**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**




Washington,
      D.C. 20549




**FORM
      10-QSB/A**


**(Amendment
      No. 1)**


(Mark
      one)




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




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




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15 (d) OF THE 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 organization)**
            **(IRS
                Employer Identification No.)****1451
                West Cypress Creek Road**
              **Ft.
                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
x No o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes o No x




The
      number of shares of the issuer’s common stock, par value $0.0001 per share,
      outstanding as of November 30, 2005 was 25,605,615.




Transitional
      Small Business Disclosure Format (check one):  Yes
oNox








**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. 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 to co-founders
      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 September 30, 2005, initially filed with the Securities and
      Exchange Commission on December 9, 2005 (the “Initial Filing”), is being filed
      to reflect the restatement of our  unaudited condensed consolidated balance
      sheet at September 30, 2005 and our unaudited condensed consolidated statements
      of operations, condensed consolidated statements of changes in stockholders’
equity and condensed consolidated statements of cash flows for the three and/or
      nine months ended September 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. We have
      amended Item 5 of Part II to disclose the entry into an agreement with Crawford
      Communications, Inc. This Form 10-QSB/A only amends and restates Items 1, 2,
      and
      3 of Part I and Item 5 of Part II 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**


**Page**PART
                  1. UNAUDITED FINANCIAL INFORMATION
              
              
              2Item
                  1. FINANCIAL STATEMENTS
              
              
              2Condensed
                  Consolidated Balance Sheets as of September 30, 2005 (unaudited)
                  and
                  December 31, 2004
              
              
              2Condensed
                  Consolidated Statements of Operations for the Three and Nine Months
                  Ended
                  September 30, 2005 and 2004 (Unaudited)
              
              
              3Condensed
                  Consolidated Statement of Changes in Stockholders’ Equity (Deficiency) for
                  the Nine Months Ended
                September
                  30, 2005 (Unaudited)
              
              
              4Condensed
                  Consolidated Statements of Cash Flows for the Nine Months Ended
                  September
                  30, 2005 and 2004  (unaudited)
              
              
              5Notes
                  to Condensed Consolidated Financial Statements September 30, 2005
                  (unaudited)
              
              
              6Item
                  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                  OF OPERATIONS.
              
              
              20Item
                  3. CONTROLS AND PROCEDURES
              
              
              28PART
                  II. OTHER INFORMATION
              
              
              28Item
                  5. OTHER INFORMATION
              
              
              28Item
                  6. EXHIBITS
              
              
              30SIGNATURES
              
              
              34




i




**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.







**PART
      1. UNAUDITED FINANCIAL INFORMATION**




**Item
      1.****FINANCIAL
      STATEMENTS**




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




**Condensed
      Consolidated Balance Sheets**


**As
      of September 30, 2005 (unaudited) and December 31,
      2004**




**September
                30, 2005**
            
            **December
                31,**
              **2004****(Unaudited)
                (RESTATED**)AssetsCurrent
                Assets:Cash
            
            $
            4,796
            
            $
            771,533Accounts
                receivable, net of allowance of $109,341 and $0
            
            
            500,956
            
            
            507,482Prepaid
                expenses
            
            
            80,617
            
            
            225,037Total
                current assets
            
            
            586,369
            
            
            1,504,052Property
                and equipment, net of accumulated depreciation of $255,717
                and $103,442
            
            
            566,514
            
            
            246,144Property
                and equipment from discontinued operations, net of accumulated
                depreciation of $96,984 and $19,818
            
            
            8,847,212
            
            
            8,864,229Intangibles,
                net of accumulated amortization
            
            
            1,184,213
            
            
            913,735Other
                assets
            
            
            143,296
            
            
            164,737Total
                assets
            
            $
            11,327,604
            
            $
            11,692,897Liabilities
                and Stockholders’ (Deficiency) EquityCurrent
                Liabilities:Accounts
                payable
            
            $
            1,430,625
            
            $
            501,514Accounts
                payable - related parties
            
            
            339,065
            
            
            169,258Notes
                payable, related parties - current portion
            
            
            1,468,008
            
            
            445,642Convertible
                notes payable, net of unamortized discount
            
            
            1,154,236
            
            
            150,000Convertible
                notes payable from discontinued operations
            
            
            7,000,000
            
            
            7,000,000Equipment
                note - current portion
            
            
            12,769
            
            
            12,140Capital
                leases payable - current portion
            
            
            8,282
            
            
            13,881Accrued
                expenses
            
            
            1,496,742
            
            
            910,418Other
                current liabilities
            
            
            8,056
            
            
            36,965Total
                current liabilities
            
            
            12,917,783
            
            
            9,239,818Capital
                leases payable - long term portion
            
            
            6,099
            
            
            11,876Equipment
                note - long term portion
            
            
            27,012
            
            
            36,668Convertible
                notes payable - net of unamortized discounts
            
            
            2,292,445
            
            
            854,178Total
                liabilities
            
            
            15,243,339
            
            
            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, 25,605,615
                and
                23,392,576 shares issued and outstanding
            
            
            2,561
            
            
            2,339Additional
                paid-in capital
            
            
            16,671,326
            
            
            8,249,675Accumulated
                deficit
            
            
            (20,589,622
            )
            
            (6,701,657
            )Total
                stockholders’ (deficiency) equity
            
            
            (3,915,735
            )
            
            1,550,357Total
                liabilities and stockholders’ (deficiency) equity
            
            $
            11,327,604
            
            $
            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 Nine Months Ended September 30, 2005 and
      2004**


**(Unaudited)**


**Three
                  Months**
              
              **Nine
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004****(RESTATED)**
              
              
              
              **(RESTATED)**Revenues
              
              $
              76,670
              
              $
              —
              
              $
              252,751
              
              $
              15,000Cost
                  of sales and services performed
              
              
              7,223
              
              
              —
              
              
              36,598
              
              
              —Gross
                  profit
              
              
              69,447
              
              
              —
              
              
              216,153
              
              
              15,000Operating
                  ExpensesPromotion
                  and advertising
              
              
              58,206
              
              
              575,618
              
              
              167,068
              
              
              1,072,849Depreciation
                  and amortization
              
              
              171,011
              
              
              56,970
              
              
              348,587
              
              
              123,958Other
                  general and administrative costs
              
              
              1,611,755
              
              
              1,168,610
              
              
              8,061,901
              
              
              3,030,132Total
                  operating expenses
              
              
              1,840,972
              
              
              1,801,198
              
              
              8,577,556
              
              
              4,226,939Operating
                  loss
              
              
              (1,771,525
              )
              
              (1,801,198
              )
              
              (8,361,403
              )
              
              (4,211,939
              )Interest
                  expense
              
              
              2,192,470
              
              
              54,752
              
              
              5,013,562
              
              
              99,905Other
                  income
              
              
              —
              
              
              (10,760
              )
              
              —
              
              
              (10,760
              )Loss
                  from continuing operations
              
              
              (3,963,995
              )
              
              (1,845,190
              )
              
              (13,374,965
              )
              
              (4,301,084
              )Loss
                  from discontinued operations
              
              
              (189,682
              )
              
              —
              
              
              (513,000
              )
              
              —Net
                  loss
              
              $
              (4,153,677
              )
              $
              (1,845,190
              )
              
              (13,887,965
              )
              $
              (4,301,084
              )Basic
                  and diluted loss per share
              
              $
              (0.16
              )
              $
              (0.09
              )
              $
              (0.56
              )
              $
              (0.22
              )Loss
                  per share from continuing operations
              
              $
              (0.15
              )
              $
              (0.09
              )
              $
              (0.54
              )
              $
              (0.22
              )Loss
                  per share from discontinued operations
              
              $
              (0.01
              )
              $
              (0.00
              )
              $
              (0.02
              )
              $
              (0.00
              )$
              (0.16
              )
              $
              (0.09
              )
              $
              (0.56
              )
              $
              (0.22
              )Weighted
                  average common shares outstanding - Basic and diluted
              
              
              25,430,713
              
              
              21,509,819
              
              
              24,592,778
              
              
              19,244,705




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 (Deficiency)**


**For
      the Nine Months Ended September 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 stock for services
            
            
            398,683
            
            
            40
            
            
            1,011,526
            
            
            —
            
            
            1,011,566Issuance
                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
            
            
            405,000
            
            
            41
            
            
            (41
            )
            
            —
            
            
            —Common
                stock issued in connection with the acquisition of property plant
                and
                equipment
            
            
            97,800
            
            
            10
            
            
            244,490
            
            
            —
            
            
            244,500Issuance
                of warrants in connection with the issuance of convertible debt
            
            
            —
            
            
            —
            
            
            4,016,142
            
            
            —
            
            
            4,016,142Issuance
                of shares in settlement of liabilities
            
            
            121,875
            
            
            12
            
            
            337,488
            
            
            —
            
            
            337,500Issuance
                of shares of common stock to directors for services
            
            
            20,000
            
            
            2
            
            
            54,248
            
            
            —
            
            
            54,250Other
                issuances of common stock to co-founders as an adjustment of shares
                previously issued
            
            
            500,000
            
            
            50
            
            
            1,179,950
            
            
            —
            
            
            1,180,000Issuances
                of shares of common stock in connection with amending the terms of
                certain
                notes payable
            
            
            60,000
            
            
            6
            
            
            137,994
            
            
            —
            
            
            138,000Issuance
                of shares of common stock as interest expense
            
            
            8,575
            
            
            —
            
            
            21,301
            
            
            —
            
            
            21,301Issuance
                of shares of common stock to a director as an adjustment of shares
                previously issued
            
            
            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
            
            
            12
            
            
            263,288
            
            
            —
            
            
            263,300Net
                loss (As Restated)
            
            
            —
            
            
            —
            
            
            —
            
            
            (13,887,965
            )
            
            (13,887,965
            )Balance
                at September 30, 2005 (As Restated)
            
            
            25,605,615
            
            $
            2,561
            
            $
            16,671,326
            
            $
            (20,589,622
            )
            $
            (3,915,735
            )




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 Nine Months Ended September 30, 2005 and 2004**


**(Unaudited)**


**2005**
                
                **2004****(restated)**Cash
                    flows from operating activities:Net
                    loss
                
                $
                (13,374,965
                )
                $
                (4,301,084
                )Adjustments
                    to reconcile net loss to net cash used in operating
                    activities:Depreciation
                    and amortization
                
                
                430,962
                
                
                123,958Common
                    stock issued for services
                
                
                1,123,890
                
                
                245,077Common
                    stock issued as compensation to a director
                
                
                1,047,840
                
                
                —Common
                    stock issued as settlement expense
                
                
                1,180,000
                
                
                —Loss
                    from discontinued operations
                
                
                (513,000
                )
                
                —Amortization
                    of discount on note payable
                
                
                4,189,409
                
                
                11,644Amortization
                    of deferred financing fees
                
                
                55,370
                
                
                —Decrease
                    in accounts receivable
                
                
                6,526
                
                
                30,007Decrease
                    (increase) in prepaid expenses
                
                
                144,417
                
                
                (5,037
                )Increase
                    in other assets
                
                
                (33,926
                )
                
                (122,219
                )Increase
                    in accounts payable and accrued liabilities
                
                
                2,022,743
                
                
                644,575(Decrease)
                    increase in other liabilities
                
                
                (28,909
                )
                
                30,000Net
                    cash used in operating activities
                
                
                (3,749,643
                )
                
                (3,343,079
                )Cash
                    flows from investing activities:Disbursements
                    for intangibles
                
                
                —
                
                
                (151,035
                )Disbursements
                    for property and equipment
                
                
                (288,293
                )
                
                (206,137
                )Net
                    cash used in investing activities
                
                
                (288,293
                )
                
                (357,172
                )Cash
                    flows from financing activities:Payment
                    of notes payable
                
                
                (502,464
                )
                
                (8,439
                )Proceeds
                    from notes payable to related parties
                
                
                1,026,003
                
                
                281,910Payment
                    of notes payable to related parties
                
                
                (5,900
                )
                
                (40,094
                )Payment
                    on capital leases
                
                
                (11,376
                )
                
                (8,474
                )Proceeds
                    from the sale of common stock
                
                
                —
                
                
                60,000Proceeds
                    from convertible and other notes payable
                
                
                2,764,936
                
                
                3,279,000Net
                    cash provided by financing activities
                
                
                3,271,199
                
                
                3,563,903Net
                    (decrease) increase in cash
                
                
                (766,737
                )
                
                (136,348
                )Cash,
                    beginning of period
                
                
                771,533
                
                
                137,048Cash,
                    end of period
                
                $
                4,796
                
                $
                700Supplemental
                    disclosure of cash flow information:Cash
                    paid for income taxes
                
                $
                —
                
                $
                —Cash
                    paid for interest
                
                $
                537,295
                
                $
                16,404Non-cash
                    financing activities:Common
                    stock issued as payment for services
                
                $
                1,173,290
                
                $
                245,077Common
                    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
                
                $
                —
                
                $
                14,637Common
                    stock issued for financing expenses
                
                $
                159,301
                
                $
                —Warrants
                    issued for convertible debt
                
                $
                4,016,142
                
                $
                —




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**


**September
      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.




**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.




6




The
      accompanying financial statements reflect the results of the operations of
      the
      Company and its subsidiaries for the three and nine months ended September
      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, September 30, 2005 unaudited
      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 expenses in
      connection with the settlement of a dispute.




7




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




Loss
                  from continuing operations as originally reported at September
                  30,
                  2005
              
              $
              (4,153,677
              )Less;Reclassification
                  of loss attributable to discontinued operations
              
              
              189,682Loss
                  from continuing operations at September 30, 2005 as
                  restated
              
              $
              (3,963,995
              )Loss
                  from Discontinued operations
              
              $
              (189,682
              )




***The
      following is a summary of the unaudited restatements for the nine months ended
      September 30, 2005*** *:*


Loss
                  from continuing operations as originally reported at September
                  30,
                  2005
              
              $
              (11,660,125
              )Less;Additional
                  compensation expense recorded in connection with theissuance
                  of common stock, (See Note 4)
              
              
              (1,047,840
              )Additional
                  expenses in connection with the settlement of a dispute,(See
                  Note 4)
              
              
              (1,180,000
              )Reclassification
                  of loss attributable to discontinued operations
              
              
              513,000Loss
                  from continuing operations at September 30, 2005 as
                  restated
              
              $
              (13,374,965
              )Loss
                  from Discontinued operations
              
              $
              (513,000
              )




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





***Balance
      Sheet (unaudited) as of September 30, 2005*** **:**


***Previously***
                ***Reported***
              
              ***Increase***
                ***(Decrease)***
              
              ***Restated***Current
                  Assets
              
              $
              9,433,581
              
              $
              (8,847,212
              )
              $
              586,369Property
                  and Equipment, from discontinued operations
              
              
              —
              
              
              8,847,212
              
              
              8,847,212All
                  Other Assets
              
              
              1,894,023
              
              
              —
              
              
              1,894,023Total
                  Assets
              
              $
              11,327,604
              
              
              —
              
              $
              11,327,604Current
                  Liabilities
              
              $
              12,917,783
              
              
              —
              
              $
              12,917,783Long
                  Term Debt
              
              
              2,325,556
              
              
              
              
              
              2,325,556Total
                  Liabilities
              
              
              15,243,339
              
              
              —
              
              
              15,243,339Stockholders’
                  Deficit:Common
                  Stock
              
              
              2,561
              
              
              —
              
              
              2,561Additional
                  paid-in-capital
              
              
              14,443,486
              
              
              2,227,840
              
              
              16,671,326Accumulated
                  deficit
              
              
              (18,361,782
              )
              
              (2,227,840
              )
              
              (20,589,622
              )Total
                  Liabilities and Stockholders’ Deficit
              
              $
              11,327,604
              
              $
              —
              
              $
              11,327,604





8




***Statement
      of Operations (unaudited) for the Three Months Ended September 30,
      2005:***


***Previously
                  Reported***
              
              ***Increase
                  (Decrease)***
              
              ***Restated***Revenue
              
              $
              94,080
              
              $
              (17,410
              )
              $
              76,670Cost
                  of Sales
              
              
              7,223
              
              
              —
              
              
              7,223Gross
                  Profit
              
              
              86,857
              
              
              (17,410
              )
              
              69,447Total
                  Operating Expenses
              
              
              1,895,755
              
              
              (
                  54,783
              )
              
              1,840,972Loss
                  from Operations
              
              
              (1,808,898
              )
              
              (37,373
              )
              
              (1,771,525
              )Interest
                  Expense
              
              
              2,344,779
              
              
              152,309
              
              
              2,192,470Loss
                  from Continuing Operations
              
              
              (4,153,677
              )
              
              (189,682
              )
              
              (3,963,995
              )Loss
                  from Discontinued Operations
              
              
              —
              
              
              189,682
              
              
              (189,682
              )Net
                  Loss
              
              $
              (4,153,677
              )
              $
              —
              
              $
              (4,153,677
              )




***Statement
      of Operations (unaudited) for the nine Months Ended September 30,
      2005:***


***Previously***
                ***Reported***
              
              ***Increase***
                ***(Decrease)***
              
              ***Restated***Revenue
              
              $
              352,062
              
              $
              (99,311
              )
              $
              252,751Cost
                  of Sales
              
              
              57,306
              
              
              (20,708
              )
              
              36,598Gross
                  Profit
              
              
              294,756
              
              
              (78,603
              )
              
              216,153Total
                  Operating Expenses
              
              
              6,513,178
              
              
              2,064,378
              
              
              8,577,556Loss
                  from Operations
              
              
              (6,218,422
              )
              
              (2,142,981
              )
              
              (8,361,403
              )Interest
                  Expense
              
              
              5,441,703
              
              
              (428,141
              )
              
              5,013,562Loss
                  from Continuing Operations
              
              
              (11,660,125
              )
              
              (1,714,840
              )
              
              (13,374,965
              )Loss
                  from Discontinued Operations
              
              
              —
              
              
              (513,000
              )
              
              (513,000
              )Net
                  Loss
              
              $
              (11,660,125
              )
              $
              (2,227,840
              )
              $
              (13,887,965
              )





9




***Shareholders
      Equity (unaudited) as of September 30, 2005*** ****


***Number
                    of Shares***
                ****
                ***Common
                    Stock***
                ****
                ***Additional
                    Paid in Capital***
                ****
                ***Accumulated
                    Deficit***
                ****
                ***Total
                    Stockholders Equity***
                ****
  Balance
                    at September 30, 2005, as previously reported
                
                
                25,605,615
                
                $
                2,561
                
                $
                14,443,486
                
                $
                (18,361,782
                )
                $
                (3,915,735
                )Additional
                    compensation expense and settlement expenses recorded from the
                    issuance of common stock (See Note 4)
                
                
                —
                
                
                —
                
                
                2,227,840
                
                
                (2,227,840
                )
                
                **—**Balance
                    at September 30, 2005, as restated
                
                
                25,605,615
                
                $
                2,561
                
                $
                16,671,326
                
                $
                (20,589,622
                )
                $
                (3,915,735
                )


10





**2.**  **INTANGIBLES**




Intangible
      assets at September 30, 2005 are as follows




**Value
                at acquisition**
            
            **Accumulated
                amortization**
            
            **Balance
                at**
              **September
                30, 2005**Distribution
                agreement(see
                note 3)
            
            $
            350,000
            
            $
            (174,800
            )
            $
            175,200Contract
                rights
            
            
            472,000
            
            
            (23,600
            )
            
            448,400Other
                intangibles
            
            
            651,035
            
            
            (90,422
            )
            
            560,613Total
                intangibles
            
            $
            1,473,035
            
            $
            (288,822
            )
            $
            1,184,213




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,
      are being amortized over a five year period beginning in July of 2005, 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 interstitials 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
            
            $
            107,1532006
            
            
            428,2122007
            
            
            340,6122008
            
            
            166,7372009
            
            
            94,4002010
            
            
            47,200




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




**Convertible
      Notes**




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




**2005**
            
            **2004**First
                mortgage note secured by real property
            
            $
            6,750,000
            
            $
            7,000,000Second
                mortgage note secured by real property
            
            
            3,000,000
            
            
            3,000,000Other
                convertible notes and subordinated debentures
            
            
            3,994,236
            
            
            1,475,00013,744,236
            
            
            11,475,000Less:
                current portion
            
            
            (8,154,236
            )
            
            (7,150,000
            )Less:
                Discount on convertible mortgage and notes payable
            
            
            (3,297,555
            )
            
            (3,470,822
            )Notes
                payable, long term portion, net of discounts
            
            $
            2,292,445
            
            $
            854,178





11




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. The remaining balance of
      the
      note matures on December 22, 2006. 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 did not pay 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, 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 anon-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. The September
      Payment was made in September of 2005.




12


During
      the first nine months of 2005, the Company issued convertible promissory notes
      to various accredited investors in the aggregate principal amount of $715,000.
      These 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. The Company issued a convertible promissory note to an
      accredited investor in the aggregate principal amount of $50,000, which pays
      interest at 4 1/2% and is due on the second anniversary issuance and is
      convertible into shares of the Company’s common stock at the option of each
      holder at a conversion price of $2.00 per share. The Company issued a
      convertible promissory note to an accredited investor in the aggregate principal
      amount of $500,000, which pays interest at 4 1/2% and is due on January 1,
      2007
      and is convertible into shares of the Company’s common stock at the option of
      each holder at a conversion price of $2.00 per share. The Company also issued
      an
      additional $700,000 of promissory notes on September 1, 2005 to a significant
      stockholder, which mature on various dates between September 10, 2005 and
      December 15, 2005. The Company also issued a 10% promissory note of $150,000
      to
      an accredited investor on June 27, 2005, which is due on its second anniversary.




**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 September 30, 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.




13




During
      the first nine months of 2005, the Company received loans in the aggregate
      amount of $977,803 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 nine months of
      2005 in the aggregate amount of $79,100. These loans pay interest at 10% and
      are
      due on September 30, 2005 and December 31, 2005. During the third quarter of
      2005, $5,900 of these loans was repaid. At September 30, 2005, $30,000 of these
      loans was outstanding.




**4.**  **STOCKHOLDERS’
      EQUITY**




During
      the first nine months of 2005, the Company issued 398,683 shares of common
      stock
      to third parties in exchange for services performed. These services were valued
      at $1,011,566 and this amount was charged to earnings during the period. The
      Company also issued 65,540 shares of common stock to employees and directors
      during the first nine months of 2005 and recorded compensation expense of
      $161,724. 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 having a fair value of $1,047,840 (See Note 1
      Restatement) and 111,566 shares of common stock in connection with the terms
      of
      his termination agreement and recorded compensation expense of $263,300, 405,000
      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 for $244,500 and 121,875 shares of common stock in settlement of
      a
      liability of $337,500. Also during this period, the Company issued 60,000 shares
      in connection with amending the terms of certain notes payable and 8,575 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 a settlement
      adjustment to the shares allocated to the original investors of the Company,
      having a fair value of $1,180,000 (See Note 1 Restatement).




During
      the first nine months of 2005, the Company issued 2,395,000 detached common
      stock purchase warrants to acquire the Company’s common stock in connection with
      the issuance of convertible promissory notes. The warrants have an exercise
      price between $2.00 and $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 inconsideration
      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 300,000 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 nine months of
      2005
      was $4,016,042, 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. The unamortized balance of the discount for these notes as of
      September 30, 2005 was $1,170,654. No warrants were exercised during the first
      nine months of 2005 and 7,880,911 warrants were outstanding at September 30,
      2005. The unamortized balance of the discount for all notes as of September
      30,
      2005 was $3,297,555.




14





**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 and
      six
      months ended  September 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
      September 1, 2005, the Company entered into an agreement to sell the Lauderdale
      Property to a local real estate developer. The purchase price to be received
      for
      the Lauderdale Property is $15.0 million and is expected to be paid in cash.
      The
      purchaser had until November 1, 2005 to examine the Lauderdale Property, and
      if
      for any reason the purchaser was not satisfied with its investigation, then
      prior to November 1, 2005, the purchaser was required to notify the Company
      in
      writing that it was exercising its right to terminate the purchase agreement.
      Because the Company did not receive such a notice prior to November 1, the
      $1.5
      million deposit placed into escrow by the purchaser upon executing the purchase
      agreement became non-refundable.




Pursuant
      to the terms of the purchase agreement, the closing date is expected to be
      prior
      to December 31, 2005. If the transaction fails to close due to a default on
      the
      part of the purchaser, the deposit will be delivered by the escrow agent to
      the
      Company as liquidated damages, and if the transaction fails to close due to
      a
      default on the part of the Company, at the option of the purchaser, the Deposit
      will be returned to the purchaser. Any such return will not limit the
      purchaser’s right to maintain an action for specific performance by the Company.
      The Company may be required to obtain stockholder approval for the sale of
      the
      Lauderdale Property.




In
      connection with the purchase and sale agreement for the Lauderdale Property,
      the
      purchaser agreed to loan $2.5 million to the Company, to be advanced in three
      tranches upon the Company meeting certain conditions. The first two tranches,
      totaling $1.5 million, were received by the Company on October 21, 2005. The
      third tranche of $1.0 million was received by the Company on November 17, 2005.




The
      loan
      will accrue interest at a rate per annum of 6.5% with interest due and payable
      monthly; provided however, in the event that no event of default exists, the
      interest will be deferred and paid upon the maturity of the Loan. The Loan
      will
      mature no later than a date that is earlier to occur of (i) the date of closing
      of the purchase and sale of the Lauderdale Property and (ii) December 23, 2005.
      In addition, the Loan will be secured by a third mortgage on the Lauderdale
      Property. The proceeds of the loan were used to pay down certain indebtedness
      and for working capital to continue the Company’s business operations.




The
      Company’s Board of Directors and management determined that it was in the best
      interest of the Company’s stockholders to abandon the AGU Studios concept and
      use the proceeds from the sale of the property to help alleviate the Company’s
      liquidity crisis, retire currently maturing debt, and provide additional funds
      for working capital (See Note 9). The Company’s Board of Directors and
      management believe that selling the Lauderdale Property and focusing on the
      Company’s core businesses, the Tube Music Network Inc. and AGU Music, Inc. will
      attract additional investors to the Company. The Company is currently unable
      to
      predict the costs of relocating its continuing operations from the Lauderdale
      Property into a permanent replacement facility.




15


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, and 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. The complaint filed by the Plaintiffs
      has
      since been dismissed.




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 the Company’s operations and other entertainment industry
      organizations. However, the Company’s continued liquidity problem requires the
      Company to sell the Lauderdale Property and cease operations with respect to
      AGU
      Studios (see Note 6 for further information). 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.




16




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




**Three
                Months**
            
            **Nine
                Months****2005**
            
            **2004**
            
            **2005**
            
            **2004**RevenuesAGU
                Music
            
            $
            76,670
            
            $
            —
            
            $
            252,751
            
            $
            15,000The
                Tube
            
            
            —
            
            
            —
            
            
            —
            
            
            —Consolidated
                revenues before discontinued operations
            
            
            76,670
            
            
            —
            
            
            252,751
            
            
            15,000Discontinued
                operations
            
            
            17,410
            
            
            —
            
            
            99,311
            
            
            —Consolidated
                revenues
            
            $
            94,080
            
            $
            —
            
            $
            352,062
            
            $
            15,000Operating
                lossAGU
                Music
            
            
            (85,586
            )
            
            (551,837
            )
            
            (492,966
            )
            
            (1,504,418
            )The
                Tube
            
            
            (470,993
            )
            
            (709,217
            )
            
            (2,365,665
            )
            
            (1,485,253
            )Segment
                loss before corporate and discontinued operations
            
            
            (556,579
            )
            
            (1,261,054
            )
            
            (2,858,631
            )
            
            (2,989,671
            )Corporate
            
            
            (1,214,946
            )
            
            (540,144
            )
            
            (5,502,772
            )
            
            (1,222,268
            )Discontinued
                operations
            
            
            (189,682
            )
            
            —
            
            
            (513,000
            )
            
            —Consolidated
                operating loss
            
            $
            (1,961,207
            )
            $
            (1,801,198
            )
            $
            (8,874,403
            )
            $
            (4,211,939
            )




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




**Three
                Months**
            
            **Nine
                Months****2005**
            
            **2004**
            
            **2005**
            
            **2004**Total
                segment loss
            
            $
            (556,579
            )
            $
            (1,261,054
            )
            $
            (2,858,631
            )
            $
            (2,989,671
            )Operating
                loss - corporate
            
            
            (1,214,946
            )
            
            (540,144
            )
            
            (5,502,772
            )
            
            (1,222,268
            )Loss
                from discontinued operations
            
            
            (189,682
            )
            
            —
            
            
            (513,000
            )
            
            —Other
                income
            
            
            —
            
            
            10,760
            
            
            —
            
            
            10,760Interest
                expense
            
            
            (2,192,470
            )
            
            (54,752
            )
            
            (5,013,562
            )
            
            (99,905
            )Loss
                before income tax
            
            $
            (4,153,677
            )
            $
            (1,845,190
            )
            $
            (13,887,965
            )
            $
            (4,301,084
            )




17




**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.




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




During
      the first nine months of 2005, the Company received loans in the aggregate
      amount of $977,803 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 nine months of
      2005 in the aggregate amount of $48,200. These loans pay interest at 10% and
      are
      due December 31, 2005. In addition to the ARK 21 Notes, as of September 30,
      2005, the Company had outstanding loans payable to related parties in the
      aggregate amount of $114,400 that were due Nov. 1, 2004. 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 September 30, 2005, the Company received
      various consulting services totaling approximately $193,000 from two
      stockholders. At September 30, 2005 approximately $124,000 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 September 30, 2005 was
      approximately $193,000.




Accounts
      payable to related parties at September 30, 2005 totaled approximately $339,000.
      Included in this amount was $6,700 in director’s fees payable to a certain
      director and a $5,000 director’s fee payable to a second director.




During
      October and November 2005, the Company received various loans from two
      significant stockholders totaling $111,000. These loans were repaid during
      the
      same period from proceeds received in connection with the sale of the Lauderdale
      property.




18




**11.**  **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 $12.3 million and a stockholders deficiency of approximately
      $3.9
      million at September 30, 2005, as well as a net loss and net cash used in
      operations of approximately $13.9 million and $3.8 million, respectively, for
      the nine months ending September 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 sale of the Lauderdale Property.




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.




**12.**  **SUBSEQUENT
      EVENTS**




In
      connection with the purchase and sale agreement for the Lauderdale Property
      (see
      Note 6), the purchaser agreed to loan $2.5 million to the Company, to be
      advanced in three tranches upon the Company meeting certain conditions. The
      first two tranches, totaling $1.5 million, was received by the Company on
      October 21, 2005. The third tranche of $1.0 million was received by the Company
      on November 17, 2005.




On
      October 21, 2005, the Company issued a promissory note in the aggregate
      principal amount of $250,000 (the “Buntrock Note”) to the holder of the first
      mortgage note secured by the Lauderdale Property, as consideration for past
      defaults by the Company under the first mortgage. The Company did not receive
      any additional cash proceeds in connection with the Buntrock Note. The Buntrock
      Note bears interest at the applicable Internal Revenue Service federal interest
      rate per annum, as adjusted from time to time, and matures on the earlier of
      (i)
      the date of closing of the purchase and sale of the Lauderdale Property or
      (ii)
      December 23, 2005. In the event of the continuation of any default in payment
      for a period of ten days after such payment is due, the holder of the Buntrock
      Note may declare the entire unpaid principal and interest immediately due and
      payable. In order to compensate the holder of the Buntrock Note for loss and
      expense occasioned by handling delinquent payments, the Company must pay, in
      addition to any interest, a service charge equal to 5% of the amount of any
      payment received by the holder ten days or more after the due date thereof.
      Upon
      the occurrence of any default under the Buntrock Note or any default under
      the
      loan documents related to the first mortgage on the Lauderdale Property, the
      Company must pay the holder, on demand, interest on all sums outstanding under
      the Buntrock Note at the lesser of (i) the maximum rate permitted by applicable
      law or (ii) 18% per annum.




In
      addition, in connection with the Buntrock Note, the Company and the holder
      of
      the first mortgage note on the Lauderdale Property entered into an agreement
      pursuant to which the holder agreed to waive certain defaults under the first
      mortgage and the Company agreed to issue 175,000 shares of the Company’s common
      stock to the holder and 125,000 shares the holder’s legal counsel.




19


**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.




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.




20


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 and beyond 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.




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. 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 nine 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 were
      to have taken place. However, due to the Company’s continuing liquidity problems
      (see Liquidity and Capital Resources), we have decided to sell the Lauderdale
      Property, and use the proceeds, $2.5 million of which the Company received
      in
      October and November 2005 in the form of a bridge loan from the purchaser,
      to
      pay down maturing debt and for working capital and to discontinue the operations
      of AGU Studios.




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




**Restatement**




The
      Company has restated its previously issued, September 30, 2005 unaudited
      (condensed) consolidated financial statements for matters related to the
      following previously reported items: discontinued operations; issuance of stock
      as compensation to a director in connection with an employment contract and
      the
      issuance of stock in connection with the 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.




21




Our
      financial condition and operating results, specifically a working capital
      deficiency of approximately $12.3 million, a stockholders deficiency of
      approximately $3.9 million and de-minimus cash on hand as of September 30,
      2005,
      as well as a net loss and net cash used in operations of approximately $13.9
      million and $3.8 million, respectively, for the nine months ending September
      30,
      2005 raise substantial doubt about our ability to continue to operate as a
      going
      concern.




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. 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 $6,948,000 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 $3,344,000 of the remaining convertible promissory notes
      mature between the fourth quarter of 2006 and the third 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, which was 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.




22




On
      September 1, 2005, we entered into an agreement to sell the Lauderdale Property
      to a local real estate developer. The purchase price to be received for the
      Lauderdale Property is $15.0 million and is expected to be received in cash.
      The
      purchaser had until November 1, 2005 to examine the Lauderdale Property, and
      if
      for any reason the purchaser was not satisfied with its investigation, then
      prior to November 1, 2005, the purchaser was required to notify us in writing
      that it was exercising its right to terminate the purchase agreement. Because
      we
      did not receive such a notice prior to November 1, the $1.5 million deposit
      placed into escrow by the purchaser upon executing the purchase agreement became
      non-refundable.




Pursuant
      to the terms of the purchase agreement, the closing date is expected to be
      prior
      to December 31, 2005. If the transaction fails to close due to a default on
      the
      part of the purchaser, the deposit will be delivered by the escrow agent to
      us
      as liquidated damages, and if the transaction fails to close due to a default
      on
      our part, at the option of the purchaser, the deposit will be returned to the
      purchaser. Any such return will not limit the purchaser’s right to maintain an
      action for specific performance by us. We may also be required to obtain
      stockholder approval for the sale of the Lauderdale Property.




In
      connection with the purchase and sale agreement for the Lauderdale Property,
      the
      purchaser agreed to loan $2.5 million to us, which was advanced to us in three
      tranches during October and November of 2005. The loan will accrue interest
      at a
      rate per annum of 6.5% with interest due and payable monthly; provided however,
      in the event that no event of default exists, the interest will be deferred
      and
      paid upon the maturity of the Loan. The Loan will mature no later than a date
      that is earlier to occur of (i) the date of closing of the purchase and sale
      of
      the Lauderdale Property and (ii) December 23, 2005. In addition, the Loan will
      be secured by a third mortgage on the Lauderdale Property. The proceeds of
      the
      loan were used to pay down certain indebtedness and for working capital to
      continue our business operations.




Our
      Board
      of Directors and management determined that it was in the best interest of
      our
      stockholders to abandon the AGU Studios concept and use the proceeds from the
      sale of the property to help alleviate our liquidity crisis, retire currently
      maturing debt, and provide additional funds for working capital. We believe
      that
      selling the Lauderdale Property and focusing on our core businesses, the Tube
      Music Network Inc., and AGU Music, Inc., will attract additional investors
      to
      the Company. We are currently unable to predict the costs of relocating our
      continuing operations from the Lauderdale Property into a permanent replacement
      facility.




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.




23




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%.




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 was 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, under 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.




Prior
      to
      the hurricane damage and evacuation of the Lauderdale Property, we had a monthly
      cash requirement of approximately $550,000, however, the need for temporary
      office space and dividing the operations into different locations will have
      an
      impact on our monthly costs. We are unable to predict the costs of relocating
      our continuing operations from the Lauderdale Property into a permanent
      replacement facility but believe our monthly costs will be reduced due to the
      sale of the Lauderdale Property. We will need to raise additional capital for
      the remainder of 2005 and 2006, 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 between $10 to $15 million over
      the
      balance of 2005 and through 2006 to provide for these requirements. Management
      is evaluating several alternatives, including the 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. Notwithstanding the $2.5 million
      bridge loan we received from the sale of the Lauderdale Property, if we are
      not
      successful in raising additional capital and closing on the sale of the
      Lauderdale Property prior to December 31, 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.




24




Cash
      used
      in operations for the first nine months of 2005 was $3,750,000, which was
      primarily the result of our operating loss of $13,888,000, 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 $3,343,000.
      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 nine months of 2005 amounted to $288,000, as
      compared to $357,000 in 2004. The decrease was 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 $1.0 million
      of capital expenditures over the next twelve months.




We
      received cash from financing activities in the first nine months of 2005 in
      the
      amount of $3,271,000, as compared to $3,564,000 in the same period of a year
      ago. The decrease was due to repayments of certain debt in 2005.




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
      September 30, 2005, we had approximately $15.3 million of debt outstanding,
      approximately $8.2 million of which is due at various dates in 2005. We
      currently do not have the financial resources to repay any of these or any
      of
      the aforementioned obligations without completing the sale of the Lauderdale
      Property and obtaining additional financing. We also currently do not have
      funds
      available for working capital requirements beyond December 15, 2005.




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.




25




The
      Company’s financial condition and operating results, specifically a working
      capital deficiency of approximately $12.3 million and accumulated deficit of
      approximately $20.6 million at September 30, 2005, as well as a net loss of
      approximately $13.9 million for the nine months ending September 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 sale of the Lauderdale
      Property




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 ended September 30, 2005 and 2004**




Revenues
      from continuing operations were $77,000 for the three months ended September
      30,
      2005 and $0 for the three months ended September 30, 2004 and were primarily
      related to recorded music shipments by AGU Music. Approximately $17,000 of
      revenues were generated by the discontinued operations of AGU Studios. AGU
      Music
      had gross profit of $69,000 and the gross profit from discontinued operations
      was $17,000 during the period.




Our
      operating loss from discontinued operations for the three months ended September
      30, 2005 was $190,000 compared to $0 for the three months ended September 30,
      2004.




Operating
      expenses from continuing operations were $1,961,000 and $1,801,000 for the
      three
      months ended September 30, 2005 and 2004, respectively, the majority of which
      was general and administrative expenses. 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, and complete the sale of the Lauderdale Property.




Interest
      expense in the three months ended September 30, 2005 was $2,192,000 as compared
      to $55,000 in 2004, and includes $1,878,000 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.




26




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 September 30, 2005 was $4,154,000, as compared to
      $1,845,000 in the prior year.




**Results
      of Operations for the Nine Months ended September 30, 2005 and 2004.**




Revenues
      from continuing operations were $253,000 for the nine months ended September
      30,
      2005 and $15,000 for the nine months ended September 30, 2004 and were primarily
      related to recorded music shipments by AGU Music. Revenues of approximately
      $99,000 were generated by the discontinued operations of AGU Studios. AGU Music
      had gross profit of $216,000 and the gross profit from discontinued operations
      was $79,000 during the period.




Our
      operating loss from discontinued operations for the nine months ended September
      30, 2005 was $513,000 compared to $0 for the nine months ended September 30,
      2004.




Operating
      expenses from continuing operations were $8,578,000 and $4,227,000 for the
      nine
      months ended September 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 and $1,048,000 for the issuance of common stock as compensation to
      a
      director. 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 and sale of the
      Lauderdale Property.




Interest
      expense for the nine months ended September 30, 2005 was $5,014,000, as compared
      to $100,000 for the nine months ended September 30, 2004, and includes
      $4,245,000 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 nine months ended September 30, 2005 was $13,888,000, as compared
      to $4,301,000 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 in 2006. While we expect this market penetration to generate a substantial
      increase in marketing, promotion and other expenses at The Tube, 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.




27




**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.




**PART
      II. OTHER INFORMATION**




**Item
              5.**
            **OTHER
                INFORMATION**




On
      August
      4, 2005, we issued a convertible promissory note in the aggregate principal
      amount of $50,000 and warrants to purchase 16,667 shares of our
      restricted common stock to an accredited investor. The promissory note accrues
      interest on the principal balance at an annual rate of 10% and matures on August
      4, 2007. At any time, the holder of the promissory note may convert the
      principal of the promissory note into shares of our common stock at the
      conversion price of $3.00 per share. The warrants have an exercise price of
      $3.00 per share and are exercisable until August 4, 2007. We maintain that
      the
      issuance of these securities is exempt under the Securities Act of 1933, as
      amended, in reliance upon Regulation D
      promulgated thereunder as a transaction by an issuer not involving a public
      offering.




28




On
      August
      25, 2005, we issued a convertible promissory note in the aggregate principal
      amount of $50,000 and warrants to purchase 21,667 shares of our
      restricted common stock to an accredited investor. The promissory note accrues
      interest on the principal balance at an annual rate of 4.5% and matures on
      August 25, 2007. The interest on the promissory note is compounded quarterly
      beginning November 25, 2005. At any time, the holder of the promissory note
      may
      convert the principal and interest of the promissory note into shares of our
      common stock at the conversion price of $2.00 per share. The warrants have
      an
      exercise price of $2.00 per share and are exercisable until February 25, 2007.
      The Company granted “piggy-back registration” rights for the shares of common
      stock underlying the promissory note and the warrant. We maintain that the
      issuance of these securities is exempt under the Securities Act of 1933, as
      amended, in reliance upon Regulation D promulgated there under as a transaction
      by an issuer not involving a public offering.





On
      November 1, 2005, the Company and Tarragon entered into a First Amendment to
      the
      Agreement for Purchase and Sale, dated as of November 1, 2005 (the
      “First Amendment”), pursuant to which the Company agreed to extend the
      investigation period from November 1, 2005 to November 15, 2005, during which
      period Tarragon was permitted to examine the Lauderdale Property.





On
      December 2, 2005, the Company and Tarragon entered into a Second Amendment
      to
      the Agreement for Purchase and Sale, dated as of December 1, 2005 (the
      “Second Amendment”), pursuant to which the Company agreed to provide Tarragon
      with an option of extending the closing date of the transaction to December
      31,
      2005 from December 15, 2005. In order to exercise the option, Tarragon was
      required to forward to the Company, on or before December 2, 2005, an additional
      security deposit in an amount equal to $1,000,000 (“Extension Additional
      Deposit”). On December 2, 2005, Tarragon exercised the option to extend the
      closing date and paid the Extension Additional Deposit to the Company. The
      Extension Additional Deposit will be credited to Tarragon’s obligation to pay
      the purchase price on the closing date and is fully non-refundable to Tarragon,
      except in the event that the Company defaults under the Agreement for Purchase
      and Sale or any permitted right of termination under the Agreement for Purchase
      and Sale in favor of Tarragon.





In
      connection with the extension of the closing date, Tarragon agreed to provide
      the Company with a credit at closing to cover the Company’s expenses for the
      Lauderdale Property during the extension period. In addition, Tarragon also
      agreed to comply with the Company’s obligations under the Tri-Party Developer’s
      Agreement, dated as of November 4, 2005, by and among the City of Lauderdale
      Lakes, the Company and Tarragon to demolish the building on the Lauderdale
      Lakes
      property no later than February 15, 2006.





Our
      wholly-owned subsidiary, The Tube Music Network, Inc. entered into a services
      agreement with Crawford Communications, Inc. dated as of July 13, 2005. Pursuant
      to the services agreement, Crawford Communications provides us with origination
      services, library/storage services, uplink services, satellite space, security,
      monitoring services, performance and operation support. The term of the services
      agreement is for three years beginning on August 1, 2005. As consideration
      for
      services, pursuant to the services agreement, we will pay Crawford
      Communications a monthly fee during the term of the agreement of $40,000. Any
      amounts due to Crawford Communications that are not paid within 20 days after
      the due date will accrue interest from the due date until paid at the rate
      of
      the lesser of one and one percent (1%) per month or the highest rate permitted
      by applicable law. Upon execution of the services agreement, we delivered to
      Crawford Communications $80,000, which represented the first monthly fee and
      a
      security deposit to be held and used by Crawford Communications for payment
      of
      any valid fees, expenses or other charge against us, including interest due
      to
      late payments. In the event that Crawford Communications must use any part
      of or
      the entire amount of the security deposit prior to the termination of the
      services agreement, we will pay to Crawford Communications all or a portion
      of
      the security deposit as Crawford Communications may demand in writing. Any
      portion of the security deposit remaining at the termination of the agreement
      will be returned to us.




29




Crawford
      Communications will issue a credit to us on a monthly basis for any outage,
      as
      defined in the services agreement, occurring for ten or more consecutive minutes
      or for more than fifteen cumulative minutes in a twenty-four hour period. The
      credit will be equal to the quotient of the monthly fee divided by forty-three
      thousand two hundred multiplied by the total length of the qualifying outage
      expressed in minutes rounded to the nearest minute. Crawford Communications,
      during the term of the services agreement, will offer to us the opportunity
      to
      upgrade the services or obtain new services that are made generally available
      by
      Crawford Communications on commercially reasonable terms and pricing.
      Additionally, in the event that Crawford Communications introduces any new
      technology that substantially or materially increases the overall capacity
      of
      the space segment available to Crawford Communications or materially reduces
      the
      costs of such capacity, Crawford Communications will promptly notify us and
      upon
      written request from us, we and Crawford Communications will negotiate in good
      faith an equitable reduction in the fees payable by us under the services
      agreement.





In
      the
      event we default under the services agreement, Crawford Communications would
      be
      entitled to terminate the services agreement, retain any unapplied portion
      of
      the security deposit and exercise any other remedies available to it under
      the
      services agreement or applicable law. In the event that Crawford Communications
      defaults under the services agreement, we would be entitled to terminate the
      services agreement and exercise any other remedies available to us under the
      services agreement or applicable law. The services agreement contains
      representations and warranties that are customary of an agreement of this
      type.





**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 8-K
                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 10-QSB 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)




30




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)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).4.9
            
            $500,000
                Promissory Note, dated August 31, 2005, issued to Robert Alan Kast
                by AGU
                Entertainment Corp. (incorporated herein by reference to the Registrant’s
                Form 8-K filed on September 8, 2005).4.10
            
            $200,000
                Promissory Note, dated August 31, 2005, issued to Daniel K. Kast
                and
                Lenore S. Kast by AGU Entertainment Corp. (incorporated herein by
                reference to the Registrant’s Form 8-K filed on September 8, 2005).4.11
            
            Warrant
                to subscribe for 100,000 shares of common stock of AGU Entertainment
                Corp.
                issued to Robert Alan Kast (incorporated herein by reference to the
                Registrant’s Form 8-K filed on September 8, 2005).




31




4.12
            
            Warrant
                to subscribe for 200,000 shares of common stock of AGU Entertainment
                Corp.
                issued to Robert Alan Kast (incorporated herein by reference to the
                Registrant’s Form 8-K filed on September 8, 2005).4.13
            
            Warrant
                to subscribe for 100,000 shares of common stock of AGU Entertainment
                Corp.
                issued to Robert Alan Kast (incorporated herein by reference to the
                Registrant’s Form 8-K filed on September 8, 2005).4.14
            
            Warrant
                to subscribe for 150,000 shares of common stock of AGU Entertainment
                Corp.
                issued to Robert Alan Kast (incorporated herein by reference to the
                Registrant’s Form 8-K filed on September 8, 2005).4.15
            
            Warrant
                to subscribe for 200,000 shares of common stock of AGU Entertainment
                Corp.
                issued to Daniel K. Kast and Lenore S. Kast (incorporated herein
                by
                reference to the Registrant’s Form 8-K filed on September 8, 2005).4.16*
            
            Warrant
                to subscribe for 21,667 shares of common stock of AGU Entertainment
                Corp.
                issued to Arnold Palmer.4.17*
            
            $50,000
                Promissory Note issued by AGU Entertainment Corp. to Arnold Palmer.4.18*
            
            Warrant
                to subscribe for 16,667 shares of common stock of AGU Entertainment
                Corp.
                issued to Ron Moore.4.19
            
            $50,000
                Promissory Note issued by AGU Entertainment Corp. to Ron Moore. 10.1
                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).10.2
            
            Letter
                Agreement, dated August 11, 2005, by and between AGU Entertainment
                Corp.
                and Mitchell Entertainment Company regarding extension of maturity
                date
                (incorporated by reference to the Registrants Form 10-QSB for the
                fiscal
                quarter ended June 30, 2005).10.3
            
            Letter
                Agreement, dated August 11, 2005, by and between AGU Entertainment
                Corp.
                and Mitchell Entertainment Company regarding extension of due date
                for
                filing of registration statement (incorporated by reference to the
                Registrants Form 10-QSB for the fiscal quarter ended June 30, 2005).10.4
            
            Agreement
                for Purchase and Sale, dated as of August 29, 2005, by and between
                AGU
                Entertainment Corp. and Tarragon South Development Corp. (includes
                the
                Side Letter) (incorporated herein by reference to the Registrant’s Form
                8-K filed on November 17, 2005).10.5
            
            Consulting
                Agreement dated as of August 31, 2005, by and between AGU Entertainment
                Corp. and DKK-RK Enterprises, Inc. (incorporated herein by reference
                to
                the Registrant’s Form 8-K filed on September 8, 2005).10.6
            
            Letter
                Agreement, dated September 2, 2005, by and between AGU Entertainment
                Corp., The Tube Music Network, Inc. and AGU Music Inc. and Robert
                Alan
                Kast (incorporated herein by reference to the Registrant’s Form 8-K filed
                on September 8, 2005).




32




10.7*
            
            Amendment
                No. 3 to Agreement for Purchase and Sale, dated as of December 2,
                2005, by
                and between Charley Zeches, in her capacity as Trustee of Lakes Holding
                Trust U/A and AGU Entertainment Corp.10.8*
            
            First
                Amendment to Agreement for Purchase and Sale, dated as of November
                1,
                2005, by and between AGU Entertainment and Tarragon South Development
                Corp.10.9*
            
            Second
                Amendment to Agreement for Purchase and Sale, dated as of December
                2,
                2005, by and between AGU Entertainment and Tarragon South Development
                Corp.10.10
            
            Services
                Agreement by and between The Tube Music Network, Inc. and Crawford
                Communications, Inc. dated as of July 13, 2005. (incorporated by
                reference
                to the Registrant’s Form 10-KSB for the year ended December 31,
                2005)31.1
            
            Certification
                of D. Patrick LaPlatney, Chief Executive Officer of the Company,
                dated
                September 1, 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 2002.31.2
            
            Certification
                of Celestine F. Spoden, Chief Financial Officer of the Company, dated
                September 1, 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 D. Patrick LaPlatney, Chief Executive Officer of the Company,
                and
                Celestine F. Spoden, Chief Financial Officer of the Company, dated
                September 1, 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


**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:
                September 1, 2006
            
            /s/
              Celestine F. Spoden**Name**:
              Celestine F. Spoden**Title**:
              Chief Financial Officer




34