United States Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB

                |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

                                       OR

              |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        FOR THE TRANSITION PERIOD FROM TO

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

                        COMMISSION FILE NUMBER 000-18689

                       CONNECTED MEDIA TECHNOLOGIES, INC.

           DELAWARE                                   06-1238435
   (STATE OF INCORPORATION)                           (I.R.S. ID)

     950 SOUTH PINE ISLAND ROAD, SUITE A150-1094, PLANTATION, FLORIDA 33324

                                 (954) 727-8128

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK, $.001 par value

Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ] No

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

Indicate by check mark whether the registrant is a shell company as defined in
Rule 12b-2 of the Exchange Act.
Yes  |_|          No |X|

State issuer's revenues for its most recent fiscal year. $0

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) $3,873,717 as of March 28, 2006.

The number of shares outstanding of the registrant's common stock as of March
28, 2006 was 306,307,663 .* * This number includes 2,000,000 shares that have
been redeemed by the Company.



                                       1
<PAGE>



                       Connected Media Technologies, Inc.

                                   FORM 10-KSB

                   For The Fiscal Year Ended December 31, 2005

                                      INDEX
<TABLE>

--------------------------------------------------------------------------------
PART I
<S>                                                                                       <C>
Item 1.    Description of Business                                                        3
Item 2.    Description of Property                                                        5
Item 3.    Legal Proceedings                                                              5
Item 4.    Submission of Matters to a Vote of Security Holders                            6



PART II
Item 5.    Market for Common Equity, Related Stockholder Matters and Small
           Business Issuer Purchases of Equity Securities                                 7
Item 6.    Management's Discussion and Analysis or Plan of Operation                      7
Item 7.    Financial Statements                                                           F-
Item 8.    Changes in and Disagreements With Accountants on Accounting and
           Financial Disclosure                                                           17
Item 8A.   Controls and Procedures                                                        17
Item 8B.   Other Information                                                              17


PART III
Item 9.    Directors and Executive Officers of the Registrant                             18
Item 10.   Executive Compensation                                                         20
Item 11.   Security Ownership of Certain Beneficial Owners and Management
           and Related Stockholder Matters                                                21
Item 12.   Certain Relationships and Related Transactions                                 23
Item 13.   Exhibits, List and Reports on Form 8-K                                         26
Item 14.   Principal Accountant Fees and Services                                         26

</TABLE>




                                       2
<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

     Connected Media Technologies, Inc. ("we", the "company", or "CMT") is a
technology and intellectual property creation, management and licensing company,
whose mission is to be an architect and licensor of cutting edge,
state-of-the-art technology concepts, with a wide range of potential commercial
applications.

     We were originally formed to leverage an existing patent portfolio and
related intellectual property and technology in order to build a collection of
licensees in the areas of entertainment content (e.g. film, music, and video),
education, advertising, travel and promotion. In addition to pursuing direct
licensing royalty arrangements we also seek to enforce our existing issued
patent and any subsequently issued or acquired patents against those that
infringe. We may also incubate and/or acquire minority equity interests in
select growth-oriented companies that can benefit from integration and
utilization of CMT-owned intellectual property. We may also seek to acquire
additional patents and patent portfolios.

BUSINESS DEVELOPMENT

     Mountaintop Corporation becomes New Mountaintop Corporation

     We were first organized as a Delaware corporation on December 11, 1989
under the name Mountaintop Corporation. Mountaintop Corporation was involved in
the distribution and marketing of spirits, among other things. That business
ultimately did not succeed and in 1992, we ceased operations. Shortly
thereafter, the charter of Mountaintop Corporation was forfeited by the State of
Delaware for non-payment of franchise taxes. On February 21, 2003 through the
efforts of our then-majority stockholder and sole director, we revived and
reinstated our charter effective March 1, 1993. However, during the process of
reviving the company, the State of Delaware notified us that our name,
Mountaintop Corporation, was no longer available. Thus, the name was changed to
New Mountaintop Corporation. In addition, at the time of that name change, we
amended our Certificate of Incorporation to authorize common stock of
500,000,000 shares, par value $0.0001, and 10,000,000 shares of preferred stock,
par value $0.0001. New Mountaintop Corporation subsequently announced its
intention to seek new business opportunities.

     New Mountaintop Corporation becomes Trust Licensing, Inc., now known as
Connected Media Technologies, Inc.

     On August 24, 2004, Trust Licensing, LLC ("TLLC"), a Florida limited
liability company, merged with our wholly owned subsidiary. As consideration for
all of the assets and business of Trust Licensing, LLC, we issued 270,072,000
shares of our common stock, par value $.0001 per share, to the principals of
TLLC, representing approximately 93% of our issued and outstanding shares (after
giving effect to a 1:10 reverse stock split). The reverse merger was accompanied
by a change in the company's Board of Directors, its management, and its
business focus. The name of New Mountaintop Corporation was subsequently changed
to Trust Licensing, Inc. On December 31, 2004, the company became eligible for
trading on the over-the-counter bulletin board under the symbol TRTL.OB.

     In May 2005, we were advised by the Secretary of State of the State of
Delaware that the State had failed to notify us that the use of the word "Trust"
in its corporate name was inconsistent with the requirements of applicable
Delaware Banking Law and requested that we change our name On May 17, 2005, we
changed our name to Connected Media Technologies, Inc. Thereafter, on May 20,
2005 our trading symbol changed to CNCM.OB.

                                       3
<PAGE>

BUSINESS


     The core initial asset of CMT is United States Patent #6,101,534,
"Interactive, Remote, Computer Interface System" ("'534 Patent") which was filed
in 1997 and granted in 2000. We were also issued the patent, "A Media Validation
System", U.S. Patent No. 6,952,697 in October 2005. We also have several
additional patent applications filed with the United States Patent and Trademark
Office and are planning to file numerous additional patent applications. The
pending and soon to be filed patents are not necessarily limited to the areas
and potential market sectors of this patent. (As a technical matter, the issued
patent and the patents pending are held by one of our wholly-owned subsidiary
corporations.)

     In general, the claims of patent relates to technology that allows
multimedia content stored on a removable local media (including, but not limited
to CD-ROM and DVD-ROM discs) to be "controlled" or "released" for access by the
user by visiting a related website on the Internet. Essentially every computer
sold today has either a CD-ROM drive and/or a DVD drive and has the ability to
access the Internet. In addition, it is anticipated that next generation DVD
players will also have the ability to access the Internet, either directly, or
by connecting through a home or business media hub. We believe our technology
will offer content providers and advertisers opportunities to combine the
dynamic capabilities of the Internet with disc based or similar local content.
Advertisers can use our technology to control access to disc based ads and
promotions, allowing them to time release content, track usage and add updated
information from the internet. In addition to developing patented and patent
pending applications for license to third parties, we will enforce our
intellectual property as appropriate and seek out third parties that are
utilizing our patents without permission.

     We are principally involved in four activities:

o    Creating Patents - Where opportunities arise, we will develop technology,
     concepts, and/or improvements on existing technologies and file for patent
     protection on such inventions;

o    Developing Applications and Solutions - We plan to develop application and
     solutions based upon our core patent along with the other patents in our
     portfolio. The company will often create working demos and proof of concept
     technology for specific applications in order to demonstrate its offering
     to potential customers and licensees. The areas where we believe our
     technology can be used include;

          making available full motion video without the need for a broadband
          connection; and

          directing customers to specific related websites where dynamic
          information and content could be added to their CD experience, and
          demographic information could be captured by the website in exchange
          for giving the user access to enhanced or bonus content on the CD; and

          preventing piracy;

o    Enforcement - As appropriate, we intend to protect and enforce its
     intellectual property against third parties that may be infringing upon the
     companies rights; and

o    Licensing - We plan to license rights under our patents(s), and or rights
     to utilize specific patented applications to third parties. Currently the
     we are targeting potential licensees in the areas of advertising and
     promotion, film, music, video, television, education and travel, among
     others:

     The markets that we intend to pursue include educational and distance
learning, entertainment (film, music and video areas), travel related marketing
services, advertising, publishing, digital photography and real estate.

     There are four current licensees of this patent: (a) Digital Media
Publishing Group; (b) Interactual Technologies, Inc.; (c) Sonic Solutions, Inc;
and (d) NatCom, Inc.

                                       4
<PAGE>

CUSTOMERS

     Our targeted customers include licensees and potential licensees in the
areas of entertainment content (e.g. film, music, and video), education,
advertising, travel and promotion, who may deploy applications that utilize our
patent or our intellectual property. In addition, our licensees may generally
include those entities that, without an appropriate license from us, would be
infringing upon our patent rights. Though it is possible that we may grant
licenses to our pending patent applications, we anticipate that in the near
future most licenses will involve our issued '534 patent.

COMPETITION

     We are subject to intense competition. The CD, DVD, software and Internet
industries are highly competitive. Although we believe that the solutions we
offer using our patent are highly valuable and useful, there are several
alternatives available for the advertising and promotion of products and
services. It is true that the precise process protected by our patent is
exclusive insofar as it is protected under the United States patent law.
However, it is possible that due to the wide use of both the Internet and
rich-media there are other processes available that are similar to, but not
covered under our patent, that may offer equally good functionality. Prospective
clients may choose to license these similar solutions instead of ours.
Additionally, although we intend to seek enforcement of our patent rights
against infringers, there can be no assurance that we will be able to discover
(and thereafter collect license fees from) every party who is utilizing our
protected process. Moreover, our patent does not prohibit the utilization of the
process outside of the United States.

     Our competitors range from small companies with limited resources to large
companies with substantial financial, technical and marketing resources.
Competitors with greater financial resources than us may be able to broaden
their offerings, make greater investments in design and product development,
undertake more extensive marketing campaigns, and adopt more aggressive pricing
policies than the company. There can be no assurance that we will be able to
respond effectively to market changes or to compete successfully in the future.

EMPLOYEES

     As of December 31, 2005, we employed 4 people on a full-time basis. Our
success is highly dependent on our ability to attract and retain qualified
employees. Competition for qualified employees remains intense in our industry.
We believe that we can attract and retain qualified employees, but we cannot
guarantee that we will be as successful. None of our employees are subject to
collective bargaining agreements. We believe that our relationship with our
employees is excellent.

AVAILABLE INFORMATION

     Our Internet address is http://www.connectedmedia.com. In the future we
intend to make available, free of charge, our annual report on Form 10-KSB,
quarterly reports on Form 10-QSB, current reports on Form 8-K, and any
amendments to those reports, as well as our governance documents, as soon as
reasonably practicable after we electronically file such material with or
furnish it to the SEC. The information found on our Web site is not part of this
or any other report we file with or furnish to the SEC.

ITEM 2.  DESCRIPTION OF PROPERTY

         We do not own any real property. Our corporate offices are located
within two leased offices in a professional office suite complex at 950 South
Pine Island Road, Suite A15-1094, Plantation, Florida. The term of our current
lease runs through December 31, 2005, our rent is approximately $2,200 per
month, and the property is in good condition. We use our corporate offices for
all of our operations.

ITEM 3.  LEGAL PROCEEDINGS

         None.

                                       5
<PAGE>

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

On January 12, 2005, the unanimous consent of the Board of Directors and a
majority of the shareholders of record approved the adoption of our Equity
Incentive Plan in accordance with the provisions of Section 228 of the Delaware
Corporation Law. The action was approved by approximately 84% of the
shareholders of record. An Information Statement describing such action was
mailed to Shareholders.

On April 28, 2005, the unanimous consent of the Board of Directors and a
majority of the shareholders of record approved the Amendment to the Certificate
of Incorporation increasing the authorized Common Stock from 500,000,000 to
750,000,000 in accordance with the provisions of Section 228 of the Delaware
Corporation Law. The action was approved by approximately 83% of the
shareholders of record.

On April 28, 2005, the unanimous consent of the Board of Directors and a
majority of the shareholders of record approved: (a) increasing the number of
Directors on the Company's Board to four (4) Directors; and (b) the appointment
of Jeffrey W. Sass, Michael R. Moore, and Adam Bauman as additional Directors of
the Company, in accordance with the provisions of Section 228 of the Delaware
Corporation Law. The action was approved by approximately 83% of the
shareholders of record.

On May 17, 2005, the unanimous consent of the Board of Directors and a majority
of the shareholders of record approved the Amendment to the Certificate of
Incorporation changing the name of the company to Connected Media Technologies,
Inc. in accordance with the provisions of Section 228 of the Delaware
Corporation Law. The action was approved by approximately 83% of the
shareholders of record.



                                       6
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND SMALL
         BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

     Our common stock is traded on Over-The-Counter Bulletin Board under the
symbol CNCM.OB. Our common stock became eligible for trading on December 31,
2004. Prior to that date our Company had not traded for at least the last two
fiscal years. As of March 28, 2006, there were 341 registered holders of record
of our common stock. During the period from January 1, 2005 through December 31,
2005, our stock traded as low as $ 0.02 per share and as high as $ 0.10 per
share.

Period                   HIGH BID           LOW BID
------                   --------           -------

2005

First Quarter           $ .09               $.02
Second Quarter          $.065               $.03
Third Quarter           $.055              $.055
Fourth Quarter          $ .03               $.02

The above quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions.

DIVIDENDS

     We did not pay any cash dividends to stockholders during fiscal year 2005.
The declaration of any future cash dividend will be at the discretion of our
board of directors and will depend upon our earnings, if any, our capital
requirements and financial position, our general economic conditions, and other
pertinent conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in our
business operations.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
         RESULTS OF OPERATIONS FOR 2005 AND 2004

     This annual report on Form 10-KSB, including this Management's Discussion
and Analysis of Financial Condition and Results of Operations, contains
forward-looking statements regarding future events and our future results that
are subject to the safe harbors created under the Securities Act of 1933 and the
Securities Exchange Act of 1934. These statements are based on current
expectations, estimates, forecasts, and projections about the industries in
which we operate and the beliefs and assumptions of our management. Words such
as "expects," "anticipates," "targets," "goals," "projects," "intends," "plans,"
"believes," "seeks," "estimates," "continues," "may," variations of such words,
and similar expressions are intended to identify such forward-looking
statements. In addition, any statements that refer to projections of our future
financial performance, our anticipated growth and trends in our business and
other characterizations of future events or circumstances are forward-looking
statements. Readers are cautioned that these forward-looking statements are only
predictions and are subject to risks, uncertainties, and assumptions that are
difficult to predict. Therefore, actual results may differ materially and
adversely from those expressed in any forward-looking statements. Readers are
referred to risks and uncertainties identified below, under "Risk Factors" and
elsewhere herein. We undertake no obligation to revise or update any
forward-looking statements for any reason.

OUR BUSINESS

     On August 24, 2004, we, through a newly formed wholly owned subsidiary
acquired, by merger, all of the assets and business of Trust Licensing, LLC. As
consideration for the merger we issued 270,072,000 shares of our common stock,
par value $.0001 per share representing approximately 93% of our issued and
outstanding shares (after giving effect to a 1:10 reverse stock split.) The
reverse merger was accompanied by a change in our Board of Directors, our
management, and our business focus. Prior to the merger, we had not conducted
regular business operations for several years; rather, our primary focus was
seeking a business to acquire.

                                       7
<PAGE>

     Currently, through the operations of our wholly-owned subsidiary, we are
now a technology and intellectual property company that architects and licenses
various technology concepts, with a wide range of potential commercial
applications. (For purposes of convenience and clarity to the reader, for the
balance of this discussion we refer to the company and its wholly-owned
operating subsidiary interchangeably, unless otherwise noted.)

     We plan to leverage an existing patent portfolio and related intellectual
property and technology in order to build a collection of licensees in the areas
of entertainment content (film, music, video), education, advertising, travel
and promotion. In addition to pursuing direct licensing royalty arrangements, we
will also seek to enforce our existing issued patent and any subsequently issued
or acquired issued patents against those that infringe. We may also actively
incubate and/or acquire equity interests in select growth-oriented companies
that can benefit from integration and utilization of our intellectual property.
We may also seek to acquire additional patents and patent portfolios. Our
initial core asset is United States Patent #6,101,534, "Interactive, Remote,
Computer Interface System." The company's patent portfolio also includes:

o    the issued patent, "Interactive, Remote, Computer Interface System", U.S.
     Patent No. 6,101,534, which is our core patent;
o    the issued patent, "A Media Validation System", U.S. Patent No. 6,952,697;
o    seven other patents pending; and
o    several additional patent applications that are in progress but have not
     yet been filed.

     Our core patent covers technology that allows multimedia content stored on
a removable local media (including, but not limited to CD-ROM and DVD-ROM discs)
to be "controlled" or "released" for access by the user by visiting a related
website on the Internet. Our business plan is to exploit this patent and/or
license the exploitation of the patent to support the connection between a
website and content on a DVD, CD, Flash Card, or any other storage disc or
drive.

     Since changing the Company's name to Connected Media Technologies, Inc. in
May 2005, we have introduced a new website and have been developing sales and
marketing materials. In addition, we are developing interactive demos and proof
of concept technology for a variety of applications and solutions based on its
patent(s). Applications of our patent that are currently being presented to
potential licensees include:

o    The "Connected MediAD" Promotional Tool: A method of combining the dynamic
     capabilities of the Internet with the high quality visual impact of rich
     media content stored locally on a CD, DVD, memory card, hard drive, or
     other digital storage platform.

o    The Connected Companion Disc: A method of using a DVC, CD or other disc to
     supplement the content of a television program.

o    The Connected Cross-Sell: A method of using the internet to create an
     upsell opportunity by "unlocking" pre-existing content on a dual disc or
     other DVD, CD-ROM, etc.

     We have begun to offer our technology to advertising agencies, marketing
agencies, and interactive agencies. In addition, we are offering our technology
to targeted content providers. In June 2005, we engaged a consultant as a
commissioned sales agent in Los Angeles, California to pursue potential
opportunities for us within the media and entertainment industry. In July, 2005,
we entered into a license agreement with a marketing agency focused on
presenting our technology to our contacts and customers in the government and
travel sectors. We intend to continue to pursue similar relationships with
additional consultants, sales agents, and agencies. Depending on the
circumstances, we may offer our technology pursuant to a license, or as part of
a turn-key solution.

     In 2004, we received $700,000 (classified as Other Income) from the
settlement of a patent infringement litigation action that we initiated against
a third party with respect to our core patent. As part of the settlement, the
third party entered into a non-exclusive pre-paid license and agreed to
acknowledge and identify our patent and the company, including a link to the
Company's website, within certain of its software products.

                                       8
<PAGE>

APRIL 2005 FUNDING TRANSACTION

     On April 11, 2005, we entered into a Standby Equity Distribution Agreement
with Cornell Capital Partners, LP ("Cornell"). Pursuant to the Standby Equity
Distribution Agreement ("SEDA"), and subject to the terms and conditions
contained therein, we may, at our discretion, periodically sell to Cornell
shares of common stock for a total purchase price of up to $10.0 million. For
each share of common stock purchased under the SEDA, Cornell will pay us 98% of
the lowest volume weighted average price of our common stock as quoted by
Bloomberg, LP on the Over-the-Counter Bulletin Board or other principal market
on which our common stock is traded for the 5 days immediately following the
notice date. Further, Cornell will retain 6% of each advance under the SEDA. In
connection with the SEDA, Cornell received a fee including 3,800,000 shares of
common stock of which 1,900,000 shares were issued on execution of the SEDA and
1,900,000 will be issued on the second installment (as defined below).

     Pursuant to the terms of a registration rights agreement, we are required
to register the shares issued to Cornell as well as the shares to be issued
pursuant to the SEDA within 40 days from the date of execution of the agreements
and is required to have the registration statement declared effective 105 days
from the date thereof. In the event that the registration statement is not filed
or declared effective within these time limits, we may be subject to liquidated
damages in the amount of $5,000 per month and may be deemed in default of the
operative agreements.

     Pursuant to the SEDA, Cornell was also issued a warrant for 200,000 shares
of our common stock. The warrant is exercisable for a period of two (2) years
from the date of issuance, which is April 14, 2005. The exercise price per share
under the warrant is $0.01 per share and the shares issuable upon exercise of
the warrant are to be included in the registration statement.

     In connection with the SEDA, we entered into the Placement Agent Agreement
with Monitor Capital, Inc. ("Monitor"). Pursuant to the Placement Agent
Agreement, the Company paid a one-time placement agent fee of 200,000 shares of
common stock equal to approximately $10,000 based on the market price of the
common stock at the time of issuance. Monitor shall act on behalf of Cornell in
connection with the sale of the shares of common stock issued to Cornell
pursuant to the SEDA and the Cornell warrant.

     We also entered into an agreement with Knightsbridge Holdings, LLC whereby
Knightsbridge will assist us in a variety of areas including, but not limited to
financial, strategic and related developmental growth. The agreement runs for a
term of six (6) months, starting April 1, 2005, and will continue on a
month-to-month basis subject to a right to cancel upon thirty (30) days written
notice. We are obligated to pay Knightsbridge a monthly retainer of $2,000.00
and also 4,441,000 shares of our common stock, which amount represents 1.5% of
our issued and outstanding common stock on a fully diluted basis. Knightsbridge
is also entitled to additional compensation in the future based upon any
transactions that they bring to the Company.

     Simultaneous with the execution of the SEDA, we executed a Promissory Note
in favor of Montgomery Equity Partners, Ltd. ("Montgomery") in the principal
amount of $600,000. We plan on using the proceeds of the Note as bridge
financing. The Note proceeds were received by the Company in two installments of
$300,000. The first installment was due upon execution of the Note and was paid
and the second installment was received by the Company two (2) days prior to the
filing of the registration statement referred to above. The Note accrues
interest at the rate of twenty-four (24%) percent per year and matures one (1)
year from its issuance date. For the first six (6) months, we shall make
payments of interest only. Thereafter, we shall make payments of principal and
interest as set forth in the Note. Notwithstanding the foregoing, the first two
(2) payments of interest were deducted from the first installment payment and
the second (2) months of interest were deducted from the second installment
payment. The Note is secured by a first priority lien on all of our assets. As
further security for our obligations under the Note, we pledged 60,000,000
shares of our common stock to Montgomery. In the Event of Default under the
Note, Montgomery shall have the right to receive the pledged shares at a rate
equal to three times the number of shares of the common stock to be necessary to
effectuate repayment of the principal and accrued interest due and outstanding,
from the pledged shares at the price per share equal to the closing bid price of
our common stock, as quoted by Bloomberg, LP, on the date of issuance of the
Note.

                                       9
<PAGE>

         COMPARISON OF RESULTS OF OPERATIONS FOR 2005 AND 2004

     We are a development stage company and remain in the very early stages of
implementing our business plan. Nonetheless, we have already successfully
generated other income and taken other actions to increase the value of our
issued patent. Over time, our plan is to attempt to generate revenue from
several sources as described above. We believe that if these potential revenue
streams materialize in a timely and meaningful fashion, it will enable us to
increase shareholder value. However, we do not believe that cash flow from
operations alone will be sufficient to fund our activities in the next 12
months. As of December 31, 2005, we had total assets of approximately $ 14,972
($ 1,408 of which is cash), and total liabilities of $ 1,899,640. As described
below, we will need to obtain additional financing for us to both implement our
plans and to continue as a going concern.

     Revenue Recognition. We follow the guidance of the Securities and Exchange
Commission's Staff Accounting Bulletin No. 104 for revenue recognition. In
general, we record revenue when persuasive evidence of an arrangement exists,
services have been rendered or product delivery has occurred, the sales price to
the customer is fixed or determinable, and the ability to collect is reasonably
assured. The following policies reflect specific criteria for our various
revenues streams:

     We intend to generate and collect periodic royalty revenue in connection
with licensing agreements associated with their intellectual property. Royalty
revenue is recognized as it is earned. We recognize income from licensing of
patents ratably over the lesser of the economic or legal life of any granted
licenses. We have not recognized any royalty revenue or licensing revenue from
the period of January 1, 2005 through December 31, 2005.

     The company recognizes other income from patent infringement claims when
the claim is settled, whether by negotiation or litigation. We recognized no
"other income" from the period of January 1, 2005 through December 31, 2005.

     Impairment of Long-Lived Assets. Our long-lived assets consist of patents
(having a fair value of zero for GAAP purposes) and equipment. We review
long-lived assets and certain identifiable assets related to those assets for
impairment whenever circumstances and situations change such that there is an
indication that the carrying amounts may not be recoverable. If the undiscounted
future cash flows of the long-lived assets are less that the carrying amount,
their carrying amount is reduced to fair value and an impairment loss is
recognized. None of our long-lived assets required an impairment charge during
the twelve months ended December 31, 2005.

     Contingencies and Litigation. We record an accrual for contingencies and
related liabilities such as litigation when an adverse outcome is probable and
the amount of the potential liability can be reasonably estimated. We are not
currently a party in any litigation nor are we subject to any such
contingencies.

     Revenue. Our revenue was zero for the twelve months ended December 31, 2005
and for the same period in 2004.

     Other income. For the twelve months ended December 31, 2004, the company
recognized $ 700,000 in other income resulting from the settlement of a civil
action relating to one of the company's patents. No other income was recognized
for the twelve months period ending December 31, 2005.

     Operating Expenses. Operating expenses for the twelve months ended December
31, 2005 was $1,437,060, compared to operating expenses of $ 815,735 for the
same period in 2004. The increase in operating expenses results primarily from
the following: increase in payroll (resulting from employment contracts with
officers), professional fees incurred in connection with the merger and related
public company filings, cost of recapitalization, and R&D and rent which did not
exist in 2004. The increase in operating expenses was also due to the costs of
filing a registration statement, developing prototypes, and actively pursuing
licensees.

     Net Loss. Our net loss for the twelve months ended December 31, 2005 was $
1,567,108, compared to net losses of $ 119,568 for the same period in 2004. The
increase in net loss results primarily from increase in operating expenses and
from the other income recognized in 2004.

                                       10
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2005, we had $ 1,408 in cash and $2,500 in prepaid
expenses. We have no other liquid assets. We have financed our activities to
date primarily through financing from the Cornell and Montgomery transactions,
and loans from, and loans secured by, related parties.

     We received an audit opinion for the fiscal year ended December 31, 2005
and for the fiscal year ended December 31, 2004 that includes a "going concern"
risk, which raises substantial doubt regarding our ability to continue as a
going concern. We are in development stage and do not believe that cash flow
from operations will be sufficient to fund our activities over the next 12
months. Our ability to continue as a going concern is dependent upon obtaining
additional capital and debt financing. Until we can generate sufficient cash
flow from our operations (which we do not anticipate in the foreseeable future)
we expect to finance future cash needs through private and public financings,
including equity financings. We cannot be certain that additional funding will
be available as needed, or upon terms that are favorable. In addition, we may
need to curtail the implementation of our core business activities and plans if
funding is not available.

CAPITAL EXPENDITURES AND COMMITMENTS

     We did not acquire a material amount of fixed assets during 2005 and
currently do not plan to do so during the next fiscal year.

OFF-BALANCE SHEET ARRANGEMENTS

     We do not currently have any off-balance sheet arrangements.

SUBSEQUENT EVENTS

     On January 10, 2006, Michael Moore resigned from his position as a member
of the Board of Directors of the Company. Such resignation was not due to any
disagreements with the Company on any matter relating to the Company's
operations, policies or practice. On March 6, 2006, Rafael J. Diaz-Balart was
appointed to the Board of Directors of the Company to fill the vacancy created
by the resignation of Michael Moore.

     On January 31, 2006 (the "SPA Effective Date"), we entered into a Stock
Purchase Agreement and Share Exchange (the "Agreement") with Natcom Marketing
International, Inc., a Puerto Rican based full-service marketing communications
agency ("NMI"), and the NMI shareholders. The close of the transaction is
subject to NMI completion of two years of audited financial statements and to
the completion of each parties due diligence.

     NMI is focused on serving multi-national organizations, as well as emerging
growth companies seeking to enter or expand in the U.S. Hispanic/Latin American
markets. NMI uses the media as its main entry into the Hispanic and minority
advertising space. To date, NMI has entered into a letter of intent to purchase
a controlling interest in NewsProNet Interactive, LLC, an Atlanta based provider
of converged media content solutions and interactive branding strategies for
local broadcasters.

     The anticipated closing of the transaction will take place on or about
April 30, 2006 (the "SPA Closing Date"). On the SPA Closing Date, the Company
shall acquire all of the outstanding shares of NMI in exchange for a total of
fifty percent (50%) of the issued and outstanding shares of our common stock. As
additional consideration, on the SPA Closing Date, we will reserve up to
$250,000 of the funding received by Montgomery Equity Partners, LP (as described
below) for distribution to NMI to be used toward the acquisition of a majority
interest in NewsProNet. On the SPA Closing Date, we will also provide funding to
NMI for the payment of certain outstanding debts. Pursuant to the Agreement, on
the SPA Closing Date, NMI will become our wholly owned subsidiary. The Agreement
was approved by the unanimous consent of our Board of Directors on January 31,
2006.

                                       11
<PAGE>

     On January 31, 2006 (the "Closing Date"), we completed a financing
agreement for $1,600,000 with Montgomery Equity Partners, Ltd. ("Montgomery").
Of such amount, the original principal amount of $600,000 was previously funded
pursuant to a non-convertible Promissory Note dated April 14, 2005, $400,000 was
funded on the Closing Date, $300,000 shall be funded Ninety (90) days from the
closing and $300,000 shall be funded One Hundred Fifty (150) days from the
closing. Under the terms of the agreement, we issued to Montgomery a secured
convertible debenture in the amount of $718,000 which represents the original
principal, interest and fees for the $600,000 previously funded as well as an
additional secured convertible debenture in the amount of $400,000. Both
convertible debentures have an interest rate of 14% and maturity dates of April
30, 2007, and are convertible into shares of our common stock at a conversion
price equal to the lesser of (a) $0.04 or (b) seventy five percent (75%) of the
lowest Closing Bid Price of the Common Stock, as quoted by Bloomberg, LP, of the
ten (10) trading days immediately preceding the Conversion Date. The Conversion
Price may be adjusted pursuant to the other terms of this Debenture.

     The Convertible Debentures are secured by a first priority lien on all of
our assets. As further security for the Company's obligations under the
Convertible Debentures, we executed an Amended and Restated Pledge Agreement,
pursuant to which we re-pledged the 60,000,000 shares of our common stock to
Montgomery that were originally pledged pursuant to the Note to Montgomery dated
April 14, 2005.

     Pursuant to the funding transaction, Montgomery was also issued a warrant
for 8,000,000 shares of the our common stock. The warrant is exercisable for a
period of three years from the date of issuance, which is January 31, 2006. The
exercise price per share under the warrant is $0.0001 per share and the shares
issuable upon exercise of the warrant are to be included in the registration
statement.

     Pursuant to the terms of a Registration Rights Agreement, we are required
to register the shares underlying the Convertible Debentures, as well as the
shares to be issued pursuant to the Warrant within 60 days from the Closing Date
of the Stock Purchase Agreement with NMI and are required to have the
registration statement declared effective 90 days from the date thereof. In the
event that the registration statement is not filed or declared effective within
these time limits, we may be subject to liquidated damages in the amount of 2%
of the entire funding amount per month and may be deemed in default of the
operative agreements.

     On January 31, 2006, we entered into a Purchase and Sale Agreement with
Rothschild Trust Holdings, LLC (the "Trust") for the sale of certain issued and
pending patents in exchange for the return of 13,241,223 shares of our common
stock held by the Trust (the "Shares"). As additional consideration, the Trust
granted tus a license to use the patents pursuant to the terms of a License and
Royalty Agreement, which grants us a twelve month right of election to license
the patents. If we exercise the right of election, the Trust shall grant us a
two year exclusive license for the use of the patents that is renewable subject
to performance, and the Trust shall receive 10% royalties on all gross receipts
as defined in the License and Royalty Agreement.

     On January 31, 2006, the Company, the Trust, Montgomery, and David
Gonzalez, as the Escrow Agent, entered into an Escrow Agreement, whereby the
Trust agreed to place the Shares and we agreed to deposit royalties otherwise
payable to the Trust into an escrow account held by the Escrow Agent until such
time as royalties of $690,000 have been deposited into the escrow account or
until Montgomery has been repaid and/or converted $690,000 of the Convertible
Debentures. At such time, the Trust shall have 30 days to replace the Shares
with $728,267.26 which shall be distributed to us in exchange for the Shares;
otherwise, the Escrow Agent shall release the Shares to us and the royalties to
the Trust.

                                       12
<PAGE>

     On January 31, 2006, we entered into a Termination Agreement with Cornell
Capital Partners, LP ("Cornell") terminating the Standby Equity Distribution
Agreement, Registration Rights Agreement, Escrow Agreement, and Placement Agent
Agreement all of which are dated April 14, 2005. Pursuant to the terms of the
Termination Agreement, Cornell retained the portion of the commitment fee
consisting of 3,800,000 shares of common stock of the Company. Additionally, on
the termination date, the Company issued to Cornell an additional 3,800,000
shares of common stock of the Company. Additionally, Cornell retained the
Warrant dated April 14, 2005 for 150,000 shares of our common stock. The entire
7,600,000 shares issued to Cornell and the 150,000 shares underlying the warrant
shall have "piggy-back" registration rights. In connection with the termination
of the SEDA and related documents, we withdrew the registration statement with
the Securities and Exchange Commission, which was originally filed on June 6,
2005.

ISSUES AND UNCERTAINTIES

This Annual Report on Form 10-K contains statements that are forward-looking.
These statements are based on current expectations and assumptions that are
subject to risks and uncertainties. Actual results could differ materially
because of issues and uncertainties such as those listed below and elsewhere in
this report, which, among others, should be considered in evaluating our future
financial performance.

In addition to those risks cited in the Company's prior filings, the following
are additional risk factors to which the Company desires to draw your attention:

We have had a history of operating losses. The company has a history of
operating losses and there is no guarantee the company will be able to achieve a
positive operating income in the future and, if achieved, sustain such positive
operating income. For the period July 19, 2001 (inception) to December 31, 2005,
the company had a net loss of $ 1,989,734. Accordingly, an investment in the
company is extremely speculative in nature and involves a high degree of risk.

We are a development stage company and have a limited operating history. We are
a development stage company and have a limited income history from the licensing
of our technology. While the company has generated in excess of $700,000 in
other income, we have not had any revenue from royalties or licensing of the
patent[s] which we hold, and there can be no assurance that we will be able to
generate income or achieve profitability in the future from our intended
operations. If profitability is achieved there is no assurance that it can be
sustained. We anticipate that creating and marketing new technology will require
additional expenditures. Accordingly, an investment in us is extremely
speculative in nature and involves a high degree of risk.

Our technology, and the law governing such technology, is subject to rapid
change. Our issued and pending patents and main business activity involves CD,
DVD, Internet and other computer technologies. These are areas that have
experienced and are expected to continue to experience rapid changes. Companies
that have not kept up with these changes have been adversely impacted. There is
no assurance that management will be able to keep up with these changes and
failure to do so may have a material adverse effect on operations. In addition,
given that the company's business is premised largely upon the creation,
maintenance and enforcement of intellectual property rights, any changes in the
applicable laws with respect to the maintenance and enforcement of intellectual
property rights could have a material adverse impact on us.

If our applications for pending patents are not granted it could materially
affect our business. We have applied for patent protection for some aspects of
its technology. There can be no guarantee or assurance that the patents or
trademarks applied for will be awarded. In the event we are not awarded certain
patent or trademark claims, or if other companies are granted patent protection
on similar and/or competing technology, it may be difficult for us to maintain
an advantage over our competition. Even if our patent or trademarks are granted,
there is no assurance that competitors will not infringe upon them, or our
already issued patent.

                                       13
<PAGE>

If we are unable to protect our intellectual property, it could have a material
adverse effect on us. Our ability to compete depends, in part, upon successful
protection of our proprietary assets. We plan to protect proprietary and
intellectual property rights through available patent, copyright and trademark
laws and licensing and distribution arrangements with reputable companies, and
to the extent management deems economically prudent. Despite these precautionary
measures, existing patent, copyright and trademark laws afford only limited
protection in certain jurisdictions. We may distribute our solutions in other
jurisdictions in which there is no protection. As a result, it may be possible
for unauthorized third parties to copy and distribute our intellectual property.
This could result in a material adverse effect on the company.

Litigation to enforce our intellectual property rights can be time-consuming and
costly. In connection with our intellectual property, litigation may be
necessary to enforce and protect our intellectual property rights, or to
determine the validity and scope of the proprietary rights of others or to
defend against claims of infringement or invalidity. Any such litigation could
take an extended period of time to resolve and, even if the company is
successful in the litigation, result in significant costs and the diversion of
resources that could have a material adverse effect on our business, operating
results or financial condition. In addition, there is no assurance that the
company would be able to collect any damages should it receive a favorable
judgment against an infringer. We may also receive notice of claims of
infringement of other parties' proprietary rights. There can be no assurance
that infringement or invalid claims will not materially adversely affect our
business, financial condition or results of operations.

We are subject to intense competition. The CD, DVD, software and Internet
industries are highly competitive. Our competitors range from small companies
with limited resources to large companies with substantial financial, technical
and marketing resources. Competitors with greater financial resources than us
may be able to broaden their offerings, make greater investments in design and
product development, undertake more extensive marketing campaigns, and adopt
more aggressive pricing policies than the company. There can be no assurance
that the company will be able to respond effectively to market changes or to
compete successfully in the future.

We are controlled by our principal shareholders and as a result you may not be
able to exert meaningful influence on significant corporate decisions. At
present, our principal shareholders own approximately 83% of the issued and
outstanding shares and therefore have the ability to elect all of the members of
the Board of Directors of the company. As such, control of the company will
remain with the controlling shareholders who will continue to formulate business
decisions and policy.

Developing application prototypes can be time consuming and complicated.
Developing prototype applications based upon our patents and intellectual
property can be time-consuming and complicated. Problems and delays in the
application development and deployment process often arise. Given that we expect
a portion of our future revenue to come from licensing particular applications
of our patents and intellectual property, any problems or delays in the
application development and deployment process could adversely affect our
revenue.

We do not carry liability insurance or business interruption insurance. We carry
customary Director's & Officer's Insurance, but we do not carry general
liability insurance or business interruption insurance at this time. We intend
to purchase such insurance when we deem such an investment to be economically
prudent. Consequently, if any peril or event occurs that would subject the
company to liability or business interruption, we will not be insured for that
loss. Such an event could severely affect our ability to conduct our normal
business operations and adversely affect both our business operations and our
revenue.

We need additional financing and if we are unable to raise the capital
necessary, we may be forced to abandon or curtail our business plan or
operations. As of December 31, 2005, the company had a working capital deficit
(current assets less current liabilities) of $ 1,895,732. We do not have any
continual commitments or identified sources of additional capital from third
parties or from its officers, directors or majority shareholders. There is no
assurance that additional financing will be available on favorable terms, if at
all.

                                       14
<PAGE>

Our auditors have expressed an opinion that there is substantial doubt about our
ability to continue as a going concern. In its report dated March 17, 2006,
Salberg & company, P.A. expressed an opinion that there is substantial doubt
about our ability to continue as a going concern. As discussed in the
accompanying unaudited consolidated financial statements, for the fiscal year
ending December 31, 2005, the company had no revenues, a net loss of $
1,567,108, cash used in operations of $ 668,368, a working capital deficiency of
$ 1,895,732, a stockholder's deficiency of $ 1,884,668, and an accumulated
deficit during the development stage of $ 1,989,734. For the immediately
preceding fiscal year ending December 31, 2004, the company had no revenues, a
net loss of $ 119,568, cash provided by operations of $ 8,907, a working capital
deficiency of $ 497,084, a stockholder's deficiency of $ 487,221 and a deficit
accumulated during development state of $ 422,626. If we are unable to continue
as a going concern, you may lose your entire investment.

There is a limited public market for our common stock and stockholders may be
unable to liquidate their shares. Our shares are listed on the Over-the-Counter
Bulletin Board, and there is a limited volume of sales, thus providing a limited
liquidity into the market for our shares. As a result of the foregoing,
stockholders may be unable to liquidate their shares.

We are reliant on key personnel and if we lose any of our key employees, it
could have a material adverse effect on our business and operations. Our success
depends largely on highly skilled personnel. We rely heavily upon personnel
having skills in areas such as determining the validity of intellectual
property, maintaining intellectual property, identifying infringing parties,
developing and commercializing the company's intellectual property, and general
operations. The loss of the services of any key personnel could adversely affect
us.

We may not be able to manage growth effectively and our business, results of
operations and financial condition could be adversely affected. The company's
growth is expected to place a significant strain on the company's managerial,
operational and financial resources. There can be no assurance that the
company's systems, procedures or controls will be adequate to support the
company's operations or that the company's management will be able to achieve
the rapid execution necessary to unsuccessfully implement its business plan. If
the company is unable to manage growth effectively, the company's business,
results of operations and financial condition will be adversely affected.

Even if there is a market for our common stock, our stock price may be volatile.
Even if there is a market for our shares, we anticipate that such market would
be subject to wide fluctuations in response to several factors, including, but
not limited to: (1) actual or anticipated variations in our results of
operations; (2) our ability or inability to generate new revenues; (3) our
ability or inability to attract additional investment; and (4) increased
competition. Our shares are traded on the over-the-counter Bulletin Board. In
recent years the stock market in general has experienced extreme price
fluctuations that have oftentimes have been unrelated to the operating
performance of the affected companies. Similarly, the market price of our shares
may fluctuate significantly based upon factors unrelated or disproportionate to
our operating performance. These market fluctuations, as well as general
economic, political and market conditions may adversely affect the market price
of our shares.

We do not expect to pay dividends for the foreseeable future. We have not
declared or paid, and do not anticipate declaring or paying in the foreseeable
future, any cash dividends on our shares. Our ability to pay dividends is
dependent upon, among other things, our future earnings, if any, as well as our
operating and financial condition, capital requirements, general business
conditions and other pertinent factors. Furthermore, any payment of dividends by
us is subject to the discretion of our board of directors. Accordingly, there is
no assurance that any dividends will ever be paid on our shares.

                                       15
<PAGE>

We are subject to price volatility due to our operations materially fluctuating;
as a result, any quarter-to-quarter comparisons in our financial statements may
not be meaningful. As a result of the evolving nature of the markets in which we
compete, as well as the current nature of the public markets and our current
financial condition, we believe that our operating results may fluctuate
materially, as a result of which quarter-to-quarter comparisons of our results
of operations may not be meaningful. If in some future quarter, whether as a
result of such a fluctuation or otherwise, our results of operations fall below
the expectations of securities analysts and investors, the trading price of our
common stock would likely be materially and adversely affected. You should not
rely on our results of any interim period as an indication of our future
performance. Additionally, our quarterly results of operations may fluctuate
significantly in the future as a result of a variety of factors, many of which
are outside our control. Factors that may cause our quarterly results to
fluctuate include, among others:

o        our ability to retain existing clients and customers;

o        our ability to attract new clients and customers at a steady rate;

o        our ability to maintain client satisfaction;

o        the extent to which our products gain market acceptance;

o        the timing and size of client and customer purchases;

o        introductions of products and services by competitors;

o        price competition in the markets in which we compete;

o        our ability to attract, train, and retain skilled management;

o        the amount and timing of operating costs and capital expenditures
           relating to the expansion of our business, operations, and
           infrastructure; and

o        general economic conditions and economic conditions specific to
           licensing.

We do not carry liability insurance or business interruption insurance. Although
we carry customary Director's & Officer's Insurance, we do not carry general
liability insurance or business interruption insurance at this time. The company
intends to purchase such insurance after it either brings in a material amount
of additional revenue or after it raises additional capital. Consequently, if
any peril or event occurs that would subject the company to liability or
business interruption, we will not be insured for that loss. Such an event could
severely affect our ability to conduct our normal business operations and
adversely affect both our business operations and our revenue.

                                       16
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS.


             Report of Independent Registered Public Accounting Firm

To the Board of Directors of:
     Connected Media Technologies, Inc.
     (A Development Stage Company)

We have audited the accompanying consolidated balance sheet of Connected Media
Technologies, Inc. and Subsidiaries (a development stage company) as of December
31, 2005 and the related consolidated statements of operations, changes in
stockholders' deficiency and cash flows for the years ended December 31, 2005
and 2004 and for the period from July 19, 2001 (inception) to December 31, 2005.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly in all material respects, the consolidated financial position of
Connected Media Technologies, Inc. and Subsidiaries (a development stage
company) as of December 31, 2005, and the consolidated results of their
operations, changes in stockholders' deficiency and cash flows for the years
ended December 31, 2005 and 2004, and for the period from July 19, 2001
(inception) to December 31 2005, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
consolidated financial statements, the Company has no revenues, a net loss of
$1,567,108 and cash used in operations of $668,368 in 2005, and a working
capital deficiency of $1,895,732, a stockholders' deficiency of $1,884,668 and a
deficit accumulated during development stage of $1,989,734 at December 31, 2005.
In addition, there was a default on certain note principal and interest payments
after December 31, 2005. These factors raise substantial doubt about its ability
to continue as a going concern. Management's plan in regards to these matters is
also described in Note 9. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.




SALBERG & COMPANY, P.A.
Boca Raton, Florida
March 17, 2006

                                       F-2
<PAGE>

<TABLE>

               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                               December 31, 2005


                                 ASSETS

Current Assets
<S>                                                                        <C>
  Cash                                                                     $             1,408
  Prepaid expenses                                                                       2,500
                                                                             ------------------
Total Current Assets                                                                     3,908
                                                                             ------------------

Office equipment, net of $23,762 accumulated depreciation                               11,064

                                                                             ------------------
Total Assets                                                               $            14,972
                                                                             ==================

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities
  Accounts payable                                                         $           123,407
  Accounts payable - related parties                                                   184,491
  Accrued expenses                                                                      65,645
  Accrued compensation - officers                                                      389,645
  Accrued payroll taxes payable                                                         16,146
  Accrued interest payable - related party                                              10,766
  Accrued interest payable                                                              59,165
  Line of credit                                                                       248,375
  Note payable - related party                                                         202,000
  Note payable                                                                         600,000
                                                                             ------------------
Total Current Liabilities                                                            1,899,640
                                                                             ------------------


Total Liabilities                                                                    1,899,640
                                                                             ------------------

Commitments and Contingencies (See Note 8)

Stockholders' Deficiency
  Preferred stock,  $0.0001 par value; 10,000,000 shares authorized,
    none issued  and outstanding                                                             -
  Common stock,  $0.0001 par value; 750,000,000 shares authorized,
    302,507,663 shares issued 300,507,663 outstanding                                   30,251
  Additional paid-in capital                                                           359,984
  Deficit accumulated during the development stage                                  (1,989,734)
                                                                             ------------------
                                                                                    (1,599,499)
                                                                             ------------------
  Less:  Deferred equity line commitment fee                                          (134,417)
  Less:  Deferred compensation                                                          (1,709)
  Less:  Deferred consulting                                                           (14,043)
  Less:  Treasury stock (2,000,000 shares at cost)                                    (135,000)
                                                                             ------------------
Total Stockholders' Deficiency                                                      (1,884,668)
                                                                             ------------------

Total Liabilities and Stockholders' Deficiency                             $            14,972
                                                                             ==================
</TABLE>


                                       F-3
<PAGE>

<TABLE>

               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                      Consolidated Statements of Operations


<CAPTION>
                                                                                                For the
                                                                                              Period from
                                                                   Year ended                July 19, 2001
                                                                  December 31,              (Inception) to
                                                                2005           2004       December 31, 2005
                                                          -------------    -------------    -------------
<S>                                                       <C>              <C>              <C>
Revenue                                                   $          --    $          --    $          --
                                                          -------------    -------------    -------------

Operating Expenses
Payroll, contract services and stock based compensation         606,918          369,543          976,461
Professional fees                                               455,079          258,686          932,812
Research and development                                         27,977           30,194           58,171
Rent                                                             26,151           19,255           45,406
Depreciation                                                      7,014            9,398           29,619
Costs of recapitalization                                            --           62,217           62,217
Equity line commitment fee expense                              104,356               --          104,356
General and administrative                                      209,565           66,442          290,546
Impairment loss                                                      --               --           61,265
                                                          -------------    -------------    -------------
Total Operating Expenses                                      1,437,060          815,735        2,560,853
                                                          -------------    -------------    -------------

Loss from Operations                                         (1,437,060)        (815,735)      (2,560,853)

Other Income (Expense)
Other income                                                         --          700,000          705,000
Interest expense - related party                                 (8,023)          (2,563)         (10,586)
Interest expense                                               (122,025)          (1,270)        (123,295)
                                                          -------------    -------------    -------------
Total Other Income (Expense), net                              (130,048)         696,167          571,119
                                                          -------------    -------------    -------------

Net Loss                                                  $  (1,567,108)   $    (119,568)   $  (1,989,734)

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

Weighted average number of shares outstanding
  during the period - basic and diluted                     298,015,773      277,901,150      278,089,705
                                                          =============    =============    =============

</TABLE>

                                       F-4
<PAGE>

<TABLE>

               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
          Consolidated Statement of Changes in Stockholders' Deficiency
            Years ended December 31, 2005 and 2004 and for the period
              from July 19, 2001 (inception) to December 31, 2005
<CAPTION>

                                                                          Additional   Deferred Equity
                                                    Common Stock           Paid-in     Line Commitment  Deferred       Deferred
                                                  Shares        Amount     Capital          Fee         Compensation  Consulting
                                                 -----------  -----------  -----------   -----------   -----------   -----------
<S>                                              <C>          <C>          <C>           <C>           <C>           <C>
Issuance to founders                             270,072,000  $    27,007  $    (7,007)  $        --            --   $        --

Net loss, 2001                                            --           --           --            --            --            --
                                                 -----------  -----------  -----------   -----------   -----------   -----------

Balance, December 31, 2001                       270,072,000       27,007       (7,007)           --            --            --

Net loss, 2002                                            --           --           --            --            --            --
                                                 -----------  -----------  -----------   -----------   -----------   -----------

Balance, December 31, 2002                       270,072,000       27,007       (7,007)           --            --            --

Net loss, 2003                                            --           --           --            --            --            --
                                                 -----------  -----------  -----------   -----------   -----------   -----------

Balance, December 31, 2003                       270,072,000       27,007       (7,007)           --            --            --

Deemed issuance including treasury shares         22,328,000        2,233       (2,233)           --            --            --

Recapitalization (net equity at reverse
 merger date)                                             --           --          405            --            --            --

Shares issued in exchange for consulting fees      1,666,666          167       49,833            --            --            --

Net loss, 2004                                            --           --           --            --            --            --
                                                 -----------  -----------  -----------   -----------   -----------   -----------

Balance, December 31, 2004                       294,066,666       29,407       40,998            --            --            --

Stock issued for consulting services               4,441,000          444      132,786            --            --       (66,615)

Amortization of deferred consluting                       --           --           --            --            --        66,615

Stock issued for placement agent fee                 200,000           20        5,980            --            --            --

Stock issued for equity line commitment            3,800,000          380      115,520            --            --            --

Deferred equity line commitment fee                       --           --           --      (205,265)           --            --

Amortization of deferred equity line
commitment fee                                            --           --           --        70,848            --            --

Warrants issued on equity line commitment                 --           --        4,364            --            --            --

Recognition of stock based compensation expense
 under graded vesting                                     --           --       29,726            --            --            --

Grant of stock options - compensation                     --           --        4,103            --        (3,761)           --

Amortization of deferred compensation                     --           --           --            --         2,052            --

Grant of stock options - consulting                       --           --       26,507            --            --       (21,005)

Amortization of deferred consulting                       --           --           --            --            --         6,962

Net loss, 2005                                            --           --           --            --            --            --
                                                 -----------  -----------  -----------   -----------   -----------   -----------

Balance, December 31, 2005                       302,507,666  $    30,251  $   359,984   $  (134,417)  $    (1,709)  $   (14,043)
                                                 ===========  ===========  ===========   ===========   ===========   ===========
</TABLE>



<TABLE>
<CAPTION>

                                           Deficit accumulated
                                               during the        Treasury
                                            development stage      Stock           Total
                                                 -----------   -----------   -----------

<S>                                              <C>           <C>           <C>
Issuance to founders                                      --   $        --        20,000

Net loss, 2001                                       (47,059)           --       (47,059)
                                                 -----------   -----------   -----------

Balance, December 31, 2001                           (47,059)           --       (27,059)

Net loss, 2002                                       (78,194)           --       (78,194)
                                                 -----------   -----------   -----------

Balance, December 31, 2002                          (125,253)           --      (105,253)

Net loss, 2003                                      (177,805)           --      (177,805)
                                                 -----------   -----------   -----------

Balance, December 31, 2003                          (303,058)           --      (283,058)

Deemed issuance including treasury shares                 --      (135,000)     (135,000)

Recapitalization (net equity at reverse
 merger date)                                             --            --           405

Shares issued in exchange for consulting fees             --            --        50,000

Net loss, 2004                                      (119,568)           --      (119,568)
                                                 -----------   -----------   -----------

Balance, December 31, 2004                          (422,626)     (135,000)     (487,221)

Stock issued for consulting services                      --            --        66,615

Amortization of deferred consluting                       --            --        66,615

Stock issued for placement agent fee                      --            --         6,000

Stock issued for equity line commitment                   --            --       115,900

Deferred equity line commitment fee                       --            --      (205,265)

Amortization of deferred equity line
commitment fee                                            --            --        70,848

Warrants issued on equity line commitment                 --            --         4,364

Recognition of stock based compensation expense
 under graded vesting                                     --            --        29,726

Grant of stock options - compensation                     --            --           342

Amortization of deferred compensation                     --            --         2,052

Grant of stock options - consulting                       --            --         5,502

Amortization of deferred consulting                       --            --         6,962

Net loss, 2005                                    (1,567,108)           --    (1,567,108)
                                                 -----------   -----------   -----------

Balance, December 31, 2005                       $(1,989,734)  $  (135,000)  $(1,884,668)
                                                 ===========   ===========   ===========

</TABLE>

                                       F-5
<PAGE>

<TABLE>

               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows

<CAPTION>

                                                                                              For the
                                                                                            Period from
                                                                    Year Ended             July 19, 2001
                                                                   December 31,           (Inception) to
                                                                 2005         2004       December 31, 2005
                                                              -----------  ----------- ----------------------
Cash Flows From Operating Activities:
<S>                                                         <C>            <C>          <C>
Net (Loss)                                                  $ (1,567,108)  $ (119,568)  $         (1,989,734)
Adjustments to reconcile net (loss) to net cash
  Provided by (Used in) operations:
Depreciation                                                       7,014        9,398                 29,619
Stock issued for services                                          6,000       50,000                 56,000
Recognition of stock based compensation for prior
 employee stock option grant                                      29,726            -                 29,726
Recognition of equity line commitment fee expense                 70,848            -                 70,848
Recognition of deferred compensation                               2,394            -                  2,394
Recognition of deferred consulting                               145,694            -                145,694
Impairment loss - patent and trademark                                 -            -                 61,265

Changes in operating assets and liabilities:
(Increase) Decrease
  Prepaid Expenses                                                (2,500)           -                 (2,500)
Increase (Decrease)
  Accounts payable                                                97,260     (114,477)               123,406
  Accounts payable - related party                               136,792       47,699                184,491
  Accrued expenses                                                55,000       10,645                 65,645
  Accrued compensation - officers                                285,544      104,101                389,645
  Accrued payroll taxes payable                                   (1,130)      17,276                 16,146
  Accrued interest payable - related party                         8,203        2,563                 10,766
  Accrued interest payable                                        57,895        1,270                 59,165
                                                              -----------  ----------- ----------------------
Net Cash Provided by (Used In) Operating Activities             (668,368)       8,907               (747,424)
                                                              -----------  ----------- ----------------------

Cash Flows From Investing Activities:
  Purchase of equipment                                           (8,215)     (11,576)               (40,683)
  Patent and trademark cost disbursements                              -            -                (61,265)
  Advance to related party                                             -      (20,000)               (20,000)
  Loan repayment from related party                               20,000            -                 20,000
  Cash acquired in recapitalization                                    -          405                    405
                                                              -----------  ----------- ----------------------
Net Cash Provided By (Used In) Investing Activities               11,785      (31,171)              (101,543)
                                                              -----------  ----------- ----------------------


Cash Flows From Financing Activities:
  Proceeds from issuance of common stock                               -            -                 20,000
  Proceeds from promissory notes                                 600,000            -                600,000
  Equity line commitment fee disbursement                        (85,000)           -                (85,000)
  Proceeds from related party notes                               42,000      190,000                232,000
  Repayments of related party notes                              (30,000)    (266,000)               (30,000)
  Recapitalization consideration paid for treasury shares              -     (135,000)              (135,000)
  Proceeds from line of credit                                    97,000      151,375                248,375
  Proceeds from related party loans                                    -      110,000                266,000
  Repayments of related party loans                                    -            -               (266,000)
                                                              -----------  ----------- ----------------------
Net Cash Provided by Financing Activities                        624,000       50,375                850,375
                                                              -----------  ----------- ----------------------

Net (Decrease)Increase in Cash                                   (32,583)      28,111                  1,408

Cash at Beginning of Period                                       33,991        5,880                      -
                                                              -----------  ----------- ----------------------

Cash at End of Period                                       $      1,408   $   33,991   $              1,408
                                                              ===========  =========== ======================

Supplemental disclosure of cash flow information:

Cash paid for interest                                      $     14,420   $        -   $             14,420
                                                              ===========  =========== ======================
Cash paid for taxes                                         $          -   $        -   $      -           -
                                                              ===========  =========== ======================

Supplemental disclosure of Non-Cash Investing and Financing Activities:

Common stock issued for compensation                        $      4,103   $        -   $              4,103
                                                              ===========  =========== ======================
Common stock issued for consulting services                 $    158,901   $        -   $            158,901
                                                              ===========  =========== ======================
Deferred equity line commitment fee                         $    120,264   $        -   $            120,264
                                                              ===========  =========== ======================

</TABLE>

                                       F-6
<PAGE>

               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

Note 1            Nature of Operations and Summary of Significant Accounting
                  Policies
                  --------------------------------------------------------------

         (A)      Nature of Business

         Trust Licensing, LLC ("TLLLC") was formed as a Florida limited
         liability corporation on July 19, 2001. On August 24, 2004, the company
         entered into a transaction that was treated as a recapitalization with
         a publicly held shell known as New Mountaintop Corporation ("NMC"). NMC
         was incorporated in Delaware on December 11, 1989. On August 23, 2004,
         NMC formed a wholly owned subsidiary named Trust Licensing, Inc.
         ("TLI") (legal acquirer), a Florida corporation, which TLLLC was merged
         into in a transaction treated as a recapitalization of TLLLC. (See Note
         6(B) regarding recapitalization.) In connection with the reverse
         merger, NMC changed its name to Trust Licensing, Inc. Subsequently, in
         early May 2005 the company was advised by the Secretary of State of
         Delaware that the State had failed to notify the company that the use
         of the word "Trust" in its corporate name was inconsistent with the
         applicable provisions of the Delaware Banking Law and requested that
         the company change its name. Therefore, on May 18, 2005, the company
         changed its name to Connected Media Technologies, Inc.

         Subsequently, effective March 28, 2005, the company received by
         assignment, at zero cost (in an unrelated transaction), all of the
         issued and outstanding shares of Connected Media, Inc., an inactive
         California corporation with no assets or liabilities. The California
         Corporation had been formed by a third party in anticipation of a
         transaction with the company, which was never consummated. The company
         received this assignment in connection with the decision to change its
         corporate name. There was no accounting effect to this transaction. On
         May 18, 2005, the parent corporation changed its name to Connected
         Media Technologies, Inc.

         Currently, the consolidated company consists of the parent corporation,
         Connected Media Technologies, Inc., its wholly owned subsidiary Trust
         Licensing, Inc., a Florida corporation, and the wholly owned inactive
         subsidiary Connected Media, Inc., a California corporation. For
         purposes of clarity, the consolidated entity consisting of the parent
         and the wholly owned subsidiaries are hereafter collectively referred
         to as the "company."

         The company is a technology and intellectual property company that
         designs technology concepts with a wide range of potential commercial
         applications. Currently the company owns two issued patent, #6,101,534
         ("#534 Patent") (see Notes 2, 8(A) and 9) and a second patent entitled
         "A Media Valuation System", #6,952,697, which was issued in October
         2005. The company intends to license various technologies pursuant to
         the #534 Patent and the second patent. In addition to direct licensing
         royalty arrangements it intends to enter into, the company has also
         enforced its rights pertaining to the #534 Patent, and may do so with
         other patents that are issued to it.

         Activities during the development stage include acquisition of debt and
         equity-based financing, acquisition of and creation of intellectual
         properties and certain research and development activities to improve
         current technological concepts.

                                       F-7
<PAGE>

               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         (B)      Principles of Consolidation

         The  consolidated  financial  statements  include the accounts of
         Connected Media Technologies, Inc. (f/k/a Trust Licensing, Inc.), a
         Delaware corporation, and its wholly owned subsidiaries: (a) Trust
         Licensing, Inc., a Florida corporation (successor-by-merger to Trust
         Licensing, LLC); and (b) Connected Media, Inc., an inactive California
         corporation. All significant intercompany accounts and transactions
         have been eliminated in consolidation.

         (C)      Use of Estimates

         In preparing financial statements, management is required 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 revenues and expenses during the
         periods presented. Actual results may differ from these estimates.

         Significant estimates during 2005 and 2004 and from July 19, 2001
         (inception) to December 31, 2005 include depreciable lives on
         equipment, valuation of intangible assets and valuation allowance for
         deferred tax assets.

         (D)      Cash and Cash Equivalents

         For the purpose of the cash flow statements, the Company considers all
         highly liquid investments with original maturities of three months or
         less at the time of purchase to be cash equivalents.

         (E)      Concentrations

         The Company maintains its cash in bank deposit accounts, which, at
         times, exceed federally insured limits. As of December 31, 2005, the
         Company did not have any deposits in excess of federally insured
         limits. The Company has not experienced any losses in such accounts
         through December 31, 2005.

         The Company has two patents available for licensing as of December 31,
         2005. (See Note 1(A) and 2).

         (F)      Equipment

         Equipment is stated at cost, less accumulated depreciation.
         Expenditures for maintenance and repairs are charged to expense as
         incurred. Depreciation is provided using the 200% double declining
         balance method over the estimated useful lives of the assets, which is
         five years. Total cost of equipment as of December 31, 2005 is $34,826
         less accumulated depreciation of $23,762. Depreciation expense for the
         years ended December 31, 2005 and 2004 and from July 19, 2001
         (inception) to December 31, 2005 was $7,014, $9,398 and $29,619,
         respectively.


                                       F-8
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         (G)      Long-Lived Assets

         The company reviews long-lived assets and certain identifiable assets
         related to those assets for impairment whenever circumstances and
         situations change such that there is an indication that the carrying
         amounts may not be recoverable. If the undiscounted future cash flows
         of the long-lived assets are less that the carrying amount, their
         carrying amount is reduced to fair value and an impairment loss is
         recognized. During the year ended December 31, 2005 and 2004, and for
         the period from July 19, 2001 (inception) to December 31, 2005, the
         company recognized an impairment loss of $0, $0, and $61,265,
         respectively. The impairment losses are related to previously
         capitalized amounts relating to the #534 Patent (See Notes 2, 7 and
         8(A)).

         (H)      Revenue Recognition

         The company follows the guidance of the Securities and Exchange
         Commission's Staff Accounting Bulletin No. 104 for revenue recognition.
         In general, the company records revenue when persuasive evidence of an
         arrangement exists, services have been rendered or product delivery has
         occurred, the sales price to the customer is fixed or determinable, and
         collectibility is reasonably assured. The policies set forth below
         reflect specific criteria for the various revenues streams of the
         company.

         The company intends to generate and collect periodic royalty revenue in
         connection with licensing agreements associated with its intellectual
         property. Royalty revenue is recognized as it is earned. The company
         did not recognize any royalty revenue for the year ended December 31,
         2005 or 2004 or for the period from July 19, 2001 (inception) to
         December 31, 2005.

         The company recognizes income from licensing of patents ratably over
         the lesser of the economic or legal life of any granted licenses. The
         company did not recognize any licensing revenue for the year ended
         December 31, 2005, and 2004 or for the period from July 19, 2001
         (inception) to December 31, 2005.

         The company recognizes "other income" from patent infringement claims
         when the claim is settled, whether by negotiation or litigation. The
         company recognized no "other income" for the year ended December 31,
         2005 or 2004, and $705,000 of "other income" for the period from July
         19, 2001 (inception) to December 31, 2005. (See Note 8(A) and below).

         During the year ended December 31, 2002, the company recognized $5,000
         as a component of "other income". The source of this income came from
         what resulted in a settlement between the company and an unrelated
         third party relating to the #534 Patent. There were no continuing
         commitments in connection with this settlement. During the year ended
         December 31, 2004, $700,000 was recognized from a patent infringement
         claim related to the # 534 Patent (See Note 8 (A)).

         (I)      Net Loss Per Share

         In accordance with Statement of Financial Accounting Standards No. 128,
         "Earnings per Share", basic earnings per share is computed by dividing
         the net income (loss) less preferred dividends for the period by the
         weighted average number of shares outstanding. Diluted earnings per
         share is computed by dividing net income (loss) less preferred


                                       F-9
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005


         dividends by the weighted average number of shares outstanding
         including the effect of share equivalents. At December 31, 2005 there
         were 3,500,000 options outstanding ("Issued Options") and 200,000
         warrants outstanding ("Issued Warrants") that could potentially dilute
         future earnings per share (See Note 6(D)). For the period from July 19,
         2001 (inception) to December 31, 2005, the 3,500,000 Issued Options and
         200,000 Issued Warrants represented the only common share equivalents
         which could potentially dilute future earnings per share. The effect of
         these common stock equivalents is anti-dilutive since the company
         reflects a net loss.

         (J)      Stock Based Compensation

         The company follows the fair value method under the provisions of
         Statement of Financial Accounting Standards ("SFAS") No. 123R,
         "Accounting for Stock-Based Compensation," in accounting for
         stock-based transactions with employees and non-employees. In December
         2002, SFAS No. 148, "Accounting for Stock-Based Compensation -
         Transition and Disclosure," was issued. This pronouncement amends SFAS
         No. 123, "Accounting for Stock-Based Compensation," and provides
         guidance to companies that wish to voluntarily change to the fair value
         based method of accounting for stock-based employee compensation, among
         other provisions. The company has historically accounted for, and will
         continue to account for, its employee stock-based compensation under
         the fair value based method provisions of SFAS No. 123, and therefore
         the issuance of SFAS No. 148 did not have any impact on the company's
         consolidated financial position, results of operations or cash flows.

         In December 2004, the FASB issued SFAS No. 123 ("SFAS 123") (revised
         2004) "Share-Based Payment" (SFAS 123R"). This Statement requires that
         the cost resulting from all share-based transactions be recorded in the
         financial statements. The Statement establishes fair value as the
         measurement objective in accounting for share-based payment
         arrangements and requires all entities to apply a fair-value-based
         measurement in accounting for share-based payment transactions with
         employees. The Statement also establishes fair value as the measurement
         objective for transactions in which an entity acquires goods or
         services from non-employees in share-based payment transactions. The
         Statement replaces SFAS 123 "Accounting for Stock-Based Compensation"
         and supersedes APB Opinion No. 25 "Accounting for Stock Issued to
         Employees". At December 31, 2005, the company adopted the provisions of
         SFAS No. 123R.

         See Note 6 for valuations pursuant to SFAS 123R.

         (K)      Research and Development Costs

         Pursuant to SFAS No. 2, "Research and Development Costs" ("SFAS 2"),
         disbursements are expensed as incurred. Research and development
         expense for the years ended December 31, 2005 and 2004, was $27,977 and
         $30,194, respectively, and $58,171 for the period from July 19, 2001
         (inception) to December 31, 2005.

         (L)      Income Taxes

         For the period from July 19, 2001 (inception) to August 24, 2004, TLLC
         was taxed as a partnership and was not subject to federal and state
         income taxes; accordingly, no provision had been made.

                                       F-10
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         On August 24, 2004, effective with the reverse triangular merger and
         the change in legal entity from a limited liability corporation to a
         C-Corporation, the Company accounts for income taxes under the
         Financial Accounting Standards No. 109 "Accounting for Income Taxes"
         ("Statement 109"). Under Statement 109, deferred tax assets and
         liabilities are recognized for the future tax consequences attributable
         to differences between the financial statement carrying amounts of
         existing assets and liabilities and their respective tax bases.
         Deferred tax assets and liabilities are measured using enacted tax
         rates expected to apply to taxable income in the years in which those
         temporary differences are expected to be recovered or settled. Under
         Statement 109, the effect on deferred tax assets and liabilities of a
         change in tax rates is recognized in income in the period, which
         includes the enactment date. (See Note 10).

         (M)      New Accounting Pronouncements

         In December 2004, the FASB issued SFAS 153 "Exchanges of Non-monetary
         Assets" - an amendment of APB Opinion No. 29. This Statement amended
         APB Opinion 29 to eliminate the exception for non-monetary exchanges of
         similar productive assets and replaces it with a general exception for
         exchanges of non-monetary assets that do not have commercial substance.
         A non-monetary exchange has commercial substance if the future cash
         flows of the entity are expected to change significantly as a result of
         the exchange. The adoption of this Standard is not expected to have any
         material impact on the Company's consolidated financial position,
         results of operations or cash flows.

         In December 2004, the FASB issued SFAS 123 (revised 2004) "Share-Based
         Payment". This Statement requires that the cost resulting from all
         share-based transactions be recorded in the financial statements. The
         Statement establishes fair value as the measurement objective in
         accounting for share-based payment arrangements and requires all
         entities to apply a fair-value-based measurement in accounting for
         share-based payment transactions with employees. The Statement also
         establishes fair value as the measurement objective for transactions in
         which an entity acquires goods or services from non-employees in
         share-based payment transactions. The Statement replaces SFAS 123
         "Accounting for Stock-Based Compensation" and supersedes APB Opinion
         No. 25 "Accounting for Stock Issued to Employees". The provisions of
         this Statement was effective for the Company beginning with its fiscal
         year ending 2005.

         In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and
         Error Corrections" ("SFAS 154"). This statement replaces APB Opinion
         No. 20 "Accounting Changes" and FASB Statement No. 3 "Reporting
         Accounting Changes in Interim Financial Statements". SFAS 154 applies
         to all voluntary changes in accounting principle and to changes
         required by an accounting pronouncement in the unusual instance that
         the pronouncement does not include specific transition provisions.
         SFAS154 requires retrospective application to prior periods' financial
         statements of changes in accounting principle, unless it is
         impracticable to determine either the period specific effects or the
         cumulative effect of the change. When it is impracticable to determine
         the period specific effects of an accounting change on one or more
         individual prior periods presented, this SFAS requires that the new
         accounting principle be applied to the balances of assets and
         liabilities as of the beginning of the earliest period for which

                                       F-11
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         retrospective application is practicable and that a corresponding
         adjustment be made to the opening balance of equity or net assets for
         that period rather than being reported in an income statement. When it
         is impracticable to determine the cumulative effect of applying a
         change in accounting principle to all prior periods, this SFAS requires
         that the new accounting principle be applied as if it were adopted
         prospectively from the earliest date practicable. The Company adopted
         this SFAS as of January 1, 2006. There is no current impact on the
         Company's financial statements with the adoption of this FASB.

Note 2            Patents

Prior to the formation of TLLLC (July 19, 2001), the current Chairman of the
company, who is also the primary beneficiary of Irrevocable Trust Agreement
Number I ("Trust I") (see below) and Irrevocable Trust Agreement Number III
("Trust III") (see below), had created, maintained and enhanced the #534 Patent
and several patent applications. Pursuant to Staff Accounting Bulletin Topic
5(G), "Transfers of Nonmonetary Assets by Promoters or Shareholders", the patent
and several patent applications were contributed to the company at their
historical cost basis of $0 as determined under generally accepted accounting
principles.

On August 13, 2001, the #534 Patent was validly assigned from the
individual/promoter to Trust I and then simultaneously assigned from Trust I to
TLLLC. Subsequently, all costs incurred and paid by the company were initially
capitalized. Pursuant to SFAS No. 144, management is unable to predict positive
future cash flows that can be generated from patent #534 and could not assess a
non-zero fair value of the patent. Pursuant to SFAS No. 144, as discussed above,
all costs were considered non-recoverable and the company charged the statement
of operations for the related impairment loss.

The impairment losses are as follows:

         July 19, 2001 (inception) to December 31, 2001          $  17,014
         Year ended December 31, 2002                            $  39,181
         Year ended December 31, 2003                            $   5,070
         Year ended December 31, 2004                            $       -
         Year ended December 31, 2005                            $       -
                                                                 ---------
         Total impairment loss                                   $  61,265
                                                                 ==========

Note 3            Loans Receivable and Payable, Related Parties
                  ---------------------------------------------

Prior to the reverse merger, TLLLC was owned by Trust III, TLLLC's Founder (who
is also the company's Chairman), the company's current Chief Executive Officer,
and the company's current Executive Vice President. As previously noted, the
primary beneficiary of Trust III is the company's Founder. From July 19, 2001
(Inception) up until time of the August 2004 reverse merger (described in Note
1), Trust III and a separate Trust directly related to the company's Chairman
advanced working capital to TLLLC. Total advances were as follows:

         July 19, 2001 (inception) to December 31, 2001          $  20,000
         Year ended December 31, 2002                            $ 107,000
         Year ended December 31, 2003                            $  29,000
         Year ended December 31, 2004                            $ 110,000
         Total pre-reverse merger advances from
         Trusts directly related to the company's Chairman       $ 266,000
                                                                 =========

                                       F-12
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

All $266,000 of these advances were repaid in full on June 7, 2004 (See Note 7).

Note that these "advances" do not include amounts borrowed from Trust III
pursuant to certain Notes Payable. Notes Payable to Trust III are detailed in
"Notes Payable, Related Party and Accrued Interest Payable, Related Party" in
Note 4.

$20,000 was advanced by the company to Trust III on June 7, 2004. The full
$20,000 was repaid to the company on February 22, 2005 (See Note 7).

All advances to and from the entities mentioned above were non-interest bearing,
unsecured and due on demand.

Note 4            Notes Payable, Related Party and Accrued Interest Payable,
                  Related Party
                  ----------------------------------------------------------

On August 24, 2004, the company issued a note payable for $165,000 to TLLLC for
an original term of nine months bearing interest at the annual rate of 4%. The
borrowing was unsecured. These funds were used in connection with the reverse
triangular merger in order to acquire NMC (a public shell) (see Note 6(B)).
During the year ended December 31, 2004, the entire $165,000 was charged to
capital as costs of recapitalization. Of the $165,000 borrowed, $135,000 was
paid to NMC's former sole officer and director to acquire NMC and the remaining
$30,000 represented a finder's fee paid to an unrelated third party who arranged
for the transaction. On May 16, 2005, the maturity date of this note was
extended to December 9, 2005 pursuant to a Loan Extension Agreement by and
between the Company and Trust III dated May 16, 2005 ("Loan Extension
Agreement"); the extension provides for the same terms currently in force under
the original debt agreement. On January 31, 2006, the maturity date of this note
was extended again to December 9, 2006 pursuant to a Loan Extension Agreement by
and between the Company and Trust III dated January 31, 2006; the extension
provides for the same terms currently in force under the original debt
agreement. At December 31, 2005, $165,000 remains outstanding. Related accrued
interest payable was $8,932.

On October 8, 2004, TLI issued a note payable for $25,000 to Trust III for an
original term of nine months bearing interest at the annual rate of 4%. The
borrowing was unsecured. The company used these funds in connection with its
general operations. On May 16, 2005, the maturity date of this note was extended
to December 9, 2005 pursuant to the Loan Extension Agreement; the extension
provides for the same terms currently in force under the original debt
agreement. On January 31, 2006, the maturity date of this note was extended
again to December 9, 2006 pursuant to a Loan Extension Agreement by and between
the Company and Trust III dated January 31, 2006; the extension provides for the
same terms currently in force under the original debt agreement. At December 31,
2005, $25,000 remains outstanding. Related accrued interest payable was $1,230.

On March 9, 2005, the company entered into a line of credit arrangement to
borrow up to an additional $55,000 from Trust III. This borrowing was originally
secured, but the security interest was terminated via Termination Agreement
dated March 21, 2005. The line of credit arrangement is evidenced by the
issuance of a Promissory Note/Line of Credit. The note bears interest at 10% per

                                       F-13
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

annum and was originally payable at the earliest of the company receiving a
bridge loan or equity investment that nets proceeds to the company of at least
$300,000, or December 9, 2005. On May 16, 2005, the maturity date of this note
was extended to December 9, 2005 pursuant to the Loan Extension Agreement; the
extension provides for the same terms currently in force under the original debt
agreement. On January 31, 2006 the maturity date of this note was extended again
to December 9, 2006 pursuant to a Loan Extension Agreement by and between the
Company and Trust III dated January 31, 2006; the extension provides for the
same terms currently in force under the original debt agreement. The company had
drawn down a total of $42,000 of this amount and subsequently repaid $30,000 to
Trust III in June 2005. The repayment of $30,000 specifically related to the
March 9, 2005 borrowing. At December 31, 2005, $12,000 remains outstanding.
Related accrued interest payable at December 31, 2005 was $1,304.

Total Notes Payable, Related Party aggregated $202,000 at December 31, 2005. At
December 31, 2005, the company had Accrued Interest Payable, Related Party for
$10,766 (See Note 7).

Note 5            Line of Credit and Promissory Note
                  ----------------------------------

On October 6, 2004, effective November 16, 2004, the company entered into a
transaction with a Bank pursuant to which the company has access to a two
hundred and fifty thousand dollar ($250,000) line of credit. In general, all or
any portion of the $250,000 may be drawn down at any time, and must be repaid in
full by October 25, 2006, with interest at prime plus 1.5%. In addition,
commencing November 25, 2004 and continuing each consecutive month thereafter,
the company must pay accrued interest on outstanding amounts owed. The company
intends on using the line of credit for general working capital and may also
repay some or all of the loans due Trust III. The credit line is guaranteed by
Trust III and secured by a Certificate of Deposit owned by the Chairman of the
company. As previously noted, the company's Chairman is the primary beneficiary
of Trust III. At December 31, 2005, the company reflected a long-term liability
of $248,375 and related accrued interest payable of $1,861.

On April 11, 2005, the company executed a Promissory Note in favor of Montgomery
Equity Partners, Ltd. ("Montgomery") in the principal amount of $600,000
("Montgomery Note"). The company plans to use the proceeds of the Montgomery
Note as bridge financing. The proceeds were received by the company in two
installments. The first installment of $227,250 (net of related expenses) was
received shortly after execution of the Montgomery Note and the second
installment of $254,250 (net of related expenses) was received by the company in
early June 2005, approximately two (2) days prior to the company's filing of its
pending SB-2. The Montgomery Note accrues interest at the rate of twenty-four
(24%) percent per year and matures one (1) year from its issuance date. For the
first six (6) months, the company is required to make payments of interest only.
Thereafter, the company is required to make payments of principal and interest.
Notwithstanding the foregoing, the first two (2) payments of interest were
deducted from the first installment payment and the second (2) months of
interest were deducted from the second installment payment. The Montgomery Note
is secured by a first priority lien on all of the company's assets. As further
security for the company's obligations under the Note, the company pledged
60,000,000 shares of its common stock to Montgomery. These shares currently are
in escrow. The pledged collateral shares are not considered issued and not
considered outstanding for purposes of computing basic and diluted earnings per
share. In the Event of Default under the Note, Montgomery shall have the right


                                       F-14
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005


to receive the pledged shares at a rate equal to three times the number of
shares of the common stock to be necessary to effectuate repayment of the
principal and accrued interest due and outstanding, from the pledged shares at
the price per share equal to the closing bid price of the company's common
stock, as quoted by Bloomberg, LP, on the date of issuance of the Note. At
December 31, 2005, the entire $600,000 remained outstanding along with related
accrued interest payable of $57,304. In October 2005, the Company defaulted on
an interest payment and in November 2005, the Company defaulted on its first
principal and interest payment due on the April 11, 2005 Promissory Note. No
action has yet been taken by the lender as of the date of this financial
statement. The company has not made the interest payments due in October 2005
and November 2005 and has not made the principal payment due in November 2005.

As discussed above, the company received aggregate gross proceeds of $600,000.
In connection with theses debt issuances, $85,000 was deducted from the gross
proceeds and paid in order to allow the company future access to the Standby
Equity Distribution Agreement ("SEDA") (see Note 6(A)). The Standby Equity
Distribution Agreement is not currently available to the company for any
drawdowns. The $85,000 is being deferred and amortized over the life of the
Standby Equity Distribution Agreement, which is twenty-four months. See Note
6(A) for total equity line commitment fees paid and expensed.

Other fees taken from the $600,000 in gross proceeds include $24,000 relating to
prepaid interest and $9,500 for consulting and related fees due to
Knightsbridge. (See Note 6)

Net proceeds of $ 481,500 were calculated as follows:

            Gross proceeds                                       $ 600,000
            Less: deferred equity line commitment fee            $ (85,000)
            Less: prepaid interest                               $ (24,000)
            Less: consulting fees                                $ ( 9,500)
                                                                 -----------

            Net proceeds                                         $ 481,500

In connection with obtaining the debt funding, the company paid 3,800,000 shares
and 200,000 warrants to affiliates of the lender. These stock based payments are
components of the recorded deferred equity line commitment fee. (See Note 6)

Note 6            Stockholders' Deficiency

         (A)      Stock issuances

         On or about July 19, 2001 (inception) the Company sold 270,072,000
         common shares for $20,000 to Trust III.  (See Note 7)

         On August 24, 2004, the company issued 1,666,663 shares of its common
         stock having a fair value of $0.03 per share aggregating $50,000 in
         exchange for consulting services rendered. The fair value of the stock
         was based on a mutual understanding between the company and the service


                                       F-15
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         provider. There had been no recent cash offerings in which to base the
         fair value per share. In addition, the stock was not publicly traded
         until December 31, 2004.

         On April 11, 2005, the company entered into a Standby Equity
         Distribution Agreement with Cornel Capital Partners, L.P. ("Cornell").
         Pursuant to the Standby Equity Distribution Agreement, the company may,
         at its discretion, periodically sell to Cornell shares of common stock
         for a total purchase price of up to $10,000,000. For each share of
         common stock purchased under the SEDA, Cornell will pay the company 98%
         of the lowest volume weighted average price of the company's common
         stock as quoted by Bloomberg, LP on the Over-the-Counter Bulletin Board
         or other principal market on which the company's common stock is traded
         for the 5 days immediately following the notice date. Further, Cornell
         will retain 6% of each advance under the Standby Equity Distribution
         Agreement. In connection with the Standby Equity Distribution
         Agreement, Cornell received a commitment fee in the form of the
         commitment shares. As part of the Standby Equity Distribution Agreement
         the company agreed to issue to Cornell 3,800,000 common shares which
         where issued in two installments of 1,900,000 shares each, coinciding
         approximately with the company's receipt of the Montgomery Note
         proceeds installments. 1,900,000 shares were issued on April 11, 2005
         and the remaining 1,900,000 shares were issued May 11, 2005. The
         3,800,000 shares were valued based on the closing quoted trading price
         of $0.03 (April 11, 2005) and $0.031 (May 11, 2005). The aggregate fair
         value was $115,900. The fair value of commitment shares will be treated
         as a deferred equity line commitment fee to be amortized over the life
         of the Standby Equity Distribution Agreement.

         Pursuant to the Standby Equity Distribution Agreement, on April 11,
         2005 Cornell was also issued a warrant for 200,000 shares of the
         company's common stock ("Cornell Warrant"). The Cornell Warrant is
         exercisable for a period of two (2) years.
          The exercise price per share under the Cornell Warrant is $0.01 per
         share. The value of the warrants will be treated as a deferred equity
         line commitment fee to be amortized over the life of the Standby Equity
         Distribution Agreement. Pursuant to SFAS 123R, the company valued these
         warrants at $4,365. See assumptions below in 6(D).

         The total equity line commitment fee of $205,264 was calculated as
         follows:

         Cash portion of equity line commitment fee (See Note 6):  $  85,000
         Shares and warrants issued for equity line
                commitment fee (See above)                           120,265
                                                                   ---------
         Total                                                      $205,265
         Equity line commitment fee amortization                     (70,848)
                                                                   ---------
         Deferred equity line commitment fee                       $ 134,417
                                                                   =========

         In connection with the SEDA, the Company entered into a registration
         rights agreement, which requires underlying common shares to be
         registered subject to filing and effective date deadline. Liquidated
         damages of $5,000 per month payable in cash or stock at the holder's
         option are due every 30 days the Company is in violation of the
         deadline. The effectiveness date was not met and the Company accrued
         $25,000 as liquidated damages payable as of December 31, 2005, which is
         included in accrued expenses in the accompanying consolidated balance
         sheet.


                                       F-16
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         Further, on April 11, 2005, the company entered into a Consulting
         Agreement with Knightsbridge Holdings, LLC ("Knightsbridge") whereby
         Knightsbridge will assist the company in a variety of areas including,
         but not limited to financial, strategic and related developmental
         growth. The agreement runs for a term of six (6) months, and will
         continue on a month-to-month basis thereafter subject to a right to
         cancel upon thirty (30) days written notice. The company is obligated
         to pay Knightsbridge a monthly retainer of $2,000 and issued
         Knightsbridge 4,441,000 shares of the company's common stock
         ("Knightsbridge Shares"). Knightsbridge is also entitled to additional
         compensation in the future based upon any transactions that they bring
         to the company. As of June 30, 2005, the company had recorded the fair
         value of the stock issued based on a quoted closing trading price of
         $0.03 per share aggregating $133,230. The $133,230 is being amortized
         over a period of six months as discussed in the terms of the agreement.
         As of December 31, 2005, the full amount has been amortized.

         On April 11, 2005, in connection with the Standby Equity Distribution
         Agreement, the Company entered into a Placement Agent Agreement with
         Monitor Capital, Inc. ("Monitor"). As consideration for to the
         Placement Agent Agreement, the company issued Monitor 200,000 shares of
         its common stock ("Placement Agent Shares") reflecting the placement
         fee. As of June 30, 2005, the company had recorded the fair value of
         the stock issued based on a quoted closing trading price of $.03 per
         share aggregating $6,000. Since there was no access to the Standby
         Equity Distribution Agreement, and no current equity financing to
         offset this offering cost, the entire $6,000 is expensed as a placement
         agent fee. The entire $6,000 is a component of general and
         administrative expenses in the accompanying consolidated financial
         statements.

         A summary of the share issuances for the company is below:

         Shares issued and outstanding, December 31, 2004:     292,066,663
         Treasury shares, December 31, 2004                      2,000,000

         Issuances for the year ending December 31, 2005:

         Cornell Capital Partners, L.P., April 11, 2005          1,900,000
         Knightsbridge Holdings, LLC, April 11, 2005             4,441,000
         Monitor Capital, Inc., April 11, 2005                     200,000
         Escrow shares (security for Montgomery Note),
          April 11, 2005                                        60,000,000
         Cornell Capital Partners, L.P., June 2, 2005            1,900,000
                                                               -----------
         Shares issued by transfer agent, December 31, 2005    362,507,663
                                                               ===========
         Less: Escrow shares, December 31, 2005                 60,000,000
                                                               ============
         Total issued, December 31, 2005                       302,507,663
                                                               ============
         Less: Treasury shares                                  (2,000,000)
                                                               ------------
         Total Outstanding at December 31, 2005                300,507,663
                                                               ============


                                       F-17
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         (B)      Recapitalization

         On August 24, 2004 (the "recapitalization date"), TLLLC was acquired by
         an inactive publicly held Delaware corporation (then NMC) in a
         transaction accounted for as a reverse triangular merger and
         recapitalization. The members of TLLLC received 270,072,000 common
         shares of the publicly held company or approximately 93% of the total
         outstanding voting common stock just subsequent to the reverse
         triangular merger and after giving effect to a 1:10 reverse common
         stock split of the publicly held Delaware corporation prior to the
         reverse triangular merger. The shares of common stock were issued to
         the members of TLLLC as follows: Trust III received 195,054,000 shares,
         the company's President and CEO received 65,018,000 shares and the
         company's Executive Vice President and Secretary received 10,000,000
         shares. As part of the reverse triangular merger, NMC redeemed
         2,000,000 (post-split) shares of its common stock from its sole
         director and former principal shareholder for cash consideration paid
         to the former principal stockholder of NMC totaling $135,000. The
         2,000,000 shares are currently held in the company's treasury as
         treasury stock. Immediately prior to the closing, TLLLC borrowed
         $165,000 from Trust III, a related party, (See Note 4).

         In addition to the $135,000 paid for the public shell accounted for as
         treasury stock, the company incurred and paid an additional $30,000 as
         a finder's fee and $32,217 for certain related legal and other
         professional fees associated with the recapitalization. For the year
         ended December 31, 2004, the company charged the statement of
         operations for $62,217 as total transaction costs of recapitalization
         and $135,000 to treasury stock. There have been no additional charges
         for recapitalization since that time.

         As a result of the above recapitalization, the original shareholders of
         the publicly held shell are deemed to have been issued 20,328,000
         common shares of the company and 2,000,000 are held as treasury shares.
         All share and per share information in the accompanying consolidated
         financial statements has been retroactively restated to reflect the
         recapitalization.

         The company's financial statements just after the transaction consisted
         of the assets and liabilities of entities at historical cost, the
         historical operations of TLLLC, and the operations of the publicly held
         corporation from the recapitalization date.

         (C)      Corporate Name Change

         Effective September 15, 2004, the parent corporation changed its name
         from New Mountaintop Corporation to Trust Licensing, Inc. Effective May
         18, 2005, the parent corporation changed its name from Trust Licensing,
         Inc. to Connected Media Technologies, Inc.

         (D)      Common Stock Options and Warrants Issued for Services

         The company follows fair value accounting and the related provisions of
         SFAS 123R for all share based payment awards. The fair value of each
         option or warrant granted is estimated on the date of grant using the
         Black-Scholes option pricing model. The following is a summary of all
         stock options and warrants granted to employees and non-employees since
         the company's inception, all awards occurred in 2005:


                                       F-18
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         (i)      Stock options granted to employees

         a. Employee award: 2,000,000 stock options (Non-Executive Employee)

                  i.       On February 14, 2005, the Company granted 2,000,000
                           stock options to an employee for past services
                           rendered. The option grant was valued pursuant to
                           SFAS 123R and totaled $40,000.

                  In connection with the provisions of SFAS 123R as they relate
                  to graded vesting, the Company recognized compensation expense
                  of $29,726 for the year ended December 31, 2005. The
                  compensation expense was offset directly with a corresponding
                  credit to additional paid in capital. The remaining $10,274
                  will be recognized as the options vest. There is no deferred
                  portion of equity recorded in connection with this
                  computation.

                  ii. The weighted average assumptions used by management were
as follows:

                           Stock price on grant date                $0.02
                           Exercise price on grant date             $0.02
                           Dividend yield                               0%
                           Expected volatility                     306.50%
                           Risk free interest rate                   4.08%
                           Expected life of option               10 years

                  iii.     The stock option award is exercisable as the vesting
                           occurs. The following represents the vesting of the
                           award:

                           34% of the options granted vested on the vesting
                           commencement date, which was August 26, 2005.

                           2.75% of the options granted vest on the last day of
                           each successive calendar month.

                           At December 31, 2005, 36.75% of the stock options
                           were exercisable since those vesting provisions had
                           been met.

                  iv. These stock options are issued pursuant to the Company's
Equity Incentive Plan.

         b. Employee award - 300,000 stock options (Director)

                  i.       On May 23, 2005, the Company granted 300,000 stock
                           options to an employee for future services to be
                           rendered. The term of services is from May 23, 2005
                           through May 23, 2006. The option grant was valued
                           pursuant to SFAS 123R and totaled $4,103.

                  The Company recognized compensation expense of $2,394. for the
                  year ended December 31, 2005. The remaining $1,710 is
                  accounted for as a contra equity account titled deferred
                  compensation.

                                       F-19
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005


                  ii. The weighted average assumptions used by management were
as follows:

                           Stock price on grant date                $0.04
                           Exercise price on grant date             $0.04
                           Dividend yield                               0%
                           Expected volatility                      44.83%
                           Risk free interest rate                   3.73%
                           Expected life of option                3 years

                  iii.     The stock option award is exercisable as the vesting
                           occurs. The following represents the vesting of the
                           award:

                           100% of the options granted vest on the vesting
commencement date, which is May 23, 2006.

                           At December 31, 2005, no stock options are
exercisable since the vesting provisions have not yet been met.

                  iv. These stock options are issued pursuant to the Company's
Equity Incentive Plan.

     (ii) Stock options and warrants granted to non-employees

                  a. Consultant award - 200,000 stock options

                           i.       On June 1, 2005, the Company granted 200,000
                                    stock options to a consultant for future
                                    services to be rendered. The term of
                                    services is from June 1, 2005 through June
                                    1, 2006. The option grant was valued
                                    pursuant to SFAS 123R and totaled $2,677.

                                    Pursuant to the terms of the option
                                    agreement, since one-fourth of the stock
                                    options granted vest immediately, one-fourth
                                    or $669 was expensed immediately. The
                                    remaining three-fourths or $2,008 is
                                    expensed pro-rata over the service period.
                                    The Company recognized consulting expense of
                                    $1,171 for the year ended December 31, 2005.
                                    The remaining $837 is accounted for as a
                                    contra equity account titled deferred
                                    consulting.

                           ii. The weighted average assumptions used by
management were as follows:

                                    Stock price on grant date           $0.04
                                    Exercise price on grant date        $0.05
                                    Dividend yield                          0%
                                    Expected volatility                 43.95%
                                    Risk free interest rate              3.55%
                                    Expected life of option           3 years


                                       F-20
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

                           iii.     The stock option award is exercisable as the
                                    vesting occurs. The following represents the
                                    vesting of the award:

                                    50,000 stock options vest immediately on
                                    June 1, 2005.

                                    The remaining 150,000 stock options vest and
become exercisable on June 1, 2006.

                                    At December 31, 2005, 50,000 stock options
                                    are exercisable since the vesting provisions
                                    had been met.

                           iv. These stock options are issued pursuant to the
Company's Equity Incentive Plan.

                  b. Consultant award - 500,000 stock options

i.                                  On July 12, 2005, the Company granted
                                    500,000 stock options to a consultant for
                                    future services to be rendered. The term of
                                    services is from July 12, 2005 through July
                                    12, 2006. The option grant was valued
                                    pursuant to SFAS 123R and is approximately
                                    $11,900.

                                    Pursuant to the terms of the option
                                    agreement, 100,000 options vest immediately
                                    and the remaining vest 100,000 for each sale
                                    of consultants' product. A measurement date
                                    is achieved for the 100,000 and a pro rata
                                    value of $2,380 is recognized over the
                                    one-year service period. Variable accounting
                                    is applied for the remaining 400,000 valued
                                    at the $9,520 on the grant date. As of
                                    December 31, 2005, the Company recognized
                                    consulting expense of $5,454. The remaining
                                    $6,446 is accounted for as a contra equity
                                    account titled deferred consulting.

                           ii. The weighted average assumptions used by
management were as follows:

                                    Stock price on grant date           $0.055
                                    Exercise price on grant date        $0.055
                                    Dividend yield                           0%
                                    Expected volatility                  60.00%
                                    Risk free interest rate               3.88%
                                    Expected life of option            3 years

                           iii. These stock options are issued pursuant to the
Company's Equity Incentive Plan.


                                       F-21
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

                  c. Consultant award - 200,000 stock options

i.                                  On July 12, 2005, the Company granted
                                    200,000 stock options to a consultant for
                                    future services to be rendered. The term of
                                    services is from July 12, 2005 through July
                                    12, 2006. The option grant was valued
                                    pursuant to SFAS 123R and is approximately
                                    $4,760.

                                    The Company recognized consulting expense of
                                    $2,181 for the year ended December 31, 2005.
                                    The remaining $2,578 is accounted for as a
                                    contra equity account titled deferred
                                    compensation.

                           ii. The weighted average assumptions used by
management were as follows:

                                    Stock price on grant date        $0.055
                                    Exercise price on grant date     $0.055
                                    Dividend yield                        0%
                                    Expected volatility               60.00%
                                    Risk free interest rate            3.88%
                                    Expected life of option         3 years

                           iii.     The stock option award is exercisable as the
                                    vesting occurs. The option vested in full on
                                    the grant date.

                           iv.      These stock options are issued pursuant to
                                    the Company's Equity Incentive Plan.

                  d. Consultant award - 300,000 stock options

i.                                  On August 1, 2005, the Company granted
                                    300,000 stock options to a consultant for
                                    future services to be rendered. The term of
                                    services is from August 1, 2005 through
                                    August 1, 2006. The option grant was valued
                                    pursuant to SFAS 123R and is approximately
                                    $7,170.

                                    Pursuant to the terms of the option
                                    agreement, 75,000 of the options granted
                                    vest immediately, and the remainder vest on
                                    August 1st 2006 provided the consulting and
                                    technical advisory agreement is still in
                                    effect. A measurement date is achieved for
                                    the 75,000 options and variable accounting
                                    is applied to the remaining 225,000 options.
                                    As of December 31, 2005, the Company
                                    recognized consulting expense of $2,987. The
                                    remaining $4,182 is accounted for as a
                                    contra equity account titled deferred
                                    consulting.

                           ii. The weighted average assumptions used by
management were as follows:


                                       F-22
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

                                    Stock price on grant date           $0.055
                                    Exercise price on grant date        $0.055
                                    Dividend yield                           0%
                                    Expected volatility                  60.00%
                                    Risk free interest rate               4.06%
                                    Expected life of option            3 years



                           iii. These stock options are issued pursuant to the
Company's Equity Incentive Plan.

                  e. Standby Equity Distribution fee - 200,000 stock warrants

                           i.       On April 11, 2005, the Company granted
                                    200,000 stock warrants to the lender as a
                                    commitment for obtaining Standby Equity
                                    Distribution Agreement (See Note 6). The
                                    warrant issuance was valued pursuant to SFAS
                                    123R and totaled $4,365.

                                    Pursuant to the terms of the warrant
                                    agreement, the Company has two years in
                                    which to exercise the warrants. The warrants
                                    are considered fully vested and all warrants
                                    are immediately exercisable. However, since
                                    the warrants are a stock based fee in
                                    connection with obtaining the Standby Equity
                                    Distribution Agreement, the $4,365 is
                                    allocated to a contra equity account,
                                    deferred equity line commitment fee, and
                                    amortized over the two-year life of the
                                    Standby Equity Distribution Agreement.

                           Total gross deferred equity line commitment fee is as
follows:

                           Note 7(A)                 $ 115,900
                           Note 6                    $  85,000
                           Per above                 $   4,365
                                                     ----------
                           Total                     $ 205,265

                           During the year ended December 31, 2005, the Company
                           recognized equity line commitment fee expense of $
                           70,848.

                           ii. The weighted average assumptions used by
management were as follows:

                                    Stock price on grant date           $0.03
                                    Exercise price on grant date        $0.01
                                    Dividend yield                          0%
                                    Expected volatility                 55.59%
                                    Risk free interest rate              3.91%
                                    Expected life of warrant          2 years

                                    200,000 stock warrants vest immediately on
                                    April 11, 2005.

                                       F-23
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005


                                    At December 31, 2005, 200,000 stock warrants
                                    are exercisable since the vesting provisions
                                    had been met.

         A summary of the options granted to employees as of December 31, 2005,
         and 2004 and changes during these periods is presented below:

<TABLE>
<CAPTION>
                                                                                         Weighted Average
                                                              Number of Options           Exercise Price
                                                            -----------------------    ----------------------
<S>                                                                      <C>        <C>
Stock Options
Balance at December 31, 2003                                                 -      $                  -
Granted                                                                      -      $                  -
Exercised                                                                    -      $                  -
Forfeited                                                                    -      $                  -
                                                            -----------------------    ----------------------
Balance at December 31, 2004                                                 -      $                  -

Granted                                                                  2,300,000  $                 0.023
Exercised                                                                    -      $                  -
Forfeited                                                                    -      $                  -
                                                            -----------------------    ----------------------
Balance at December 31, 2005                                             2,300,000  $
                                                                                                      0.023
                                                            -----------------------    ----------------------


Options exercisable at December 31, 2005                                   735,000  $                  .02
                                                            -----------------------    ----------------------
Weighted average fair value of options granted during 2005                          $
                                                                                                      0.018
                                                                                       ----------------------
</TABLE>


The following table summarizes information about employee stock options at
December 31, 2005:
<TABLE>
<CAPTION>
                            Options Outstanding                                           Options Exercisable
------------------------------------------------------------------------------    ---------------------------------------
       Exercise             Number              Weighted           Weighted             Number                Weighted
                                                 Average
                                                Remaining          Average                                    Average
                        Outstanding at         Contractual         Exercise         Exercisable at            Exercise
         Price         December 31, 2005          Life              Price           December 31 2005           Price
      ------------    -------------------    ----------------    -------------    --------------------      -------------
<S>                           <C>                 <C>         <C>                            <C>         <C>
   $        0.02              2,000,000           9.13 Years  $         0.020                735,000     $          0.02
   $        0.04                300,000           9.40 Years            0.040                      -                 --
                      -------------------                        -------------    --------------------      -------------

                              2,300,000                       $         0.022                735,000     $             -
                      ===================                        =============    ====================      =============
</TABLE>

A summary of the options and warrants issued to non-employees as of December 31,
2005 and 2004 and changes during these periods is presented below:


                                       F-24
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

<TABLE>
<CAPTION>

                                                             Number of Options          Weighted Average
                                                                                         Exercise Price
                                                           -----------------------    ----------------------
<S>                                                                     <C>        <C>
Stock Options/Warrants
Balance at December 31, 2003                                                -      $                  -
Granted                                                                     -      $                  -
Exercised                                                                   -      $                  -
Forfeited                                                                   -      $                  -
                                                           -----------------------    ----------------------
Balance at December 31, 2004                                                -      $                  -
Granted                                                                 1,400,000  $                  0.048
Exercised                                                                   -      $                  -
Forfeited                                                                   -      $                  -
                                                           -----------------------    ----------------------
Balance at December 31, 2005                                            1,400,000  $                  0.048
                                                           -----------------------    ----------------------

Options/Warrants exercisable at December 31, 2005                         625,000  $                  0.012
                                                           -----------------------    ----------------------

Weighted average fair value of options granted during 2005                         $                  0.022
                                                                                      ----------------------
</TABLE>

The following table summarizes information about non-employee stock
options/warrants at December 31, 2005:
<TABLE>
<CAPTION>

                        Options/Warrants Outstanding                                   Options/Warrants Exercisable
------------------------------------------------------------------------------    ---------------------------------------
       Range of             Number              Weighted           Weighted             Number                Weighted
                                                 Average
                                                Remaining          Average                                    Average
       Exercise         Outstanding at         Contractual         Exercise         Exercisable at            Exercise
         Price         December 31, 2005          Life              Price          December 31, 2005           Price
      ------------    -------------------    ----------------    -------------    --------------------      -------------
<S>         <C>               <C>                  <C>        <C>                            <C>         <C>
   $   0.05-.055              1,200,000            .52 Years  $        .0361                 425,000     $          .009
   $         0.01               200,000           1.28 Years           .0118                 200,000                .003
                      -------------------                        -------------    --------------------      -------------
                              1,400,000                       $        .048                  625,000     $          .012
                      ===================                        =============    ====================      =============
</TABLE>

         (E)      Capital Structure

         On April 28, 2005, the company amended its articles of incorporation to
         increase the authorized common stock to 750,000,000 shares having a par
         value of $ 0.0001. Additionally, the company authorized for issuance
         10,000,000 shares of preferred stock having a par value of $0.0001.

Note 7            Related Parties

On July 19, 2001 (inception), TLLLC sold 270,072,000 common shares for $20,000
to Trust III (See Note 2).

On August 13, 2001, the patent was validly assigned from the individual/promoter
to Trust I and simultaneously assigned from Trust I to TLLLC. Effective August
24, 2004, the patent is owned by TLI as a result of the reverse triangular
merger (See Note 2).


                                       F-25
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

During the period from July 19, 2001 (inception) to December 31, 2004, the
company received working capital from related parties totaling $266,000. The
company repaid the entire $266,000 on June 7, 2004 (See Note 3). During the year
ended December 31, 2004, as a result of an administrative oversight, $20,000 was
advanced by TLLLC to Trust III on June 7, 2004. The full $20,000 was repaid to
the company on February 22, 2005.

On August 24, 2004, October 8, 2004, and March 9, 2005, the company issued notes
payable for $165,000, $25,000 and $55,000 (only $42,000 was drawn down on this
Note), respectively, to Trust III and in 2005 $30,000 was repaid. The maturity
date of each of these notes was extended through December 9, 2005 pursuant to
the Loan Extension Agreement. On January 31, 2006 the maturity date of this note
was extended again to December 9, 2006 pursuant to a Loan Extension Agreement by
and between the Company and Trust III dated January 31, 2006; the extension
provides for the same terms currently in force under the original debt agreement

During 2004, the company engaged a law firm whose counsel is the father of the
company's President and Chief Executive Officer. The company had total expenses
in 2004 of $46,399 for legal fees to this related party and expenses of $158,446
for the year ended December 31, 2005. Total fees remaining unpaid as of December
31, 2005 aggregated $ 131,195.

During 2005, we paid approximately $6,500 for professional services rendered by
our acting Chief Financial Officer. At December 31, 2005, $4,500 remains
payable. The acting Chief Financial Officer is also the trustee of Trust III.

Note 8            Commitments and Contingencies

         (A)      Litigation Settlement - Other Income

         During 2003, the company filed suit in the United States District Court
         of the Southern District of Florida against an unrelated third-party
         for, among other things, infringement of the #534 Patent (Case No.
         03-20672). A subsequent related civil action was initiated by the third
         party against the company in the Superior Court of California, County
         of Santa Clara for, among other things, breach of contract (Case No.
         103-009764). The settlement was finalized on May 5, 2004 and paid on
         June 4, 2004 under the following general terms:

o                 The third party paid to the company's escrow agent $700,000.
                  Of the total, the company was remitted $475,000. The remaining
                  $225,000 was paid to settle accrued legal fees in connection
                  with this lawsuit and is reflected in professional fees in the
                  accompanying consolidated financial statements.

o                 The company granted to the third party a certain
                  non-exclusive, non-transferable, worldwide, fully paid up
                  right and license under the #534 Patent.

         The $700,000 was recorded as other income during the year ended
December 31, 2004.

         (B)     Employment Agreements

         On August 23, 2004, the company entered into the following employment
agreements with its executive officers:


                                       F-26
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         (1)      Chairman of the Board

                  (i) Term is from August 23, 2004 to August 23, 2006. (ii)
                  Salary of $175,000 per year

         (2) President and CEO

                  (i) Term is from August 23, 2004 to August 23, 2006. (ii)
                  Salary of $175,000 per year

         (3)      Executive Vice President

                  (i) Term is from August 23, 2004 to August 23, 2006. (ii)
                  Salary of $132,000 per year

         At December 31, 2005, total accrued compensation to these officers was
$389,645.

         On May 1, 2005, the employment contract for the company's Executive
         Vice President was amended to conform the benefits to those received by
         the company's other executive officers and to increase the base salary
         to $160,000 annually. This Executive Vice President has agreed to
         accrue the difference between the pre-amendment rate and the
         post-amendment rate until August 24, 2005. The accrual was added to the
         total accrued compensation owed to this officer.

         (C)      Consulting Agreement

         On August 23, 2004, the company entered into a consulting agreement
         with the former sole officer and director of NMC. Under the terms of
         the agreement, the consultant will provide certain financial consulting
         services. The term of the agreement is from August 23, 2004 to August
         23, 2006. The consultant is to be paid $2,500 per month as
         compensation; provided, however, the fees will be accrued until the
         company receives net cash financing proceeds of at least $500,000.

Note  9           Going Concern

As reflected in the accompanying audited consolidated financial statements, the
company has no revenues, a net loss of $1,567,108 and net cash used in
operations of $668,368 for the year ended December 31, 2005, and a working
capital deficiency of $1,895,732, a stockholders' deficiency of $1,884,668 and a
deficit accumulated during development stage of $ 1,989,734 at December 31,
2005. In addition, there was a default on certain note principal and interest
payments after December 31, 2005 (see Note 6).

The company has no operating revenues. The company has incurred cumulative
losses since inception and has funded operations primarily through related-party
loans and investor capital. The ability of the company to continue as a going
concern is dependent on the company's ability to further implement its business
plan, raise capital, and generate revenues from the licensing of the #534
Patent. The consolidated financial statements do not include any adjustments
that might be necessary if the company is unable to continue as a going concern.


                                       F-27
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

The company is currently a development stage company and its continued existence
is dependent upon the company's ability to resolve its liquidity problems,
principally by obtaining additional debt financing and/or equity capital. In
January 2006 the Company obtained debt financing. (See Note11(B)). The company
has yet to generate an internal cash flow, and until licensing activities
commence, the company is very dependent upon debt and equity funding.

Note 10           Income Taxes

There was no income tax expense for the years ended December 31, 2005 and 2004
due to the Company's net losses and utilization of net operating loss carry
forwards. Additionally, during the period from July 19, 2001 (inception) to
August 23, 2004, the Company was taxed as a partnership and was not subject to
federal and state income taxes; accordingly, no provision had been made.

The Company's tax expense differs from the "expected" tax expense for the year
ended December 31, 2005, (computed by applying the Federal Corporate tax rate of
34% to loss before taxes), as follows:

                                                    2005                 2004
                                                -------------     --------------
Computed "expected" tax expense (benefit)    $     (532,816)   $        (40,653)
Change in valuation allowance                       532,816                   -
                                                -------------     --------------
                                             $         -       $           -
                                                =============     ==============

The effects of temporary differences that gave rise to significant portions of
deferred tax assets and liabilities at December 31, 2005 are as follows:

Deferred tax assets:
Net operating loss carry forward                     $       (573,469)
                                                        ---------------
Total gross deferred tax assets                              (573,469)
Less valuation allowance                                      573,469
                                                        ---------------
Net deferred tax assets                              $           -
                                                        ===============

The Company has a net operating loss carry forward of approximately $1,686,675,
available to offset future taxable income expiring 2025. Utilization of this
loss may be limited due to a change in control, which occurred on August 24,
2004 (See Note 1 (A)).

The valuation allowance at December 31, 2004 was $40,653. The net change in
valuation allowance during the year ended December 31, 2005 was an increase of
$532,816.


                                       F-28
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

Note 11           Subsequent Events

         (A)      Acquisition of Natcom Marketing International, Inc.

         On January 31, 2006 (the "SPA Effective Date"), the Company entered
         into a preliminary Stock Purchase Agreement and Share Exchange (the
         "Agreement") with Natcom Marketing International, Inc., a Puerto Rican
         based full-service marketing communications agency ("NMI"), and the NMI
         shareholders. The close of the transaction is subject to NMI's
         completion of two years of audited financial statements, to the
         completion of each parties due diligence, and certain other
         requirements.

         NMI is focused on serving multi-national organizations, as well as
         emerging growth companies seeking to enter or expand in the U.S.
         Hispanic/Latin American markets. NMI uses television programming as its
         main entry into the Hispanic and minority advertising space. To date,
         NMI has entered into a letter of intent to purchase a controlling
         interest in NewsProNet Interactive, LLC ("NewsProNet"), an Atlanta
         based provider of converged media content solutions and interactive
         branding strategies for local broadcasters.

         The anticipated closing of the transaction will take place on or about
         April 30, 2006 or such other date as mutually agreed upon by the
         parties (the "SPA Closing Date"). On the SPA Closing Date, the Company
         shall acquire all of the outstanding shares of NMI in exchange for a
         total of fifty percent (50%) of the issued and outstanding shares of
         the Company's common stock. As additional consideration, on the SPA
         Closing Date, the Company will reserve up to $250,000 of the funding
         received by Montgomery Equity Partners, LP (as described below) for
         distribution to NMI to be used toward the acquisition of a majority
         interest in NewsProNet. On the SPA Closing Date, the Company will also
         provide funding to NMI for the payment of certain outstanding debts.
         Pursuant to the Agreement, on the SPA Closing Date, NMI will become a
         wholly owned subsidiary of the Company.

         (B)      Funding Transaction with Montgomery Equity Partners, LP

         On January 31, 2006 (the "Closing Date"), the Company completed a
         financing agreement for $1,600,000 (which includes a refinance of a
         $600,000 promissory note issued in April 2005) with Montgomery Equity
         Partners, Ltd. ("Montgomery"). Of such amount, the original principal
         amount of $600,000 was previously funded pursuant to a non-convertible
         Promissory Note dated April 14, 2005, $400,000 was funded on the
         Closing Date, $300,000 shall be funded Ninety (90) days from the
         closing and $300,000 shall be funded One Hundred Fifty (150) days from
         the closing. Under the terms of the agreement, the Company issued to
         Montgomery a secured convertible debenture in the amount of $718,000
         which represents the original principal, interest and fees for the
         $600,000 previously funded as well as an additional secured convertible
         debenture in the amount of $400,000. Both convertible debentures have
         an interest rate of 14% and maturity dates of April 30, 2007, and are
         convertible into shares of the Company's common stock at a conversion
         price equal to the lesser of (a) $0.04 or (b) seventy five percent
         (75%) of the lowest Closing Bid Price of the Common Stock, as quoted by
         Bloomberg, LP, of the ten (10) trading days immediately preceding the
         Conversion Date. The Conversion Price may be adjusted pursuant to the
         other terms of this Debenture.


                                       F-29
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         The Convertible Debentures are secured by a first priority lien on all
         of the Company's assets. As further security for the Company's
         obligations under the Convertible Debentures, the Company executed an
         Amended and Restated Pledge Agreement, pursuant to which the Company
         re-pledged the 60,000,000 shares of its common stock to Montgomery that
         were originally pledged pursuant to the Note to Montgomery dated April
         14, 2005.

         Pursuant to the funding transaction, Montgomery was also issued a
         warrant for 8,000,000 shares of the Company's common stock. The warrant
         is exercisable for a period of three years from the date of issuance,
         which is January 31, 2006. The exercise price per share under the
         warrant is $0.0001 per share and the shares issuable upon exercise of
         the warrant are to be included in the registration statement.

         Pursuant to the terms of a Registration Rights Agreement, the Company
         is required to register the shares underlying the Convertible
         Debentures, as well as the shares to be issued pursuant to the Warrant
         within 60 days from the Closing Date of the Stock Purchase Agreement
         with NMI and is required to have the registration statement declared
         effective 90 days from the date thereof. In the event that the
         registration statement is not filed or declared effective within these
         time limits, the Company may be subject to liquidated damages in the
         amount of 2% of the entire funding amount per month and may be deemed
         in default of the operative agreements.

         The Company is reviewing the accounting method for these new debentures
         and warrants and believes they may conclude to account for embedded
         conversion options and warrants as derivative liabilities at fair value
         in accordance with SFAS 133 "Accounting for Derivative Instruments and
         Hedging Activities".

         (C)      Agreements with Rothschild Trust Holdings, LLC

         On January 31, 2006, the Company entered into a Purchase and Sale
         Agreement with Rothschild Trust Holdings, LLC (the "Trust"), a related
         party, for the sale of certain issued and pending patents in exchange
         for the return of 13,241,223 shares of the Company's common stock held
         by the Trust (the "Shares"). As additional consideration, the Trust
         granted the Company a license to use the patents pursuant to the terms
         of a License and Royalty Agreement, which grants the Company a
         twelve-month right of election to license the patents. If the Company
         exercises the right of election, the Trust shall grant the Company a
         two-year exclusive license for the use of the patents that is renewable
         subject to performance, and the Trust shall receive 10% royalties on
         all gross receipts as defined in the License and Royalty Agreement.


                                       F-30
<PAGE>
               Connected Media Technologies, Inc. and Subsidiaries
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

         On January 31, 2006, the Company, the Trust, Montgomery, and David
         Gonzalez, as the Escrow Agent, entered into an Escrow Agreement,
         whereby the Trust agreed to place the Shares and the Company agreed to
         deposit royalties otherwise payable to the Trust into an escrow account
         held by the Escrow Agent until such time as royalties of $690,000 have
         been deposited into the escrow account or until Montgomery has been
         repaid and/or converted $690,000 of the Convertible Debentures. At such
         time, the Trust shall have 30 days to replace the Shares with
         $728,267.26, which shall be distributed to the Company in exchange for
         the Shares; otherwise, the Escrow Agent shall release the Shares to the
         Company and the royalties to the Trust.

        (D)       Termination of Financing Agreement

         On January 31, 2006, the Company and Cornell Capital Partners, LP
         ("Cornell") entered into a Termination Agreement terminating the
         Standby Equity Distribution Agreement, Registration Rights Agreement,
         Escrow Agreement, and Placement Agent Agreement all of which are dated
         April 14, 2005. Pursuant to the terms of the Termination Agreement,
         Cornell retained the portion of the commitment fee consisting of
         3,800,000 shares of common stock of the Company. Additionally, on the
         termination date, the Company issued to Cornell an additional
         3,800,000 shares of common stock of the Company. Additionally, Cornell
         retained the Warrant dated April 14, 2005 for 150,000 shares of the
         Company's common stock. The entire 7,600,000 shares issued to Cornell
         and the 150,000 shares underlying the warrant shall have "piggy-back"
         registration rights. In connection with the termination of the SEDA
         and related documents, the Company withdrew the registration statement
         with the Securities and Exchange Commission, which was originally
         filed on June 6, 2005.

                                       F-31
<PAGE>

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

None.

ITEM 8A. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures
------------------------------------------------

Our principal executive officer and principal financial officer evaluated our
disclosure controls and procedures (as defined in rule 13a-14(c) and 15d-14(c)
under the Securities Exchange Act of 1934, as amended) as of a date within 90
days before the filing of this annual report (the Evaluation Date). Based on
that evaluation, our principal executive officer and principal financial officer
concluded that, as of the Evaluation Date, the disclosure controls and
procedures in place were adequate to ensure that information required to be
disclosed by us, including our consolidated subsidiaries, in reports that we
file or submit under the Exchange Act, is recorded, processed, summarized and
reported on a timely basis in accordance with applicable rules and regulations.
Although our principal executive officer and principal financial officer
believes our existing disclosure controls and procedures are adequate to enable
us to comply with our disclosure obligations, we intend to formalize and
document the procedures already in place and establish a disclosure committee.

Changes in internal controls
----------------------------

We have not made any significant changes to our internal controls subsequent to
the Evaluation Date. We have not identified any significant deficiencies or
material weaknesses or other factors that could significantly affect these
controls, and therefore, no corrective action was taken.

ITEM 8B.    OTHER INFORMATION

None.

                                       17
<PAGE>

                                    PART III

ITEM 9.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers as of December 31, 2005 were as follows:

                  Name                        Age     Position with the company
------------------------------------------ ---------- --------------------------
           Leigh M. Rothschild                52      Chairman of the Board
------------------------------------------ ---------- --------------------------
             Jeffrey W. Sass                  46      Chief Executive Officer
                                                      and Director
------------------------------------------ ---------- --------------------------
            Michael R. Moore                  37      Executive Vice President,
                                                      Business & Legal Affairs
                                                      and Director
------------------------------------------ ---------- --------------------------
             Jay Howard Linn                  71      Acting Chief Financial
                                                      Officer
------------------------------------------ ---------- --------------------------
               Adam Bauman                    47      Director

Leigh M. Rothschild, Chairman: Mr. Rothschild is currently Chairman of the Board
and Founder of Connected Media Technologies, Inc., a publicly traded
intellectual property and licensing company. Mr. Rothschild is an established
inventor who to date has been issued seven US patents and has twenty-three
patents pending worldwide. Mr. Rothschild has licensed patents from his
portfolio to several major companies and his technologies are in use at
companies ranging from Pricegrabber.com to Sonic Solutions and InterActual among
others. From October 1998 through February 2004, Mr. Rothschild was Chairman and
founder of BarPoint.com a Nasdq publicly traded wireless information company.
The company was sold in February of 2004. Prior to founding BarPoint, Mr.
Rothschild was Chairman and Chief Executive Officer of IntraCorp Entertainment,
Inc., a consumer software company with worldwide product distribution.
Rothschild is a former presidential appointee to the High-Resolution Board for
the United States under former President George H. W. Bush. He has served three
Florida governors on technology boards and served as a special advisor to then
Florida Secretary of Commerce Jeb Bush. Mr. Rothschild currently serves on the
IT Florida Technology Board as an appointee of Governor Bush. Mr. Rothschild
chairs the Rothschild Family Foundation, which has given endowments to
outstanding charities and institutions including the Tampa Children's Home,
Thomas Amour Youth Ballet Company, Miami Symphony, and the University of Miami
School of Business Entrepreneurial contest and Lecture Series. Rothschild has an
undergraduate degree from the University of Miami, where he also completed the
Graduate Program in Management Studies.

     Jeffrey W. Sass, President, Chief Executive Officer and Director: A veteran
of the entertainment, licensing, and computer industries, Jeff Sass is currently
President, Chief Executive Officer, Director and a co-founder of Connected Media
Technologies, Inc., a position he has held since May 2004. From October 1998
through December 2001, Mr. Sass was co-founder and Chief Operating Officer of
BarPoint.com, a publicly traded wireless information and mobile commerce
company. He became BarPoint's President and Chief Executive Officer in January
2002 and served in that capacity through February 2004 when BarPoint engaged in
a reverse merger transaction with SchoolPop/Fundever, Inc. During Mr. Sass'
tenure, BarPoint entered into strategic alliances and business relationships
with Symbol Technologies, AT&T, Cingular, Verizon, Sprint, Nextel, Office Depot,
The Sharper Image and others.

Prior to BarPoint, in 1997 Mr. Sass founded and ran The Marketing Machine, a
full-service marketing agency and consulting firm, servicing the computer
hardware, software and other industries, with clients including Fujitsu
Interactive as well as networking hardware manufacturer Nexland, Inc. (Nexland
was subsequently sold to Symantec).

Previously, Jeffrey Sass has held management, production, and marketing
positions at companies including IntraCorp Entertainment (1995-1997), GameTek,
Inc. (1994-1995) and Troma Entertainment (1987-1994). At Troma, in addition to
writing and producing chores, he helped create and launch the cartoon series,
TOXIC CRUSADERS, and then started and ran the independent movie studio's
licensing and merchandising division, working closely with more than 70
manufacturers worldwide including Marvel Comics, Playmates Toys, Golden Books
Publishing, Sega, Bandai and more. Jeff also handled licensing and merchandising
for the Emmy Award winning PBS series, READING RAINBOW.



                                       18
<PAGE>


Jeff is a frequent guest lecturer for the "Starting New Ventures" class at the
University of Miami School of Business Administration, and he has actively
supported the University's Entrepreneurship initiatives, including serving as a
panel judge at the annual Business Plan competition. Jeff is a graduate of
Cornell University.

         Michael R. Moore, Executive Vice President, Business & Legal Affairs
and Director: Michael is a corporate transactional attorney, with over ten years
of experience in business development and venture capital, focusing primarily in
the Internet and technology industry. Prior to joining CMT, from July 2000
through February 2004 Mr. Moore was Vice President of Business & Legal Affairs
of BarPoint.com (OTC BB: BPNT), a wireless information company. In February 2004
BarPoint engaged in a reverse merger transaction with Fundever, Inc. and
BarPoint subsequently changed its name to LoyaltyPoint, Inc. (OTCBB: LYLP).
Previously, from the fall of 1994 through early 1997 Mr. Moore worked as a
senior associate in the corporate transactions and commercial litigation
department at a large law firm where he co-founded the firm's technology
committee and thereafter, from early 1997 through July 2000 held a senior
management position at HotOffice Technologies, Inc., the developer of an
award-winning Intranet service. Mr. Moore simultaneously received his Juris
Doctor, cum laude, and his Master of Business Administration, with highest
distinction, from the State University of New York at Buffalo in 1993.

     Jay Howard Linn, Acting Chief Financial Officer: Since 1995 Mr. Linn has
practiced as a Certified Public Accountant in his own firm. Prior to opening his
own office, he was a partner in the CPA firm of Moss & Linn and predecessor
partnerships for 14 years in North Miami, Florida. From 1977 to 1981 he
maintained a CPA practice in his own name in North Miami. Prior to that he was a
partner in the CPA firm of Sidney Wasserman & company in Miami Beach, Florida.
Mr. Linn is also an attorney admitted to practice in U.S. Tax Court, the
Southern District of Florida and Florida courts. He also serves as President of
The Rothschild Charitable Foundation and was a founding director of Homestead
Federal Savings Bank. He received a Bachelor of Business Administration in 1955
and a Juris Doctor in 1962 from the University of Miami. Mr. Linn is not
employed as a full time basis with the company. Mr. Linn also serves as Trustee
of Irrevocable Trust Agreement Number III.

Adam Bauman, Director: Adam Bauman is the CEO and President of STI, an executive
talent management firm with offices in Los Angeles, New York, San Francisco,
Atlanta, Dallas and Miami, where its 6 partners advise senior management in the
entertainment, technology, publishing, fashion and retail industries. Since its
founding in 1996, executives have retained STI to strategically advise them on
career opportunities and advancement, board seats, media exposure and eminence,
investments and alliances, e-commerce, emerging technologies and other arenas in
which they may be personally interested.

As an agent with 4 years of experience representing senior executives at STI,
Adam brings expertise in the areas of e-commerce, management consulting, direct
marketing, editorial writing and Hollywood production. An early Internet
adopter, Adam started as a Special Projects Producer for The Los Angeles Times
New Media Group, became Director of Internet Production for Universal Studios
and then built a corporate Intranet for DreamWorks S.K.G. Subsequently, he was
the Director of Emerging Technology at VWR Scientific Products Corp., and then
became Executive Vice President of E-Commerce at a Young & Rubicam subsidiary.
After serving as the founding Chief International E-Commerce Officer of American
International Group, he was named Chief Global E-Commerce Officer of Deloitte
Consulting. Subsequently, he was named Chairman and CEO of IsoSpace, a leading
web collaboration software firm.

Adam holds both a Master's degree from the Peter Stark Producing Program and an
MBA from the University of Southern California. He is also a graduate of the
California State University Long Beach school of Radio and Television.

CERTAIN LEGAL PROCEEDINGS

No director, nominee for director, or executive officer has appeared as a party
in any legal proceeding material to an evaluation of his ability or integrity
during the past five years.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

We have not filed a Form 5 for the year ending December 31, 2005.


                                       19
<PAGE>

CODE OF ETHICS

The company has adopted a Code of Ethics applicable to its Chief Executive
Officer and Chief Financial Officer. This Code of Ethics is filed herewith as an
exhibit.

ITEM 10.    EXECUTIVE COMPENSATION

The following table discloses executive compensation received for the three
fiscal years ended December 31, 2005.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

Name and Principal Position               Year           Annual Compensation                  Long-Term
                                                                                         Compensation Awards
                                                                                     Restricted      Securities
                                                                                        Stock        Underlying    All Other
                                                     Salary          Bonus          Award(s) ($)     Options (#)   Compensation
--------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>      <C>              <C> <C>        <C> <C>        <C> <C>          <C> <C>
Leigh M. Rothschild                       2005     $68,553          $ - 0 -        $ - 0 -        $ - 0 -          $ - 0 -
Chairman                                  2004     $122,622         $ - 0 -        $ - 0 -        $ - 0 -          $3,750.
                                          2003     $ - 0 -          $ - 0 -        $ - 0 -        $ - 0 -          $ - 0 -

Jeffrey W. Sass                           2005     $68,553          $ - 0 -        $ - 0 -        $ - 0 -          $ - 0 -
President and Chief Executive Officer     2004     $122,622         $ - 0 -        $ - 0 -        $ - 0 -          $3,750.
                                          2003     $ - 0 -          $ - 0 -        $ - 0 -        $ - 0 -          $ - 0 -

Michael R. Moore                          2005     $76,154          $ - 0 -        $ - 0 -        $ - 0 -          $ - 0 -
Executive Vice President, Business        2004     $77,014          $ - 0 -        $ - 0 -        $ - 0 -          $ - 0 -
    and Legal Affairs                     2003     $ - 0 -          $ - 0 -        $ - 0 -        $ - 0 -          $ - 0 -

</TABLE>


(1)      Mr. Rothschild executed an employment agreement with the Company on
         August 23, 2004. The base annual salary is $ 175,000. To provide
         assistance to the Company's cash flow, Mr. Rothschild has agreed to
         defer payment of the balance of his base salary until a later,
         unspecified date. This amount has been accrued as a current liability
         on the Company's Balance Sheet.

(2)      Mr. Sass executed an employment agreement with the Company on August
         23, 2004. The base annual salary is $ 175,000. To provide assistance to
         the Company's cash flow, Mr. Sass has agreed to defer payment of the
         balance of his base salary until a later, unspecified date. This amount
         has been accrued a current liability on the Company's Balance Sheet.

(3)      Mr. Moore executed an employment agreement with the Company on August
         23, 2004, which agreement was amended effective as of August 24, 2005.
         The base annual salary is $ 160,000. To provide assistance to the
         Company's cash flow, Mr. Moore agreed to defer payment of the balance
         of his base salary until a later, unspecified date. This amount has
         been accrued as a current liability on the Company's Balance Sheet.



                                       20
<PAGE>


ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
            RELATED STOCKHOLDER MATTERS.

SECURITY OWNERSHIP

The following table sets forth as of December 31, 2005 certain information as of
the record date concerning the beneficial ownership of our common stock by: (i)
each person known by us to be the beneficial owner of more than 5% of our
outstanding common stock, (ii) each director, (iii) each of the named executive
officers (as defined below), and (iv) all executive officers and directors as a
group.
<TABLE>
<CAPTION>

Names                                                   Amount and Nature of Beneficial         Percent
                                                                   Ownership                   of Class
                                                               of Common Shares                     (2)
----------------------------------------------------------------------------------------------------------
<S>                                                              <C>                              <C>
Leigh M. Rothschild                                              173,427,700(1)                   57.7%
Director
Irrevocable Trust Agreement Number III                           126,785,100                      42.2%
Jeffrey W. Sass
President, CEO, Director                                          65,018,000                      21.6%
Michael R. Moore
Director                                                          10,000,000                       3.3%
Jay Howard Linn
Chief Financial Officer                                            1,000,000                          *
Adam Bauman
Director                                                             300,000                          *
Executive Officers, Directors as a group (4 persons)             249,445,700                      83.0%
</TABLE>

----------------------------------------------------------------------------
* = Less than 1%

(1)   Includes  46,642,600 shares owned by Mr.  Rothschild  directly and
      126,785,100 owned by Irrevocable Trust Agreement Number III, a
      trust in which Mr. Rothschild is a direct beneficiary.

(2)   Based on 300,507,663 shares outstanding as of December 31, 2005. Excludes:
      (a) 60,000,000 shares pledged to Montgomery as collateral for the
      Company's obligations under the Promissory Note owed to Montgomery; and
      (b) 2,000,000 treasury shares held by the company. Also excludes the
      warrant for 200,000 shares issued to Cornell and options issued pursuant
      to the company's Equity Incentive Plan.

EQUITY INCENTIVE PLAN

     On January 12, 2005, Mr. Leigh M. Rothschild, as the sole Director of the
company, approved the Equity Incentive Plan (the "Plan") covering 50,000,000
shares. The Plan was subsequently approved by the shareholders.

     As of December 31, 2005, 3,500,000 have been granted under the Plan, each
such grant being priced at the fair market value on the company's shares on the
date of grant.

     Under the arrangement with Cornell and Montgomery, effective April 14, 2005
the company cannot grant options under the Plan in excess of 10,000,000 shares
without Cornell or Montgomery's consent. This restriction is in effect so long
as the Standby Equity Distribution Agreement is in place.

     The Plan provides a means whereby employees, officers, directors, and
certain consultants and independent contractors of the company ("Qualified
Grantees") may acquire the common shares of the company pursuant to grants of:
(i) incentive stock options ("ISO"); (ii) non-qualified stock options (the
ANQSO@); and (iii) restricted stock. A summary of the significant provisions of
the Plan is set forth below. A copy of the full Plan is annexed to this
registration statement. The following description of the Plan is qualified in
its entirety by reference to the Plan itself.


                                       21
<PAGE>

     The purpose of the Plan is to, among other things, further the long-term
stability, continuing growth and financial success of the company by attracting
and retaining key employees, directors and selected advisors through the use of
stock incentives, while stimulating the efforts of these individuals upon whose
judgment and interest the company is and will be largely dependent for the
successful conduct of its business. The company believes that the Plan will
strengthen these persons' desire to remain with the company and will further the
identification of those persons' interests with those of the company's
shareholders.

     The Plan shall be administered by the Compensation Committee of the Board
of Directors. The membership of the Committee shall be constituted so as to
comply at all times with the then applicable requirements under the Exchange Act
and Section 162(m) of the Internal Revenue Code.

     The Plan provides that options to purchase up to 50,000,000 common shares
of the company may be issued to the employees, officers, directors and certain
consultants and independent contractors. All present and future employees shall
be eligible to receive incentive awards under the Plan, and all present and
future non-employee directors shall be eligible to receive non-statutory options
under the Plan. An eligible employee or non-employee director being awarded a
grant shall be notified in writing of such grant, which notice shall state the
number of shares for which options are granted, the option price per share, and
conditions surrounding the grant and exercise of the options.

     The exercise price of shares of company Stock covered by an ISO shall be
not less than 100% of the fair market value of such shares on the date of grant;
provided that if an ISO is granted to an employee who, at the time of the grant,
is a 10% shareholder, then the exercise price of the shares covered by the
incentive stock option shall be not less than 110% of the fair market value of
such shares on the date of grant. The Plan also provides for cashless exercise
of Options. In such event, there may be a charge to the earnings of the company
with respect to the cashless exercise of the Options.

     The Compensation Committee may determine the number of shares that may be
awarded to a participant as restricted stock and the provisions relating to risk
of forfeiture and may determine that the restricted stock is only earned upon
the satisfaction of performance goals established by the Committee. The
Committee shall also determine the nature, length and starting date of any
performance period and the terms thereof. The maximum number of shares that may
be granted to any participant may not exceed 20% of the total shares subject to
the Plan.

     U.S. Federal Income Tax Consequences. The rules governing the U.S. federal
tax treatment of stock options, restricted stock and shares acquired upon the
exercise of stock options are quite technical. Therefore, the description of
U.S. federal income tax consequences set forth below is necessarily general in
nature and does not purport to be complete. Moreover, the statutory provisions
are subject to change, as are their interpretations, and their application may
vary in individual circumstances. In particular, the American Jobs Creation Act
of 2004 imposed new rules concerning the taxation of various deferred
compensation arrangements. It is not clear whether, and to what extent, these
new rules apply to awards under the Plan. Although the company does not believe
that awards under the Plan are affected by the new rules, there can be no
assurance to that effect until adequate guidance is forthcoming from the U.S.
Treasury Department. Finally, the tax consequences under applicable state, local
and foreign income tax laws may not be the same as under the U.S. federal income
tax laws.

     Incentive Stock Options. ISOs granted pursuant to the Plan are intended to
qualify as incentive stock options within the meaning of Section 422A of the
Internal Revenue Code. If the participant makes no disposition of the shares
acquired pursuant to exercise of an ISO within one year after the transfer of
shares to such participant and within two years from grant of the option, such
participant will realize no taxable income as a result of the grant or exercise
of such option, and any gain or loss that is subsequently realized may be
treated as long-term capital gain or loss, as the case may be. Under these
circumstances, neither the company nor any subsidiary will be entitled to a
deduction for federal income tax purposes with respect to either the issuance of
the ISOs or the issuance of shares upon their exercise.


                                       22
<PAGE>

     If shares acquired upon exercise of ISOs are disposed of prior to the
expiration of the above time periods, the participant will recognize ordinary
income in the year in which the disqualifying disposition occurs, the amount of
which will generally be the lesser of (i) the excess of the fair market value of
the shares on the date of exercise over the option price, or (ii) the gain
recognized on such disposition. Such amount will ordinarily be deductible for
federal income tax purposes by the company or subsidiary for whom the
participant performs services (a service recipient) in the same year, provided
that the amount constitutes reasonable compensation for services that would
result in a deduction for U.S. federal income tax purposes and that certain
federal income tax withholding requirements are satisfied. In addition, the
excess, if any, of the amount realized on a disqualifying disposition over the
market value of the shares on the date of exercise will be treated as capital
gain.

     The foregoing discussion does not consider the impact of the alternative
minimum tax, which may be particularly applicable to the year in which an ISO is
exercised.

     Nonqualified Stock Options. A participant who acquires shares by exercise
of a NQSO generally realizes as taxable ordinary income, at the time of
exercise, the difference between the exercise price and the fair market value of
the shares on the date of exercise. Such amount will ordinarily be deductible by
the service recipient for federal income tax purposes in the same year, provided
that the amount constitutes reasonable compensation for services that would
result in a deduction for U.S. federal income tax purposes and that certain
federal income tax withholding requirements are satisfied. Subsequent
appreciation or decline in the value of the shares on the sale or other
disposition of the shares will generally be treated as capital gain or loss.

     Restricted Stock. A participant granted shares of restricted stock under
the Plan is not required to include the value of such shares in ordinary income
until the first time such participant=s rights in the shares are transferable or
are not subject to substantial risk of forfeiture, whichever occurs earlier,
unless such participant timely files an election under Section 83(b) of the
Internal Revenue Code to be taxed on the receipt of the shares. In either case,
the amount of such income will be equal to the excess of the fair market value
of the stock at the time the income is recognized over the amount (if any) paid
for the stock. The service recipient will ordinarily be entitled to a deduction,
in the amount of the ordinary income recognized by the participant, for the
service recipient=s taxable year in which the participant recognizes such
income, provided that the amount constitutes reasonable compensation for
services that would result in a deduction for U.S. federal income tax purposes
and that certain federal income tax withholding requirements are satisfied.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We believe that all prior related party transactions have been entered into
upon terms no less favorable to us than those that could be obtained from
unaffiliated third parties. Our reasonable belief of fair value is based upon
proximate similar transactions with third parties or attempts to obtain the
consideration from third parties. All ongoing and future transactions with such
persons, including any loans or compensation to such persons, will be approved
by a majority of disinterested members of the Board of Directors.

     Several transactions involving related parties were consummated in
connection with the August 2004 reverse merger:

         1. Prior to the merger Trust Licensing, LLC (the predecessor-by-merger
to Trust Licensing, Inc., now a wholly-owned subsidiary of CMT, "TLLLC ") was
owned by Irrevocable Trust Agreement Number III ("Trust III"), the company's
Chairman Leigh Rothschild, the company's Chief Executive Officer Jeffrey Sass,
and the company's Executive Vice President, Business & Legal Affairs Michael
Moore. The primary beneficiary of Trust III is the company's Chairman and
Founder Leigh Rothschild. Since July 19, 2001 (Inception) and from time to time,
Trust III has advanced working capital to the company. Total advances, prior to
August 24, 2004 reverse the merger, were as follows:

     July 19, 2001 (inception) to December 31, 2001                $  20,000
     Year ended December 31, 2002                                  $ 100,000
     Year ended December 31, 2003                                  $  29,000
     As of August 24, 2004                                         $ 110,000
                                                                   ---------
     Total advances from Trust III at August 24, 2004              $ 259,000
                                                                   =========

                                       23
<PAGE>

     These advances do not include amounts borrowed from Trust III pursuant to
certain Notes Payable set forth in the company's financial statements.

     In addition to the above advances, a separate trust directly related to the
company's Founder Leigh Rothschild also advanced working capital of $7,000
during the year ended December 31, 2003. All $266,000 of these advances were
repaid in full on June 7, 2004.

     An additional $20,000 was advanced to Trust III on June 7, 2004. This
amount has been repaid to the company in full on February 22, 2005. All advances
to and from Trust III were non-interest bearing, unsecured and due on demand.

     Included in the amounts set forth above, $165,000 is represented by a Note
bearing interest at a rate of four percent (4.00%) and all principal and accrued
interest thereon is due and payable on May 24, 2005. Our Chairman is the primary
beneficiary of Trust III. These funds were utilized as set forth in paragraph 2
below.

     2. New Mountaintop Corporation (now known as Connected Media Technologies,
Inc., Delaware) redeemed 2,000,000 shares of common stock from Dr. Mark Golden,
its former majority stockholder, for a purchase price of $ 135,000. In addition,
we entered into a two-year consulting agreement with our former majority
stockholder. Under the terms of the agreement, he will provide certain financial
consulting services in return for a payment of $2,500 per month. The fees are
currently accruing but are not due and payable until we raise at least $500,000
in additional capital.

     3. We entered into employment agreements with Leigh M. Rothschild, our
Chairman of the Board, Jeffrey W. Sass, our President and Chief Executive
Officer, and Michael R. Moore, our Executive Vice President. Annual base
salaries under the employment contracts are $ 175,000, $ 175,000, and $ 132,000,
respectively. The initial term of each contract runs through August 23, 2006.
The company owes accrued salary and benefits to each of these officers. As of
December 31, 2005, the company has accrued $ 389,645 as a current liability for
this purpose. On May 1, 2005, Mr. Moore's employment contract was amended to
conform the benefits to those received by the Company's other executive officers
and to increase the base salary to $160,000 annually.

     4. In addition to payment for services provided in the ordinary course of
business, Michael D. Harris, the former outside counsel of New Mountaintop
Corporation was paid a finder's fee of thirty-thousand dollars ($ 30,000) and
1,666,663, shares (valued at approximately $50,000) of the company's common
stock. The fair value of the stock was based on a mutual understanding between
the company and the service provider; there had been no recent cash offerings
upon which to base the fair value per share. Also, the stock was not publicly
traded at that time.

     5. On October 6, 2004 (but effective November 16, 2004), the company
entered into a transaction with a Bristol Bank pursuant to which the company has
access to a two hundred and fifty thousand dollar ($ 250,000) line of credit
secured by a $250,000 certificate of deposit. In general, all or any portion of
the $ 250,000 may be drawn down at any time, and must be repaid in full by
October 25, 2006, with interest at the rate of libor plus 1.5%. In addition,
commencing November 25, 2004 and continuing each consecutive month thereafter,
the company must pay accrued interest on outstanding amounts owed. The company
intends on using the line of credit for general working capital and may also
repay some or all of the loans with Trust III. The credit line is guaranteed by
Trust III and secured by a Certificate of Deposit owned by the Chairman of the
company. As previously noted, our Chairman is the primary beneficiary of Trust
III. As of December 31, 2005, the company reflected a long term liability of $
248,375 and related accrued interest of $ 1,861 relating to this line of credit.

     6. On July 19, 2001 (inception), the company (then operating as Trust
Licensing, LLC) sold 100 membership units for $20,000 to Trust III. Effective
January 2, 2004, membership interests were sold to the company's Chairman, the
company's Chief Executive Officer, and the Company's Executive Vice President,
Business & Legal Affairs.

     7. On August 13, 2001, the patent was validly assigned from the
individual/promoter Leigh Rothschild to Irrevocable Trust Agreement Number 1
("Trust I") and simultaneously assigned from Trust I to TLLLC. Effective August
24, 2004, our principal patent is owned by Trust Licensing, Inc. as a result of
the reverse triangular merger. Trust Licensing, Inc. is a wholly-owned
subsidiary of CMT.


                                       24
<PAGE>

     8. During the period from July 19, 2001 (inception) to December 31, 2004,
the company received working capital totaling $266,000 from Leigh Rothschild
and/or a related entity. The company also repaid the entire $266,000 on June 7,
2004.

     9. On August 24, 2004, October 8, 2004, and March 9, 2005 the company
issued notes payable to Trust III for $165,000, $25,000 and $55,000
respectively. On May 16, 2005 the company entered into a Loan Extension
Agreement with Trust III extending the maturity dates of each of these notes
through December 9, 2005. On January 31, 2006, the maturity date was extended to
December 9, 2006.

     10. The company engaged the law firm of McLaughlin & Stern, LLP whose
counsel is the father of the company's Chief Executive Officer Jeffrey Sass. The
company had total expenses of $ 158,446 for legal fees to this related party for
the period January 1, 2005 through December 31, 2005. The company had total
expenses of $46,399 for the firm in 2004. The company has used the services of
the law firm to handle the August 2004 reverse merger transaction, the April
2005 Cornell financing transactions, and general SEC related matters. During
April 2005 the company paid $ 50,000 to the law firm to be applied against
outstanding invoices.

     11. As of December 31, 2005, Jay Howard Linn earned fees of approximately
$11,000 for professional services rendered as our Acting Chief Financial
Officer. Mr. Linn has been paid $6,500 of this amount and $4,500 remains owed to
him. Mr. Linn is Trustee of Trust III.

     12. On March 9, 2005 the company entered into a line of credit arrangement
to borrow up to an additional $55,000 from Trust III. The company has drawn down
$ 42,000 of this amount. The line of credit arrangement is evidenced by the
issuance of a Promissory Note/Line of Credit. This note bears interest at 10%
per annum and was originally payable at the earlier of the company receiving a
bridge loan or equity investment that nets proceeds to the company of at least
$300,000, or December 9, 2005. The maturity date since been revised and extended
through December 9, 2006 pursuant to a Loan Extension Agreement by and between
the company and Trust III dated January 31, 2006.


                                       25
<PAGE>


ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K.

(a)      Exhibits:

10.1     Securities Purchase Agreement*
10.2     Secured Convertible Debenture*
10.3     Amended and Restated Convertible Debenture*
10.4     Investor Registration Rights Agreement*
10.5     Security Agreement*
10.6     Pledge and Escrow Agreement*
10.7     Termination Agreement with Cornell Capital Partners, LP*
10.8     Stock Purchase Agreement with NMI International Marketing, Inc.*
10.9     Purchase and Sale Agreement with Rothschild Trust Holdings, LLC*
10.10    License and Royalty Agreement with Rothschild Trust Holdings, LLC*
10.11    Escrow Agreement with Rothschild Trust Holdings, LLC, Montgomery Equity
             Partners, and David Gonzalez as Escrow Agent*

*As filed on Form 8-K with the Securities and Exchange Commission on February 8,
2006 (File No. 000-50996).

(b) Reports of Form 8-K filed in fourth quarter of the fiscal year:
            On October 3, 2005, the Company filed a Form 8-K to disclose the
            Agreement entered into with Triple Crown Consulting, Inc. for
            investor relations services.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The financial statements of the Company, which are furnished herein as of
December 31, 2005, have been audited by Salberg & Company, P.A., Boca Raton,
Florida, Independent Registered Public Accounting Firm. Salberg & Company, P.A.
billed the Company an aggregate of $53,000 in fees and expenses for professional
services rendered in connection with the audit of the Company's financial
statements for the fiscal year ended December 31, 2005 and the reviews of the
financial statements included in each of the Company's Quarterly Reports on Form
10-QSB during the fiscal year ended December 31, 2005. Salberg & Company, P.A.
billed the Company an aggregate of $23,000 in fees and expenses for professional
services rendered in connection with the audit of the Company's financial
statements for the fiscal year ended December 31, 2004 and the reviews of the
financial statements included in each of the Company's Quarterly Reports on Form
10-QSB during the fiscal year ended December 31, 2004. Audit related fees for
2005 were $18,000 and for 2004 were $0. The Company paid these sums.

Tax Fees

For the Company's fiscal year ended December 31, 2005 and 2004, we were billed
approximately $10,000 and $10,000 for professional services rendered for tax
compliance, tax advice, and tax planning.

All Other Fees

The Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal year ended December 31, 2005 and 2004.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.


ITEM 31.  CERTIFICATIONS

         Exhibit 31 A - Certification of Chief Executive Officer
         Exhibit 31 B - Certification of Chief Financial Officer
         Exhibit 32   - Certification Pursuant to Section 906 of the
                        Sarbanes-Oxley Act of 2002





                                       26
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned; thereunto duly authorized, in the City of Plantation,
State of Florida, on March 29, 2006.

Connected Media Technologies, Inc.

By: /s/  Jeffrey W. Sass
    --------------------------------------------------
    Jeffrey W. Sass
    Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Registrant and in
the capacities indicated on March 29, 2006.
<TABLE>
<CAPTION>

Signature                                                  Title

<S>                                                        <C>
/s/  Leigh M. Rothschild
--------------------------------------------------         Chairman
Leigh M. Rothschild

/s/  Jeffrey W. Sass
--------------------------------------------------         President and Chief Executive Officer
Jeffrey W. Sass

/s/  Jay Howard Linn                             .
--------------------------------------------------         Acting Chief Financial Officer
Jay Howard Linn                                            Chief Accounting Officer


</TABLE>




                                       27
<PAGE>