**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB/A**


**(Amendment
      No. 1)**


(Mark
      one)




x
            **QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934**




For
      the
      quarterly period ended **June
      30, 2005**




o
            **TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934**




For
      the
      transition period from __________ to __________




Commission
      file number: 000-52067




The
                Tube Media Corp.(Exact
                name of small business issuer as specified in its
                charter)**Delaware**
            **84-1557072**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)1451
                West Cypress Creek Road, Suite 300.
              Fort
                Lauderdale, FL 33309(Address
                of principal executive offices)**(954)
                714-8100**(Issuer’s
                telephone number)




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.




Yes  
      o   No x




The
      number of shares of the issuer’s common stock, no par value, outstanding as of
      August 19, 2005 was 25,587,615.




Transitional
      Small Business Disclosure Format (check one):




Yes 
      o   No x





**Explanatory
      Note**




In
      connection
      with the preparation of our annual report on Form 10-KSB for the year ended
      December 31, 2005, we determined that we needed to restate our quarterly
      financials for the fiscal year ended December 31, 2005 to reflect discontinued
      operations and the issuance of stock  to a former director in connection
      with an employment agreement and the issuance of stock in connection with the
      settlement of a dispute. Our Form 10-KSB for the fiscal year ended December
      31,
      2005 has taken into account the discontinued operations, the issuance of stock
      to a former director in connection with an employment agreement and the issuance
      of stock in connection with the settlement of a dispute.




This
      Amendment No. 1 on Form 10-QSB/A to our quarterly report on Form 10-QSB for
      the
      quarter ended June 30, 2005, initially filed with the Securities and Exchange
      Commission on August 19, 2005 (the “Initial Filing”), is being filed to reflect
      the restatement of our condensed consolidated balance sheet at June 30, 2005
      and
      our condensed consolidated statements of operations, condensed consolidated
      statements of changes in stockholders’ equity and condensed consolidated
      statements of cash flows for the three months ended June 30, 2005 and the notes
      related thereto. For a more detailed description of this restatement, see Note
      1, “Nature of Operations and Basis of Presentation - Restatement” and Note 9,
“Discontinued Operations” to the accompanying condensed consolidated financial
      statements and the section entitled “Restatement” in Management’s Discussion and
      Analysis of Financial Condition and Results of Operations contained in this
      Form
      10-QSB/A. This Form 10-QSB/A only amends and restates Items 1, 2, and 3 of
      Part
      I of the Initial Filing and no other material information in the Initial Filing
      is amended hereby. The foregoing items have not been updated to reflect other
      events concerning our business or financial condition occurring after the
      Initial Filing or to modify or update those disclosures affected by subsequent
      events except that we updated the information contained in such sections to
      include recent accounting pronouncements and to reflect our name change from
      AGU
      Entertainment Corp. to The Tube Media Corp., our change in address, the change
      in our state of incorporation from Colorado to Delaware on February 25, 2006
      and
      the receipt of a new commission file number. We also corrected typographical
      errors. In addition, pursuant to the rules of the SEC, Item 6 of Part II to
      the
      Initial Filing has been amended to contain currently dated certifications from
      our Principal Executive Officer and Principal Financial Officer, as required
      by
      Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications
      of
      our Principal Executive Officer and Principal Financial Officer are attached
      to
      this Form 10-QSB/A as Exhibits 31.1, 31.2 and 32.1, respectively.







**The
      Tube Media Corp.**


**(Formerly
      AGU Entertainment Corp.)**


**FORM
      10-QSB/A**




**INDEX**




PART
                      I.UNAUDITED
                      FINANCIAL INFORMATION
                  1ITEM
                    1.
                  FINANCIAL
                    STATEMENTS
                  1Condensed
                      Consolidated Balance Sheets as of June 30, 2005 (unaudited)
                      and December
                      31, 2004(audited)
                  1Condensed
                      Consolidated Statements of Operations For the Three and Six
                      Months Ended
                      June 30, 2005 and 2004 (Unaudited)
                  1Condensed
                      Consolidated Statement of Changes in Stockholders’ Equity for the Six
                      Months Ended June 30, 2005 (Unaudited)
                  1Condensed
                      Consolidated Statements of Cash Flows for the Six Months Ended
                      June 30,
                      2005 and 2004 (Unaudited)
                  1Notes
                      to Condensed Consolidated Financial Statements June 30, 2005
                      (unaudited)
                  1ITEM
                    2.
                  MANAGEMENT’S DISCUSSION
                    AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
                  1ITEM
                    3.
                  CONTROLS
                    AND
                    PROCEDURES
                  1PART
                      II.OTHER
                      INFORMATION
                  1ITEM
                    6.
                  EXHIBITS
                  1SIGNATURES
                  
                  
                  1







**FORWARD
      LOOKING STATEMENTS**




Cautionary
      Statement Pursuant to Safe Harbor Provisions of the


Private
      Securities Litigation Reform Act of 1995




This
      report may include a number of “forward-looking statements” as that term is
      defined in Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended. These statements reflect
      management’s current views with respect to future events and financial
      performance and include statements regarding management’s intent, belief or
      current expectations, which are based upon assumptions about future conditions
      that may prove to be inaccurate. Prospective investors are cautioned that any
      such forward-looking statements are not guarantees of future performance,
      involve risk and uncertainties, and that as a result, actual results may differ
      materially from those contemplated by such forward-looking statements. Such
      risks include, among other things, the volatile and competitive markets in
      which
      we operate, our limited operating history, our limited financial resources,
      our
      ability to manage our growth and the lack of an established trading market
      for
      our securities. When considering forward-looking statements, readers are urged
      to carefully review and consider the various disclosures, including risk factors
      and their cautionary statements, made by us in this report and in our other
      reports filed with the Securities and Exchange Commission.






1


PART
      I.UNAUDITED
      FINANCIAL INFORMATION




**ITEM
      1.** **FINANCIAL
      STATEMENTS**




**THE
      TUBE MEDIA CORP. (Formerly AGU Entertainment Corp.) and
      SUBSIDIARIES**


**Condensed
      Consolidated Balance Sheet**


**as
      of June 30, 2005 (unaudited) and December 31, 2004** ****




**June
                30, 2005**
            
            **December
                31, 2004****(Unaudited)**
              **(RESTATED)**
            
            **(Audited)****Current
                Assets**Cash
                and cash equivalents
            
            $
            1,332
            
            $
            771,533Accounts
                receivable, net of allowance of $109,838 and $0
            
            
            431,509
            
            
            507,482Prepaid
                expenses
            
            
            104,628
            
            
            225,037Total
                current assets
            
            
            537,469
            
            
            1,504,052Property
                and equipment, net of accumulateddepreciation
                of $191,857 and $103,442, respectively
            
            
            492,730
            
            
            246,144Property
                and equipment from discontinued operations, net ofaccumulated
                depreciation of $77,317 and $19,818, respectively
            
            
            8,851,880
            
            
            8,864,229Intangibles,
                net of accumulated amortization
            
            
            1,291,366
            
            
            913,735Other
                assets
            
            
            159,268
            
            
            164,737Total
                assets
            
            $
            11,332,713
            
            $
            11,692,897**Liabilities
                and Stockholders’ (Deficiency) Equity**Current
                Liabilities:Accounts
                payable
            
            $
            1,276,039
            
            $
            501,514Accounts
                payable - related parties
            
            
            162,300
            
            
            169,258Notes
                payable,, related parties - current portion
            
            
            890,921
            
            
            445,642Convertible
                notes payable, net of unamortized
                discount
            
            
            939,041
            
            
            150,000Convertible
                notes payable from discontinued operation
            
            
            7,000,000
            
            
            7,000,000Other
                notes payable
            
            
            245,000
            
            
            -Equipment
                note - current portion
            
            
            12,556
            
            
            12,140Capital
                leases payable - current portion
            
            
            13,603
            
            
            13,881Accrued
                expenses
            
            
            1,393,288
            
            
            910,418Other
                current liabilities
            
            
            6,852
            
            
            36,965Total
                current liabilities
            
            
            11,939,600
            
            
            9,239,818Capital
                leases payable - long term portion
            
            
            5,480
            
            
            11,876Equipment
                note - long term portion
            
            
            30,285
            
            
            36,668Convertible
                notes payable - net of unamortized discounts
            
            
            1,740,190
            
            
            854,178Total
                liabilities
            
            
            13,715,555
            
            
            10,142,540Stockholders’
                (Deficiency) Equity:Preferred
                stock, $0.0001 par value; 10,000,000 shares authorized, -0- shares
                issued
                and outstanding
            
            
            -
            
            
            -Common
                stock, $0.0001 par value; 100,000,000 shares authorized, 25,134,919
                and
                23,392,576 shares issued and outstanding
            
            
            2,514
            
            
            4,658,380Additional
                paid-in capital
            
            
            14,050,589
            
            
            3,593,634Accumulated
                deficit
            
            
            (16,435,945
            )
            
            (6,701,657
            )Total
                stockholders’ (deficiency) equity
            
            
            (2,382,842
            )
            
            1,550,357Total
                liabilities and stockholders’ (deficiency) equity
            
            $
            11,332,713
            
            $
            11,692,897




See
      accompanying notes to condensed consolidated financial statements




2


**THE
      TUBE MEDIA CORP. (Formerly AGU Entertainment Corp.) and
      SUBSIDIARIES**


**Condensed
      Consolidated Statements of Operations**


**For
      the Three and Six Months Ended June 30, 2005 and 2004**


**(Unaudited)**




**Three
                Months Ended**
            
            **Six
                Months Ended****June
                30, 2005**
            
            **June
                30, 2004**
            
            **June
                30, 2005**
            
            **June
                30, 2004**(RESTATED)
            
            
            
            (RESTATED)Revenues
            
            $
            70,154
            
            $
            15,000
            
            $
            176,081
            
            $
            15,000Cost
                of sales and services performed
            
            
            6,636
            
            
            -
            
            
            29,375
            
            
            -Gross
                profit
            
            
            63,518
            
            
            15,000
            
            
            146,706
            
            
            15,000Operating
                ExpensesPromotion
                and advertising
            
            
            37,333
            
            
            394,263
            
            
            108,864
            
            
            528,230Depreciation
                and amortization
            
            
            112,447
            
            
            54,689
            
            
            177,574
            
            
            66,987Other
                general and administrative costs
            
            
            3,730,186
            
            
            1,091,421
            
            
            6,450,145
            
            
            1,830,523Total
                operating expenses
            
            
            3,879,966
            
            
            1,540,373
            
            
            6,736,583
            
            
            2,425,740Operating
                loss
            
            
            (3,816,448
            )
            
            (1,525,373
            )
            
            (6,589,877
            )
            
            (2,410,740
            )Interest
                expense
            
            
            1,533,408
            
            
            32,640
            
            
            2,821,093
            
            
            45,154Loss
                from continuing operations
            
            
            (5,349,856
            )
            
            (1,558,013
            )
            
            (9,410,970
            )
            
            (2,455,894
            )Loss
                from discontinued operations
            
            
            (139,680
            )
            
            -
            
            
            (323,318
            )
            
            -Net
                loss
            
            $
            (5,489,536
            )
            $
            (1,558,013
            )
            $
            (9,734,288
            )
            $
            (2,455,894
            )Basic
                and diluted loss per share
            
            $
            (0.22
            )
            $
            (0.07
            )
            $
            (0.40
            )
            $
            (0.14
            )Loss
                per share from continuing operations
            
            $
            (0.22
            )
            $
            (0.07
            )
            $
            (0.39
            )
            $
            (0.14
            )Loss
                per share from discontinued operations
            
            $
            (0.00
            )
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.00
            )Weighted
                average common shares outstanding -Basic
                and diluted
            
            
            24,608,150
            
            
            21,318,560
            
            
            24,166,866
            
            
            18,125,558







See
      accompanying notes to condensed consolidated financial statements




3


**THE
      TUBE MEDIA CORP. (Formerly AGU Entertainment Corp.) and
      SUBSIDIARIES**


**Condensed
      Consolidated Statement of Changes in Stockholders’ Equity**


**for
      the Six Months Ended June 30, 2005**


**(Unaudited)**




**Shares**
            
            **Amount**
            
            **Additional**
              **Paid-In**
              **Capital**
            
            **Retained**
              **Earnings**
              **(Accumulated**
              **Deficit)**
            
            **Total**Balance
                at December 31, 2004
            
            
            23,392,576
            
            $
            2,339
            
            $
            8,249,675
            
            $
            (6,701,657
            )
            $
            1,550,357Issuance
                of shares of common stockfor
                services
            
            
            347,987
            
            
            35
            
            
            868,061
            
            
            -
            
            
            868,096Issuance
                of shares of common stock to employees for compensation
            
            
            45,540
            
            
            5
            
            
            107,469
            
            
            -
            
            
            107,474Issuance
                of common stock as a price adjustment for certain
                investors
            
            
            5,000
            
            
            1
            
            
            (1
            )
            
            -
            
            
            -Common
                stock issued in connection with the acquisition of property and
                equipment
            
            
            97,800
            
            
            10
            
            
            244,490
            
            
            -
            
            
            244,500Issuance
                of warrants in connection with the issuance of convertible
                debt
            
            
            -
            
            
            -
            
            
            1,595,428
            
            
            -
            
            
            1,595,428Issuance
                of shares in settlement of liabilities
            
            
            121,875
            
            
            12
            
            
            337,488
            
            
            -
            
            
            337,500Issuance
                of shares of common stock to directors for services
            
            
            5,000
            
            
            1
            
            
            11,799
            
            
            
            
            
            11,800Other
                issuances of common stock in settlement of a dispute
            
            
            500,000
            
            
            50
            
            
            1,179,950
            
            
            
            
            
            1,180,000Issuances
                of shares of common stock in connection with amended the terms of
                certain
                notes payable
            
            
            60,000
            
            
            6
            
            
            137,994
            
            
            -
            
            
            138,000Issuance
                of shares of common stock for interest expense
            
            
            3,575
            
            
            -
            
            
            7,151
            
            
            -
            
            
            7,151Issuance
                of shares of common stock to a director as an adjustment to shares
                awarded
                pursuant to an employment agreement
            
            
            444,000
            
            
            44
            
            
            1,047,796
            
            
            
            
            
            1,047,840Issuance
                of shares of common stock to a director in connection with a termination
                letter
            
            
            111,566
            
            
            11
            
            
            263,289
            
            
            -
            
            
            263,300Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (9,734,288
            )
            
            (9,734,288
            )Balance
                at June 30, 2005
            
            
            25,134,919
            
            $
            2,514
            
            $
            14,050,589
            
            $
            (16,435,945
            )
            $
            (2,382,842
            )




See
      accompanying notes to condensed consolidated financial statements




4


**THE
      TUBE MEDIA CORP. (Formerly AGU Entertainment Corp.) and
      SUBSIDIARIES**


**Condensed
      Consolidated Statements of Cash Flows**


**for
      the Six Months Ended June 30, 2005 and 2004**


**(Unaudited)**




**Six
                Months Ended****June
                30, 2005**
            
            **June
                30, 2004**Cash
                flows from operating activities:
            
            (Restated)Net
                loss from continuing operations
            
            $
            (9,410,970
            )
            $
            (2,455,894
            )Adjustments
                to reconcile net loss to net cash
              used
                in operating activities:Depreciation
                and amortization
            
            
            177,574
            
            
            66,987Stock
                based service expense
            
            
            778,670
            
            
            28,677Common
                Stock issued financing expenses
            
            
            145,151Common
                Stock issued as compensation to director
            
            
            1,047,840
            
            
            -Common
                Stock issued as a settlement expense
            
            
            1,180,000
            
            
            -Loss
              from discontinued operations, less depreciation
            
            
            (260,608
            )
            
            --Amortization
                of discount on note payable
            
            
            2,330,481
            
            
            -Amortization
                of deferred financing fees
            
            
            36,710Decrease
                in accounts receivable
            
            
            75,973
            
            
            40,671Decrease
                (increase) in prepaid expenses
            
            
            120,409
            
            
            (101,588
            )Increase
                in other assets
            
            
            (31,240
            )
            
            (22,219
            )Increase
                in accounts payable and accrued liabilities
            
            
            1,587,937
            
            
            337,213(Decrease)
                increase in other liabilities
            
            
            (30,113
            )
            
            124,796Net
                cash used in operating activities
            
            
            (2,252,186
            )
            
            (1,981,357
            )Cash
                flows from investing activities:Disbursements
                for intangibles
            
            
            -
            
            
            (51,035
            )Disbursements
                for property and equipment
            
            
            (135,652
            )
            
            (182,159
            )Net
                cash used in investing activities
            
            
            (135,652
            )
            
            (233,194
            )Cash
                flows from financing activities:Payment
                of notes payable
            
            
            (5,968
            )
            
            (30,673
            )Proceeds
                from notes payable to related parties
            
            
            445,279
            
            
            235,000Payment
                on capital leases
            
            
            (6,674
            )
            
            (5,224
            )Proceeds
                from convertible and other notes payable
            
            
            1,185,000
            
            
            1,879,000Net
                cash provided by financing activities
            
            
            1,617,637
            
            
            2,078,103Net
                (decrease) increase in cash
            
            
            (770,201
            )
            
            (136,448
            )Cash,
                beginning of period
            
            
            771,533
            
            
            137,048Cash,
                end of period
            
            $
            1,332
            
            $
            600Supplemental
                disclosure of cash flow information:Cash
                paid for income taxes
            
            $
            --
            
            $
            -Cash
                paid for interest
            
            $
            201,914
            
            $
            4,862Non-cash
                financing activities:Common
                stock issued as payment for services
            
            $
            1,250,670
            
            $
            28,677Common
                stock issued as compensation to a director
            
            $
            1,047,840
            
            $
            -Common
                stock issued as settlement expense
            
            $
            1,180,000
            
            $
            -Conversion
                of liabilities to common stock
            
            $
            337,500
            
            $
            740,702Equipment
                acquired through issuance of common stock
            
            $
            244,500
            
            $
            -Equipment
                acquired through capital lease obligations
            
            $
            -
            
            $
            12,940


Common
                stock issued for financing expenses
            
            $
            145,151
            
            $
            -Warrants
                issued for convertible debt
            
            $
            1,595,428
            
            $
            -


See
      accompanying notes to condensed consolidated financial statements




5


**THE
      TUBE MEDIA CORP. (Formerly AGU Entertainment Corp.) and
      SUBSIDIARIES**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 2005 (unaudited)**




**1.** **NATURE
      OF OPERATIONS AND BASIS OF PRESENTATION**




**Nature
      of Operations**




AGU
      Entertainment Corp. (formerly Lexington Barron Technologies, Inc.) was
      incorporated in the state of Colorado on August 23, 2000 to engage in financial,
      operational and systems consulting to startup and small businesses. Prior to
      April 1, 2004, AGU Entertainment Corp. (“AGU”) was a development stage, public
      reporting company and did not engage in any significant operations or enter
      into
      any material transactions.




Effective
      April 1, 2004, AGU entered into a Share Exchange Agreement with Pyramid Music
      Corp. (“PMC”), a Florida corporation having an inception date of May 20, 2003,
      whereby AGU acquired 100% of the outstanding common stock of PMC in exchange
      for
      issuing 16,922,464 shares of its common stock to the stockholders of PMC .
      PMC
      was a development stage company and was formed for the purpose of developing
      market share in the recording and broadcast media industries through the
      establishment of a music oriented television network and archived video and
      music collection libraries.




On
      October 20, 2004, AGU was reincorporated in the state of Delaware through a
      merger of AGU into a wholly owned subsidiary corporation incorporated in the
      State of Delaware. The reincorporation resulted in AGU becoming a Delaware
      corporation effective as of October 21, 2004 and did not result in any change
      in
      the Company’s name, business, assets, liabilities or net worth.




At
      March
      31, 2005, AGU had two wholly-owned operating subsidiaries that were engaged
      in
      the following services: (i) the formation and operation of a television network,
      The Tube Music Network, Inc., (“The Tube”) that airs traditional music videos
      and live concerts of contemporary music material that is derived from archived
      video and music collection libraries, and (ii) a production, marketing and
      distribution record company, AGU Music, Inc. (“AGU Music”), formerly Pyramid
      Records International, Inc. In February of 2005, the Company formed two new
      subsidiaries, AGU Studios, Inc., (“AGU Studios”) a Florida corporation, and 3200
      Oakland Park Boulevard, Inc., a Florida corporation for the purpose of
      developing a media center for the film and entertainment business.




On
      February 25, 2006, AGU Entertainment Corp. changed its name to The Tube Media
      Corp. The name change was effected pursuant to Section 253 of the General
      Corporation Law of the State of Delaware by the merger of a wholly-owned
      subsidiary of the Company into the Company. The Company was the surviving
      corporation and, in connection with the merger, the Company amended its
      Certificate of Incorporation to change its name pursuant to the Certificate
      of
      Ownership and Merger filed with the Secretary of State of the State of Delaware.
      The Company also amended its Bylaws to reflect the name change and restated
      its
      Certificate of Incorporation.




6







**Basis
      of Presentation**




The
      unaudited condensed consolidated financial statements of The Tube Media Corp.
      (formerly AGU Entertainment Corp.) and its subsidiaries (the “Company”) have
      been prepared in accordance with accounting principles generally accepted in
      the
      United States of America for interim financial reporting and the regulations
      of
      the Securities and Exchange Commission (“SEC”) for quarterly reporting. The
      interim unaudited condensed consolidated financial statements should be read
      in
      conjunction with the financial statements and notes thereto included in the
      Company’s annual report on Form 10-KSB as filed with the SEC for the year ended
      December 31, 2004. Management acknowledges its responsibility for the
      preparation of the accompanying interim condensed consolidated financial
      statements which reflect all adjustments considered necessary, in the opinion
      of
      management, for a fair statement of the results of interim periods presented.
      Because the Company was a development stage enterprise for most of 2004, the
      financial statements for 2005 are not comparable to those of the prior year.
      In
      addition, the results of operations for the interim periods are not necessarily
      indicative of the results of operations for the entire year.




The
      accompanying financial statements reflect the results of the operations of
      The
      Tube Media Corp. (formerly AGU Entertainment Corp.) and its subsidiaries for
      the
      three months and six months ended June 30, 2005 and 2004.




**Principles
      of Consolidation**




The
      accompanying consolidated financial statements include the accounts of The
      Tube
      Media Corp. (formerly AGU Entertainment Corp.) and its subsidiaries. All
      significant intercompany transactions have been eliminated.




**Use
      of Estimates**




The
      preparation of financial statements in accordance with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and the disclosure of
      contingent assets and liabilities at the date of financial statements and the
      reported amounts of revenues and expenses during the reporting period. Actual
      results could differ from those estimates.




**Recent
      Accounting Pronouncements**




In
      December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      123, Share-Based Payments (revised 2004), (“SFAS No. 123R”). This statement
      eliminates the option to apply the intrinsic value measurement provisions of
      Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued
      to Employees, to stock based compensation issued to employees. The Statement
      requires companies to measure the cost of employee services received in exchange
      for an award of equity instruments based on the fair value of the award at
      the
      date of grant, and recognize that cost over the period during which an employee
      is required to provide services in exchange for the award. The adoption of
      SFAS
      No. 123R could have a material effect on the Company’s results of operations.
      SFAS 123R must be adopted no later than the first annual reporting period of
      the
      first fiscal year that begins after December 15, 2005 by small business
      issuers.




**Restatement**




The
      Company has restated its previously issued June 30, 2005 condensed consolidated
      financial statements for matters related to the following previously reported
      items: discontinued operations, the issuance of stock to a former director
      in
      connection with an employment agreement and the issuance of stock in connection
      the settlement of a dispute.




7




The
        following is a summary of the restatements for the three months ended June
        30,
        2005:


Loss
                    from continuing operations as originally reported at June 30,
                    2005
              
              $
              (4,309,536
              )Less;Additional
                  expenses in connection with the settlement of a dispute
              
              
              (1,180,000
              )Reclassification
                  of loss attributable to discontinued operations
              
              
              139,680Loss
                  from continuing operations at June 30, 2005 as restated
              
              $
              (5,349,856
              )Loss
                  from Discontinued operations
              
              $
              (139,680
              )The
                  following is a summary of the restatements for the Six months ended
                  June
                  30, 2005:Loss
                    from continuing operations as originally reported atJune
                    30, 2005
              
              $
              (7,506,448
              )Less;Additional
                    compensation expense recorded in connection with theissuance of
                    common stock,
              
              
              (1,047,840
              )Additional
                  expenses in connection with the settlement of a dispute,
              
              
              (1,180,000
              )Reclassification
                  of loss attributable to discontinued operations
              
              
              323,318Loss
                  from continuing operations at June 30, 2005 as restated
              
              $
              (9,410,970
              )Loss
                  from Discontinued operations
              
              $
              (323,318
              )







The
      effect on the Company’s previously issued June 30, 2005 (unaudited) financial
      statements are summarized as follows:





***Balance
      Sheet as of June 30, 2005*** **:**




***Previously***
              ***Reported***
            
            ***Increase***
              ***(Decrease)***
            
            ***Restated***Current
                Assets
            
            $
            537,469
            
            
            --
            
            $
            537,469Other
                Assets
            
            
            10,795,244
            
            
            --
            
            
            10,795,244Total
                Assets
            
            
            11,332,713
            
            
            --
            
            
            11,332,713Current
                Liabilities
            
            
            11,939,600
            
            
            --
            
            
            11,939,600Deferred
                Tax LiabilityTotal
                Liabilities
            
            
            13,715,555
            
            
            --
            
            
            13,715,555Stockholders’
                Deficit:Common
                Stock
            
            
            2,514
            
            
            --
            
            
            2,514Additional
                paid-in-capital
            
            
            11,822,749
            
            $
            2,227,840
            
            
            14,050,589Accumulated
                deficit
            
            
            (14,208,105
            )
            
            (2,227,840
            )
            
            (16,435,945
            )Total
                Liabilities and Stockholders’ Deficit
            
            $
            11,332,713
            
            $
            --
            
            $
            11,332,713







8


***Statement
      of Operations for the Three Months Ended June 30, 2005*** *:*




***Previously***
              ***Reported***
            
            ***Increase***
              ***(Decrease)***
            
            ***Restated***Revenue
            
            $
            107,479
            
            $
            (37,325
            )
            $
            70,154Cost
                of Sales
            
            
            13,338
            
            
            (6,702
            )
            
            6,636Gross
                Profit
            
            
            94,141
            
            
            (30,623
            )
            
            63,518Total
                Operating Expenses
            
            
            2,756,519
            
            
            1,123,447
            
            
            3,879,966Loss
                from Operations
            
            
            (2,662,378
            )
            
            1,154,070
            
            
            (3,816,448
            )Loss
                from Discontinued Operations
            
            
            --
            
            
            139,680
            
            
            (139,680
            )Interest
                Expense
            
            
            1,647,158
            
            
            (
                113,750
            )
            
            1,553,408Net
                Loss
            
            $
            (4,309,536
            )
            $
            1,180,000
            
            $
            (5,489,536
            )







***Statement
      of Operations for the Six Months Ended June 30, 2005*** *:*




***Previously***
              ***Reported***
            
            ***Increase***
              ***(Decrease)***
            
            ***Restated***Revenue
            
            $
            257,982
            
            $
            (81,901
            )
            $
            176,081Cost
                of Sales
            
            
            50,083
            
            
            (20,708
            )
            
            29,375Gross
                Profit
            
            
            207,899
            
            
            (61,193
            )
            
            146,706Total
                Operating Expenses
            
            
            4,617,422
            
            
            2,119,161
            
            
            6,736,583Loss
                from Operations
            
            
            (4,409,523
            )
            
            2,180,354
            
            
            (6,589,877
            )Loss
                from Discontinued Operations
            
            
            --
            
            
            (323,318
            )
            
            (323,318
            )Interest
                Expense
            
            
            3,096,925
            
            
            (275,832
            )
            
            2,821,093Net
                Loss
            
            $
            (7,506,448
            )
            $
            2,227,840
            
            $
            (9,734,288
            )







***Shareholders’
      Equity as of June 30, 2005*** ****







***Number
                of***
              ***Shares***
            
            ***Common***
              ***Stock***
            
            ***Additional***
              ***Paid
                in***
              ***Capital***
            
            ***Accumulated***
              ***Deficit***
            
            ***Total
                Stockholders’***
              ***Equity/Deficit)***Balance
                at June 30, 2005, aspreviously
                reported
            
            
            25,134,919
            
            
            2,514
            
            $
            11,822,749
            
            $
            (14,208,105
            )
            $
            (2,382,842
            )Prior
                period adjustment
            
            
            --
            
            
            --
            
            
            2,227,840
            
            
            (2,227,840
            )
            
            --Balance
                at June 30, 2005, asrestated
            
            
            25,134,919
            
            
            2,514
            
            $
            14,050,589
            
            $
            (16,435,945
            )
            $
            (2,382,842
            )







9







**2.** **INTANGIBLES**




Intangible
      assets at June 30, 2005 are as follows:




***Value
                at***
              ***acquisition***
            
            ***Accumulated***
              ***amortization***
            
            ***Balance
                at***
              ***June
                30, 2005***Distribution
                  agreement (see note 3)
            
            $
            350,000
            
            $
            (145,500
            )
            $
            204,500Contract
                rights
            
            
            472,000
            
            
            -
            
            
            472,000Other
                intangibles
            
            
            651,035
            
            
            (36,169
            )
            
            614,866Total
                intangibles
            
            $
            1,473,035
            
            $
            (181,669
            )
            $
            1,291,366


The
      distribution agreement is being amortized on a straight line basis over a period
      of three years. Contract rights, which were acquired in April 2005 for stock,
      will be amortized, beginning in July of 2005, over a five year period, which
      corresponds to the initial term of an agreement to air The Tube in certain
      markets. Other intangibles pertain to costs to develop network logos, graphic
      templates and on-air intersticials for The Tube. The estimated useful life
      of
      these assets is three years, and amortization of these assets commenced in
      the
      second quarter of 2005. Aggregate amortization expense over the next five years,
      assuming an estimated useful life of two years for the other intangibles, is
      expected to be as follows:




For
                the year ending December 31:Remainder
                of 2005
            
            $
            214,2062006
            
            
            428,2122007
            
            
            340,6122008
            
            
            166,7362009
            
            
            94,4002010
            
            
            47,200






**3.** **NOTES
        PAYABLE**




**Convertible
      Notes**




Convertible
      Notes Payable consists of the following at June 30, 2005 and December 31,
      2004:




**2005**
            
            **2004**First
                mortgage note secured by real property
            
            $
            7,000,000
            
            $
            7,000,000Second
                mortgage note secured by real property
            
            
            3,000,000
            
            
            3,000,000Other
                convertible notes and subordinated debentures
            
            
            2,415,000
            
            
            1,475,00012,415,000
            
            
            11,475,000Less:
                current portion
            
            
            (7,939,041
            )
            
            (7,150,000
            )Less:
                Discount on convertible mortgage and notes payable
            
            
            (2,735,769
            )
            
            (3,470,822
            )Notes
                payable, long term portion, net of discounts
            
            $
            1,740,190
            
            $
            854,178







10







On
      December 22, 2004, the Company closed on the purchase of a 162,000 square foot
      facility situated on 23 acres of land in Lauderdale Lakes, Florida (the
“Lauderdale Property”). In connection with the purchase of the Lauderdale
      Property, the Company issued to the seller, on December 22, 2004, a convertible
      mortgage promissory note in the principal amount of $7,000,000. The note pays
      interest at an annual rate of 6.5% and is convertible at any time at the
      seller’s option into shares of the Company’s common stock at a conversion price
      of $2.50 per share. A principal payment of $250,000 was due on June 20, 2005
      and
      was paid on July 1, 2005. The remaining balance of the note matures on December
      20, 2005. The terms of the convertible mortgage promissory note require
      quarterly prepayments of $145,000 into an escrow account for interest on the
      note and real estate taxes on the property. Additional quarterly prepayments
      of
      interest and real estate taxes in the amount of $145,000 were required to be
      put
      into escrow beginning March 20, 2005. The Company did not make the required
      prepayment on March 20, 2005. This amount was paid on behalf of the Company
      by
      the holder of the $3 million second mortgage note (the “Mitchell Note”) on April
      22, 2005, at which time the Company received a letter from the holder of the
      first mortgage note acknowledging the cure of the payment default. The quarterly
      payment due June 20, 2005 was paid on July 1, 2005. All of the Company’s
      obligations to the holder of this convertible promissory note and related
      agreements are secured by a first mortgage on the Lauderdale Property, including
      all of the Company’s rights, title and interest as lessor in and to all leases
      or rental arrangements of the Lauderdale Property.




On
      May
      13, 2005, the Company executed a letter agreement with the holder of the
      Mitchell Note whereby the Company agreed that the $145,000 interest and real
      estate tax payment made on behalf of the Company, the $100,000 that was advanced
      to the Company on April 29, 2005 by the holder of the Mitchell Note, the unpaid
      interest on the Mitchell Note for March and April 2005 and the legal fees
      incurred by the holder in connection with the letter agreement, would accrue
      interest at the default rate of 18% and would be due and payable by the Company
      on August 1, 2005. The letter agreement also extended the deadline for which
      the
      Company was to have filed a registration statement to register the Company’s
      common stock pertaining to the Mitchell Note and related warrants from April
      30,
      2005 to June 30, 2005, and extended the date for which the registration
      statement is required to be declared effective to November 30, 2005. The
      $145,000 payment made on behalf of the Company and the $100,000 advanced to
      the
      Company are reflected in the Company’s balance sheet as Other Notes Payable. The
      Company also agreed to grant the holder of the Mitchell Note an additional
      150,000 warrants to purchase the Company’s common stock at an exercise price of
      $1.50 per share, with the same registration and anti-dilution protections
      contained in the warrants originally granted to the holder of the Mitchell
      Note.
      These warrants were valued at $169,025 and were recorded as a discount to the
      $245,000 loan. The discount is being amortized through August 1, 2005, and
      the
      unamortized balance of this discount at June 30, 2005 is $54,902. The Mitchell
      Note is secured by a second mortgage on the Lauderdale Property and by
      substantially all of the Company’s other assets, including the capital stock of
      its subsidiaries. Because the Company did not pay the required monthly interest
      payments for March and April 2005, the interest rate on the note was increased
      to the default rate of 18%.




The
      Company has not paid the $245,000 plus accrued interest and lender legal fees
      that was due on August 1, 2005, in accordance with the May 13, letter agreement,
      nor has it filed a registration statement to register the required securities.
      The holder of the Mitchell Note issued a default letter on August 2, 2005.
      On
      August 11, 2005, and August 17, 2005, the Company entered into two letter
      agreements with the holder of the Mitchell Note, pursuant to which (i) the
      holder of the Mitchell Note agreed that the payment due on August 1, 2005 would
      be deferred until September 1, 2005; (ii) the parties agreed that, until
      maturity of the Mitchell Note, all monies due under the Mitchell Note, other
      than monies that accrue interest at the 18% default rate, will bear interest
      at
      the lower of 18% per annum or the highest rate permitted by law; (iii) the
      Company agreed to pay the holder, upon the first monies it receives, in addition
      to the sums otherwise due under the Mitchell Note, approximately $512,000 plus
      interest, attorneys’ fees in the amount of $1,000 and any further costs of
      collection (the “September Payment”); (iv) the Company agreed to pay the holder,
      up to the September Payment, any monies it receives upon the consummation of
      the
      terms of a non-binding letter of intent relating to the sale of the Lauderdale
      Property; (v) the lender agreed to extend the filing date for the registration
      statement to September 1, 2005; and (vi) the parties agreed that there would
      be
      no further grace periods allowed under the Mitchell Note. In addition, the
      letter agreement provides for the issue to the holder of warrants to purchase
      an
      additional 150,000 shares of the Company’s common stock at an exercise price of
      $1.50 per share under the same terms and conditions as the common stock purchase
      warrants previously issued to the holder.




11







During
      the first six months of 2005 the Company issued convertible promissory notes
      to
      various accredited investors in the aggregate principal amount of $665,000.
      The
      $665,000 of convertible promissory notes pay interest at 10% and are due on
      the
      second anniversary of their issuance date and are convertible into shares of
      the
      Company’s common stock at the option of each holder at a conversion price of
      $3.00 per share. In connection with the issuance of the convertible notes,
      the
      Company issued to the holders an aggregate of 221,666 warrants to purchase
      the
      Company’s common stock. The common stock purchase warrants have a two year term
      and the exercise price is $3.00 per share. The common stock purchase warrants
      were valued at $113,832, and this amount was recorded as a discount to the
      convertible promissory notes. The unamortized balance of the discount for these
      notes as of June 30, 2005 was $102,786.




**Related
      Party Notes**




On
      March
      3, 2004, AGU Music entered into an Assignment and Assumption Agreement with
      Pyramid Media Group, Inc. (“PMG”) (of which a related party and a stockholder of
      the Company own a controlling interest), whereby AGU Music agreed to assume
      all
      of the covenants and obligations of a Distribution Agreement between PMG and
      ARK
      21 Records, LP (“ARK21”). The Distribution Agreement provides that ARK21 be the
      manufacturer and distributor of certain recorded music projects for AGU Music
      through normal retail channels throughout the United States. In exchange for
      the
      rights to the Distribution Agreement and certain assets of PMG, AGU Music
      assumed the obligation to repay $350,000 of notes payable (“the ARK 21 Notes”)
      to certain principals of PMG. The Company has guaranteed the payment of the
      ARK
      21 Notes, which have an annual interest rate of 8%, and were to have matured
      on
      May 1, 2007. Approximately $19,000 of these notes was paid in 2004 and the
      outstanding balance as of March 31, 2005 is approximately $331,000. The terms
      of
      the ARK 21 Notes require monthly payments of principal and interest. The Company
      has not made the required monthly principal and interest payments since June
      of
      2004. On May 5, 2005, the Company entered into a settlement agreement with
      the
      holders of the ARK 21 Notes, who are significant stockholders of the Company.
      Under the terms of the settlement agreement, the ARK 21 Notes were cancelled
      and
      were replaced with new notes containing the same terms and conditions as the
      old
      notes, except that the new notes have a beginning principal balance of $345,806
      ($331,000 plus accrued interest of $14,508) and require, in addition to the
      monthly payment of approximately $8,500, the repayment of principal in the
      amount of $50,000 for every $1,000,000 in equity capital raised by the Company.
      In addition, upon the Company’s closing of a capital raising of at least
      $250,000, the Company must pay all the principal and interest due under the
      original notes for the period January through April, 2005 in the amount of
      approximately $36,000. The Company has not made any of the required payments
      under the settlement agreement and received a default letter on August 1, 2005
      demanding immediate repayment of all amounts due under the ARK 21 Notes and
      related settlement agreement. The Company is in discussions with the note
      holders to remedy the default. The Company does not have the resources to
      satisfy this obligation.




During
      the first six months of 2005 the Company received loans in the aggregate amount
      of $382,516 from a stockholder of the Company who is a related party. The loans
      pay interest at 10% and are due on December 31, 2005. The Company also received
      loans from significant stockholders during the first six months of 2005 in
      the
      aggregate amount of $48,200. These loans pay interest at 10% and are due on
      September 30, 2005. During July and August of 2005, $43,200 of these loans
      were
      repaid.




12







**4.** **STOCKHOLDERS’
      EQUITY**




During
      the first six months of 2005, the Company issued 347,987 shares of common stock
      to third parties in exchange for services performed. These services were valued
      at $868,096 and this amount was charged to earnings during the period. The
      Company also issued 50,540 shares of common stock to employees and directors
      during the first three months of 2005 and recorded compensation expense of
      $119,274. In addition, the Company issued 444,000 shares of common stock to
      its
      former chairman as an adjustment to the shares allocated to the original
      investors of the Company and 111,566 shares of common stock in connection with
      the terms of his termination agreement and recorded compensation expense of
      $263,300, and agreed to pay an additional $50,000 as compensation, 5,000 shares
      of common stock as a share price adjustment for certain investors, 97,800 shares
      of common stock in connection with the acquisition of property and equipment
      and
      121,875 shares of common stock in settlement of a liability. Also during this
      period, the Company issued 60,000 shares in connection with amending the terms
      of certain notes payable and 3,575 shares for payment of interest expense in
      lieu of cash. The Company also issued 500,000 shares of common stock to two
      co-founders of the Company as an adjustment to the shares allocated to the
      original investors of the Company.




During
      the first six months of 2005, the Company issued 221,666 detached common stock
      purchase warrants to acquire the Company’s common stock in connection with the
      issuance of convertible promissory notes (see Note 3). The warrants have an
      exercise price of $3.00 per share and expire on the maturity dates of the
      respective convertible promissory notes with which they were issued. In
      addition, the Company issued 2,550,000 common stock purchase warrants at an
      exercise price of $3.00 per share and 3,575 common stock purchase warrants
      at an
      exercise price of $2.00 per share to a significant stockholder in consideration
      for converting a substantial portion of his holdings of Company promissory
      notes
      to common stock and for extending the maturity dates of some of the other
      promissory notes of the Company. The Company also issued 150,000 warrants at
      an
      exercise price of $1.50 per share to the holder of the Mitchell Note in
      connection with advances made to the Company during the second quarter of 2005.
      The aggregate value of the warrants issued during the first six months of 2005
      was $1,595,428, and this amount was recorded as a discount on the Company’s
      convertible debt with an offset to paid in capital. The discount is being
      amortized on a pro rata basis over the life of the respective convertible debt
      instruments. No warrants were exercised during the first six months of 2005
      and
      5,607,577 warrants were outstanding at June 30, 2005.




**5.** **LOSS
      PER SHARE**




Basic
      income or loss per share is computed by dividing net income or loss attributable
      to common stockholders by the weighted average number of shares outstanding
      during the year. Diluted income or loss per share attributable to common
      stockholders further considers the impact of dilutive common stock equivalents.
      Diluted loss per share has not been presented separately for the three ending
      June 30, 2005 and 2004 because the effect of the additional shares which would
      be issued, assuming conversion of the convertible notes and common stock
      purchase warrants, are anti-dilutive for the aforementioned
      periods.




**6.** **COMMITMENTS
      AND CONTINGENCIES**




On
      January 27, 2005, the Company was served with a summons with notice by Jarred
      Weisfeld and Cherry Jones, individually and doing business as JarredCherry
      Productions LLC, referred to herein as the plaintiffs, which indicates that
      the
      plaintiffs commenced an action against the Company. The plaintiffs alleged,
      among other things, breach of contract, breach of implied covenant of good
      faith
      and fair dealing, unfair competition, tortuous misappropriation of goodwill,
      and
      deceptive acts and practices pursuant to Section 349 of the New York General
      Business Law. The dispute originated from an alleged agreement between the
      plaintiffs and the Company related to the works of the late Mr. Russell Jones,
      who was the son of Ms. Jones and the management client of Mr. Weisfeld. The
      complaint indicated that the plaintiffs were seeking compensatory and punitive
      damages of no less than $1,812,500 for each of the six causes of action alleged.
      On June 20, 2005, the Company and the Plaintiffs entered into a Confidential
      Settlement Agreement and Mutual Release (the “Agreement”) wherein the parties
      agreed to resolve their differences without admitting or acknowledging the
      validity of the position taken by the other parties in the course of the
      litigation. Under the terms of the Agreement, the Company paid JarredCherry
      $10,000 on June 28, 2005, and will pay $10,000 per month for eight consecutive
      months commencing 30 days from the date of the Agreement, as full and final
      settlement of the disputes. This amount has been accrued on the Company’s
      balance sheet as of June 30, 2005. The complaint filed by the Plaintiffs has
      since been dismissed.




13







On
      October 13, 2004, The Tube received notification from a television channel
      featuring music related programming that the circle logo used by The Tube is
      “confusingly similar” to the circle logo used by that television channel,
      supporting claims of trademark infringement and unfair competition. On November
      3, 2004, the Company responded to the October 13, letter stating it does not
      believe the logos are confusingly similar or that any trademark infringement
      has
      occurred. The Company has not received a response to its November 3, 2004
      letter. The Company intends to vigorously defend any challenge to its use of
      its
      logo.




The
      Company is subject to claims and legal actions that arise in the ordinary course
      of its business. The Company believes that the ultimate liability, if any,
      with
      respect to these claims and legal actions, will not have a material effect
      on
      the financial position or results of operations of the Company.




**7.** **RECENT
      ACCOUNTING PRONOUNCEMENTS**




In
      December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      123, Share-Based Payments (revised 2004), (“SFAS No. 123R”). This statement
      eliminates the option to apply the intrinsic value measurement provisions of
      Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued
      to Employees, to stock based compensation issued to employees. The Statement
      requires companies to measure the cost of employee services received in exchange
      for an award of equity instruments based on the fair value of the award at
      the
      date of grant, and recognize that cost over the period during which an employee
      is required to provide services in exchange for the award. The adoption of
      SFAS
      No. 123R could have a material effect on the Company’s results of
      operations.




**8.** **SEGMENT
      REPORTING**




The
      Company has two reportable operating segments: The Tube and AGU Music. AGU
      Studios operations have been discontinued and are being reported as discontinued
      operations (see Note 9) . The Tube airs traditional music videos and live
      concerts of contemporary music material that is derived from archived video
      and
      music collection libraries. When fully operational, the Company expects that
      The
      Tube will generate revenues by selling advertising time and through direct
      sales
      of music related to the content broadcasted on the network. AGU Music is a
      record company engaged in the release of recorded music materials acquired
      through artist signings and acquisitions. AGU Studios was originally conceived
      as a comprehensive media entertainment center, which will offer film, television
      and music production facilities, sound stages for recording, and executive
      offices for AGU’s operations and other entertainment industry organizations.
      However the Company’s continued liquidity problem requires the Company to
      reevaluate the feasibility of developing this business as originally planned.
      No
      final decisions have been made and the Company is currently evaluating various
      alternatives for AGU Studios and the Lauderdale Property. Each segment is
      separately managed and is evaluated by the Company’s chief operating decision
      makers for the purpose of allocating the Company’s resources. The Company also
      has a corporate headquarters function, which does not meet the criteria of
      a
      reportable operating segment.




14







The
      table
      below presents information about reportable segments for the three and six
      months ending June 30, 2005 and 2004.




**Three
                Months**
            
            **Six
                Months****2005**
            
            **2004**
            
            **2005**
            
            **2004**RevenuesAGU
                Music
            
            $
            70,154
            
            $
            15,000
            
            $
            176,081
            
            $
            15,000Discontinued
                Operations
            
            
            37,325
            
            
            -
            
            
            81,901
            
            
            -The
                Tube
            
            
            -
            
            
            -
            
            
            -
            
            
            -Consolidated
                revenues
            
            $
            107,479
            
            $
            15,000
            
            $
            257,982
            
            $
            15,000Operating
                lossAGU
                Music
            
            $
            (426,139
            )
            $
            (637,239
            )
            $
            (407,380
            )
            $
            (952,580
            )The
                Tube
            
            
            (1,083,431
            )
            
            (482,774
            )
            
            (1,894,672
            )
            
            (776,036
            )Segment
                loss
            
            
            (1,509,570
            )
            
            (1,120,013
            )
            
            (2,302,052
            )
            
            (1,728,616
            )Corporate
            
            
            (2,306,878
            )
            
            (405,360
            )
            
            (4,287,825
            )
            
            (682,124
            )Discontinued
                operations
            
            
            (139,80
            )
            
            --
            
            
            (323,318
            )
            
            --Consolidated
                operating loss
            
            $
            (3,956,128
            )
            $
            (1,525,373
            )
            $
            (6,913,195
            )
            $
            (2,410,740
            )




The
      table
      below reconciles the measurement of segment profit shown in the previous table
      to the Company’s consolidated income before taxes:




**Three
                Months**
            
            **Six
                Months****2005**
            
            **2004**
            
            **2005**
            
            **2004**Total
                segment loss
            
            $
            (1,509,570
            )
            $
            (1,120,013
            )
            $
            (2,302,052
            )
            $
            (1,728,616
            )Operating
                loss — corporate
            
            
            (2,306,878
            )
            
            (405,360
            )
            
            (4,287,825
            )
            
            (682,124
            )Loss
                from discontinued operations
            
            
            (139,680
            )
            
            -
            
            
            (323,318
            )
            
            -Interest
                expense
            
            
            (1,533,408
            )
            
            (32,640
            )
            
            (2,821,093
            )
            
            (45,154
            )Loss
                before income tax
            
            $
            (5,489,536
            )
            $
            (1,558,013
            )
            $
            (9,734,288
            )
            $
            (2,455,894
            )




**9.** **DISCONTINUED
      OPERATIONS**




During
      the third quarter of 2005, the Company determined to discontinue the operations
      of AGU Studios and sell the Lauderdale Property. The Company decided to sell
      the
      building and discontinue the studio operations primarily due to liquidity issues
      and to provide additional funds for working capital and the repayment of debt.
      The sale of the building took place on December 28, 2005. AGU Studios revenues
      reported in discontinued operations, for the years ended December 31, 2005
      were
      $44,576. There were no revenues from AGU Studios in 2004. Prior year financial
      statements for 2005 have been restated to reflect the operations of AGU Studios
      as a discontinued operation.




The
      following table illustrates the reporting of the discontinued operations for
      the
      three months ended June 30, 2005 and the three months ended June 30,
      2004.




15







**Three
                  Month****June
                  30, 2005**
              
              **June
                  30, 2004**Loss
                  from continuing operations
              
              $
              (3,042,978
              )
              $
              (1,152,653
              )Discontinued
                  operations:Loss
                  from operations of discontinued AGU Studios
              
              
              (139,680
              )
              
              -Corporate
              
              
              (2,306,878
              )
              
              (405,360
              )Net
                  operating loss
              
              $
              (5,489,536
              )
              $
              (1,558,013
              )




**10.** **RELATED
      PARTY TRANSACTIONS**




During
      the first six months of 2005 the Company received loans in the aggregate amount
      of $382,516 from a stockholder of the Company who is a related party. The loans
      pay interest at 10% and are due December 31, 2005. The Company also received
      loans from significant stockholders during the first six months of 2005 in
      the
      aggregate amount of $48,200. These loans pay interest at 10% and are due
      September 30, 2005 and December 31, 2005. In addition to the ARK 21 Notes,
      as of
      June 30, 2005, the Company had outstanding loans payable to related parties
      in
      the aggregate amount of $54,500 that were due Nov. 1, 2004, $59,500 that was
      due
      June 30, 2005, $48,200 that are due Sept. 30, 2005 and $382,516 that are due
      Dec. 31, 2005. The Company currently does not have the resources to pay these
      loans upon their maturity.




On
      May 5,
      2005, the Company entered into a settlement agreement, effective April 15,
      2005,
      with the holders of the ARK 21 Notes, who are significant stockholders of the
      Company. Under the terms of the settlement agreement, the ARK 21 notes were
      cancelled and were replaced with new notes containing the same terms and
      conditions as the old notes, except that the new notes have a beginning
      principal balance of $345,806 and require, in addition to the monthly payment
      of
      approximately $8,500, the repayment of principal in the amount of $50,000 for
      every $1,000,000 in equity capital raised by the Company. In addition, upon
      the
      Company’s closing of a capital raising of at least $250,000, the Company must
      pay all the principal and interest due under the original notes for the period
      January through April 2005 in the amount of approximately $36,000. The Company
      has not made any of the required payments under the settlement agreement and
      received a default letter on August 1, 2005 demanding immediate payment of
      all
      amounts due under the Ark21 Notes and related settlement agreement.




For
      the
      period from January 1, 2005 through June 30, 2005, the Company received various
      consulting services totaling approximately $117,500 from two stockholders.
      At
      June 30, 2005 approximately $72,000 was unpaid.




Additionally,
      two officers of the Company agreed to defer a portion of their salary, payable
      under their employment agreements until such time as adequate capital has been
      raised by the Company. The amount deferred as of June 30, 2005 was approximately
      $212,000.




Accounts
      payable to related parties at June 30, 2005 totaled approximately $162,000.
      Included in this amount was $7,800 in director’s fees due to a certain director
      and a $2,500 director’s fee payable to a second director.




16







In
      July
      and August of 2005, the Company received various loans from two significant
      stockholders as follows; $401,225 from DML Marketing Corp, and $156,424 from
      John P. Grandinetti. Approximately $158,000 of these loans, plus approximately
      $43,000 of loans which were outstanding at June 30, 2005, were repaid during
      the
      same period. The remaining outstanding loans will accrue interest at an annual
      rate of 10% and mature on December 31, 2005.




**11.** **SUBSEQUENT
      EVENTS**




On
      July
      27, 2005, the Company issued a promissory note in the principal amount of
      $500,000. The Promissory Note accrues interest at an annual rate of 4 1/2%,
      payable annually, and matures on January 1, 2007. The interest on the Promissory
      Note is compounded quarterly and at the end of each quarter such interest is
      added to the principal balance of the Promissory Note. The Company does not
      have
      the right to prepay the Promissory Note. The note is convertible along with
      all
      outstanding accrued interest, into shares of the Company’s common stock at the
      conversion price of $2.00 per share. In connection with the promissory note,
      the
      Company issued a warrant to purchase 400,000 shares of the Company’s common
      stock at an exercise price of $1.50 per share.




In
      July
      and August of 2005, the Company issued convertible promissory notes to two
      accredited investors in the aggregate principal amount of $110,000. The $110,000
      of convertible promissory notes are due on the second anniversary of their
      issuance date and are convertible into shares of the Company’s common stock at
      the option of each holder at a conversion price of $3.00 per share. In
      connection with the issuance of the convertible notes, the Company issued to
      the
      holders an aggregate of 36,667 warrants to purchase the Company’s common stock.
      The common stock purchase warrants have a two year term and the exercise price
      is $3.00 per share.




In
      July
      and August of 2005, the Company issued 452,696 shares of its common stock as
      follows:




·
            400,000
                shares to a certain investor as a price adjustment for prior conversions
                of debt to equity


·
            37,696
                shares in exchange for professional services received by the
                Company


·
            5,000
                shares as consideration for defaults on promissory
                notes


·
            10,000
                shares as compensation to non-employee
                directors







On
      August
      2, 2005, the Company issued warrants to purchase Company’s common stock as
      follows:




·
            650,000
                shares to related parties as consideration for various advances to
                the
                Company


·
            36,667
                shares to convertible noteholders


·
            25,000
                shares as consideration for defaults on promissory
                notes


·
            10,000
                shares in exchange for professional services received by the
                Company


17





The
      Company has not paid the $245,000 plus accrued interest and lender legal fees
      that was due on August 1, 2005, in accordance with the May 13, letter agreement,
      nor has it filed a registration statement to register the required securities.
      The holder of the Mitchell Note issued a default letter on August 2, 2005.
      On
      August 11, 2005, and August 17, 2005, the Company entered into two letter
      agreements with the holder of the Mitchell Note, pursuant to which (i) the
      holder of the Mitchell Note agreed that the payment due on August 1, 2005 would
      be deferred until September 1, 2005; (ii) the parties agreed that, until
      maturity of the Mitchell Note, all monies due under the Mitchell Note, other
      than monies that accrue interest at the 18% default rate, will bear interest
      at
      the lower of 18% per annum or the highest rate permitted by law; (iii) the
      Company agreed to pay the holder, upon the first monies it receives, in addition
      to the sums otherwise due under the Mitchell Note, approximately $512,000 plus
      interest, attorneys’ fees in the amount of $1,000 and any further costs of
      collection (the “September Payment”); (iv) the Company agreed to pay the holder,
      up to the September Payment, any monies it receives upon the consummation of
      the
      terms of a non-binding letter of intent relating to the sale of the Lauderdale
      Property; (v) the lender agreed to extend the filing date and effective date
      of
      the registration statement to December 31, 2005 and March 31, 2006,
      respectively; and (vi) the parties agreed that there would be no further grace
      periods allowed under the Mitchell Note. In addition, the letter agreement
      provides for the issue to the holder of warrants to purchase an additional
      150,000 shares of the Company’s common stock at an exercise price of $1.50 per
      share under the same terms and conditions as the common stock purchase warrants
      previously issued to the holder.




Effective
      August 1, 2005 the Company entered into a Technical Services and Support
      Agreement which requires a monthly payment of $22,000 and $18,000,
      respectively.




**12.** **GOING
      CONCERN**




The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. The Company’s financial condition
      and operating results, specifically a working capital deficiency of
      approximately $11.4 million and accumulated deficit of approximately $16.4
      million at June 30, 2005, negative cash flow from operations of approximately
      $2.3 million as well as a net loss of approximately $9.7 million for the six
      months ending June 30, 2005 and de minimus cash on hand, raise substantial
      doubt
      about its ability to continue as a going concern. The Company’s existence is
      dependent on Management’s ability to develop profitable operations and resolve
      the Company’s liquidity problems. Management anticipates that the Company will
      attain profitable status and improve its liquidity through the continued
      development of the Company’s television network, recorded music business and the
      potential sale of certain assets.




These
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty. If the Company is unsuccessful in obtaining the
      additional capital necessary to fund its operations, it may be forced to
      downsize certain operations, restructure its current debt obligations on terms
      less favorable to the Company than the existing obligations or sell some of
      its
      assets. It may also need to seek protection under the federal bankruptcy laws
      or
      be forced into bankruptcy by its creditors. There can be no assurance the
      Company will be successful in its efforts to raise additional
      financing.




**ITEM
      2.** **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.**




**Overview**




We
      were
      formerly known as Lexington Barron Technologies, Inc. and were incorporated
      in
      the State of Colorado on August 23, 2000 for the purpose of addressing the
      specific needs of small businesses and startup organizations by providing a
      broad range of consulting and advisory services, ranging from market research
      and analysis to business plan and systems development to financial consulting.
      In early 2004, our former management determined that their business model was
      not progressing and that we should either merge with or acquire an operating
      company with an operating history and assets.




18







Effective
      April 1, 2004, we completed a Share Exchange Agreement with Pyramid Music Corp.,
      a Florida corporation (“PMC”). Under the terms of the Share Exchange Agreement,
      we acquired 100% of the outstanding common stock of PMC in exchange for
      16,922,464 shares of our common stock. On March 26, 2004, in anticipation of
      the
      completion of the share exchange, we changed our name to AGU Entertainment
      Corp.
      Upon completion of this transaction, the former stockholders of PMC owned,
      on a
      fully diluted basis, approximately eighty percent of the outstanding common
      stock of AGU Entertainment Corp. as of April 1, 2004, resulting in a change
      in
      control. The transaction was accounted for as a reverse merger and
      recapitalization whereby PMC, which became a wholly owned subsidiary of AGU
      Entertainment Corp., is deemed to be the acquirer for accounting purposes.
      In
      addition, we had no identifiable assets and liabilities as of April 1, 2004.
      As
      a result, PMC is deemed to be the surviving accounting and reporting entity,
      and
      all of the historical financial information presented in this Form 10-KSB,
      including the consolidated financial statements and this Management’s Discussion
      and Analysis of Financial Condition and Results of Operations, reflect the
      assets, liabilities, results of operations and cash flows of PMC and its
      subsidiaries, The Tube Music Network, Inc., a Florida corporation (“The Tube”)
      and Pyramid Records International, inc., a Florida corporation
      (“PRI”).




As
      a
      result of the share exchange, AGU became the parent company of PMC, which was
      a
      development stage company with an inception date of May 20, 2003 with two
      wholly-owned operating subsidiaries that are engaged in the following services:
      (i) the formation and operation of a television network, The Tube Music Network,
      Inc., (“The Tube”) that airs traditional music videos and live concerts of
      contemporary music material that is derived from archived video and music
      collection libraries, and (ii) a production, marketing and distribution record
      company, Pyramid Records International, Inc. (“PRI”). PMC was dissolved in July
      of 2004 and at that time The Tube and PRI became wholly-owned subsidiaries
      of
      AGU Entertainment Corp. In February 2005, PRI officially changed its name to
      AGU
      Music, Inc. (“AGU Music”).




The
      Tube
      is a 24-hour per day broadcast digital television network that delivers high
      quality music video, audio, pay-per-view options and commerce to digital viewers
      nationally. Its national launch is expected to take place in the third quarter
      of 2005. The Tube can currently be seen in a limited number of households in
      various parts of the United States.




In
      the
      late 1990’s, broadcasters throughout the country were granted portions of the
      airwaves at no cost with the understanding that they would provide free digital
      signals as part of the U.S. government’s desire for high definition television.
      However, due to improvements in digital signal compression, the bandwidth
      required to broadcast digital television was substantially reduced, leaving
      broadcasters with excess bandwidth to use at their discretion. As a result,
      there are currently a number of media companies that have the ability to offer
      a
      digital quality picture over the air directly to consumers and indirectly
      through the cable and satellite operators’ digital box using surplus bandwidth
      from local broadcasters. These media outlets can offer additional channels
      to
      broadcast local news, sports, weather or other specialty services like The
      Tube.
      This new broadcasting concept is referred to as “multicasting.” In April of
      2005, we signed an agreement with Raycom Media, Inc. (“Raycom”), which will
      enable consumers in all of the markets served by Raycom to receive The Tube
      with
      digital cable service or with television sets that are enabled with digital
      tuners. Raycom owns and operates 39 television stations in 20 states, which
      cover over 10% of United States television households. We are currently in
      negotiations with several other broadcasters with multicasting capabilities,
      and
      expect to eventually leverage this market penetration into households served
      by
      larger cable and satellite systems. There can be no assurance as to whether
      or
      when these negotiations will result in additional definitive agreements. We
      expect that The Tube will earn revenues through advertising sales and through
      e-commerce with respect to music and related products that will be seen by
      consumers on The Tube.




AGU
      Music
      produces both studio albums and DVD concerts. It entered into several agreements
      for distribution and released three albums to the public in 2004. Our ability
      to
      produce new albums and DVD concerts in 2005 will be dependent on the amount
      of
      working capital available to us (see Liquidity and Capital Resources) for the
      required marketing, promotional and other operating expenses necessary to
      produce recorded music projects. We have not produced any new music projects
      in
      2005, and do not expect to release any new projects until our liquidity
      situation improves.




19







In
      the
      third quarter of 2004, our board of directors decided to purchase and develop
      a
      facility that would serve as a comprehensive media entertainment recording
      and
      production facility that would encompass film, television and musical projects.
      On December 22, 2004, we closed on the purchase of a 162,000 square foot
      facility situated on 23 acres of land in Lauderdale Lakes, Florida (the
“Lauderdale Property”). Our business plan envisioned a facility that will
      consist of approximately 75,000 square feet of office space available for lease,
      as well as six sound stages, an audio production studio and a two and a half
      acre back lot for film projects.




It
      was
      originally anticipated that within three years the rental income from the office
      space and production facilities would be sufficient to cover substantially
      all
      of the operating expenses of the studio, which would allow us to use the
      soundstages and production studio to develop new music and film projects without
      requiring significant cash outlays. To date, we have not entered into any leases
      or any other material contractual commitments with respect to the usage of
      this
      facility. The Company’s expectation was that revenue would be generated by
      offering technical and production services in the areas of film, television
      and
      music production, and through the rental of office and studio space. A limited
      amount of production activity did take place on the Lauderdale Property in
      2004
      and in the first six months of 2005, and in February 2005 we formed a separate
      subsidiary, AGU Studios, Inc., a Florida Corporation, under which our studio
      development and production activities would take place. However due to the
      Company’s continuing liquidity problems (see Liquidity and Capital
      Resources),the Company decided to discontinue AGU Studios and sell the
      Lauderdale Property.




Because
      of the start up nature of our business throughout most of 2004, our results
      of
      operations and cash flows in the first quarter of 2005 are not comparable to
      the
      same period of a year ago.




**Restatement**




We
      restated our previously issued, June 30, 2005 condensed consolidated financial
      statements for matters related to the following previously reported items:
      discontinued operations, the issuance of stock to a former director in
      connection with an employment agreement and the issuance of stock in connection
      with a settlement of a dispute.




**Liquidity
      and Capital Resources**




We
      do not
      have adequate cash to meet our current obligations as well as our short and
      long
      term objectives and we do not have the capital resources necessary to implement
      our business plan. The growth and development of our business will require
      a
      significant amount of additional working capital. We currently have very limited
      financial resources and will need to raise additional capital in order to
      continue as a going concern. If we are unsuccessful in obtaining the additional
      capital necessary to fund our operations, we may be forced to downsize certain
      operations, restructure our current debt obligations on terms less favorable
      to
      us than the existing obligations or sell some of our assets. We may also need
      to
      seek protection under the federal bankruptcy laws or be forced into bankruptcy
      by our creditors.




Our
      financial condition and operating results, specifically a working capital
      deficit of approximately $11.4 million, an accumulated deficit of approximately
      $16.4 million and de minimus cash on hand as of June 30, 2005, as well as a
      net
      loss of approximately $9.7 million for the six months ending June 30, 2005
      raise
      substantial doubt about our ability to continue to operate as a going
      concern.




20







As
      a
      company that has recently emerged from the start-up phase with a limited
      operating history, we are subject to all the substantial risks inherent in
      the
      development of a new business enterprise within an extremely competitive
      industry. We cannot assure you that the business will continue as a going
      concern or ever achieve profitability. Due to the absence of an operating
      history, the emerging nature of the market in which we compete and lack of
      sufficient capital to fund our operations and implement our business plan,
      we
      anticipate operating losses until such time as we can successfully implement
      our
      business strategy, which includes the national launch of The Tube and,
      potentially, new projects for AGU Music and the development of the Lauderdale
      Property. Because of losses incurred by us through our most recent fiscal year
      end and our general financial condition, our independent registered public
      accounting firm inserted a going concern qualification in their audit report
      for
      the most recent fiscal year that raises substantial doubt about our ability
      to
      continue as a going concern.




Since
      May
      20, 2003, we have financed our operations through numerous debt and equity
      issuances. In addition to the convertible notes discussed below, we issued
      approximately $5,369,000 of convertible notes or debentures, approximately
      $3,379,000 of which plus accrued interest, were subsequently converted into
      1,173,540 shares of common stock of the Company and $75,000 of which was repaid
      in 2004. Approximately $1,765,000 of the remaining convertible promissory notes
      mature between the fourth quarter of 2006 and the second quarter of 2007 and
      a
      $150,000 promissory note was to have matured on June 30, 2005. On August 2,
      2005, we issued 5,000 shares of our common stock and warrants to purchase 25,000
      shares of our common stock at an exercise price of $1.50 per share in exchange
      for the holder of this note extending the maturity date of this note to October
      1, 2005. While these convertible notes are convertible into shares of our common
      stock at a conversion price of $3.00 per share, there can be no assurances
      that
      these notes will be converted prior to their becoming due. We currently do
      not
      have the financial resources to repay these promissory notes without completing
      an additional financing, reducing expenses, selling assets or extending the
      maturities of this debt. If we are unsuccessful in obtaining the additional
      capital necessary to fund our operations and service our debt, we may be forced
      to downsize certain operations, restructure our current debt obligations, find
      a
      strategic partner, and or sell some of our assets. We may also need to seek
      protection under the federal bankruptcy laws or be forced into bankruptcy by
      our
      creditors.




As
      part
      of the purchase price of the Lauderdale Property, we issued to the seller on
      December 22, 2004 a convertible promissory note in the principal amount of
      $7,000,000. The note pays interest at an annual rate of 6.5% and is convertible
      at any time at the seller’s option into shares of our common stock at a
      conversion price of $2.50 per share. A principal payment of $250,000 was due
      on
      June 25, 2005 and was paid on July 1, 2005. The remaining balance of the note
      matures on December 22, 2005. All of our obligations to the seller under this
      convertible promissory note and related agreements are secured by a first
      mortgage on the Lauderdale Property, including all of our rights, title and
      interest as lessor in and to all leases or rental arrangements of the Lauderdale
      Property. At the closing of the purchase of the Lauderdale Property, we made
      a
      prepayment into an escrow account of $150,000 for interest on the note and
      real
      estate taxes on the Lauderdale Property covering the quarterly period ending
      March 31, 2005. Additional quarterly prepayments of $145,000 are required to
      be
      put into escrow beginning March 22, 2005. We did not make the required
      prepayment on March 22, 2005. This amount was paid on behalf of the Company
      by
      one of our other creditors (see below) on April 22, 2005, at which time we
      received a letter from the holder of the first mortgage note acknowledging
      the
      cure of the payment default. The quarterly prepayment due June 22, 2005 was
      paid
      by the Company on July 1, 2005 with the proceeds of a note issued on the same
      date by the Company to a related party.




Also
      on
      December 22, 2004, we issued a secured convertible term note in the principal
      amount of $3,000,000 to Mitchell Entertainment Company (the “Mitchell Note”).
      The note pays interest monthly at an annual rate of 10% and has a maturity
      date
      of December 19, 2006. The note can be converted at any time by the lender into
      shares of our common stock at an initial conversion price of $1.50 per share,
      subject to anti-dilution protections and certain other adjustments. The Mitchell
      note is secured by a second mortgage on the Lauderdale Property and by
      substantially all of our other assets, including the capital stock of our
      subsidiaries.




21







On
      May
      13, 2005, we executed a letter agreement with the holder of the Mitchell Note
      whereby we agreed that the $145,000 interest and real estate tax payment made
      on
      behalf of the Company, the $100,000 that was advanced to us on April 29, 2005
      by
      the holder of the Mitchell Note, the interest installments on the Mitchell
      Note
      for April 1, 2005 and May 1, 2005 and the legal fees incurred by the holder
      in
      connection with the letter agreement, together with the interest due on the
      foregoing amount would accrue interest at the default rate of 18% and would
      be
      due and payable by us on August 1, 2005. The letter agreement also extended
      the
      deadline for which we were to have filed a registration statement to register
      the Company’s common stock pertaining to the Mitchell Note and related warrants
      from April 30, 2005 to June 30, 2005, and extended the date for which the
      registration statement is required to be declared effective to November 30,
      2005. We also agreed to grant the holder of the Mitchell Note additional
      warrants of 100,000 and 50,000 respectively, to purchase our common stock at
      an
      exercise price of $1.50 per share, with the same registration and anti-dilution
      protections contained in the warrants originally granted to the holder of the
      Mitchell Note. Because we did not pay the required monthly interest payments
      for
      March and April 2005, which resulted in our receiving a default letter from
      the
      holder of the Mitchell Note on April 8, 2005, the interest rate on the note
      was
      increased to the default rate of 18%.




We
      have
      not paid the $245,000 plus accrued interest and lender legal fees that was
      due
      on August 1, 2005, in accordance with the May 13, letter agreement, nor have
      we
      filed a registration statement to register the required securities. The holder
      of the Mitchell Note issued a default letter on August 2, 2005. On August 11,
      2005, we entered into two letter agreements with the holder of the Mitchell
      Note, pursuant to which (i) the holder of the Mitchell Note agreed that the
      payment due on August 1, 2005 would be deferred until September 1, 2005; (ii)
      the parties agreed that, until maturity of the Mitchell Note, all monies due
      under the Mitchell Note, other than monies that accrue interest at the 18%
      default rate, will bear interest at the lower of 18% per annum or the highest
      rate permitted by law; (iii) we agreed to pay the holder, upon the first monies
      it receives, in addition to the sums otherwise due under the Mitchell Note,
      approximately $512,000 plus interest, attorneys’ fees in the amount of $1000 and
      any further costs of collection (the “September Payment”); (iv) we agreed to pay
      the holder, up to the September Payment, any monies we receive upon the
      consummation of the terms of a non-binding letter of intent relating to the
      sale
      of the Lauderdale Property; (v) the lender agreed to extend the filing date
      for
      the registration statement to September 1, 2005; and (vi) the parties agreed
      that there would be no further grace periods allowed under the Mitchell Note.
      In
      addition, the letter agreement provides for the issue to the holder of warrants
      to purchase an additional 150,000 shares of our common stock at an exercise
      price of $1.50 per share under the same terms and conditions as the common
      stock
      purchase warrants previously issued to the holder. On August 3, 2005, the holder
      of the first mortgage note on this property issued a default letter to us
      pursuant to the cross default provision of the note, which was triggered by
      the
      Company’s default on the Mitchell Note. On August 19, 2005, the holder of the
      first mortgage note issued a letter acknowledging the cure of the Mitchell
      Note
      and accepting the cure under the first mortgage note.




22







On
      March
      3, 2004, our AGU Music subsidiary entered into an Assignment and Assumption
      Agreement with Pyramid Media Group, Inc. (“PMG”) whereby AGU Music agreed to
      assume all of the covenants and obligations of a Distribution Agreement between
      PMG and ARK 21 Records, LP (“ARK21”). In exchange for the rights to the
      Distribution Agreement and certain assets of PMG, AGU Music assumed the
      obligation to repay $350,000 of notes payable to certain principals of PMG
      (the
“ARK 21 Notes”). The Company has guaranteed the payment of the ARK 21 notes,
      which have an annual interest rate of 8% and mature on May 1, 2007. Allen
      Jacobi, the former President of AGU Music, is an owner and controlling
      stockholder of PMG. Approximately $19,000 of these notes was paid in 2004 and
      the outstanding balance as of March 31, 2005 is approximately $331,000. The
      terms of these notes require monthly payments of principal and interest. We
      have
      not made the required monthly principal and interest payments since June of
      2004. On May 5, 2005, we entered into a settlement agreement with the holders
      of
      the ARK 21 Notes, who are significant stockholders of the Company. Under the
      terms of the settlement agreement, the ARK 21 Notes were cancelled and were
      replaced with new notes containing the same terms and conditions as the old
      notes, except that the new notes have a beginning principal balance of $345,806
      and require, in addition to the monthly payment of approximately $8,500, the
      repayment of principal in the amount of $50,000 for every $1,000,000 in equity
      capital raised by us. In addition, upon the our closing of a capital raising
      of
      at least $250,000, we must pay all the principal and interest due under the
      original notes for the period January through April, 2005 in the amount of
      approximately $36,000. We also agreed to issue 500,000 restricted shares of
      the
      Company’s common stock to the holders of the ARK 21 Notes. We have not made any
      of the required payments under the settlement agreement and received a default
      letter on August 1, 2005 demanding immediate repayment of all amounts due under
      the ARK 21 Notes and related settlement agreement. We currently do not have
      the
      financial resources to repay these notes without completing an additional
      financing, reducing expenses, selling assets or extending the maturity of the
      ARK 21 Notes. In addition, defaults under the ARK 21 Notes cause a default,
      pursuant to the cross default provision, of the first mortgage note of the
      Lauderdale Property. To date, the holder of the first mortgage has not issued
      a
      default notice relating to our default on the ARK21 Notes.




We
      currently have a monthly cash requirement of approximately $550,000 and we
      will
      need to raise additional capital in the remainder of 2005, for working capital,
      capital expenditures, business expansion, repayment of maturing debt and to
      continue as a going concern. We anticipate that we will need to raise up to
      approximately $6 million over the balance of 2005 to provide for these
      requirements. Management is evaluating several alternatives, including the
      sale
      of assets, sale of equity securities or issuance of additional debt, or finding
      a strategic partner. We cannot assure you that we will be successful in
      completing such an offering, in executing the business plan or achieving
      profitability. If we are not successful in raising additional capital and
      refinancing the $7,000,000 convertible promissory note due in December 2005,
      our
      financial condition, business operations and ability to continue as a going
      concern will be adversely affected, and we may need to seek protection under
      the
      federal bankruptcy laws.




Cash
      used
      in operations for the first six months of 2005 was $2,221,000, which was
      primarily the result of our operating loss of $5,490,000, partially offset
      by
      increases to accounts payable and accrued expenses and the issuance of common
      stock in exchange for services. Cash used in operations in 2004 was $1,981,000.
      We expect to continue to generate negative cash flows from operations until
      such
      time as we can gain national distribution for, and generate significant
      advertising revenues from, The Tube. No assurances can be given as to when
      or if
      we will be able to develop profitable operations.




Cash
      used
      in investing activities in the six months of 2005 amounted to $166,000, as
      compared to $233,000 in 2004. The decrease was primarily due to a $51,000
      investment for certain intangible assets for The Tube in 2004, and severe
      liquidity restraints, which have limited our capital expenditures in 2005.
      Capital expenditures for the remainder of 2005 will depend largely upon our
      ability to raise additional capital; however, our business plan currently
      assumes approximately $1 million of capital expenditures over the next twelve
      months.




We
      received cash from financing activities in the first six months of 2005 in
      the
      amount of $1,618,000, as compared to $2,078,000 in the same period of a year
      ago. The decrease was due to fewer issuances of convertible notes in
      2005.




23







We
      have
      experienced liquidity issues since our inception due primarily to our limited
      ability, to date, to raise adequate capital on acceptable terms. We have
      historically relied upon the issuance of promissory notes that are convertible
      into shares of our common stock to fund our operations and currently anticipate
      that we will need to continue to issue promissory notes and common stock to
      fund
      our operations and repay our outstanding debt for the foreseeable future. At
      June 30, 2005, we had approximately $13.5 million of debt outstanding,
      approximately $8.2 million of which is due at various dates in 2005 or in
      default. We currently do not have the financial resources to repay any of these
      or any of the aforementioned obligations without completing an additional
      financing. We also currently do not have funds available for working capital
      requirements beyond August, 2005. On July 27, 2005, we issued a promissory
      note
      in the principal amount of $500,000. The Promissory Note accrues interest at
      an
      annual rate of 4 1/2%, payable annually, and matures on January 1, 2007. The
      interest on the Promissory Note is compounded quarterly and at the end of each
      quarter such interest is added to the principal balance of the Promissory Note.
      The note is convertible, along with all outstanding accrued interest, into
      shares of the Company’s common stock at the conversion price of $2.00 per share.
      The proceeds from this note were used for general corporate purposes, primarily
      working capital. There can be no assurance that we will be successful in
      obtaining additional funds necessary to finance our operations or repay
      debt.




If
      we are
      unable to raise the necessary capital to meet our current and future
      obligations, we will need to consider other alternatives, which could include
      curtailing our business plan, selling some of our assets or finding a strategic
      partner. We may also need to seek protection under the federal bankruptcy laws
      or be forced into bankruptcy by our creditors.




Moreover,
      as a result of our liquidity issues, we have experienced delays in the repayment
      of certain promissory notes upon maturity. However, certain holders of our
      promissory notes have agreed to extend the due dates on their promissory notes.
      If in the future, the holders of our promissory notes demand repayment of
      principal and accrued interest instead of electing to extend the maturity dates
      on their notes and if we are unable to repay our debt when due because of our
      continued liquidity issues, we may be forced into an involuntary bankruptcy
      filing.




**Critical
      Accounting Policies and Estimates**




The
      accounting policies that we have identified as critical to our business
      operations and to an understanding of our results of operations are described
      in
      detail in our Annual Report on Form 10-KSB for the fiscal year ended December
      31, 2004. In many cases, the accounting treatment of a particular transaction
      is
      specifically dictated by accounting principles generally accepted in the United
      States of America, with no need for management’s judgment in their application.
      In other cases, preparation of our unaudited condensed consolidated financial
      statements for interim periods requires us to make estimates and assumptions
      that affect the reported amount of assets and liabilities, disclosure of
      contingent assets and liabilities at the date of the financial statements,
      and
      the reported amounts of revenues and expenses during the reporting period.
      There
      can be no assurance that the actual results will not differ from those
      estimates.




**Results
      of Operations for the Three Months ending June 30, 2005 and
      2004**




Revenues
      from continuing operations were approximately $70,000 for the three months
      ended
      June 30, 2005 and $15,000 in the three months ended June 30, 2004 and were
      related to recorded music shipments by AGU Music. Approximately $37,000 of
      revenues were generated by the discontinued operations of AGU Studios. AGU
      Music
      had gross profit of $63,000 and the gross profit from discontinued operations
      was $31,000 during the period.




Operating
      expenses from continuing operations were $3,880,000 and $1,540,000 in the three
      months ended June 30, 2005 and 2004, respectively, the majority of which was
      general and administrative expenses. Included in this amount is $1,180,000
      of
      expense in connection with the issuance of common stock in the settlement of
      a
      dispute. Thus far in 2005 our liquidity constraints have severely limited our
      ability to engage in marketing, promotion, advertising and similar expenses
      necessary to develop our business. We expect this trend to continue until such
      time as we can complete a substantial debt or equity offering.




24







Our
      operating loss from discontinued operations for the three months ended June
      30,
      2005 was $140,000 compared to the operating loss of $0 for the three months
      ended June 30, 2004.




Interest
      expense in 2005 was $1,533,000, as compared to $33,000 in 2004, and includes
      $1,169,000 for the reduction of debt discounts and the amortization of deferred
      financing fees. The remainder of the increase in interest expense was the result
      of increased indebtedness in 2005.




We
      did
      not record a tax benefit during this period as we determined that it was more
      likely than not that we would not be able to generate sufficient taxable income
      to use any net deferred tax assets. As such, we increased our valuation
      allowance for the net deferred tax asset that existed at December 31, 2004
      so
      that no net tax benefit was recorded in 2005.




Our
      net
      loss for the quarter ended June 30, 2005 was $5,490,000 compared to $1,558,000
      for the same period in the prior year.




**Results
      of Operations for the Six Months ending June 30, 2005 and
      2004**




Revenues
      from continuing operations were $176,000 for the six months ended June 30,
      2005
      and $15,000 for the six months ended June 30, 2004 and were related to recorded
      music shipments by AGU Music. Revenues generated from the discontinued
      operations of AGU Studios were approximately $82,000. AGU Music had gross profit
      of $147,000 and the gross profit from discontinued operations of AGU Studios
      was
      $61,000 during the period.




Operating
      expenses from continuing operations were $6,737,000 and $2,426,000 for the
      six
      months ended June 30, 2005 and 2004 respectively, the majority of which was
      general and administrative expenses. Included in this amount is $1,048,000
      of
      compensation expense in connection to the issuance of common stock to a director
      relative to his employment contract and $1,180,000 of expense in connection
      with
      the issuance of common stock as settlement to a dispute. Thus far in 2005 our
      liquidity constraints have severely limited our ability to engage in marketing,
      promotion, advertising and similar expenses necessary to develop our business.
      We expect this trend to continue until such time as we can complete a
      substantial debt or equity offering.




Our
      operating loss from discontinued operations for the six months ended June 30,
      2005 was $323,000 compared to an operating loss of $0 for the three months
      ended
      June 30, 2004.




Interest
      expense for the six months ended June 30, 2005 was $2,821,000, compared to
      $45,000 for the six months ended June 30, 2004, and includes $2,367,000 for
      the
      reduction of debt discounts and the amortization of deferred financing fees.
      The
      remainder of the increase in interest expense is the result of increased
      indebtedness in 2005.




We
      did
      not record a tax benefit during this period as we determined that it was more
      likely than not that we would not be able to generate sufficient taxable income
      to use any net deferred tax assets. As such, we increased our valuation
      allowance for the net deferred tax asset that existed at December 31, 2004
      so
      that no net tax benefit was recorded in 2005.




Our
      net
      loss for the six month period ended June 30, 2005 was $9,734,000, as compared
      to
      $2,456,000 in the prior year.




We
      anticipate entering into several additional affiliate agreements with digital
      broadcasters, which will allow The Tube to be seen in approximately 20 million
      homes by the end of 2005. While we expect this market penetration to generate
      a
      substantial increase in marketing, promotion and other expenses both at The
      Tube
      and at AGU Studios, we also expect that our revenues will ultimately increase
      sufficiently enough to cover these increases. Thus, we believe that our results
      of operations in fiscal 2004 and 2005 are not indicative of our projected
      results of operations in fiscal 2006 and beyond.




25







**ITEM
      3.** **CONTROLS
      AND PROCEDURES**




The
      Company, under the supervision and with the participation of its management,
      including its principal executive officer and principal financial officer,
      previously evaluated the effectiveness of the design and operation of its
      disclosure controls and procedures as of the end of the period covered by this
      report. Based on this evaluation, the principal executive officer and principal
      financial officer concluded that, as of the end of the period covered by this
      report, the Company’s disclosure controls and procedures were effective in
      reaching a reasonable level of assurance that management is timely alerted
      to
      material information related to and during the period when our periodic reports
      are being prepared. Subsequent to the original evaluation and in connection
      with
      the preparation of the Company’s Form 10-KSB for the year ended December 31,
      2005, the Company recognized an error in the accounting treatment for the
      issuance of stock to a director pursuant to an employment agreement and the
      issuance of stock in settlement of a dispute and that the Company should have
      reported the operations of AGU Studios as discontinued operations. At that
      time,
      the Company determined that it should restate the financial results to correct
      the accounting treatment of the issuance of stock, the issuance of stock in
      settlement of a dispute and also reflect discontinued operations. The Company’s
      disclosure controls and procedures did not detect on a timely basis the
      additional expense in connection with the issuance of common stock or that
      the
      operations of AGU Studios should have been reported as discontinued operations.
      The methodology for accounting for the issuance of such stock and the reporting
      of the operations of AGU Studios as discontinued operations were corrected
      subsequent to the initial filing of the Form 10-QSB for the period covered
      by
      this report. As a result of this restatement as discussed further in Note 1
      and
      Note 9 to the condensed consolidated financial statements, the Company, under
      the supervision and with the participation of its management, including its
      principal executive officer and principal financial officer, re-evaluated the
      effectiveness of the design and operation of its disclosure controls and
      procedures as of the end of the period covered by this report. Based upon this
      re-evaluation, the principal executive officer and principal financial officer
      concluded that, as of the end of the period covered by this report, the
      Company’s disclosure controls and procedures were not effective in reaching a
      reasonable level of assurance that management is timely alerted to material
      information related to and during the period when our periodic reports are
      being
      prepared.




A
      control
      system, no matter how well conceived and operated, can provide only reasonable,
      not absolute, assurance that the objectives of the control system are met.
      Further, the design of a control system must reflect the fact that there are
      resource constraints, and the benefits of controls must be considered relative
      to their costs. Because of the inherent limitations in all control systems,
      no
      evaluation of controls can provide absolute assurance that all control issues
      and instances of fraud, if any, within the Company have been detected. Because
      of the inherent limitations in a cost-effective control system, misstatements
      due to error or fraud may occur and not be detected.




There
      has
      been no change in the Company’s internal control over financial reporting that
      occurred during the Company’s most recent fiscal quarter that has materially
      affected, or is reasonably likely to materially affect, the Company’s internal
      control over financial reporting.




26







**PART
      ll**  **OTHER
      INFORMATION**




**ITEM
      6.**     **EXHIBITS**




The
      following exhibits are incorporated by reference herein or filed herewith.
      The
      warranties, representations  and
      covenants contained in the agreements listed below as exhibits should not be
      relied upon by buyers, sellers or holders of the Company’s securities and are
      not intended as warranties, representations or covenants to any individual
      or
      entity except as specifically set forth in the agreements.




Number
            Title


2.1
            Share
                Exchange Agreement, dated March 15, 2004, between the stockholders
                of
                Pyramid Music Corp., Pyramid Music Corp. and Lexington Barron
                Technologies, Inc. (Incorporated by reference to the Registrants
                Form 8K
                filed April 21, 2004, as amended)2.2
            Agreement
                and Plan of Merger, dated as of September 30, 2004, by and between
                AGU
                Entertainment Corp., a Colorado corporation, and AGU Entertainment
                Corp.,
                a Delaware corporation (incorporated herein by reference to the
                Registrant’s Form 10QSB filed November 12, 2004)3.1
            Certificate
                of Incorporation of AGU Entertainment Corp., a Delaware corporation
                (incorporated herein by reference to the Registrant’s Form 10-QSB filed
                November 12, 2004)3.2
            Bylaws
                of AGU Entertainment Corp., a Delaware corporation (incorporated
                herein by
                reference to the Registrant’s Form 10-QSB filed November 12,
                2004)3.4
            Specimen
                certificate of the common stock of AGU Entertainment Corp., a Delaware
                company (incorporated herein by reference to the Registrant’s Registration
                Statement on Form SB-2, File No. 333-86244).4.1
            Convertible
                Promissory Note dated September 13, 2004, made by AGU Entertainment
                Corp.
                in favor of Galt Financial Corp. (incorporated herein by reference
                to the
                Registrant’s Form 8-K filed September 20, 2004)4.2
            Warrant
                to subscribe for 500,000 shares of common stock of AGU Entertainment
                Corp.
                issued to Galt Financial Corporation (incorporated herein by reference
                to
                the Registrant’s Form 8-K filed September 20, 2004)4.3
            Secured
                Convertible Term Note issued by AGU Entertainment Corp., The Tube
                Music
                Network, Inc., and Pyramid Records International, Inc. to Mitchell
                Entertainment Company (incorporated herein by reference to the
                Registrant’s Form 8-K filed December 29, 2004)4.4
            Common
                Stock Purchase Warrant of AGU Entertainment Corp. issued to Mitchell
                Entertainment Company (incorporated herein by reference to the
                Registrant’s Form 8-K filed December 29, 2004)4.5
            Promissory
                Note issued by AGU Entertainment Corp. to Charley Zeches, in her
                capacity
                as trustee of Lakes Holding Trust U/A (incorporated herein by reference
                to
                the Registrant’s Form 10-KSB filed March 31, 2005)4.6
            Common
                Stock Purchase Warrant of AGU Entertainment Corp. issued to Mitchell
                Entertainment Company (incorporated herein by reference to the
                Registrant’s Form 8-K filed August 2,
                2004)


27


Number
            Title


4.7
            Promissory
                Note issued by AGU Entertainment Corp. to Robert Jaffee (incorporated
                by
                reference to the Registrant’s Form 8-K filed August 2,
                2005).4.8
            Warrant
                to purchase up to 400,000 shares of common stock of AGU Entertainment
                Corp. issued to Robert Jaffee (incorporated by reference to the
                Registrant’s Form 8-K filed August 2, 2005).10.1
            Letter
                Agreement regarding $145,000 Protective Advance, dated April 14,
                2005
                (incorporated herein by reference to the Registrant’s Form 8-K filed April
                20, 2005)10.2
            Letter,
                dated April 22, 2005 from Elizabeth Buntrock (incorporated herein
                by
                reference to the Registrant’s Form 8-K/A filed April 28,
                2005)10.3
            Settlement
                and Mutual Release Agreement, effective April 15, 2005, by and among
                AgU
                Entertainment Corp. and each of its subsidiaries, and Ned Siegel,
                Neil
                Strum and Strum Brothers Investment, LLC. (incorporated herein by
                reference to the Registrant’s Form 8-K filed May 11,
                2005)10.4
            Charter
                Affiliate Affiliation Agreement dated as of April 15, 2005, by and
                between
                The Tube Music Network, Inc. and Raycom Media, Inc. (incorporated
                herein
                by reference to the Registrant’s Form 8-K/A filed May 23, 2005) (This
                agreement has been redacted pursuant to a confidential treatment
                request
                filed with the SEC)10.5
            Technical
                Services Agreement, dated as of December 1, 2004, by and between
                The Tube
                Music Network, Inc. and Skyport Services, Inc. (incorporated herein
                by
                reference to the Registrant’s Form 8-K/A filed May 23, 2005) (This
                agreement has been redacted pursuant to a confidential treatment
                request
                filed with the SEC)10.6
            Loan
                Agreement dated July 25, 2005, David Levy, Les Garland, Victoria
                Levy,
                Marc Gelberg, Greg Catinella and John W. Poling (incorporated herein
                by
                reference to the Registrant’s Form 8-K filed August 2,
                2004).10.7
            Confidential
                Settlement Agreement, dated June 20, 2005, between AGU Entertainment
                Corp., and Jarred Weisfeld and Cherry Jones, individually and doing
                business as JarredCherry Productions LLC (incorporated by reference
                to the
                Registrant’s Form 8-K filed July 8, 2005).10.8*
            Letter
                Agreement, dated August 11, 2005, by and between AGU Entertainment
                Corp.
                and Mitchell Entertainment Company regarding extension of maturity
                date.10.9*
            Letter
                Agreement, dated August 17, 2005, by and between AGU Entertainment
                Corp.
                and Mitchell Entertainment Company regarding extension of due date
                for
                filing of registration statement.31.1
            Certification
                of David C. Levy, Chief Executive Officer of the Company, dated July
                20,
                2006, pursuant to Rule 13a - 14(a)/15d - 14(a) of the Securities
                Exchange
                Act of 1934, as amended, as adopted pursuant to Sections 302 and
                404 of
                the Sarbanes-Oxley Act of 2002.


28


Number
            Title


31.2
            Certification
                of Celestin Spoden, Chief Financial Officer of the Company, dated
                July 20,
                2006, pursuant to Rule 13a - 14(a)/15d - 14(a) of the Securities
                Exchange
                Act of 1934, as amended, as adopted pursuant to Sections 302 and
                404 of
                the Sarbanes-Oxley Act of 2002.32.1
            Certification
                of David C. Levy, Chief Executive Officer of the Company, and Celestine
                F.
                Spoden, Chief Financial Officer of the Company, dated July 20, 2006,
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.


___________________________________




*Previously
      filed.




29


**SIGNATURES**




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




Date:
                July 20, 2006
            /s/
                Celestine F. SpodenName:Celestin
                F. Spoden
              Title:Chief
                Financial Officer






30


Number
              Title
 2.1
              Share
                  Exchange Agreement, dated March 15, 2004, between the stockholders
                  of
                  Pyramid Music Corp., Pyramid Music Corp. and Lexington Barron
                  Technologies, Inc. (Incorporated by reference to the Registrants
                  Form 8K
                  filed April 21, 2004, as amended)2.2
              Agreement
                  and Plan of Merger, dated as of September 30, 2004, by and between
                  AGU
                  Entertainment Corp., a Colorado corporation, and AGU Entertainment
                  Corp.,
                  a Delaware corporation (incorporated herein by reference to the
                  Registrant’s Form 10QSB filed November 12, 2004)3.1
              Certificate
                  of Incorporation of AGU Entertainment Corp., a Delaware corporation
                  (incorporated herein by reference to the Registrant’s Form 10-QSB filed
                  November 12, 2004)3.2
              Bylaws
                  of AGU Entertainment Corp., a Delaware corporation (incorporated
                  herein by
                  reference to the Registrant’s Form 10-QSB filed November 12,
                  2004)3.4
              Specimen
                  certificate of the common stock of AGU Entertainment Corp., a Delaware
                  company (incorporated herein by reference to the Registrant’s Registration
                  Statement on Form SB-2, File No. 333-86244).4.1
              Convertible
                  Promissory Note dated September 13, 2004, made by AGU Entertainment
                  Corp.
                  in favor of Galt Financial Corp. (incorporated herein by reference
                  to the
                  Registrant’s Form 8-K filed September 20, 2004)4.2
              Warrant
                  to subscribe for 500,000 shares of common stock of AGU Entertainment
                  Corp.
                  issued to Galt Financial Corporation (incorporated herein by reference
                  to
                  the Registrant’s Form 8-K filed September 20, 2004)4.3
              Secured
                  Convertible Term Note issued by AGU Entertainment Corp., The Tube
                  Music
                  Network, Inc., and Pyramid Records International, Inc. to Mitchell
                  Entertainment Company (incorporated herein by reference to the
                  Registrant’s Form 8-K filed December 29, 2004)4.4
              Common
                  Stock Purchase Warrant of AGU Entertainment Corp. issued to Mitchell
                  Entertainment Company (incorporated herein by reference to the
                  Registrant’s Form 8-K filed December 29, 2004)4.5
              Promissory
                  Note issued by AGU Entertainment Corp. to Charley Zeches, in her
                  capacity
                  as trustee of Lakes Holding Trust U/A (incorporated herein by reference
                  to
                  the Registrant’s Form 10-KSB filed March 31, 2005)4.6
              Common
                  Stock Purchase Warrant of AGU Entertainment Corp. issued to Mitchell
                  Entertainment Company (incorporated herein by reference to the
                  Registrant’s Form 8-K filed August 2,
                  2004)
  31
  Number
              Title
 4.7
              Promissory
                  Note issued by AGU Entertainment Corp. to Robert Jaffee (incorporated
                  by
                  reference to the Registrant’s Form 8-K filed August 2,
                  2005).4.8
              Warrant
                  to purchase up to 400,000 shares of common stock of AGU Entertainment
                  Corp. issued to Robert Jaffee (incorporated by reference to the
                  Registrant’s Form 8-K filed August 2, 2005).10.1
              Letter
                  Agreement regarding $145,000 Protective Advance, dated April 14,
                  2005
                  (incorporated herein by reference to the Registrant’s Form 8-K filed April
                  20, 2005)10.2
              Letter,
                  dated April 22, 2005 from Elizabeth Buntrock (incorporated herein
                  by
                  reference to the Registrant’s Form 8-K/A filed April 28,
                  2005)10.3
              Settlement
                  and Mutual Release Agreement, effective April 15, 2005, by and
                  among AgU
                  Entertainment Corp. and each of its subsidiaries, and Ned Siegel,
                  Neil
                  Strum and Strum Brothers Investment, LLC. (incorporated herein
                  by
                  reference to the Registrant’s Form 8-K filed May 11,
                  2005)10.4
              Charter
                  Affiliate Affiliation Agreement dated as of April 15, 2005, by
                  and between
                  The Tube Music Network, Inc. and Raycom Media, Inc. (incorporated
                  herein
                  by reference to the Registrant’s Form 8-K/A filed May 23, 2005) (This
                  agreement has been redacted pursuant to a confidential treatment
                  request
                  filed with the SEC)10.5
              Technical
                  Services Agreement, dated as of December 1, 2004, by and between
                  The Tube
                  Music Network, Inc. and Skyport Services, Inc. (incorporated herein
                  by
                  reference to the Registrant’s Form 8-K/A filed May 23, 2005) (This
                  agreement has been redacted pursuant to a confidential treatment
                  request
                  filed with the SEC)10.6
              Loan
                  Agreement dated July 25, 2005, David Levy, Les Garland, Victoria
                  Levy,
                  Marc Gelberg, Greg Catinella and John W. Poling (incorporated herein
                  by
                  reference to the Registrant’s Form 8-K filed August 2,
                  2004).10.7
              Confidential
                  Settlement Agreement, dated June 20, 2005, between AGU Entertainment
                  Corp., and Jarred Weisfeld and Cherry Jones, individually and doing
                  business as JarredCherry Productions LLC (incorporated by reference
                  to the
                  Registrant’s Form 8-K filed July 8, 2005).10.8*
              Letter
                  Agreement, dated August 11, 2005, by and between AGU Entertainment
                  Corp.
                  and Mitchell Entertainment Company regarding extension of maturity
                  date.10.9*
              Letter
                  Agreement, dated August 17, 2005, by and between AGU Entertainment
                  Corp.
                  and Mitchell Entertainment Company regarding extension of due date
                  for
                  filing of registration statement.31.1
              Certification
                  of David C. Levy, Chief Executive Officer of the Company, dated
                  July 20,
                  2006, pursuant to Rule 13a - 14(a)/15d - 14(a) of the Securities
                  Exchange
                  Act of 1934, as amended, as adopted pursuant to Sections 302 and
                  404 of
                  the Sarbanes-Oxley Act of 2002.
  32
  Number
              Title
 31.2
              Certification
                  of Celestin Spoden, Chief Financial Officer of the Company, dated
                  July 20,
                  2006, pursuant to Rule 13a - 14(a)/15d - 14(a) of the Securities
                  Exchange
                  Act of 1934, as amended, as adopted pursuant to Sections 302 and
                  404 of
                  the Sarbanes-Oxley Act of 2002.32.1
              Certification
                  of David C. Levy, Chief Executive Officer of the Company, and Celestine
                  F.
                  Spoden, Chief Financial Officer of the Company, dated July 20,
                  2006,
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002.
 ___________________________________
  *Previously
        filed.
   33