**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**









**FORM
      10-K/A**


Amendment
      No. 1 to Form 10-K







þ
            **Annual
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934****for
                the fiscal year ended July 31,
                2008**




**OR**




 ̈
            **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: 000-28761**




**JAG
      MEDIA HOLDINGS, INC.**


(Exact
      name of registrant as specified in its charter)




**Nevada**
            **88-0380546**(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer
              Identification
                Number)





**6865
      SW 18th Street, Suite B-13, Boca Raton, Florida 33433**


(Address
      of principal executive offices) (Zip code)





**(866)
      300-7410**


(Registrant’s
      telephone number, including area code)





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


**Securities
      registered pursuant to Section 12(g) of the Act:**


Common
      Stock—$0.00001 par value


Series
      2
      Class B Common Stock—$0.00001 par value




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes  ̈ No þ




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act. Yes  ̈ No þ .




Indicate
      by check mark whether the registrant (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 registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes þ 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 registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. þ




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, non-accelerated filer or a smaller reporting company. See
      definition of “large accelerated filer, accelerated filer and smaller reporting
      company” in Rule 12b-2 of the Exchange Act. (Check one):




Large
                accelerated filer ̈
            Accelerated
                filer ̈
            Non-accelerated
                filer ̈(Do
              not
                check if smaller reporting
              company)
            Smaller
                reporting companyþ




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Act). Yes  ̈ No þ .




The
      aggregate market value of the registrant’s voting and non-voting common stock
      held by non-affiliates on January 31, 2008 (based on the closing stock price
      as
      reported by Bloomberg L.P.) on such date was approximately
      $58,153,945.




As
      of
      October 31, 2008, there were 63,503,004 shares of the Registrant’s common stock
      outstanding, 380,931 shares of the Registrant’s Series 2 Class B common stock
      outstanding and 21,500 shares of the Registrant’s Series 3 Class B common stock
      outstanding.










**JAG
      MEDIA HOLDINGS, INC.**




**ANNUAL
      REPORT ON FORM 10-K**




**FOR
      THE FISCAL YEAR ENDED JULY 31, 2008**




**TABLE
      OF CONTENTS**




Page**Part
                I**
            **1**Item
                1. Business
            1Item
                1A. Risk Factors
            10Item
                1B. Unresolved Staff Comments
            18Item
                2. Properties
            18Item
                3. Legal Proceedings
            18Item
                4. Submission of Matters to a Vote of Security Holders
            19**Part
                II**
            **19**Item
                5. Market for Registrant’s Common Equity, Related Stockholder Matters and
                Issuer Purchases of Securities
            19Item
                6. Selected Financial Data
            20Item
                7. Management’s Discussion and Analysis or Plan of
                Operation
            21Item7A.
                Quantitative and Qualitative Disclosure about Market Risk
            26Item
                8. Financial Statements and Supplementary Data
            26Item
                9. Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosure
            26Item
                9A(T). Controls and Procedures
            26Item
                9B. Other Information
            26**Part
                III**
            **27**Item
                10. Directors, Executive Officers and Corporate Governance
            27Item
                11. Executive Compensation
            27Item
                12. Security Ownership of Certain Beneficial Owners and Related
                Stockholder Matters
            29Item
                13. Certain Relationships and Related Transactions, and Director
                Independence
            30Item
                14. Principal Accounting Fees and Services
            31**Part
                IV**
            **32**Item
                15. Exhibits, Financial Statement Schedules
            32


i




**EXPLANATORY
        NOTE**
  This
        Amendment No. 1 on Form 10-K/A hereby amends the Registrant’s Annual Report
        on Form 10-K for the fiscal year ended July 31, 2008, which the Registrant
        filed
        with the Securities and Exchange Commission on November 13, 2008 (the
“ **Original
        10-K** ”).
        This
        amendment is being filed solely in order to (i) correct the exhibit list
        and
        (ii) include the signature page and the exhibit index, which were
        inadvertently omitted from the Original 10-K. No other modification or update
        is
        otherwise being made to any other disclosure or exhibits to the Original
        10-K.
  **Part
        I**




**ITEM
      1. BUSINESS**




This
      Annual Report on Form 10-K contains forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended (the
“ **Securities
      Act** ”),
      and
      Section 21E of the Securities Exchange Act of 1934, as amended (the
“ **Exchange
      Act** ”).
      Such
      statements are based upon current expectations that involve risks and
      uncertainties. Any statements contained herein that are not statements of
      historical fact may be deemed to be forward-looking statements. Words such
      as
“may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue,”
“strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends” and similar
      expressions are intended to identify forward-looking statements. Our discussions
      relating to our liquidity and capital resources, our subscription and
      advertising revenues, our business strategy, our competition, and the future
      of
      the Internet and webcasting over the Internet, our proposed merger with
      BlueCreek Energy, Inc., among others, contain such statements. Our actual
      results and the timing of certain events may differ significantly from the
      results discussed in the forward-looking statements. Factors that might cause
      or
      contribute to such a discrepancy include, but are not limited to, those
      discussed elsewhere in this report in the section entitled “Item 1A. Risk
      Factors.”




Our
      forward-looking statements in this Annual Report on Form 10-K are based on
      management’s current views and assumptions regarding future events and speak
      only as of their date. We undertake no obligation to publicly update or revise
      any forward-looking statements, whether as a result of new information, future
      events or otherwise, except as required by the federal securities laws. Unless
      the context requires otherwise, the terms “we,” “us” and “our” refer to JAG
      Media Holdings, Inc., our predecessors and subsidiaries.




**Overview**




We
      have
      been providing financial and investment information to the investment community
      since 1989. In May 1999, we began offering our services on a subscription fee
      basis to the general public for the first time through our website at
      jagnotes.com. Through our website and our traditional fax-based service, we
      offer timely financial data, reports and commentary.




Our
      online services currently consist of a subscription-based service that offers
      two specific products, the JAGNotes (Upgrade/Downgrade) Report and the Rumor
      Room, providing timely market reports, including breaking news and potentially
      market moving information. We currently derive revenues primarily from the
      sale
      of subscriptions.




In
      addition, we have been seeking acquisition candidates, which may be engaged
      in
      unrelated lines of business. On October 1, 2008, we entered into a non-binding
      letter of intent with respect to a merger opportunity with BlueCreek Energy,
      Inc., (“ **BlueCreek** ”)
      a
      Colorado corporation engaged in the development, extraction and processing
      of
      coalbed methane. See “—Proposed Merger with BlueCreek Energy.”




We
      are a
      Nevada corporation. Our address is 6865 SW 18th Street, Suite B-13, Boca Raton,
      Florida 33433, and our telephone number is 866-300-7410.




**Company
      Background**




From
      1989
      to 1992, we operated as an unincorporated business entity. In 1992, we
      incorporated in the State of New Jersey as New Jag, Inc. On December 14, 1993,
      JagNotes, Inc. merged with and into New Jag Inc., and we changed our name to
      JagNotes, Inc. We operated as JagNotes, Inc. until March 1999 when we were
      acquired by Professional Perceptions, Inc., a Nevada corporation, which
      subsequently changed our name to JagNotes.com Inc.




Until
      1999, we targeted only a limited audience of financial professionals and did
      not
      engage in organized sales and marketing efforts. In 1999, we decided to change
      focus by expanding onto the Internet and targeting retail subscribers with
      the
      hope of expanding our subscriber base and business.




We
      undertook a corporate reorganization in January 2002 in order to distinguish
      and
      better manage separate areas of business. On January 4, 2002, we formed JAG
      Media LLC, a Delaware limited liability company and wholly owned subsidiary.
      The
      assets and liabilities of our current fax and Internet subscription business
      were transferred to JAG Media LLC. In order to better reflect the overall
      business in which we expected to engage and the corporate structure we intended
      to use to conduct that business, we changed our name from JagNotes.com Inc.
      to
      JAG Media Holdings, Inc. effective April 8, 2002.


1


On
      November 24, 2004, through one of our subsidiaries, Pixaya (UK) Limited
      (“ **Pixaya** ”),
      we
      purchased certain development stage software products and related assets in
      the
      United Kingdom from TComm Limited, a company organized in the United Kingdom.
      We
      subsequently changed the name of our subsidiary, JAG Media LLC, to Pixaya LLC
      in
      order to better reflect its role as owner of Pixaya and primary provider of
      support for our Pixaya products in the United States. In light of our current
      cash constraints and primary strategy to find a suitable merger candidate,
      we
      have currently ceased financing development and marketing by Pixaya of our
      SurvayaCam product, a mobile surveillance system which streams live video in
      real time from the point of use back to a control center and, if desired, to
      other locations. To date, we have only made minimal sales of SurvayaCam as
      part
      of our prior marketing and distribution efforts.




**Our
      Industry**




The
      growth of the Internet has changed the way investors seek information and manage
      their portfolios. Individual investors are increasingly seeking access to
      information that was formerly available only to financial professionals.
      Professional investors who have traditionally relied on print and other media
      for information are demanding faster information and greater
      accessibility.




According
      to tracking surveys conducted by Pew Internet & American Life Project as of
      September 2007, approximately 36% of Internet users utilize the Internet to
      obtain financial information and approximately 11% of Internet users utilize
      the
      Internet to buy or sell stocks, bonds or mutual funds. Although this represents
      a decrease from the 44% and 13%, respectively, for these activities, reported
      by
      Pew in 2005, the Internet population base has steadily risen during this period
      as has broadband usage.




With
      respect to our Pixaya business unit, the mobile and wireless industries are
      experiencing significant growth and changing the way businesses operate and
      people communicate. Both industries are also giving rise to new forms of mobile
      entertainment, communication and information not available just a few short
      years ago. As of June 2008 there were more than 262 million wireless subscribers
      in the U.S., reported wireless minutes of use exceeded 2.2 trillion and wireless
      penetration reached 84% of the total U.S. population.




In
      addition, wireless carriers are updating their networks and are in the process
      of deploying their next-generation high-speed broadband networks, commonly
      referred to as 3G. Such 3G networks will significantly improve uplink and
      downlink speeds, thereby providing an enhanced user experience when viewing
      video, accessing the Internet or working with any large data files.




**Our
      Products**




***Subscription
      Products***




We
      have
      been providing financial and investment information to the investment community
      since 1989. In 1999, we began offering our services on a subscription fee basis
      to the general public for the first time through our website.




Our
      jagnotes.com website consists solely of a subscription-based service. We offer
      our subscribers two targeted products: The JAGNotes (Upgrade/Downgrade) Report,
      targeted primarily at institutional subscribers, and the Rumor Room, targeted
      primarily at retail individual customers. These two products are accessible
      only
      to paid subscribers. Subscriptions are offered to individuals at the rate of
      $9.95 per month, or $99.95 per year. We have offered free trial subscriptions
      at
      times in the past and may do so in the future.




*JAGNotes
      (Upgrade/Downgrade) Report*




The
      JAGNotes Report is a daily consolidated investment report that summarizes newly
      issued research, analyst opinions, upgrades, downgrades and analyst coverage
      changes from various investment banks and brokerage houses. Each morning we
      gather this information, then compile and release it in a concise, easy to
      read
      format before the markets open. We believe that this report gives early,
      convenient access to its subscribers of potentially market moving information
      that was traditionally not available in a convenient format when the market
      opens. We update this report from time to time during the trading day.


2


Our
      current strategy involves phasing out retail subscribers for the JAGNotes Report
      and refocusing on institutional customers and professional traders. We have
      always maintained our original JAGNotes fax-based service for a limited number
      of mostly institutional subscribers. Through this service, we provide our
      subscribers faxed copies of our daily JAGNotes Report, which is provided through
      installments as information is received every weekday morning before the stock
      market opens. We also allow our subscribers access to our website by providing
      them with a specified number of access codes. The price for this combined
      service is approximately $1,500 to $2,150 per year. The website contains
      substantially all of the information provided in the faxed reports, updates
      of
      such information and access to the Rumor Room.




We
      intend
      to continue providing our combined fax/Internet service primarily to
      institutional subscribers. We believe that some financial institutions are
      willing to pay a higher price for this combined service because they consider
      a
      faxed report to be a more user friendly means of receiving the information
      even
      if their employees have direct Internet access.




While
      we
      intend to focus efforts exclusively on offering the JAGNotes Report to
      institutional customers, we recognize that it remains of interest to some retail
      customers as well. However, to avoid the cost of accessing such individuals
      we
      expect to do so almost exclusively through strategic affiliations such as our
      current arrangement with Track Data, as described under “—Our Strategy—Increase
      Revenue by Expanding Our Subscriber Base and Product Distribution.”




*Rumor
      Room*




Because
      rumors can move equities, we have established the Rumor Room where we post
      rumors that have been heard on the street about various stocks. When we hear
      rumors, we post the information in the Rumor Room and indicate the date and
      time
      of the rumor. While we realize that rumors are inherently unreliable as
      indicated by a cautionary note introducing this portion of our website at
      jagnotes.com, we believe that every trader and investor, both large and small,
      should have access to this information to determine its usefulness. The Rumor
      Room is available to our subscribers and updated whenever we receive relevant
      information.




Although
      targeted primarily at individual subscribers, the Rumor Room is also made
      available through our website to institutional investors as described above.
      As
      described below, if we can obtain funding and we can complete development of
      our
      Pixaya Mobile software product, which delivers on-demand video/audio clips
      and
      text messages to mobile phones, we intend to try to distribute the Rumor Room
      through mobile phones as well. We believe such a distribution channel might
      better access our target audience. There can be no assurance, however, that
      such
      development will be successfully completed or, if completed, that customers
      will
      embrace this new mode of distribution. For the time being, we have stopped
      further development of our Pixaya Mobile software product in light of our lack
      of liquidity.




***Advertising***




While
      we
      expect the primary source of our revenue to continue to be from subscriptions
      for our JAGNotes Report and the Rumor Room, we may supplement this with
      advertising revenue. Such revenues have, however, not been substantial to date.
      We do not expect such advertising revenues to become material
      until:




·
            there
                is a major upturn from current levels in Internet banner advertising
                generally or we are able to offer advertisers various media advertising
                alternatives to banners; and




·
            we
                are successful in increasing the number of unique visitors to our
                website.




***Pixaya
      Products***




*SurvayaCam*




In
      November 2004, we purchased certain development stage software products and
      related assets from TComm Limited, a company organized in the United Kingdom.
      At
      the time of acquisition, TComm Limited was in various stages of development
      of
      four software products. One product that we continued to develop is SurvayaCam
      (previously CCMTV), a mobile surveillance system that consists of software
      programs and related hardware intended to permit field personnel to send
      encrypted real-time video streams from the field to a central location (or
      multiple locations) where they can be viewed. The system can be used as a
      fixed-in-place or body worn surveillance system. In light of our current cash
      constraints and primary strategy to find a suitable merger candidate we have
      currently suspended marketing and further development of SurvayaCam. We have
      only made minimal sales of such product as part of our prior marketing and
      distribution efforts.


3


*Pixaya
      Mobile and Other Pixaya Products*




Due
      to
      our lack of funding, we have for the time being discontinued developing Pixaya
      Mobile (previously known as TComm TV), which delivers on-demand video/audio
      clips and text messages to various Java-based and Symbian-based mobile phones.
      We have also discontinued our support of the other products we acquired through
      our Pixaya acquisition. In addition, after the acquisition we first supported
      and then had to suspend development of a new mobile phone product named “SOS
      Guides,” which are mobile travel guides deliverable to users through their
      mobile phones.




**Our
      Strategy**




The
      success of our business depends on our ability to obtain the requisite financing
      and be able to:




●
            pursue
                merger and other expansion opportunities;




●
            expand
                our subscriber base and product distribution;
                and




●
            curtail
                costs to correspond with our
                revenues.




We
      will
      require additional funds in order to implement our business strategy. Our
      strategy to increase our revenues by expanding our subscriber base and product
      distribution has not been effective to date, as our revenues have declined
      and
      leveled off below the cost of subscriber revenues. At our current usage rate
      of
      cash, the cash generated from our operations will not be sufficient to fund
      the
      liquidity requirements of our current business operations. While we have taken
      steps to curtail costs, we do not believe it is practicable to further curtail
      costs to the level that they will correspond with our revenues. Accordingly,
      we
      will need to raise additional funds through public or private financing,
      strategic relationships, mergers or other arrangements. We have not abandoned
      our revenue and cost strategies, but the primary focus of our strategy is the
      pursuit of merger and other expansion opportunities, such as the proposed merger
      with BlueCreek. See “—Pursue Merger and Other Expansion Opportunities.” We have
      used our limited available funds principally to support our attempts to find
      merger candidates and consummate a merger, with a modest amount also being
      used
      to support our JAGNotes Report and Rumor Room subscription service.




If
      we
      obtain the requisite financing through a merger or otherwise, we intend to
      try
      to reposition our two basic products so they are targeted more effectively
      at
      their respective markets: institutional customers (JAGNotes Report) and retail
      customers (the Rumor Room). In time, we hope that by refocusing our products
      on
      specific customer groups, we may become a more important information resource
      both for institutional customers, such as investors, brokers and investment
      advisers, and for individual retail customers.




Although
      we believe in these strategies, goals and targets, we cannot guarantee that
      we
      will be successful in implementing them or that, even if implemented, they
      will
      be effective in creating a profitable business. Strategies that in the past
      we
      thought would be successful have not proven effective. In addition, we are
      dependent on having sufficient cash to carry out our strategies. Alternatively,
      we may have to continue to reduce services to a level that subscribers and
      other
      customers may not find valuable.




***Pursue
      Merger and Other Expansion Opportunities.***




This
      portion of our strategy represents our highest priority and we have looked
      at
      various possible acquisitions over the past four years. Over that period, we
      have increased our efforts to find a compatible merger candidate and have
      considered dividing our business to help make our business more attractive
      to
      potential investors.




4


In
      December of 2005, we entered into an agreement and plan of merger with
      Cryptometrics, Inc., a Delaware corporation (“ **Cryptometrics** ”),
      Cryptometrics Acquisition, Inc., a Delaware corporation and our wholly-owned
      subsidiary, Robert Barra and Michael Vitale. The agreement and plan of merger
      was subsequently amended thirteen times through April 14, 2008. On June 18,
      2008, we received a letter from Cryptometrics dated June 17, 2008, stating
      that
      the automatic termination date of the agreement and plan of merger had expired
      and that Cryptometrics had decided not to extend the agreement and plan of
      merger any further. The letter further stated that the agreement and plan of
      merger had by its terms been terminated, and is void and of no force or
      effect.




On
      October 1, 2008, we entered into a non-binding letter of intent with respect
      to
      a merger opportunity with BlueCreek, a Colorado corporation engaged in the
      development, extraction and processing of coalbed methane. For a discussion
      of
      the proposed merger, see “—Proposed Merger with BlueCreek Energy.”




We
      are
      also pursuing the possibility, subject to available funding, of spinning off
      one
      of our two major services in order to maximize the chances of successfully
      developing both such services by focusing them on their respective target
      customer bases. We have considered a possible spin-off of either the Rumor
      Room,
      together with our related Pixaya Mobile software development business, or the
      JAGNotes Report. Any such spin-off might possibly be done in connection with
      a
      merger with another enterprise which may be in an unrelated line of business.
      We
      believe our two products might be better repositioned and developed as their
      own
      corporate entities which might also appeal to different investors. We are not
      currently considering any spin-off and have not entered into any term sheet
      in
      connection with any merger related to such a spin off.




***Increase
      Revenue by Expanding Our Subscriber Base and Product
      Distribution***




We
      do not
      believe we can pursue our strategy to increase revenue by expanding our
      subscriber base and product distribution unless we obtain additional financing
      to improve the content and distribution of our JAGNotes Report and Rumor Room
      products and to further develop our SurvayaCam product. We believe the
      institutional market for the JAGNotes Report offers an opportunity to achieve
      higher revenues at lower per unit cost than the retail market we have been
      pursuing. Accordingly, with respect to the JAGNotes Report, we plan to focus
      on
      servicing the institutional segment of our business. To assist us in this
      effort, if we have the requisite funding, we intend to investigate ways of
      using
      the Internet more effectively in distributing the JAGNotes Report to the
      institutional market and help those customers in turn redistribute the product
      to their professional employees. Also, in order to access individual
      professional traders without incurring excessive marketing costs, we intend
      to
      pursue strategic affiliations, partnerships, joint ventures or other
      relationships with strategic partners, such as our current strategic
      arrangements with Track Data, Comtex, Inc. and Acquire Media Corporation. As
      part of our strategic arrangements with these financial information providers,
      the JAGNotes Report is offered as part of their collection of subscriber
      services to the professional trading community. We have to date not been
      successful in adding additional strategic partners.




With
      respect to our Rumor Room product, we believe that developing technologies,
      such
      as broadband-based content delivery to mobile phones, may give us a better
      distribution channel which can make the individual customer market for the
      Rumor
      Room cost effective as well. In order to implement this strategy, we must also
      obtain the necessary funds to improve the content and distribution of the Rumor
      Room. If we are able to fund development of our Pixaya Mobile software product,
      it will explore the feasibility of using mobile phones as a new distribution
      channel for our Rumor Room product.




We
      previously attempted to market SurvayaCam through demonstrations and pilot
      program deployments. Some pilot programs involved us providing SurvayaCam
      software and hardware free of charge, while others involved the sale of
      SurvayaCam at a discount price. In addition, we previously attempted to develop
      a network of resellers who could function as the primary distribution channel
      for SurvayaCam. We had only made minimal sales of SurvayaCam as part of such
      distribution efforts before we suspended such efforts due to cash constraints.
      If we are able to fund the marketing and distribution of SurvayaCam in the
      future we will evaluate the feasibility of continued use of our pilot program
      and reseller distribution model, as well as examine other distribution channels
      such as licensing SurvayaCam on a “white label” basis to a single major
      reseller.




***Curtail
      Costs***




In
      2000,
      we sold our webcasting business and discontinued our efforts to market our
      advertiser-based financial webcast product to reduce our cash flow requirements.
      In addition, we have discontinued all our paid commentators and all except
      two
      of our employees in order to save costs where we concluded that the cost was
      not
      justified by our subscribers’ interest and current revenue levels.


5


We
      are
      not aware of further costs which can be curtailed at this point without unduly
      adversely affecting our business. Many of our general and administrative costs
      are related to being a public company and these costs are difficult to reduce
      in
      light of the Sarbanes-Oxley legislation and its requirements. While we will
      continue to look for cost savings as well to explore ways to reduce cash
      expenditures, we do not believe it is possible as a practical matter to reduce
      costs on an accrual or cash basis to a level commensurate with our current
      or
      expected revenues.




**Regulation**




The
      securities industry is subject to extensive regulation under federal and state
      laws in the United States, and companies that provide financial advice to
      investors are generally required to register as investment advisers at either
      the federal or state level. We believe that our business consists of a
      publishing activity for which investment adviser registration and regulation
      do
      not apply under applicable federal or state law, and thus we are not registered
      as an investment adviser with either the Securities and Exchange Commission
      (the
“ **SEC** ”)
      or any
      of the various states. The regulatory environment in which it operates is
      subject to change, however, and we could be required to register as an
      investment adviser with an appropriate regulatory agency at some point in the
      future.




We
      are
      also subject to a number of domestic and international laws and regulation
      that
      affect companies conducting business on the Internet. The application of these
      laws and regulations in many instances is unclear or unsettled. A number of
      U.S.
      federal laws, including those referenced below, impact our business. The United
      States Congress has passed legislation that regulates certain aspects of the
      Internet, including on-line content, copyright infringement, user privacy,
      liability for third-party activities and jurisdiction. Specifically, with
      respect to one aspect of copyright law, the United States Congress enacted
      the
      Digital Millennium Copyright Act (“ **DMCA** ”).
      The
      DMCA is intended, in part, to limit the liability of eligible online service
      providers for listing or linking to third-party websites that include materials
      that infringe the copyrights of others. The United States Congress also enacted
      the Communications Decency Act (“ **CDA** ”).
      Portions of the CDA are intended to provide statutory protections to online
      service providers who distribute third-party content. We rely on the protections
      provided by both the DMCA and CDA in conducting our business. Our failure to
      comply with any statutory requirements of these acts could result in greater
      liability. Additionally, any changes in these laws or judicial interpretations
      narrowing their protections will subject us to greater risk of liability and
      may
      increase our costs of compliance with these regulations or limit our ability
      to
      operate certain lines of business.




In
      the
      area of data protection, many states have passed laws requiring notification
      to
      users when there is a security breach for personal data, such as California’s
      Information Practices Act. The costs of compliance with these laws may increase
      in the future as a result of changes in interpretation. Furthermore, any failure
      on our part to comply with these laws may subject us to significant liabilities.




Additionally,
      federal, state, local and foreign governmental organizations from time to time
      consider other legislative and regulatory proposals that would regulate the
      Internet. We may be subject to any such new laws or regulations that are
      directly applicable to our domestic and international activities. The
      distribution of content to mobile phones is also regulated.




We
      cannot
      predict what new laws will be enacted or how courts will interpret both existing
      and new laws. As a result, we are uncertain as to how new laws or the
      application of existing laws may affect our business. For example, while we
      are
      not aware of any pending laws or regulations that would restrict our ability
      to
      disseminate market-based rumors and other information of unsubstantiated
      reliability, it is possible that such laws or regulations may be passed in
      the
      future. Increased regulation in this area could decrease the demand for our
      services, increase our cost of doing business or otherwise have a material
      adverse effect on our business, results of operations and financial condition.
      In addition, the ways in which Internet companies deal with copyrighted content
      which appears on their sites are in flux.




**Competition**




Providing
      financial information and analysis over the Internet is an intensely competitive
      business. A large number of web-based financial information providers are
      competing for subscribers, customers, advertisers, content providers, analysts,
      commentators and staff. In addition, cable television is an increasingly
      important source of financial news and therefore competition.


6


Our
      business competes to a different degree with the following information sources,
      many of which provide their information without charge:




●
            Online
                financial news and information providers, such as Yahoo Finance,
                Marketwatch, TheStreet.com, Forbes.com, Briefing.com, America Online
                Personal Finance, Reuters and
                MotleyFool.com;




●
            Internet
                portals and search engines such as Google, AOL, MSN and
                Yahoo;




●
            Traditional
                media sources such as The Wall Street Journal, Investor’s Business Daily,
                The Financial Times, Barrons, CNN/Money, and MSN Money/CNBC, all
                of which
                also have an Internet presence;




●
            Terminal-based
                financial news providers including Bloomberg, Reuters and Dow Jones;
                and




●
            Online
                brokerage firms such as TD Ameritrade, E*Trade Financial, Charles
                Schwab
                and Fidelity.




Because
      there is not a readily defined market in which we compete, we cannot predict
      which information source or sources will be our primary competition in the
      future. However, we expect competition from each of the above information
      sources to intensify and increase in the future. Most of our current and
      potential competitors have greater name recognition, larger financial, technical
      and marketing resources, and more extensive customer bases than we do, all
      of
      which could be leveraged to gain market share to our detriment. Such advantages
      have permitted our competitors to enter new sectors such as distribution through
      mobile phones, more easily than we have been able.




It
      is not
      difficult for new competitors to enter the market. Many blogs now provide
      financial information at no cost. Much of the information we provide is publicly
      available and it does not have any patented or otherwise protected technologies
      that would preclude or inhibit competitors from entering our markets. Our
      current and future competitors may develop or offer services that have
      significant price, content, creative or other advantages over the services
      we
      provide.




In
      order
      for us to successfully compete, we will need to reliably provide valuable
      services to a greater number of institutional and other subscribers who are
      willing to pay fees sufficient to support such services. We believe that over
      time, if we can obtain sufficient funding, a successful implementation of our
      business strategy will allow us to compete successfully as a focused provider
      of
      timely investment information to institutional and retail
      customers.




**Intellectual
      Property**




We
      are
      the owner of several trademarks, including “JAGNOTES,” “AHEAD OF THE MONEY” and
“STREETSIDE,” but consider only the “JAGNOTES” trademark to be material to our
      business.




**Website
      Technical Information**




We
      lease
      one web server, which is the computer system on which all of the content for
      our
      jagnotes.com website is maintained and through which we operate our jagnotes.com
      website. Our U.S. server is maintained by Woodbourne Solutions and is located
      at
      their facility in Germantown, Maryland.




Our
      Pixaya website at www.pixaya.com is hosted by InnoTech. InnoTech has offices
      located in southern California and Raleigh, North Carolina. Our Internet data
      center is located in Orange County, California.




**Employees**




As
      of
      July 31, 2008, we had two employees, Messrs. Mazzarisi and Schoepfer, our Chief
      Executive Officer and Chief Financial Officer, both of whom have employment
      agreements with the Company.




**Proposed
      Merger with BlueCreek Energy**




On
      October 1, 2008, we entered into a non-binding letter of intent with respect
      to
      a merger opportunity with BlueCreek, e2Business Services (“ **e2Business** ”),
      a
      majority shareholder of BlueCreek, and Y.A. Global Investments, L.P.
      (“ **YA
      Global** ”).
      BlueCreek is a Colorado corporation engaged in the development, extraction
      and
      processing of coalbed methane natural gas currently operating within the Rocky
      Mountains region of the United States. YA Global, in addition to being the
      provider of much of our financing since 2002, is a senior secured lender to
      BlueCreek and has agreed to restructure its two convertible debentures and
      warrant with BlueCreek at the closing of the merger by reducing the interest
      rates, amending the conversion terms of the debentures, deferring certain
      principal payments, converting $2,000,000 of principal into equity of BlueCreek
      in the form of a warrant, and agreeing to remove certain registration rights
      it
      had with respect to the shares underlying the convertible debentures and the
      warrants.


7


Pursuant
      to the letter of intent, we would enter into a merger agreement with BlueCreek
      and e2Business under which BlueCreek would become our wholly owned subsidiary.
      In consideration of the merger, the shareholders of BlueCreek would acquire
      339,402,576 shares of our common stock, representing upon issuance 82% of our
      outstanding common stock on a fully diluted basis, in exchange for all of the
      issued and outstanding capital stock of BlueCreek. In addition to shares of
      our
      common stock to be received by the shareholders of BlueCreek at the closing
      of
      the merger, the shareholders of BlueCreek may also receive up to an additional
      200,000,000 shares of our common stock if BlueCreek achieves certain
      post-closing milestones. The shares of our common stock to be issued to the
      shareholders of BlueCreek would not be registered for sale with the SEC and
      would, therefore, be subject to the resale restrictions of Rule 144. Our
      existing public shareholders will experience significant dilution from the
      issuance of these shares to the shareholders of BlueCreek.




Upon
      closing of the merger, our current directors and executive officers would resign
      as directors and executive officers of JAG Media Holdings, Inc and our
      subsidiaries. Our Board of Directors and management would be replaced with
      designees of BlueCreek.




In
      connection with the proposed merger, the BlueCreek shareholders who immediately
      prior to the closing own more than 15% of the outstanding BlueCreek stock (other
      than YA Global, if applicable) will agree not to sell the shares of our common
      stock issued in the merger for a period of twelve months from the closing;
      provided, however, that prior to the expiration of such period and subject
      to
      the resale restrictions of Rule 144, each of such shareholders may sell not
      more
      than:




●
            50%
                of the shares that it would be permitted to sell pursuant to Rule
                144,
                during any 3-month period following the expiration of the 6-month
                Rule 144
                holding period, if the post-merger company does not have its shares
                listed
                on the American Stock Exchange or the NASDAQ Capital Market at the
                time of
                such sales; or




●
            75%
                of the shares that it would be permitted to sell pursuant to Rule
                144,
                during any 3-month period following the expiration of the 6-month
                Rule 144
                holding period, if the post-merger company does have its shares listed
                on
                the American Stock Exchange or the NASDAQ Capital Market at the time
                of
                such sales and has not received notice that it is not in compliance
                with
                any exchange listing requirements.




The
      closing of the merger would be conditioned upon (i) each party completing a
      due
      diligence review, the results of which are satisfactory in all respects to
      each
      party, (ii) ourselves and BlueCreek obtaining all appropriate and necessary
      corporate and shareholder approvals for the transaction, and (iii) the entering
      into of definitive agreements among the parties, including, without limitation,
      a mutually acceptable definitive merger agreement between BlueCreek and
      ourselves and debt restructuring agreement with YA Global. Except for certain
      specified provisions, the letter of intent is non-binding. There is no assurance
      that the definitive documentation called for in the letter of intent will ever
      be executed, or if executed, that the proposed merger between ourselves and
      BlueCreek will be consummated. Further, to the extent that definitive agreements
      are reached, no assurances can be given that any such agreements will be entered
      into consistent with the current expectations of us and BlueCreek, as
      contemplated by the terms of the letter of intent.




**Financing
      Arrangements**




***Equity
      Line of Credit with YA Global***




Until
      May
      of 2006, we had a $10 million equity line of credit with YA Global (f/k/a
      Cornell Capital Partners, L.P.) pursuant to an Equity Line Purchase Agreement,
      entered into in April of 2002 and amended in July of 2004, which superseded
      our
      original equity line purchase agreement with YA Global from August of 2001.
      Pursuant to our equity line of credit we were able to sell our shares of common
      stock to YA Global from time to time to fund general working capital, including
      funds which might be required by virtue of our strategic plans. Effective May
      25, 2006, as a condition of a new financing from YA Global, we terminated the
      Equity Line Purchase Agreement, which had been scheduled to expire on August
      28,
      2006. See “—Secured Convertible Debentures.” As of its termination, $4,035,000
      of our equity line had been utilized.


8


***$2,000,000
      Promissory Note***




On
      February 2, 2005 we borrowed $2,000,000 from YA Global evidenced by a promissory
      note dated as of January 25, 2005, the repayment of which was subsequently
      extended on August 5, 2005 (the “ **Promissory
      Note** ”).
      We
      paid YA Global a fee of $100,000 in connection with this transaction, as well
      as
      a $5,000 documentation fee. We used the proceeds of the loan for working capital
      and general corporate purposes. Under the terms of the Promissory Note, the
      face
      amount of the Promissory Note and interest at a rate of 12% per annum on
      outstanding principal was payable from time to time either (i) out of the net
      proceeds to be received upon delivery of put notices under our equity line
      of
      credit or (ii) in full within 753 calendar days of January 25, 2005, regardless
      of the availability of proceeds under our equity line of credit, unless an
      extension was mutually agreed to in writing. Pursuant to the Promissory Note,
      we
      deposited in escrow 35 put notices under our equity line of credit in an amount
      of $60,000 each and one put notice in an amount of $181,017. None of these
      put
      notices were ever released from escrow and they were all returned to us for
      cancellation. As permitted by the terms of the Promissory Note, we opted to
      make
      three interest payments to YA Global, each in the amount of $20,000, paid in
      a
      single lump sum of $60,000 on August 5, 2005. We refinanced the outstanding
      principal amount of the Promissory Note in May of 2006.




***Secured
      Convertible Debentures***




On
      May
      25, 2006, pursuant to a letter agreement with YA Global, we refinanced the
      Promissory Note. Under the terms of the refinancing YA Global received 1,250,000
      shares of our common stock as consideration for $250,000 of the outstanding
      principal amount of the Promissory Note and a $1,900,000 10% secured convertible
      debenture with a maturity of three years in consideration of the remaining
      $1,750,000 of the outstanding principal amount of the Promissory Note and
      $150,000 in accrued and unpaid interest. We also issued two additional 10%
      secured convertible debentures in the aggregate principal amount of $2,250,000
      to YA Global, each with a maturity of three years. We paid YA Global a
      commitment fee equal to 10% of the disbursements of $2,250,000 at closing,
      as
      well as a $15,000 structuring fee and their counsel’s fee of
      $15,000.




In
      connection with the two additional secured convertible debentures, we entered
      into security agreements with YA Global, which provided that the secured
      convertible debentures would remain secured by our assets until a registration
      statement covering the shares into which such secured convertible debentures
      are
      convertible has been effective for 60 days. These security agreements were
      terminated as of January 31, 2008 in connection with the conversion of the
      remaining principal and accrued interest on the debentures.




YA
      Global
      had the right to convert the secured convertible debentures, in whole or in
      part
      and at its sole option, into shares of our common stock at a conversion price
      that is the lower of (i) $0.40 per share or (ii) a 10% discount to the lowest
      volume weighted average price, as reported by Bloomberg L.P., of shares of
      our
      common stock during the 30 trading days prior to the conversion date. Pursuant
      to the debentures, YA Global was restricted from converting the debentures
      into
      an amount of shares of our common stock that would result in it owning in excess
      of 9.99% of the then total outstanding shares of our common stock, unless YA
      Global chooses to waive such restriction, which waiver would be subject to
      a
      65-day notice period.




As
      of
      January 31, 2008, YA Global has converted the entire principal and accrued
      interest of the secured convertible debentures and the debentures are no longer
      outstanding. See “Item. 5—Market for Registrant’s Common Equity, Related
      Stockholders Matters and Issuer Purchases of Securities—Recent Sales of
      Unregistered Securities.”




***Warrants***




In
      connection with the issuance of the secured convertible debentures, we issued
      to
      YA Global five warrants to purchase 12,000,000 shares of our common stock,
      as
      follows: (i) warrant No. CCP-1 exercisable for 2,000,000 shares, at an exercise
      price of $0.40 per share; (ii) warrant No. CCP-2 exercisable for 2,000,000
      shares at an exercise price of $0.50 per share; (iii) warrant No. CCP-3
      exercisable for 2,000,000 shares at an exercise price of $0.60 per share; (iv)
      warrant No. CCP-4 exercisable for 3,000,000 shares at an exercise price of
      $0.70
      per share; and (v) warrant No. CCP-5 exercisable for 3,000,000 shares at an
      exercise price of $0.80 per share. Warrant No. CCP-1 was exercised by YA Global
      in its entirety for an aggregate exercise price of $800,000. Warrant No. CCP-4
      was amended on September 30, 2008 to reduce the exercise price to $0.20 per
      share, and in connection with such amendment, YA Global partially exercised
      the
      warrant with respect to 1,750,000 shares of common stock for an aggregate
      exercise price of $350,000. All four remaining warrants expire in May
      2011.


9


The
      exercise price and number of shares issuable pursuant to each of the warrants
      are also subject to adjustment in certain circumstances. In the event that
      we
      issue or sell any common stock, or are deemed to have issued or sold common
      stock through issuing stock options or convertible securities at or representing
      a price per share less than the exercise price of the warrants in effect
      immediately prior to such issuance or sale, then immediately after the issuance
      or sale, the exercise price of the warrants then in effect will be reduced
      to an
      amount equal to the price at which the common stock was, or was deemed to be,
      sold or issued. No such adjustment shall be made as a result of issuances of
      shares under our 1999 Long-Term Incentive Plan. Upon each adjustment to the
      exercise price of the warrants, the number of shares issuable upon exercise
      of
      the warrants will be adjusted to the number of shares determined by multiplying
      the exercise price in effect immediately prior to such adjustment by the number
      of shares of common stock issuable upon exercise of the warrants immediately
      prior to such adjustment and dividing the product by the exercise price
      resulting from such adjustment. The exercise price and the number of shares
      issuable pursuant to each of the warrants are also subject to adjustment in
      connection with certain corporate transactions.




YA
      Global
      may not exercise the warrants that would result in it owning in excess of 9.99%
      of the then total outstanding shares of our common stock, unless YA Global
      chooses to waive such restriction, which waiver would be subject to a 65-day
      notice period.




**Increase
      in Authorized Shares**




At
      the
      2006 Annual Stockholders Meeting held on April 26, 2006, our stockholders voted
      to increase the authorized shares of our common stock from 250,000,000 to
      500,000,000.




**Facilities**




See
“Item
      2.—Properties.”




**Legal
      Proceedings**




See
“Item
      3.—Legal Proceedings.”




**Where
      You Can Find More Information About Us**




We
      are
      required to file annual, quarterly and current reports, proxy statements and
      other information with the SEC. You can read and copy any of this information
      at
      the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 on
      official business days during the hours of 10:00 a.m. to 3:00 p.m. You may
      obtain information on the operation of the Public Reference Room by calling
      the
      SEC at 1-800-SEC-0330. This information is also available from the SEC’s website
      at http://www.sec.gov .
      We will
      also gladly send any filing to you upon your written request to Thomas J.
      Mazzarisi, our Chairman, Chief Executive Officer and General Counsel, at 6865
      SW
      18th Street, Suite B-13, Boca Raton, Florida 33433.




**ITEM
      1A. RISK FACTORS**




An
      investment in our company involves a high degree of risk. You should carefully
      consider the risks below, together with the other information contained in
      this
      report, before you decide to invest in our company. If any of the following
      risks occur, our business, results of operations and financial condition could
      be harmed, the trading price of our common stock could decline, and our
      stockholders could lose all or part of their investment in our common
      stock.




**Risks
      Related to Our Business**




***We
      have had a history of losses, anticipate losses for the foreseeable future
      and
      may never achieve profitability*** . ****




As
      of
      July 31, 2008, we had an accumulated deficit of $63.3 million and we may never
      achieve profitability. We will continue to incur significant losses for the
      foreseeable future and cannot assure you that our revenue will grow in the
      future or that additional financing will be made available to us. As a result,
      we believe that there is substantial doubt about our ability to continue as
      a
      going concern and our independent auditors included an explanatory paragraph
      to
      emphasize such doubt in their report on the audit of our consolidated financial
      statements included in this Annual Report. We have made, and will need to
      continue to make, very significant expenditures well before our revenues
      increase sufficiently to cover our deficit. We are unable to estimate when,
      if
      ever, our revenues will increase sufficiently to cover our costs as our
      subscription revenues are materially below our costs. We require additional
      funding and if we do not obtain it, we may be forced to restructure, file for
      bankruptcy or cease operations, any of which could cause our stockholders to
      lose part of or all their investment in our common stock.


10


**We
      will require additional funds to meet our cash operating expenses and achieve
      our current business strategy**.




We
      will
      require additional capital to meet our current operating expenses as well as
      any
      non-recurring costs or liabilities and to achieve our current business strategy.
      As a condition of our financing in May 2006, we were required to cancel our
      existing equity line purchase agreement and do not have access to our historical
      source of liquidity. Other than capital received from the exercise of our
      outstanding warrants, the only foreseeable source of additional capital
      necessary to sustain our operations as well as refocus our business and search
      for appropriate merger candidates is through the sale of equity, including
      in
      the context of a merger. Without access to the readily available mechanism
      of an
      equity line, it will be more difficult and time consuming for us to arrange
      private placements or other sales of our common stock. If we are unable to
      raise
      money by selling our common stock through private placements or otherwise,
      we
      will be unable to meet our cash needs and we would be forced to restructure,
      file for bankruptcy or cease operations, any of which could cause our
      stockholders to lose all or part of their investment in our common stock. Even
      if we are able to raise additional capital, it may be on terms that are
      materially adverse to our stockholders’ interests with respect to dilution of
      our book value, dividend preferences, liquidation preferences, or other
      terms.




***We
      may not be able to find or consummate a suitable merger or
      acquisition*** .




Our
      primary business strategy is the consummation of a successful merger or
      acquisition and we are actively looking for merger or acquisition candidates
      that would be beneficial to us. Over the past years, we have entered into
      negotiations with several companies and recently entered into a non-binding
      letter of intent with respect to a merger opportunity with BlueCreek, a Colorado
      corporation engaged in the development, extraction and processing of coalbed
      methane. This merger may not be successfully concluded and we may not be able
      to
      find or consummate another suitable merger or acquisition. Recently, our
      agreement and plan of merger with Cryptometrics expired and Cryptometrics
      notified us that they did not wish to extend the agreement and plan of merger.
      Our business will be adversely affected if we are unable to find a suitable
      merger or acquisition candidate and complete a business combination and even
      if
      we are able to complete a merger or acquisition, the resulting business may
      result in losses or not prove viable.




***We
      may be effectively acquired and managed by a business with no experience in
      our
      sector*** .




In
      order
      to expand our business substantially, we may have to merge with a company in
      a
      different line of business than our current activities and in doing so may
      issue
      many more of our shares than are now outstanding to the stockholders of the
      other business. The proposed transaction with BlueCreek is proposed to be
      structured in this manner. In addition to greatly diluting our current
      stockholders’ interest in us, the company with which we would merge would have
      control over our business. A company such as BlueCreek, whose primary business
      is a natural gas company, would have no expertise in our area of operations
      permitting it to effectively manage our current business. As a result of the
      proposed merger with BlueCreek or any similar merger, current or new management
      may not be able to effectively manage the newly combined business or the
      business of the other company. If current or new management is unable to operate
      the new combined businesses at a profit or if we incur substantial costs in
      merging the businesses, it could materially and adversely affect our business,
      results of operation and financial condition and could cause our stockholders
      to
      lose part or all of their investment in our common stock.




***We
      have not been successful in sufficiently reducing our cost of revenues and
      may
      continue to be unsuccessful*** .




Our
      costs
      continue to exceed our revenues, even though we believe we have reduced our
      costs as much as practically possible. At the same time, our revenues remain
      low. If this trend continues, we may be unable to meet our cash needs and we
      may
      be forced to restructure, file for bankruptcy or cease operations, any of which
      could cause our stockholders to lose part or all of their investment in our
      common stock.


11


***We
      may not be able to stop contraction of our subscriber revenues and attract
      sufficient institutional customers.***




Our
      subscriber base has been shrinking and we have determined that we cannot expand
      our retail subscriber base for our traditional product, the JAGNotes Report.
      We
      believe that we must refocus our subscriber base on institutional customers
      to
      be successful, but do not have the funding to do so. Our subscription revenues
      have leveled off at a level which cannot support our operating costs. During
      the
      year ended July 31, 2008, revenues were approximately $177,065, and consisted
      entirely of revenues from subscriptions.




Our
      efforts to refocus our key subscriber base have been ineffective and
      historically Internet users have only been attracted to subscription websites
      in
      limited areas. Our competitors may be more successful than us in attracting
      customers, or the number of institutional and other professional users seeking
      or willing to pay for financial information of the kind we provide may not
      increase or may even decrease. Any of these would adversely affect our revenues.
      Because there is currently limited potential for Internet banner advertising
      revenues, if we cannot reverse the current shrinkage of our subscriber base
      or
      refocus such base, we will have little, if any, financial success.




***We
      have been forced to discontinue our commentators and the free portion of our
      website, which may cause us to lose subscribers*** .




In
      order
      to attempt to reduce costs, we have been forced to discontinue all of our
      commentators as well as the entire free portion of our website. Accordingly,
      we
      run the risk that existing and potential subscribers may not find our website
      valuable and our revenues may decline. Moreover, many of our competitors offer
      financial information for free and are likely to continue to do so, perhaps
      at
      an increasing rate. Our current and potential subscribers may be unwilling
      to
      pay for our service if they feel they can receive comparable information for
      free.




***We
      have been forced to reduce the number of our employees to two, which may affect
      the quality of our remaining products and cause us to lose
      subscribers*** .




In
      order
      to attempt to reduce costs, we have has been forced to reduce the number of
      our
      employees to two. In November 2005, we did not renew employment agreements
      with
      three of our employees. Additionally, one of our employees resigned in January
      2006 and three more resigned in April 2007. We do not intend to replace any
      of
      the foregoing employees. With a limited staff, the quality of our remaining
      products—JAGNotes Report and the Rumor Room, as well as our principal remaining
      Pixaya product, SurvayaCam—may be adversely affected. In such a case, our
      existing and potential subscribers may not find our website valuable and the
      development of our SurvayaCam product may be further delayed or have fewer
      features, which may result in a decline in revenues and potential revenues
      may
      be delayed or never realized.




***We
      may not be successful in our attempt to refocus our business strategy of
      targeting institutional investors for our JAGNotes
      Report*** .




Our
      efforts to include individual retail subscribers as part of our strategy to
      increase sales of our flagship product, the JAGNotes Report, have been
      unsuccessful, and we have therefore decided to refocus our strategy on offering
      subscriptions solely to institutional investors and professional traders. Due
      to
      the uncertain nature of this undertaking and our lack of funding, this shift
      in
      business strategy may not be executed, or if executed, may not be successful,
      and we may not realize any benefit from it.




***We
      may not be successful at building brand awareness or building strategic
      relationships*** .




Our
      growth and success depends in part on our ability to build awareness of the
      JAG
      Media name. We changed our name to JAG Media in April 2002 after operating
      for
      almost three years under the name JagNotes.com. The JAG Media name has only
      limited recognition within the financial community and little if any recognition
      among the general public. We do not currently allocate any of our working
      capital to marketing and advertising the JAG Media name but rather rely solely
      upon strategic alliances to increase our name recognition. Our ability to
      refocus our subscriber base, offer new services or otherwise expand the business
      will be limited if we cannot increase our name recognition.


12


**We
      may experience difficulties in developing new and enhanced services and
      products**.




We
      believe that our website will be more attractive to subscribers if we introduce
      additional or enhanced services in the future in order to retain our current
      users and attract new users. Our first attempt to introduce streaming audio
      and
      video was not financially successful and the business was sold. We are
      considering various new enhanced services for our website, as well as new
      products for our Pixaya business unit, but adequate financing is not currently
      available.




In
      addition, we may experience other difficulties that could delay or prevent
      us
      from introducing such enhanced services. We may encounter technological problems
      in enhancing our websites and developing new products or enhancements to current
      products in our Pixaya business unit. We may need to modify significantly the
      design of these services on our websites and modify significantly (or
      discontinue, as we have already had to do) certain products and services being
      offered through our Pixaya business unit. Our business could be adversely
      affected if we experience difficulties in introducing or maintaining new
      services and products, if these new services and products are not accepted
      by
      users or if their cost exceeds the revenue they generate.




If
      we
      introduce enhanced service on our website that is not favorably received, our
      current users may not continue using our service as frequently. New users could
      also choose a competitive service over ours.




***Our
      failure to respond to rapid changes in technology and its applications and
      intense competition in the mobile services industry could make our services
      obsolete*** .




If
      and
      when funds become available, our Pixaya business unit hopes to again develop
      software for the mobile phone and wireless environment. The mobile and wireless
      services industries are subject to rapid and substantial technological
      development and product innovations. To be successful, we must respond to new
      developments in technology and find new applications of existing technology
      in
      our Pixaya business unit for which we currently have no available funds. In
      addition, our response may be hindered if we require, but cannot secure, rights
      to essential third party intellectual property. We compete against numerous
      companies offering alternative products and services to ours, most of which
      have
      much greater financial, marketing and technical resources to utilize in pursuing
      technological development.




***We
      may not successfully attract or manage our strategic
      alliances*** .




We
      currently intend to evaluate strategic alliances, partnerships or joint
      ventures, as a means of acquiring additional distribution. Pursuing such
      transactions will entail a number of risks and difficulties, including a
      continuing lack of available funds and personnel. We compete with a wide variety
      of information providers and there is substantial competition for distribution
      channels. We can offer no guarantee that we will be able to locate suitable
      candidates for alliances or risk sharing partners. If we are able to do so,
      we
      will require a high level of managerial skill to successfully evaluate and
      implement these transactions. While we have limited experience in evaluating
      and
      implementing transactions of this type, we cannot guarantee that we will be
      able
      to successfully pursue this strategy.




***We
      may have to defend against intellectual property infringement claims and libel
      and defamation claims, which may cause significant operations
      expenditures*** .




Third
      parties may assert claims against us that we have violated a patent or infringed
      a copyright, trademark or other proprietary right belonging to them. Parties
      could also bring libel, defamation or similar claims based on the content
      published on our websites. Any such claims, whether meritorious or not, could
      result in the expenditure of significant financial and managerial resources
      on
      our part, which could materially adversely affect our business, results of
      operations and financial condition.




***Failure
      to maintain our reputation as a trustworthy provider of financial news may
      reduce the number of our users, which would harm our
      business*** .




It
      is
      very important that we maintain our reputation as a trustworthy provider of
      financial news. The occurrence of events, including our misreporting a news
      story, could harm our reputation for trustworthiness. These events could result
      in a significant reduction in the number of our subscribers, which could
      materially adversely affect our business, results of operations and financial
      condition.


13


**We
      depend on key people in management and operations**.




We
      depend
      on our key employees’ contacts within the professional financial community for
      certain information that we provide to our subscribers. Accordingly, our success
      will be largely dependent on our ability to retain Mr. Thomas J. Mazzarisi,
      our
      Chairman, Chief Executive Officer and General Counsel, and Mr. Stephen J.
      Schoepfer, our President, Chief Operating Officer, Chief Financial Officer
      and
      Secretary. We may also need to attract and retain additional qualified officers,
      software developers and other key personnel in the future in order to
      successfully manage our new strategy. We may not be able to attract or retain
      the requisite personnel or have the requisite funding to hire them. If we lose
      the services of any of our key personnel or are unable to attract, hire, train
      and retain qualified officers, software developers and other key personnel,
      our
      business, and our stockholders’ investment in us could be adversely
      affected.




***Certain
      terms of the employment agreement of our executive officers could discourage
      a
      potential takeover by a third party*** .




Pursuant
      to the amended and restated employment agreements of Messrs. Mazzarisi and
      Schoepfer, each executive may resign upon a change-in-control. A “change in
      control” shall be deemed to have occurred if, among other things, there is an
      acquisition of 30% or more of our then outstanding shares of common stock.
      If
      such executive opts to resign from his position, he shall be entitled to receive
      (i) continued medical and life insurance coverage for a severance period equal
      to the greater of one year or the number of years and fractions thereof between
      the date of such termination and the end of the term, (ii) a lump sum cash
      payment equal to the executive’s highest rate of annual salary in effect during
      the term multiplied by the severance period, (iii) a lump sum cash payment
      equal
      to the number of accrued and unused vacation days calculated at the executive’s
      then current salary rate and (iv) accelerated vesting of all of the executive’s
      outstanding stock options. Furthermore, immediately prior to a
      change-in-control, each of Messrs. Mazzarisi and Schoepfer shall also be granted
      an option to acquire 1,000,000 shares of our common stock at an exercise price
      equal to the fair market value of the stock prior to such change in control,
      which option shall be fully vested and immediately exercisable in full and
      expire on a date which is the earlier of ten years from such change in control
      and three years after termination of employment. Any or all of these provisions
      may have the effect of preventing or discouraging an attempt by a party to
      take
      over or otherwise gain control of us or reduce the price which such a party
      is
      willing to pay for us.




***We
      face difficulties concerning availability of our sources of information for
      our
      products*** .




Our
      JAGNotes Report and Rumor Room products rely on information from independent
      third party sources. We do maintain written agreements with these sources to
      provide this information, so we cannot guarantee that any of these sources
      will
      continue to provide the information necessary to maintain our products. If
      information from these sources is altered, curtailed or discontinued this could
      adversely affect the quality or even the viability of these products, which
      could decrease the demand for our website and adversely impact our
      revenues.




***We
      may become party to legal proceedings relating to the dissemination of rumors
      and other information of questionable reliability*** .




Information
      posted in the Rumor Room consists of rumors and other information received
      from
      third party sources that may have no reasonable factual basis. We realize that
      rumors are inherently unreliable, and provide a cautionary note on this portion
      of our site reminding subscribers that cyberfraud is prevalent and that rumors
      should not be relied upon when making investment decisions. There can be no
      assurance that we will be able to prevent the unlawful posting of misleading,
      defamatory, fraudulent or intentionally erroneous information or material that
      infringes on the intellectual property rights of others, and the law relating
      to
      its potential liability relating to such activity is currently unsettled. The
      potential imposition of liability for unlawful activities of subscribers to
      our
      site could require us to implement measures to reduce our exposure to such
      liability, which may require us, among other things, to spend substantial
      resources and/or to discontinue certain service offerings. In addition, it
      is
      possible that we could become subject to various legal proceedings alleging,
      among other things, that we have intentionally disseminated or have aided and
      abetted others in intentionally disseminating false or defamatory information
      or
      material that infringes on the intellectual property rights of others. These
      claims, even without merit, could cause us to expend significant financial
      and
      managerial resources, which could adversely affect our business
      operations.


14


***Future
      government regulation of the Internet may add to our operating costs.***




Like
      many
      businesses engaging in Internet-related activities, we may face unanticipated
      operating costs because of the current uncertainty surrounding potential laws
      and government regulation applicable to the Internet and e-commerce. Laws and
      regulations may be introduced and court decisions reached that affect the
      Internet or other online services, covering issues such as user pricing, user
      privacy, freedom of expression, defamation, libel, access charges, content
      and
      quality of products and services, advertising, intellectual property rights
      and
      information security. For example, if the government determines that our website
      and the types of activities engaged in by visitors and/or subscribers to our
      website should be subject to new or existing rules or regulations, our business
      model may be adversely affected and our operating costs may increase. In
      addition, as an Internet company it is unclear in which jurisdictions we are
      actually conducting business. Our failure to qualify to do business in a
      jurisdiction that requires us to do so could subject us to fines or penalties
      and could result in our inability to enforce contracts in that jurisdiction.
      Even if we were able to ascertain correctly in which jurisdictions we conduct
      business, many of these jurisdictions have yet to determine the application
      of
      their existing laws to Internet-related activities or develop laws that apply
      to
      such activities.




***We
      could be deemed to be an investment advisor subject to federal or state
      regulatory oversight*** .




Companies
      and individuals that provide financial advice to investors in the United States
      are generally required to register as an investment adviser at either the
      federal or state level, and are subject to extensive regulation. We believe
      that
      our business consists of a publishing activity for which investment adviser
      registration and regulation do not apply under applicable federal or state
      law,
      and do not believe that we are required to register as an investment adviser
      with either the SEC or any of the various states. The regulatory environment
      in
      which we operate is subject to change, however, and we could be required to
      register as an investment adviser with an appropriate regulatory agency at
      some
      point in the future. Such registration could adversely affect our method of
      operation and revenues. For example, if we were ever deemed to be in
      non-compliance with applicable investment adviser regulations, we could be
      subject to various penalties, including administrative or judicial proceedings
      that might result in censure, fine, civil penalties (including treble damages
      in
      the case of insider trading violations), the issuance of cease-and-desist orders
      or other adverse consequences.




**Risks
      Related to Our Industry**




***Our
      business is currently dependant on the continued public interest in investing
      in
      the stock market*** .




The
      volatility of the stock market in the 1990s generated unprecedented public
      interest in the stock market and trading. Our success depends upon the continued
      maintenance or growth of this interest. The subsequent downturn in the stock
      market may have been in part responsible for an overall decrease in subscription
      revenues since the end of the second fiscal quarter of 2001. Even after the
      market had recovered to some extent, our revenues generally continued to
      decline. A number of factors that are out of our control, such as the recent
      turmoil in global stock markets, that could lead to a stagnant or depressed
      stock market that would likely decrease the public’s interest in stock trading
      and financial information. If this were to happen, it is likely that we would
      lose a significant percentage of our then current and potential subscriber
      base.




***Our
      common stock—and technology and Internet stocks generally—have been and may
      continue to be volatile*** .




The
      market for our stock has been and is likely to continue to be highly volatile
      and subject to wide price and volume fluctuations. These variations are the
      result of many factors, most of which are beyond our control. Furthermore,
      Internet and technology related stocks generally have been subject to wide
      fluctuations in price and volume that often appear to be unrelated to the
      operating results of these companies. The burst of the dot-com bubble and
      continued volatility of the stock market has made it difficult for many dot-com
      companies to raise funds, and a number of such companies have gone bankrupt.
      Such volatility can present risks for investors. Moreover, such volatility
      often
      leads to securities litigation brought by investors who are seeking to recoup
      losses resulting from rapid and significant drops in price and/or volume. While
      we are not aware of any pending or threatened suit or basis therefore, such
      suits are costly and we could be adversely affected if such a suit were brought
      against us.


15


**Most
      of our current and potential competitors have greater name recognition,
      financial, technical and marketing resources, as well as more extensive customer
      bases and industry relationships than we do, all of which could be leveraged
      to
      gain market share to our detriment**.




Our
      website’s primary current competitors provide financial news, commentary and
      analysis on the Internet such as Yahoo Finance, Marketwatch, TheStreet.com,
      Briefing.com, America Online Personal Finance, Reuters and MotleyFool.com.
      Providing financial information and analysis over the Internet is an intensely
      competitive business. An increasing number of web-based financial information
      providers are competing for subscribers, customers, advertisers, content
      providers, analysts, commentators and staff, and we continue to face competition
      from traditional news and information sources including television and print.
      We
      expect competition from both sources to intensify and increase in the future.
      Many of our competitors have substantially greater financial and other resources
      than we do.




***We
      are an intensely competitive business with low barriers to
      entry*** .




The
      barriers to entry into our business are relatively low—i.e., it is not difficult
      for new competitors to enter the market. Many blogs now provide financial
      information at no cost. Much of the information we provide to subscribers is
      available and we do not have any patented or otherwise protected technologies
      that would preclude or inhibit competitors from entering our markets. Our
      current and future competitors may develop or offer services that have
      significant price, substantive, creative or other advantages over the services
      we provide. If they do so and we are unable to respond satisfactorily, our
      business and financial condition will likely be adversely affected.




***We
      may not be able to adequately protect ourselves against security
      risks*** .




All
      Internet businesses are subject to electronic and computer security risks.
      We
      have taken steps to protect ourselves from unauthorized access to our systems
      and use of our site, but we cannot guarantee that these measures will be
      effective. If our security measures are ineffective, unauthorized parties could
      alter, misappropriate, or otherwise disrupt our service or information. If
      such
      unauthorized parties were able to access certain of our, or our customers’
proprietary information, including subscribers’ credit card numbers and personal
      information, we would face significant unexpected costs and a risk of material
      loss, either of which could adversely affect our business.




**Risks
      Related to Our Capital Structure**




***Our
      shareholders may experience significant dilution from the exercise of warrants
      to purchase shares of our common stock*** .




In
      June
      2006, we issued warrants to purchase 12,000,000 shares of our common stock
      to YA
      Global. The exercise price of such warrants is as follows: $.40 per share for
      2,000,000 shares, $.50 per share for 2,000,000 shares, $.60 per share for
      2,000,000 shares, $.70 per share for 3,000,000 shares (subsequently reduced
      to
      $.20 per share), and $.80 per share for 3,000,000 shares. To date, we have
      issued 3,750,000 shares of our common stock upon the exercise of these warrants.
      The remaining warrants expire in May 2011. The specified exercise price of
      each
      warrant can be further reduced by adjustments upon the occurrence of various
      corporate transactions, including any issuance of shares of our common stock
      for
      a price less than the relevant warrant price, in which event such lower issue
      price shall become the new warrant exercise price and the number of shares
      issuable upon exercise of the warrant shall be proportionately
      increased.




Accordingly,
      you may experience substantial dilution upon exercise of the warrants because
      of
      the adjustment features of the exercise price of the warrants and the number
      of
      shares of our common stock purchasable on exercise of the warrants. In addition,
      you may experience substantial dilution if the price of shares of our common
      stock increases to a level greater than the adjusted exercise
      prices.




***Future
      issuances of our common stock could dilute current stockholder or adversely
      affect the market for our common stock*** *.*




Future
      issuances of our common stock, including an issuance of common stock in
      connection with our proposed merger with BlueCreek, could be at values
      substantially below the price paid by the current holders of common stock.
      In
      addition, common stock could be issued to fend off unwanted tender offers or
      hostile takeovers without further stockholder approval. Sales of substantial
      amounts of our common stock in the public market, or even just the prospect
      of
      such sales, could depress the prevailing market price of our common stock and
      our ability to raise equity capital in the future.


16






**We
      have limited cash resources, which limits our ability to defend against legal
      claims**.




As
      of
      July 31, 2008, we had approximately $275,168 in cash. Such low levels of cash
      restrict our ability to operate and expose us to claims and lawsuits whatever
      the merits of such claims may be. If a claim or lawsuit is pursued against
      us
      and we do not have adequate cash at the time to defend against it, we may be
      forced to restructure, file for bankruptcy or cease operations, any of which
      could cause our stockholders to lose all or part of their investment in our
      common stock.




***The
      market for our common stock is limited*** .




Our
      common stock is traded on the Pink Sheets. Trading activity in our stock has
      fluctuated and at times been limited. We cannot guarantee that a consistently
      active trading market for our stock will continue, especially while we remain
      on
      the Pink Sheets.




***The
      resale by YA Global of its shares of our common stock may lower the market
      price
      of our common stock*** .




The
      resale by YA Global of shares of our common stock that it receives from us
      in
      exercise of the warrants will increase the number of publicly traded shares
      of
      our stock, which could lower the market price of our common stock. Moreover,
      the
      shares that we issue to YA Global, or other holders will be available for
      immediate resale, subject to the resale restrictions of Rule 144 of the
      Securities Act. There are no contractual restrictions on the ability of YA
      Global to offer shares issued to it pursuant to our warrants, other than the
      limitation that YA Global cannot beneficially own more than 9.99% of our then
      outstanding shares of common stock. If YA Global continues to resell such
      shares, the market price for our shares could decrease significantly. In
      addition, the mere prospect of such transactions could lower the market price
      for our common stock.




***Because
      our common stock currently trades below $5.00 per share and is quoted on the
      Pink Sheets, our common stock is considered by the SEC to be a “penny stock,”
which adversely affects our liquidity*** .




Our
      common stock does not currently qualify for listing on any national securities
      exchange, and we do not anticipate that it will qualify for such a listing
      in
      the foreseeable future in the absence of a significant merger or acquisition.
      If
      our common stock continues to be quoted on the Pink Sheets or Nasdaq OTC
      Bulletin Board, and if the trading price of our common stock remains less than
      $5.00 per share, our common stock is considered a “penny stock,” and trading in
      our common stock is subject to the requirements of Rule 15g-9 under the Exchange
      Act. Under this rule, brokers or dealers who recommend low-priced securities
      to
      persons other than established customers and accredited investors must satisfy
      special sales practice requirements. The broker or dealer must make an
      individualized written suitability determination for the purchaser and receive
      the purchaser’s written consent prior to the transaction. SEC regulations also
      require additional disclosure in connection with any trades involving a penny
      stock, including the delivery, prior to any penny stock transaction, of a
      disclosure schedule explaining the penny stock market and its associated risks.
      These requirements could severely limit the liquidity of such securities in
      the
      secondary market because few brokers or dealers are likely to undertake these
      compliance activities. In addition to the applicability of the penny stock
      rules, another risk associated with trading in penny stocks may be large price
      fluctuations.




***Our
      amended charter contains provisions that may discourage an unaffiliated party
      to
      take us over*** .




On
      April
      26, 2006, we increased our authorized common stock by 250 million additional
      shares of stock. Without further stockholder action, our Board of Directors
      could authorize the issuance of about 400,000,000 shares of common stock as
      well
      as preferred stock with special voting rights by class or with more than one
      vote per share, to a “white knight” in order to deter a potential buyer. This
      might have the effect of preventing or discouraging an attempt by a party unable
      to obtain the approval of our Board of Directors to take over or otherwise
      gain
      control of us.


17




***Our
      stockholders ownership of our common stock may be in doubt due to possible
      naked
      shorting of our common stock*** .




Our
      Board
      of Directors believes, but cannot confirm, that speculators may have engaged
      in
      a practice commonly known as a “naked short” sale of our common stock, which
      means that certain brokers may be permitting their short selling customers
      to
      sell shares of our common stock that their customers do not own and may have
      failed to borrow and therefore deliver the shares sold to the purchaser of
      the
      shares. We have from time to time been included by Nasdaq on the Regulation
      SHO
      Threshold Security List which is indicative of a significant amount of naked
      shorting in the stock. Because naked shorting may result in an artificial
      depression of our stock price, our stockholders could lose all or part of their
      investment in our common stock. As a result of this naked short selling, there
      may be a substantial number of purchasers who believe they are our stockholders,
      but who in fact would not be stockholders since their brokers may never have
      received any shares of our common stock for their account. In addition,
      investors who believe they are our stockholders may not have received a stock
      dividend to which they are entitled or may have been deprived of the right
      to
      vote some or all of their shares.




**ITEM
      1B. UNRESOLVED STAFF COMMENTS**




None.




**ITEM
      2. PROPERTIES**




Our
      executive and administrative headquarters are currently located at 6865 SW
      18th
      Street, Suite B-13, in Boca Raton, Florida 33433. We rent this space at a cost
      of $1,470 per month. The lease for this space expires in June 2009. The servers
      for our websites are housed at separate locations as described above. See “Item
      1. Business—Website Technical Information.” We believe that our facilities are
      adequate for our current needs and that, if our lease is not renewed on
      commercially reasonable terms, we will be able to locate suitable new office
      space and obtain a suitable replacement for our executive and administrative
      headquarters.




**ITEM
      3. LEGAL PROCEEDINGS**




On
      June
      20, 2002, we, along with our then President and Chief Executive Officer, Gary
      Valinoti, filed a complaint in the 165th District Court of Harris County, Texas
      against over 150 brokerage firms, alleging, among other things, a conspiracy
      among the defendants to short sell our stock. The original lawsuit was
      subsequently amended on June 24, 2002 and was removed to the United States
      District Court for the Southern District of Texas. The plaintiffs subsequently
      filed a motion in the United States District Court for the Southern District
      of
      Texas to have the action remanded back to the state court where it was
      originally commenced. That motion was denied and the action proceeded in the
      federal district court. On October 1, 2003, the Court denied various motions
      to
      dismiss made on behalf of the defendants. However, in its ruling, the Court
      indicated that all motions to dismiss could have been granted in light of the
      defective pleadings made by plaintiffs and allowed plaintiffs 20 days to file
      an
      amended complaint to comply with certain pleading requirements of the Court.
      Plaintiffs filed an amended complaint within the required period. Discovery
      was
      stayed while the motions to dismiss were pending.




After
      plaintiffs filed their third amended complaint, 78 out of the total of
      approximately 150 defendants again filed a motion to dismiss the lawsuit. On
      September 6, 2004, the Court entered an order granting the moving defendants’
motion to dismiss the lawsuit, again citing various deficiencies in the
      pleadings. The Court did not grant the plaintiffs leave to replead.




The
      plaintiffs and the moving defendants have since stipulated to the entry of
      a
      final judgment dismissing the third amended complaint against the moving
      defendants with prejudice. Under this stipulation, the parties agreed on entry
      of final judgment to (a) waive their right to attorneys’ fees or seek sanctions
      and bear their own costs and (b) not appeal the judgment.




On
      December 3, 2004, we announced that our original counsel had assigned our legal
      retainer agreement in connection with the lawsuit to a legal consortium
      consisting of various law firms and other consultants throughout the country,
      which includes our original counsel. In light of our current strategy of
      pursuing merger opportunities, we are not currently planning to recommence
      litigation with respect to this matter. We have, however, met with our new
      attorneys and continue to evaluate the option of litigation against certain
      defendants and possibly other parties in light of the court’s order should our
      strategic priorities change.


18





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




No
      matters were submitted to a vote of security holders during the fourth quarter
      of the fiscal year covered by this report.




**PART
      II**




**ITEM
      5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF SECURITIES**




For
      the
      period covered below, our common stock (other than our class B common stock)
      is
      traded on the over-the-counter market on the Pink Sheets under the symbol JAGH.
      The following table based on Bloomberg L.P. reflects quarterly high and low
      bid
      prices of our common stock from August 1, 2006 through July 31, 2008. Such
      prices are inter-dealer quotations without retail mark-ups, mark-downs or
      commissions, and may not represent actual transactions.




High
            
            LowFiscal
                Year 2007
            
            ($)
            
            ($)First
                Quarter, ending October 31, 2006
            
            
            0.30
            
            
            0.05Second
                Quarter, ending January 31, 2007
            
            
            0.45
            
            
            0.12Third
                Quarter, ending April 30, 2007
            
            
            0.60
            
            
            0.30Fourth
                Quarter, ending July 31, 2007
            
            
            1.45
            
            
            0.44Fiscal
                Year 2008First
                Quarter, ending October 31, 2007
            
            
            1.10
            
            
            0.59Second
                Quarter, ending January 31, 2008
            
            
            1.07
            
            
            0.66Third
                Quarter, ending April 30, 2008
            
            
            0.98
            
            
            0.68Fourth
                Quarter, ending July 31, 2008
            
            
            0.79
            
            
            0.17





On
      October 31, 2008, the closing bid price for our common stock was $0.38. A public
      trading market for our Series 2 and Series 3 Class B common stock has never
      developed.




As
      of
      October 31, 2008, there were 63,503,004 shares of our common stock outstanding
      with 1,223 stockholders of record, 380,931 shares of our Series 2 Class B common
      stock outstanding with 2,667 stockholders of record, and 21,500 shares of our
      Series 3 Class B common stock outstanding with 2 stockholders of record. The
      number of shares of our common stock outstanding includes several classes of
      stock the shares of which were converted into the right to receive shares of
      our
      common stock upon surrender thereof in our recapitalizations in 2002 and 2004.
      As of October 31, 2008, there were 180,728 Series 1 Class B common shares with
      799 holders of record, 1,085,481 Class A common shares with 521 holders of
      record, and 123,277 original JagNotes.com Inc. common shares with 35 holders
      of
      record, that remain unsurrendered.




**Dividend
      Policy**




We
      have
      never paid any cash dividends on our common stock and anticipate that, for
      the
      foreseeable future, no cash dividends will be paid on our common stock.




**Equity
      Compensation Plans Information**




See
      the
      information provided under “Item 12.—Security Ownership of Certain Beneficial
      Owners and Related Stockholder Matters—Equity Compensation Plan
      Information.”




**Recent
      Sales of Unregistered Securities**




On
      May
      25, 2006 we issued 1,250,000 shares of our common stock to YA Global as
      repayment for $250,000 of the outstanding principal amount of the Promissory
      Note and a $1,900,000 10% secured convertible debenture with a maturity of
      three
      years in consideration of the remaining $1,750,000 of the outstanding principal
      amount of the Promissory Note and $150,000 in accrued and unpaid interest.
      This
      issuance was exempt from registration under the Securities Act, pursuant to
      Section 3(a)(9) thereof.


19




On
      May
      25, 2006, as partial consideration for YA Global’s purchase of the secured
      convertible debentures, we issued five warrants to purchase an aggregate of
      12,000,000 shares of our common stock, as follows. For a description of such
      warrants, see “Item 1.—Business—Financing Arrangements—Warrants.” This issuance
      was exempt from registration under the Securities Act, pursuant to Section
      4(2)
      thereof, as YA Global is an accredited investor.




In
      May of
      2006, we issued two secured convertible debentures to YA Global in an aggregate
      principal amount of $1,250,000, as follows: (i) a $1,250,000 10% secured
      convertible debenture and (ii) a $1,000,000 10% secured convertible debenture,
      each with a maturity of three years. This issuance was exempt from registration
      under the Securities Act, pursuant to Section 4 (2) thereof, as YA Global is
      an
      accredited investor.




Pursuant
      to the terms of the secured convertible debentures, YA Global has converted
      the
      entire principal and accrued interest on the debentures into an aggregate of
      14,651,265 shares of common stock, as set forth below:




**Date
                of issuance**
            
            **Principal Amount Converted**
            
            **Number of Shares**June
                28, 2006
            
            $
            25,000
            
            
            125,313July
                21, 2006
            
            $
            50,000
            
            
            279,642August
                3, 2006
            
            $
            50,000
            
            
            279,642August
                15, 2006
            
            $
            50,000
            
            
            289,855September
                14, 2006
            
            $
            50,000
            
            
            556,793September
                18, 2006
            
            $
            50,000
            
            
            556,793November
                20, 2006
            
            $
            150,000
            
            
            1,246,883November
                30, 2006
            
            $
            105,000
            
            
            872,818January
                5, 2007
            
            $
            100,000
            
            
            629,327August
                23, 2007
            
            $
            500,000
            
            
            1,250,000August
                28, 2007
            
            $
            420,000
            
            
            1,050,000September
                25, 2007
            
            $
            550,000
            
            
            1,375,000September
                28, 2007
            
            $
            130,000
            
            
            325,000November
                14, 2007
            
            $
            300,000
            
            
            750,000December
                17, 2007
            
            $
            1,000,000
            
            
            2,500,000January
                24, 2008
            
            $
            295,000
            
            
            737,500January
                31, 2008
            
            $
            860,679
            (1)
            
            2,151,699







(1)
            Amount
                includes $535,679 of accrued interest on the secured convertibles
                debentures.





These
      issuances of shares of our common stock upon conversion of such debentures
      were
      exempt from registration under the Securities Act, pursuant to Section 3(a)(9)
      thereof.




On
      January 31, 2008, we issued 700,000 shares of our common stock to YA Global
      pursuant to warrant No. CCP-1 for aggregate gross proceeds of $280,000. This
      issuance was exempt from registration under the Securities Act, pursuant to
      Section 4(2) thereof, as YA Global is an accredited investor.




On
      May
      16, 2008, we issued 1,300,000 shares of our common stock to YA Global pursuant
      to warrant No. CCP-1 for aggregate gross proceeds of $520,000. This issuance
      was
      exempt from registration under the Securities Act, pursuant to Section 4(2)
      thereof, as YA Global is an accredited investor.




On
      September 30, 2008, we issued 1,750,000 shares of our common stock to YA Global
      pursuant to warrant No. CCP-4 for aggregate gross proceeds of $350,000. This
      issuance was exempt from registration under the Securities Act, pursuant to
      Section 4(2) thereof, as YA Global is an accredited investor.




**Purchases
      of Equity Securities**




There
      were no repurchases made for any class or series of securities in a month within
      the fourth quarter of the fiscal year ended July 31, 2008.




**ITEM
      6. SELECTED FINANCIAL DATA**




We
      are a
      smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
      are
      not required to provide information under this item.


20




**ITEM
      7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**




The
      following discussion should be read in conjunction with the consolidated
      financial statements and the notes to those statements that appear elsewhere
      in
      this Annual Report on Form 10-K. The following discussion contains
      forward-looking statements that reflect our plans, estimates and beliefs. Our
      actual results could differ materially from those discussed in the
      forward-looking statements. Factors that could cause or contribute to such
      differences include, but are not limited to, those discussed below and elsewhere
      in this Annual Report on Form 10-K, particularly in “Item 1A. Risk
      Factors.”





**Results
      of Operations for the Years Ended July 31, 2008 and July 31,
      2007**





The
      following table sets for our results of operations for the years ended July
      31,
      2008 and July 31, 2007.




Year Ended July 31,2008
            
            2007Revenues
            
            $
            177,065
            
            $
            203,286Operating
                expenses:Cost
                of revenues
            
            
            31,258
            
            
            73,047Selling
                expenses
            
            
            71,806
            
            
            97,029General
                and administrative expenses
            
            
            1,848,461
            
            
            1,754,085Total
            
            
            1,951,525
            
            
            1,924,161Loss
                from operations
            
            
            (1,774,460
            )
            
            (1,720,875
            )Other
                income (expense):Gain
                (loss) on change in value of derivative liability
            
            
            602,338
            
            
            (8,524,813
            )Interest
                income
            
            
            —
            
            
            54Interest
                expense
            
            
            (1,659,841
            )
            
            (1,529,518
            )Net
                loss
            
            $
            (2,831,963
            )
            $
            (11,775,152
            )





***Revenues***





Revenues
      consist of sales of annual, semi-annual, quarterly and monthly subscriptions
      relating to our JAGNotes Report product. JAGNotes Report is a daily consolidated
      investment report that summarizes newly issued research, analyst opinions,
      upgrades, downgrades, and analyst coverage changes from various investment
      banks
      and brokerage houses. Revenues decreased for the year ended July 31, 2008
      versus the year ended July 31, 2007 due to the lack of advertising sales
      and increased competition.





***Cost
      of revenue*** ****





Cost
      of
      revenues includes the cost to transmit the product over the telephone and fax
      lines, on-line service charges for our website, costs in connection with the
      development and maintenance of the website, and payments to employees for their
      reports that are posted on our website.





During
      the year ended July 31, 2008, cost of revenues decreased due to decreases
      in consulting fees which were approximately $18,000 as compared to approximately
      $31,000 for the year ended July 31, 2007. The decrease in consulting
      fees is a result of the expiration of consulting contracts associated with
      commentators for our website. Costs associated with the transmission of our
      product over telephone and fax lines and costs associated with the maintenance
      of our website have also decreased.


21





During
      the year ended July 31, 2008, there were no costs associated with the
      manufacture of our streaming video products as compared to approximately $23,000
      for the manufacture of streaming video products placed in test markets during
      the year ended July 31, 2007.





***Selling
      expenses***





Selling
      expenses, which consist primarily of advertising and other promotional expenses,
      decreased during the year ended July 31, 2008. Selling expenses for the years
      ended July 31, 2008 and July 31, 2007, respectively, included approximately
      $48,000 and $24,000 of non-cash amortization of options issued to a consultant
      for 150,000 and 200,000 shares of common stock with a fair market value of
      approximately $48,000 and $36,000 in exchange for services. The increase in
      non-cash amortization charged to selling expenses was offset by decreases in
      sales related travel and entertainment expenses to approximately $10,000 from
      $33,000 and other reductions in sales and marketing expenses of Pixaya, our
      United Kingdom subsidiary, during the years ended July 31, 2008 and 2007,
      respectively. During the year ended July 31, 2007, we had also incurred $15,000
      for training classes for resellers of the Survaya Cam.





***General
      and administrative expenses***





General
      and administrative expenses, which consist primarily of compensation and
      benefits for the officers, other compensation, increased for the year ended
      July
      31, 2008. The increase in general and administrative expenses is primarily
      attributable to liabilities arising from a payroll tax audit of approximately
      $66,000, non-cash charges of approximately $345,000 for a portion of the
      issuance of 905,000 options with an aggregate fair value of approximately
      $378,000 to non-employees for services and an increase of approximately $118,000
      in legal and accounting fees associated with a proposed acquisition during
      the
      year ended July 31, 2008 versus the year ended July 31, 2007. These increases
      were offset by a decrease in payroll expenses of approximately $437,000 due
      to a
      reduction in the number of employees during the year ended July 31, 2008 versus
      the year ended July 31, 2007. General and administrative expenses for the year
      ended July 31, 2008 and 2007, respectively, included non-cash charges for
      the issuance of 40,000 and 180,000 shares of our common stock with an aggregate
      fair value of $25,600 and $62,200 to certain employees, occupancy costs,
      professional fees and other office expenses.





In
      December 2005, we entered into a merger agreement with Cryptometrics, among
      others, pursuant to which Cryptometrics would have merged with a newly created
      subsidiary of ours. During the year ended July 31, 2007, pursuant to the
      terms of the merger agreement, Cryptometrics paid various legal and accounting
      costs, totaling approximately $230,000 and $580,000 on our behalf, of which
      approximately $230,000 and $543,000 were related to the merger agreement and
      approximately nil and $37,000 were related to our operations for the years
      ended
      July 31, 2008 and July 31, 2007, respectively. We will not have to repay these
      costs to Cryptometrics because the merger agreement, which was terminated,
      was
      not terminated by us. The costs paid by Cryptometrics have been charged to
      general and administrative expenses and the amounts we received have been
      recorded as a capital contribution and included in additional paid-in capital.





***Gain
      (loss) on change in value of derivative liability***





The
      gain
      on change in value of the derivative liability for the year ended July 31,
      2008
      reflects the decrease in the fair market value of our common stock. In the
      year
      ending July 31, 2006, we determined that, based on the guidance in the consensus
      for Emerging Issues Task Force Issue No. 00-19 (“ **EITF
      00-19** ”)
      “Accounting for Derivative Financial Instruments Indexed to, and Potentially
      Settled in a Company’s Own Stock”, we were prohibited from concluding that we
      would have a sufficient number of authorized and unissued shares to net-share
      settle any of those warrants or any other warrants or options previously issued
      or granted to non-employees because the conversion of our secured convertible
      debentures and the related warrants could have resulted in the issuance of
      an
      indeterminable number of common shares as they were convertible at a discount
      from the market price. We therefore had to record the warrants at fair value.
      However, as of January 31, 2008, YA Global converted debentures in the
      principal amounts of $3,520,000 into 8,800,000 shares of our common stock.
      Therefore, all of the remaining outstanding debentures were converted on
      January 31, 2008. As a result, we no longer had any equity instruments that
      could result in the issuance of an indeterminable number of common shares.
      Accordingly, we were no longer required to record the warrants at fair value
      and
      the fair value of the warrants of $10,400,900 was reclassified from derivative
      liability to additional paid-in capital.


22




As
      of
      January 31, 2008, the fair market value of the 12,000,000 warrants was
      approximately $10,400,900 while as of July 31, 2007, the fair market value
      of those warrants was approximately $11,059,000, resulting in a gain of
      approximately $658,000 for the year ended July 31, 2008 compared to a loss
      of
      approximately $8,315,000 for the year ended July 31, 2007 as a result of an
      increase in the value of our stock.





As
      a
      result of changes in the fair market value of our common stock, we also recorded
      an unrealized loss on the change in value of the derivative liability of
      approximately $55,000 and $130,000 in the years ended July 31, 2008 and 2007,
      respectively, related to changes in the fair value of options that were
      outstanding during portions of those periods. No options issued to non-employees
      were outstanding as of July 31, 2008 or July 31, 2007.





***Interest
      expense*** ****





Interest
      expense increased approximately $130,000 for the year ended July 31, 2008 over
      the year ended July 31, 2007 due to the immediate amortization of
      approximately $913,000 of debt discount related to the convertible debentures
      upon their conversion offet by the reduction in the principal amount outstanding
      of our second convertible debuntures payable to YA Global.





During
      the year ended July 31, 2008, interest expense totaling approximately $1,660,000
      was comprised primarily of interest on our secured convertible debentures and
      interest from amortization of debt discount. Interest expense of approximately
      $95,000 was incurred as interest charged at 10% per annum on our secured
      convertible debentures. Interest expense of approximately $913,000 was incurred
      from the amortization of debt discount related to the $2,250,000 secured
      convertible debentures issued May 25, 2006 and May 31, 2006.





During
      the year ended July 31, 2007, interest totaling approximately $1,530,000
      was comprised primarily of interest on our secured convertible debentures and
      interest from amortization of debt discount. Interest expense of approximately
      $366,000 was incurred as interest charged at 10% per annum on our secured
      convertible debentures. Interest expense of approximately $1,135,000 was
      incurred from the amortization of debt discount related to the $2,250,000
      secured convertible debentures issued May 25, 2006 and May 31, 2006.





**Liquidity
      and Capital Resources**





We
      only
      generated revenues of approximately $177,000 and $203,000 and we incurred net
      losses of approximately $2,832,000 and $11,775,000 and had negative cash flows
      from operating activities of approximately $1,321,443 and $449,000 for the
      years
      ended July 31, 2008 and 2007, respectively. As of July 31, 2008, we
      had a working capital of approximately $71,000. As a result, we believe there
      is
      substantial doubt about our ability to continue as a going concern and our
      independent auditors included an explanatory paragraph to emphasize such doubt
      in their report on the audit of our financial statements.





We
      believe that, in the absence of a substantial increase in subscription revenues
      or sales of our streaming video products, it is probable that the we will
      continue to incur losses and negative cash flows from operating activities
      through at least July 31, 2009 and that we will need to obtain additional
      equity or debt financing to sustain our operations until we can market our
      services, expand our customer base and achieve profitability or effect a merger.





We
      believe that we will be able to obtain sufficient financing either directly
      from
      an investor, such as YA Global, or that we will be able to find an appropriate
      merger candidate that has such financing to enable us to continue as a going
      concern through at least July 31, 2009. However, if we cannot obtain
      sufficient additional financing by that date, we may be forced to restructure
      our operations, file for bankruptcy or entirely cease our
      operations.





On
      October 1, 2008, we entered into a non-binding Letter of Intent with respect
      to
      a merger opportunity with BlueCreek, e2Business Services, a majority shareholder
      of BlueCreek, and YA Global. BlueCreek is a Colorado corporation engaged in
      the
      development, extraction and processing of coalbed methane natural gas currently
      operating within the Rocky Mountains region of the United States. YA Global,
      in
      addition to being the provider of much of our financing since 2002, is a senior
      secured lender to BlueCreek and has agreed to restructure its two secured
      convertible debentures and warrant with BlueCreek at the closing of the merger
      by reducing the interest rates, amending the conversion terms of the debentures,
      deferring certain principal payments, converting $2,000,000 of principal into
      equity of BlueCreek in the form of a warrant, and agreeing to remove certain
      registration rights it had with respect to the shares underlying the secured
      convertible debentures and the warrants. For more information on the Letter
      of
      Intent, see “Item 1. Business—Proposed Merger with BlueCreek Energy.”


23




**Related
      Party Transactions**





For
      a
      discussion of related party transactions, please see “Item 13. Certain
      Relationships and Related Transactions, and Director Independence.”





**Off-Balance
      Sheet Arrangements**





We
      were
      not party to any material off-balance sheet arrangements at July 31, 2008
      or 2007




**Seasonality**





We
      do not
      believe that our business is materially affected by seasonal trends or
      inflation. On an ongoing basis, we will attempt to minimize any effect of
      inflation on our operating results by controlling operating costs and whenever
      possible, seeking to insure that subscription rates reflect increases in costs
      due to inflation.





**Critical
      Accounting Policies and Estimates**





Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America for financial statements filed with the SEC. The preparation of these
      consolidated financial statements requires us to make estimates and judgments
      that affect the reported amounts of assets, liabilities, revenues and expenses,
      and related disclosure of contingent assets and liabilities. On an on-going
      basis, we evaluate our estimates, including those related to accounts
      receivable, equipment, stock-based compensation, income taxes, derivative
      liability and contingencies. We base our estimates on historical experience
      and
      on various other assumptions that are believed to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      the carrying values of assets and liabilities that are not readily apparent
      from
      other sources. Actual results may differ from these estimates under different
      assumptions or conditions.





As
      required, effective August 1, 2006, we adopted Statement of Financial
      Accounting Standards No. 123 (Revised 2004), “Share-Based Payment”
(“ **SFAS
      123(R)** ”)
      using
      the modified prospective application transition method. Because the fair value
      recognition and the amortization provisions of Statement of Financial Accounting
      Standards No. 123, “Accounting for Stock-Based Compensation” (“ **SFAS
      No. 123** ”)
      and
      SFAS No. 123(R) are materially consistent, the adoption of SFAS 123(R) did
      not have a significant impact on the methods we used to value and account for
      our options or our financial position and results of operations and,
      accordingly, charges to compensation cost for the fair value of the options
      continue to be amortized to expense over the vesting period. In accordance
      with
      SFAS No. 123(R), we reclassified previously unamortized unearned
      compensation of $34,870 from unearned compensation to additional paid-in capital
      as of the date of adoption. The adoption of SFAS 123(R) did not result in any
      charge to operations. Through July 31, 2006, we recognized the cost of
      grants of options to employees and non-employees based on the fair value of
      the
      equity instruments at the date issued amortized over the periods in which the
      related services were rendered in accordance with the provisions of SFAS 123.
      Accordingly, we had been estimating the fair value of stock options using an
      option-pricing model (generally, the Black-Scholes model) that meets the
      criteria set forth in SFAS 123 and common stock using its market value. We
      have
      been recording such value through charges to compensation cost and corresponding
      credits to equity. The charges to compensation cost are being amortized to
      expense over the vesting period.





We
      review
      the terms of convertible debt and equity instruments we issue to determine
      whether there are embedded derivative instruments, including embedded conversion
      options, that are required to be bifurcated and accounted for separately as
      derivative financial instruments. In connection with the sale of convertible
      debt and equity instruments, we may issue freestanding warrants and options
      that
      may, depending on their terms, be accounted for as derivative instrument
      liabilities, rather than as equity.


24





Bifurcated
      embedded derivatives and freestanding warrants and options accounted for as
      derivative instrument liabilities are initially recorded at fair value and
      are
      then revalued at each reporting date with changes in the fair value reported
      as
      charges or credits to income. When the convertible debt or equity instruments
      contain embedded derivative instruments that are to be bifurcated and accounted
      for as liabilities, the total proceeds allocated to the convertible host
      instruments are first allocated to the fair value of all the bifurcated
      derivative instruments to be accounted for as derivative liabilities. The
      remaining proceeds, if any, are then allocated to the convertible instruments
      themselves. This usually results in those convertible instruments being recorded
      at a discount from their face amount to reflect beneficial conversion prices
      that are, effectively, below market value.





The
      discount from the face value of the convertible debt, together with the stated
      interest on the instrument, is amortized over the life of the instrument through
      periodic charges to income, using the effective interest method. Since the
      conversion of the secured convertible debentures issued by us during the year
      ended July 31, 2006 could have been at a discount from the market price
      and, accordingly, could have resulted in the issuance of an indeterminable
      number of common shares, we determined that we would be prohibited from
      concluding that it would have a sufficient number of authorized and unissued
      shares to net-share settle any of those warrants or any other warrants or
      options previously issued or granted to non-employees. Therefore, as of the
      date
      the secured convertible debentures and the related warrants were issued, we
      recorded the related fair value of all warrants issued with the debentures
      and
      options previously issued to non-employees as a liability. Accordingly,
      subsequent changes in the fair value of such options and warrants at the end
      of
      each reporting period have been and will be recorded as charges or credits
      to
      our results of operations.





Due
      to
      uncertainties related to, among other things, the extent and timing of future
      taxable income, we have recorded a full valuation allowance to reduce our
      deferred tax assets. A positive adjustment to income will be required in future
      years if we determine that we could realize these deferred tax assets.





**Recent
      Accounting Pronouncements**





The
      FASB
      and the Accounting Standards Committee of the American Institute of Certified
      Public Accountants had issued certain accounting pronouncements as of
      July 31, 2008 that will become effective in subsequent periods; however, we
      do not believe that any of those pronouncements would have significantly
      affected our financial accounting measurements or disclosures had they been
      in
      effect during the year ended July 31, 2008 and 2007 or that they will have
      a significant effect at the time they become effective.





In
      December 2007, the FASB has issued Statement No. 141 (R), “Business
      Combinations” (“ **SFAS
      No. 141R** ”).
      This
      statement retains the fundamental requirements in Statement No. 141 that the
      acquisition method of accounting (which Statement No. 141 called the “purchase
      method”) be used, and applies to the all business entities, including mutual
      entities that previously used the pooling of interest method of accounting
      for
      some business combinations. The statement is effective for transactions within
      the annual reporting period beginning on or after December 15, 2008. Management
      is currently evaluating the impact this new standard could have on our financial
      position and results of operations.





In
      December 2007, the FASB issued SFAS 160, “Non-controlling Interests in
      Consolidated Financial Statements” (“ **SFAS
      No. 160** ”).
      This
      statement changes the way the consolidated income statement is presented when
      non-controlling interests are present. It requires consolidated net income
      to be
      reported at amounts that include the amounts attributable to both the parent
      and
      the non-controlling interest, and is effective for periods beginning on or
      after
      December 15, 2008. Management is currently evaluating the impact this new
      standard could have on our financial position and results of
      operations.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities” (“ **SFAS
      No. 161** ”).
      SFAS
      No. 161 requires enhanced disclosures about an entity’s derivative and hedging
      activities and thereby improves the transparency of financial reporting.
      Constituents have expressed concerns that the existing disclosure requirements
      in FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging
      Activities” *,* do
      not
      provide adequate information about how derivative and hedging activities affect
      an entity’s financial position, financial performance, and cash flows. The
      adoption of SFAS No. 161 is not expected to have a material effect on our
      financial position and results of operations.




In
      May
      2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
      Accounting Principles” (“ **SFAS
      No. 162** ”).
      SFAS
      No. 162 identifies the sources of accounting principles and provides entities
      with a framework for selecting the principles used in preparation of financial
      statements that are presented in conformity with GAAP. The Board believes the
      GAAP hierarchy should be directed to entities because it is the entity (not
      its
      auditors) that is responsible for selecting accounting principles for financial
      statements that are presented in conformity with GAAP. The adoption of FASB
      162
      is not expected to have a material impact on our financial position and results
      of operations.


25
  **Recent
        Developments**





On
      September 30, 2008, we and YA Global entered into a letter agreement amending
      warrant no. CCP-004 dated May 24, 2006 (the “ **Warrant
      Letter Agreement** ”),
      which
      currently permits YA Global, as warrant holder, to exercise warrant no. CCP-004
      for up to 3,000,000 shares of our common stock at a price of $0.70 per share
      on
      a cashless basis. Under the Warrant Letter Agreement, the exercise price for
      the
      3,000,000 shares of our common stock under warrant no. CCP-004 was changed
      from
      $0.70 per share to $0.20 per share. In addition, YA Global agreed to exercise
      1,750,000 shares under warrant no. CCP-004 at the reduced exercise price of
      $0.20 per share, on a cash basis, resulting in an aggregate exercise amount
      of
      $350,000 to be paid to the Company.





**ITEM7A.
      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**




We
      are a
      smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
      are
      not required to provide information under this item.




**ITEM
      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**




The
      consolidated financial statements and supplementary data required in this item
      are set forth beginning on Page F-1 of this Annual Report on Form
      10-K.




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




None.




**ITEM
      9A(T). CONTROLS AND PROCEDURES**


**Disclosure
        Controls and Procedures**
  Our
        management, which consists of our Chief Executive Officer and Chief Financial
        Officer, has evaluated the effectiveness of our disclosure controls and
        procedures (as such term in defined in Rules 13a-15(e) and 15d-15(e) under
        the
        Exchange Act) in connection with the preparation of this Annual Report on
        Form
        10-K, as of July 31, 2008.
  Based
        upon that evaluation, the Chief Executive Officer and Chief Financial Officer
        concluded that our disclosure controls and procedures were not effective
        as of
        the end of the period covered by this report.
  **Internal
        Controls Over Financial Reporting**
  Management
        is responsible for establishing and maintaining adequate internal control
        over
        financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
        Exchange Act) to provide reasonable assurance regarding the reliability of
        our
        financial reporting and preparation of financial statement for external purposes
        in accordance with U.S. generally accepted accounting principals. A control
        system, no matter how well designed and operated, can provide only reasonable
        assurance of achieving the desired control objectives. Because of the inherent
        limitations in all control systems, internal controls over financial reporting
        may not prevent or detect misstatements. The design and operation of a control
        system must also reflect that there are resource constraints and management
        is
        necessarily required to apply its judgment in evaluating the cost-benefit
        relationship of possible controls.
  Our
        management, with the assistance of an outside consultant, assessed the
        effectiveness of our internal controls over financial reporting for the fiscal
        year ended July 31, 2008 based on the criteria established in Internal
        Control—Integrated Framework issued by the Committee of Sponsoring Organizations
        of the Treadway Commission. Based on such assessment, our management concluded
        that during the period covered by this report, our internal controls over
        financial reporting were not effective. Management has identified the following
        material weaknesses in our internal controls over financial reporting:
  ·
            lack
                of documented policies and procedures; and  ·
            there
                is no effective separation of duties, which includes monitoring controls,
                between the members of management.  Management
        is currently evaluating what steps can be taken in order to address these
        material weaknesses.
  **Changes
        in Internal Controls**
  During
        the fiscal quarter ended July 31, 2008, there were no changes in our internal
        control over financial reporting that have materially affected, or are
        reasonably likely to materially affect, our internal control over financial
        reporting.
  This
        Annual Report on Form 10-K does not include an attestation report of our
        registered public accounting firm regarding internal controls over financial
        reporting. Management’s report was not subject to attestation by our registered
        public accounting firm pursuant to temporary rules of the SEC that permit
        us to
        provide only a management’s report.


**ITEM
      9B. OTHER INFORMATION**




On
      November 12, 2008, we amended the employment agreements of Thomas J. Mazzarisi,
      our Chief Executive Office and General Counsel and Stephen J. Schoepfer, our
      President, Chief Operating Officer, Chief Financial Officer and Secretary to
      extend the terms of the agreements to August 31, 2009. For more information
      on
      these employment agreements, please see “Item 11. Executive
      Compensation—Employment Agreements.”


26


**PART
      III**




**ITEM
      10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**




**Board
      of Directors and Executive Officers**




*Thomas
      J. Mazzarisi* ,
      age 51,
      is our Chairman of the Board, Chief Executive Officer and General Counsel.
      Previously, Mr. Mazzarisi served as our Executive Vice President and General
      Counsel from March 1999 to April 2, 2004 and as our Chief Financial Officer
      from
      November 9, 2001 to April 2, 2004. Mr. Mazzarisi has been a member of our Board
      of Directors since July 1999. From 1997 until joining our company, Mr. Mazzarisi
      practiced law at his own firm in New York, specializing in international
      commercial transactions. From 1988 until 1997, Mr. Mazzarisi was a Senior
      Associate at the former law firm of Coudert Brothers where he also specialized
      in international commercial transactions. Prior to joining Coudert Brothers,
      Mr.
      Mazzarisi was Deputy General Counsel of the New York Convention Center
      Development Corporation. Mr. Mazzarisi is a graduate of Fordham University
      where
      he received a B.A. in Political Economy and was elected to Phi Beta Kappa.
      Mr.
      Mazzarisi received his J.D. from Hofstra University School of Law.





*Stephen
      J. Schoepfer* ,
      age 49,
      is our President, Chief Operating Officer, Chief Financial Officer and
      Secretary. Previously, Mr. Schoepfer served as our Executive Vice President,
      Chief Operating Officer and Secretary from July 1999 to April 2, 2004. Mr.
      Schoepfer has been a member of our Board of Directors since July 1999. Prior
      to
      joining the Company in July 1999, he was a Financial Advisor with the investment
      firm of Legg Mason Wood Walker. Prior to joining Legg Mason, Mr. Schoepfer
      served as a Financial Advisor and Training Coordinator at Prudential Securities.
      Mr. Schoepfer attended Wagner College.




**Board
      Committees**




The
      Board
      of Directors is comprised solely of Messrs. Mazzarisi and Schoepfer, neither
      of
      whom is independent. For that reason, we do not have a standing audit,
      nominating or compensation committee consisting of independent directors. In
      light of our limited revenues and operations, the Board of Directors does not
      believe it would be cost effective to establish such committees. See “Item 13.
      Certain Relationships and Related Transactions, and Director
      Independence-Director Independence.”




**Nomination
      of Directors**




There
      have been no material changes to the procedures by which our security holders
      may recommend nominees to our Board of Directors.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Under
      the
      securities laws of the United States, our directors, executive officers and
      any
      person holding more than 10% of our common stock are required to file initial
      forms of ownership of our common stock and reports of changes in that ownership
      to the SEC. Specific due dates for these forms have been established, and we
      are
      required to disclose in this report any failure to file by these due
      dates.




Based
      solely on our review of the copies of such forms with respect to fiscal 2008,
      or
      written representations from certain reporting persons, to the best of our
      knowledge, all reports were filed on a timely basis.




**Code
      of Ethics**




We
      have
      adopted a Code of Ethics (our “ **Code
      of Ethics** ”)
      that
      applies to our Chief Executive Officer and Chief Financial Officer. We will
      provide to any person without charge, upon request, a copy of our Code of
      Ethics. All requests should be directed to the attention of Thomas J. Mazzarisi,
      Chairman, Chief Executive Officer and General Counsel, JAG Media Holdings,
      Inc.,
      6865 S.W. 18th Street, Suite B-13, Boca Raton, Florida 33433. We will promptly
      disclose any amendments or waivers to our Code of Ethics on Form
      8-K.




**ITEM
      11. EXECUTIVE COMPENSATION**




**Summary
      Compensation Table**





The
      following table sets forth certain information regarding compensation awarded
      to, paid to or earned by our Chairman of the Board, Chief Executive Officer
      and
      General Counsel and our other most highly compensated executive officer, our
      President, Chief Operating Officer, Chief Financial Officer and Secretary,
      for
      services rendered during fiscal years ended July 31, 2007 and 2008 (together,
      the “ **named
      executive officers** ”).
      No
      other executive officer received total compensation exceeding $100,000 in fiscal
      2008.





**Name and principal position**
            
            **Year**
            
            **Salary**
              **($)**
            
            **Total**
              **($)**Thomas
                J. Mazzarisi,
            
            
            2008
            
            
            150,000
            
            
            150,000Chairman
                of the Board, Chief
              Executive
                Officer and General Counsel
            
            
            2007
            
            
            150,000
            
            
            150,000Stephen
                J. Schoepfer,
            
            
            2008
            
            
            150,000
            
            
            150,000President,
                Chief Operating Officer,
              Chief
                Financial Officer and Secretary
            
            
            2007
            
            
            150,000
            
            
            150,000




27


**Employment
      Agreements**




Messrs.
      Mazzarisi and Schoepfer each entered into an employment agreement with us on
      August 31, 2001. The employment agreements were amended on November 12, 2008
      in
      connection with the extension of each officer’s respective term of employment.
      Pursuant to the terms of Messrs. Mazzarisi’s and Schoepfer’s amended and
      restated employment agreements, they each receive an annual base salary of
      $150,000.




Messrs.
      Mazzarisi and Schoepfer are entitled to the same medical and other benefits,
      including health and life insurance coverage, as are provided to our other
      employees. In the event we terminate the employment of Messrs. Mazzarisi and
      Schoepfer without cause or such executive resigns for good reason (as defined
      in
      the employment agreements), they shall be entitled to receive (i) continued
      medical and life insurance coverage for a period equal to the greater of one
      year or the number of years and fractions thereof between the date of such
      termination and the end of the term (the “ **Severance
      Period** ”),
      (ii)
      a lump sum cash payment equal to the executive’s highest rate of annual salary
      in effect during the term multiplied by the Severance Period, (iii) a lump
      sum
      cash payment equal to the number of accrued and unused vacation days calculated
      at the executive’s then current salary rate and (iv) accelerated vesting of all
      of the executive’s outstanding stock options. Such cash payments will be made
      within ten days of termination of employment, and shall not be subject to offset
      for amounts earned by the executive in respect of any subsequent employment,
      nor
      is the executive required to seek any such subsequent employment.




Further,
      immediately prior to a “change in control” (as defined in our 1999 Long-Term
      Incentive Plan), Messrs. Mazzarisi and Schoepfer will each be granted an option
      to acquire 1,000,000 shares of our common stock (subject to equitable
      adjustments for stock splits, etc.) at an exercise price equal to the fair
      market value of the average closing bid price for shares of our common stock
      for
      the 30 days prior to such change in control, which option shall be fully vested
      and immediately exercisable in full and expire on a date which is the earlier
      of
      ten years from such change in control and three years after termination of
      employment. Generally, under our 1999 Long-Term Incentive Plan a “change in
      control” shall be deemed to have occurred (i) if there is an acquisition of 30%
      or more of our then outstanding shares of common stock, (ii) Messrs. Mazzarisi
      and Schoepfer cease for any reason to constitute at least a majority of the
      members of our Board or Directors, or (iii) a merger, consolidation,
      recapitalization, reorganization, sale or disposition of all or a substantial
      portion of our assets, or similar transaction shall have occurred. However,
      a
      change in control shall not be deemed to have occurred if consummation of such
      a
      transaction would result in at least 70% of the total voting power represented
      by our voting securities outstanding immediately after such transaction being
      beneficially owned by at least 75% of the holders of our outstanding voting
      securities immediately prior to the transaction, with the voting power of each
      such continuing holder relative to other such continuing holders not
      substantially altered in the transaction.




For
      a
      complete description of our 1999 Long-Term Incentive Plan, see “Item.
      12—Security Ownership of Certain Beneficial Owners and Related Stockholder
      Matters—Equity Compensation Plan Information.”




In
      addition, Messrs. Mazzarisi and Schoepfer would be granted an option to purchase
      a 5% ownership interest in any subsidiary that we successfully create and
      spin-off during the term of their employment contracts.




**Outstanding
      Equity Awards at July 31, 2008 Fiscal Year End**




The
      following table sets forth information regarding unexercised options to acquire
      shares of our common stock outstanding as of July 31, 2008.




**Name**
            
            **Grant date**
            
            **Number of**
              **securities**
              **underlying**
              **unexercised**
              **options**
              **(#)**
              **exercisable(1)**
            
            **Option exercise price**
              **($)**
            
            **Option**
              **expiration**
              **date**Thomas J. Mazzarisi
            
            
            August
                31, 2001
            
            
            500,000
            
            
            0.02
            
            
            08/31/2011Stephen
                J. Schoepfer
            
            
            August
                31, 2001
            
            
            250,000
            
            
            0.02
            
            
            08/31/2011







(1)
            Options
                become fully vested and exercisable immediately upon grant.


28




The
      options terminate on the earlier of the tenth anniversary of the date of the
      grant, or the 1,095th day following the grantee’s resignation, unless the
      grantee is terminated for cause, in which case the options terminate
      immediately.




For
      a
      complete description of our 1999 Long-Term Incentive Plan, see “Item.
      12—Security Ownership of Certain Beneficial Owners and Related Stockholder
      Matters—Equity Compensation Plan Information.”




**Director
      Compensation**




Both
      of
      our directors are officers of the company and they do not receive additional
      compensation for their services as directors. We do not intend to compensate
      our
      directors in fiscal 2009.




**Indemnification
      of Officers and Directors**




Our
      amended and restated Articles of Incorporation provide that we shall indemnify
      our officers, directors, employees and agents to the full extent permitted
      by
      Nevada law. Our Bylaws include provisions to indemnify our officers and
      directors and other persons against expenses (including judgments, fines and
      amounts paid for settlement) incurred in connection with actions or proceedings
      brought against them by reason of their serving or having served as officers,
      directors or in other capacities. We do not, however, indemnify them in actions
      in which it is determined that they have not acted in good faith or have acted
      unlawfully or not in our best interest. In the case of an action brought by
      or
      in the right of us, we shall indemnify them only to the extent of expenses
      actually and reasonably incurred by them in connection with the defense or
      settlement of these actions and we shall not indemnify them in connection with
      any matter as to which they have been found to be liable to us, unless the
      deciding court determines that, notwithstanding such liability, that person
      is
      fairly entitled to indemnity in light of all of the relevant facts and
      circumstances.




We
      do not
      currently maintain director’s and officer’s liability insurance but we may do so
      in the future.




Insofar
      as indemnification for liabilities arising under the Securities Act may be
      permitted to our directors and officers pursuant to the foregoing provisions,
      or
      otherwise, we have been advised that in the opinion of the SEC such
      indemnification is against public policy as expressed in the Securities Act
      and
      is, therefore, unenforceable.




**ITEM
      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER
      MATTERS**




The
      following table sets forth information regarding the beneficial ownership of
      our
      common stock as of October 31, 2008 (except as otherwise indicated) by (i)
      each
      person known by us to be the beneficial owner of more than 5% of our common
      stock, (ii) each director and nominee to be a director, (iii) each named
      executive officer and (iv) all directors and executive officers as a group.
      Except as otherwise indicated below, each of the persons named in the table
      has
      sole voting and investment power with respect to the shares set forth opposite
      such person’s name. Unless otherwise indicated the address of each person listed
      in this table is c/o JAG Media Holdings, Inc, 6865 SW 18th Street, Suite B-13,
      Boca Raton, Florida 33433.




**Name & Address of Beneficial Owner**
            
            **Number of Shares**
              **Beneficiary Owned**
            
            **Percentage of**
              **Class**YA
                Global Investments L.P.(1)
            
            
            6,609,486
            
            
            9.99
            %Thomas
                J. Mazzarisi(2)
            
            
            610,000
            
            
            *Stephen
                J. Schoepfer(3)
            
            
            325,000
            
            
            *All
                executive officers and directors as a group (2 persons)
            
            
            935,000
            
            
            1.48
            %







*
            Less
                than one percent




(1)
            Includes
                warrants to purchase 8,250,000 shares of common stock, however, by
                contract the warrants cannot be exercised if after exercise the beneficial
                owner would own more than 9.99% of the outstanding shares of common
                stock,
                unless waived by YA Global upon 65 days notice. Accordingly only
                3,259,486
                shares subject to such warrants are included. The address of YA Global
                Investment L.P. is 101 Hudson Street, Suite 3700, Jersey City,
                NJ.




(2)
            Includes
                500,000 shares of common stock issuable upon the exercise of stock
                options.




(3)
            Includes
                250,000 shares of common stock issuable upon the exercise of stock
                options.




29




**Equity
      Compensation Plan Information**




The
      following table summarizes the shares of our common stock authorized for
      issuance under our equity compensation plans as of July 31, 2008.




Number of
              securities
              to be issued upon
              exercise of
              outstanding options,
              warrants and rights
            
            Weighted average
              exercise price of
              outstanding
              options, warrants
              and rights
            
            Number of
              securities remaining
              available for future
              issuance under
              equity compensation
              plans (excluding
              securities reflected
              in column (a))(a)
            
            (b)
            
            (c)Equity
                compensation plans approved by security holders
            
            
            Not
                applicable
            
            
            Not
                applicable
            
            
            Not
                applicableEquity
                compensation plans not approved by security holders
            
            
            750,000
            
            
            $.02
            
            
            5,250,000(1)TOTAL
            
            
            750,000
            
            
            —
            
            
            5,250,000







(1)
            The
                maximum number of shares that may be subject to outstanding awards
                under
                our 1999 Long-Term Incentive Plan is 6,000,000 shares of Common Stock.
                Because this limitation applies only to outstanding awards under
                the plan,
                as the outstanding options included in column (a) are either exercised,
                forfeited or expire pursuant to their terms, the number of shares
                remaining available for future issuance in column (c) shall be increased
                by the number of shares subject to such option so exercised, forfeited
                or
                expired.




Our
      1999
      Long-Term Incentive Plan provides our directors, officers, employees and
      consultants with the opportunity to participate in our ownership. Our Board
      of
      Directors acts as the committee under the plan which administers the plan,
      addressing participation, the awards offered and any applicable conditions
      of
      exercise. In making these determinations, our Board of Directors will generally
      consider the participant’s position and record of service to us. The Board of
      Directors may issue options, stock appreciation rights, restricted stock,
      deferred stock, bonus stock, awards in lieu of cash obligations, dividend
      equivalents and other stock based awards, all subject to terms and conditions
      to
      be set by the Board of Directors. The plan also contains standard provisions
      dealing with matters such as adjustment of the number of shares subject to
      options and covered by the plan in addition to amendment and termination of
      the
      plan.




**ITEM
      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**




**Certain
      Relationships and Related Transactions**




On
      October 1, 2008, we entered into a non-binding letter of intent with respect
      to
      a merger opportunity with BlueCreek, e2Business, a majority shareholder of
      BlueCreek, and YA Global. YA Global currently holds 5.27% of our outstanding
      common stock (this excludes shares issuable upon exercise of the warrants held
      by YA Global) and has been a significant source our financing since 2002. YA
      Global is also a senior secured lender to BlueCreek. The terms of the
      non-binding letter of intent contemplate that YA Global will restructure its
      two
      convertible debentures and warrant with BlueCreek at the closing of the merger
      by reducing the interest rates, amending the conversion terms of the debentures,
      deferring certain principal payments, converting $2,000,000 of principal into
      equity of BlueCreek in the form of a warrant, and agreeing to remove certain
      registration rights it had with respect to the shares underlying the convertible
      debentures and the warrants. See “Item. 1 Business—Proposed Merger with
      BlueCreek Energy.”




**Director
      Independence**




The
      Board
      of Directors is comprised solely of Messrs. Mazzarisi and Schoepfer, neither
      of
      whom is independent. For that reason, we do not have a standing audit,
      nominating or compensation committee made up of independent directors. In light
      of our limited revenues and operations, the Board of Directors does not believe
      it would be cost effective to establish such committees.


30




**ITEM
      14. PRINCIPAL ACCOUNTING FEES AND SERVICES**




**Audit
      Fees**




The
      aggregate fees billed for the fiscal years ended July 31, 2008 and 2007 for
      professional services rendered by J.H. Cohn LLP for the audit of the our annual
      consolidated financial statements and the reviews of the consolidated financial
      statements included in our Quarterly Reports were $115,000 and $122,000,
      respectively.




**Audit-Related
      Fees**




The
      aggregate fees billed for the fiscal years ended July 31, 2008 and 2007 for
      assurance and related services rendered by J.H. Cohn LLP related to the
      performance of the audit or review of our consolidated financial statements
      were
      $24,000 and $23,000, respectively.




**Tax
      Fees**




The
      aggregate fees billed for the fiscal years ended July 31, 2008 and 2007 for
      services rendered by J.H. Cohn LLP in connection with the preparation of our
      federal and state tax returns or payroll tax related matters were $7,500 and
      $3,900, respectively.




**All
      Other Fees**




There
      were no other fees billed by J.H. Cohn LLP in the years ended July 31, 2008
      or
      July 31, 2007.




**Pre-Approval
      Policies and Procedures**




The
      Board
      of Directors is required to pre-approve the rendering by our independent auditor
      of audit or permitted non-audit services. The Board of Directors pre-approved
      all of the services rendered by J.H. Cohn LLP for the audit of the consolidated
      financial statements included in our Annual Reports on Form 10-K and reviews
      of
      consolidated financial statements included in our Quarterly Reports on Form
      10-Q
      and on Form 10-QSB for the years ended July 31, 2008 and 2007.




The
      services provided for 2008 were 78% audit services, 17% audit related fees
      and
      5% tax services. The services provided above for 2007 were 82% audit services,
      15% audit related fees and 3% tax services.


31




**PART
      IV**




**ITEM
      15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**




**Consolidated
      Financial Statements**




Report
                of Independent Registered Public Accounting Firm
            
            
            F-2Consolidated
                Balance Sheets July 31, 2008 and July 31, 2007
            
            
            F-3Consolidated
                Statements of Operations Years Ended July 31, 2008 and
                2007
            
            
            F-4Consolidated
                Statement of Changes in Stockholders’ Deficiency Years Ended July 31, 2008
                and 2007
            
            
            F-5Consolidated
                Statements of Cash Flows Years Ended July 31, 2008 and
                2007
            
            
            F-6Notes
                to Consolidated Financial Statements
            
            
            F-7/20




**Exhibits**




The
      following Exhibits are filed as part of this Annual Report on Form 10-K or
      incorporated by reference.





Exhibit No.
            
            Description3.1
            
            Amended
                and Restated Articles of Incorporation of Registrant. Incorporated
                by
                reference to the Registrant’s Form 10-QSB filed with the SEC on June 19,
                2006.3.2
            
            Bylaws
                of Registrant. Incorporated by reference to the Registrant’s Form SB-2
                filed with the SEC on September 30, 1999.4.1
            
            Form
                of Common Stock Certificate. Incorporated by reference to the Registrant’s
                Form 10-KSB filed with the SEC on November 8, 2005.4.2
            
            Form
                of Series 2 Class B Stock Certificate. Incorporated by reference
                to the
                Registrant’s Form 10-KSB filed with the SEC on November 8,
                2005.4.3
            
            Securities
                Purchase Agreement, effective May 25, 2006, with YA Global. Incorporated
                by reference to the Registrant’s Form 8-K filed with the SEC on June 1,
                2006.4.4
            
            Letter
                Agreement, dated January 31, 2008, relating to the conversion of
                the
                remaining principal balance of the convertible secured debentures.
                Incorporated by reference to the Registrant’s Form 8-K filed with the SEC
                on February 6, 2008.4.5
            
            Warrant
                No. CCP-1 for 2,000,000 shares of common stock issued to YA Global,
                effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                8-K filed with the SEC on June 1, 2006.4.6
            
            Warrant
                No. CCP-2 for 2,000,000 shares of common stock issued to YA Global,
                effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                8-K filed with the SEC on June 1, 2006.4.7
            
            Warrant
                No. CCP-3 for 2,000,000 shares of common stock issued to YA Global,
                effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                8-K filed with the SEC on June 1, 2006.4.8
            
            Warrant
                No. CCP-4 for 3,000,000 shares of common stock issued to YA Global,
                effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                8-K filed with the SEC on June 1,
                2006.




32





Exhibit No.
            
            Description4.9
            
            Warrant
                No. CCP-5 for 3,000,000 shares of common stock issued to YA Global,
                effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                8-K filed with the SEC on June 1, 2006.4.10
            
            Letter
                Agreement, amending Warrant No. CCP-4. Incorporated by reference
                to the
                Registrant’s Form 8-K filed with the SEC on October 3,
                2008.4.11
            
            Investor
                Registration Rights Agreement, effective May 25, 2006, with YA Global.
                Incorporated by reference to the Registrant’s Form 8-K filed with the SEC
                on June 1, 2006.10.1
            
            Non-Binding
                Letter of Intent, dated October 1, 2008, by and among the Registrant,
                BlueCreek, e2Business and YA Global. Incorporated by reference to
                the
                Registrant’s Form 8-K filed with the SEC on October 3,
                2008.10.2
            
            1999
                Long-Term Incentive Plan, as amended. Incorporated by reference to
                Exhibit
                10.1 to the Registrant’s Form S-8 filed with the SEC on May 1,
                2002.10.3
            
            Amended
                and Restated Employment Agreement, dated August 31, 2001, between
                Thomas
                J. Mazzarisi and Registrant. Incorporated by reference to Exhibit
                10.21 in
                Amendment No. 1 to the Registrant’s Form SB-2 filed with the SEC on
                September 26, 2001.10.4
            
            Amended
                and Restated Employment Agreement, dated August 31, 2001, between
                Stephen
                J. Schoepfer and Registrant. Incorporated by reference to Exhibit
                10.20 in
                Amendment No. 1 to the Registrant’s Form SB-2 filed with the SEC on
                September 26, 2001.10.5
            
            Amendment
                to Amended and Restated Employment Agreement, dated as of November
                3,
                2005, between Registrant and Thomas J. Mazzarisi. Incorporated by
                reference to the Registrant’s Form 10-KSB filed with the SEC on November
                8, 2005.10.6
            
            Amendment
                to Amended and Restated Employment Agreement, dated as of November
                3,
                2005, between Registrant and Stephen J. Schoepfer. Incorporated by
                reference to the Registrant’s Form 10-KSB filed with the SEC on November
                8, 2005.10.7
            
            Amendment
                to Amended and Restated Employment Agreement, dated as of November
                12,
                2007, by and between Registrant and Thomas J. Mazzarisi. Incorporated
                by
                reference to Exhibit 10.6 of Registrant’s Form 10-K filed with the SEC on
                November 13, 2007.10.8
            
            Amendment
                to Amended and Restated Employment Agreement, dated as of November
                12,
                2007, by and between Registrant and Stephen J. Schoepfer.****Incorporated
                by reference to Exhibit 10.7 of the Registrant’s Form 10-K filed with the
                SEC on November 13, 2007.10.9
            
            Extension
                of Amended and Restated Employment Agreement, dated as of November
                12,
                2008, by and between Registrant and Thomas J.
                Mazzarisi.*10.10
            
            Extension
                of Amended and Restated Employment Agreement, dated as of November
                12,
                2008, by and between Registrant and Stephen J.
                Schoepfer.*


10.11
              
              Consulting
                  Agreement, dated November 12, 2007, between the Registrant and
                  Walsh
                  Organization, Inc. Incorporated by reference to Exhibit 10.31 of
                  the
                  Registrant’s Annual Report on Form 10-KSB filed November 13,
                  2003.10.12
              
              Power
                  of Attorney and Contingent Fee Contract, dated June 14, 2002, among
                  the
                  Registrant, Gary Valinoti and the Law Firm of O’Quinn, Laminack &
                  Pirtle. Incorporated by reference to Exhibit 10.32 of the Registrant’s
                  Annual Report on Form 10-KSB filed November 13, 2003.10.13
              
              Subscription
                  Agreement, dated December 10, 2002, between the Registrant and
                  Bay Point
                  Investment Partners LLC. Incorporated by reference to the Registrant’s
                  Registration Statement on Form SB-2 filed on January 9,
                  2003.


33





Exhibit No.
            
            Description


10.14
              
              Placement
                  Agent Agreement, dated December 10, 2002, between the Registrant
                  and RMC 1
                  Capital Markets, Inc. Incorporated by reference to the
                  Registrant’sRegistration
                  Statement on Form SB-2 filed on January 9, 2003.10.15
              
              Placement
                  Agent Agreement, dated as of June 19, 2003, between the Registrant
                  and RMC
                  1 Capital Markets, Inc., as amended on August 12, 2003. Incorporated
                  by
                  reference to the Registrant’s Current Report on Form 8-K filed on August
                  13, 2003.10.16
              
              Subscription
                  Agreement, dated as of June 19, 2003, between the Registrant and
                  Bay Point
                  Investment Partners LLC, as amended on August 12, 2003. Incorporated
                  by
                  reference to the Registrant’s Current Report on Form 8-K filed on August
                  13, 2003.10.17
              
              Subscription
                  Agreement, dated as of September 25, 2003, between the Registrant
                  and
                  Kuekenhof Equity Fund L.P. Incorporated by reference to Exhibit
                  10.39 of
                  the Registrant’s Form 10-KSB filed with the SEC on November 13,
                  2003.10.18
              
              Non-Circumvention/Non-Disclosure
                  Agreement, dated as of January 1, 2004 between Flow Capital Advisors
                  Inc.
                  and the Registrant. Incorporated by reference to the Registrant’s Form 8-K
                  filed with the SEC on July 25, 2007.10.19
              
              Finder’s
                  Fee Agreement, dated as of January 5, 2004, between the Registrant
                  and
                  Flow Capital Advisors, Inc. Incorporated by reference to the Registrant’s
                  Form 8-K filed with the SEC on January 20, 2004.10.20
              
              Finder’s
                  Fee Agreement, dated as of March 14, 2005, by and between the Registrant
                  and Flow Capital Advisors, Inc. Incorporated by reference to the
                  Registrant’s Form 8-K filed with the SEC on July 25,
                  2007.




10.21
            
            Irrevocable
                Transfer Agent Instructions, effective May 25, 2006, between the
                Registrant and YA Global. Incorporated by reference to the Registrant’s
                Form 8-K filed with the SEC on June 1, 2006.10.22
            
            Letter,
                dated as of June 17, 2008, from Cryptometrics regarding termination
                of the
                agreement and plan of merger between the Registrant and Cryptometrics.
                Incorporated by reference to the Registrant’s Form 8-K filed with the SEC
                on June 18, 2008.14.1
            
            Code
                of Ethics. Incorporated by reference to the Registrant’s Form 10-KSB filed
                with the SEC on November 13, 2003.21.1
            
            Subsidiaries
                of Registrant. Incorporated by reference to the Registrant’s Form 8-K
                filed with the SEC on March 5, 2007.31.1
            
            Section
                302 Certification of Chief Executive Officer*31.2
            
            Section
                302 Certification of Chief Financial Officer*32.1
            
            Section
                906 Certification of Chief Executive Officer and Chief Financial
                Officer*







*
            Filed
                herewith.


34




JAG
      Media
      Holdings, Inc. and Subsidiaries





PAGEReport
                of Independent Registered Public Accounting Firm
            F-2Consolidated
                Balance Sheets July 31, 2008 and 2007
            F-3Consolidated
                Statements of Operations Years Ended July 31, 2008 and
                2007
            F-4Consolidated
                Statements of Changes in Stockholders' Equity (Deficiency) Years
                Ended
                July 31, 2008 and 2007
            F-5Consolidated
                Statements of Cash Flows Years Ended July 31, 2008 and
                2007
            F-6Notes
                to Consolidated Financial Statements
            F-7/20





*
      *
      *


F-1





Report
      of Independent Registered Public Accounting Firm





To
      the
      Board of Directors and Stockholders


JAG
      Media
      Holdings, Inc.





We
      have
      audited the accompanying consolidated balance sheets of JAG
      Media
      Holdings, Inc. and Subsidiaries as
      of
      July 31, 2008 and 2007, and the related consolidated statements of operations,
      changes in stockholders' equity (deficiency) and cash flows for the years ended
      July 31, 2008 and 2007. These financial statements are the responsibility of
      the
      Company's management. Our responsibility is to express an opinion on these
      financial statements based on our audits.





We
      conducted our audits 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 audits provide 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 JAG
      Media
      Holdings, Inc. and Subsidiaries as
      of
      July 31, 2008 and 2007, and their results of operations and cash flows for
      the
      years ended July 31, 2008 and 2007 in conformity with accounting principles
      generally accepted in the United States of America.





The
      consolidated financial statements referred to above have been prepared assuming
      that the Company will continue as a going concern. As further discussed in
      Note
      2 to the consolidated financial statements, the Company's operations have
      generated recurring losses and negative cash flows from operating activities.
      Such matters raise substantial doubt about the Company's ability to continue
      as
      a going concern. Management's plans concerning these matters are also described
      in Note 2. The accompanying consolidated financial statements do not include
      any
      adjustments that might result from the outcome of these
      uncertainties.





/s/
      J.H.
      Cohn LLP





Roseland,
      New Jersey


November
      11, 2008


F-2


Jag
      Media
      Holdings, Inc. and Subsidiaries





Consolidated
      Balance Sheets


July
      31,
      2008 and 2007





2008
            
            2007AssetsCurrent
                assets:Cash
                and cash equivalents
            
            $
            275,168
            
            $
            507Accounts
                receivable, net of allowance for doubtful accounts of $47,500 and
                $7,500
                at July 31, 2008 and 2007, respectively
            
            
            33,369
            
            
            34,345Other
                current assets
            
            
            103,352
            
            
            44,426Total
                current assets
            
            
            411,889
            
            
            79,278Equipment,
                net of accumulated depreciation of $142,746 and $154,975 at July
                31, 2008
                and 2007, respectively
            
            
            31,207
            
            
            55,071Totals
            
            $
            443,096
            
            $
            134,349Liabilities
                and Stockholders' Equity (Deficiency)Current
                liabilities:Accounts
                payable and accrued expenses
            
            $
            325,128
            
            $
            1,088,819Deferred
                revenues
            
            
            15,824
            
            
            18,695Derivative
                liability
            
            
            -
            
            
            11,058,561Total
                current liabilities
            
            
            340,952
            
            
            12,166,075Convertible
                debentures payable, net of unamortized debt discount of $912,820
                at July
                31, 2007
            
            
            -
            
            
            2,607,180Total
                liabilities
            
            
            340,952
            
            
            14,773,255Mandatorily
                redeemable Class B common stock; par value $.00001 per share: 400,000
                shares designated as Series 2; 381,749 shares issued and outstanding
                at
                both July 31, 2008 and 2007,
            
            
            4
            
            
            440,000
                shares designated as Series 3; 21,500 shares issued and outstanding
                at
                both July 31, 2008 and 2007
            
            
            -
            
            
            -4
            
            
            4Commitments
                and contingenciesStockholders'
                equity (deficiency):Preferred
                stock; par value $.00001 per share; 50,000,000 shares authorized,
                none
                issued at both July 31, 2008 and 2007Common
                stock; par value $.00001 per share; 500,000,000 shares authorized;
                61,767,816 shares issued and 48,048,617 issued and outstanding at
                July 31,
                2008 and 2007, respectively
            
            
            617
            
            
            480Additional
                paid-in capital
            
            
            63,379,154
            
            
            45,806,278Accumulated
                deficit
            
            
            (63,277,631
            )
            
            (60,445,668
            )Total
                stockholders' equity (deficiency)
            
            
            102,140
            
            
            (14,638,910
            )Totals
            
            $
            443,096
            
            $
            134,349





See
      Notes
      to Consolidated Financial Statements.


F-3


JAG
      Media
      Holdings, Inc. and Subsidiaries





Consolidated
      Statements of Operations


Years
      Ended July 31, 2008 and 2007





2008
            
            2007Revenues
            
            $
            177,065
            
            $
            203,286Operating
                expenses:Cost
                of revenues
            
            
            31,258
            
            
            73,047Selling
                expenses
            
            
            71,806
            
            
            97,029General
                and administrative expenses
            
            
            1,848,461
            
            
            1,754,085Totals
            
            
            1,951,525
            
            
            1,924,161Loss
                from operations
            
            
            (1,774,460
            )
            
            (1,720,875
            )Other
                income (expense)Gain
                (loss) on change in value of derivative liability
            
            
            602,338
            
            
            (8,524,813
            )Interest
                income
            
            
            -
            
            
            54Interest
                expense
            
            
            (1,659,841
            )
            
            (1,529,518
            )Net
                loss
            
            $
            (2,831,963
            )
            $
            (11,775,152
            )Basic
                and diluted net loss per share
            
            $
            (0.05
            )
            $
            (0.25
            )Basic
                and diluted weighted average common shares outstanding
            
            
            56,945,614
            
            
            46,466,147





See
      Notes
      to Consolidated Financial Statements


F-4


JAG
      Media
      Holdings, Inc. and Subsidiaries


Consolidated
      Statements of Changes in Stockholders’ Equity


Years
      Ended July 31, 2008 and 2007





Common StockNumber of
            
            
            
            Additional
            
            Unearned
            
            AccumulatedShares
            
            Amount
            
            Paid-In Capital
            
            Compensation
            
            Deficit
            
            TotalBalance,
                August 1, 2006
            
            
            42,896,506
            
            $
            429
            
            $
            44,209,217
            
            $
            (34,870
            )
            $
            (48,670,516
            )
            $
            (4,495,740
            )Amortization
                of unearned, stock-based compensation
            
            
            
            
            
            
            
            
            28,167
            
            
            
            
            
            
            
            
            28,167Reclassification
                of deferred compensation upon adoption of SFAS 123R
            
            
            
            
            
            
            
            
            (34,870
            )
            
            34,870
            
            
            
            
            
            -Effect
                of issuance of common stock in exchange for services
            
            
            180,000
            
            
            2
            
            
            62,198
            
            
            
            
            
            
            
            
            62,200Effect
                of repricing of employee options
            
            
            
            
            
            
            
            
            70,946
            
            
            
            
            
            
            
            
            70,946Shares
                issued on conversion of convertible debentures
            
            
            4,432,111
            
            
            44
            
            
            554,956
            
            
            
            
            
            
            
            
            555,000Shares
                issued on exercise of options
            
            
            540,000
            
            
            5
            
            
            43,395
            
            
            
            
            
            
            
            
            43,400Capital
                contribution from payment by prospective merger partner of the Company's
                costs related to merger
            
            
            
            
            
            
            
            
            580,269
            
            
            
            
            
            
            
            
            580,269Reclassification
                of derivative liability upon exercise of options for 340,000
                shares
            
            
            
            
            
            
            
            
            292,000
            
            
            
            
            
            
            
            
            292,000Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (11,775,152
            )
            
            (11,775,152
            )Balance,
                July 31, 2007
            
            
            48,048,617
            
            
            480
            
            
            45,806,278
            
            
            -
            
            
            (60,445,668
            )
            
            (14,638,910
            )Amortization
                of unearned stock-based compensation
            
            
            
            
            
            
            
            
            3,854
            
            
            
            
            
            
            
            
            3,854Effect
                  of issuance of common stock in exchange for services and payment
                  of
                  accounts payable
            
            
            165,000
            
            
            2
            
            
            109,348
            
            
            
            
            
            
            
            
            109,350Effect
                of issuance of options in exchange for services
            
            
            
            
            
            
            
            
            82,524
            
            
            
            
            
            
            
            
            82,524Shares
                issued on conversion of convertible debentures
            
            
            8,800,000
            
            
            88
            
            
            3,519,912
            
            
            
            
            
            
            
            
            3,520,000Shares
                issued as payment for accrued interest on convertible
                debentures
            
            
            1,339,199
            
            
            13
            
            
            535,666
            
            
            
            
            
            
            
            
            535,679Shares
                issued on exercise of options
            
            
            1,415,000
            
            
            14
            
            
            773,936
            
            
            
            
            
            
            
            
            773,950Shares
                issued on exercise of warrants
            
            
            2,000,000
            
            
            20
            
            
            799,980
            
            
            
            
            
            
            
            
            800,000Capital
                contribution from payment by prospective merger partner of the Company's
                costs
            
            
            
            
            
            
            
            
            230,113
            
            
            
            
            
            
            
            
            230,113Reclassification
                of derivative liability upon exercise of options for 905,000
                shares
            
            
            
            
            
            
            
            
            433,652
            
            
            
            
            
            
            
            
            433,652Beneficial
                conversion charge incurred upon conversion of accrued interest on
                convertible debentures at $0.40 per share while fair market value
                of
                common stock was $0.91 per share
            
            
            
            
            
            
            
            
            682,991
            
            
            
            
            
            
            
            
            682,991Reclassification
                of fair value of warrants from derivative liability due to exercise
                of
                warrants and debt conversion
            
            
            
            
            
            
            
            
            10,400,900
            
            
            
            
            
            
            
            
            10,400,900Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,831,963
            )
            
            (2,831,963
            )Balance,
                July 31, 2008
            
            
            61,767,816
            
            $
            617
            
            $
            63,379,154
            
            $
            -
            
            $
            (63,277,631
            )
            $
            102,140





See
      Notes
      to Consolidated Financial Statements


F-5


JAG
      Media
      Holdings, Inc. and Subsidiaries


Consolidated
      Statements of Cash Flows


Years
      Ended July 31, 2008 and 2007





2008
            
            2007Operating
                activities:Net
                loss
            
            $
            (2,831,963
            )
            $
            (11,775,152
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            25,163
            
            
            35,707Amortization
                of unearned, stock-based compensation
            
            
            3,854
            
            
            28,167Beneficial
                conversion charge included in interest expense
            
            
            682,991
            
            
            -Provision
                for doubtful accounts
            
            
            40,000
            
            
            -(Gain)
                loss on change in value of derivative liability
            
            
            (602,338
            )
            
            8,524,813Amortization
                of debt discount
            
            
            912,820
            
            
            1,135,091Costs
                of the Company paid by potential merger partner
            
            
            230,113
            
            
            580,269Effect
                of issuance of common stock in exchange for services
            
            
            97,150
            
            
            62,200Effect
                of repricing employee options for common stock for
                services
            
            
            -
            
            
            70,946Amortization
                of deferred consulting costs
            
            
            410,266
            
            
            -Loss
                on abandonment of fixed assets
            
            
            6,029
            
            
            -Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (39,024
            )
            
            (18,765
            )Other
                current assets
            
            
            (39,157
            )
            
            55,418Accounts
                payable and accrued expenses
            
            
            (214,476
            )
            
            856,521Deferred
                revenues
            
            
            (2,871
            )
            
            (3,753
            )Net
                cash used in operating activities
            
            
            (1,321,443
            )
            
            (448,538
            )Investing
                activities:Equipment
                purchases
            
            
            (7,246
            )
            
            (15,573
            )Net
                cash used in investing activities
            
            
            (7,246
            )
            
            (15,573
            )Financing
                activities:Proceeds
                from exercise of stock options and warrants
            
            
            1,603,350
            
            
            14,000Net
                cash provided by financing activities
            
            
            1,603,350
            
            
            14,000Net
                increase (decrease) in cash and cash equivalents
            
            
            274,661
            
            
            (450,111
            )Cash
                and cash equivalents, beginning of year
            
            
            507
            
            
            450,618Cash
                and cash equivalents, end of year
            
            $
            275,168
            
            $
            507Supplemental
                disclosure of noncash financing activities:Effect
                of convertible debentures converted to common stock
            
            $
            3,520,000
            
            $
            555,000Effect
                of issuance of common stock as payment for accrued
                interest
            
            $
            535,679Fair
                value of fully-vested common stock issued to consultant in exchange
                for
                services and payment of accounts payable
            
            $
            109,350
            
            $
            36,000Receivable
                from employees for exercise of options
            
            
            
            
            $
            29,400Reclassification
                of derivative liability
            
            
            
            
            $
            292,000Fair
                value of options issued for future services
            
            $
            460,851Reclassification
                of derivative liability upon exercise of options
            
            $
            433,652Reclassification
                of fair value of warrants from derivative liabilityto
                additional paid-in capital
            
            $
            10,400,900





See
      Notes
      to Condensed Consolidated Financial Statements.


F-6





**Note
      1 – Organization and business** :





JAG
      Media
      Holdings, Inc., a Nevada corporation, and its subsidiaries (the "Company")
      gather and compile financial and investment information from contacts with
      financial institutions, experienced journalists, money managers, analysts and
      other Wall Street professionals and generate revenues by releasing such
      information to subscribers on a timely basis through facsimile transmissions
      and
      a web site, www.jagnotes.com. Subscribers receive, among other things, a daily
      early-morning investment report that summarizes newly issued research, analyst
      opinions, upgrades, downgrades and analyst coverage changes from various
      investment banks and brokerage houses and alerts, during the trading day, of
      rumors circulating on Wall Street. The Company is also in the business of
      developing related software focused on streaming video solutions, including
      the
      delivery of services already provided by the Company. Management considers
      all
      of its activities to be within the same business segment.





The
      Company commenced operations in 1989 and its subscribers were initially limited
      primarily to institutional investors. During the year ended July 31, 2000,
      the
      Company opened its web site and began targeting retail subscribers in an effort
      to expand its subscriber base.





On
      November 24, 2004, a newly established subsidiary of the Company, Pixaya (UK)
      Limited (“Pixaya”) (formerly known as TComm (UK) Limited), a company organized
      in the United Kingdom, acquired the business and assets of TComm Limited, a
      development stage company, also organized in the United Kingdom, that was
      developing various mobile video streaming products.





The
      Company is actively pursuing potential mergers. As further discussed in Note
      9
      herein, on December 27, 2005, the Company entered into an agreement and plan
      of
      merger that was amended on various dates through April 14, 2008 (the "Merger
      Agreement") with, among others, Cryptometrics, Inc., a Delaware corporation
      ("Cryptometrics"), pursuant to which Cryptometrics would have merged with a
      newly created subsidiary of the Company. On June 18, 2008, the Company received
      a letter from Cryptometrics dated June 17, 2008, stating that the automatic
      termination date of the Merger Agreement had expired and that Cryptometrics
      had
      decided not to extend the Merger Agreement any further. The letter further
      stated that the Merger Agreement between the Company and Cryptometrics had
      by
      its terms been terminated, and was void and of no force or effect. The Company
      is actively seeking alternative merger candidates. As further discussed in
      Note
      10 herein, on October 1, 2008, the Company entered into a non-binding letter
      of
      (the “Letter of Intent”) with respect to a merger opportunity with BlueCreek
      Energy, (“BlueCreek”), e2Business Services (“e2Business”), a majority
      shareholder of BlueCreek and YA Global Investments, L.P. (“YA Global”).




**Note
      2 - Basis of presentation and summary of significant accounting
      policies** :





Basis
      of
      presentation:





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. However, as shown in the
      accompanying consolidated financial statements, the Company only generated
      revenues of approximately $177,000 and $203,000 and it incurred net losses
      of
      approximately $2,832,000 and $11,775,000 and negative cash flows from operating
      activities of approximately $1,321,000 and $449,000 for the years ended July
      31,
      2008 and 2007, respectively. In addition, as of July 31, 2008 the Company only
      had cash and cash equivalents available of approximately $275,000 and working
      capital of $71,000. These matters raise substantial doubt about the Company’s
      ability to continue as a going concern.





Management
      believes that in the absence of a substantial increase in subscription revenues,
      it is probable that the Company will continue to incur losses and negative
      cash
      flows from operating activities through at least July 31, 2009 and that the
      Company will need to obtain additional equity or debt financing to sustain
      its
      operations.





Management
      believes that the Company will be able to obtain sufficient financing directly
      through the consummation of the merger with an appropriate merger candidate
      that
      has such financing, to enable it to continue as a going concern through at
      least
      July 31, 2009. However, if the Company cannot obtain sufficient additional
      financing by that date, the Company may be forced thereafter to restructure
      its
      operations, file for bankruptcy or entirely cease its
      operations.


F-7


The
      accompanying consolidated financial statements do not include any adjustments
      related to the recoverability and classification of assets or the amount and
      classification of liabilities that might be necessary should the Company be
      unable to continue as a going concern.





Use
      of
      estimates:





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect certain reported amounts and disclosures.
      Accordingly, actual results could differ from those estimates.





Principles
      of consolidation:





The
      accompanying consolidated financial statements include the accounts of JAG
      Media
      Holdings, Inc. and its subsidiaries. All significant intercompany accounts
      and
      transactions have been eliminated in consolidation.





Revenue
      recognition:





Fees
      for
      subscriptions are generally billed in advance on a monthly, quarterly,
      semi-annual or annual basis. Revenues from subscriptions are recognized ratably
      over the subscription period. Subscription fees collected that relate to periods
      subsequent to the date of the consolidated balance sheet are included in
      deferred revenues.





Cash
      equivalents:




Cash
      equivalents consist of highly liquid investments with a maturity of three months
      or less when acquired.





Equipment:





Equipment
      is stated at cost, net of accumulated depreciation. Depreciation is provided
      using accelerated methods over the estimated useful lives of the assets, which
      range from three to seven years.





Impairment
      of long-lived assets subject to amortization:





The
      Company has adopted the provisions of Statement of Financial Accounting
      Standards No. 144, "Accounting for the Impairment of Long-Lived Assets" ("SFAS
      144"). Under SFAS 144, impairment losses on long-lived assets subject to
      amortization, such as equipment, are recognized when events or changes in
      circumstances indicate that the undiscounted cash flows estimated to be
      generated by such assets are less than their carrying value and, accordingly,
      all or a portion of such carrying value may not be recoverable. Impairment
      losses are then measured by comparing the fair value of assets to their carrying
      amounts.





Income
      taxes:





The
      Company accounts for income taxes pursuant to the asset and liability method
      which requires deferred income tax assets and liabilities to be computed
      annually for temporary differences between the financial statement and tax
      bases
      of assets and liabilities that will result in taxable or deductible amounts
      in
      the future based on enacted tax laws and rates applicable to the periods in
      which the differences are expected to affect taxable income. Valuation
      allowances are established when necessary to reduce deferred tax assets to
      the
      amount expected to be realized. The income tax provision or credit is the tax
      payable or refundable for the period plus or minus the change during the period
      in deferred tax assets and liabilities.





The
      amount of income taxes a Company pays is subject to periodic audits by Federal
      and state tax authorities and these audits may result in proposed deficiency
      assessments. In June 2006, the Financial Accounting Standards Board (“FASB”)
      issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income
      Taxes - an interpretation of FASB Statement No. 109” (“FIN 48”) which
      clarifies the accounting for uncertainty in income taxes in an enterprise’s
      financial statements in accordance with SFAS No. 109. FIN 48 prescribes a
      recognition threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. FIN 48 also provides guidance on derecognition, classification,
      interest and penalties, accounting in interim periods, disclosure and
      transition. The Company recognizes interest and penalties, if any, related
      to
      uncertain tax positions in income tax expense.


F-8


The
      Company defines the Federal jurisdiction as well as various multi-state
      jurisdictions as “major” jurisdictions (within the meaning of FIN 48). As of
      July 31, 2008, fiscal 2005, 2006 and 2007 remain open to examination. The
      Company adopted FIN 48 as of July 1, 2007, with no impact on the
      consolidated financial statements.





Stock-based
      compensation:





Through
      July 31, 2006, the Company recognized the cost of grants of options to
      employees and non-employees based on the fair value of the equity instruments
      at
      the date issued amortized over the periods in which the related services were
      rendered in accordance with the provisions of Statement of Financial Accounting
      Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”).
      Accordingly, the Company had been estimating the fair value of stock options
      using an option-pricing model (generally, the Black-Scholes model) that met
      the
      criteria set forth in SFAS 123 and common stock using its market value. It
      has
      been recording such value through charges to compensation cost and corresponding
      credits to equity. The charges to compensation cost for the fair value of the
      options were being amortized to expense over the vesting period. The Company
      recognizes compensation on a straight-line basis over the requisite service
      period for the entire award.





As
      required, effective August 1, 2006, the Company adopted Statement of
      Financial Accounting Standards No. 123 (Revised 2004), “Share-Based
      Payment” (“SFAS 123(R)”) using the modified prospective application transition
      method. Because the fair value recognition and the amortization provisions
      of
      SFAS No. 123 and SFAS No. 123(R) are materially consistent, the
      adoption of SFAS No. 123(R) did not have a significant impact on the methods
      used by the Company to value and account for its options or its financial
      position and results of operations and, accordingly, charges to compensation
      cost for the fair value of the options continue to be amortized to expense
      over
      the vesting period. In accordance with SFAS No. 123(R), the Company reclassified
      previously unamortized unearned compensation of $34,870 from unearned
      compensation to additional paid-in capital as of the date of adoption. There
      was
      no charge to operations.





The
      Company accounts for equity instruments issued to non-employees in accordance
      with the provisions  EITF No. 96-18, “Accounting for Equity Instruments
      That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
      Selling Goods or Services.” Under EITF No. 96-18, where the fair value of the
      equity instrument is more reliably measurable than the fair value of services
      received, such services will be valued based on the fair value of the equity
      instrument. We utilize the Black-Scholes model to measure the value
      of options issued to consultants.





Net
      earnings (loss) per share:





The
      Company presents "basic" earnings (loss) per share and, if applicable, "diluted"
      earnings per share pursuant to the provisions of Statement of Financial
      Accounting Standards No. 128, "Earnings per Share." Basic earnings (loss) per
      share is calculated by dividing net income or loss by the weighted average
      number of common shares outstanding during each period. The calculation of
      diluted earnings per share is similar to that of basic earnings per share,
      except that the denominator is increased to include the number of additional
      common shares that would have been outstanding if all potentially dilutive
      common shares, such as those issuable upon the exercise of stock options and
      warrants, and the conversion of outstanding convertible debentures, were issued
      during the period and the treasury stock method had been applied to the proceeds
      from the exercise of the options and warrants and net income or loss was
      adjusted for interest on the convertible debentures.





As
      of
      July 31, 2008, there were stock options and warrants outstanding for the
      purchase of a total of 750,000 and 10,000,000 shares of common stock,
      respectively (see Note 5). As of July 31, 2007, there were stock options,
      warrants, and convertible debentures outstanding for the purchase of a total
      of
      1,000,000, 12,000,000 and 4,050,000 shares of common stock, respectively.
      However, diluted per share amounts have not been presented in the accompanying
      consolidated statements of operations because the Company had a net loss in
      the
      years ended July 31, 2008 and 2007 and the assumed effects of the exercise
      of
      the Company's stock options and warrants and the conversion of convertible
      debentures that were outstanding during all or part of those periods would
      have
      been anti-dilutive.


F-9


Derivative
      and Convertible Financial Instruments:





The
      Company does not use derivative instruments to hedge exposures to cash flow,
      market or foreign currency risks.





The
      Company reviews the terms of convertible debt and equity instruments it issues
      to determine whether there are embedded derivative instruments, including an
      embedded conversion option, that are required to be bifurcated and accounted
      for
      separately as derivative financial instruments. In connection with the sale
      of
      convertible debt and equity instruments, the Company may issue freestanding
      warrants and options that may, depending on their terms, be accounted for as
      derivative instrument liabilities, rather than as equity.





Bifurcated
      embedded derivatives and freestanding warrants and options accounted for as
      derivative instrument liabilities are initially recorded at fair value and
      are
      then revalued at each reporting date with changes in the fair value reported
      as
      charges or credits to income. When the convertible debt or equity instruments
      contain embedded derivative instruments that are to be bifurcated and accounted
      for as liabilities, the total proceeds allocated to the convertible host
      instruments are first allocated to the fair value of all the bifurcated
      derivative instruments to be accounted for as derivative liabilities. The
      remaining proceeds, if any, are then allocated to the convertible instruments
      themselves. This usually results in those convertible instruments being recorded
      at a discount from their face amount to reflect beneficial conversion prices
      that are, effectively, below market value.





The
      discount from the face value of the convertible debt, together with the stated
      interest on the instrument, is amortized over the life of the instrument through
      periodic charges to income, using the effective interest method. Since the
      conversion of the secured convertible debentures issued by the Company during
      the year ended July 31, 2006 could have been at a discount from the market
      price
      and, accordingly, could have resulted in the issuance of an indeterminable
      number of common shares, the Company determined that it was prohibited from
      concluding that it would have a sufficient number of authorized and unissued
      shares to net-share settle any of those warrants or any other warrants or
      options previously issued or granted to non-employees. Therefore, as of the
      date
      the secured convertible debentures and the related warrants were initially
      issued, the Company recorded the related fair value of all warrants issued
      with
      the debentures and options previously issued to non-employees as a liability.
      Accordingly, subsequent changes in the fair value of such options and warrants
      at the end of each reporting period were recorded as increases or decreases
      to
      the liability and charges or credits to the Company's results of operations
      until they were exercised and until all of the debentures were
      converted.





Recently
      Issued Accounting Standards:





The
      FASB
      and the Accounting Standards Committee of the American Institute of Certified
      Public Accountants had issued certain accounting pronouncements as of
      July 31, 2008 that will become effective in subsequent periods; however, we
      do not believe that any of those pronouncements would have significantly
      affected our financial accounting measurements or disclosures had they been
      in
      effect during the year ended July 31, 2008 and 2007 or that they will have
      a significant effect at the time they become effective.





In
      December 2007, the FASB has issued Statement No. 141 (R), “Business
      Combinations” (“SFAS No. 141R”). This statement retains the fundamental
      requirements in Statement No. 141 that the acquisition method of accounting
      (which Statement No. 141 called the “purchase method”) be used, and applies to
      the all business entities, including mutual entities that previously used the
      pooling of interest method of accounting for some business combinations. The
      statement is effective for transactions within the annual reporting period
      beginning on or after December 15, 2008. Management is currently evaluating
      the
      impact this new standard could have on the Company’s financial position and
      results of operations.





In
      December 2007, the FASB issued SFAS 160, “Non-controlling Interests in
      Consolidated Financial Statements” (“SFAS No. 160”). This statement changes the
      way the consolidated income statement is presented when non-controlling
      interests are present. It requires consolidated net income to be reported at
      amounts that include the amounts attributable to both the parent and the
      non-controlling interest, and is effective for periods beginning on or after
      December 15, 2008. Management is currently evaluating the impact this new
      standard could have on the Company’s financial position and results of
      operations.


F-10







In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities” (”SFAS No. 161”). SFAS No. 161 requires enhanced
      disclosures about an entitiy’s derivative and hedging activities and thereby
      improves the transparency of financial reporting. Constituents have expressed
      concerns that the existing disclosure requirements in FASB Statement No. 133, *Accounting
      for Derivative Instruments and Hedging Activities,* do
      not
      provide adequateinformation about how derivative and hedging activities affect
      an entity’s financial position, financial performance, and cash flows. The
      adoption of SFAS No. 161 is not expected to have a material effect on the
      financial statements.





In
      May
      2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
      Accounting Principles” (”SFAS No. 162”). SFAS No. 162 identifies the sources of
      accounting principles and provides entities with a framework for selecting
      the
      principles used in preparation of financial statements that are presented in
      conformity with GAAP. The Board believes the GAAP hierarchy should be directed
      to entities because it is the entity (not its auditors) that is responsible
      for
      selecting accounting principles for financial statements that are presented
      in
      conformity with GAAP. The adoption of FASB 162 is not expected to have a
      material impact on the Company’s financial position.





**Note
      3 - Income taxes** :





As
      of
      July 31, 2008, the Company had net operating loss carryforwards of approximately
      $38,600,000 available to reduce future Federal taxable income which will expire
      from 2019 through 2028.





As
      of
      July 31, 2008 and 2007, the Company's deferred tax assets consisted of the
      effects of temporary differences attributable to the following:





July2008
            
            2007Deferred
                revenues, net
            
            $
            5,000
            
            $
            6,000Unearned
                compensation
            
            
            20,000
            
            
            31,000Net
                operating loss carryforwards
            
            
            14,409,000
            
            
            13,262,00014,434,000
            
            
            13,299,000Less
                valuation allowances
            
            
            14,434,000
            
            
            13,299,000Totals
            
            $
            -
            
            $
            -





Due
      to
      the uncertainties related to, among other things, the extent and timing of
      its
      future taxable income, the Company offset its net deferred tax assets by an
      equivalent valuation allowance as of July 31, 2008.





The
      Company had also offset the potential benefits from its net deferred tax assets
      by an equivalent valuation allowance as of July 31, 2007 of approximately
      $13,299,000. As a result of increases in the valuation allowances of $1,135,000
      and $1,072,000 during the years ended July 31, 2008 and 2007, respectively,
      which were primarily attributable to the net loss incurred during each of those
      years, the exercise of options, and the expiration and cancellation of options
      and warrants that had not been exercised, there are no credits for income taxes
      reflected in the accompanying consolidated statements of operations to offset
      pre-tax losses.





**Note
      4 -** **Equity
      and debt financing agreements with YA Global Investments,
      L.P.** :





On
      April
      9, 2002, the Company entered into an equity line purchase agreement (the “Equity
      Line Agreement") with YA Global Investments, L.P. (YA Global”) (formerly known
      as Cornell Capital Partners, L.P.) pursuant to which the Company had, in effect,
      put options whereby, subject to certain conditions, it could have required
      YA
      Global to purchase shares of its common stock from time to time at an aggregate
      purchase price of $10,000,000 through August 2006. The purchase price was to
      be
      95% of the lowest closing bid price of the Company's common stock over a
      specified number of trading days commencing on specified dates. YA Global was
      entitled to a cash fee equal to 5% of the gross proceeds received by the Company
      from YA Global in connection with each put. As of May 25, 2006, the date the
      Equity Line Agreement was effectively canceled, $4,035,000 of the Company’s
      Equity Line with YA Global had been utilized.


F-11





On
      January 25, 2005, the Company entered into a Promissory Note Agreement with
      YA
      Global for a loan of $2,000,000. The $2,000,000 loan from YA Global was funded
      on February 2, 2005 net of a debt discount of $100,000 deducted at the time
      of
      funding which was being amortized over the original term of the loan. The
      unamortized debt discount was approximately $32,000 as of May 25, 2006 when
      the
      promissory note was converted into common stock and a secured convertible
      debenture. The face amount of the promissory note and interest on the amount
      from time to time outstanding at a rate of 12% per year was originally payable
      either (i) out of the net proceeds to be received by the Company upon delivery
      of put notices under the Equity Line Agreement or (ii) in full by the Company
      within 663 calendar days, subsequently extended to 753 calendar days, of January
      25, 2005 regardless of the availability of proceeds under the Equity Line
      Agreement, unless an extension was mutually agreed to by the parties in
      writing.





Pursuant
      to the promissory note, the Company had agreed to deposit in escrow 35 put
      notices under the Equity Line Agreement in an amount of $60,000 each and one
      request for a put under the Equity Line Agreement in an amount of $181,017.
      Under the terms of the promissory note, as amended on August 5, 2005, the put
      notices were to have been held in escrow and released every 14 days commencing
      November 4, 2005.





All
      put
      notices were returned to the Company on May 25, 2006, when the Company
      terminated its Equity Line with YA Global, converted $250,000 of the principal
      of its $2,000,000 promissory note payable to YA Global into 1,250,000 shares
      of
      the Company's common stock which were issued on such date for which the fair
      value was $400,000, and converted the remaining principal amount of $1,750,000
      and accrued interest of $150,000 on the promissory note into a secured
      convertible debenture in the principal amount of $1,900,000. As the cash flows
      of the new debentures were substantially different from those of the promissory
      notes, the restructuring qualified as an extinguishment for financial accounting
      purposes. In addition, the Company issued similar secured convertible debentures
      to YA Global in the principal amounts of $1,250,000 on May 25, 2006 and
      $1,000,000 on May 31, 2006, which provided the Company with net proceeds of
      approximately $2,025,000 after fees and costs of $225,000 paid to YA Global
      which were recorded as part of the debt discount on the debentures. All the
      secured convertible debentures bore interest at the rate of 10% per year and
      were initially due to mature three years after issuance. They were convertible
      through maturity into shares of the Company's common stock as described below.





The
      Company was required to issue irrevocable transfer agent instructions relating
      to the issuance of stock certificates on conversion of the debentures or
      exercise of the warrants. The Company was also required to deliver on behalf
      of
      itself and its subsidiary, JAG Media LLC, security agreements executed by the
      Company and its subsidiary granting YA Global a security interest in all their
      respective assets. Pursuant to such security agreements, the Company and its
      subsidiary could not incur any further liens, declare a dividend, issue any
      guarantees or incur any new indebtedness in excess of $25,000 other than trade
      accounts payable. In accordance with the terms of the January 31, 2008
      agreement between the Company and YA Global, the security agreements were
      terminated, effective upon conversion by YA Global of the remaining principal
      and accrued interest on the convertible debentures into common stock of the
      Company.





YA
      Global
      had the right to convert the debentures, at its sole option, into shares of
      the
      Company's common stock at a conversion price which was the lower of (i) $0.40
      per share or (ii) a 10% discount to the lowest volume weighted average price,
      as
      reported by Bloomberg, of the Company's common stock during the 30 trading
      days
      prior to the conversion date (see Note 9).





In
      connection with the foregoing May 25, 2006 transaction, the Company issued
      warrants to YA Global to purchase 12,000,000 shares of common stock. The
      warrants are exercisable through May 2011 at prices ranging from $0.40 to $0.80
      per share (see Note 5). The exercise price and number of shares issuable
      pursuant to each of the warrants are subject to antidilution
      provisions.





Since
      the
      conversion of the secured convertible debentures could have resulted in the
      issuance of an indeterminable number of common shares since they were
      convertible at a discount from the market price, the Company determined that
      based on the guidance in the consensus for EITF Issue No. 00-19 ("EITF 00-19")
      "Accounting for Derivative Financial Instruments Indexed to, and Potentially
      Settled in a Company's Own Stock", the Company was prohibited from concluding
      that it would have a sufficient number of authorized and unissued shares to
      net-share settle any of those warrants or any other warrants or options
      previously issued or granted to non-employees while the debentures were
      outstanding. Therefore, as of the date the secured convertible debentures and
      the related warrants were initially issued, the Company recorded the related
      fair value of all warrants issued with the debentures and options previously
      issued to non-employees as a liability as explained below. Subsequent changes
      in
      the fair value of such options and warrants at the end of each reporting period
      were recorded as increases (decreases) to the liability and charges or credits
      to the Company's results of operations until all the debentures were
      converted.




F-12


As
      of
      July 31, 2006, the warrants for the purchase of 12,000,000 shares were
      valued at approximately $2,744,000 based on the Black-Scholes option pricing
      model assuming a risk free interest rate of 6% annually, no dividend payments,
      annual volatility of 338.441%, exercise prices ranging from $0.40 to $0.80,
      and
      the stock price of $0.23 per share when valued.





As
      of
      July 31, 2007, the warrants for the purchase of 12,000,000 shares were valued
      at
      approximately $11,059,000 based on the Black-Scholes options pricing model
      assuming a risk free interest rate of 6% annually, no dividend payments, annual
      volatility of 216.543%, exercise prices ranging from $0.40 to $0.80, and the
      stock price of $0.95 per share when valued. This resulted in the recognition
      of
      unrealized losses on derivative liability of approximately $8,314,000 for the
      year ended July 31, 2007.





As
      of
      January 31, 2008, the warrants for the purchase of 12,000,000 shares were valued
      at approximately $10,400,900 based on the Black-Scholes option pricing model
      assuming a risk free interest rate of 5.25% annually, no dividend payments,
      annual volatility of 203.855%, exercise prices ranging from $0.40 to
      $0.80 per share, and the stock price of $0.91 per share when valued.
      This resulted in the recognition of unrealized gain on derivative liability
      of
      approximately $658,000 during the year ended July 31, 2008.





In
      addition, as explained below, all of the remaining debentures were converted
      on
      January 31, 2008. As a result, the Company no longer had any equity
      instruments that could result in the issuance of an indeterminable number of
      common shares. Accordingly, the fair value of the warrants of $10,400,900 at
      the
      time of the exercise of the 700,000 warrants and the conversion of the
      debentures was reclassified from derivative liability to additional paid-in
      capital.





As
      explained above, EITF 00-19 required the Company to record the fair value of
      the
      warrants issued in connection with the debentures at their gross value of
      approximately $3,820,000 and fully offset the net proceeds received with an
      equivalent amount of debt discount. As a result, there was no amount allocable
      to the net carrying value of the convertible debentures upon issuance on May
      25,
      2006 although they could have been converted as of that date into 6,756,757
      shares of common stock with an aggregate fair value of approximately $2,252,000.
      This amount represented a beneficial conversion feature that could not be
      recorded in the consolidated financial statements since it would have resulted
      in the recording of an aggregate debt discount that would have exceeded the
      net
      proceeds from the issuance of the debentures which is prohibited by EITF
      00-19.





The
      issuance of convertible debentures and warrants to YA Global also caused the
      Company to reclassify the fair value of 200,000 options issued to a consultant
      that were outstanding as of May 25, 2006 from stockholders’ equity to the
      derivative liability and include the fair value of all options and warrants
      subsequently granted to non-employees for services as a derivative liability
      until the options and warrants are exercised or expire. As of July 31, 2006,
      the
      fair value of the warrants was $46,000. On October 2, 2006, the Company
      granted options to another consultant with a fair value at the date of grant
      of
      approximately $36,000 which is being amortized over the service period. The
      fair
      value at the date of the grant was determined using the Black-Scholes option
      pricing model assuming a risk free interest rate of 6% annually, no dividend
      payments, annual volatility of 340.641%, an exercise price of $0.05 per share,
      and the stock price of $0.18 per share when issued. On February 21, 2007, a
      consultant exercised the options to purchase 200,000 shares of common stock
      at
      $0.02 per share resulting in proceeds of $4,000 and the reclassification of
      $116,000 (the fair value of the options at the exercise date) from the
      derivative liability to equity. On June 11, 2007, a consultant exercised options
      to purchase 200,000 shares of common stock at $0.05 per share resulting in
      proceeds of $10,000 and the reclassification of $176,000 (the fair value of
      the
      options at the exercise date) from the derivative liability to equity. As of
      July 31, 2007 all the warrants issued to non-employees had been exercised or
      expired.





During
      the years ended July 31, 2008 and 2007, respectively, YA Global converted
      debentures in the principal amounts of $3,520,000 into 8,800,000 shares of
      the
      Company’s common stock and $555,000 into 4,432,111 shares of the Company’s
      common stock. The Company recorded amortization of debt discount attributable
      to
      the debentures of approximately $913,000, including $705,000 which was accreted
      as a result of conversions during the year ended July 31, 2008. The Company
      recorded amortization of debt discount attributable to the debentures of
      approximately $1,135,000, including $555,000 which was accreted as a result
      of
      the conversions during the year ended July 31, 2007. As a result of the
      conversions, the Company had no debentures outstanding as of July 31, 2008.


F-13


As
      of
      July 31, 2007, the debentures had a net carrying value of approximately
      $2,607,000, reflecting the outstanding principal balance due of $3,520,000
      reduced by remaining unamortized debt discounts aggregating approximately
      $913,000.





In
      connection with the conversion of all of the remaining debentures on
      January 31, 2008, YA Global agreed to the conversion of the accrued
      interest thereon, totaling approximately $535,700, at $0.40 per share which
      resulted in the issuance by the Company of 1,339,199 shares of common stock.
      In
      addition to interest expense of approximately $95,000 and charged to operations
      in the year ended July 31, 2008 based on the terms of the debentures, the
      Company also recorded a non-cash charge to interest expense of approximately
      $683,000 to reflect the beneficial conversion feature arising from the
      conversion of the accrued interest at $0.40 per share on January 31, 2008
      when the fair market value of the Company’s common stock was $0.91 per share.





**Note
      5 – Other issuances of common stock and stock options** :





Authorized
      shares:





On
      April
      26, 2006, the Company’s articles of incorporation were amended to increase the
      total number of common shares authorized for issuance from 250,000,000 shares
      to
      500,000,000 shares of common stock, par value $0.00001 per share. As a result,
      the total number of shares of all classes of capital stock authorized for
      issuance by the Company increased from 200,000,000 shares to 550,440,000 shares
      with a par value of $.00001 per share, of which 50,000,000 shares are authorized
      for issuance as preferred stock, 500,000,000 shares are authorized for issuance
      as common stock, 400,000 shares are authorized for issuance as Series 2 Class
      B
      common stock and 40,000 shares are authorized for issuance as Series 3 Class
      B
      common stock.





The
      shares of Series 2 and Series 3 Class B common stock will be nonvoting, have
      dividend and liquidation rights equal to the Class A common stock and be
      redeemable. Redemption by the Company shall be mandatory within six months
      (or
      as soon thereafter as permitted by law) following the final resolution of any
      successor lawsuit brought by the Company relating to the subject matter of
      the
      Company’s now dismissed lawsuit against certain brokerage firms (JAG Media
      Holdings, Inc. v. A.G. Edwards & Sons, et al.) in U.S. District Court for
      the Southern District of Texas, which date shall be determined by the board
      of
      directors. The redemption price per share of the Series 2 Class B common stock
      will be the greater of (i) the par value of each share or (ii) the amount
      obtained by dividing (a) 90% of the net proceeds to the Company of such lawsuit
      after payment of fees and expenses incurred in connection with such lawsuit
      and
      all taxes on net income accrued or paid with respect to such amount by (b)
      the
      total number of shares of Series 2 Class B common outstanding. The redemption
      price per share of the Series 3 Class B common stock will be the greater of
      (i)
      the par value of each share or (ii) .0025% of 10% of the net proceeds to the
      Company of such lawsuit after payment of fees and expenses incurred in
      connection with such lawsuit and all taxes on net income accrued or paid with
      respect to such amount.





Since
      the
      value of the Series 2 and Series 3 Class B common stock is contingent upon
      the
      outcome of a pending or successor litigation, the Company recorded the shares
      of
      Series 2 and Series 3 Class B common stock that were originally issuable during
      the year ended July 31, 2003 at their total par value of $4.20. Since the
      Company will be required to distribute substantially all of the proceeds of
      the
      pending litigation to the holders of Series 2 and Series 3 Class B common stock,
      the Company has classified the shares as the equivalent of mandatorily
      redeemable preferred stock and excluded their carrying value from stockholders’
equity in the accompanying July 31, 2008 and 2007 consolidated balance sheets
      pursuant to the rules and regulations of the Securities and Exchange Commission
      and Statement of Financial Accounting Standards No. 150, “Accounting for Certain
      Financial Instruments with Characteristics of Both Liabilities and
      Equity.”


F-14


Issuance
      of common stock:





During
      the year ended July 31, 2008, YA Global exercised warrants for the purchase
      of
      2,000,000 shares of the Company’s common stock at $0.40 per share.





During
      the year ended July 31, 2008, YA Global converted $3,520,000 of the principal
      balance of the debentures discussed in Note 4 into 8,800,000 shares of the
      Company’s common stock and accrued interest thereon, totaling approximately
      $535,700, at $0.40 per share which resulted in the issuance by the Company
      of an
      additional 1,339,199 shares of the Company’s common stock.





On
      August
      3, 2007, the Company issued 80,000 shares of common stock when a consultant
      to
      the Company exercised options to purchase 80,000 shares of common stock at
      $0.86
      per share. The Company received payment in full of $68,800 as of September
      6,
      2007.





On
      October 9, 2007, the Company issued 175,000 shares of common stock when
      consultants to the Company exercised options to purchase 175,000 shares of
      common stock at $0.60 per share. The Company received payment in full of
      $105,000 as of October 29, 2007.





On
      October 9, 2007, the Company issued a total of 40,000 shares of common stock
      with an aggregate fair value of $25,600 to certain employees for services,
      which
      was charged to general and administrative expense.





On
      October 9, 2007, the Company issued a total of 110,000 shares of common stock
      with an aggregate fair value of $70,400 to a consultant for services, which
      was
      charged to general and administrative expense.





On
      October 18, 2007, the Company received $95,000 when a consultant to the Company
      exercised options to purchase 250,000 and 150,000 shares of common stock at
      $0.02 per share and $0.60 per share, respectively.





On
      October 22, 2007, the Company issued a total of 125,000 shares of common stock
      when consultants to the Company exercised options to purchase 125,000 shares
      of
      common stock at $0.80 per share. The Company received payment in full of
      $100,000 as of October 29, 2007.





On
      October 31, 2007, the Company issued 125,000 shares of common stock when a
      consultant to the Company exercised options to purchase 125,000 shares of common
      stock at $0.63 per share. The Company received the proceeds of $78,750 on
      November 14, 2007.





On
      December 12, 2007, the Company received $150,000 when a consultant to the
      Company exercised options to purchase 250,000 shares of common stock at $0.60
      per share.





On
      December 14, 2007, the Company issued a total of 15,000 shares of common stock
      with an aggregate fair value of $13,350 to a vendor of the Company for services,
      which was charged to general and administrative expense.





On
      April
      30, 2008, the Company received $176,400 when consultants to the Company
      exercised option to purchase 110,000 and 150,000 shares of common stock at
      $0.69
      per share and $0.67 per share, respectively.





During
      the year ended July 31, 2007, YA Global converted $555,000 of the principal
      balance of the debentures discussed in Note 4 into 4,432,111 shares of the
      Company’s common stock.





On
      July
      16, 2007, employees of the company exercised options to purchase 140,000 shares
      of common stock at $0.21 per share. The Company did not receive the proceeds
      of
      $29,400 until August 13, 2007 and, accordingly, the balance receivable was
      included in other current assets at July 31, 2007. On June 11, 2007, the Company
      received proceeds of $10,000 when a consultant exercised options to purchase
      200,000 shares of common stock at $0.05 per share. On February 21, 2007,
      the Company received proceeds of $4,000 when a consultant exercised the options
      to purchase 200,000 shares of common stock at $0.02 per share.





On
      December 26, 2006 the Company issued a total of 180,000 shares of common
      stock with an aggregate fair value of $62,200 to certain employees for services,
      which was charged to general and administrative expense


F-15


Stock options:





As
      of
      July 31, 2008, the Company has options outstanding for the purchase of
      750,000 shares of common stock all of which were granted pursuant to the
      Company’s 1999 Long-term Incentive Plan (the “Incentive Plan”) which provides
      for individual awards to officers, employees, directors, consultants and certain
      other individuals that may take the form of stock options and certain other
      types of awards for which the value is based in whole or in part upon the fair
      market value of, the Company’s common stock. The number of shares of common
      stock that may be subject to all types of awards under the Incentive Plan as
      amended may not exceed 6,000,000 shares. The options typically vest upon grant
      but in no case later than two and one-half years after grant and expire the
      earlier of the tenth anniversary of the grant or the 90th day following
      termination of employment; provided that during such 90 day period the
      option will be exercisable only to the extent it was vested as of the date
      of
      such termination.





The
      Company has issued the options, from time to time, to employees as compensation
      and to nonemployees, including investment analysts and commentators that have
      entered into agreements to provide the Company with financial information that
      is released to subscribers, as consideration for consulting, professional and
      other services. As explained in Note 2, the Company has recognized the cost
      of
      such issuances based on the fair value of the options and other equity
      instruments issued over the periods in which the related services are rendered
      in accordance with the provisions of SFAS 123 and, subsequent to July 31, 2006,
      SFAS 123(R). Accordingly, the cost of such equity instruments may be initially
      charged directly to compensation expense or to unearned compensation which
      is
      subsequently amortized to expense.





As
      of
      July 31, 2008, the Company has the ability to issue options to purchase
      5,250,000 additional shares of common stock under the Incentive
      Plan.





The
      following table summarizes information about the number of shares of common
      stock subject to options that were outstanding at July 31, 2008 as a result
      of
      issuances of options to employees and nonemployees as compensation for
      services:





Shares
            
            Weighted
              Average
              Exercise
              Prices
            
            Weighted
              Average
              Remaining
              Contractual
              Term
            
            Aggregate
              Intrinsic
              ValueOptions outstanding,
                August 1, 2006
            
            
            1,420,000
            
            $
            .12Granted
            
            
            200,000
            
            $
            .05Exercised
            
            
            (
                540,000
            )
            $
            .08Canceled
            
            
            (
                80,000
            )
            $
            .69Options
                outstanding, July 31, 2007
            
            
            1,000,000
            
            $
            .02Granted
            
            
            1,165,000
            
            $
            .66Exercised
            
            
            (
                1,415,000
            )
            $
            .55Options
                outstanding, July 31, 2008
            
            
            750,000
            
            $
            .02
            
            
            3.08
            
            $
            157,500Options
                exercisable, July 31, 2008
            
            
            750,000
            
            $
            .02
            
            
            3.08
            
            $
            157,500





The
      fair
      value of each option granted by the Company in the years ended July 31, 2007,
      2006, and 2005 were estimated using the Black-Scholes option pricing model
      with
      the following assumptions:





Year
                Ended
              July
                31, 2008
            
            Year
                Ended
              July
                31, 2007Risk
                free interest rate
            
            2.08%
                - 6.00%
            
            6.00%Dividend
                yield
            
            0%
            
            0%Expected
                life
            
            1.5
                to 11 months
            
            5
                yearsExpected
                volatility factor
            
            96.478% to 216.543%
            
            216.543%




F-16





Expected
      volatilities are based on historical volatility of our stock. We have adopted
      the guidance of the SEC’s Staff Accounting Bulletin No. 107 to
      temporarily employ the simplified method of estimating the expected life of
      the
      option. The simplified method utilizes the average of the vested term and the
      original contract term. Our short term historical experience with exercise
      and
      post-vesting employment termination behavior supports this method for
      determining the option’s expected life. When sufficient historical experience
      has been obtained, we will use such experience for future estimations of the
      expected life. The expected life represents the period of time that options
      granted are expected to be outstanding. The risk-free rate is based on the
      U.S. Treasury rate with a maturity corresponding to the options expected
      life.




On
      July
      11, 2007, the per share exercise prices of options to purchase 140,000 shares
      of
      common stock previously issued to employees was reduced from prices ranging
      from
      $0.50 to $1.00 to $0.21 to settle accrued compensation for these employees
      of
      $66,000. As required by SFAS 123(R), incremental compensation cost of
      approximately $4,000 was recognized for the excess of the fair value of the
      modified award over the fair value of the original award immediately before
      the
      modification. As a result, the Company increased additional paid-in capital
      by
      $70,946. The fair value of the options at the date of the modification was
      determined assuming a risk free interest rate of 6.0% annually, no dividend
      payments, annual volatility of 216.54%, an exercise price of $0.21 and a stock
      price when modified of $1.17 per share.





As
      of
      July 31, 2008, approximately $31,000 of expense related to such options will
      be
      charged to general and administrative expenses during the next fiscal year..





Warrants
      issued:





During
      the year ended July 31, 2006, the Company issued warrants to purchase 12,000,000
      shares of common stock in connection with debt financing (see Note 4) to YA
      Global. These warrants had per share exercise prices ranging from $0.40 to
      $0.80, will expire in May 2011 and had an aggregate fair value of approximately
      $3,834,000 when issued and approximately $11,387,000 as of July 31,
      2007.





During
      the year ended July 31, 2008, YA Global exercised warrants to purchase 2,000,000
      shares of common stock at $0.40 (see above). In addition, as explained above,
      all of the remaining debentures were converted on January 31, 2008. As a
      result, the Company no longer had any equity instruments that could result
      in
      the issuance of an indeterminable number of common shares. Accordingly, the
      fair
      value of the warrants of $10,400,900 at the time of the exercise of the 700,000
      warrants and the conversion of the debentures was reclassified from derivative
      liability to additional paid-in capital





The
      following table summarizes information about the number of shares of common
      stock subject to warrants that were outstanding at July 31, 2008.




Warrants Outstanding
            
            Warrants ExercisableExercise Prices
            
            Number
              Outstanding
            
            Weighted
              Average Years
              of Remaining
              Contractual
              Life
            
            Weighted
              Average
              Exercise
              Price
            
            Number
              Exercisable
            
            Weighted Average
              Exercise Price$
            .50
            
            
            2,000,000
            
            
            2.82
            
            $
            .50
            
            
            2,000,000
            
            $
            .50.60
            
            
            2,000,000
            
            
            2.82
            
            
            .60
            
            
            2,000,000
            
            
            .60.70
            
            
            3,000,000
            
            
            2.82
            
            
            .70
            
            
            3,000,000
            
            
            .70.80
            
            
            3,000,000
            
            
            2.82
            
            
            .80
            
            
            3,000,000
            
            
            .80$
            .50-$.80
            
            
            10,000,000
            
            
            2.82
            
            $
            .67
            
            
            10,000,000
            
            $
            .67





As
      discussed in Note 10, on September 30, 2008 the Company and YA Global amended
      a
      warrant for the purchase of 3,000,000 shares of the Company’s common
      stock.


F-17





Other
      Equity Transactions:





As
      explained in Notes 1 and 9, the Company entered into the Merger Agreement with,
      among others, Cryptometrics, Inc. pursuant to which Cryptometrics would have
      merged with a newly created subsidiary of the Company. Pursuant to the terms
      of
      the Merger Agreement, Cryptometrics paid various legal and accounting costs,
      totaling approximately $230,000 and $580,000 during the years ended July 31,
      2008 and 2007, respectively, on behalf of the Company, that will not be repaid
      by the Company to Cryptometrics since the merger agreement was not terminated
      by
      the Company. The costs paid by Cryptomertrics have been charged to operating
      expenses and the amounts received by the Company have been recorded as a capital
      contribution and included in additional paid-in capital.





**Note
      6 - Employee benefit plans** :





The
      Company maintains a profit-sharing plan and a money purchase plan for the
      benefit of all eligible employees. The Company's contributions to these defined
      contribution plans are made on a discretionary basis. The Company made no
      contributions to the plans in 2008 and 2007.





**Note
      7 - Commitments and contingencies** :





Concentrations
      of credit risk:





Financial
      instruments that potentially subject the Company to concentrations of credit
      risk consist primarily of cash and cash equivalents and accounts receivable.
      From time to time the Company's cash account balances exceed the Federal
      insurance limit of $100,000. The Company reduces its exposure to credit risk
      by
      maintaining its cash deposits with major financial institutions and monitoring
      their credit ratings. Accordingly, management does not believe that the Company
      was exposed to significant credit risk at July 31, 2008.





In
      addition, the Company routinely assesses the financial strength of its customers
      and establishes an allowance for doubtful accounts based upon factors
      surrounding the credit risk of specific customers, historical trends and other
      information.





Leases:





During
      2008 and 2007, the Company had been leasing office space under month-to-month
      leases and noncancelable leases. Rent expense under all such leases, which
      were
      classified as operating leases, totaled approximately $22,000 and $26,000 for
      2008 and 2007, respectively. As of July 31, 2008, the Company was not party
      to
      any significant noncancelable office leases.





Litigation:





The
      Company is a party to various claims and lawsuits incidental to its business.
      In
      the opinion of management, it is probable that the resolution of such
      contingencies will not materially affect the consolidated financial position
      or
      results of operations of the Company in subsequent years.





**Note
      8 - Fair value of financial instruments** :





The
      Company's material financial instruments at July 31, 2008 for which disclosure
      of estimated fair value is required by certain accounting standards consisted
      of
      cash and cash equivalents, accounts receivable, and accounts payable. In the
      opinion of management, the financial instruments were carried at values that
      approximated their fair values at July 31, 2008 because of their liquidity
      and/or their short-term maturities.


F-18





**Note
      9 – Cryptometrics merger** :





As
      explained in Note 1, the Company entered into the Merger Agreement on December
      27, 2005, that had been amended on various dates through April 14, 2008, with,
      among others, Cryptometrics pursuant to which Cryptometrics would have merged
      with a newly created subsidiary of the Company. In consideration of the merger,
      the stockholders of Cryptometrics would have acquired shares of common stock
      of
      the Company, which would have, upon issuance, represented approximately 89.66%
      of the combined companies’ outstanding shares of common stock, in exchange for
      all of the issued and outstanding shares of common stock of Cryptometrics.
      The
      shares of common stock that were to be received by the stockholders of
      Cryptometrics would have been registered under the U.S. Securities Act of 1933,
      as amended. If consummated, the proposed transaction would have been accounted
      for as a reverse acquisition in which Cryptometrics would be the acquirer for
      accounting purposes. As of April 30, the automatic termination date for the
      proposed merger with Cryptometrics elapsed. Pursuant to a letter from
      Cryptometrics to the Company dated June 17, 2008 and received by the Company
      on
      June 18, 2008, Cryptometrics had decided not to extend the Merger Agreement
      any
      further and the Merger Agreement had by its terms been terminated, and was
      void
      and of no force or effect.





Pursuant
      to various amendments to the Merger Agreement, if the transaction had been
      terminated by the Company or for certain other reasons, under certain conditions
      the Company had agreed to issue Cryptometrics up to 1,000,000 shares of its
      common stock in consideration for various costs aggregating $230,000 during
      the
      year ended July 31, 2008 and $580,000 during the year ended July 31, 2007
      advanced by Cryptometrics for the account of the Company (see Note 5). In
      addition, in consideration of $167,660 of such advances, the Company granted
      a
      non-exclusive, perpetual, royalty free license to Cryptometrics to use certain
      of the intellectual property of Pixaya. As explained in Notes 1 and 5, pursuant
      to the terms of the Merger Agreement, Cryptometrics has paid various legal
      and
      accounting costs related to the merger agreement on behalf of the Company
      totaling approximately $810,000 that will not have to be repaid by the Company
      to Cryptometrics since the merger agreement was not terminated by the Company.
      The costs paid by Cryptometrics have been charged to operating expenses and
      the
      amounts received by the Company have been recorded as a capital contribution
      and
      included in additional paid-in capital.





In
      connection with the proposed merger, on various dates from January 24, 2007
      through May 20, 2008, the secured convertible debentures and warrants issued
      to
      YA Global were amended. As a result, on the date the proposed merger between
      the
      Company and Cryptometrics would have closed and becomes effective,
      (i) Cryptometrics would have assumed all of the rights and obligations
      under those amended agreements on behalf of the post-merger, combined company,
      and (ii) the secured convertible debentures would have become convertible
      at a discount of 5% to the lowest volume weighted average price of the Company’s
      common stock during the 30 trading days prior to the conversion date and the
      warrants issued to YA Global would have become convertible at a discount of
      12%
      to the average of the volume weighted average price of the Company’s common
      stock during the 30 trading days prior to the exercise date. On March 11,
      March 31 and May 15, 2008, the Company and YA Global agreed to exclude certain
      warrants from a prior agreement. Accordingly, warrants covering 1,300,000 and
      2,000,000 shares of common stock could have been exercised at any time at
      their original exercise prices of $0.40 and $0.50 per share, respectively,
      while
      warrants covering 5,000,000 shares of common stock could have been exercised
      at
      various dates commencing September 30, 2008 at 88% of the average
      of the Volume Weighted Average Price of the Common Stock as quoted by Bloomberg,
      L.P. during the thirty (30) trading days immediately prior to the “Exercise
      Restriction Date” or such shorter period if less than thirty (30) trading days
      had elapsed.





**Note
      10 – Subsequent events** :





On
      September 30, 2008, the Company and YA
      Global entered
      into a letter agreement amending Warrant No. CCP-004 dated May 24, 2006 (the
      “ Warrant
      Letter Agreement ”),
      which
      currently permits YA Global, as warrant holder, to exercise Warrant No. CCP-004
      for up to 3,000,000 shares of the Company’s common stock at a price of $0.70 per
      share on a cashless basis. Under the Warrant Letter Agreement, the exercise
      price for the 3,000,000 shares of the Company’s common stock under Warrant No.
      CCP-004 was changed from $0.70 per share to $0.20 per share. In addition, YA
      Global agreed to exercise 1,750,000 shares under Warrant No-CCP-004 at the
      reduced exercise price of $0.20 per share, on a cash basis, resulting in an
      aggregate exercise amount of $350,000 to be paid to the Company. YA Global
      exercised the 1,750,000 shares under Warrant No-CCP-004 on September 30,
      2008.





On
      October 1, 2008, the Company entered into a
      non-binding Letter of Intent with respect to a merger opportunity with BlueCreek
      Energy, e2Business Services, a majority shareholder of BlueCreek and YA Global.
      BlueCreek is a Colorado corporation engaged in the development, extraction
      and
      processing of coalbed methane natural gas currently operating within the Rocky
      Mountains region of the United States. YA Global, in addition to being the
      provider of much of the Company’s financing since 2002, is a senior secured
      lender to BlueCreek and has agreed to restructure its two convertible debentures
      and warrant with BlueCreek at the closing of the merger by reducing the interest
      rates, amending the conversion terms of the debentures, deferring certain
      principal payments, converting $2,000,000 of principal into equity of BlueCreek
      in the form of a warrant, and agreeing to remove certain registration rights
      it
      had with respect to the shares underlying the convertible debentures and the
      warrants.




F-19


Pursuant
      to the letter of intent, we would enter into a merger agreement with BlueCreek
      and e2Business under which BlueCreek would become our wholly owned subsidiary.
      In consideration of the merger, the shareholders of BlueCreek would acquire
      339,402,576 shares of our common stock, representing upon issuance 82% of our
      outstanding common stock on a fully diluted basis, in exchange for all of the
      issued and outstanding capital stock of BlueCreek. In addition to shares of
      our
      common stock to be received by the shareholders of BlueCreek at the closing
      of
      the merger, the shareholders of BlueCreek may also receive up to an additional
      200,000,000 shares of our common stock if BlueCreek achieves certain
      post-closing milestones. The shares of our common stock to be issued to the
      shareholders of BlueCreek would not be registered for sale with the SEC and
      would, therefore, be subject to the resale restrictions of Rule 144. Our
      existing public shareholders will experience significant dilution from the
      issuance of these shares to the shareholders of BlueCreek .




Upon
      closing of the merger, the Company’s current directors and executive officers
      would resign as directors and executive officers of JAG Media Holdings, Inc
      and
      its subsidiaries. The Board of Directors and management would be replaced with
      designees of BlueCreek.




In
      connection with the proposed merger, the BlueCreek shareholders who immediately
      prior to the closing own more than 15% of the outstanding BlueCreek stock (other
      than YA Global, if applicable) will agree not to sell the shares of the
      Company’s common stock issued in the merger for a period of twelve months from
      the closing; provided, however, that prior to the expiration of such period
      and
      subject to the resale restrictions of Rule 144, each of such shareholders may
      sell not more than:




●  50%
      of
      the shares that it would be permitted to sell pursuant to Rule 144, during
      any
      3-month period following the expiration of the 6-month Rule 144 holding period,
      if the post-merger company does not have its shares listed on the American
      Stock
      Exchange or the NASDAQ Capital Market at the time of such sales; or




●  75%
      of
      the shares that it would be permitted to sell pursuant to Rule 144, during
      any
      3-month period following the expiration of the 6-month Rule 144 holding period,
      if the post-merger company does have its shares listed on the American Stock
      Exchange or the NASDAQ Capital Market at the time of such sales and has not
      received notice that it is not in compliance with any exchange listing
      requirements.




The
      closing of the merger would be conditioned upon (i) each party completing a
      due
      diligence review, the results of which are satisfactory in all respects to
      each
      party, (ii) the Company and BlueCreek obtaining all appropriate and necessary
      corporate and shareholder approvals for the transaction, and (iii) the entering
      into of definitive agreements among the parties, including, without limitation,
      a mutually acceptable definitive merger agreement between BlueCreek and the
      Company and debt restructuring agreement with YA Global. Except for certain
      specified provisions, the letter of intent is non-binding. There is no assurance
      that the definitive documentation called for in the letter of intent will ever
      be executed, or if executed, that the proposed merger between the Company and
      BlueCreek will be consummated. Further, to the extent that definitive agreements
      are reached, no assurances can be given that any such agreements will be entered
      into consistent with the current expectations of the Company and BlueCreek,
      as
      contemplated by the terms of the letter of intent.




F-20


**SIGNATURES**
 
 Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of 1934, the Registrant has duly caused this report to be signed on its behalf
        by the undersigned, thereunto duly authorized.
 
 **JAG
                  MEDIA HOLDINGS, INC.**By:
              /s/
                  Thomas J. MazzarisiThomas
                  J. MazzarisiChairman
                  of the Board and Chief Executive Officer
 Dated:
        November 13, 2008
 
 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 Registrant and in
        the
        capacities and on the date indicated.
 
 SIGNATURE
              
              TITLE
              
              DATE/s/
                  Thomas J. Mazzarisi
              
              Chairman
                  of the Board, Chief Executive
              
              November
                  13, 2008Thomas
                  J. Mazzarisi
              
              Officer
                  and General Counsel (PrincipalExecutive
                  Officer)/s/
                  Stephen J. Schoepfer
              
              President,
                  Chief Operating Officer, Chief
              
              November
                  13, 2008Stephen
                  J. Schoepfer
              
              Financial
                  Officer, Secretary and Director(Principal
                  Financial and Accounting Officer)
 
 
  **EXHIBIT
          INDEX**
 Exhibit No.
                
                Description3.1
                
                Amended
                    and Restated Articles of Incorporation of Registrant. Incorporated
                    by
                    reference to the Registrant’s Form 10-QSB filed with the SEC on June 19,
                    2006.3.2
                
                Bylaws
                    of Registrant. Incorporated by reference to the Registrant’s Form SB-2
                    filed with the SEC on September 30, 1999.4.1
                
                Form
                    of Common Stock Certificate. Incorporated by reference to the
                    Registrant’s
                    Form 10-KSB filed with the SEC on November 8, 2005.4.2
                
                Form
                    of Series 2 Class B Stock Certificate. Incorporated by reference
                    to the
                    Registrant’s Form 10-KSB filed with the SEC on November 8,
                    2005.4.3
                
                Securities
                    Purchase Agreement, effective May 25, 2006, with YA Global. Incorporated
                    by reference to the Registrant’s Form 8-K filed with the SEC on June 1,
                    2006.4.4
                
                Letter
                    Agreement, dated January 31, 2008, relating to the conversion
                    of the
                    remaining principal balance of the convertible secured debentures.
                    Incorporated by reference to the Registrant’s Form 8-K filed with the SEC
                    on February 6, 2008.4.5
                
                Warrant
                    No. CCP-1 for 2,000,000 shares of common stock issued to YA Global,
                    effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                    8-K filed with the SEC on June 1, 2006.4.6
                
                Warrant
                    No. CCP-2 for 2,000,000 shares of common stock issued to YA Global,
                    effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                    8-K filed with the SEC on June 1, 2006.4.7
                
                Warrant
                    No. CCP-3 for 2,000,000 shares of common stock issued to YA Global,
                    effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                    8-K filed with the SEC on June 1, 2006.4.8
                
                Warrant
                    No. CCP-4 for 3,000,000 shares of common stock issued to YA Global,
                    effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                    8-K filed with the SEC on June 1, 2006.4.9
                
                Warrant
                    No. CCP-5 for 3,000,000 shares of common stock issued to YA Global,
                    effective May 25, 2006. Incorporated by reference to the Registrant’s Form
                    8-K filed with the SEC on June 1, 2006.4.10
                
                Letter
                    Agreement, amending Warrant No. CCP-4. Incorporated by reference
                    to the
                    Registrant’s Form 8-K filed with the SEC on October 3,
                    2008.4.11
                
                Investor
                    Registration Rights Agreement, effective May 25, 2006, with YA
                    Global.
                    Incorporated by reference to the Registrant’s Form 8-K filed with the SEC
                    on June 1, 2006.10.1
                
                Non-Binding
                    Letter of Intent, dated October 1, 2008, by and among the Registrant,
                    BlueCreek, e2Business and YA Global. Incorporated by reference
                    to the
                    Registrant’s Form 8-K filed with the SEC on October 3,
                    2008.10.2
                
                1999
                    Long-Term Incentive Plan, as amended. Incorporated by reference
                    to Exhibit
                    10.1 to the Registrant’s Form S-8 filed with the SEC on May 1,
                    2002.10.3
                
                Amended
                    and Restated Employment Agreement, dated August 31, 2001, between
                    Thomas
                    J. Mazzarisi and Registrant. Incorporated by reference to Exhibit
                    10.21 in
                    Amendment No. 1 to the Registrant’s Form SB-2 filed with the SEC on
                    September 26, 2001.
  
  10.4
                
                Amended
                    and Restated Employment Agreement, dated August 31, 2001, between
                    Stephen
                    J. Schoepfer and Registrant. Incorporated by reference to Exhibit
                    10.20 in
                    Amendment No. 1 to the Registrant’s Form SB-2 filed with the SEC on
                    September 26, 2001.10.5
                
                Amendment
                    to Amended and Restated Employment Agreement, dated as of November
                    3,
                    2005, between Registrant and Thomas J. Mazzarisi. Incorporated
                    by
                    reference to the Registrant’s Form 10-KSB filed with the SEC on November
                    8, 2005.10.6
                
                Amendment
                    to Amended and Restated Employment Agreement, dated as of November
                    3,
                    2005, between Registrant and Stephen J. Schoepfer. Incorporated
                    by
                    reference to the Registrant’s Form 10-KSB filed with the SEC on November
                    8, 2005.10.7
                
                Amendment
                    to Amended and Restated Employment Agreement, dated as of November
                    12,
                    2007, by and between Registrant and Thomas J. Mazzarisi. Incorporated
                    by
                    reference to Exhibit 10.6 of Registrant’s Form 10-K filed with the SEC on
                    November 13, 2007.10.8
                
                Amendment
                    to Amended and Restated Employment Agreement, dated as of November
                    12,
                    2007, by and between Registrant and Stephen J. Schoepfer.****Incorporated
                    by reference to Exhibit 10.7 of the Registrant’s Form 10-K filed with the
                    SEC on November 13, 2007.10.9
                
                Extension
                    of Amended and Restated Employment Agreement, dated as of November
                    12,
                    2008, by and between Registrant and Thomas J.
                    Mazzarisi.*10.10
                
                Extension
                    of Amended and Restated Employment Agreement, dated as of November
                    12,
                    2008, by and between Registrant and Stephen J.
                    Schoepfer.*
 10.11
                  
                  Consulting
                      Agreement, dated November 12, 2007, between the Registrant
                      and Walsh
                      Organization, Inc. Incorporated by reference to Exhibit 10.31
                      of the
                      Registrant’s Annual Report on Form 10-KSB filed November 13,
                      2003.10.12
                  
                  Power
                      of Attorney and Contingent Fee Contract, dated June 14, 2002,
                      among the
                      Registrant, Gary Valinoti and the Law Firm of O’Quinn, Laminack &
                      Pirtle. Incorporated by reference to Exhibit 10.32 of the Registrant’s
                      Annual Report on Form 10-KSB filed November 13, 2003.10.13
                  
                  Subscription
                      Agreement, dated December 10, 2002, between the Registrant
                      and Bay Point
                      Investment Partners LLC. Incorporated by reference to the Registrant’s
                      Registration Statement on Form SB-2 filed on January 9,
                      2003.10.14
                  
                  Placement
                      Agent Agreement, dated December 10, 2002, between the Registrant
                      and RMC 1
                      Capital Markets, Inc. Incorporated by reference to the
                      Registrant’sRegistration
                      Statement on Form SB-2 filed on January 9, 2003.10.15
                  
                  Placement
                      Agent Agreement, dated as of June 19, 2003, between the Registrant
                      and RMC
                      1 Capital Markets, Inc., as amended on August 12, 2003. Incorporated
                      by
                      reference to the Registrant’s Current Report on Form 8-K filed on August
                      13, 2003.10.16
                  
                  Subscription
                      Agreement, dated as of June 19, 2003, between the Registrant
                      and Bay Point
                      Investment Partners LLC, as amended on August 12, 2003. Incorporated
                      by
                      reference to the Registrant’s Current Report on Form 8-K filed on August
                      13, 2003.10.17
                  
                  Subscription
                      Agreement, dated as of September 25, 2003, between the Registrant
                      and
                      Kuekenhof Equity Fund L.P. Incorporated by reference to Exhibit
                      10.39 of
                      the Registrant’s Form 10-KSB filed with the SEC on November 13,
                      2003.10.18
                  
                  Non-Circumvention/Non-Disclosure
                      Agreement, dated as of January 1, 2004 between Flow Capital
                      Advisors Inc.
                      and the Registrant. Incorporated by reference to the Registrant’s Form 8-K
                      filed with the SEC on July 25,
                      2007.
  
 10.19
                  
                  Finder’s
                      Fee Agreement, dated as of January 5, 2004, between the Registrant
                      and
                      Flow Capital Advisors, Inc. Incorporated by reference to the
                      Registrant’s
                      Form 8-K filed with the SEC on January 20, 2004.10.20
                  
                  Finder’s
                      Fee Agreement, dated as of March 14, 2005, by and between the
                      Registrant
                      and Flow Capital Advisors, Inc. Incorporated by reference to
                      the
                      Registrant’s Form 8-K filed with the SEC on July 25,
                      2007.
 10.21
                
                Irrevocable
                    Transfer Agent Instructions, effective May 25, 2006, between
                    the
                    Registrant and YA Global. Incorporated by reference to the Registrant’s
                    Form 8-K filed with the SEC on June 1, 2006.10.22
                
                Letter,
                    dated as of June 17, 2008, from Cryptometrics regarding termination
                    of the
                    agreement and plan of merger between the Registrant and Cryptometrics.
                    Incorporated by reference to the Registrant’s Form 8-K filed with the SEC
                    on June 18, 2008.14.1
                
                Code
                    of Ethics. Incorporated by reference to the Registrant’s Form 10-KSB filed
                    with the SEC on November 13, 2003.21.1
                
                Subsidiaries
                    of Registrant. Incorporated by reference to the Registrant’s Form 8-K
                    filed with the SEC on March 5, 2007.31.1
                
                Section
                    302 Certification of Chief Executive Officer*31.2
                
                Section
                    302 Certification of Chief Financial Officer*32.1
                
                Section
                    906 Certification of Chief Executive Officer and Chief Financial
                    Officer*






*
              Filed
                  herewith.