Private Media Group (PRVT)

8. Other investments

In November 2007 the Company entered into two agreements to acquire shares of Horse Creek Entertainment AB (publ), a mainstream content aggregator operating HomeTV (www.hometv.se), a broadband Video-On-Demand (VOD) platform in Scandinavia. In two private offerings the Company acquired: (1) 2,000,000 million common shares of Horse Creek Entertainment AB at SEK 1.95 per share and paid the subscription price for these shares by issuing 169,565 shares of our common stock to Horse Creek Entertainment AB; and (2) an additional 2,000,000 million common shares of Horse Creek Entertainment AB at SEK 2.80 per share together with stock purchase warrants entitling the Company to acquire an additional 2,000,000 shares at SEK 1.95 per share until November 2009, and paid the subscription price for the shares and warrants by issuing 265,762 shares of our common stock to Horse Creek Entertainment AB. Following the transaction the Company held 17.2% of the outstanding shares in Horse Creek Entertainment AB. The aggregate purchase price of EUR 1,021,978 was computed using applicable market rates at the time of the transaction and is recorded at cost under other investments. Horse Creek Entertainment AB is a business in an early development stage and the Company monitors the business regularly in order to access if any impairment to the asset value is required.

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PRIVATE MEDIA GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20. Other investments

In November 2007 the Company entered into two agreements to acquire shares of Horse Creek Entertainment AB (publ), a mainstream content aggregator operating HomeTV (www.hometv.se), a broadband Video-On-Demand (VOD) platform in Scandinavia. In two private offerings the Company acquired: (1) 2,000,000 million common shares of Horse Creek Entertainment AB at SEK 1.95 per share and paid the subscription price for these shares by issuing 169,565 shares of our common stock to Horse Creek Entertainment AB; and (2) an additional 2,000,000 million common shares of Horse Creek Entertainment AB at SEK 2.80 per share together with stock purchase warrants entitling the Company to acquire an additional 2,000,000 shares at SEK 1.95 per share until November 2009, and paid the subscription price for the shares and warrants by issuing 265,762 shares of our common stock to Horse Creek Entertainment AB. Following the transaction the Company held 17.2% of the outstanding shares in Horse Creek Entertainment AB. The aggregate purchase price of EUR 1,021,978 was computed using applicable market rates at the time of the transaction and is recorded at cost under other investments.

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20. Other investments

FACE="Times New Roman" SIZE="2">In November 2007 the Company entered into two agreements to acquire shares of Horse Creek Entertainment AB (publ), a mainstream content aggregator operating HomeTV (www.hometv.se), a broadband Video-On-Demand (VOD)
platform in Scandinavia. In two private offerings the Company acquired: (1) 2,000,000 million common shares of Horse Creek Entertainment AB at SEK 1.95 per share and paid the subscription price for these shares by issuing 169,565
shares of our common stock to Horse Creek Entertainment AB; and (2) an additional 2,000,000 million common shares of Horse Creek Entertainment AB at SEK 2.80 per share together with stock purchase warrants entitling the Company to
acquire an additional 2,000,000 shares at SEK 1.95 per share until November 2009, and paid the subscription price for the shares and warrants by issuing 265,762 shares of our common stock to Horse Creek Entertainment AB. Following the
transaction the Company held 17.2% of the outstanding shares in Horse Creek Entertainment AB. The aggregate purchase price of EUR 1,021,978 was computed using applicable market rates at the time of the transaction and is recorded at cost under other
investments.

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