**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-QSB**





[X]
            Quarterly
                Report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934





For
      the
      quarterly period endedJune 30, 2007





[  ]
            Transition
                Report pursuant to 13 or 15(d) of the Securities Exchange Act of
                1934





For
      the
      transition period __________  to __________





Commission
      File Number:000-51125





Oxford
      Media, Inc.


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





Nevada
            20-3270909(State
                or other jurisdiction of incorporation or
                organization)
            (IRS
                Employer Identification No.)





OneTechnologyDriveBuildingH,Irvine,CA92618


(Address
      of principal executive offices)








949-341-0050


(Issuer's
      telephone number)





_______________________________________________________________


(Former
      name, former address and former fiscal year, if changed since last
      report)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
      (or
      for such shorter period that the issuer was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days [X] Yes
      [  ] No







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





As
      of
      August 14, 2007, 48,145,157 shares of common stock were
      outstanding.





Transitional
      Small Business Disclosure Format (check one): Yes [  ] No [X]




























TABLE
      OF CONTENTS







PagePART
                I - FINANCIAL INFORMATIONItem
                1.
            Financial
                Statements
            3Item
                2.
            Management’s
                  Discussion and Analysis or Plan of Operation
            12Item
                3.
            Controls
                and Procedures
            18PART
                II - OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            19Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            19Item
                3.
            Defaults
                Upon Senior Securities
            21Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            21Item
                5.
            Other
                Information
            21Item
                6.
            Exhibits
            21





































2





**PART
      I - FINANCIAL INFORMATION**


**ITEM 1.
      FINANCIAL STATEMENTS**





**OXFORD
      MEDIA, INC.**


**CONSOLIDATEDBALANCE SHEET**


**(UNAUDITED)**


**June
                30,****2007****Assets**Current
                assets:Cash
            
            $
            14,459Escrow
                proceeds receivable
            
            
            28,393Accounts
                receivable, net
            
            
            595,229Inventories
            
            
            330,514Deferred
                cost of sales
            
            
            168,116Other
                current assets
            
            
            234,828Total
                current assets
            
            
            1,371,539Property
                and equipment, net
            
            
            4,304,786Deferred
                cost of sales
            
            
            530,143Intangible
                assets, net
            
            
            3,760,542Goodwill
            
            
            2,668,378Other
            
            
            186,000Total
                assets
            
            $
            12,821,388**Liabilities
                and Stockholders' Deficit**Current
                liabilities:Accounts
                payable
            
            $
            2,534,945Accrued
                expenses
            
            
            1,607,296Deferred
                revenue
            
            
            381,468Current
                portion of capital lease obligation
            
            
            28,515Liabilities
                of discontinued operations
            
            
            52,382Total
                current liabilities
            
            
            4,604,606Notes
                payable
            
            
            14,306,006Accrued
                interest and dividends
            
            
            990,646Deferred
                revenue
            
            
            666,478Derivative
                liabilities
            
            
            290,487Capital
                lease obligation, net of current portion
            
            
            9,505Total
                liabilities
            
            
            20,867,728Commitments
                and contingencies
            
            
            -Preferred
                stock- $0.001 par value; 1,000,000 shares authorized
              Issued
                and outstanding shares - 7,857
            
            
            7,857,000Stockholders'
                deficit:Common
                stock - $0.001 par value; 100,000,000 shares authorized
              Issued
                and outstanding shares - 41,845,157
            
            
            41,847Additional
                paid-in capital
            
            
            22,391,797Accumulated
                deficit
            
            
            (38,336,984
            )Total
                stockholders' deficit
            
            
            (15,903,340
            )Total
                liabilities and stockholders' deficit
            
            $
            12,821,388








See
      accompanying Notes to Consolidated Financial Statements.





3





**OXFORD
      MEDIA, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**





**Three
                Months Ended June 30,**
            
            
            **Six
                Months Ended June 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Revenue:Services
            
            $
            2,624,006
            
            
            $
            21,834
            
            
            $
            5,340,418
            
            
            $
            21,834Products
            
            
            222,943
            
            
            
            46,043
            
            
            
            804,161
            
            
            
            79,0022,846,949
            
            
            
            67,877
            
            
            
            6,144,579
            
            
            
            100,836Cost
                of sales:Cost
                of services
            
            
            622,605
            
            
            
            78,800
            
            
            
            1,237,188
            
            
            
            78,800Cost
                of products
            
            
            196,435
            
            
            
            93,131
            
            
            
            507,287
            
            
            
            126,655819,040
            
            
            
            171,931
            
            
            
            1,744,475
            
            
            
            205,455Gross
                profit
            
            
            2,027,909
            
            
            
            (104,054
            )
            
            
            4,400,104
            
            
            
            (104,619
            )Operating
                expenses:Selling,
                general and administrative
            
            
            4,438,556
            
            
            
            2,856,461
            
            
            
            8,711,690
            
            
            
            6,558,227Amortization
                of intangibles
            
            
            218,782
            
            
            
            175,682
            
            
            
            437,652
            
            
            
            351,364Operating
                loss
            
            
            (2,629,429
            )
            
            
            (3,136,197
            )
            
            
            (4,749,238
            )
            
            
            (7,014,210
            )Other
                income (expense):Interest
                income
            
            
            15
            
            
            
            1,195
            
            
            
            78
            
            
            
            1,392Interest
                expense
            
            
            (7,017,758
            )
            
            
            (497,957
            )
            
            
            (8,165,419
            )
            
            
            (929,937
            )Derivative
                liabilities
            
            
            2,464,420
            
            
            
            (684,730
            )
            
            
            8,903,849
            
            
            
            (2,579,755
            )Income
                (loss) before discountinued operations
            
            
            (7,182,752
            )
            
            
            (4,317,689
            )
            
            
            (4,010,730
            )
            
            
            (10,522,510
            )Income
                (loss) from discontinued operations, net of tax
            
            
            (1,822
            )
            
            
            115,882
            
            
            
            (29,899
            )
            
            
            (59,938
            )Gain
                (loss) from sale of discontinued operations, net of tax
            
            
            (7,879
            )
            
            
            -
            
            
            
            1,173,951
            
            
            
            -(9,701
            )
            
            
            115,882
            
            
            
            1,144,052
            
            
            
            (59,938
            )Income
                taxes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Net
                loss
            
            
            (7,192,453
            )
            
            
            (4,201,807
            )
            
            
            (2,866,678
            )
            
            
            (10,582,448
            )Preferred
                stock dividends
            
            
            (159,183
            )
            
            
            (80,000
            )
            
            
            (316,323
            )
            
            
            (160,000
            )Net
                loss attributable to common stockholders
            
            $
            (7,351,636
            )
            
            $
            (4,281,807
            )
            
            $
            (3,183,001
            )
            
            $
            (10,742,448
            )Basic
                and diluted net loss available to common stockholders:Basic:Loss
                from continuing operations
            
            $
            (0.17
            )
            
            $
            (0.25
            )
            
            $
            (0.11
            )
            
            $
            (0.62
            )Income
                (loss) from discontinuing operations
            
            
            (0.00
            )
            
            
            0.01
            
            
            
            0.03
            
            
            
            (0.00
            )$
            (0.17
            )
            
            $
            (0.24
            )
            
            $
            (0.08
            )
            
            $
            (0.62
            )Dilutive:Loss
                from continuing operations
            
            $
            (0.17
            )
            
            $
            (0.25
            )
            
            
            (0.11
            )
            
            $
            (0.62
            )Income
                (loss) from discontinuing operations
            
            
            (0.00
            )
            
            
            0.01
            
            
            
            0.03
            
            
            
            (0.00
            )$
            (0.17
            )
            
            $
            (0.24
            )
            
            $
            (0.08
            )
            
            $
            (0.62
            )Weighted-average
                common shares outstanding - Basic
            
            
            41,261,641
            
            
            
            17,790,472
            
            
            
            36,359,747
            
            
            
            17,076,149Weighted-average
                common shares outstanding - Diluted
            
            
            41,261,641
            
            
            
            17,790,472
            
            
            
            36,359,747
            
            
            
            17,076,149








See
      accompanying Notes to Consolidated Financial Statements.








4





**OXFORD
      MEDIA, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





**Six
                Months Ended June 30,****2007**
            
            
            **2006****Cash
                flows from operating activities:**Net
                loss
            
            $
            (2,866,678
            )
            
            $
            (10,582,448
            )Adjustments
                to reconcile net loss to net cash from operating
                activities:Gain
                on sale of discontinued operations
            
            
            (1,173,951
            )
            
            
            -Depreciation
            
            
            1,078,564
            
            
            
            71,122Amortization
                of intangible assets
            
            
            436,937
            
            
            
            351,364Stock-based
                compensation
            
            
            113,125
            
            
            
            3,431,625Change
                in fair value of derivative liabilities
            
            
            (8,988,949
            )
            
            
            2,579,755Extinguishment
                of derivative liabilities
            
            
            85,100
            
            
            
            -Non-cash
                interest expense
            
            
            6,901,962
            
            
            
            -Amortization
                of debt discounts, premiums and debt issue costs
            
            
            174,286
            
            
            
            811,666Modification
                of warrant
            
            
            -
            
            
            
            164,331Changes
                in operating assets and liabilities:Escrow
                proceeds receivable
            
            
            391,705
            
            
            
            -Accounts
                receivable
            
            
            98,589
            
            
            
            (373,493
            )Inventory
            
            
            110,985
            
            
            
            41,486Other
                current assets
            
            
            (32,388
            )
            
            
            (118,039
            )Accounts
                payable
            
            
            1,862,859
            
            
            
            72,577Accrued
                expenses
            
            
            1,423,767
            
            
            
            86,587Deferred
                revenue
            
            
            (293,229
            )
            
            
            74,967Deferred
                cost of sales
            
            
            (149,913
            )
            
            
            -Net
                cash used in operating activities
            
            
            (827,229
            )
            
            
            (3,388,500
            )**Cash
                flows from investing activities:**Purchases
                of property and equipment
            
            
            (442,560
            )
            
            
            (153,828
            )Proceeds
                from sales of property and equipment
            
            
            13,641
            
            
            
            -Other
                assets
            
            
            -
            
            
            
            (162,083
            )Net
                cash used in investing activities
            
            
            (428,919
            )
            
            
            (315,911
            )**Cash
                flows from financing activities:**Net
                proceeds from the issuance of notes payable
            
            
            200,000
            
            
            
            3,500,000Proceeds
                from exercise of common stock warrants
            
            
            830,000
            
            
            
            20,000Principal
                payments on notes payable
            
            
            (28,892
            )
            
            
            -Net
                borrowings on wholesale financing line of credit
            
            
            -
            
            
            
            147,665Principal
                payments on capital lease obligations
            
            
            (19,700
            )
            
            
            (4,060
            )Net
                cash provided by financing activities
            
            
            981,408
            
            
            
            3,663,605Net
                decrease in cash and cash equivalents
            
            
            (274,740
            )
            
            
            (40,806
            )Cash
                and cash equivalents at beginning of period
            
            
            289,199
            
            
            
            640,299Cash
                and cash equivalents at end of period
            
            $
            14,459
            
            
            $
            599,493





See
      accompanying Notes to Consolidated Financial Statements.








5





**OXFORD
      MEDIA, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**June
      30, 2007**


**(UNAUDITED)**





**1.**
            **Business**





*Business*


Oxford
      Media, Inc and its subsidiaries ("collectively, the "Company") provides
      services to the hospitality industry. These services include the sale of
      video-on-demand (“VOD”) systems, delivery of the content which includes
      on-demand movies, television and the internet.





Effective
      July 1, 2006, OMI purchased all of the outstanding shares of SVI. SVI has the
      following products and services available for the hospitality
      industry:





§
            Instant
                Entertainment is an
                electronic delivery system that allows a guest to start a movie on-demand
                and pay for that movie by utilizing a credit card swiper connected
                to the
                room telephone or by cash at the front desk. The hotels/motels earn
                commissions based on the property's net collected movie revenues,
                excluding any applicable taxes and fees, multiplied by the commission
                percentage as stated in their individual
                contract.


§
            Super
                Video Cinema is a video
                player and tape-based system supplied to the hotel/motel, which then
                rents
                the equipment to their customers and remits gross proceeds, net of
                applicable taxes, fees and earned commissions, to the
                Company.


§
            DirecTV/DSS,
                a leading digital TV
                service in the residential market, is also available to hotels. As
                a
                licensed dealer of DirecTV, SVI can install digital quality programming
                by
                DirecTV on a per channel cost basis. DirecTV programming provides
                more
                choices and flexibility with access to great movies, sports, news,
                and
                family entertainment
                channels.


§
            Internet
                by SVI, an always-on
                high-speed Internet solution, is the hotel's first choice when it
                comes to
                an Internet amenity. SVI provides all the hardware and software necessary
                to allow hotel guests to plug into a wireless (or wired) network
                using
                their laptop computers. With Internet by SVI, the hotel receives
                installation and maintenance services by full-time SVI employees
                stationed
                throughout theU.S.


§
            Security
                by SVI, offers a full
                array of surveillance products, including high-resolution cameras,
                digital
                video recorders and the capability of remote viewing and management
                through a high-speed internet
                connection.





SVI
      has
      developed several strategic partnerships in an effort to provide additional
      revenue streams and value added products for the hospitality industry utilizing
      the Company's integrated support network.





CBC
      was
      sold in March 2007. Through CBC, the Company provided consulting services to
      information technology (“IT”) clients regarding IT networking and security. In
      addition, CBC provides IT training services to clients. The consulting and
      training services were provided primarily to government and industry clients
      in
      Southern California. CBC also purchased, assembled, installed and sold IT
      networking hardware and related software and provides network maintenance
      services.





**2.**
            **Exchange
                Transaction, Issuance of Senior Secured Notes and David Parker
                Settlement**





*Exchange
      Transaction*


On
      July
      16, 2007, the Company entered into a transaction whereby the holders of certain
      debt and preferred stock securities (individually or collectively “Holder”)
      cancelled and exchanged their principal and accrued interest on outstanding
      debt
      and the face amount and accrued dividends on preferred stock into shares of
      Series C convertible preferred stock (“Series C Preferred”). This transaction
      (“Exchange Transaction”) was contingent upon the issuance of the senior secured
      notes as described below titled “Issuance of Senior Secured
      Notes”.  The Holders converted the following securities:





§
            Senior
                Notes - outstanding principal and accrued interest of $11,897,608
                and
                $532,357, respectively were exchanged on a basis of one shares of
                Series C Preferred (for a total of 12,429.97 shares) for each $1,000
                of
                amounts owed;





§
            SVI
                Notes - outstanding principal and accrued interest of $2,350,000
                and
                $259,269, respectively were exchanged on a basis of 0.50 shares of Series
                C Preferred (for a total of 1,304.63 shares) for each $1,000 of amounts
                owed.  In addition, the Company agreed to forgive approximately
                $93,000 of net amounts owed (accounts payable, net of accounts receivable)
                and provide additional service credits of $388,600 to a company
                related to the holders of the SVI Notes in connection with this
                exchange;








6





§
            Series
                A Convertible Preferred Stock - outstanding stated value and accrued
                dividends of $4,000,000 and $134,040, respectively were exchanged
                on a
                basis of 0.25 shares of Series C Preferred  (for a total of
                1,033.51 shares) for each $1,000 of amounts
                owed;





§
            Series
                B Convertible Preferred Stock - outstanding stated value and accrued
                dividends of $3,857,000 and $128,179, respectively were exchanged
                on a
                basis of 0.25 shares of Series C Preferred  (for a total of
                996.30 shares) for each $1,000 of amounts owed;
                and





§
            Other
                Notes - outstanding principal and accrued interest of $447,000 and
                $66,161, respectively were exchanged on a basis of 0.125 shares of
                Series
                C Preferred (for a total of 64.14 shares) for each $1,000 of amounts
                owed.





In
      addition, warrants to purchase common stock held by the Holders totaling
      13,514,386 shares were cancelled.





*Accounting
      for the Exchange Transaction*


The
      Company expects to account for these extinguishments in accordance with
      Statement of Financial Accounting Standards (“SFAS”) No. 15, “*Accounting by
      Debtors and Creditors fo**r Troubled Debt**Restructurings*” due to the fact that the
      holders of the debt and
      preferred stock instruments granted the Company concessions intended to
      alleviate its immediate liquidity constraints. The concession that the creditors
      granted to the Company enabled it to (a) effectuate their settlement
      through an exchange of equity instead of a use of cash and (b) consummate a
      sale of Senior Secured Notes (see below) that resulted in an infusion of cash
      that was needed to sustain operations.




In
      accordance with the provisions of SFAS 15, the Company will record a non-cash
      loss on the extinguishment of the Senior Notes, based on the difference between
      the (a) fair value of the Series C Preferred on as if converted to common
      stock basis using the closing stock price ($0.03 per share) on the date of
      the
      transaction and (b) the carrying value of the notes on the settlement
      date.  The Company will also record non-cash gains on the
      extinguishment on the SVI Notes, Series A convertible preferred stock, Series
      B
      convertible preferred stock and Other Notes.  Management expects the
      Company will record a net, non-cash loss on the above extinguishments of
      approximately $6,200,000.  In addition, the Company estimates the
      direct, cash-based transaction costs to be approximately $154,000 which will
      be
      also be included in the calculation of the loss on extinguishment.




The
      Company also expects to record non-cash gains resulting from the extinguishments
      of the derivative liabilities for the outstanding warrants on the Senior Notes
      of approximately $352,000.




*Issuance
      of Senior Secured Notes*


In
      connection with the Exchange Transaction, the Company issued $4,210,526 face
      value, 12% senior secured promissory notes (“Senior Secured Notes”), due July
      16, 2011. The Company received gross proceeds of $3,800,000 and converted
      $200,000 of secured promissory notes issued on June 29, 2007.  Of the
      total proceeds received, approximately 69% was from a third party that did
      not
      have a previous debt or significant equity interest in the
      Company.  The Company also issued to the holders of the Senior Secured
      Notes 7,228.14 shares of Series C Preferred, which represented 30% of the
      fully-diluted shares of the Company on an as if, converted basis.





The
      holders of the Senior Secured Notes have a first priority lien on all of the
      Company's assets and are guaranteed by each of its subsidiaries. The Senior
      Secured Notes require the Company to repay the principal amounts in equal
      installments beginning September 30, 2009. Interest is payable based on a
      360-day year at the stated rate every three months beginning October 1, 2007.
      In
      the event the Company is in default of the Senior Secured Notes, the default
      interest rate is 18% per annum, until such default has been cured.





The
      Company expects to use the proceeds to fund its ongoing operations, allowing
      for
      its future growth in the VOD business, further expansion of other business
      initiatives and servicing of its debt obligations.





The
      Company expects to account for the preferred stock issued with the Senior
      Secured Notes, in accordance with Accounting Principles Board Opinion
      No. 14 (“APB 14”), *Accounting**for Convertible Debt and Debt
      Issued with Stock Purchase Warrants* and will allocate the proceeds from the
      issuance of the debt and underlying Series C Preferred based on their relative
      fair value and will record this amount as a debt discount and additional paid-in
      capital. The debt discount will be amortized over the term of the related debt.
      Any beneficial conversion feature that is present will be amortized over the
      earliest conversion date to which the Series C Preferred can be converted into
      common stock.





*Registration
      Rights Agreement*


The
      Company entered into a registration rights agreement with the holders of the
      Senior Secured Debt and the Series C Preferred whereby the Company is required
      to file an initial registration statement on Form SB-2 or Form S-3 with the
      Securities and Exchange Commission in order to register the resale of the
      maximum amount of common stock underlying the Series C Preferred under the
      Securities Act within sixty days of the Exchange Agreement (or September 14,
      2007).  The registration statement must then be declared effective no
      later than 175 calendar days (December 28, 2007), in the event of a full review
      by the Securities and Exchange Commission, or in the event of no review, 90
      days
      from the initial filing date.





In
      the
      event that the Company fails to have the registration statement declared
      effective by the SEC by the dates described above, or fails to maintain on
      the
      registration statement the effectiveness of the registration statement
      thereafter, then the Company must pay the Holders an amount equal to 2% of
      the
      aggregate purchase price paid by each Holder, for each month the registration
      statement remains uncured.  Additionally, failure to have a
      registration statement declared effective would result in the Company being
      in
      default of the terms of the Senior Secured Notes and the Series C Preferred
      would be in default of this provision.








7





*Rights
      and Preferences of Series C Preferred*


The
      holders of the Series C Preferred have the following rights and
      preferences:





*Dividends*


The
      Holders are entitled to receive cumulative dividends at a rate of 7.0% per
      annum. Dividends are payable in shares of Series C Preferred, payable quarterly
      beginning on October 1, 2008, and ending upon the earlier of four years from
      the
      date of issuance or the forced conversion date.





*Conversion*


Each
      share of Series C Preferred is convertible at the option of the holder at any
      time into common stock by dividing the face value per share of $1,000 by the
      conversion price ($0.02 or 50,000 shares of common stock), subject to
      adjustments for dividends. Upon the four year anniversary from the date of
      issuance, each share of Series C Preferred outstanding will be automatically
      converted into common stock.





Upon
      the
      occurrence of certain events for each 22 consecutive trading day periods (i)
      the
      VWAP for each 22 consecutive trading day period exceeds $0.05 per share and
      (ii)
      the volume for each trading day period exceeds 1% percent of the then issued
      and
      outstanding shares of common stock, the Company may cause each holder to convert
      all or part of such holder’s Series C preferred.





In
      the
      event the Company issues additional shares of common stock at a price per share
      lower than the Series C Preferred conversion price, the Series C Preferred
      are
      entitled have their conversion price reduced to such amount.





*Voting*


The
        holders of shares of Series C Preferred are entitled to the number of votes
        equal to the number of shares of common stock into which each preferred share
        is
        convertible at the time of such vote, notwithstanding any limitations on
        the
        actual number shares which may be issued upon conversion of the Series C
        Preferred Stock.
 
 The
        holders of our Series C Convertible Preferred Stock collectively beneficially
        own securities with voting power equivalent to that of 1,152,435,465 billion
        common shares (or approximately 96% of the voting power of our capital
        stock).   Accordingly, the holders of our Series C Convertible
        Preferred Stock will have a significant and overwhelming  influence in
        determining the outcome of all corporate transactions or other
        matters.





*Liquidation
      Preference*


Each
      holder of the Series C Preferred is entitled to receive upon any liquidation,
      dissolution or winding-up of the Company, whether voluntary or involuntary,
      amounts equal to the stated value per share, plus accrued and unpaid dividends
      and any other fees or liquidated damages owing upon before any payments to
      the
      holders of common stock.





*Redemption*


The
      Preferred Stock is redeemable for cash at a premium equal to the respective
      stated value plus accrued dividends upon the occurrence of certain contingent
      events that include registration effectiveness requirements pursuant to an
      executed registration rights agreement. As a result, the Company carries the
      Preferred Stock outside of stockholders' equity. In the event a redemption
      event
      becomes probable, the Company would be required to adjust the carrying value
      to
      redemption value.





In
      the
      event of default, the holder of the Series C Preferred may demand redemption
      based on (i) the greater of (A) 120% of the stated value and (B) the product
      of
      (a) the volume weighted-average price (“VWAP”) on the trading day immediately
      preceding the date of the default and (b) the stated value divided by the then
      set conversion price, (ii) all accrued but unpaid dividends, (iii) all
      liquidated damages and other amounts due in respect to the Preferred Stock.
      At
      the option of the holder, the determined redemption can be paid in cash or
      converted into common stock at a rate of 75% of the average of the 10 VWAP
      immediately prior to the date of election. As of the reporting date, the
      Company's management has determined that the likelihood of such redemption
      is
      not probable.





*David
      Parker Settlement*


On
      July
      16 2007, the Company entered into a Settlement and Release Agreement with David
      L. Parker, a former employee and member of the Company’s board of
      directors.  Mr. Parker agreed to terminate his employment agreement
      with the Company and waive all rights he might have to any further compensation
      or payment of any kind under an employment contract.  As part of the
      agreement, the Company issued 6,300,000 shares of common stock to Mr.
      Parker.  Mr. Parker also released the Company of $157,500 of accrued
      compensation.  The Company expects to record a non-cash charge to the
      statement of operations for the difference between the fair value of the common
      stock totaling $189,000 based on the closing stock price and the accrued
      compensation.  Mr. Parker was granted the same registration rights as
      provided to holder of the Series C Preferred.





**3.**
            **Basis
                of Presentation and Significant Accounting
                Policies**





*Basis
      of Presentation*


The
      consolidated financial statements of Oxford Media, Inc. are unaudited and have
      been prepared in accordance with accounting principles generally accepted in
      the
      United States of America for interim financial information, pursuant to the
      rules and regulations of the Securities and Exchange Commission. Notes to the
      financial statements which would substantially duplicate the disclosures
      contained in the audited financial statements for the most recent fiscal
      year 2006 as reported in the Form 10-KSB, have been omitted. The
      results of operations for the three and six months ended June 30, 2007 and
      2006
      are not necessarily indicative of the results to be expected for the full year.
      All accounts and intercompany transactions have been eliminated in
      consolidation. In the opinion of management, the consolidated financial
      statements include all adjustments, consisting of normal recurring accruals,
      necessary to present fairly the Company's financial position, results of
      operations and cash flows. The results of operations for these interim periods
      are not necessarily indicative of results to be expected for the full year.
      These statements should be read in conjunction with the financial statements
      and
      related notes which are part of the Company's Annual Report on Form 10-KSB
      for
      the year ended December 31, 2006.








8





The
      Company has identified certain significant accounting policies that it considers
      particularly important to the portrayal of its results of operations and
      financial position which may require the application of a higher level of
      judgment by the Company's management and, as a result, are subject to an
      inherent level of uncertainty.





*Discontinued
      Operations*


Effective
      March 1, 2007, the Company sold certain assets and transferred certain
      liabilities related to its CBC business unit.  The results of
      operations and cash flows have been eliminated as a result of the sale and
      the
      Company has not had any involvement in the operations after the sale. In
      accordance with SFAS 144 “Accounting for the Impairment or Disposal of
      Long-lived Assets”, these results are presented on a historical basis as a
      separate line in the consolidated statements of operations labeled “Loss from
      Discontinued Operations”. The financial information included in these notes to
      the consolidated financial statements reflects only the results of continuing
      operations of the Company, unless otherwise noted.





*Going
      Concern Consideration*


The
      accompanying consolidated financial statements have been prepared on a going
      concern basis, which contemplates the realization of assets and the settlement
      of liabilities in the normal course of business. The Company has incurred losses
      from operations and negative cash flows from operating activities since
      inception, and as of June 30, 2007, had a working capital deficiency of
      $3,233,067 and was in default under its debt and preferred stock
      agreements.  As described in Note 2, these instruments have been
      extinguished and new debt and equity instruments have been issued.





The
      Company anticipates its current cash reserves including the funds received
      from
      the Senior Secured Notes in July 2007, plus its expected generation of cash
      from
      existing operations, anticipated capital expenditures and working capital will
      be sufficient to fund its anticipated operations into the first quarter of
      2008.
      The Company will need to seek to obtain additional debt and/or equity financing
      sooner if it experiences downturns or cyclical fluctuations in its business
      that
      are unforeseen, more severe or longer than anticipated, if it fails to achieve
      anticipated revenue targets, if it experiences significant increases in the
      cost
      of content, or declines in the selling prices of its
      content.  Consequently, the Company will need to raise additional debt
      and/or equity capital in order to finance its business plan and needs for
      working capital. There is no assurance that the proceeds from future financings
      will be sufficient to obtain profitable operations.  Such
      financing(s), if available may increase the risk of the Company not being able
      to service its debt obligations, and/or cause dilution to existing equity
      holders. The accompanying consolidated financial statements do not include
      any
      adjustments to reflect the possible future effects on the recoverability and
      classification of assets and liabilities that might result from the outcome
      of
      this uncertainty.





*Net
      Loss per Common Share*


Basic
      net
      loss per share is calculated by dividing net loss by the weighted average common
      shares outstanding during the period. Diluted net income loss per share reflects
      the potential dilution to basic EPS that could occur upon conversion or exercise
      of securities, options or other such items to common shares using the treasury
      stock method, based upon the weighted average fair value of our common shares
      during the period.





The
      following is a summary of outstanding securities which have been excluded from
      the calculation of diluted net loss per share because the effect would have
      been
      anti-dilutive as of June 30:





**2007**
            
            
            **2006**Common
                stock warrants
            
            
            15,235,000
            
            
            
            585,000Convertible
                preferred stock – Series A
            
            
            8,000,000
            
            
            
            4,000,000Convertible
                preferred stock – Series B
            
            
            7,714,000
            
            
            
            -Convertible
                debt
            
            
            1,836,857
            
            
            
            988,250Common
                stock options
            
            
            320,000
            
            
            
            585,00033,105,857
            
            
            
            6,158,250








*Pro-Forma
      Financial Information*


The
      following unaudited pro forma operating data gives effect to the acquisition
      of
      SVI which was acquired effective July 1, 2006, as if it had occurred on January
      1, 2006 through June 30, 2006 and excludes the results of CBC due to its
      presentation as discontinued operations. Pro forma financial information is
      not
      necessarily indicative of the results of operations that may have occurred
      had
      the acquisition of SVI occurred at the beginning of 2006.





For
                Three Months Ended June 30, 2006
            
            
            For
                Six Months Ended June 30, 2006Revenues
            
            $
            3,312,475
            
            
            $
            6,364,099Net
                loss, before discontinued operations
            
            
            (5,172,546
            )
            
            
            (12,208,142
            )Net
                loss applicable to common stockholders
            
            
            (5,136,664
            )
            
            
            (12,428,080
            )Basic
                and diluted loss per common share, before discontinued
                operations
            
            $
            (0.29
            )
            
            $
            (0.71
            )Basic
                and diluted loss per common share, applicable to common
                stockholders
            
            $
            (0.29
            )
            
            $
            (0.73
            )








9





**4.**
            **Accrued

                Expenses**





Accrued
      expenses consist of the following at June 30, 2007:





Wages
                and benefits
            
            $
            725,849Service
                credits
            
            
            361,395Other
            
            
            520,052$
            1,607,296





As
      discussed in Note 2, the Company converted accrued interest and dividends on
      its
      then outstanding debt securities and accrued dividends on its Series A and
      Series B convertible preferred stock into shares of Series C
      Preferred.





**5.**
            **Debt**





As
      of
      June 30, 2007, the Company’s Senior Notes, SVI Acquisition Notes and Other Notes
      as described below were in default under the terms of their respective
      agreements.  Since such amounts were subsequently exchanged for equity
      as part of the Exchange Transaction (see Note 2), the outstanding principal
      balances and accrued interest have been classified as long-term liabilities
      in
      the accompanying consolidated balance sheet. On July 16, 2007, the outstanding
      principal and accrued interest was exchanged and converted into shares of Series
      C convertible preferred stock.





*Bridge
      Notes*


On
      June
      29, 2007, the Company issued two promissory notes (“Promissory Notes”) for
      aggregate cash proceeds of $200,000.  The Promissory Notes while
      outstanding had a stated interest rate of 12% per annum. The Promissory Notes
      had a maturity date of the earlier of (i) written demand by the holders of
      the
      notes; or, (ii) December 31, 2007, unless due earlier in accordance with the
      terms of the Promissory Notes. On July 16, 2007, the outstanding principal
      balance of $200,000 was converted into an equal amount of Senior Secured Debt
      (see Note 2).





*Senior
      Notes*


As
      of
      June 30, 2007, the Company had $11,897,608 face value, 12% senior secured
      promissory notes (18% default interest rate) (“Senior Notes”) outstanding. On
      June 15, 2007, the Senior Notes became in default due to non-payment of
      interest.





The
      Company accounted for Senior Notes and other included instruments under SFAS
      155
“Accounting for Certain Hybrid Financial Instruments an amendment of FASB
      Statements No. 133 and 140”, and thus carried them at their respective fair
      value at each reporting period. At June 30, 2007, the Company determined the
      fair value of the Senior Notes to be $10,911,398. The Company recorded the
      change in the fair value to interest expense $124,847 and $271,676 for the
      three
      and six months ended June 30, 2007, respectively.





On
      February 28, 2007 and March 15, 2007, the Company issued 3,714,768 and 1,407,900
      shares, respectively of restricted common stock in satisfaction of $557,215
      of
      accrued interest on the Senior Notes. The closing market price of the Company's
      common stock ranged from $0.29 to $0.18 per share while the agreed to conversion
      price was $0.15 per share. As a result, the Company recorded additional interest
      expense during the six months of 2007 of approximately $520,068 for the
      difference between the closing market price and the conversion price at each
      issuance date.





*SVI
      Acquisition Notes*


On
      September 1, 2006, the Company issued $2,350,000 face value subordinated
      convertible notes to the selling shareholders of SVI (“SVI Notes”). While
      outstanding, the notes were convertible into shares of common stock at a
      conversion price of $1.75 per share. The notes had a stated interest rate equal
      to prime rate plus 1.5% as announced, published or referenced by Citibank N.A
      and a default interest rate equal to the variable interest rate plus 5%. 
Interest was payable at the end of each calendar quarter beginning September
      30,
      2006. At June 30, 2007, the notes are in default as the Company did not make
      the
      required interest payments. The Company determined the fair value of the
      subordinated convertible notes on the date of issuance was $2,682,000 due to
      the
      conversion feature which resulted in a premium on the notes.  As a
      result of notes being in default during the three months ended June 30, 2007,
      the Company accreted the premium on the notes of $228,711 to their face
      value.





In
      addition, the Company issued $100,000 of promissory notes to these selling
      shareholders and was due on or before January 31, 2007. These notes were not
      repaid by their due date and were in default at June 30, 2007.





*Other
      Notes*


As
      of
      June 30, 2007, the Company had outstanding amount due under promissory note
      agreements totaling $347,000 which were in default.





**6.**
            **Derivative
                Liabilities**





During
      the three months and six months ended June 30, 2007, the Company recognized
      a
      gain due to the change in the fair value of our derivative liabilities of
      $2,464,420 and $8,903,849, respectively. The gain resulted from (1) the decrease
      in the Company's stock price from December 31, 2006 to June 30, 2007, (2) the
      exercise of the warrants underlying certain of the Company's debt instruments
      and (3) the issuance of additional warrants that were determined to be
      derivative instruments (see Note 8).  The underlying derivative
      liabilities were terminated on July 16, 2007 as the underlying common stock
      warrants were cancelled (see Note 2).








10





**7.**
            **Preferred
                Stock**





As
      of
      June 30, 2007, the Company’s Series A and Series B convertible preferred stock
      (collectively “Preferred Stock”) were in default resulting from the non-payment
      of contractual dividend payments and were immediately redeemable by the
      respective holders.  The Preferred Stock, prior to being in default,
      was being carried at discounted amounts. As a result of the redemption
      provision, the Company accreted the Preferred Stock to its face value during
      the
      three months ended June 30, 2007.  Accordingly, the Company recorded
      non-cash interest expense relating to the accretion of $6,381,894 during the
      three months ended June 30, 2007. On July 16, 2007, the outstanding principal
      and accrued interest was exchanged and converted into shares of Series
      C Preferred (see Note 2).





**8.**
            **Common
                Stock**





*Modification,
      Exercise and Issuance of Warrants*


On
      February 28, 2007, the Company agreed to modify the exercise price of 11,500,000
      common stock warrants from $0.50 to $0.10 per share to induce the holders to
      exercise their warrants. During the three and six months ended June 30, 2007,
      the Company received $200,000 and $830,000, respectively, in proceeds from
      the
      exercise of an aggregate of 8,300,000 common stock warrants. At the time of
      exercise of the warrants, the underlying derivative liabilities were terminated,
      as such the fair value was reclassified to additional paid in capital totaling
      $2,095,929 through June 30, 2007.





On
      the
      date of each modification, the Company recorded a non-cash charge to gain on
      derivative liability, representing the difference between the fair value of
      the
      modified warrants immediately before and after the modification. The holders
      that elected to exercise their warrants were also issued additional warrants
      (“Replacement Warrants”) to purchase 8,300,000 shares of common stock at an
      exercise price of $0.50 per share.





Upon
      issuance of the Replacement Warrants, the Company evaluated the terms and
      features and determined the warrants did not meet all of the established
      criteria for equity classification provided in EITF 00-19 “Accounting for
      Derivative Financial Instruments Indexed to, and Potentially Settled in, a
      Company's Own Stock.” The fair value of the warrants was determined using the
      Black-Scholes model using market based assumptions consistent with those used
      during 2006.





*Issuance
      of Common Stock for Accrued Dividends on Series A and Series B Convertible
      Preferred Stock*


On
      February 28, 2007, the Company issued 861,041 shares of restricted common stock
      for payment of dividends on its Series A and Series B Preferred stock for
      amounts accrued through February 28, 2007 totaling $258,312, a conversion rate
      of $0.30. The closing stock price of the Company's common stock was $0.29 per
      share.





**9.**
            **Discontinued
                Operations**





Effective
      March 1, 2007, the Company completed the sale of all the assets of CBC to
      an unrelated third party. The Company chose to dispose of CBC as it was not
      within the parameters of the Company's core business. The purchase price
      included aggregate cash payments to the Company of $457,219, the transfer
      $584,796 of accounts receivable to the buyer and the assumption of accounts
      payable by the buyer of $1,035,322, accrued liabilities of $100,332 and $45,000
      of transaction costs paid by the Company. As of June 30, 2007, $28,393 of the
      funds remained in escrow and amounts are classified in the consolidated balance
      sheet as “Escrow Proceeds Receivable”.





As
      result
      of the sale, the Company recognized a gain from the sale totaling $1,173,951
      during the six months ended June 30, 2007. Such amounts have been reported
      in
      the consolidated statement of operations under the caption of “Gain from Sale of
      Discontinued Operations”.





The
      following is a condensed balance sheet of CBC as of June 30, 2007:





Current
                assets
            
            $
            31,354Total
                assets
            
            
            31,354Current
                liabilities
            
            
            52,382Total
                liabilities
            
            
            52,382Total
                stockholders' deficit
            
            
            (21,028
            )Total
                liabilities and stockholders' deficit
            
            $
            31,354








The
      following are condensed statements of operations for the discontinued operations
      of CBC for the three months and six months ended June 30:





Three
                Months Ended June 30,
            
            
            Six
                Months Ended June 30,2007
            
            
            2006
            
            
            2007
            
            
            2006Revenues
            
            $
            -
            
            
            $
            1,594,995
            
            
            $
            801,579
            
            
            $
            2,612,021Net
                income (loss) from discontinued operations
            
            $
            (1,822
            )
            
            $
            149,463
            
            
            $
            (29,899
            )
            
            $
            (59,938
            )











11




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





This
      quarterly report on Form 10-QSB of Oxford Media, Inc. for the three months
      ended
      June 30, 2007 contains forward-looking statements, principally in this Section.
      Generally, you can identify these statements because they use words like
“anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” and similar
      terms. These statements reflect only our current expectations. Although we
      do
      not make forward-looking statements unless we believe we have a reasonable
      basis
      for doing so, we cannot guarantee their accuracy and actual results may differ
      materially from those we anticipated due to a number of uncertainties, many
      of
      which are unforeseen, including, among others, the risks we face as described
      in
      this filing. You should not place undue reliance on these forward-looking
      statements which apply only as of the date of this annual report. These
      forward-looking statements are within the meaning of Section 27A of the
      Securities Act of 1933, as amended, and section 21E of the Securities Exchange
      Act of 1934, as amended, and are intended to be covered by the safe harbors
      created thereby. To the extent that such statements are not recitations of
      historical fact, such statements constitute forward-looking statements that,
      by
      definition, involve risks and uncertainties. In any forward-looking statement
      where we express an expectation or belief as to future results or events, such
      expectation or belief is expressed in good faith and believed to have a
      reasonable basis, but there can be no assurance that the statement of
      expectation of belief will be accomplished.





We
      believe it is important to communicate our expectations to our investors. There
      may be events in the future, however, that we are unable to predict accurately
      or over which we have no control. The cautionary language in this report,
      provide examples of risks, uncertainties and events that may cause our actual
      results to differ materially from the expectations we describe in our
      forward-looking statements. Factors that could cause actual results or events
      to
      differ materially from those anticipated, include, but are not limited to:
      our
      ability to successfully develop new products; the ability to obtain financing
      for product development; changes in product strategies; general economic,
      financial and business conditions; changes in and compliance with governmental
      healthcare and other regulations; changes in tax laws; and the availability
      of
      key management and other personnel.





This
      information should be read in conjunction with our unaudited consolidated
      condensed financial statements and the notes thereto included in this Quarterly
      Report and our audited consolidated financial statements and notes thereto
      and
      Management's Discussion and Analysis of Financial Condition and Results of
      Operations contained in our Annual Report on Form 10-KSB for our year ended
      December 31, 2006.





**Our
      Business**





Our
      primary business is providing technology, content and support services for
      in-room entertainment and high-speed internet access to small and medium sized
      hospitality properties. We have developed a proprietary system comprised of
      hardware and software technology for the cost-effective delivery of
      Video-on-Demand (“VOD”), on a pay-per-view basis.





Our
      technology platform has three major components; proprietary software, video
      server and in-room equipment. We provide content that is rented in the hotel
      room on demand. We also maintain relationships with a variety of major content
      providers including: Hollywood studios, independent movie producers, and
      numerous sources for music and music videos. OxfordSVI is also a reseller of
      DIRECTV®, selling the hardware and receiving monthly recurring revenue from its
      free-to-guest (FTG) television services. We also provide customer support
      services using our integrated call center located in Peoria, IL and a field
      service organization located throughout the United States.





We
      plan
      to continue to grow our business through the growth of our customer base and
      sales of our VOD systems using the benefits that come from our technology to
      save costs and to increase our revenues produced. Specifically, this will result
      in increases in the number of hotels using our products and services, as well
      as
      increasing revenue produced per room.





We
      are
      continuing to focus on the hospitality service business over the coming year.
      Our strategy includes two major growth drivers; adding hotel properties and
      generating more revenue per room. We are well positioned for this growth
      starting with our base of over 2,400 hotel properties that we deliver our VOD
      and/or HSIA services. Our important differentiation in the marketplace is a
      combination of our lower price points for the technology that enables the
      delivery of our VOD content well as our ability to deliver superior customer
      support services.





There
      are
      external factors which will help with our growth as well. In the near term,
      the
      biggest driver we see is the move to high definition (HD) content. During 2008,
      we expect to introduce our next generation product which will be scalable
      to properties with rooms ranging from 70 to well over 1000. Our technology
      makes
      it viable for hotels to deploy HD at their own pace, allowing upgrades to occur
      over time without compromise to their delivery of standard definition content.
      We believe we are the first company to take this approach and it should give
      us
      a real competitive advantage in the marketplace. Our ability to enable a
      reasoned and economic upgrade path for our client hotels is a further reflection
      of our commitment to attend to the needs of our hotel customers. With the merger
      of our two largest competitors in the market it opens up opportunities as we
      are
      now positioned to be the competitive alternative to the largest provider in
      the
      industry and we are getting involved in proposals with larger hotel chains
      and
      higher-end properties than we have in years past. These properties also yield
      higher revenue per room rates than our current installed base.








12





Our
      sales
      strategy is to leverage our in-house sales team to up-sell our current installed
      base and find deals on a direct basis while also working an authorized dealer
      channel that delivers non competitive technologies to a similar market
      demographic. Our hybrid model focuses direct efforts on management companies
      and
      brands, and leveraging the dealer channel where appropriate to capitalize on
      their relationships, marketing and ability to cover geographies where we do
      not
      have a direct presence. This sales strategy provides us greater exposure to
      new
      potential customers.





Another
      significant opportunity in the short-term is gaining more revenue per room
      from
      our installed base. This will be achieved by (1) upgrading technology, (2)
      providing more compelling content and (3) introducing opportunities for
      advertising revenue.





The
      greater storage capacity of digital systems allows us to offer a broader
      selection of content that's appealing to a wider audience of hotel guests which
      is expected drive additional revenue per room.




The
        other
        new source of revenue the Company expects to have is advertising. The Company
        plans to add a TV guide channel on the system with space available for
        advertising which would be shared between the hotel property and
        us.
 
 We
        will
        face some significant challenges as we attempt to execute on our business
        plan
        over the coming months.  Currently, we are engaged in an effort to
        upgrade approximately 1,500 hotel properties from our VHS-based analog systems
        to our full digital service.  In our experience, hotel properties
        featuring our digital system generate more revenue per-room, per-month than
        those featuring our older, analog system.  Our ability to continue to
        operate while meeting our anticipated expenses will depend in part on our
        being
        able to convert a sufficient number of properties to our digital system on
        a
        month-by-month basis.  We estimate that we will need to convert a
        minimum of approximately 20 properties per month to our digital system in
        order
        to experience the required revenue growth in this area of our
        business.  In addition, our ability to meet our operating expenses
        will depend in part on establishing and expanding a significant flow of
        advertising revenues over the coming months.   If we are unable
        to execute our planned technology upgrades in a timely fashion, and/or if
        we are
        unable to significantly expand our revenues through the sale of advertising,
        we
        may need additional capital to continue our operations and our business may
        fail.
  **Recent
        Developments**





On
      July
      16, 2007, we entered into a transaction whereby the holders of certain debt
      and
      preferred stock securities (individually or collectively “Holder”) cancelled and
      exchanged their principal and accrued interest on outstanding debt and the
      face
      amount and accrued dividends on preferred stock into shares of Series C
      convertible preferred stock (Series C Preferred”). Under this transaction
      (“Exchange Transaction”), the Holders converted the following
      securities:





§
            Senior
                Notes - outstanding principal and accrued interest of $11,897,608
                and
                $532,357, respectively  were exchanged on a basis of one shares
                of Series C Preferred (for a total of 12,429.97 shares) for each
                $1,000 of
                amounts owed;





§
            SVI
                Notes - outstanding principal and accrued interest of $2,350,000
                and
                $259,269, respectively were exchanged on a basis of 0.50 shares of
                Series
                C Preferred  (for a total of 1,304.63 shares) for each $1,000 of
                amounts owed;





§
            Series
                A Convertible Preferred Stock - outstanding stated value and accrued
                dividends of $4,000,000 and $134,040, respectively were exchanged
                on a
                basis of 0.25 shares of Series C Preferred  (for a total of
                1,033.51 shares) for each $1,000 of amounts
                owed;





§
            Series
                B Convertible Preferred Stock - outstanding stated value and accrued
                dividends of $3,857,000 and $128,179, respectively were exchanged
                on a
                basis of 0.25 shares of Series C Preferred  (for a total of
                996.30 shares) for each $1,000 of amounts owed;
                and





§
            Other
                Notes - outstanding principal and accrued interest of $447,000 and
                $66,161, respectively were exchanged on a basis of 0.125shares of
                Series C
                Preferred (for a total of 64.14 shares) for each $1,000 of amounts
                owed.





In
      addition, warrants to purchase common stock held by the Holders totaling
      13,514,386 were cancelled.





In
      connection with the Exchange Transaction, we issued $4,210,526 face value,
      12%
      senior secured promissory notes (“Senior Secured Notes”), due July 16, 2011. We
      received gross proceeds of $3,800,000 and converted $200,000 of secured
      promissory notes issued on June 29, 2007.  We also issued to the
      holders of the Senior Secured Notes 7,228.14 shares of Series C Preferred,
      which
      represented 30% of the fully-diluted shares on an as if, converted
      basis.





**Critical
      Accounting Policies**





*Estimates*





Our
      discussion and analysis of our financial condition and results of operations
      are
      based on our consolidated financial statements, which have been prepared in
      accordance with accounting principles generally accepted in the United States.
      The preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the consolidated
      financial statements and the reported amounts of revenues and expenses during
      the reporting period. By their nature, these estimates and judgments are subject
      to an inherent degree of uncertainty. We review our estimates on an on-going
      basis, including those related to sales allowances, the allowance for doubtful
      accounts, inventories and related reserves, long-lived assets, income taxes,
      litigation and stock-based compensation. We base our estimates on our historical
      experience, knowledge of current conditions and our beliefs of what could occur
      in the future considering available information. Actual results may differ
      from
      these estimates, and material effects on our operating results and financial
      position may result. We believe the following critical accounting policies
      involve our more significant judgments and estimates used in the preparation
      of
      our consolidated financial statements.








13





*Revenue
      Recognition*


We
      generate our revenues from the sale of products and services and recognize
      revenue when the following fundamental criteria are met:





§
            persuasive
                evidence that an arrangement
                exists;


§
            the
                products and services have been
                delivered;


§
            selling
                prices are fixed and determinable and not subject to refund or adjustment;
                and


§
            collection
                of amounts due is reasonably
                assured.





Delivery
      occurs when goods are shipped and title and risk of loss transfer to the
      customer, in accordance with the terms specified in the arrangement with the
      customer. Revenue recognition is deferred in all instances where the earnings
      process is incomplete. We provide for sales returns and allowances in the same
      period as the related revenues are recognized. We base these estimates on our
      historical experience or the specific identification of an event necessitating
      a
      reserve. To the extent actual sales returns differ from our estimates; our
      future results of operations may be affected. Should changes in conditions
      cause
      management to determine that these criteria are not met for certain future
      transactions, revenue recognized for any reporting period could be adversely
      affected.





We
      derive
      revenues from the following sources:





*Guest
      Pay Services*


Revenues
      from in-room video-on-demand (“VOD”) are generated when a hotel guest purchases
      the content we provide upon the viewing of the content by the guest. The pricing
      of these transactions is established through individual contracts with each
      hotel. Refunds are reflected net of revenue recognized. We account for these
      revenue on a gross basis in accordance with EITF 99-19, “Reporting Revenue Gross
      as a Principal versus Net as an Agent”. We are responsible for the delivery of
      the content, possess royalty-based licenses with our content providers and
      bear
      the credit risk of collecting payment from the customer as we are ultimately
      responsible for the delivery of the content.





*Free-to-Guest
      Services*


Free-to-guest
      services include revenues generated from the sale of equipment (rack-mounted
      satellite receivers, one per channel) allowing a hotel to receive DirecTV
      programming for its guests. We record revenues from the sale of the receivers
      in
      the period in which such equipment is installed. The hotelier contracts directly
      with DirecTV for the related programming services. We receive commissions from
      DirecTV related to such programming services and recognize revenue in the period
      in which such commission payments are received.





*High-Speed
      Internet Access (HSIA)*


High-speed
      internet access is provided through the sale and installation of equipment
      and
      is recognized upon installation. The equipment has stand-alone value to the
      customer. The software used within these systems is non-proprietary and can
      be
      supplied by other vendors unrelated to us.





We
      also
      provide ongoing maintenance, service and call center support services to hotel
      properties that have high-speed internet access regardless of whether we
      provided the equipment or internet access. We record revenues ratably over
      the
      term of the service contract for the services we provide.





*Sales
      of VOD Systems*


In
      addition to providing VOD content, we sell VOD systems to the hospitality
      industry through our sales force and network of dealers. At the time of
      sale, we generally require the hotelier to enter into a content agreement
      whereby training, customer support and loading of content is provided.
      Currently, due to the limited sales history of selling the systems, we have
      not
      obtained vendor specific objective evidence to segregate the VOD server,
      software, and related upgrades, and customer service elements. Accordingly,
      revenues from the sale of the VOD systems are recognized ratably over the period
      of the content agreement, which is generally five years. As additional VOD
      systems are sold, we will analyze our sales and content trends to determine
      whether vendor specific objective evidence on each element sold is independent
      of one another. If it is determined that elements are sold on a stand-alone
      basis, we may recognize the sale of the VOD system upon shipment.





The
      cost
      of the VOD system is being deferred and amortized to cost of sales over the
      respective service periods.





*Accounting
      for Embedded Conversion Features and Warrants Issued with Preferred Stock and
      Debt Instruments*


We
      accounted for embedded conversion features (ECF) and warrants issued with
      preferred stock and debt instruments in accordance with the guidance in
      paragraph 12 of SFAS No. 133, “Accounting for Derivative Instruments and Hedging
      Activities”, which requires the evaluation of an ECF from the respective
      instrument and separate accounting if the equity instrument(s) meet met certain
      criteria. The ECFs and warrants we issued with each of our Series A preferred
      stock, Series B preferred stock and $11.5 million in senior notes met all three
      criteria of paragraph 12 which requires bifurcation from the host instrument.
      These criteria include: (1) the conversion feature is not clearly and closely
      related to the host component, (2) the convertible instrument is not accounted
      for at fair value, and (3) the embedded conversion option meets the definition
      of a derivative in paragraph 6 of SFAS No. 133.




To
      assess
      whether or not the ECF would be classified as stockholders' equity if it were
      freestanding, management considered the guidance in EITF 00-19 “Accounting for
      Derivative Financial Instruments Indexed to, and Potentially Settled in, a
      Company's Own Stock”. In assessing whether or not the conversion option would be
      classified as equity or a liability if it were freestanding, management
      determined whether or not the Series A convertible preferred stock is considered
      “conventional”. EITF 00-19 and EITF 05-2, “The Meaning of Conventional
      Convertible Debt Instruments in issue No. 00-19”, defines conventional
      convertible debt as debt whereby the holder will, at the issuer's option,
      receive a fixed amount of shares or the equivalent amount of cash as proceeds
      when he exercises the conversion option. We determined that our Series A
      convertible preferred stock was not “conventional”, and we considered all
      aspects of EITF 00-19, paragraphs 12-33.







14





The
      accounting treatment of derivative financial instruments requires that we record
      the ECF and warrants at their fair values as of each reporting date. Any change
      in fair value is recorded as non-operating, non-cash income or expense at each
      reporting date. The derivatives were valued using the Black-Scholes option
      pricing model.





*Equity
      Instruments Issued with Registration Rights Agreement*


We
      account for these penalties as contingent liabilities, applying the accounting
      guidance of SFAS No. 5, “Accounting for Contingencies”. This accounting is
      consistent with views established by the Emerging Issues Task Force (EITF)
      in
      its consensus set forth in EITF 05-04 (view C) and FASB Staff Positions FSP
      EITF
      00-19-2 “Accounting for Registration Payment Arrangements”, which was issued
      December 21, 2006. Accordingly, we recognize the damages when it becomes
      probable that they will be incurred and amounts are reasonably estimable. We
      concluded at June 30, 2007 that the registration rights did not represent a
      liability under our existing registration rights
      agreement.  Additionally, in connection with the Exchange Transaction,
      the underlying securities and related agreements were cancelled and a new
      registration rights agreement was entered into under the terms of the Series
      C
      Preferred.





**Results
      of Operation**





Effective
      March 1, 2007, we sold certain assets and transferred certain liabilities
      related to our CBC business unit to an unrelated third party. The purchase
      price
      included aggregate cash payments to us of $457,219, the transfer $584,796 of
      accounts receivable to the buyer and the assumption of accounts payable by
      the
      buyer of $1,035,322, accrued liabilities of $100,332 and $45,000 of
      transaction costs paid by us.  In accordance with current accounting
      regulations, the financial information for the three and six months ended June
      30, 2007 and 2006 are presented as discontinued operations.





**Three
      Months Ended June 30, 2007 Compared to the Three Months Ended June 30,
      2006**





*Service
      Revenues*


Revenues
      generated from services consist primarily of video-on-demand (“VOD”)
      pay-per-view content, monthly service fees, free-to-guest residuals, high
      speed internet access (“HSIA”) call center and field support
      services.





Revenues
      for the second quarter of 2007 were $2,624,006 compared to $21,834 for the
      comparable period in 2006.  The increase resulted from the inclusion
      of revenues generated by SVI during the second quarter of
      2007.  Revenues for the second quarter of 2006 exclude the amounts
      generated by SVI as the acquisition was consummated subsequent to June 30,
      2006.





During
      the second quarter of 2007, we generated $2,173,864 from the sales of our VOD
      content representing monthly revenue per room (“RPR”) of $4.66.  For
      comparative purposes, during the first quarter of 2007, revenues from VOD
      content and our RPR was $2,211,811 and $4.69, respectively.





During
      the second quarter of 2007, we generated $231,469 and $218,673 of revenues
      from
      HSIA services other service revenues, respectively.





*Product
      Revenues*


Revenues
      generated from product sales consists of equipment sales of all our products,
      primarily eModTM VOD, free-to-guest and high-speed internet access (“HSIA”)
      components.  We also recognized revenue from revenue previously
      deferred.  Revenues for the second quarter of 2007 were $222,943
      compared to $46,043 for the comparable period in 2006. The increase resulted
      from the inclusion of revenues generated by SVI and revenues generated from
      the
      shipment and/or installation of our eMod systems.





*Gross
      Profits from Services Revenues*


VOD
      costs
      (exclusive of operating expenses and depreciation and amortization of the
      underlying equipment) includes movie license fees, the commission retained
      by
      the hotel and other related costs.





Gross
      profit for the second quarter of 2007 was $2,001,401 compared to a gross loss
      of
      $56,966 for the comparable period in 2006. Our gross margin for the second
      quarter of 2007 for VOD content was $1,553,701 or 71%.





*Gross
      Profit from Product Revenues*


Gross
      profit from product revenues for the second quarter of 2007 was $26,508 (or
      12%)
      compared to a gross loss of $47,088 (or 102%) for the comparable period in
      2006.





*Selling,
      General and Administrative*


Selling,
      general and administrative expenses for the second quarter of 2007 were
      $4,438,556 compared to $2,856,461 for the comparable period of 2006. The
      increase during the second quarter of 2007 resulted from the inclusion of
      expense for SVI during the second quarter of 2007.  The costs for the
      second quarter of 2006 exclude the amounts generated by SVI as the acquisition
      was consummated subsequent to June 30, 2006.








15





During
      the second quarter of 2007, we incurred approximately $383,000 of expenses
      relating to employee severance agreements and an investment banking
      agreement.  During the second quarter of 2007 and 2006, we incurred
      $50,000 and $590,000, respectively of non-cash stock-based compensation under
      employment contracts.





*Interest
      Expense*


Interest
      expense during the second quarter of 2007 includes amounts outstanding under
      our
      Senior Notes, SVI Acquisition and other outstanding notes and accretion of
      our
      Series A and Series B convertible preferred stock which was in default as of
      June 30, 2007.





For
      the
      second quarter of 2007, interest expense was $7,017,758 compared to $497,957
      for
      the comparable period in 2006. Interest expense for the second quarter of 2007
      includes $488,867 and $6,381,894, respectively, of interest on our outstanding
      debt and non-cash interest expense relating to our Series A and Series B
      convertible preferred stock at June 30, 2007.





*Amortization
      of Intangible Assets*


Amortization
      of intangible includes software technology, customer relationships and a trade
      name from business combinations we completed.





For
      the
      second quarter of 2007 and 2006, amortization expense related to our intangible
      assets was $218,782 and $175,682, respectively.  The increase in 2007
      resulted from the inclusion of amounts related to our acquisition of
      SVI.





*Other
      Income*


Other
      income for the second quarter of 2007 was $15 as compared to $1,195 for the
      comparable period in 2006.





*Change
      in Fair Value of Derivative Liabilities*


During
      2005, we issued Series A convertible preferred stock (“Series A Preferred”) and
      in 2006, issued Series B convertible preferred stock (“Series B Preferred”) and
      certain debt instruments which contained embedded conversion features and
      warrants which were deemed to be derivative instruments, requiring bifurcation
      from the respective host instrument. The changes in the fair value are recorded
      in each reporting period.





We
      recognized a gain on the fair value of our derivative liabilities of $2,464,420
      during the second quarter of 2007 as compared to a loss of $684,730 for the
      comparable period in 2006.





The
      gain
      during the second quarter of 2007 resulted from (1) the decrease in our stock
      price from March 31, 2007 to June 30, 2007, (2) the exercise of the warrants
      underlying our debt instruments and (3) the issuance of additional warrants
      that
      were determined to be derivative instruments.





*Preferred
      Stock Dividends*


Preferred
      stock dividends consist of dividends on our Series A and Series B convertible
      preferred stock.





During
      the second quarter of 2007 and 2006, dividends totaled $159,183 and $80,000,
      respectively. The increase in dividends in 2007 resulted from inclusion of
      amounts due under our Series B convertible preferred stock which was issued
      August 3, 2006 through the conversion of previously issued and outstanding
      common stock.





**Six
      Months Ended June 30, 2007 Compared to the Six Months Ended June 30,
      2006**





*Service
      Revenues*


Revenues
      generated from services consist primarily of video-on-demand (“VOD”)
      pay-per-view content, monthly service fees, free-to-guest residuals, high
      speed internet access (“HSIA”) call center and field support
      services.





Revenues
      for the first half of 2007 were $5,340,418 compared to $21,834 for the
      comparable period in 2006.  The increase resulted from the inclusion
      of revenues generated by SVI during the first half of 2007.  Revenues
      for the first half of 2006 exclude the amounts generated by SVI as the
      acquisition was consummated subsequent to June 30, 2006.





During
      the first half of 2007, we generated $4,385,675 from the sales of our VOD
      content representing monthly revenue per room of $4.68.





During
      the first half of 2007, we generated $490,300 and $464,443 of revenues from
      HSIA
      services other service revenues, respectively.





*Product
      Revenues*


Revenues
      for the first half of 2007 were $804,161 compared to $79,002 for the comparable
      period in 2006. The increase resulted from the inclusion of revenues generated
      by SVI and revenues generated from the shipment and/or installation of our
      eMod
      systems.





*Gross
      Profits from Services Revenues*


Gross
      profit for the first half of 2007 was $4,103,230 compared to a gross loss of
      $56,966 for the comparable period in 2006. Our gross margin for the first half
      of 2007 for VOD content was $3,155,479 or 72%.





*Gross
      Profit from Product Revenues*


Gross
      profit from product revenues for the first half of 2007 was $296,874 or 37%
      compared to a gross loss of $47,653 or (60%) for the comparable period in
      2006.








16





*Selling,
      General and Administrative*


Selling,
      general and administrative expenses for the first half of 2007 were $8,711,690
      compared to $6,558,227 for the comparable period of 2006. The increase during
      the first half of 2007 resulted from the inclusion of expense for SVI during
      the
      2007 period.  The costs for the 2006 period exclude the amounts
      generated by SVI as the acquisition was consummated subsequent to June 30,
      2006.





During
      the first half of 2007, we incurred approximately $383,000 of expenses relating
      to employee severance agreements and an investment banking
      agreement.  During the first half of 2007 and 2006, we incurred
      $113,125 and $3,431,625 of non-cash stock-based compensation under employment
      contracts, respectively.





*Interest
      Expense*


Interest
      expense during the first half of 2007 includes amounts outstanding under our
      Senior Notes, SVI Acquisition and other outstanding notes and accretion of
      our
      Series A and Series B convertible preferred stock which was in default as of
      June 30, 2007.





For
      the
      first half of 2007, interest expense was $8,165,419 compared to $929,937 for
      the
      comparable period in 2006. Included in interest expense for the 2007 period
      is
      $1,052,401 and $6,381,894, respectively, of interest on our outstanding debt
      and
      non-cash interest expense relating to our Series A and Series B convertible
      preferred stock at June 30, 2007.





*Amortization
      of Intangible Assets*


Amortization
      of intangible includes software technology, customer relationships and a trade
      name from business combinations we completed.





For
      the
      first half of 2007 and 2006, amortization expense related to our intangible
      assets was $437,652 and $351,364, respectively.  The increase in 2007
      resulted from the inclusion of amounts related to our acquisition of
      SVI.





*Other
      Income*


Other
      income for the first half of 2007 was $78 compared to $1,392 for the comparable
      period in 2006.





*Change
      in Fair Value of Derivative Liabilities*


During
      2005, we issued Series A convertible preferred stock (“Series A Preferred”) and
      in 2006, issued Series B convertible preferred stock (“Series B Preferred”) and
      certain debt instruments which contained embedded conversion features and
      warrants which were deemed to be derivative instruments, requiring bifurcation
      from the respective host instrument. The changes in the fair value are recorded
      in each reporting period.





We
      recognized a gain on the fair value of our derivative liabilities was $8,903,849
      for the first half of 2007 as compared to a loss of $2,579,755 for the
      comparable period in 2006.





The
      gain
      during the first half of 2007 resulted from (1) the decrease in our stock price
      from December 31, 2006 to June 30, 2007, (2) the exercise of the warrants
      underlying our debt instruments and (3) the issuance of additional warrants
      that
      were determined to be derivative instruments.





*Preferred
      Stock Dividends*


Preferred
      stock dividends consist of dividends on our Series A and Series B convertible
      preferred stock.





During
      the first half of 2007 and 2006, dividends totaled $316,323 and $160,000,
      respectively. The increase in dividends in 2007 resulted from inclusion of
      amounts due under our Series B convertible preferred stock which was issued
      August 3, 2006 through the conversion of previously issued and outstanding
      common stock.





**Liquidity
      and Capital Resources**





The
      accompanying consolidated financial statements have been prepared on a
      going-concern basis, which contemplates the realization of assets and
      satisfaction of liabilities and other commitments in the normal course of
      business. The report of our independent registered public accounting firm on
      the
      consolidated financial statements for the year ended December 31, 2006 contains
      an explanatory paragraph expressing substantial doubt about our ability to
      continue as a going concern as a result of recurring losses, a working capital
      deficiency, and negative cash flows. The consolidated financial statements
      do
      not include any adjustments relating to the recoverability and classification
      of
      recorded asset amounts or the amounts and classification of liabilities that
      would be necessary if we are unable to continue as a going concern.





At
      June
      30, 2007, our cash balance was $14,459 and we had negative working capital
      of
      $3,233,067. Current liabilities at that date consisted primarily of accounts
      payable, accrued expenses, deferred revenue and the current portion of our
      long-term debt. As of June 30, 2007, we had $14,694,608 in debt obligations
      outstanding of which we were in default of the terms of such agreements for
      non-payment of accrued interest by the due date.





On
      June
      29, 2007, we issued two promissory notes (“Promissory Notes”) for aggregate cash
      proceeds of $200,000.  The Promissory notes while outstanding had a
      stated interest rate of 12% per annum. The Promissory Notes had a maturity
      date
      of the earlier of (i) written demand by the holders of the notes; or, (ii)
      December 31, 2007, unless due earlier in accordance with the terms of the Notes.
      On July 16, 2007, the outstanding principal balance of $200,000 was converted
      into Senior Secured Debt.








17





On
      July
      16, 2007, we entered into a transaction whereby the holders of $15,552,394
      in
      outstanding debt and accrued interest and holders of $8,119,219 of preferred
      stock and accrued dividends cancelled and exchanged amounts owed into shares
      of
      Series C convertible preferred stock (Series C Preferred”).  On July
      16, 2007, we also issued $4,210,526 face value, 12% senior secured promissory
      notes (“Senior Secured Notes”), due July 16, 2011. We received gross proceeds of
      $3,800,000 and converted $200,000 of secured promissory notes issued on June
      29,
      2007.





The
      holders of the Senior Secured Notes have a first priority lien on all of the
      Company's assets and are guaranteed by each of its subsidiaries. The Senior
      Secured Notes require the Company to repay the principal amounts in equal
      installments at a rate of 12% per quarter beginning September 30, 2009. Interest
      is payable based on a 360-day year at the stated rate every three months
      beginning October 1, 2007. In the event the Company is in default of the Senior
      Secured Notes, the default interest rate is 18% per annum, until such default
      has been cured.





We
      anticipate our current cash reserves including the funds received from the
      Senior Secured Notes in July 2007, plus its expected generation of cash from
      existing operations, anticipated capital expenditures and working capital will
      be sufficient to fund its anticipated operations to the middle of the first
      quarter of 2008. We will need to seek to obtain additional debt and/or equity
      financing sooner if we experience downturns or cyclical fluctuations in its
      business that are unforeseen, more severe or longer than anticipated, if it
      fails to achieve anticipated revenue targets, if we experience significant
      increases in the cost of content, or declines in the selling prices of our
      content.  Consequently, we will need to raise additional debt and/or
      equity capital in order to finance our business plan and needs for working
      capital. There is no assurance that the proceeds from future financings will
      be
      sufficient to obtain profitable operations.  Such financing(s), if
      available may increase our risk of not being able to service our debt
      obligations, and/or cause dilution to existing equity holders.





*Operating
      Activities*


Cash
      used
      in operating activities was $827,229 for the six months of 2007 compared to
      cash
      used of $3,388,500 for the same period in 2006. Operating cash flows for the
      six
      months of 2007 reflect our net loss of $2,866,678 which includes non-cash
      amounts, non-cash expenses and changes in working capital. During the first
      half
      of 2007, we experienced significant increases in our accounts payable and
      accrued expenses due to our liquidity constraints during this
      period.  Included in our net loss for the first six months of 2007 are
      non-cash income items relating to the net change in the fair value of our
      derivative liabilities and the gain on the sale of our CBC business unit,
      partially offset by non-cash expenses (depreciation, amortization of intangible
      assets, stock-based compensation and interest) with a net, non-cash effect
      to
      our net loss of $(1,372,926).





Operating
      cash flows for the first six months of 2006 reflect operating losses of
      $10,582,448, partially offset by non-cash expenses of $7,409,863 including
      $3,431,625 of stock-based compensation, $2,579,755 for the change in the fair
      value of derivative liabilities and $811,666 of amortization of debt issuance
      costs.





*Investing
      Activities*


Cash
      used
      in investing activities was $428,919 for the first six months of fiscal 2007
      compared to $315,911 for the comparable period of 2006. During the first quarter
      of fiscal 2007, our capital expenditures were primarily comprised of purchases
      of video-on demand equipment provided to our customers.





*Financing
      Activities*


Cash
      generated by financing activities was $981,408 for the first six months of
      2007
      compared to $3,663,605 for the comparable period of 2006.  During
      2007, we received $830,000 from the exercise of common stock warrants and issued
      $200,000 of promissory notes.





**Off
      Balance Sheet Arrangements**





We
      have
      no known off balance sheet arrangements.





**Item
                3.**
            **Controls
                and Procedures**




We
      have
      reviewed the effectiveness of the design and operation of our disclosure
      controls and procedures and our internal controls over financial reporting
      during the year ended December 31, 2006 that have materially affected or are
      reasonably likely to materially affect such controls. Our certifying officers
      have disclosed, based on our most recent evaluation of the internal control
      over
      financial reporting, to the small business issuer's auditors and the audit
      committee of small business issuer's board of directors (or persons performing
      the equivalent functions) all significant material weaknesses in the design
      or
      operation of internal control over financial reporting which are reasonably
      likely to adversely affect the small business issuer's ability to record,
      process, summarize and report financial information. Disclosure controls and
      procedures are controls and other procedures that are designed to ensure that
      information required to be disclosed in our reports filed or submitted under
      the
      Exchange Act are recorded, processed, summarized and reported, within the time
      periods specified in the SEC's rules and forms. Disclosure controls and
      procedures include, without limitation, controls and procedures designed to
      ensure that information required to be disclosed in our reports filed under
      the
      Exchange Act is accumulated and communicated to management, including our Chief
      Executive Officer and Interim Chief Financial Officer, to allow timely decisions
      regarding required disclosure.







18





In
      connection with its audit of the our consolidated financial statements for
      the
      year ended December 31, 2006, McKennon, Wilson & Morgan LLP, our
      independent accountants, advised management of certain significant internal
      control deficiencies that they considered to be, in the aggregate, a material
      weakness, including, inadequate staffing and supervision; substantiation and
      evaluation of certain general ledger account balances including the lack of
      reconciliations and improper cut-offs; lack of procedures and/or expertise
      needed to prepare all required financial disclosures; and evidence that
      employees lack the qualifications and training to fulfill their assigned
      functions. McKennon, Wilson & Morgan LLP indicated that they considered
      these deficiencies to be a material weakness as that term is defined under
      standards established by the American Institute of Certified Public Accountants.
      A material weakness is a significant deficiency in one or more of the internal
      control components that alone or in the aggregate precludes our internal control
      from reducing to an appropriately low level the risk that material misstatements
      in our financial statements will not be prevented or detected on a timely basis.
      We considered these matters in connection with the year-end closing of accounts
      and preparation of financial statements as and for the year ended December
      31,
      2006 and determined that no prior period financial statements were materially
      affected by such matters.





We
      have
      been and are currently in process of remediation of the observations by McKennon
      Wilson & Morgan LLP. We recently completed the integration of the accounting
      functions and responsibilities incurred from the merger of nine companies within
      the last two years, including the reverse merger into a public company. Through
      the acquisition of SVI Hotel Corporation, we obtained an accounting department.
      In February 2007, we retained Brian Weiss, a principle with BSW &
Associates, as our Interim Chief Financial Officer. Mr. Weiss has the requisite
      financial and accounting background to assist us with addressing our material
      weaknesses. He is working with our staff to address and remediate our
      deficiencies. During the second quarter of 2007, we successfully centralized
      our
      accounting function to our Peoria facility, utilizing our SVI accounting
      personnel.  We are continuing to implement additional policies,
      procedures, and controls to address the remaining outstanding
      issues.





Limitations
      on the Effectiveness of Internal Controls





Our
      management does not expect that our disclosure controls and procedures or our
      internal control over financial reporting will necessarily prevent all fraud
      and
      material error. Our disclosure controls and procedures are designed to provide
      reasonable assurance of achieving our objectives and our Chief Executive Officer
      and Chief Financial Officer concluded that our disclosure controls and
      procedures are effective at that reasonable assurance level. Further, the design
      of a control system must reflect the fact that there are resource constraints,
      and the benefits of controls must be considered relative to their costs. Because
      of the inherent limitations in all control systems, no evaluation of controls
      can provide absolute assurance that all control issues and instances of fraud,
      if any, within the Company have been detected. These inherent limitations
      include the realities that judgments in decision-making can be faulty, and
      that
      breakdowns can occur because of simple error or mistake. Additionally, controls
      can be circumvented by the individual acts of some persons, by collusion of
      two
      or more people, or by management override of the internal control. The design
      of
      any system of controls also is based in part upon certain assumptions about the
      likelihood of future events, and there can be no assurance that any design
      will
      succeed in achieving its stated goals under all potential future conditions.
      Over time, control may become inadequate because of changes in conditions,
      or
      the degree of compliance with the policies or procedures may
      deteriorate.





**PART
      II - OTHER INFORMATION**





**Item
                1.**
            **Legal
                Proceedings**





We
      are
      not a party to any pending legal proceeding. We are not aware of any pending
      legal proceeding to which any of our officers, directors, or any beneficial
      holders of 5% or more of our voting securities are adverse to us or have a
      material interest adverse to us.





**Item
                2.**
            **Unregistered
                Sales of Equity Securities and Use of
                Proceeds**





The
      following is a list of equity securities that we issued during the reporting
      period that were not registered under the Securities Act:





1. On
        April 25, 2007, we issued 2,000,000 shares of common stock in the exercise
        of
        the $.10 per share warrants held by Midsummer Investment Ltd., one of our
        Senior
        Lenders. This issuance was exempt from registration under Section 4(2) of
        the
        Securities Act of 1933.
 
 2. On
        April 25, 2007, we issued to Midsummer Investment Ltd., one of our Senior
        Lenders, warrants to acquire 2,000,000 shares of our common stock at $.50
        per
        share no later than five years after the issuance of the warrant. This issuance
        was exempt from registration under Section 4(2) of the Securities Act of
        1933.





19




None
      of
      the sales of securities described above have been registered with the Securities
      and Exchange Commission because they are believed to be exempt from registration
      under the Securities Act of 1933 pursuant to Regulation D, Rule 506, promulgated
      there under or generally section 4(2) of the Act. Each purchaser represented
      his, her or its intention to acquire the securities for investment only and
      not
      with a view toward distribution. Each investor was given adequate information
      about us to make an informed investment decision. We did not engage in any
      general solicitation or advertising.





The
      following is a list of equity securities that we issued since June 30, 2007
      that
      were not registered under the Securities Act.





1.
      On
      June 16, 2007, we issued 6,300,000 shares of our common stock to David L.
      Parker, at the time one of our senior lenders and the Vice Chairman of our
      Board
      of Directors, as payment under a settlement entered into with Mr. Parker under
      which, among other things, Mr. Parker resigned from our Board of Directors
      and
      agreed to waive all right and claims under his employment agreement. This
      issuance was exempt from registration under Section 4(2) of the Securities
      Act
      of 1933.





2.
      On
      June 17, 2007, we issued 6,407.0373 shares of our Series C Preferred Stock
      to
      Palisades Master Fund, LP in exchange for its conversion of (i) our senior
      non-convertible promissory note in the total amount of $5,373,527; and, (ii)
      our
      Series A Preferred Stock with a stated value of $4,134,040. This issuance was
      exempt from registration under Section 3(a)(9) of the Securities Act of
      1933.





3.
      On
      June 17, 2007, we issued 3,093.2811 shares of our Series C Preferred Stock
      to
      Midsummer Investment, Ltd. in exchange for its conversion of (i) our senior
      non-convertible promissory note in the total amount of $2,096,986; and, (ii)
      our
      Series B Preferred Stock with a stated value of $3,985,179. This issuance was
      exempt from registration under Section 3(a)(9) of the Securities Act of
      1933.





4.
      On
      June 17, 2007, we issued 2,652.7661 shares of our Series C Preferred Stock
      to
      Longview Fund, L.P. in exchange for its conversion of  our senior
      non-convertible promissory note in the total amount of $2,652,766. This issuance
      was exempt from registration under Section 3(a)(9) of the Securities Act of
      1933.





5.
      On
      June 17, 2007, we issued 1,048.493 shares of our Series C Preferred Stock to
      Camofi Master LDC in exchange for its conversion of our senior non-convertible
      promissory note in the total amount of $1,048,493. This issuance was exempt
      from
      registration under Section 3(a)(9) of the Securities Act of 1933.





6.
      On
      June 17, 2007, we issued 524.2466 shares of our Series C Preferred Stock to
      Crescent International, Ltd. in exchange for its conversion of our senior
      non-convertible promissory note in the total amount of $524,247. This issuance
      was exempt from registration under Section 3(a)(9) of the Securities Act of
      1933.





7.
      On
      June 17, 2007, we issued 524.2466 shares of our Series C Preferred Stock to
      Plus
      Four Private Equities, L.P.  in exchange for its conversion of our
      senior non-convertible promissory note in the total amount of $524,247. This
      issuance was exempt from registration under Section 3(a)(9) of the Securities
      Act of 1933.





8.
      On
      June 17, 2007, we issued 104.8493 shares of our Series C Preferred Stock to
      Lewis Jaffe, our Chief Executive Officer and a member of our Board of Directors,
      in exchange for his conversion of our senior non-convertible promissory note
      in
      the total amount of $104,849. This issuance was exempt from registration under
      Section 3(a)(9) of the Securities Act of 1933.





9.
      On
      June 17, 2007, we issued 104.8493 shares of our Series C Preferred Stock to
      David L. Parker, who resigned as an officer and as a member of our Board of
      Directors on June 16, 2007, in exchange for his conversion of our senior
      non-convertible promissory note in the total amount of $104,849. This issuance
      was exempt from registration under Section 3(a)(9) of the Securities Act of
      1933.





10.
      On
      June 17, 2007, we issued 639.271 shares of our Series C Preferred Stock to
      The
      Marital Trust Under The Richard L. Owens Trust Dated November 24, 1992 in
      exchange for its conversion of our convertible subordinated promissory note
      in
      the total amount of $1,278,542. This issuance was exempt from registration
      under
      Section 3(a)(9) of the Securities Act of 1933.





11.
      On
      June 17, 2007, we issued 639.271 shares of our Series C Preferred Stock to
      Marsha S. Glazer in exchange for her conversion of our convertible subordinated
      promissory note in the total amount of $1,278,542. This issuance was exempt
      from
      registration under Section 3(a)(9) of the Securities Act of 1933.





12.
      On
      June 17, 2007, we issued 26.092 shares of our Series C Preferred Stock to Andrew
      Rubenstein in exchange for her conversion of our convertible subordinated
      promissory note in the total amount of $52,185. This issuance was exempt from
      registration under Section 3(a)(9) of the Securities Act of 1933.





13.
      On
      June 17, 2007, we issued 37.229 shares of our Series C Preferred Stock to Lewis
      Jaffe, our Chief Executive Officer and a member of our Board of Directors,
      as
      the legal and lawful assignee of our subordinated non-convertible promissory
      note in the total amount of $54,406 held by Nicholas Yocca, a former member
      of
      our Board of Directors, in exchange for his conversion of that subordinated
      non-convertible promissory note. This issuance was exempt from registration
      under Section 3(a)(9) of the Securities Act of 1933.





14.
      On
      June 17, 2007, we issued 6.8 shares of our Series C Preferred Stock to The
      Marital Trust Under The Richard L. Owens Trust Dated November 24, 1992 in
      exchange for its conversion of our subordinated non-convertible promissory
      note
      in the total amount of $54,406. This issuance was exempt from registration
      under
      Section 3(a)(9) of the Securities Act of 1933.








20





15.
      On
      June 17, 2007, we issued 6.8 shares of our Series C Preferred Stock to Marsha
      S.
      Glazer in exchange for her conversion of our subordinated non-convertible
      promissory note in the total amount of $54,406. This issuance was exempt from
      registration under Section 3(a)(9) of the Securities Act of 1933.





16.
      On
      June 17, 2007, we issued 6.518 shares of our Series C Preferred Stock to Edward
      Kelly in exchange for his conversion of our subordinated non-convertible
      promissory note in the total amount of $52,144. This issuance was exempt from
      registration under Section 3(a)(9) of the Securities Act of 1933.





17.
      On
      June 17, 2007, we issued 6.518 shares of our Series C Preferred Stock to Paul
      & Kathleen Kelly in exchange for their conversion of our subordinated
      non-convertible promissory note in the total amount of $52,144. This issuance
      was exempt from registration under Section 3(a)(9) of the Securities Act of
      1933.





18.
      On
      June 17, 2007, we issued 0.277 shares of our Series C Preferred Stock to Andrew
      Rubenstein in exchange for his conversion of our subordinated non-convertible
      promissory note in the total amount of $2,221. This issuance was exempt from
      registration under Section 3(a)(9) of the Securities Act of 1933.





19.
      On
      June 17, 2007 we issued 4,963.86 shares of our Series C Preferred Stock to
      Cantone Office Center, LLC in connection with and as additional consideration
      for its purchase of $2,894,736.84 face amount of our Senior Secured Debentures.
      This issuance was exempt from registration under Section 4(2) of the Securities
      Act of 1933.





20.
      On
      June 17, 2007 we issued 902.52 shares of our Series C Preferred Stock to
      Palisades Master Fund, LP in connection with and as additional consideration
      for
      its purchase of $526,315.79 face amount of our Senior Secured Debentures. This
      issuance was exempt from registration under Section 4(2) of the Securities
      Act
      of 1933.





21.
      On
      June 17, 2007 we issued 902.52 shares of our Series C Preferred Stock to
      Midsummer Investment, Ltd. in connection with and as additional consideration
      for its purchase of $526,315.79 face amount of our Senior Secured Debentures.
      This issuance was exempt from registration under Section 4(2) of the Securities
      Act of 1933.





22.
      On
      June 17, 2007 we issued 451.26 shares of our Series C Preferred Stock to
      Crescent International, Ltd. in connection with and as additional consideration
      for its purchase of $263,157.89 face amount of our Senior Secured Debentures.
      This issuance was exempt from registration under Section 4(2) of the Securities
      Act of 1933.


**Item
                  3.**
              **Defaults
                  upon Senior Securities**
 As
          of the
          close of the reporting period the Company was in default of the following
          notes:
          (i) all Senior Notes as the Company failed to make the required interest
          payments due in June, 2007; (ii) all SVI Notes as the Company failed to
          make any
          interest payments due on the SVI Notes; (iii) four promissory notes in
          the total
          principal amount of $100,000 issued in favor of the holders of the SVI
          Notes
          (the “Additional SVI Notes”) as the Company failed to pay these notes by their
          due date in January, 2007; and, (iv) other notes totaling $347,000 were
          due and
          payable prior to June, 2007 (the “Other Notes”). Each of these notes was in
          default at June 30, 2007.
 
 As
          of the
          close of the reporting period the Company had not received any notice of
          default
          under the Senior Notes. Since the end of the reporting period no notice
          of
          default has been received by the Company from any of the holders of the
          Senior
          Notes.  After the close of the Reporting Period all underlying debt
          with regard to the Senior Notes was exchanged for Series C Preferred Stock
          as
          part of the Exchange Transaction.
 
 As
          of the
          close of the reporting period the Company had received notice of default
          under
          the SVI Notes and under the Additional SVI Notes. Since the end of the
          reporting
          period no notice of default has been received by the Company from any of
          the
          holders of the SVI Notes or the Additional SVI Notes. After the close of
          the
          Reporting Period all underlying debt with regard to the SVI Notes and the
          Additional SVI Notes was exchanged for Series C Preferred Stock as part
          of the
          Exchange Transaction.
 
 As
          of the
          close of the reporting period the Company had not received notice of default
          under any of the Other Notes. Since the end of the reporting period no
          notice of
          default has been received by the Company from any of the holders of the
          Other
          Notes. After the close of the Reporting Period all underlying debt with
          regard
          to the Other Notes was exchanged for Series C Preferred Stock as part of
          the
          Exchange Transaction.
 
 As
          of the
          close of the reporting period the Company was aware that it had certain
          registration requirements with regard to its common stock underlying its
          shares
          of Series A and Series B Preferred Stock. The Company believes it is not
          in
          default of any of those provisions. At the end of the reporting period,
          and
          since the end of the reporting period, the Company had not received any
          notice
          of default in regard to its registration obligations related to its Series
          A and
          Series B Preferred Stock.  The underlying securities and related
          obligations were cancelled as part of the Exchange Transaction.


**Item
                4.**
            **Submission
                of Matters to a Vote of Security
                Holders**





No
      matters have been submitted to our security holders for a vote, through the
      solicitation of proxies or otherwise, during the quarterly period ended June
      30,
      2007.





**Item
                5.**
            **Other
                Information**





None





**Item
                6.**
            **Exhibits**


**Exhibit
                  Number**
              **Description
                  of Exhibit**
 31.1
              Certification
                  of Chief Executive
                  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to Section
                  302 of the Sarbanes-Oxley Act of
                  2002
 31.2
              Certification
                  of Chief Financial
                  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to Section
                  302 of the Sarbanes-Oxley Act of
                  2002
 32.1
              Certification
                  of Chief Executive
                  Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
                  1350, as
                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002




21





**SIGNATURES**





In
      accordance with the requirements of the Securities and Exchange Act of 1934,
      the
      Registrant has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.





**Oxford
      Media, Inc.**





Date:
            August
                14, 2007





By:
            /s/
                Lewis Jaffe


Lewis Jaffe


Title:
            **Chief
                Executive Officer and
                Director**























































22