----

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| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                          |
|   | For the quarterly period ended March 31, 2011                                                                                                                                                 |
|   |                                                                                                                                                                                          |
| or     |
|   |                                                                                                                                                                                          |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                     |
|   |                                                                                                                                                                                          |
|   | For the transition period from              to              |

| Delaware                                                      |   | 98-0469479                          |
|---------------------------------------------------------------|--------|-------------------------------------|
| (State or Other Jurisdiction ofIncorporation or Organization) |   | (I.R.S. EmployerIdentification No.) |

| 1600 Old Country Road, Plainview, New York | 11803      |
|--------------------------------------------|------------|
| (Address of principal executive offices)   | (Zip Code) |

| (516) 622-8300                                             |
|------------------------------------------------------------|
| (Registrant’s Telephone Number, Including Area Code) |

| Large accelerated filer                                            | o | Accelerated filer         | o |
|--------------------------------------------------------------------|---|---------------------------|---|
| Non-accelerated filer(Do not check if a smaller reporting company) | o | Smaller reporting company | x |

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NEULION, INC.

|          | Part I.  Financial Information                             | Page No. |
|---------------|----------------------------------------------------------------------|----------|
|          |                                                                 |     |
| Item 1.  | Financial Statements                                                 | 1        |
|          |                                                                 |     |
|          | Consolidated Balance Sheets as at                                    |     |
|          |      March 31, 2011 (unaudited) and December 31, 2010 | 1        |
|          |                                                                 |     |
|          | Consolidated Statements of Operations and Comprehensive Loss for the |     |
|          | Three Months Ended March 31, 2011 and 2010 (unaudited)               | 2        |
|          |                                                                 |     |
|          | Consolidated Statements of Equity for the                            |     |
|          | Three Months Ended March 31, 2011 (unaudited)                        | 3        |
|          |                                                                 |     |
|          | Consolidated Statements of Cash Flows for the                        |     |
|          | Three Months Ended March 31, 2011 and 2010 (unaudited)               | 4        |
|          |                                                                 |     |
|          | Notes to Consolidated Financial Statements                           | 5-12     |
|          |                                                                 |     |
| Item 2.  | Management’s Discussion and Analysis of Financial         |     |
|          | Condition and Results of Operations                                  | 13-22    |
|          |                                                                 |     |
| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk           | 23       |
|          |                                                                 |     |
| Item 4.  | Controls and Procedures                                              | 23       |
|          |
|          | Part II. Other Information                                      |     |
|          |
| Item 2.       | Unregistered Sales of Equity Securities and Use of Proceeds          | 24       |
|          |                                                                 |
| Item 6.  | Exhibits                                                             | 24       |
|          |                                                                 |
| SIGNATURES    | 25                                                                   |

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Table of Contents

Item 1.      Financial Statements

NEULION, INC.

|                                                                                |   | March 31,   |        |   | December 31, |   |
|-------------------------------------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|
|                                                                                |   | 2011        |        |   | 2010         |   |
|                                                                                |   | (unaudited) |        |   |         |   |
|                                                                                |   | $           |        |   | $            |   |
|                                                                                |   |        |        |   |         |   |   |   |
| ASSETS                                                                              |   |        |        |   |         |   |   |   |
| Current                                                                             |   |        |        |   |         |   |   |   |
| Cash and cash equivalents                                                           |   |        | 8,082,507   |   |         |   | 12,929,325 |   |
| Accounts receivable, net of allowance for doubtful accounts of $48,419 and $60,555, |   |        |        |   |         |   |   |   |
|    respectively                                                      |   |        | 2,454,411   |   |         |   | 2,356,843 |   |
| Other receivables                                                                   |   |        | 201,789     |   |         |   | 296,154 |   |
| Inventory (note 4)                                                                  |   |        | 1,094,082   |   |         |   | 946,780 |   |
| Prepaid expenses and deposits                                                       |   |        | 1,320,032   |   |         |   | 1,014,703 |   |
| Due from related parties (note 6)                                                   |   |        | 1,349,091   |   |         |   | 1,261,776 |   |
| Total current assets                                                                |   |        | 14,501,912  |   |         |   | 18,805,581 |   |
| Property, plant and equipment, net                                                  |   |        | 4,648,292   |   |         |   | 5,119,422 |   |
| Intangible assets, net                                                              |   |        | 8,608,148   |   |         |   | 9,283,151 |   |
| Goodwill                                                                            |   |        | 11,240,432  |   |         |   | 11,240,432 |   |
| Other assets                                                                        |   |        | 280,505     |   |         |   | 259,497 |   |
| Total assets                                                                        |   |        | 39,279,289  |   |         |   | 44,708,083 |   |
|                                                                                |   |        |        |   |         |   |   |   |
| LIABILITIES AND EQUITY                                                              |   |        |        |   |         |   |   |   |
| Current                                                                             |   |        |        |   |         |   |   |   |
| Accounts payable                                                                    |   |        | 4,890,307   |   |         |   | 5,504,489 |   |
| Accrued liabilities                                                                 |   |        | 5,720,687   |   |         |   | 5,431,217 |   |
| Due to related parties (note 6)                                                     |   |        | —     |   |         |   | 26 |   |
| Deferred revenue                                                                    |   |        | 4,779,999   |   |         |   | 6,432,445 |   |
| Total current liabilities                                                           |   |        | 15,390,993  |   |         |   | 17,368,177 |   |
| Long-term deferred revenue                                                          |   |        | 604,047     |   |         |   | 548,309 |   |
| Other long-term liabilities                                                         |   |        | 492,596     |   |         |   | 495,275 |   |
| Total liabilities                                                                   |   |        | 16,487,636  |   |         |   | 18,411,761 |   |
|                                                                                |   |        |        |   |         |   |   |   |
| Redeemable preferred stock, net (note 12)                                           |   |        |        |   |         |   |   |   |
| Class 3 Preference Shares (par value: $0.01; authorized: 17,176,818; issued and     |   |        |        |   |         |   |   |   |
|     outstanding: 17,176,818)                                    |   |        | 10,408,606  |   |         |   | 10,128,667 |   |
|                                                                                |   |        |        |   |         |   |   |   |
| NeuLion, Inc. stockholders' equity                                                  |   |        |        |   |         |   |   |   |
| Common stock (par value: $0.01; authorized: 300,000,000; issued and outstanding:    |   |        |        |   |         |   |   |   |
|     139,330,279 and 139,180,279, respectively)             |   |        | 1,393,302   |   |         |   | 1,391,802 |   |
| Additional paid-in capital                                                          |   |        | 75,597,702  |   |         |   | 75,480,756 |   |
| Promissory notes receivable                                                         |   |        | (209,250    | )      |         |   | (209,250 | ) |
| Accumulated deficit                                                                 |   |        | (64,856,393 | )      |         |   | (60,963,093 | ) |
| Total NeuLion, Inc. stockholders’ equity                                      |   |        | 11,925,361  |   |         |   | 15,700,215 |   |
| Non-controlling interest                                                            |   |        | 457,686     |   |         |   | 467,440 |   |
| Total equity                                                                        |   |        | 12,383,047  |   |         |   | 16,167,655 |   |
| Total liabilities and equity                                                        |   |        | 39,279,289  |   |         |   | 44,708,083 |   |

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NEULION, INC.

|                                                                                  |   | Three months ended |   |
|---------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                  |   | March 31,          |   |
|                                                                                  |   |               |   |   |   |
|                                                                                  |   | 2011               |   | 2010 |   |
|                                                                                  |   | $                  |   | $ |   |
|                                                                                  |   |               |   |   |   |
| Revenue                                                                               |   |               |   |   |   |
| Services revenue                                                                      |   | 9,563,930          |   | 7,462,899 |   |
| Equipment revenue                                                                     |   | 382,068            |   | 381,596 |   |
|                                                                                  |   | 9,945,998          |   | 7,844,495 |   |
|                                                                                  |   |               |   |   |   |
| Costs and Expenses                                                                    |   |               |   |   |   |
| Cost of services revenue, exclusive of depreciation and                               |   | 3,668,811          |   | 3,364,407 |   |
|     amortization shown separately below                           |   |               |   |   |   |
| Cost of equipment revenue                                                             |   | 311,562            |   | 354,690 |   |
| Selling, general and administrative, including stock-based compensation (note 9) |   | 8,399,074          |   | 7,332,912 |   |
| Depreciation and amortization                                                         |   | 1,445,419          |   | 1,276,965 |   |
|                                                                                  |   | 13,824,866         |   | 12,328,974 |   |
| Operating loss                                                                        |   | (3,878,868         | )      | (4,484,479 | ) |
|                                                                                  |   |               |   |   |   |
| Other income (expense)                                                                |   |               |   |   |   |
| Unrealized gain on derivative (note 13)                                          |   | —            |   | 999,900 |   |
| Loss on foreign exchange                                                              |   | (38,096            | )      | (49,129 | ) |
| Investment income                                                                     |   | 13,910             |   | 21,906 |   |
|                                                                                  |   | (24,186            | )      | 972,677 |   |
| Consolidated net and comprehensive loss                                               |   | (3,903,054         | )      | (3,511,802 | ) |
| Net loss attributable to non-controlling interest                                     |   | 9,754              |   | — |   |
| Net and comprehensive loss attributable to controlling interest                       |   | (3,893,300         | )      | (3,511,802 | ) |
| Adjustment to the carrying amount of redeemable preferred stock                       |   | (267,656           | )      | — |   |
| Net and comprehensive loss attributable to NeuLion, Inc. common stockholders          |   | (4,160,956         | )      | (3,511,802 | ) |
|                                                                                  |   |               |   |   |   |
|                                                                                  |   |               |   |   |   |
| Net loss per weighted average number of shares of common stock                        |   |               |   |   |   |
|     outstanding - basic and diluted (note 7)                 |   | $(0.03             | )      | $(0.03 | ) |
|                                                                                  |   |               |   |   |   |
| Weighted average number of shares of common stock                                     |   |               |   |   |   |
|     outstanding - basic and diluted (note 7)                      |   | 139,196,946        |   | 116,742,433 |   |

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NEULION, INC.

|                                                       |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   | Non-        |   |   |   |    |
|------------------------------------------------------------|--------|--------------|--------|-----------|-----------------|--------|------------|------------|--------|------------|---------|----------|-------------|----------|--------|-------------|--------|--------|--------|---------|
|                                                       |   |         |   |      |            |   | Additional |       |   | Promissory |    |     | Accumulated |     |   | controlling |   |   | Total  |    |
|                                                       |   | Common stock |   |      | paid-in capital |   |       | notes      |   |       | deficit |     |        | interest |   |        | equity |   |
|                                                       |   | #            |   | $         |            |   | $          |       |   | $          |    |     | $           |     |   | $           |   |   | $      |    |
|                                                       |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|                                                       |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
| Balance, December 31, 2010                                 |   | 139,180,279  |   | 1,391,802 |            |   |       | 75,480,756 |   |       |    | (209,250 | )           |     |   | (60,963,093 | )      |   |   | 467,440 |   |   |   | 16,167,655 |   |
|                                                       |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
| Accretion of issuance costs                                |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|      on Class 3 Preference Shares |   | —      |   | —   |            |   |       | (12,283    | )      |       |    | —  |        |     |   | —     |   |   |   | — |   |   |   | (12,283 | ) |
| Adjustment to the carrying                                 |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|      amount of Class 3            |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|      Preference Shares            |   | —      |   | —   |            |   |       | (267,656   | )      |       |    | —  |        |     |   | —     |   |   |   | — |   |   |   | (267,656 | ) |
| Stock-based compensation:                                  |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|     Issuance of common stock           |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|     under Directors’             |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|     Compensation Plan                  |   | 150,000      |   | 1,500     |            |   |       | —    |   |       |    | —  |        |     |   | —     |   |   |   | — |   |   |   | 1,500 |   |
|     Stock options, warrants            |   |         |   |      |            |   |       |       |   |       |    |     |        |     |   |        |   |   |   |    |   |   |   |   |   |
|     and other compensation             |   | —      |   | —   |            |   |       | 396,885    |   |       |    | —  |        |     |   | —     |   |   |   | — |   |   |   | 396,885 |   |
| Net loss                                                   |   | —      |   | —   |            |   |       | —    |   |       |    | —  |        |     |   | (3,893,300  | )      |   |   | (9,754  | ) |   |   | (3,903,054 | ) |
| Balance, March 31, 2011                                    |   | 139,330,279  |   | 1,393,302 |            |   |       | 75,597,702 |   |       |    | (209,250 | )           |     |   | (64,856,393 | )      |   |   | 457,686 |   |   |   | 12,383,047 |   |

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NEULION, INC.

|                                                                   |   |                  Three months ended |   |
|------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                   |   |                  March 31,          |   |
|                                                                   |   |                                                                                                      |   |   |   |
|                                                                   |   | 2011                                                                                                      |   | 2010 |   |
|                                                                   |   | $                                                                                                         |   | $ |   |
|                                                                   |   |                                                                                                      |   |   |   |
| OPERATING ACTIVITIES                                                   |   |                                                                                                      |   |   |   |
| Consolidated net loss                                                  |   | (3,903,054                                                                                                | )      | (3,511,802 | ) |
| Adjustments to reconcile net loss to cash used in operating activities |   |                                                                                                      |   |   |   |
| Depreciation and amortization                                          |   | 1,445,419                                                                                                 |   | 1,276,965 |   |
| Stock-based compensation                                               |   | 395,214                                                                                                   |   | 207,257 |   |
| Unrealized gain on derivative                                          |   | —                                                                                                   |   | (999,900 | ) |
|                                                                   |   |                                                                                                      |   |   |   |
| Changes in operating assets and liabilities                            |   |                                                                                                      |   |   |   |
| Accounts receivable                                                    |   | (97,568                                                                                                   | )      | (120,910 | ) |
| Inventory                                                              |   | (147,302                                                                                                  | )      | 376,349 |   |
| Prepaid expenses, deposits and other assets                            |   | (326,337                                                                                                  | )      | (237,392 | ) |
| Other receivables                                                      |   | 94,365                                                                                                    |   | 62,941 |   |
| Due from related parties                                               |   | (87,315                                                                                                   | )      | 38,942 |   |
| Accounts payable                                                       |   | (614,182                                                                                                  | )      | (1,413,568 | ) |
| Accrued liabilities                                                    |   | 283,266                                                                                                   |   | (206,844 | ) |
| Deferred revenue                                                       |   | (1,596,708                                                                                                | )      | (85,183 | ) |
| Long-term liabilities                                                  |   | (2,679                                                                                                    | )      | (74,054 | ) |
| Due to related parties                                                 |   | 9,349                                                                                                     |   | (188,909 | ) |
| Cash used in operating activities                                      |   | (4,547,532                                                                                                | )      | (4,876,108 | ) |
|                                                                   |   |                                                                                                      |   |   |   |
| INVESTING ACTIVITIES                                                   |   |                                                                                                      |   |   |   |
| Purchase of property, plant and equipment                              |   | (299,286                                                                                                  | )      | (298,285 | ) |
| Cash used in investing activities                                      |   | (299,286                                                                                                  | )      | (298,285 | ) |
|                                                                   |   |                                                                                                      |   |   |   |
| FINANCING ACTIVITIES                                                   |   |                                                                                                      |   |   |   |
| Proceeds from exercise of stock options                                |   | —                                                                                                   |   | 7,197 |   |
| Cash provided by financing activities                                  |   | —                                                                                                   |   | 7,197 |   |
| Net decrease in cash and cash equivalents during the period            |   | (4,846,818                                                                                                | )      | (5,167,196 | ) |
| Cash and cash equivalents, beginning of period                         |   | 12,929,325                                                                                                |   | 12,957,679 |   |
| Cash and cash equivalents, end of period                               |   | 8,082,507                                                                                                 |   | 7,790,483 |   |

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NEULION, INC.

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NEULION, INC.

|                          |   | As at October 1, 2010 |       |
|-------------------------------|--------|-----------------------|------------|
|                          |   |                  |       |
| Cash                          |   | $                     | 243,226    |   |
| Other current assets          |   |                  | 2,936,608  |   |
| Property, plant and equipment |   |                  | 209,018    |   |
| Intangible assets             |   |                  | 2,123,000  |   |
| Goodwill                      |   |                  | 4,701,076  |   |
| Total assets                  |   |                  | 10,212,928 |   |
| Current liabilities           |   |                  | (1,221,076 | ) |
| Non-controlling interest      |   |                  | (476,211   | ) |
| Net assets acquired           |   | $                     | 8,515,641  |   |

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|                                                           |   | March 31, |       |   | March 31, |   |
|----------------------------------------------------------------|--------|-----------|------------|--------|-----------|--------|
|                                                           |   | 2011      |       |   | 2010      |   |
|                                                           |   | $         |       |   | $         |   |
|                                                           |   |      |       |   |      |   |   |   |
| Total revenue                                                  |   |      | 9,945,998  |   |      |   | 8,244,386 |   |
| Total cost of services revenue, exclusive of depreciation and  |   |      |       |   |      |   |   |   |
|    amortization shown separately below          |   |      | (3,668,811 | )      |      |   | (3,364,407 | ) |
| Total cost of equipment revenue                                |   |      | (311,562   | )      |      |   | (654,208 | ) |
| Total sales, general and administrative                        |   |      | (8,003,860 | )      |      |   | (7,531,980 | ) |
| Stock-based compensation                                       |   |      | (395,214   | )      |      |   | (207,257 | ) |
| Depreciation and amortization                                  |   |      | (1,445,419 | )      |      |   | (1,406,806 | ) |
| Operating loss                                                 |   |      | (3,878,868 | )      |      |   | (4,920,272 | ) |
| Net loss attributable to common stockholders                   |   |      | (4,160,956 | )      |      |   | (3,960,479 | ) |
| Net loss per weighted average number of shares of common stock |   |      |       |   |      |   |   |   |
|    outstanding – basic and diluted        |   |      | (0.03      | )      |      |   | (0.03 | ) |

|           |   | March 31, |      |   | December 31, |   |
|----------------|--------|-----------|-----------|--------|--------------|--------|
|           |   | 2011      |      |   | 2010         |   |
|           |   | $         |      |   | $            |   |
|           |   |      |      |   |         |   |   |   |
| Raw materials  |   |      | 266,035   |   |         |   | 277,092 |   |
| Finished goods |   |      | 828,047   |   |         |   | 669,688 |   |
|           |   |      | 1,094,082 |   |         |   | 946,780 |   |

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|               |   | March 31, |    |   | March 31, |   |
|--------------------|--------|-----------|---------|--------|-----------|--------|
|               |   | 2011      |    |   | 2010      |   |
|               |   | $         |    |   | $         |   |
|               |   |      |    |   |      |   |   |   |
| New York Islanders |   |      | 87,378  |   |      |   | 96,979 |   |
| Renaissance        |   |      | 30,000  |   |      |   | 30,000 |   |
| Smile Train        |   |      | 27,000  |   |      |   | 27,000 |   |
| KyLinTV            |   |      | 530,190 |   |      |   | 477,213 |   |
|               |   |      | 674,568 |   |      |   | 631,192 |   |

|               |   | March 31, |      |   | December 31, |   |
|--------------------|--------|-----------|-----------|--------|--------------|--------|
|               |   | 2011      |      |   | 2010         |   |
|               |   | $         |      |   | $            |   |
|               |   |      |      |   |         |   |   |   |
| New York Islanders |   |      | 120,081   |   |         |   | (26 | ) |
| Renaissance        |   |      | 1,540     |   |         |   | 70 |   |
| KyLinTV            |   |      | 1,227,470 |   |         |   | 1,261,706 |   |
|               |   |      | 1,349,091 |   |         |   | 1,261,750 |   |

|                      |   | March 31, |       |   | March 31, |   |
|---------------------------|--------|-----------|------------|--------|-----------|--------|
|                      |   | 2011      |       |   | 2010      |   |
|                      |   |      | #          |   |      |   | # |   |
|                      |   |      |       |   |      |   |   |   |
| Stock options             |   |      | 12,317,292 |   |      |   | 9,639,975 |   |
| Restricted share units    |   |      | —    |   |      |   | 1,888 |   |
| Stock appreciation rights |   |      | 675,000    |   |      |   | 1,675,000 |   |
| Warrants                  |   |      | 8,642,500  |   |      |   | 19,697,500 |   |
| Retention warrants        |   |      | 739,876    |   |      |   | 801,788 |   |
| Restricted stock          |   |      | 2,500,000  |   |      |   | — |   |
| Class 3 Preference Shares |   |      | 17,176,818 |   |      |   | — |   |

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|                                           |   | March 31, |    |   | March 31, |   |
|------------------------------------------------|--------|-----------|---------|--------|-----------|--------|
|                                           |   | 2011      |    |   | 2010      |   |
|                                           |   | $         |    |   | $         |   |
|                                           |   |      |    |   |      |   |   |   |
| Stock options, retention warrants and warrants |   |      | 256,053 |   |      |   | 195,106 |   |
| Restricted share units                         |   |      | — |   |      |   | 2,929 |   |
| Stock appreciation rights                      |   |      | (3,171  | )      |      |   | (46,530 | ) |
| Directors’ compensation                  |   |      | 20,617  |   |      |   | 12,503 |   |
| Escrowed shares                                |   |      | — |   |      |   | 43,249 |   |
| Consultant compensation                        |   |      | 58,394  |   |      |   | — |   |
| Restricted stock                               |   |      | 63,321  |   |      |   | — |   |
|                                           |   |      | 395,214 |   |      |   | 207,257 |   |

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|   | ● | 5,500,000 Series A warrants exercisable at Cdn$1.25 that expired on October 20, 2010. |
|--------|---------|---------------------------------------------------------------------------------------|

|   | ● | 5,500,000 Series B warrants exercisable at Cdn$1.50 that expired on October 20, 2010. |
|--------|---------|---------------------------------------------------------------------------------------|

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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|   | Ø | Services Revenue, which is our recurring revenue stream, increased by $2.1 million, or 28%, as compared to the prior period. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | Ø | Cost of Services Revenue, exclusive of depreciation and amortization , decreased by 7% as a percentage of services revenue as compared to the prior period. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | organic growth of $1.9 million; and |
|--------|---------|------------------------------------------|

|   | ● | revenue from TransVideo of $0.2 million. |
|--------|---------|-----------------------------------------------|

|   | ● | an increase in total revenue of $2.1 million; and |
|--------|---------|--------------------------------------------------------|

|   | ● | an increase in cost of revenue, exclusive of depreciation and amortization of $0.3 million; |
|--------|---------|---------------------------------------------------------------------------------------------|

|   | ● | an increase  in selling, general and administrative expenses, excluding stock-based compensation of $0.9 million; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

|   | ● | an increase in stock-based compensation of $0.2 million (non-cash item); |
|--------|---------|-------------------------------------------------------------------------------|

|   | ● | an increase in depreciation and amortization of $0.1 million (non-cash item); |
|--------|---------|------------------------------------------------------------------------------------|

|   | ● | an unrealized gain on derivative of $0 for the three months ended March 31, 2011 as compared to an unrealized gain on derivative of $1.0 million for the three months ended March 31, 2010 (non-cash item); and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | an adjustment to the carrying amount of Class 3 Preference Shares of $0.3 million for the three months ended March 31, 2011 (non-cash item). |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

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| Consolidated Statement of Operations Reconciliation: |   |                |       |   |
|------------------------------------------------------|--------|---------------------|------------|--------|
|                                                 |   | Three months ended, |       |
|                                                 |   | March 31,           |       |
|                                                 |   | 2011                |       |   | 2010 |   |
|                                                 |   | $                   |       |   | $ |   |
|                                                 |   |                |       |   |   |   |   |   |
| Consolidated net loss on a GAAP basis                |   |                | (3,903,054 | )      |   |   | (3,511,802 | ) |
|                                                 |   |                |       |   |   |   |   |   |
| Depreciation and amortization                        |   |                | 1,445,419  |   |   |   | 1,276,965 |   |
| Stock-based compensation                             |   |                | 395,214    |   |   |   | 207,257 |   |
| Unrealized gain on derivative                        |   |                | 0          |   |   |   | (999,900 | ) |
| Investment income and foreign exchange loss          |   |                | 24,186     |   |   |   | 27,223 |   |
|                                                 |   |                |       |   |   |   |   |   |
| Non-GAAP Adjusted EBITDA loss                        |   |                | (2,038,235 | )      |   |   | (3,000,257 | ) |

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|   | ● | Subscriber revenue, which consists primarily of subscription, pay-per view and operations fees revenues and is recognized over the period of service or usage; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | eCommerce revenue, which consists of advertising, merchandise, donor and ticketing revenues and is recognized as the service is performed; and |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Technology revenue, which consists of set-up and transcoder revenue and is recognized over the life of the contract. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------|

| (ii) | Equipment revenue, which consists of the sale of set top boxes (“STBs”) to content partners and/or end users and is recognized when title to an STB passes to the customer.  Shipping revenue is included in equipment revenue. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Cost of subscriber revenue, which consists of: |
|--------|---------|------------------------------------------------|

|   | ● | royalty payments; |
|--------|---------|-------------------|

|   | ● | network operating costs; |
|--------|---------|--------------------------|

|   | ● | bandwidth usage fees; and |
|--------|---------|---------------------------|

|   | ● | colocation fees. |
|--------|---------|------------------|

|   | ● | Cost of eCommerce revenue, which consists of: |
|--------|---------|-----------------------------------------------|

|   | ● | merchandising, donor and ticketing revenues, which have minimal associated costs as revenue is booked on a net basis; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | ● | cost of advertising revenue, which is subject to revenue shares with the content provider. |
|--------|---------|--------------------------------------------------------------------------------------------|

|   | ● | Cost of technology revenue, which consists of: |
|--------|---------|------------------------------------------------|

|   | ● | transcoder licenses purchased from third parties; and |
|--------|---------|-------------------------------------------------------|

|   | ● | maintenance costs for transcoders. |
|--------|---------|------------------------------------|

|   | ● | Wages and benefits – represents compensation for our full-time and part-time employees as well as fees for consultants who we use from time to time; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ● | Stock-based compensation – represents the estimated fair value of our options, warrants and stock appreciation rights (“Convertible Securities”) for financial accounting purposes, prepared using the Black-Scholes-Merton model;  |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Marketing – represents expenses for both global and local marketing initiatives that focus on various target sports properties and ethnic communities and include online and traditional marketing expenditures, search engine marketing and search engine optimization; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Professional fees – represents legal, accounting and recruiting fees; and |
|--------|---------|---------------------------------------------------------------------------------|

|   | ● | Other SG&A expenses – represents travel expenses, rent, office supplies, corporate IT services, credit card processing fees and other general operating expenses. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                              |   | 2011   |       |   | 2010   |   |       | Change |   |
|-----------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                                              |   | $      |       |   | $      |   |       | %      |   |
| Revenue                                                                           |   |   |       |   |   |   |       |   |   |   |   |
|    Services revenue                                                |   |   | 9,563,930  |   |   |   | 7,462,899  |   |   |   | 28% |   |
|    Equipment revenue                                               |   |   | 382,068    |   |   |   | 381,596    |   |   |   | 0% |   |
| Total Revenue                                                                     |   |   | 9,945,998  |   |   |   | 7,844,495  |   |   |   | 27% |   |
|                                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
| Costs and expenses                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
|    Cost of services revenue, exclusive of depreciation             |   |   |       |   |   |   |       |   |   |   |   |   |
|       and amortization shown separately below       |   |   | 3,668,811  |   |   |   | 3,364,407  |   |   |   | 9% |   |
|    Cost of equipment revenue                                       |   |   | 311,562    |   |   |   | 354,690    |   |   |   | -12% |   |
|    Selling, general and administrative,  including       |   |   |       |   |   |   |       |   |   |   |   |   |
|       stock-based compensation                      |   |   | 8,399,074  |   |   |   | 7,332,912  |   |   |   | 15% |   |
|    Depreciation and amortization                                   |   |   | 1,445,419  |   |   |   | 1,276,965  |   |   |   | 13% |   |
|                                                                              |   |   | 13,824,866 |   |   |   | 12,328,974 |   |   |   | 12% |   |
| Operating loss                                                                    |   |   | (3,878,868 | )      |   |   | (4,484,479 | )      |   |   | -14% |   |
|                                                                              |   |   |       |   |   |   |       |   |   |   |   |   |
| Other income (expense)                                                            |   |   |       |   |   |   |       |   |   |   |   |   |
|    Unrealized gain on derivative                                   |   |   | -          |   |   |   | 999,900    |   |   |   | - |   |
|    Loss on foreign exchange                                        |   |   | (38,096    | )      |   |   | (49,129    | )      |   |   | -22% |   |
|    Investment income                                               |   |   | 13,910     |   |   |   | 21,906     |   |   |   | -37% |   |
|                                                                              |   |   | (24,186    | )      |   |   | 972,677    |   |   |   | -102% |   |
| Net and comprehensive loss for the period                                         |   |   | (3,903,054 | )      |   |   | (3,511,802 | )      |   |   | 11% |   |
|    Net loss attributable to non-controlling interest               |   |   | 9,754      |   |   |   | -          |   |   |   | - |   |
| Net loss attributable to controlling interest                                     |   |   | (3,893,300 | )      |   |   | (3,511,802 | )      |   |   | 11% |   |
|    Adjustment to the carrying amount of redeemable preferred stock |   |   | (267,656   | )      |   |   | -          |   |   |   | - |   |
| Net and comprehensive loss attributable to NeuLion, Inc. common stockholders      |   |   | (4,160,956 | )      |   |   | (3,511,802 | )      |   |   | 18% |   |

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|   | ● | Wages and benefits increased from $5.3 million for the three months ended March 31, 2010 to $5.9 million for the three months ended March 31, 2011.  Wages and benefits were $0.3 million for TransVideo.  The organic increase of $0.3 million was due to an increase in employees. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ● | Stock-based compensation expense increased from $0.2 million for the three months ended March 31, 2010 to $0.4 million for the three months ended March 31, 2011.  The increase of $0.2 million was due to additional compensation relating to a consultant’s fees and restricted stock.   |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Marketing expenses were $0.2 million for the three months ended March 31, 2010 and 2011. |
|--------|---------|------------------------------------------------------------------------------------------|

|   | ● | Professional fees were $0.5 million for the three months ended March 31, 2010 and 2011. |
|--------|---------|-----------------------------------------------------------------------------------------|

|   | ● | Other SG&A expenses increased from $1.1 million for the three months ended March 31, 2010 to $1.4 million for the three months ended March 31, 2011.  The $0.3 million increase was primarily due to an increase in travel expenses.  TransVideo comprised $0.1 million of the total other SG&A expenses increase for the period. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                          |   | March 31, |       |   | December 31, |   |
|-------------------------------|--------|-----------|------------|--------|--------------|--------|
|                          |   | 2011      |       |   | 2010         |   |
|                          |   | $         |       |   | $            |   |
| Current Assets                |   |      |       |   |         |   |   |   |
| Cash and cash equivalents     |   |      | 8,082,507  |   |         |   | 12,929,325 |   |
| Accounts receivable, net      |   |      | 2,454,411  |   |         |   | 2,356,843 |   |
| Other receivables             |   |      | 201,789    |   |         |   | 296,154 |   |
| Inventory, net                |   |      | 1,094,082  |   |         |   | 946,780 |   |
| Prepaid expenses and deposits |   |      | 1,320,032  |   |         |   | 1,014,703 |   |
| Due from related parties      |   |      | 1,349,091  |   |         |   | 1,261,776 |   |
| Total Current Assets          |   |      | 14,501,912 |   |         |   | 18,805,581 |   |
|                          |   |      |       |   |         |   |   |   |
| Current Liabilities           |   |      |       |   |         |   |   |   |
| Accounts payable              |   |      | 4,890,307  |   |         |   | 5,504,489 |   |
| Accrued liabilities           |   |      | 5,720,687  |   |         |   | 5,431,217 |   |
| Due to related parties        |   |      | -          |   |         |   | 26 |   |
| Deferred revenue              |   |      | 4,779,999  |   |         |   | 6,432,445 |   |
| Total Current Liabilities     |   |      | 15,390,993 |   |         |   | 17,368,177 |   |
|                          |   |      |       |   |         |   |   |   |
| Working Capital Ratio         |   |      | 0.94       |   |         |   | 1.08 |   |

|                                  |   | Three months ended |       |
|---------------------------------------|--------|--------------------|------------|
|                                  |   | March 31,          |       |
|                                  |   | 2011               |       |   | 2010 |   |
|                                  |   | $                  |       |   | $ |   |
|                                  |   |               |       |   |   |   |   |   |
| Cash used in operating activities     |   |               | (4,547,532 | ) |   |   | (4,876,108 | ) |
| Cash used in investing activities     |   |               | (299,286   | ) |   |   | (298,285 | ) |
| Cash provided by financing activities |   |               | -          |   |   |   | 7,197 |   |

|   | ● | non-cash items in the amount of $1.9 million, related to stock-based compensation and depreciation and amortization; and |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | changes in operating assets and liabilities of $2.5 million. |
|--------|---------|-------------------------------------------------------------------|

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Item 3.            Quantitative and Qualitative Disclosures About Market Risk

Item 4.            Controls and Procedures

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

| John R. Anderson    |   |   | 50,000  |   |
|---------------------|--------|--------|---------|--------|
| Gabriel A. Battista |   |   | 50,000  |   |
| Shirley Strum Kenny |   |   | 50,000  |   |
| Total               |   |   | 150,000 |   |

Item 6.  Exhibits

| Exhibit No. |   | Description                                                                                                                                                                            |
|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2         |   | Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K/A filed with the SEC on February 18, 2011)                    |
|        |   |                                                                                                                                                                                   |
| 31.1        | *      | Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                |
|        |   |                                                                                                                                                                                   |
| 31.2        | *      | Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                |
|        |   |                                                                                                                                                                                   |
| 32.1        | *      | Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

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SIGNATURES

|                          |                                      |   |
|-------------------------------|-------------------------------------------|--------|
|                          | NEULION, INC.                             |   |
|                          |                                      |   |
|                          |                                      |   |
|                          |                                      |   |
| Date:  May 12, 2011 | /s/ Nancy Li                              |   |
|                          | Name:  Nancy Li                 |   |
|                          | Title:  Chief Executive Officer |   |
|                          |                                      |   |
|                          |                                      |   |
|                          |                                      |   |
| Date:  May 12, 2011 | /s/ Arthur J. McCarthy                    |   |
|                          | Name:  Arthur J. McCarthy       |   |
|                          | Title:  Chief Financial Officer |   |

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