Edgar Filing: NEXT GENERATION MEDIA CORP

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006

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

COMMISSION FILE NUMBER: 000-28083

NEXT GENERATION MEDIA CORP.
(Exact name of Company as specified in its charter)

Nevada 88-0169543
(State or jurisdiction of incorporation (I.R.S. Employer or
organization) Identification No.)

7644 Dynatech Court, Springfield, Virginia 22153
(Address of principal executive offices) (Zip Code)

Company's telephone number: (703) 644-0200

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Company was required to file such reports),
and (2) been subject to such filing requirements for the past 90
days. Yes X No___

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB [ ].

The Company had $7,950,303 in revenue for the fiscal year ended on
December 31, 2006. The aggregate market value of the voting stock
held by non-affiliates of the Company as of March 29, 2007: Common
Stock, par value $0.001 per share -- $398,597. As of December 31,
2006, the Company had 12,373,397 shares of common stock issued and
outstanding, of which 6,511,672 were held by non-affiliates.

NEXT GENERATION MEDIA, CORP.
FORM 10-KSB

TABLE OF CONTENTS

PART I

ITEM 1. Description of Business....................

ITEM 2. Description of Property...................

ITEM 3. Legal Proceedings.....................

ITEM 4. Submission of Matters to a Vote of Security Holders

PART II

ITEM 5. Market for Common Equity and Other Shareholder Matters

ITEM 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations................

ITEM 7. Financial Statements....................

ITEM 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure..............

PART III

ITEM 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance with Section
16(a) of the Exchange Act...................

ITEM 10. Executive Compensation..................

ITEM 11. Security Ownership of Certain Beneficial
Owners and Management....................

ITEM 12. Certain Relationships and Related Transactions.........

ITEM 13. Exhibits and Reports on Form 8-K...............

ITEM 14. Controls and Procedures..................

Signatures.................................

PART I.

RISK FACTORS AND CAUTIONARY STATEMENTS

Forward-looking statements in this report are made pursuant to the
"safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. The Company wishes to advise readers that actual results
may differ substantially from such forward-looking statements.
Forward-looking statements include statements concerning underlying
assumptions and other statements that are other than statements of
historical facts. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by the statements, including, but not
limited to, the following: the ability of the Company to provide for
its obligations, to provide working capital needs from operating
revenues, to obtain additional financing needed for any future
acquisitions, to meet competitive challenges and technological
changes, and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission.

ITEM 1. BUSINESS.

Introduction

Next Generation Media Corporation (the "Company") was incorporated on
November 21, 1980, under the laws of the State of Nevada under the
name Micro Tech Industries, Inc. On February 6, 1997, an unrelated
third party purchased 85.72% of the outstanding stock of Micro Tech
Industries, Inc. from its majority shareholder for $50,000 in cash.
Effective March 31, 1997, Micro Tech Industries, Inc. changed its
name to Next Generation Media Corporation. Management believes that
prior to February 6, 1997, the Company was a "shell" company for at
least five years without assets and liabilities. Management is
unaware of any operating history prior to February 6, 1997.

Reporting Period Principle Services

During the reporting period, the Company operated as a holding
company with one wholly-owned operating subsidiary, United Marketing
Solutions, Inc. ("United").

The Company acquired United on April 1, 1999. Originally founded in
1981 as United Coupon Corporation, United has operated within the
cooperative direct mail industry for twenty years. United has
diversified and expanded its product lines and markets to evolve from
a coupon company to a full-service marketing provider specializing in
two communication mediums: direct mail and direct marketing. United
offers advertising and marketing products and services through a
network of franchisees in more than twenty states, with the largest
concentration being in the northeast United States. United provides
full-service design, layout, printing, packaging and distribution of
marketing products and promotional coupons sold by the franchise
network to local market businesses, services providers and
professionals as resources to help them generate "trial and repeat"
customers. United's core product, the cooperative coupon envelope,
reaches in excess of nineteen million mailboxes per year with an
estimated four hundred million coupons.

Competition

The Company's current and future lines of business are highly
competitive. First, the advertising business is highly competitive
with many firms competing in various forms of media and possessing
substantial resources. The direct mail industry is highly fragmented
and includes a large number of small and independent cooperative
direct mailers in addition to competition from companies for whom
coupon advertising is not their primary line of business. In
addition, several large firms, notably Val-Pak Direct Marketing
Systems, Inc., Money Mailer and Advo, Inc., are direct competitors of
United in its direct mail marketing business.

Government Regulation

United is subject to state regulation as a franchiser, requiring
United to file periodic state registration documents pertaining to
the offering of area and regional franchise licenses. Management
believes that United is in substantial compliance with the applicable
state franchise laws.

Employees

As of December 31, 2006, the Company, through United, had
approximately 67 employees. The Company does not have any collective
bargaining agreements covering any of its employees, has not
experienced any material labor disruption and is unaware of any
efforts or plans to organize its employees. The Company considers
relations with its employees to be good.

ITEM 2. DESCRIPTION OF PROPERTIES

The Company's principal executive and administrative offices are
located at 7644 Dynatech Court, Springfield, Virginia 22153. The
current rent for 2007 for this facility is $218,770, has built in
increases per year of four percent (4%) and has a term set to expire
in 2012. The Company considers these offices to be adequate and
suitable for its current needs.

ITEM 3. LEGAL PROCEEDINGS

Other than as set forth below, the Company is not a party to any
material pending legal proceedings and, to the best of its knowledge,
no such action by or against the Company has been threatened. The
Company is subject to legal proceedings and claims that arise in the
ordinary course of its business. Although occasional adverse
decisions or settlements may occur, the Company believes that the
final disposition of such matters will not have material adverse
effect on its financial position, results of operations or liquidity.

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

During the last quarter of fiscal year-ended December 2006, the
Company did not submit any matters to a vote of security holders.

PART II.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information

The Company's Common Stock has been and is currently traded on the
over-the-counter market and quotations are published on the OTC
Bulletin Board under the symbol "NGMC" and began trading on June 11, 2001.

The following table sets forth the range of high and low bid prices
of the Common Stock for each fiscal quarterly period. Prices reported
represent prices between dealers, do not include retail markups,
markdowns or commissions and do not represent actual transactions.

Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended on December 31, 2006

High Low

Quarter Ended December 31, 2006 0.10 0.055
Quarter Ended September 30, 2006 0.17 0.08
Quarter Ended June 30, 2006 0.09 0.08
Quarter Ended March 31, 2006 0.14 0.07

Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended on December 31, 2005

High Low

Quarter Ended December 31, 2005 0.16 0.057
Quarter Ended September 30, 2005 0.19 0.115
Quarter Ended June 30, 2005 0.15 0.11
Quarter Ended March 31, 2005 0.40 0.125

The ability of individual stockholders to trade their shares in a
particular state may be subject to various rules and regulations of
that state. A number of states require that an issuer's securities be
registered in their state or appropriately exempted from registration
before the securities are permitted to trade in that state.
Presently, the Company has no plans to register its securities in any
particular state. Further, most likely the Company's shares will be
subject to the provisions of Section 15(g) and Rule 15g-9 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
commonly referred to as the "penny stock" rule. Section 15(g) sets
forth certain requirements for transactions in penny stocks and Rule
15g-9(d)(1) incorporates the definition of penny stock as that used
in Rule 3a51-1 of the Exchange Act.

The Commission generally defines penny stock to be any equity
security that has a market price less than $5.00 per share, subject
to certain exceptions. Rule 3a51-1 provides that any equity security
is considered to be a penny stock unless that security is: registered
and traded on a national securities exchange meeting specified
criteria set by the Commission; authorized for quotation on The
NASDAQ Stock Market; issued by a registered investment company;
excluded from the definition on the basis of price (at least $5.00
per share) or the issuer's net tangible assets (at least $2 million);
or exempted from the definition by the Commission. If the Company's
shares are deemed to be a penny stock, trading in the shares may be
subject to additional sales practice requirements of broker-dealers
who sell penny stocks to persons other than established customers and
accredited investors.

For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities
and must have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the rules require the
delivery, prior to the first transaction, of a risk disclosure
document relating to the penny stock market. A broker-dealer also
must disclose the commissions payable to both the broker-dealer and
the registered representative, and current quotations for the
securities. Finally, monthly statements must be sent disclosing
recent price information for the penny stocks held in the account and
information on the limited market in penny stocks. Consequently,
these rules may restrict the ability of broker-dealers to trade
and/or maintain a market in the Company's Common Stock and may affect
the ability of stockholders to sell their shares.

Holders of Common Equity

As of March 29, 2007, there were approximately 600 shareholders of
record of the Company's common stock.

Dividend Information

The Company has not declared or paid cash dividends on its Common
Stock or made distributions in the past, and the Company does not
anticipate that it will pay cash dividends or make cash distributions
in the foreseeable future, other than non cash dividends described
below. The Company currently intends to retain and invest future
earnings, if any, to finance its operations.

Transfer Agent

The transfer agent and registrar for our common stock is OTR Transfer
Agency.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

When used in this Form 10-KSB and in our future filings with the
Securities and Exchange Commission, the words or phrases will likely
result, management expects, or we expect, will continue, is
anticipated, estimated or similar expressions are intended to
identify forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Readers are cautioned not
to place undue reliance on any such forward-looking statements, each
of which speak only as of the date made. These statements are
subject to risks and uncertainties, some of which are described
below. Actual results may differ materially from historical earnings
and those presently anticipated or projected. We have no obligation
to publicly release the result of any revisions that may be made to
any forward-looking statements to reflect anticipated events or
circumstances occurring after the date of such statements.

General Overview

Results of Operations

The Company's revenues are difficult to forecast and may vary
significantly from quarter to quarter and year to year. In addition,
the Company's expense levels for each quarter are, to a significant
extent, fixed in advance based upon the Company's expectation as to
the net revenues to be generated during that quarter. The Company
therefore is generally unable to adjust spending in a timely manner
to compensate for any unexpected shortfall in net revenues. Further
as a result of these factors any delay in product introductions,
whether due to internal delays or delays caused by third party
difficulties, or any significant shortfall in demand in relation to
the Company's expectations, would have an almost immediate adverse
impact on the Company's operating results and on its ability to
maintain profitability in a quarter.

Comparison of the Year Ended December 31, 2006 with the Year Ended
December 31, 2005

During the year ending December 31, 2006 the Company experienced a
decrease in revenues of 3.3%, with sales of $8,219,717 in 2005
compared to $7,950,303 in the year ending December 31, 2006. Core
product (cooperative envelope) revenue targets were achieved in
2006.The decline in 2006 revenue was a result of lower than expected
performance from national inserts and franchise sales. The company
has entered into a partnership with Leon Henry, Inc., a leader in the
insert media marketing industry. This partnership is a cost effective
means for the company to increase its market penetration for national
advertising revenues. Preliminary national insert revenue projections
for 2007 indicate incremental increases over 2006 results. The
company has increased its commitment for marketing and advertising to
boost franchise sales. The company will continue to offer incentive
programs designed to facilitate growth of existing franchises, and
will also continue to evaluate the staffing requirements necessary to
achieve network growth projections.

Cost of revenues consists of materials, labor costs and applied
overhead expenses. The cost of revenues as a percentage of net
revenues were up from 75% for the year ended December 31, 2006
compared to 71% in the year ended December 31, 2005, from $5,989,048
in 2006 to $5,806,010 in 2005. This rise was due to the continuing
increase in the cost of materials and growth in direct labor costs.
While the cost of goods sold percentage will fluctuate from quarter
to quarter and year to year as overhead expenses and labor ratios
change, the Company is taking steps to lower costs. The growth in
direct labor costs led to the acquisition and implementation of
workflow software which should help contain future production
staffing requirements. Additionally, the Company is in the process
of acquiring printing equipment that should also directly influence
cost containment. The Company will continue to seek production
solutions that will maximize workflow and achieve favorable cost of
goods ratios.

General and administrative (operating) expenses decreased during 2006
from $2,409,789 in 2005 as compared to $2,033,875 in 2006 as
management worked to control expenses. Incremental savings were
achieved with the outsourcing of the national insert program.
Additional cost containment was realized from the transition period
for some management positions and the capitalization of the internal
costs included in the design and development of critical software
solutions.

Net Income (Loss)

The Company realized net income of $24,034 for the year ended
December 31, 2006 as compared to $17,974 for the year ended December
31, 2005.

Liquidity and Capital Resources

The Company has relied primarily on funds generated from revenues,
the issuance of common stock and use of its line of credit to finance
its operations and expansion. Cash and cash equivalents at December
31, 2005 were $610,885 as compared to $181,196 at December 31, 2006.
The net cash flows provided used by operating activities was $97,245,
as compared to net cash flows provided by operating activities of
$473,339 as of December 31, 2005. The net cash flows used by
investing activities was $419,426, as compared to the net cash flows
used by investing activities as of December 31, 2005 of 365,079. The
Company has used its working capital to finance ongoing operations
and the marketing of its products.

New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46,
"Consolidation of Variable Interest Entities." Interpretation 46
changes the criteria by which one company includes another entity in
its consolidated financial statements. Previously, the criteria were
based on control through voting interest. Interpretation 46 requires
a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. A company that
consolidates a variable interest entity is called the primary
beneficiary of that entity. The consolidation requirements of
Interpretation 46 apply immediately to variable interest entities
created after January 31, 2003. The consolidation requirements apply
to older entities in the first fiscal year or interim period
beginning after June 15, 2003. Certain of the disclosure requirements
apply in all financial statements issued after January 31, 2003,
regardless of when the variable interest entity was established. The
Company does not expect the adoption to have a material impact to the
Company's financial position or results of operations.

In April 2003, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES. SFAS 149 amends SFAS No. 133 to
provide clarification on the financial accounting and reporting of
derivative instruments and hedging activities and requires that
contracts with similar characteristics be accounted for on a
comparable basis. The provisions of SFAS 149 are effective for
contracts entered into or modified after June 30, 2003, and for
hedging relationships designated after June 30, 2003. The adoption of
SFAS 149 will not have a material impact on the Company's results of
operations or financial position.

In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN
FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND
EQUITY. SFAS 150 establishes standards on the classification and
measurement of certain financial instruments with characteristics of
both liabilities and equity. The provisions of SFAS 150 are effective
for financial instruments entered into or modified after May 31, 2003
and to all other instruments that exist as of the beginning of the
first interim financial reporting period beginning after June 15,
2003. The adoption of SFAS 150 will not have a material impact on the
Company's results of operations or financial position.

Forward Looking Statements.

The foregoing Managements Discussion and Analysis of Financial
Condition and Results of Operations "forward looking statements"
within the meaning of Rule 175 under the Securities Act of 1933, as
amended, and Rule 3b-6 under the Securities Act of 1934, as amended,
including statements regarding, among other items, the Company's
business strategies, continued growth in the Company's markets,
projections, and anticipated trends in the Company's business and the
industry in which it operates. The words "believe," "expect,"
"anticipate," "intends," "forecast," "project," and similar
expressions identify forward-looking statements. These forward-
looking statements are based largely on the Company's expectations
and are subject to a number of risks and uncertainties, including but
not limited to, those risks associated with economic conditions
generally and the economy in those areas where the Company has or
expects to have assets and operations; competitive and other factors
affecting the Company's operations, markets, products and services;
those risks associated with the Company's ability to successfully
negotiate with certain customers, risks relating to estimated
contract costs, estimated losses on uncompleted contracts and
estimates regarding the percentage of completion of contracts,
associated costs arising out of the Company's activities and the
matters discussed in this report; risks relating to changes in
interest rates and in the availability, cost and terms of financing;
risks related to the performance of financial markets; risks related
to changes in domestic laws, regulations and taxes; risks related to
changes in business strategy or development plans; risks associated
with future profitability; and other factors discussed elsewhere in
this report and in documents filed by the Company with the Securities
and Exchange Commission. Many of these factors are beyond the
Company's control. Actual results could differ materially from these
forward-looking statements. In light of these risks and
uncertainties, there can be no assurance that the forward-looking
information contained in this Form 10-KSB will, in fact, occur. The
Company does not undertake any obligation to revise these forward-
looking statements to reflect future events or circumstances and
other factors discussed elsewhere in this report and the documents
filed or to be filed by the Company with the Securities and Exchange
Commission.

Inflation

In the opinion of management, inflation has not had a material effect
on the operations of the Company.

Trends, Risks and Uncertainties

The Company has sought to identify what it believes to be the most
significant risks to its business as discussed in "Risk Factors"
above, but cannot predict whether or to what extent any of such risks
may be realized nor can there be any assurances that the Company has
identified all possible risks that might arise. Investors should
carefully consider all of such risk factors before making an
investment decision with respect to the Company's stock.

Limited operating history; anticipated losses; uncertainly of future
results

The Company has a moderately limited operating history upon which an
evaluation of the Company and its prospects can be based. The
Company's prospects must be evaluated with a view to the risks
encountered by a company in varying stages of development,
particularly in light of the uncertainties relating to the business
model that the Company intends to market and the potential acceptance
of the Company's business model. The Company will be incurring costs
to develop, introduce and enhance its products, to establish
marketing relationships, to acquire and develop products that will
complement each other, and to build an administrative organization.
To the extent that such expenses are not subsequently followed by
commensurate revenues, the Company's business, results of operations
and financial condition will be materially adversely affected. There
can be no assurance that the Company will be able to generate
sufficient revenues from the sale of its products and services. If
cash generated by operations is insufficient to satisfy the Company's
liquidity requirements, the Company may be required to sell
additional equity or debt securities. The sale of additional equity
or convertible debt securities would result in additional dilution to
the Company's shareholders.

Potential fluctuations in quarterly operating results may fluctuate
significantly in the future as a result of a variety of factors, most
of which are outside the Company's control including: the demand for
the Company's products and services; seasonal trends in demand and
pricing of products and services; the amount and timing of capital
expenditures and other costs relating to the expansion of the
Company's operations; the introduction of new services and products
by the Company or its competitors; price competition or pricing
changes in the industry; political risks and uncertainties involving
the world's markets; technical difficulties and general economic
conditions. The Company's quarterly results may also be
significantly affected by the impact of the accounting treatment of
acquisitions, financing transactions or other matters. Such
accounting treatment can have a material impact on the results for
any quarter. Due to the foregoing factors, among others, it may be
that the Company's operating results will fall below the expectations
of the Company or investors in some future quarter.

Management of Growth

The Company may experience growth in the number of employees relative
to its current levels of employment and the scope of its operations.
In particular, the Company may need to hire sales, marketing and
administrative personnel. Additionally, acquisitions could result in
an increase in employee headcount and business activity. Such
activities could result in increased responsibilities for management.
The Company believes that its ability to increase its customer
support capability and to attract, train, and retain qualified
technical, sales, marketing, and management personnel, will be a
critical factor to its future success. In particular, the
availability of qualified sales and management personnel is quite
limited, and competition among companies to attract and retain such
personnel is intense. During strong business cycles, the Company may
experience difficulty in filling its needs for qualified sales, and
other personnel.

The Company's future success will be highly dependent upon its
ability to successfully manage the expansion of its operations. The
Company's ability to manage and support its growth effectively will
be substantially dependent on its ability to implement adequate
financial and management controls, reporting systems, and other
procedures and hire sufficient numbers of financial, accounting,
administrative, and management personnel. The Company is in the
process of establishing and upgrading its financial accounting and
procedures. There can be no assurance that the Company will be able
to identify, attract, and retain experienced accounting and financial
personnel. The Company's future operating results will depend on the
ability of its management and other key employees to implement and
improve its systems for operations, financial control, and
information management, and to recruit, train, and manage its
employee base. There can be no assurance that the Company will be
able to achieve or manage any such growth successfully or to
implement and maintain adequate financial and management controls and
procedures, and any inability to do so would have a material adverse
effect on the Company's business, results of operations, and
financial condition.

The Company's future success depends upon its ability to address
potential market opportunities while managing its expenses to match
its ability to finance its operations. This need to manage its
expenses will place a significant strain on the Company's management
and operational resources. If the Company is unable to manage its
expenses effectively, the Company's business, results of operations,
and financial condition will be materially adversely affected.

Risks associated with acquisitions

Although the Company does not presently intend to do so, as part of
its business strategy in the future, the Company could acquire assets
and businesses relating to or complementary to its operations. Any
acquisitions by the Company would involve risks commonly encountered
in acquisitions of companies. These risks would include, among other
things, the following: the Company could be exposed to unknown
liabilities of the acquired companies; the Company could incur
acquisition costs and expenses higher than it anticipated;
fluctuations in the Company's quarterly and annual operating results
could occur due to the costs and expenses of acquiring and
integrating new businesses or technologies; the Company could
experience difficulties and expenses in assimilating the operations
and personnel of the acquired businesses; the Company's ongoing
business could be disrupted and its management's time and attention
diverted; the Company could be unable to integrate successfully.

ITEM 7. FINANCIAL STATEMENTS.

Comparative Audited Financial Statements as of and for the year ended
December 31, 2006, and for the year ended December 31, 2005 are
presented in a separate section of this report following Part IV.

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

Other than as presented below, there were no changes in or
disagreements with Accountants on Accounting and Financial Disclosure.

ITEM 8A. CONTROLS AND PROCEDURES.

Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and
forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we
file under the Exchange Act is accumulated and communicated to our
management, including our principal executive and financial officers,
as appropriate to allow timely decisions regarding required
disclosure.

Evaluation of disclosure and controls and procedures. As of the end
of the period covered by this Annual Report, we conducted an
evaluation, under the supervision and with the participation of our
chief executive officer and chief financial officer, of our
disclosure controls and procedures (as defined in Rules 13a-15(e) of
the Exchange Act). Based on this evaluation, our chief executive
officer and chief financial officer concluded that our disclosure
controls and procedures are effective to ensure that information
required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange
Commission rules and forms.

Changes in internal controls over financial reporting. There was no
change in our internal controls, which are included within disclosure
controls and procedures, during our most recently completed fiscal
quarter that has materially affected, or is reasonably likely to
materially affect, our internal controls.

PART III.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT.

Officers and Directors.

The names and respective positions of the directors, executive
officers, and key employees of the Company are set forth below; there
are no other promoters or control persons of the Company. The
directors named below will serve until the next annual meeting of the
Company's stockholders or until their successors are duly elected and
have qualified. Directors are elected or re-elected at stockholders'
meeting. Officers will hold their positions at the will of the board
of directors, absent any employment agreement. There are no
arrangements, agreements or understandings between non-management
shareholders and management under which non-management shareholders
may directly or indirectly participate in or influence the management
of the Company's affairs. The directors and executive officers of the
Company are not a party to any material pending legal proceedings.
Darryl Reed, President/CEO/Director

Mr. Darryl Reed is the current President of the Company. His
background includes seven years in the financial services industry.
Mr. Reed formerly was with New York Life Insurance Company, a major
insurance company, and certain of its subsidiaries since October
1995. Such subsidiaries included #1A Eagle Strategies Corp., a
registered investment adviser, where Mr. Reed worked from April 1997
until May 2000. Mr. Reed held several licenses in the financial
services industry, including Series 7, 63 and 65. He has a BS in
Finance from the University of Florida and an MS from the American
College, Philadelphia, PA.

Leon Zajdel, Director, Chairman of the Board

Leon Zajdel has been a director of the Company since April 1999. Mr.
Zajdel was founder and has served as President of Energy Guard Corp.,
a manufacturer and retailer of replacement windows, located in
Beltsville, MD, since 1972.

Melissa Held, Director

Ms. Held was appointed to the Board of Directors in November 2002.
She possesses an extensive background in financial management and
real estate. Ms. Held was with Merrill Lynch in a variety of
positions over the past eight years, as a Sales Associate from 1994
to 1998, as a Senior Specialist, Interactive Technology from 1998 to
2000 and as Asst. Vice President, Consultative Training Services from
2000 to present. Ms. Held has a BA in Communications from Hollins
College (1993).

Fernando Mathov, Director

Mr. Mathov was appointed to the Board of Directors in February 2003.
He possesses an extensive background as a project manager, systems
engineer and consultant in the telecommunications industry with
various companies. Currently Mr. Mathov holds two positions, as a
Technical Solutions Manager from 1997 to the present at Media and
Entertainment Vertical EMC Corporation, and as a Project Manager at
Informix Software from 1994 to the present. Mr. Mathov has a BS
in Computer Science (1989) and an MBA in Management Science (1991),
both from Virginia Polytechnic Institute and State University.
(b) Compliance with Section 16(a) of the Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, certain officers and persons holding 10% or more
of the Company's common stock to file reports regarding their
ownership and regarding their acquisitions and dispositions of the
Company's common stock with the Securities and Exchange Commission.
Such persons are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on a review of the fiscal year ended December 31, 2006
and subsequently, the Company is unaware that any required reports
were not timely filed.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth certain information relating to the
compensation paid by the Company during the last three fiscal years
to the Company's President. No other executive officer of the Company
received total salary and bonus in excess of $100,000 during the
fiscal year ended December 31, 2006 and prior.

Summary Compensation Table

Annual compensation Long-term Compensation
Awards Payouts
Name and Other Restricted Securities
principal annual stock underlying LTIP All other
position Year Salary Bonus compensation award(s) options/SARs payouts compensation
($) ($) ($) ($) (#) (4) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)

Darryl Reed, 2006 205,3340 0 0 0 0 0 0
President 2005 199,650 0 0 $10,000 1,000,000 0 0
2004 180,000 0 0 0 0 0 0

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information regarding the beneficial
ownership of shares of the Company's common stock as of December 31,
2006 (issued and outstanding) by (i) all stockholders known to the
Company to be beneficial owners of more than ten percent of the
outstanding common stock; and (ii) all directors and executive
officers of the Company as a group:

Title of Name and Address of Amount and Nature Percent of
Class Beneficial Owner of Beneficial Class
(1) Ownership (2)

Common Stock Darryl Reed 3,008,965 24.3%

Common Stock Leon Zajdel 478,747 3.9%

Common Stock Melissa Marsden 100,000 1.0%

Common Stock Fernando Mathov 100,000 1.0%

Common Stock Christopher Boeman 1,981,433 15.6%
1827 E. 298th St.
Wickliffe, OH 44092

All five persons
listed above, together 5,669,146 45.8%

(1) The address for all persons listed is 7644 Dynatech Court,
Springfield, VA, 22153. Each person has sole voting power and
sole right to dispose as to all of the shares shown as
beneficially owned by them except as footnoted.

Insurance Plans

The Company makes available to all full-time employees medical and
dental plan benefits. Employees are eligible to participate in
company insurance plans when they complete 90 days of service with
the Company.

Other Benefit Plans

401(k) Plan. The Company makes available a 401(k) Savings Plan (the
"401(k) Plan"), a federally-qualified, tax-deferred plan administered
by a third party. The 401(k) Plan provides participants with savings
or retirement benefits based on employee deferrals of compensation,
as well as any matching and other discretionary contributions made by
the Company. Employees are eligible to participate in the 401(k) Plan
when they complete one month of service with the Company and have
attained the age of 18. The employee can defer up to 15% of the
compensation amount earned within a calendar year, not to exceed the
ceiling set forth annually by the Internal Revenue Service. The
Company matches the employee's contribution to the 401(k) Plan $.50-
for-$1.00 up to 6% of the employee's annual salary. Participants
become vested in any employer contributions to the 401(k) Plan after
two years of service at a rate of 20% for each completed year of
service. A participant is always 100% vested in his or her salary
reduction contributions to the 401(k) Plan.

Stock Option Plan.

The Company has also filed a Stock Option Plan for Employees on Form
S-8 in December 2001. The Company had not issued any Stock Options
pursuant to the Plan included therein to any employees as of December
31, 2006.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the past two years, and as not otherwise disclosed of in any
other filing, there have not been any transactions that have occurred
between the Company and its officers, directors, and five percent or
greater shareholders, unless listed below.

Certain of the officers and directors of the Company are engaged in
other businesses, either individually or through partnerships and
corporations in which they have an interest, hold an office, or serve
on a board of directors. As a result, certain conflicts of interest
may arise between the Company and its officers and directors. The
Company will attempt to resolve such conflicts of interest in favor
of the Company. The officers and directors of the Company are
accountable to it and its shareholders as fiduciaries, which requires
that such officers and directors exercise good faith and integrity in
handling the Company's affairs. A shareholder may be able to
institute legal action on behalf of the Company or on behalf of
itself and other similarly situated shareholders to recover damages
or for other relief in cases of the resolution of conflicts is in any
manner prejudicial to the Company.

PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

Exhibits.

Exhibits included or incorporated by reference in this document are
set forth in the Exhibit Index.

Index to Financial Statements and Schedules.

Page

Report of Independent Registered Public Accounting Firm

Financial Statements

Consolidated Balance Sheet

Consolidated Statements of Income

Consolidated Statements of Stockholders' Equity

Consolidated Statements of Cash Flows

Notes to Financial Statements

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth fees billed to us by our auditors
during the years ended December 31, 2006 and 2005 for: (i) services
rendered for the audit of our annual financial statements and the
review of our quarterly financial statements, (ii) services by our
auditor that are reasonably related to the performance of the audit
or review of our financial statements and that are not reported as
Audit Fees, (iii) services rendered in connection with tax
compliance, tax advice and tax planning, and (iv) all other fees for
services rendered.

December 31, 2006 December 31, 2005

(i) Audit Fees $45,000 $45,000
(ii Audit Related Fees $ 0 $ 0
(iii) Tax Fees $ 0 $ 0
(iv) All Other Fees $ 0 $ 0

Total fees $45,000 $45,000

AUDIT FEES. The Audit Fees consist of fees billed for professional
services rendered for the audit of the Company's consolidated
financial statements and review of the interim consolidated financial
statements included in quarterly reports and services that are
normally provided by our auditors in connection with statutory and
regulatory filings or engagements.

AUDIT-RELATED FEES. Audit Related Fees consist of fees billed for
assurance and related services that are reasonably related to the
performance of the audit or review of the Company's consolidated
financial statements and are not reported under "Audit Fees." There
were no Audit-Related services provided in fiscal 2006 or 2005.

TAX FEES. Tax Fees consist of fees billed for professional services
for tax compliance, tax advice and tax planning. There were no
charges for tax services provided in fiscal 2006 or 2005.

ALL OTHER FEES. All Other Fees consist of fees for products and
services other than the services reported above. There were no
management consulting services provided in fiscal 2006 or 2005.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-
AUDIT SERVICES OF INDEPENDENT AUDITORS

The Company currently does not have a designated Audit Committee, and
accordingly, the Company's Board of Directors' policy is to pre-
approve all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services,
audit-related services, tax services and other services. Pre-approval
is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services and is
generally subject to a specific budget. The Board of Directors may
also pre-approve particular services on a case-by-case basis.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the Company and in the capacities and on the date indicated:

Signature Title Date

/s/Darryl Reed President, Secretary, March 29, 2007
Darryl Reed Director

/s/Olin Greene Treasurer March 29, 2007
Olin Greene

/s/Melissa Held Marsden Director March 29, 2007
Melissa Held Marsden

/s/ Fernando Mathov Director March 29, 2007
Fernando Mathov

/s/ Leon Zajdel Chairman of the Board March 29, 2007
Leon Zajdel

Exhibit Description

3.1 Articles of Incorporation, under the name Micro Tech
Industries, Inc. (incorporated by reference in the filing
of the Company's annual report on Form 10KSB filed on April
15, 1998).

3.2 Amendment to the Articles of Incorporation (incorporated by
reference in the Company's quarterly report filed on Form
10 Q filed on May 15, 1997).

3.3 Amended and Restated Bylaws (incorporated by reference in
the filing of the Company's annual report on Form 10KSB
filed on November 12, 1999).

16.1 Letter on change in certifying accountant (incorporated by
reference in the filing of the Company's current report on
Form 8-K filed on January 5, 2001).

31.1 Certification of Principal Executive Officer

31.2 Certification of Chief Financial Officer

32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification Pursuant to 18 U.S.C. Section 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FINANCIAL STATEMENTS AND SCHEDULES

DECEMBER 31, 2006 AND 2005

FORMING A PART OF ANNUAL REPORT
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934
NEXT GENERATION MEDIA CORP.

NEXT GENERATION MEDIA CORP.

Index to Financial Statements

Page

Report of Independent Registered Public Accounting Firm

Financial Statements

Balance Sheet

Statements of Income

Statements of Stockholders' Equity

Statements of Cash Flows

Notes to Financial Statements

Turner, Jones & Associates, P.L.L.C
Certified Public Accountants
108 Center Street, North, 2nd Floor
Vienna, Virginia 22180-5712
(703) 242-6500
FAX (703) 242-1600

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Next Generation Media Corporation
7644 Dynatech Court
Springfield, VA 22153

We have audited the accompanying consolidated balance sheet of
Next Generation Media Corporation (a Nevada Incorporation) as of
December 31, 2006, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the two years in the
period ended December 31, 2006. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Next Generation Media Corporation as of December 31,
2006, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 2006, in conformity
with accounting principles generally accepted in the United States of
America.

/s/ Turner, Jones & Associates, P.L.L.C

Vienna, Virginia

March 1, 2007

Next Generation Media Corporation

and Subsidiary

Consolidated Financial Statements

For The Years Ended December 31, 2006 and 2005

With Audit Report of Independent

Registered Public Accounting Firm

TURNER, JONES AND ASSOCIATES, P.L.L.C.
CERTIFIED PUBLIC ACCOUNTANTS

Next Generation Media Corporation
Consolidated Balance Sheet
As of December 31, 2006

ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 181,196

Accounts receivable, net of
uncollectible accounts of $22,588 166,325

Inventories 97,434

Employee loans and advances 1,883

Prepaid expenses and other current assets 25,103

Total current assets $ 471,941

PROPERTY, PLANT AND EQUIPMENT:
Equipment 1,143,943

Furniture and fixtures 38,757

Leasehold improvements 107,300

Computer equipment/software 329,917

Software development 411,391

Vehicles 9,200

Total property, plant and equipment 2,040,508

Less: accumulated depreciation (973,071)

Net property, plant and equipment 1,067,437

OTHER ASSETS:
Goodwill 951,133

Deposits 41,200

Total other assets 992,333

TOTAL ASSETS $ 2,531,711

See accompanying notes and accountant's audit report

Next Generation Media Corporation
Consolidated Balance Sheet
As of December 31, 2006
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Obligation under capital leases, current portion $ 46,871

Notes payable, current portion 25,317

Line of credit 100,000

Accounts payable 203,670

Accrued expenses 127,891

Pension payable 34,264

Sales tax payable 1,338

Total current liabilities $ 539,351

LONG TERM LIABILITIES:
Obligation under capital leases $ 79,563

Notes payable $ 36,725

Total long term liabilities $ 116,288

Total liabilities $ 655,639

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 50,000,000 shares
authorized, 12,373,397 issued and outstanding 123,734

Additional paid in capital 7,379,744

Accumulated deficit (5,627,406)

Total stockholders' equity 1,876,072

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,531,711

See accompanying notes and accountant's audit report

Next Generation Media Corporation
Consolidated Statements of Income
For The Years Ended December 31, 2006 and 2005

2006 2005

REVENUES:
Coupon and postage sales, net of discounts $ 7,861,303 $ 8,017,717

Franchise fees 89,000 202,000

Total revenues $ 7,950,303 $ 8,219,717

COST OF GOODS SOLD $ 5,989,048 $ 5,806,010

GROSS MARGIN $ 1,961,255 $ 2,413,707

OPERATING EXPENSES:
General and Administrative 1,934,394 2,245,916

Depreciation and amortization 99,481 163,873

Total operating expense: 2,033,875 2,409,789

Income (Loss) from operations (72,620) 3,918

OTHER INCOME AND EXPENSES:
Other income (expense) 102,318 21,711

Interest expense (13,464) (9,155)

Gain on sale of equipment 7,800 1,500

Total other income (expense) 96,654 14,056

Income (Loss) before provision for income tax 24,034 17,974

Provision for income tax - -

Net income 24,034 17,974

Income (loss) applicable to common shareholders 24,034 17,974

Basic income/(loss) per common share 0.00 0.00

Weighted average common shares outstanding 12,373,397 12,215,842

Diluted income/(loss) per common share 0.00 0.00

Fully diluted common shares outstanding 13,504,897 13,347,342

See accompanying notes and accountant's audit report

Next Generation Media Corporation
Consolidated Statements of Stockholders' Equity

Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit Total

December 31, 2004 10,523,397 105,234 7,379,744 (5,669,414) 1,815,564

Net Income - - - 17,974 17,974

Shares issued 1,850,000 18,500 - - 18,500

Balance December 31, 2005 12,373,397 123,734 7,379,744 (5,651,440) 1,852,038

Net income - 0 - 24,034 24,034

Balance December 31, 2006 12,373,397 123,734 7,379,744 (5,627,406) 1,876,072

See accompanying notes and accountant's audit report

Next Generation Media Corporation
Statements of Cash Flows
For The Years Ended December 31, 2006 and 2005

2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 24,034 $ 17,974

Adjustments to reconcile net income to net cash
provided by operating activities:
Stock issued for services - 18,500

Gain on sale (7,800) (1,500)

Depreciation and amortization 99,802 161,995

(Increase)/decrease in assets
Receivables (143,040) 237,026

Inventories (36,587) 42,533

Prepaids and other current assets 15,183 (4,221)

Increase/(decrease) in liabilities
Accounts payable (12,498) 47,063

Accrued expenses (21,628) (56,487)

Deferred revenue - (29,000)

Pension payable (14,255) 41,961

Sales tax payable (456) (2,505)

Net cash flows provided/(used) by
operating activities (97,245) 473,339

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase and development of fixed assets (427,226) (366,579)

Sale of equipment 7,800 1,500

Net cash used by investing activities (419,426) (365,079)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing under capital lease 53,524 53,883

Borrowing under notes payable 100,000 100,990

Repayment of notes payable and capital lease (66,542) (47,823)

Net cash provided by financing activities 86,982 107,050

NET INCREASE (DECREASE) IN CASH (429,689) 215,310

CASH, BEGINNING OF PERIOD 610,885 395,575

CASH, END OF PERIOD 181,196 610,885

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

CASH PAID DURING THE YEAR FOR:
Income taxes - -

Interest 13,464 9,155

SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
Common stock issued for services - 18,500

See accompanying notes and accountant's audit report

Next Generation Media Corporation
Notes to Financial Statements
December 31, 2006 and 2005

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business:

Next Generation Media Corporation was incorporated in the State of
Nevada in November of 1980 as Micro Tech Industries, with an official
name change to Next Generation Media Corporation in April of 1997.
The Company, through its wholly owned subsidiary, United Marketing
Solutions, Inc., provides direct marketing products, which involves
the designing, printing, packaging, and mailing of public relations
and marketing materials and coupons for retailers who provide
services. Sales are conducted through a network of franchises that
the Company supports on a wholesale basis. At December 31, 2006, the
Company had approximately 37 active area franchise license agreements
located throughout the United States.

Property and Equipment:

Property and equipment are stated at cost. The company uses the
straight line method in computing depreciation for financial
statement purposes.

Expenditures for repairs and maintenance are charged to income, and
renewals and replacements are capitalized. When assets are retired
or otherwise disposed of, the cost of the assets and the related
accumulated depreciation are removed from the accounts.

Estimated useful lives are as follows:

Furniture, Fixtures and Equipment 7-10 years
Leasehold Improvements 10 years
Vehicles 5 years
Computers & Software 5 years
Software Development 5 years

Depreciation expense for the years ended December 31, 2006 and 2005
amounted to $99,481 and $163,873 respectively.

Internal-Use Software Costs:

The Company expenses costs incurred in the preliminary project stage
of developing or acquiring internal use software, such as research
and feasibility studies, as well as costs incurred in the post-
implementation/operational stage, such as maintenance and training.
Capitalization of software development costs occurs only after the
preliminary-project stage is complete, management authorizes the
project, and it is probable that the project will be completed and
the software will be used for the function intended. As of December
31, 2006, capitalized software costs totaled $411,391, respectively.
The capitalized costs are amortized on a straight-line basis over the
estimated useful life of the software.

Intangibles:

The Company has recorded goodwill based on the difference between the
cost and the fair value of certain purchased assets. The Company
annually evaluates the goodwill for possible impairment. The Company
performed an assessment of the fair value of its sole reporting unit
as defined by SFAS No. 142 and compared it to the carrying value of
its reporting unit. The Company's market capitalization was less
than the Company's book value indicating possible impairment under
the test established by SFAS No. 142. The Company determined the
fair value of its assets on a class-by-class basis. The fair values
of the Company's assets were based upon the expected cash flow from
the Company's business, assuming a discount rate that reflects the
degree of risk involved with this type of business. The fair value
of goodwill was in excess of its carrying value, and therefore, no
impairment was recorded.

In addition, the Company had a covenant not to compete, which was
being amortized over five (5) years. The covenant not to compete was
fully amortized during 2006.

Advertising Expense:

The Company expenses the cost of advertising and promotions as
incurred. Advertising costs charged to operations for the years
ended December 31, 2006 and 2005 were $92,912 and $86,534 respectively.

Revenue Recognition:

The Company recognizes revenue from the design production and
printing of coupons upon delivery. Revenues from initial franchise
fee is recognized when substantially all services or conditions
relating to the sale have been substantially performed.
Substantially all services or conditions are performed prior to
receipt of payment from the franchisee. Franchise support of $150
per quarter and other charges are recognized when billed to the
franchisee. Amounts billed or collected in advance of final delivery
or shipment are reported as deferred revenue.

Impairment of Long-Lived Assets:

The Company reviews the carrying values of its long-lived assets for
possible impairment on an annual basis and whenever events or changes
in circumstances indicate that the carrying amount of the assets
should be addressed. The Company believes that no permanent
impairment in the carrying value of long-lived assets exists for
either of the two years ending December 31, 2006 and 2005.

Comprehensive Income:

The Company has adopted Statement of Financial Accounting Standards
No. 130 "Reporting Comprehensive Income." Comprehensive income as
defined includes all changes to equity except that resulting from
investments by owners and distribution to owners. The Company has no
item of comprehensive income to report.

New Accounting Pronouncements:

On December 15, 2004, the Financial Accounting Standards Board issued
SFAS No. 123(R), Share-Based Payment, which amends SFAS No. 123,
Accounting for Stock-Based Compensation. SFAS No 123 (R) requires
that all share-based payments to employees, including grants of
employee stock options, be accounted for at fair value. The pro
forma disclosures previously permitted under SFAS No. 123 no longer
will be an alternative to financial statement recognition. Under
SFAS No. 123 (R), the Company must determine the appropriate fair
value model to be used for valuing share-based payments, the
amortization method for compensation cost and the transition method
to be used for valuing share-based payments, the amortization method
for compensation cost and the transition method to be used at date of
adoption. The Company previously adopted the fair-value-based method
of accounting for share-based payments under SFAS No. 123 effective
January 1, 2003 using the prospective method described in SFAS No.
148, Accounting for Stock-Based Compensation-Transition and
Disclosure. SFAS No. 123 (R) also amends SFAS No. 95, Statement of
Cash Flows, to require that excess tax benefits be reported as a
financing cash inflow rather than as a reduction of taxes paid. As
originally issued, SFAS No. 95 required all income tax payments to be
classified as operating cash outflows. This statement is effective
for fiscal periods beginning after June 15, 2005. The adoption of
SFAS No. 123 (R) had no material effect on the financial position or
results of operation.

New Accounting Pronouncements:

FIN48 In July 2006, the FASB issued FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48
clarifies the accounting for income taxes as prescribing a minimum
probability threshold that a tax position must meet before a
financial statement benefit is recognized. The minimum threshold is
defined in FIN 48 as a tax position that is more likely than not to
be sustained upon examination by the applicable taxing authority,
including resolution of any related appeals or litigation processes,
based on the technical merits of the position. The tax benefit to be
recognized is measured as the largest amount of benefit realized upon
ultimate settlement. FIN 48 must be applied to all existing tax
positions upon initial adoption. The cumulative effect of applying
FIN 48 at adoption, if any, is to be reported as an adjustment to
opening retained earnings for the year of adoption. FIN 48 is
effective for the Company's 2008 fiscal year, although early adoption
is permitted. The Company is currently assessing the potential
effect of FIN 48 on its financial statements.

SFAS 157 In September 2006, the FASB issued Statement of Financial
Accounting Standards No. 157, Fair Value Measurements (FASB 157).

SFAS 157 provides a common definition of fair value in generally
accepted accounting principles more consistent and comparable. SFAS
157 also requires expanded disclosures to provide information about
the extent to which fair value is used to measure assets and
liabilities, the methods and assumptions used to measure fair value,
and the effect of fair value measures on earnings. SFAS 157 is
effective for the Company's 2009 fiscal year, although early adoption
is permitted. The Company is currently assessing the potential
effect of SFAS 157 on its financial statements.

Use of Estimates:

The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Income Taxes:

The Corporation uses Statement of Financial Standards No. 109
Accounting for Income Taxes (SFAS No. 109) in reporting deferred
income taxes. SFAS No. 109 requires a company to recognize deferred
tax liabilities and assets for expected future income tax
consequences of events that have been recognized in the company's
financial statements. Under this method, deferred tax assets and
liabilities are determined based on temporary differences in
financial carrying amounts and the tax bases of assets and
liabilities using enacted tax rates in effect in the years in which
temporary differences are expected to reverse.

Risks and Uncertainties:

The Company operates in an environment where intense competition
exists from other companies. This competition, along with increases
in the price of paper, can impact the pricing and profitability of
the Company.

The Company at times may have cash deposits in excess of federally
insured limits.

Accounts Receivable:

The Corporation grants credit to its customers, which includes the
retail sector and their own franchisees. The Company establishes an
allowance for doubtful accounts based upon on a percentage of
accounts receivable plus those balances the Company believes will be
uncollectible. Allowance for uncollectible accounts as of December
31, 2006 was $22,588.

Cash and Cash Equivalents:

The Company considers all highly liquid investments with maturities
of three months or less to be cash equivalents.

Earnings Per Common Share:

The Company calculates its earnings per share pursuant to Statement
of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS No. 128"). Under SFAS No. 128, basic earnings per share are
computed by dividing reported earnings available to common
stockholders by weighted average shares outstanding. Diluted
earnings per share reflects the potential dilution assuming the
issuance of common shares for all potential dilative common shares
outstanding during the period. The Company had 1,131,500 options
issued and outstanding as of December 31, 2006 and 2005 at a weighted
average exercise price of $0.62.

Inventories:

Inventories consist primarily of paper, envelopes, and printing
materials and are stated at the lower of cost or market, with cost
determined on the first-in, first-out method.

Principles of Consolidation:

The accompanying consolidated financial statements include the
accounts of the parent company, Next Generation Media Corporation and
its subsidiary United Marketing Solutions, Inc. for the years ended
December 31, 2006 and 2005. All inter-company balances and
transactions have been eliminated in consolidation.

Principles of Consolidation:

NOTE 2 - RETIREMENT PLAN

The company maintains a 401(k) defined contribution plan covering
substantially all employees. The Corporation may contribute up to 3%
of each eligible employee's gross wages. Employees can elect up to
15% of their salary to be contributed before income taxes up to the
annual limit set by the Internal Revenue Code. The Corporation
contributed $34,264 and $42,154 in matching contributions, net of
forfeitures for 2006 and 2005, respectively.

NOTE 3 - NOTES PAYABLE

Notes payable at December 31, 2006 consists of:
Obligation to Bank of America, bearing interest at 6.4% percent
per annum, the loan is payable in forty-eight monthly
installments of $2,395, including interest, and is
collateralized by the equipment financed. Balance outstanding
at December 31, 2006 was $62,042.
The 5 year schedule of maturities is as follows:

2007 25,317
2008 27,011
2009 10,074
Thereafter 0

62,042

NOTE 4-LINE OF CREDIT

The Company has a line of credit in the amount of $150,000 secured by
Company's accounts receivable. The line of credit matures on
10/01/07 and calls for interest of 9.25% per annum. The balance
outstanding at December 31, 2006 was $100,000.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

Future minimum annual lease payments for capital and operating leases
as of December 31, 2006 are:
Operating Capital

2007 219,107 55,770
2008 302,855 45,520
2009 314,969 32,917
2010 327,568 11,796
2011 355,549 0
Thereafter 0 0
Total 1,520,048 146,003

Rent expense for the years ended December 31, 2006 and 2005 was
$280,006 and $303,917, respectively.

The Company has entered into various employment contracts. The
contracts provided for the award of present and/or future shares of
common stock and/or options to purchase common stock at fair market
value of the underlying options at date of grant or vesting. The
contracts can be terminated without cause upon written notice within
thirty to ninety days. The Company is party to various legal matters
encountered in the normal course of business. In the opinion of
management and legal counsel, the resolution of these matters will
not have a material adverse effect on the Company's financial
position or the future results of operations.

NOTE 6 - INCOME TAXES

Deferred tax assets are recognized for deductible temporary
differences and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax
basis.

Management has provided a valuation allowance for the total net
deferred tax assets as of December 31, 2006 and 2005, as they believe
that it is more likely than not that the entire amount of deferred
tax assets will not be realized.

The company filed a consolidated return, with a tax liability of $0
for the year 2006. At December 31, 2006, the Company had net
operating loss carry forwards for federal income tax purposes of
approximately $2,370,000 which are available to offset future taxable
income, if any, on a scheduled basis through 2018.

NOTE 7 - OBLIGATION UNDER CAPITAL LEASE

The Company acquired machinery under the provisions of a long-term
leases. For financial reporting purposes, minimum lease payments
relating to the machinery have been capitalized.

The future minimum lease payments under capital leases and net
present value of the future minimum lease payments as of December 31,
2006 are as follows:

Total minimum lease payments $ 146,003
Amount representing interest 19,569

Present value of net minimum lease payments 126,434
Current portion 46,871

Long-term capital lease obligation 79,563

NOTE 8 - COMMON STOCK

During 2005, the Company issued 1,850,000 shares of common stock, to
various officers and directors. As a result the Company recognized
$18,500 of expense.

NOTE 9 - NOTE RECEIVABLE

On June 30, 2000, the Company executed a promissory note with UNICO,
Inc. for $200,000 in conjunction with the sale of Independent News,
Inc. During 2005, the Company's management considered the note
uncollectible and the unreserved remaining balance of $40,000 was
written off.

NOTE 10 - INTANGIBLE ASSETS

Intangible assets consist of the following items:

Goodwill $1,341,850
1,341,850
Less accumulated amortization (Pre January 1, 2002) (390,717)
Intangible assets, net $ 951,133

NOTE 11 - PUBLIC STOCK LISTING

Next Generation Media Corporation common stock began trading on the
OTC Bulletin Board on June 11, 2001, under the symbol NGMC.

NOTE 12 - SEGMENT INFORMATION

The Company has one reportable segment for the twelve-month periods
ended December 31, 2006 and 2005: United Marketing Solutions. United
was acquired on April 1, 1999. The entity is a wholly owned
subsidiary. United operates a direct mail marketing business. The
accounting policies of the reportable segments are the same as those
set forth in the Summary of Accounting Policies. Summarized
financial information concerning the Company's reporting segments for
the periods ending December 31, 2006 and 2005 are presented below:

Year Ended

December 31, 2006 Segment Parent Eliminations Total

Revenue 7,950,303 148,500 (148,500) 7,950,303
Segment profit/(loss) 63,321 (39,287) - 24,034
Total assets 2,275,554 1,439,650 (1,183,493) 2,531,711

Year Ended

December 31, 2005 Segment Parent Eliminations Total

Revenue 8,219,717 225,000 (225,000) 8,219,717
Segment profit/(loss) 103,554 (85,580) - 17,974
Total assets 2,170,691 1,730,636 (1,431,829) 2,469,498

NOTE 13 - RECLASSIFICATIONS

Certain amounts on the 2005 financial statements have been
reclassified to conform with the 2006 presentation.

NOTE 14-EMPLOYEE STOCK INCENTIVE PLAN

One December 26, 2001, the Company adopted the Employee Stock
Incentive Plan authorizing 3,000,000 shares at a maximum offering
price of $0.10 per share for the purpose of providing employees
equity-based compensation incentives. During 2006 and 2005, no
shares were issued under the plan.

NOTE 15 - SUBSEQUENT EVENTS

There were no material subsequent events.