Summary of NEXT 1 INTERACTIVE, INC.

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

Forward Looking Statements

This Report contains statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as "may," "will," "expect," "intend," "estimate," "foresee," "project," "anticipate," "believe," "plans," "forecasts," "continue" or "could" or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management's opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

Next 1 plans to launch a TV Network known as Resort & Residence (R&R) during the second half of this year. The R&R Network will deploy both Interactive and Video on Demand capabilities and will allow Next 1 access to roughly 25 million households in the United States. The R&R TV Network will be supported by Next Ones digital media assets and expertise in the Travel and Real Estate arenas. During the first quarter of the year management has focused its efforts on the realignment of the company's existing assets in both the travel and real estate arenas so they might compliment the planned introduction of the R&R National television network.

In order to accomplish this goal the company has and will continue to incur a number of expenditures throughout the balance of the year. New expenditures have included the purchase of the Resort and Residence Network, upgrades to existing technology solutions, outsourcing of interactive technology solutions, elimination of certain staff and the hiring of key consultants and/or full time management with significant expertise in the set up and operations of an Interactive Network such as Resort and Residence. Additionally management has looked to use its limited financial resources to either reconfigure existing operations so they will integrate with R&R or alternatively discontinue operations of certain non performing assets. Key examples of this include the closure of the Brands on Demand offices in Philadelphia with all web sales and travel solutions being realigned to be integrated into the R&R interactive sales programs. Additionally the company ceased real estate listings operations of the Home Preview Channel in Houston and Detroit pending the launch of the R&R Network and its new format.

In managements view these expenditures are a key investment to allow the company to secure a foothold in the new interactive platforms for TV. The acquisition of the R&R Network as well as the elimination or realignment of non conforming operations has resulted in both a significant drop in revenue from traditional operations while at the same time showing a marked increase in operational costs. These steps are deemed to be essential by management as they should reposition the company's travel and real estate programs to capture potentially very significant new revenue once the R&R Network is launched.

The Company's targeted focus of its TV Network in the Travel and Real Estate industries combined with its On-Demand and Interactive services for both television and the Internet puts the Company in position to address advertisers' evolving need to focus on exploiting video opportunities on multiple platforms with the convergence of internet, television and mobile. The Company has developed and assembled key assets that allow it to provide media and technology solutions for consumers in the Home and Travel arenas across multiple media platforms. These two verticals (Home and Travel) hold significant appeal to advertisers as they continuously remain in the top five advertising spend categories in the North American market. Management believes the steps it is taking now will create a 'clear differentiation' in the cable TV space and provides the company's shareholders and its clients with a unique and cutting edge solution to both traditional and non linear platforms to advertise their products.

Results of Operations

At May 31, 2009, our cash on hand was $13,376, compared to $18,801 at February 28, 2009. This decrease was primarily attributable to revenue reductions and cash requirements to fund on-going operations.

At May 31, 2009, our accounts receivable were $105,469, compared to $125,783 at February 28, 2009. This decrease was due to timing of interactive media sales to travel suppliers.

At May 31, 2009, our total assets were $8,114,625, compared to $8,228,292 at February 28, 2009. This decrease was due to small reductions in all asset classes.

At May 31, 2009, our total current liabilities were $2,069,486, compared to $1,871,385 at February 28, 2009. This increase was due primarily to an increase in the current portion of notes payable.

Three Months Ended May 31, 2009 Compared to Three Months Ended May 31, 2008

Revenues. Our total revenues were $191,415 for the three months ended May 31, 2009, compared to $780,442 for the three months ended May 31, 2008. The decrease from 2008 to 2009 was primarily due to the declining economy, resulting in a general decline in the travel and leisure industry.

Net Loss. We had a net loss of $985,031 for the three months ended May 31, 2009 compared to a net loss of $576,496 for the three months ended May 31, 2008. The loss increase from 2008 to 2009 was primarily due to the reduction in revenues while positioning the Company for a change in its business model from that of providing recreational travel services to that of a media business with a focus on travel and residential real estate utilizing the internet, internet radio and cable television.

Operating expenses. Our operating expenses include website maintenance fees, general and administrative expenses, salaries and benefits, advertising and promotion, legal and professional fees. Our total operating expenses increased from $750,534 for the three months ended May 31, 2008 to $991,205 for the three months ended May 31, 2009. The increase from 2008 to 2009 was primarily due to the cost required to position the Company for a change in its business model from that of providing recreational travel services to that of a media business with a focus on travel and residential real estate utilizing the internet, internet radio and cable television.

Liquidity and Capital Resources

At May 31, 2009, we had total current assets of $229,631, consisting primarily of accounts receivable and security deposits. Current liabilities of $2,069,486 consisting primarily of accounts payable and accrued expenses. The Company has accumulated a net loss from inception through May 31, 2009 of $7,066,246. Stockholders' equity as of May 31, 2008 was $5,366,942. The Company has recorded gross revenues of $191,415 for the three months ended May 31, 2009.

While the Company is attempting to increase sales, the growth has not been significant enough to support the Company's daily operations and the Company cannot currently fund its operations for the next 12 months. To date, we have funded our operations primarily from private equity financings. Until the Company becomes profitable, if ever, management will attempt to raise additional funds by way of one or more public or private equity or debt offerings. Several funding sources have been identified and discussions are underway. While we believe in the viability of our strategy to improve sales volume and in our ability to raise additional funds, there can be no assurances to that effect. The availability of funds depends in large measure on capital markets and over which we exert no control and liquidity factors. We can provide no assurance that sufficient financing will be available on desirable terms to fund investments, acquisitions, stock repurchases or extraordinary actions. General weakening in the credit markets could increase our cost of capital.

Currently, revenues provide approximately 20% of the company's cash requirements. The remaining cash need is derived from raising additional capital. The current monthly cash burn rate is approximately $300,000. It is projected that with the launch of the television network in October, 2009, the monthly cash burn rate will gradually increase to approximately $500,000, with the expectation of profitability by March, 2010.

Our revenue model is new and evolving, and we cannot be certain that it will be successful. The potential profitability of this business model is unproven and there can be no assurance that we can achieve profitable operations. Our ability to generate revenues depends, among other things, on our ability to launch our television network and sign advertising, sponsorship, programming, infomercial and other revenue contracts. Accordingly, we cannot assure you that our business model will be successful or that we can sustain revenue growth, or achieve or sustain profitability.