(BOULDER, CO) -- New Frontier Media, Inc. (Nasdaq: NOOF - news), a leader in the electronic distribution of adult entertainment, announced today that it intends to file appropriate post trial motions and move for appeal, if necessary, in Lipson v. New Frontier Media, Inc. et al., in which a six-person jury found the Company liable for claims stemming from a letter of intent entered into between the Company and J.P. Lipson in October, 1998.

At the same time, the Company said that it was pleased that the jury sided with New Frontier Media rejecting the plaintiff's claim that the Company and its two principal officers had violated the Colorado Securities Act.

The jury found that Mr. Lipson is entitled to liquidated damages of $10 million on his claims for breach of contract and breach of the covenant of good faith and fair dealing, and $1 million actual damages and $1 million punitive damages on his claims for fraudulent inducement and fraudulent concealment. The Company's Chairman, Mark Kreloff, and Executive Vice President, Michael Weiner, were each found individually liable for an additional $125,000 in compensatory damages and $125,000 in punitive damages.

Because the amounts awarded on various claims are alternative rather than cumulative remedies, the Company therefore anticipates that Mr. Lipson will be required to elect between recovery on his fraud or contract claims. Mr. Lipson had sought damages in excess of $25 million on his contract and fraud claims, plus punitive damages. The Court has not yet entered judgment in the case. Colorado law also provides for a 15-day automatic stay once judgment is entered and the Court has the discretion to impose a further stay.

``The verdict will in no way interrupt the services we provide our customers, nor will it impact the leadership position we have worked hard to earn in our industry,'' New Frontier Media said. ``We have a loyal consumer audience and a trusted network of companies we work with which will not in any way be affected by the case.''

The Company is exploring various financing alternatives to fulfill the terms of the verdict should it become necessary.

``New Frontier Media is prepared to deal with any eventuality but our priority is to maintain unimpeded business operations and shareholder support,'' said the Company.

ABOUT NEW FRONTIER MEDIA, INC.

New Frontier Media, Inc. is a leader in the electronic distribution of adult entertainment with an unparalleled library of content. Through its television subsidiary, the Company distributes adult entertainment via pay-per-view and subscription cable/satellite video networks. Cable/DBS networks include Pleasure(TM), the most-edited standard available in the category; TeN(TM) and ETC (Erotic Television Clips)(TM) which incorporate a partial-editing standard, and Extasy(TM) and True Blue(TM) which incorporate the least-edited standard.

Through its Internet subsidiaries, New Frontier Media designs, creates and implements Company-owned subscription/membership-based web sites for the adult Internet consumer markets. It also operates Internet traffic sales and acquisition programs for the adult webmaster community. In addition, the Company serves as a single source for a comprehensive range of high- performance Internet products and services, including transaction processing, dedicated access, web hosting, co-location, e-commerce application development, streaming media, and bandwidth management. New Frontier Media's network infrastructure enables the delivery of live and on-demand video events to millions of Internet users.

For more information contact Keely Hawk, VP Corporate Communications at (303) 444-0900, extension 145.