U.S. SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549




FORM 10-Q




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





For the quarterly period ended:  March 31, 2010




OR




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




For the transition period from  ___ to ____




Commission File Number 0-31012




NT MEDIA CORP. OF CALIFORNIA, INC.


(NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)




Delaware

94-3357128(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)7800 Oceanus Drive

Los Angeles, California

90046(Address of principal executive offices)

(Zip Code)





Registrants telephone number: (323) 445-4833








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





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if  any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o  No o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer oAccelerated filer oNon-accelerated filer oSmaller reporting company x


Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x





Number of shares outstanding as of May 19, 2010: 26,192,093 common shares.





Transitional Small Business Disclosure Format:  Yes o  No x











NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY


March 31, 2010 (unaudited)





INDEX





Page No.PART I.
Financial Information
3Item 1.
Consolidated Financial Statements (unaudited) :
3Notes to Consolidated Financial Statements
6Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
15Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
18Item 4T.
Controls and Procedures.
18PART II.
Other Information
19Item 1.
Legal Proceedings
19Item 1A
Risk Factors
19Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
19Item 3.
Defaults Upon Senior Securities
19Item 4.
Removed and Reserved
19Item 5.
Other Information
19Item 6.
Exhibits
19SIGNATURES

20





2





PART II - FINANCIAL INFORMATION





NT Media Corp. of California, Inc. and Subsidiaries
 (A Development Stage Company)





March 31, 2010


December 31, 2009(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents

$
15


$
586TOTAL CURRENT ASSETS

$
15


$
586LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIESAccounts payable

$
543,312


$
532,206Accrued liabilities


562,485



531,868Accrued liabilities to related parties


1,047,121



1,000,237Notes payable


715,849



582,119Notes payable, related party


31,050



28,818Convertible notes payable


282,200



282,200Convertible notes payable, related party


625,600



625,600Accrued litigation settlement


113,178



113,178TOTAL CURRENT LIABILITIES


3,920,795



3,696,227LONG-TERM LIABILITIESNote Payable


176,521



260,251TOTAL LIABILITES


4,097,316



3,956,478COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS' DEFICITPreferred stock, $0.001 par value, 5,000,000 sharesauthorized; 0 shares issued and outstanding


-



-Common stock; $0.001 par value; 1,000,000,000 sharesauthorized; 25,180,329 issued and outstanding


25,180



25,180Additional paid-in capital


3,365,893



3,365,893Deficit accumulated during the development stage


(7,488,374
)


(7,346,966
)TOTAL STOCKHOLDERS' DEFICIT


(4,097,301
)


(3,955,892
)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$
15


$
586




See accompanying notes to consolidated financial statements.
  3




NT Media Corp. of California, Inc. and Subsidiaries
 (A Development Stage Company)
 Consolidated Statements of Operations
 (Unaudited)
 Cumulative fromThree Months Ended


June 4, 1999March 31,


March 31,


(inception) to2010


2009


March 31, 2010REVENUES

$
-


$
-


$
385,997COSTS AND EXPENSESGeneral and administrative


101,408



113,920



5,820,805Depreciation and amortization


-



-



132,077Impairment of film costs


-



-



156,445Impairment of related party receivables


-



-



35,383Inventory Write-down


-







24,820Loss on litigation settlement


-



-



100,000TOTAL COSTS AND EXPENSES


101,408



113,920



6,269,530LOSS FROM OPERATIONS


(101,408
)


(113,920
)


(5,883,533
)OTHER INCOME (EXPENSE)Interest income, related party


-



-



23,154Interest expense


(29,817
)


(89,882
)


(769,090
)Interest expense, related party


(9,384
)


(9,384
)


(472,045
)Loan fees


-



-



(616,000
)Debt forgiven


-



-



290,595Legal fees forgiven


-



-



12,296Provision for common stock subscription receivable


-



-



(91,552
)TOTAL OTHER INCOME (EXPENSE)


(39,201
)


(99,266
)


(1,622,642
)LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST


(140,609
)


(213,186
)


(7,506,175
)PROVISION FOR INCOME TAXES


800



800



15,200LOSS BEFORE NON-CONTROLLING INTEREST


(141,409
)


(213,986
)


(7,521,375
)LESS: LOSS ATTRIBUTABLE TO NON-CONTROLLINGINTEREST


-



-



33,000NET LOSS ATTRIBUTABLE TO NT MEDIA CORP. OFCALIFORNIA, INC. AND SUBSIDIARIES

$
(141,409
)

$
(213,986
)

$
(7,488,374
)NET (LOSS) PER SHARE:BASIC AND DILUTED

$
(0.006
)

$
(0.026
)WEIGHTED AVERAGE SHARES OUTSTANDING:BASIC AND DILUTED


25,180,329



8,382,362
 
 See accompanying notes to consolidated financial statements.






4





NT Media Corp. of California, Inc. and Subsidiaries
 (A Development Stage Company)
 Consolidated Statements of Cash Flows
 (Unaudited)
 
 
 Cumulative fromThree Months Ended


June 4, 1999March 31,

March 31,

(inception) to2010


2009


March 31, 2010CASH FLOWS FROM (TO) OPERATING ACTIVITIES:Net loss before non-controlling interest

$
(141,409
)

$
(213,986
)

$
(7,521,375
)Adjustments to reconcile net loss to net cashused in operating activities:Depreciation and amortization


-



-



132,077Impairment loss


-



-



336,773Inventory write-down


-



-



24,820Impairment of related party receivables


-



-



35,383Operating expenses paid by reducing note receivable


-



-



10,000Stock issued for services


-



55,000



942,343Deferred compensation


-



-



10,417Stock issued for loan fees


-



-



423,000Stock options issued for services


-



-



60,370Legal fees forgiven


-



-



(12,296
)Debts forgiven


-



-



(290,595
)Provision for common stock subscription receivable


-



-



89,468Amount attributable to minority interest







33,000Beneficial conversion of debt and accrued interest


-



64,000



233,380Changes in assets and liabilities:Interest receivable


-



-



(19,986
)Inventory


-



-



(24,820
)Prepaid Expenses


-



5,117



-Other assets


-



-



(24,000
)Litigation settlement


-



-



100,000Accounts payable and accrued expenses


41,723



41,467



1,476,345Accrued expenses, related party


46,884



46,885



1,003,698Net cash (used in) operating activities


(52,802
)


(1,516
)


(2,981,998
)CASH FLOWS FROM (TO) INVESTING ACTIVITIES:Notes receivable from officer


-



-



(45,048
)Collection of notes receivable from officer


-



-



35,048Notes receivable, related parties


-



-



(50,000
)Collection of notes receivable, related parties


-



-



50,000Investment in property and equipment


-



-



(18,879
)Investment in film costs


-



-



(133,005
)Investment in web site development costs


-



-



(292,968
)Net cash (used in) investing activities


-



-



(454,852
)CASH FLOWS FROM (TO) FINANCING ACTIVITIES:Proceeds from issuance of common stock


-



-



1,254,154Payment of offering costs


-



-



(66,450
)Proceeds from notes payable


50,000



1,243



1,280,038Proceeds from notes payable, related party


2,232



-



631,912Payments of notes payable






-



(201,916
)Payments of notes payable, related party



-



(378,672
)Proceeds from issuance of convertible notes


-



-



917,800Net cash provided by financing activities


52,232



1,243



3,436,866NET INCREASE/(DECREASE) IN CASH ANDCASH EQUIVALENTS


(570
)


(273
)


15CASH AND CASH EQUIVALENTS,Beginning of period


586



280



-CASH AND CASH EQUIVALENTS,End of period

$
15


$
7


$
15SUPPLEMENTAL DISCLOSURES OFCASH FLOW INFORMATION:Cash paid during the period for:Interest paid

$
-


$
-


$
21,511Income taxes paid

$
-


$
-


$
4,000NONCASH FINANCING ACTIVITIES:Beneficial conversion of debt and accrued interest

$
-


$
-


$
233,386Stock issued for services

$
-


$
-


$
942,343Stock issued for loan fees

$
-


$
-


$
423,000Stock options issued for services

$
-


$
-


$
60,370
 
 See accompanying notes to consolidated financial statements.




5





NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY


(A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009
  NOTE 1.BASIS OF PRESENTATION





The unaudited consolidated financial statements were prepared by NT Media Corp.of California, Inc. and its wholly owned subsidiary, eCast Media Corporation,Inc. (together, the "Company"), in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, these consolidated financial statements do not include all disclosures required by generally accepted accounting principles in the United States of America ("US GAAP") for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto include on Form 10-K for the period ended December 31, 2009. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. The results of the three months ended March 31, 2010 are not necessarily indicative of the results to be expected for the full year ending December 31, 2010.





Reclassifications





Certain prior period amounts were reclassified to conform to current period presentation, none of which changed total assets, stockholders' equity (deficit), net loss, or net loss per share.





NOTE 2.GOING CONCERN AND MANAGEMENT’S PLAN





The accompanying consolidated financial statements were prepared in conformity with US GAAP, which contemplate continuation of the Company as a going concern. As of and for the three months ended March 31, 2010, the Company incurred a significant net loss, had an accumulated deficit and a working capital deficit. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  These unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might b e necessary should the Company be unable to continue as a going concern.





In order for the Company to meet its financial obligations, it will continue to attempt to sell equity or incur debt, although there cannot be any assurance that the Company will be successful in doing so.




NT Media Corporation of California, Inc. is a Delaware corporation incorporated on March 14, 2000. We are focused on development, production and distribution of programming in the entertainment industry including creating music platforms and skilled gaming in the United States and abroad and vertical social and professional networks. The Company intends to continue to develop media and entertainment assets and channels going forward. While the Company's Board of Directors ("Board") has not determined to acquire or invest in any new technology opportunities to date, we may in the future, seek to expand the Company's operations by engaging in acquisitions, joint ventures or strategic investments in technology ventures as approved by the Company's Board.




6


NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009


The Company is evolving as a leader in the development of destination websites that engage users and inspire loyalty. The Company does this by launching a wide array of websites that take advantage of the Worldwide Web’s ability to reach users with information, services and products that encourages interaction between the visitor and the websites.





Using Web 2.0 techniques and technologies, the Company plans to create web applications, software and thus websites for the exchange of information. Social Networking sites like MySpace, Facebook, Wikipedia and YouTube deliver large audiences with little investment in content creation because their users develop and post the material. These sites have changed how people meet, interact and share information. Blogs have made it possible to post content on subjects easily, and invite audience participation with responses. Classified advertising sites such as Ebay and Craigslist have changed how people shop for goods and services, making it easier for small business owners and entrepreneurs to compete. The Company develops websites in these genres, and others, meeting the challenge of the Web 2.0 marketplace.





The first site launched in August of 2008, is NeuroTrash.TV. It is a video-sharing site targeting young adults between 18 and 35. Users will be able to post and share videos on the site as well as take advantage of NeuroTrash.TV’s video player to place videos on their own sites, Social Networking profile pages and blogs. The site has a social networking component providing information on the site’s users and contributors. Other sites to be developed include social networking sites on specific subjects such as a revised version of single dads, a meeting place for single fathers to connect and share information. More sites will be launched as target audiences and demographics are identified and as the Company’s financial resources allow.





The Company’s revenue model is based on standard display banner ads, in-stream video advertising, product sales, and services. One feature of the NeuroTrash.TV website is the ability to earn revenue from video ads embedded in other websites on which our users place videos. Other revenue sources include marketing services, products and offers from other NT Media-owned sites such as ntmedia.storeblocks.com a music download site, and lead generation for goods and services such as new and used car prices, insurance, travel, loans and more. However, no revenues have been earned to date.  In January 2009, the Company launched a targeted social network for single fathers. SingleFatherNetwork dedicated to serving the needs of unmarried fathers. The online community of Single Fathers will be able to post pictures, video, blogs, in the pursuit of sharing experiences, and networking amongst this very specific group. The Company expects to see continued growth in the overall online advertising market, and specifically in the social networking segment. Instead of competing with larger general topic communities, the Company creates online environments that attract predictable, sustainable and interactive traffic with multiple opportunities to repeatedly engage in a demand-filling niche conversation. The site has not generated any revenue to date.




7


NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009


In January 2009, the Company launched a targeted social network dedicated to discussion of all aspects of stem cell research. The network, www.stemcellstalk.com, is equipped with text, photos, videos, blogs, forums and extensive social networking in the area of stem cell research. The site is intended to foster education and debate as well as networking opportunities for medical professionals, patients, and companies engaged in stem cell treatment and research. The site is an open social forum for anyone wishing to join and will also be selectively inviting stem cell professionals to address participants in online forums and discussions. The site has not generated any revenue to date.





In October 2009, The Company partnered with Hollywood producers Sinahome Entertainment, LLC and Marble Step Production to produce, "Straight Up With A Twist," a series of shorts that explore the comedies of urban nightlife for its alternative-format video-sharing site NeuroTrash.tv as part of an ongoing program to publish and distribute original content. The video features anecdotal nightlife experiences with the comedic performances of an ensemble cast and is scheduled to be released in 2010. NT Media is producing the series as part of an ongoing initiative to release original content on NeuroTrash.tv.





In January 2008, the Company entered into an employment agreement with Mr. Ali Moussavi.  As part of the agreement Mr. Moussavi’s services include acting as the Chairman of the Board, Chief Executive Officer and President of the Company. On May 15 2008, Mr. Moussavi and the Company, with the approval of the Board agreed to memorialize the conditions by entering into a final employment agreement (the “Moussavi Agreement”), under which Mr. Moussavi would continue to provide services as Chief Executive Officer and President of the Company on a full time basis. The material terms of the Moussavi Agreement are described below.





The Moussavi Agreement has a five-year term, providing a base salary of $150,000 per year, which may be increased at the sole discretion of the Board on each anniversary thereafter, or from time-to-time at the sole discretion of the Board.  Upon reaching certain milestones, as determined in good faith by the Board, Mr. Moussavi may also receive an annual bonus up to the amount of his base salary.  The Company also granted Mr. Moussavi an option to purchase 1,000,000 shares of Common Stock of the Company at $0.35 per share.  The option is fully vested as of the date hereof.  Mr. Moussavi shall also be entitled to five weeks paid vacation, the use of an automobile that may be selected by Mr. Moussavi and approved by the Board, the reimbursement of up to $1,500 for Mr. Moussavi’s membership dues at two health clubs and one country club to be selected by Mr. Moussavi, and the reimbursement of up to $100,000 for the first year of Mr. Moussavi’s employment for the cost of entertainment provided by Mr. Moussavi to the Company’s customers, vendors, employees and strategic partners, which may be increased by 5% per annum starting January 1, 2009, and each year thereafter at Mr. Moussavi’s sole discretion.  Additionally, Mr. Moussavi may be entitled to reimbursement from the Company for reasonable costs and expenses incurred in connection with the performance of the duties and obligations provided for under the Moussavi Agreement.




8




NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009


NOTE 3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of Presentation





Because the Company has not generated any significant revenue, it is considered a development stage company. Consequently, the accompanying consolidated financial statements have been prepared using the accounting formats prescribed for development stage enterprises in accordance with ASC 915, "Accounting and Reporting by Development Stage Enterprises." The Company's year end is December 31st.





Basis of Consolidation





The consolidated financial statements include the accounts of NT Media and its wholly owned subsidiary, eCast and its 51% owned subsidiary, SUD. eCast and SUD are inactive. All significant intercompany accounts and transactions were eliminated in consolidation.





Cash and Cash Equivalents





Cash and cash equivalents consist primarily of cash on deposit with original maturities of three months or less.





Use of Estimates





The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates.







9





NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY


(A DEVELOPMENT STAGE COMPANY)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


March 31, 2010 (unaudited) and December 31, 2009







Equipment and Depreciation





Equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any reselling gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for consolidated financial statements purposes. There was no depreciation expense recorded for the three months ended March 31, 2010 and 2009.





Fair Value of Financial Instruments





The carrying value of cash, deferred revenue, accounts payable, and accrued expenses approximate fair value because of the short maturity of these items.





Revenue Recognition





Revenues are recognized on an accrual basis. Generally, revenues will be recognized when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed and determinable, and collectability is reasonably assured.





Revenue from the sale or licensing of films is recognized upon meeting all recognition requirements of ASC 926. Revenue from the sale of videocassettes and digital video disks ("DVDs") in the retail market is recognized on the "street date" when it is available for sale by the customer.





Capitalized Film Costs





Capitalized film costs consisted of investments in films which include the unamortized costs of completed films which have been produced by the Company. Capitalized costs include all direct production and financing costs, and production overhead.





Costs of acquiring and producing films were amortized using the individual-film-forecast method, whereby these costs are amortized and participation and residual costs are accrued in the proportion that current year's revenue bears to management's estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the films.





Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release.




10


NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009


Capitalized film costs were stated at the lower of amortized cost or estimated fair value on an individual film basis. The valuation of investment in films is reviewed on a title-by-title basis, when an event or changes in circumstances indicated that the fair value of a film is less than its unamortized cost. The fair value of the film is determined using management's future revenue and cost estimates. Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes in management's future revenue estimates.





Concentrations of Credit Risk





The Company maintains all cash in bank accounts, which at times may exceed federally insured limits. The Company has not experienced a loss in such accounts.





Income Taxes





The Company has adopted the liability method of accounting for income taxes pursuant to ASC 740 (Formerly Statement of Financial Accounting Standard (SFAS) No. 109, "Accounting for Income Taxes.") Under ASC 740 deferred income taxes are recorded to reflect tax consequences on future years for the differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end.





Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.





Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.





The Company adopted ASC 740-10, (Formerly FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (“FIN 48”) as of January 1, 2007). As a result, the Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC 740-10 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As a result of implementing ASC 740-10, the Company’s management has reviewed the Company’s tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore the implementation of this standard has not had a material affect on the Company.




11


NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009


Based on its evaluation, the Company has concluded that there were no significant uncertain tax positions requiring recognition in its financial statements as of March 31, 2010 and 2009.





The Company does not have any unrecognized tax benefits as of March 31, 2010 and 2009 which if recognized would affect the Company’s effective income tax rate.





Impairment of Long-Lived Assets





Company adopted ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets" (Formerly SFAS No. 144)  ASC 360 retains the fundamental provisions of SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of" and expands the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction.





The Company evaluates its long-lived assets by measuring the carrying amounts of assets against the estimated undiscounted future cash flows associated with them. At the time the carrying value of such assets exceeds the fair value of such assets, impairment is recognized.





Advertising Costs





Advertising and sales promotion costs are expensed as incurred. The Company did not incur any advertising costs for the three months ended March 31, 2010 and 2009.





NOTE 4.RECENTLY ISSUED ACCOUNTING STANDARDS





The Company has adopted all accounting pronouncements effective before March 31, 2010, which are applicable to the Company.





On February 25, 2010, the FASB issued ASU 2010-09 Subsequent Events Topic 855 “Amendments to Certain Recognition and Disclosure Requirements,” effective immediately. The amendments in the ASU remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of US GAAP. The FASB believes these amendments remove potential conflicts with the SEC’s literature. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.




On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives and Hedging Topic 815 “Scope Exception Related to Embedded Credit Derivatives.” This ASU clarifies the guidance within the derivative literature that exempts certain credit related features from analysis as potential embedded derivatives requiring separate accounting. The ASU specifies that an embedded credit derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another is not subject to bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging — Embedded Derivatives — Recognition.   All other embedded credit derivative features should be analyzed to determine whether their economic characteristics and risks are “clearly and closely related” to the economic characteristics and risks of the host contract and whether bifurcation is required. The ASU is effective for the Company on July 1, 2010. Early adoption is permitted.  The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.








12


NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009





NOTE 5.NOTES PAYABLE – RELATED PARTIES





During the quarter ended March 31, 2010, the Company issued notes totaling $2,232 to its President having no stated interest rate and due at various dates during the first quarter.  No payments have been made. The notes have been verbally extended and not considered in default.





At March 31, 2010, notes payable, all currently due, to related parties consisted of the following:





Notes payable to Company's President,Non-interest bearing, due through September 2010

$
16,011Non-interest bearing notes payable due throughSeptember 2010


9,039Non-interest bearing notes due on demand


6,000$
31,050





NOTE 6.NOTES PAYABLE





During the quarter ended March 31, 2010, the Company issued a promissory note of $50,000 bearing interest at 12% due February 2011.





At March 31, 2010, notes payable to non-related parties consisted of the following:




Notes Payable bearing interest at 12%, due through Nov 2010

$
725,620Notes Payable bearing interest at 10%, due on demand


128,000Notes Payable bearing interest at 12.5%, due on demand


38,750Total Due


892,370Currently Due


715,849Long-term

$
176,521




13


NT MEDIA CORP. OF CALIFORNIA INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010 (unaudited) and December 31, 2009








NOTE 7.CONVERTIBLE NOTES PAYABLE





At March 31, 2010, convertible notes payable, bearing interest at 6%, totaled $282,000 and are all currently due. Interest expense for the three months ended March 31, 2010 and 2009 totaled $4,233 and $4,233, respectively.





NOTE 8.CONVERTIBLE NOTES PAYABLE – RELATED PARTIES





At March 31, 2010, convertible notes payable to related parties, bearing interest at 6%, totaled $625,600 and are all currently due.





Interest expense for the three months ended March 31, 2010 and 2009 totaled $9,834 and $9,834 respectively.





NOTE 9.EARNINGS (LOSS) PER SHARE





The Company computes earnings per common share in accordance with ASC 260-10-45 (previously Statement of Financial Accounting Standards No. 128), "Earnings per Share". The Statement requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. The computation of diluted loss per share is similar to the basic loss per share computation except the denominator is increased to include the number of additional shares that would have been outstanding if the dilutive potential common shares had been issued. In addition, the numerator is adjusted for any changes in income or loss that would result from the assumed conversions of those potential shares. However, such presentation is not required if the effect is antidilutive. There were no outstanding warrants and options outstanding at March 31, 2010.





NOTE 10.SUBSEQUENT EVENTS





In April 2010, the Company executed a promissory note of $22,000 payable to an unrelated party.  The promissory note bears interest at 12.0%, due April 13, 2011.





In May 2010, the Company executed a promissory note of $10,000 payable to an unrelated party.  The promissory note bears interest at 12.0% and is due May 4, 2011.





In May 2010, the Company issued an aggregate of 1,011,764 shares of common stock to a third party in connection with professional services valued at approximately $21,500.





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





Forward-Looking Statements





THIS QUARTERLY REPORT ON FORM 10-Q, INCLUDING THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS, AND OTHER REPORTS FILED BY THE REGISTRANT FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION (COLLECTIVELY THE "FILINGS") CONTAIN FORWARD-LOOKING STATEMENTS WHICH ARE INTENDED TO CONVEY OUR EXPECTATIONS OR PREDICTIONS REGARDING THE OCCURRENCE OF POSSIBLE FUTURE EVENTS OR THE EXISTENCE OF TRENDS AND FACTORS THAT MAY IMPACT OUR FUTURE PLANS AND OPERATING RESULTS. THESE FORWARD-LOOKING STATEMENTS ARE DERIVED, IN PART, FROM VARIOUS ASSUMPTIONS AND ANALYSIS WE HAVE MADE IN THE CONTEXT OF OUR CURRENT BUSINESS PLAN AND INFORMATION CURRENTLY AVAILABLE TO US AND IN LIGHT OF OUR EXPERIENCE AND PERCEPTIONS OF HISTORICAL TRENDS, CURRENT CONDITIONS AND EXPECTED FUTURE


DEVELOPMENTS AND OTHER FACTORS WE BELIEVE TO BE APPROPRIATE IN THE


CIRCUMSTANCES. YOU CAN GENERALLY IDENTIFY FORWARD-LOOKING STATEMENTS THROUGH WORDS AND PHRASES SUCH AS "SEEK", "ANTICIPATE", "BELIEVE", "ESTIMATE", "EXPECT", "INTEND", "PLAN", "BUDGET", "PROJECT", "MAY BE", "MAY CONTINUE", "MAY LIKELY RESULT", AND SIMILAR EXPRESSIONS. WHEN READING ANY FORWARD-LOOKING STATEMENT YOU SHOULD REMAIN MINDFUL THAT ALL FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN AS THEY ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS CONCERNING FUTURE EVENTS OR FUTURE PERFORMANCE OF OUR COMPANY, AND ARE SUBJECT TO RISKS, UNCERTAINTIES, ASSUMPTIONS AND OTHER FACTORS RELATING TO OUR INDUSTRY AND RESULTS OF OPERATIONS.





EACH FORWARD-LOOKING STATEMENT SHOULD BE READ IN CONTEXT WITH, AND WITH AN UNDERSTANDING OF, THE VARIOUS OTHER DISCLOSURES CONCERNING OUR COMPANY AND OUR BUSINESS MADE IN OUR FILINGS. YOU SHOULD NOT PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENT AS A PREDICTION OF ACTUAL RESULTS OR DEVELOPMENTS. WE ARE NOT OBLIGATED TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT CONTAINED IN THIS REPORT TO REFLECT NEW EVENTS OR CIRCUMSTANCES UNLESS AND TO THE EXTENT


REQUIRED BY APPLICABLE LAW.





Overview





The Company is evolving as a leader in the development of destination websites that engage users and inspire loyalty. The Company is doing this by launching a wide array of websites that take advantage of the Worldwide Web’s ability to reach users with information, services and products that encourages interaction between the visitor and the websites.




Using Web 2.0 techniques and technologies, the Company plans to create web applications, software and thus websites for the exchange of information. Social Networking sites like MySpace, Facebook, Wikipedia and YouTube deliver large audiences with little investment in content creation because their users develop and post the material. These sites have changed how people meet, interact and share information. Blogs have made it possible to post content on subjects easily, and invite audience participation with responses. Classified advertising sites such as Ebay and Craigslist have changed how people shop for goods and services, making it easier for small business owners and entrepreneurs to compete. The Company develops websites in these genres, and others, meeting the challenge of the Web 2.0 marketplace.




The first site launched in August of 2008, is NeuroTrash.TV. It is a video-sharing site targeting young adults between 18 and 35. Users will be able to post and share videos on the site as well as take advantage of NeuroTrash.TV’s video player to place videos on their own sites, Social Networking profile pages and blogs. The site has a social networking component providing information on the site’s users and contributors. Other sites to be developed include social networking sites on specific subjects such as a revised version of single dads, a meeting place for single fathers to connect and share information. More sites will be launched as target audiences and demographics are identified and as the Company’s financial resources allow.




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The Company’s revenue model is based on standard display banner ads, in-stream video advertising, product sales, and services. One feature of the NeuroTrash.TV website is the ability to earn revenue from video ads embedded in other websites on which our users place videos. Other revenue sources include marketing services, products and offers from other NT Media-owned sites such as ntmedia.storeblocks.com a music download site, and lead generation for goods and services such as new and used car prices, insurance, travel, loans and more. However, no revenues have been earned to date.  In January 2009, the Company launched a targeted social network for single fathers. SingleFatherNetwork dedicated to serving the needs of unmarried fathers. The online community of Single Fathers will be able to post pictures, video, blogs, in the pursuit of sharing experiences, and networking amongst this very specific group. The Company expects to see continued growth in the overall online advertising market, and specifically in the social networking segment. Instead of competing with larger general topic communities, the Company creates online environments that attract predictable, sustainable and interactive traffic with multiple opportunities to repeatedly engage in a demand-filling niche conversation. The site has not generated any revenue to date.





In January 2009, the Company launched a targeted social network dedicated to discussion of all aspects of stem cell research. The network, www.stemcellstalk.com, is equipped with text, photos, videos, blogs, forums and extensive social networking in the area of stem cell research. The site is intended to foster education and debate as well as networking opportunities for medical professionals, patients, and companies engaged in stem cell treatment and research. The site is an open social forum for anyone wishing to join and will also be selectively inviting stem cell professionals to address participants in online forums and discussions. The site has not generated any revenue to date.





In October 2009, The Company partnered with Hollywood producers Sinahome Entertainment, LLC and Marble Step Production to produce, "Straight Up With A Twist," a series of shorts that explore the comedies of urban nightlife for its alternative-format video-sharing site NeuroTrash.tv as part of an ongoing program to publish and distribute original content. The video features anecdotal nightlife experiences with the comedic performances of an ensemble cast and is scheduled to be released in 2010. NT Media is producing the series as part of an ongoing initiative to release original content on NeuroTrash.tv.




The Company’s revenue model is based on standard display banner ads, in-stream video advertising, product sales, and services. One feature of the NeuroTrash.TV website is the ability to earn revenue from video ads embedded in other websites on which our users place videos. Other revenue sources include marketing services, products and offers from other NT Media-owned sites such as ntmedia.storeblocks.com a music download site, and lead generation for goods and services such as new and used car prices, insurance, travel, loans and more.





Obtaining outside financing will continue to be necessary to meet the Company’s anticipated working capital needs for the foreseeable future. We anticipate the Company’s major stockholders will make capital investments or loans of convertible debt to pay the Company’s operating expenses for the foreseeable future, but we cannot assure you they will commit to make the necessary capital investments or loans. Given the Company’s current financial position, for the immediate future, we expect to operate the Company’s current lines of business under strict budgetary constraints in order to keep operating expenses as low as possible until new core businesses are acquired. We will attempt to negotiate extensions of the Company’s debt obligations or negotiate for the conversion of some or all of the Company’s debt into equity; however, there can be no assurance that we will be successful.




The Company is evolving as a leader in the development of destination websites that engage users and inspire loyalty. The Company is doing this by launching a wide array of websites that take advantage of the Worldwide Web’s ability to reach users with information, services and products that encourages interaction between the visitor and the websites. The Company has also commenced launching Targeted Social Networks on the internet. Social Networking sites deliver large audiences with little investment in content creation because their users develop and post the material. These sites have changed how people meet, interact and share information. The Company has launched Single Dads, a social network dedicated to exchange of information and ideas among single dads from around the world. The Company anticipates cash requirements of approximately $4.4 million in the next 12 months, the bulk of which would be put toward the repayment of notes that would be due and servicing our debt. The remainder will be used for marketing and professional services and personnel. We expect to raise the said funds through private placements of debt and equity throughout the year, but there can be no assurance that we will be successful in such private placements.




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Over the next twelve-month period, we anticipate needing the following capital amounts, broken down as follows:




Purpose

AmountGrowth Capital for Acquired Subsidiaries

$
274,400Additional Employees

$
49,000Marketing and Public Relations Campaigns

$
164,640Participation in Industry and Trade Functions

$
27,440Ongoing Operations

$
147,000Capital needed for total amount of convertible notes reaching maturity (unless notes are extended)

$
907,800Capital needed for total amount of notes payable reaching maturity (unless notes are extended)

$
746,900Capital needed to pay accounts payable and accrued expenses due

$
2,090,400$
4,407,580




Our research will primarily consist of finding knowledgeable agents that can analyze the business of our potential joint venture partners throughout the U.S. and abroad with a concentration in Europe, the Middle East and China.





Results of Operations




OPERATING RESULTS FOR THE QUARTERS ENDED MARCH 31 2010 AND 2009




Operating expenses decreased to $101,408 for the quarter ended March 31, 2010 compared to $113,920 for the quarter ended March 31, 2009 primarily due to decreased expenses recognized under consulting and employment agreements.




Other expenses, consisting of interest expense, for the quarter ended March 31, 2010 decreased  by $60,065 compared with the quarter ended March 31, 2009 primarily due to lower interest expense resulting from  a decrease in the conversion of principal amounts due on certain notes payable to the Company's Common Stock during the current year's quarter. No interest expense was recognized from the conversion of principal amounts due under various notes in the quarter ended March 31, 2010.




Net loss for the quarter ended March 31, 2010 was $141,409 a decrease of $72,577 compared to the net loss of $213,986 for the quarter ended March 31, 2009 mainly due to decreased interest expense and decreased operating expenses discussed above.





Off-Balance Sheet Arrangements




We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources, and that would be considered material to investors.





Liquidity and Capital Resources





We have incurred operating losses since inception. As of March 31, 2010, we have an accumulated deficit of $7,521,375.  At March 31, 2010, there is $15 in cash or cash equivalents and a net working capital deficit of $3,920,780.




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During the last two years, the Company and its wholly-owned subsidiary, eCast Media Corporation, Inc. (“eCast”), have been dependent on borrowed or invested funds to finance their ongoing operations.  As of March 31, 2010, eCast owed $620,000 represented by 6% convertible notes and the Company owed $287,800 represented by 6% convertible notes. These notes were issued to two of the Company’s major stockholders. The balance of $907,800 is now classified as a current liability.  We anticipate we will continue borrowing funds or obtaining additional equity financing to provide working capital.




The audit report of the Company’s independent registered public accounting firm for the year ended December 31, 2009 includes a “going concern” explanation. In the auditor’s opinion, the Company’s limited operating history and the accumulated net deficit as of December 31, 2009, raised substantial doubt about the Company’s ability to continue as a going concern. We require approximately $3,850,000 in capital over the next twelve months to pay off accounts payable and accrued expenses, and the convertible notes and notes payable reaching maturity unless we are able to obtain additional extensions.




Due to our limited cash flow, operating losses and intangible assets, it is unlikely we could obtain financing through commercial or banking sources. Consequently, we are dependent on continuous cash infusions from our major stockholders and other outside sources to fund our current operations. If these outside sources are unwilling or unable to provide necessary working capital to us, we will probably not be able to sustain our operations. We have no written agreements or contractual obligations in place which would require our outside sources to continue to finance our operations. The NT Media and eCast convertible notes payable are voluntarily convertible when our or eCast's securities (as the case may be) are trading publicly and the underlying stock of the convertible notes have been registered with the SEC and declared effective. If they remain unpaid, the notes will automatically convert to Common Stock on the fifth anniversary of their respective issuances.  Thus, the current convertible notes would be mandatorily converted during 2010 in the amount of $907,800 unless they become eligible for conversion prior to that time, or have been extended by the parties.




If adequate funds do not become available, management believes that its officers and directors will contribute capital amounts necessary to fund the Company’s ongoing expenses; however, the Company’s officers and directors are under no obligation to do so.  If we are unable to pay the Company’s debt as it becomes due and are unable to obtain financing on terms acceptable to us, or at all, we will not be able to accomplish any or all of the Company’s initiatives and will be forced to consider steps that would protect the Company’s assets against creditors.





Critical Accounting Policies





There were no critical accounting policies that by the nature of the estimates or assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





As a Smaller Reporting Company, the Company is not required to respond to this Item 3.





ITEM 4T.CONTROLS AND PROCEDURES





Disclosure Controls and Procedures





Under the supervision and with the participation of our management, including or Chief Executive Officer and Acting Chief Financial Officer (the “Certifying Officer”) we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this report. Based upon that evaluation, our Certifying Officer concluded that our disclosure controls and procedures were not effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (a) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (b) accumulated and communicated to our management, including our chief executive officer, as appropriate to allow timely decisions regarding disclosure.




18


Changes In Internal Control Over Financial Reporting





There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.





Additional Disclosure Concerning Controls and Procedures





We currently believe the Company has material weaknesses in its disclosure controls and procedures. We will continue to work in the coming weeks and months to address such weaknesses. We believe that the out-of-pocket costs, the diversion of management's attention from running the day-to-day operations and operational changes caused by the need to make changes in our internal control and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) could be significant and still we may not achieve significant improvements in our internal controls and procedures. If the time and costs associated with such compliance exceed our current expectations, our results of operations and the accuracy and timeliness of the filing of our annual and periodic reports may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative affect on the trading price of our Common Stock.





PART II


OTHER INFORMATION





ITEM 1.LEGAL PROCEEDINGS





In the normal course of business, we may become involved in various legal proceedings. Except as stated below, there are no other past, pending or, to our knowledge, threatened litigation or administrative actions which in our opinion have had or are expected to have a material adverse effect upon our business, prospects financial condition or operations.





We are aware of a threatened litigation matter involving the nonpayment of certain legal fees.  The claim for this matter is approximately $9,000.





ITEM 1A.RISK FACTORS





As a Smaller Reporting Company, the Company is not required to respond to this Item 1A.





ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES





None.





ITEM 3.DEFAULTS UPON SENIOR SECURITIES





None.





ITEM 4. REMOVED AND RESERVED





None.





ITEM 5. OTHER INFORMATION





None.





ITEM 6.EXHIBITS





Exhibit Number
DescriptionExhibit 10.1
Promissory Note for the Principal amount of $50,000Exhibit 31
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 32
Certification 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





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






NT MEDIA CORP. OF CALIFORNIA, INC.Dated:  May 24, 2009
By:
/s/ Ali MoussaviAli Moussavi,

President, Chief Executive Officer (Principal Executive Officer), andActing Chief Financial Officer (Acting Principal Financial Officer)
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