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New Frontier Media Comments on Hosken’s Notice of Threatened Proxy Contest

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New Frontier Media, Inc., a leading provider of transactional television services and distributor of general motion picture entertainment, today confirmed that it has received a notice from an entity affiliated with the publicly-traded South African conglomerate, Hosken Consolidated Investments (Johannesburg Stock Exchange: HCL), that it intends to nominate four individuals, including two employees of a Hosken affiliate, for election to the New Frontier Media Board of Directors at the company’s 2012 Annual Meeting of Shareholders.

The notice contained no additional information regarding Hosken or Hosken’s plans or intentions. Based upon publicly available information, Hosken is an investment holding company based in Cape Town, South Africa. New Frontier Media is continuing to review the notice to determine whether the notice complies with New Frontier Media’s Bylaws and applicable law.

As previously announced, on March 9, 2012, Longkloof Limited, a Jersey, Channel Islands entity which New Frontier Media now understands is a Hosken affiliate, submitted an unsolicited, non-binding proposal to acquire all of the outstanding shares of common stock of New Frontier Media not already owned by it or its affiliates for $1.35 per share in cash.

As also previously announced, New Frontier Media has formed a Special Committee of independent directors that, with the assistance of its financial and legal advisors, is considering a broad range of strategic alternatives.

As part of that strategic review process, the Special Committee is evaluating Hosken’s unsolicited acquisition proposal as well as any other acquisition proposal subsequently received, including the previously disclosed unsolicited acquisition proposal by Manwin Holding SARL to acquire New Frontier Media’s outstanding shares for $1.50 per share in cash.

On April 6, 2012, the financial advisor for the Special Committee sent a letter to the Hosken affiliate requesting further information and clarification about its $1.35 per share proposal, including information with respect to its conditions, financing, timing and any government approvals required to acquire New Frontier Media.

To date, more than three weeks later, the Hosken affiliate, while acknowledging receipt of the information request, has not provided any of the information requested or otherwise engaged in discussions with the Special Committee’s financial advisor.

In addition, Hosken has given no indication to New Frontier Media that it is prepared to increase its proposed offer price in light of Manwin’s publicly disclosed higher competing proposal.

Alan L. Isaacman, Chairman of New Frontier Media’s Special Committee commented, “Hosken’s threatened proxy contest is a transparent attempt to take control of New Frontier Media by placing four of Hosken’s hand-picked candidates on New Frontier Media’s six-member Board who would then be in a position to give favorable consideration to Hosken’s unsolicited $1.35 per share offer.”

Mr. Isaacman continued, “It is unfortunate that rather than choosing to engage constructively with the Special Committee’s financial advisor, Hosken has chosen to launch a potentially costly and distracting proxy contest.”

New Frontier Media’s six directors, five of whom are independent, are all highly qualified and committed to acting in the best interests of all shareholders. New Frontier Media’s Board and management have a long history of maintaining an open dialogue with shareholders and engaging in a constructive manner with shareholders seeking to discuss ideas for enhancing value.

For the past 18 months, since learning that affiliates of Hosken had accumulated a significant ownership position in New Frontier Media’s stock, New Frontier Media’s Board and management have, in good faith and with an open-minded manner, engaged in several meetings with Hosken and its representatives, including a recent in-person meeting with Marcel Golding, the Executive Chairman of Hosken, and Hosken’s U.S. representative, Adam Rothstein.

New Frontier remains open to having future discussions with Hosken provided they are constructive. However, the disparaging and inflammatory tone of Hosken’s various communications, in particular its March 9, 2012 letter and the related press release, both of which contain false and misleading statements, together with Hosken’s threatened proxy contest do not promote a constructive dialogue between New Frontier Media and Hosken or its representatives.

Mr. Isaacman concluded, “The New Frontier Media Board will not be distracted from acting in the best interests of, and maximizing value for, all shareholders. We would prefer to avoid a costly and disruptive proxy contest and focus our full attention on realizing New Frontier Media’s significant potential. However, we will not stand idly by while Hosken pursues its own self-interested agenda to gain control of New Frontier Media to the detriment of our other shareholders.”

In connection with Hosken’s threatened proxy contest and the on-going review of strategic alternatives available to New Frontier Media which is being overseen by the Special Committee, the Special Committee is being assisted by its legal advisor, Alston & Bird LLP. New Frontier Media is being advised by Holland & Hart LLP. In addition, Avondale Partners, LLC is serving as the financial advisor to the Special Committee.


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