million and to issue First Equity up to 4,000,000registered shares of our common stock. We have filed an answer denyingany liability to First Equity and raising numerous affirmativedefenses. We are in the process of taking discovery in this matter andintends to vigorously defend.

National SportsPartners

In May  2003, National Sports Partners, theowner of Fox Sports Net Broadcast Service, commenced an action inCalifornia against us to collect approximately $239,000 for advertisingtime and production fees and costs for airing boxing events on Fox,plus interest, costs and attorney fees. In August  2004, wereached an agreement with NSP in which NSP agreed to forbear fromfurther action against us in exchange for full payment over time of$239,000, plus deferred interest. As of September  30,2006 we only paid $65,000.

J.P. Morgan Chase &Company

On January  13,  2004, J.P. MorganChase & Company obtained a judgment in the amount of $95,000against our former President and us in connection with our default onan outstanding note. In 

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May  2004, we settled by agreeing topay the outstanding principal amount, plus interest at 4% perannum, in 60 monthly payments of $2,000 each, in exchange forforbearance on any additional efforts to collect upon the unsatisfiedportion of the balance. The balance on this obligation atSeptember  30,  2006 amounted to $76,000. We are not incompliance with the terms set forth in the forbearanceagreement.

Other

There are other matters inwhich we have entered into settlements in prior years for which we havenot made the required payments.

In connection with theCompany's settlement, in December 2005, of an action against theCompany, and certain officers and an employee, the Company agreed toretain the services of an independent consultant to analyze theCompany's system of internal controls and accounting andfinancial reporting processes, report to the audit committee, andoversee the implementation of improved processes in these areas. Inaddition, the Company agreed to establish an escrow account in theamount of $150,000 to fund the services of the independent consultant.The court approved settlement for their required that the fund bemaintained at $150,000 throughout the consulting period. The consultanthas been paid for services as rendered from the escrow account howeverthe Company has not replenished the fund. The Company believes that theescrow balance as of September 30, 2006 is sufficient to cover theservices still to be rendered although less than the amount required bythe settlement agreement.

In the opinion of management, on theadvice of counsel, we have made adequate provision for potentialliabilities, if any, arising from litigation settlements and otherclaims arising from the above matters. As of September30,  2006, we accrued $2.5  million, with respect to suchmatters. However, the costs and other effects of pending or futurelitigation, governmental investigations, legal and administrative casesand proceedings (whether civil or criminal), settlements, judgments andinvestigations, claims and changes in those matters (including thosematters described above), and developments or assertions by or againstus relating to contractual rights related to boxers and the promotionof boxing events, intellectual property rights and intellectualproperty licenses, could have a material adverse effect on ourbusiness, financial condition and operating results.

|              |                                                            |
|--------------|------------------------------------------------------------|
| Item2.  | UNREGISTERED SALES OF EQUITY SECURITIES AND USEOF PROCEEDS |

During the three months ended September30,  2006, the Company sold 1,500,000 shares of common stock inprivate placements at $.20 per share together with 750,000 warrants topurchase common stock at $.30 per share. The proceeds were used forworking capital purposes.

|               |                                |
|---------------|--------------------------------|
| Item 3.  | DEFAULTSUPON SENIOR SECURITIES |

The Company is in default of severalnotes and loans payable in the aggregate amount of approximately$2.0  million including unpaid interest. The Company hopes toremedy these defaults through additional borrowings, conversion ofexisting debt to equity, ownership contributions, and/or renegotiationof existing terms and conditions of notes and loans payable in default.If the Company is unable to cure these defaults, it may significantlyimpede the Company's ability to raise additional funds and/or toconduct normal business operations

|              |                                                    |
|--------------|----------------------------------------------------|
| Item4.  | SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS |

None.

|               |                  |
|---------------|------------------|
| Item 5.  | OTHERINFORMATION |

The Company has no other information to report,which might otherwise be reported under Form8-K.

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|              |          |
|--------------|----------|
| Item6.  | EXHIBITS |

|               |    |      |             |  |  |                                                                                                                                                                  |
|---------------|----|------|-------------|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber |    |      | Description |
|               | 3  | .1*  |             |  |  | Articlesof Incorporation of theRegistrant(1)                                                                                                                     |
|               | 3  | .2*  |             |  |  | By-laws ofRegistrant(1)                                                                                                                                          |
|               | 3  | .3*  |             |  |  | Certificate ofDesignation, Preferences and Rights of Series E Convertible PreferredStock of Cedric Kushner Promotions, Inc., dated October25,2004.(6)            |
|               | 3  | .4*  |             |  |  | Amendment to theBy-Laws of Cedric Kushner Promotions,Inc.(9)                                                                                                     |
|               | 3  | .5*  |             |  |  | Amendments to theCertificate of Incorporation of Cedric Kushner Promotions,Inc.(9)                                                                               |
|               | 4  | .1*  |             |  |  | Specimen commonstock Certificate(1)                                                                                                                              |
|               | 10 | .1*  |             |  |  | 1996Incentive and Non-qualified Stock OptionPlan(1)                                                                                                              |
|               | 10 | .2*  |             |  |  | Form of IncentiveStock Option Agreement under 1996 Incentive and Non-qualified StockOption Plan(1)                                                               |
|               | 10 | .3*  |             |  |  | Form ofNon-qualified Stock Option Agreement under 1996 Incentive andNon-qualified Stock OptionPlan(1)                                                            |
|               | 10 | .4*  |             |  |  | 1998 Incentive andNon-qualified Stock OptionPlan(1)                                                                                                              |
|               | 10 | .5*  |             |  |  | Form of IncentiveStock Option Agreement under 1998 Incentive and Non-qualified StockOption Plan(1)                                                               |
|               | 10 | .6*  |             |  |  | Form ofNon-qualified Stock Option Agreement under 1998 Incentive andNon-qualified Stock OptionPlan(1)                                                            |
|               | 10 | .7*  |             |  |  | Form ofNon-qualified Stock Option Agreement for Outside Directors under 1998Incentive and Non-qualified Stock OptionPlan(1)                                      |
|               | 10 | .8*  |             |  |  | Form of Note andWarrant Purchase Agreement, executed between December  2001 andApril  2002, between the Company and various purchasers in aprivate placement.(2) |
|               | 10 | .9*  |             |  |  | Formof Promissory Note, executed between December  2001 andApril  2002, between the Company and various purchasers in aprivate placement.(2)                     |
|               | 10 | .10* |             |  |  | Formof Warrant to Purchase Common Stock, executed between December2001 and April  2002, between the Company and various purchasersin a privateplacement.(2)      |
|               | 10 | .11* |             |  |  | Form of Noteand Warrant Purchase Agreement, executed between March  2002 andApril  2002, between the Company and various purchasers in aprivate placement.(2)    |
|               | 10 | .12* |             |  |  | Formof Convertible Promissory Note, executed between March  2002 andApril  2002, between the Company and various purchasers in aprivate placement.(2)            |
|               | 10 | .13* |             |  |  | Formof Warrant to Purchase Common Stock, executed between March  2002and April  2002, between the Company and various purchasers in aprivate placement.(2)       |
|               | 10 | .14* |             |  |  | Formof Convertible Promissory Note, executed between January  2003and March  2003, between the Company and various purchasers in aprivate placement.(3)          |
|               | 10 | .15* |             |  |  | Formof Warrant to Purchase Common Stock, executed between January2003 and March  2003, between the Company and various purchasersin a privateplacement.(3)       |
|               | 10 | .16* |             |  |  | Form of Noteand Warrant Purchase Agreement, executed between January  2003and March  2003, between the Company and various purchasers in aprivate placement.(3)  |
|               |

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|               |    |      |             |  |  |                                                                                                                                                                                                   |
|---------------|----|------|-------------|--|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber |    |      | Description |
|               | 10 | .17* |             |  |  | Form of Warrant toPurchase Common Stock, executed May, 28 2003 between the Company and apurchaser in a privateplacement(3)                                                                        |
|               | 10 | .18* |             |  |  | Form of Noteand Warrant Purchase Agreement, executed May, 28 2003 between theCompany and a purchaser in a privateplacement.(3)                                                                    |
|               | 10 | .19* |             |  |  | Form ofConvertible Promissory Note, executed May, 28 2003 between the Companyand a purchaser in a privateplacement.(3)                                                                            |
|               | 10 | .20* |             |  |  | Form ofPromissory Note, executed January  30,  2003, between theCompany and alender.(3)                                                                                                           |
|               | 10 | .21* |             |  |  | Formof Promissory Note, executed March  24,  2003, between theCompany and alender.(3)                                                                                                             |
|               | 10 | .22* |             |  |  | Form ofPromissory Note, executed March  27,  2003, between theCompany and a lender.(3)                                                                                                            |
|               | 10 | .23* |             |  |  | Form of Warrant toPurchase Common Stock, executed August  12,  2003 betweenthe Company and a purchaser in a privateplacement(3)                                                                   |
|               | 10 | .24* |             |  |  | Form ofConvertible Promissory Note, executed August  12,  2003between the Company and a purchaser in a privateplacement(3)                                                                        |
|               | 10 | .25* |             |  |  | Form of Noteand Warrant Purchase Agreement, executed August  12,  2003between the Company and a purchaser in a privateplacement.(3)                                                               |
|               | 10 | .26* |             |  |  | Form ofWarrant to Purchase Common Stock between the Company and Yeend &Castaneda, dated September  5,2003(3)                                                                                  |
|               | 10 | .27* |             |  |  | Form of Note andWarrant Purchase Agreement, executed December  2003, between theCompany and various purchasers in a privateplacement.(3)                                                          |
|               | 10 | .28* |             |  |  | Form ofWarrant to Purchase Common Stock, executed December  2003,between the Company and various purchasers in a privateplacement.(3)                                                             |
|               | 10 | .29* |             |  |  | Form ofConvertible Promissory Note, executed December  2003, between theCompany and various purchasers in a privateplacement.(3)                                                                  |
|               | 10 | .30* |             |  |  | Supplementto the Note and Warrant Purchase Agreement, executed December2003, between the Company and various purchasers in a privateplacement.(3)                                                 |
|               | 10 | .31* |             |  |  | ConsultingAgreement, effective January  1,  2004, between the Companyand Bulldog Management,LLC.(3)                                                                                               |
|               | 10 | .32* |             |  |  | Form of Warrant toPurchase Common Stock, executed between January  2004 andApril  2004, between the Company and various purchasers in aprivate placement.(3)                                      |
|               | 10 | .33* |             |  |  | Formof Note and Warrant Purchase Agreement, executed between January2004 and April  2004, between the Company and various purchasersin a privateplacement.(3)                                     |
|               | 10 | .34* |             |  |  | Form ofConvertible Promissory Note, executed between January  2004 andApril  2004, between the Company and various purchasers in aprivateplacement.(3)                                            |
|               | 10 | .35* |             |  |  | Supplement,dated March  19,  2004, to the Note and Warrant PurchaseAgreement, executed between January  2004 and April  2004,between the Company and various purchasers in a privateplacement.(3) |
|               | 10 | .36* |             |  |  | Supplement,dated March  29,  2004, to the Note and Warrant PurchaseAgreement, executed between January  2004 and April  2004,between the Company and various purchasers in a privateplacement.(3) |
|               |

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|               |    |      |             |  |  |                                                                                                                                                                                                                                                                              |
|---------------|----|------|-------------|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber |    |      | Description |
|               | 10 | .37* |             |  |  | Consulting Agreement,effective March  24,  2004, between the Company and BusterMathis,Jr.(3)(7)                                                                                                                                                                              |
|               | 10 | .38* |             |  |  | Promissory Note,dated September  1,  2003, between the Company and DewayneLayfield.(3)                                                                                                                                                                                       |
|               | 10 | .39* |             |  |  | ConsultingAgreement, effective June  1,  2004, between the Companyand RoyRoberts.(4)(7)                                                                                                                                                                                      |
|               | 10 | .40* |             |  |  | Form ofNote and Warrant Purchase Agreement, executed between July  2004and August  2004, between the Company and various purchasers in aprivate placement.(4)                                                                                                                |
|               | 10 | .41* |             |  |  | Formof Convertible Promissory Note, executed between July  2004 andAugust  2004, between the Company and various purchasers in aprivate placement.(4)                                                                                                                        |
|               | 10 | .42* |             |  |  | Formof Warrant to Purchase Common Stock, executed between July  2004and August  2004, between the Company and various purchasers in aprivate placement.(4)                                                                                                                   |
|               | 10 | .43* |             |  |  | 2002Incentive and Non-qualified Stock OptionPlan(5)                                                                                                                                                                                                                          |
|               | 10 | .44* |             |  |  | ConsultingAgreement, effective January  10,  2005, between theCompany and Philabelle Consulting,LLC.(7)                                                                                                                                                                      |
|               | 10 | .45* |             |  |  | Term Sheet forModification of Loan and Consulting Arrangements dated as ofFebruary  10,  2005, by and among Livingston Investments,LLC, Mackin Charitable Remainder Trust, Cedric Kushner Promotions,Inc., Cedric Kushner Promotions, Ltd. and Cedric Kushner Boxing,Inc,(8) |
|               | 10 | .46* |             |  |  | ConversionAgreement, dated February  15,  2005, between the Companyand a NoteHolder.                                                                                                                                                                                         |
|               | 10 | .47* |             |  |  | Debt SettlementAgreement, dated January  23,  2005, between the Companyand Yeend & Castaneda,LLP.(9)                                                                                                                                                                     |
|               | 10 | .48* |             |  |  | ConversionAgreement dated as of June  15,  2005 between the Companyand aNoteholder.(10)                                                                                                                                                                                      |
|               | 10 | .49* |             |  |  | SubscriptionAgreement dated as of June  28,  2005 by and between CkrushEntertainment, Inc. and the investors named on the signature pagesthereto.(11)                                                                                                                        |
|               | 10 | .50* |             |  |  | GuarantyAgreement dated as of June  28,  2005 by and between CkrushEntertainment, Inc., the Company and Cornell Capital Partners,L.P.(11)                                                                                                                                    |
|               | 10 | .51* |             |  |  | SecurityAgreement dated as of June  28,  2005 by and between CkrushEntertainment, Inc., and Cornell Capital Partners,L.P.(11)                                                                                                                                                |
|               | 10 | .52* |             |  |  | Pledge and EscrowAgreement dated as of June  28,  2005 by and between theCompany, Cornell Capital Partners, L.P. and David Gonzalez,Esq.(11)                                                                                                                                 |
|               | 10 | .53* |             |  |  | OperatingAgreement of Identity Films & Company, LLC dated as of June27,  2005 by and between Ckrush Entertainment, Inc. and IdentityFilms, LLC.(12)                                                                                                                      |
|               | 10 | .54* |             |  |  | AmendmentNo. 1 to the Guaranty and Pledge Agreement dated as of June30,  2005 by and between the Company and the investors named onthe signature pagethereto.(13)                                                                                                            |
|               | 10 | .55* |             |  |  | Contributionand Indemnification Agreement dated as of June  30,  2005by and between the Company and World Wide South Beach,LLC.(13)                                                                                                                                          |
|               | 10 | .56* |             |  |  | Amendment No. 1to the Class A Common Stock and Installment Payment Agreement dated asof June  30,  2005 by and between the Company and theinvestors named on the signature pagethereto.(13)                                                                                  |
|               |

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|               |    |      |             |  |  |                                                                                                                  |
|---------------|----|------|-------------|--|--|------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber |    |      | Description |
|               | 10 | .57* |             |  |  | Settlement Agreementamong the Company and Cedric Kushner, dated March  31,2006 and effective April  10,2006.(14) |
|               | 10 | .58* |             |  |  | Letter ofEngagement between Trilogy Capital Partners, Inc. and the Company,dated April  24,2006.(15)             |
|               | 10 | .59* |             |  |  | Form ofWarrant issued to Trilogy Capital Capital Partners, Inc., datedApril  24,2006.(15)                        |
|               | 31 | .1   |             |  |  | Certification byChief Executive Officer pursuant to Sarbanes-Oxley Section 302. (filedherewith)                  |
|               | 31 | .2   |             |  |  | Certification by ChiefFinancial Officer pursuant to Sarbanes-Oxley Section 302. (filedherewith)                  |
|               | 32 | .1   |             |  |  | Certification by ChiefExecutive Officer pursuant to 18 U.S.C. Section 1350. (filedherewith)                      |
|               | 32 | .2   |             |  |  | Certification by ChiefFinancial Officer pursuant to 18 U.S.C. Section 1350. (filedherewith)                      |
|               |

|  |
|--|
|  |  |
|  |

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

|     |                                                                                                                                    |
|-----|------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Incorporatedby reference to our Current Report on Form SB-2 filed with theSecurities and Exchange Commission on Form July  7,1998. |

|     |                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|
| (2) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form May  15,2002. |

|     |                                                                                                                                       |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|
| (3) | Incorporatedby reference to our Current Report on Form 10-KSB filed with theSecurities and Exchange Commission on Form June  25,2004. |

|     |                                                                                                                                         |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|
| (4) | Incorporatedby reference to our Current Report on Form 10-QSB filed with theSecurities and Exchange Commission on Form August  13,2004. |

|     |                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|
| (5) | Incorporatedby reference to our Information Statement on Schedule 14A-6 filed withthe Securities and Exchange Commission on Form November12,2004. |

|     |                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|
| (6) | Incorporatedby reference to our Current Report on Form 10-QSB/A filed with theSecurities and Exchange Commission on Form November  18,2004. |

|     |                                                                                                                                               |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|
| (7) | Incorporatedby reference to our Registration Statement on Form S-8 filed with theSecurities and Exchange Commission on Form January  18,2005. |

|     |                                                                                                                                        |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|
| (8) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form February  15,2005. |

|     |                                                                                                                                      |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|
| (9) | Incorporatedby reference to our Current Report on Form 10-KSB filed with theSecurities and Exchange Commission on Form May  13,2005. |

|      |                                                                                                                                    |
|------|------------------------------------------------------------------------------------------------------------------------------------|
| (10) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form June  21,2005. |

|      |                                                                                                                                   |
|------|-----------------------------------------------------------------------------------------------------------------------------------|
| (11) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form July  5,2005. |

|      |                                                                                                                                   |
|------|-----------------------------------------------------------------------------------------------------------------------------------|
| (12) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form July  8,2005. |

|      |                                                                                                                                    |
|------|------------------------------------------------------------------------------------------------------------------------------------|
| (13) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form July  14,2005. |

|      |                                                                                                                                     |
|------|-------------------------------------------------------------------------------------------------------------------------------------|
| (14) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form April  14,2006. |

|      |                                                                                                                                     |
|------|-------------------------------------------------------------------------------------------------------------------------------------|
| (15) | Incorporatedby reference to our Current Report on Form 8-K filed with theSecurities and Exchange Commission on Form April  24,2006. |

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SIGNATURES

Pursuantto the requirements of the Securities Exchange Act of 1934, theregistrant has duly caused this report to be signed on its behalf bythe undersigned thereunto duly authorized.

|                          |  |  |                                                                                         |
|--------------------------|--|--|-----------------------------------------------------------------------------------------|
|                     |  |  | CKRUSH,INC.                                                                             |
| Date:November  14,  2006 |  |  | /s/ RoyRoberts                                                                          |
|                     |  |  | Roy RobertsChief ExecutiveOfficer(Principal ExecutiveOfficer)                           |
| Date:November  14,  2006 |  |  | /s/ Jan E.Chason                                                                        |
|                     |  |  | Jan E. ChasonCFO and ExecutiveVice President(Principal Financial and AccountingOfficer) |
|                          |

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