<PAGE>

             SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 --------------

                                  FORM 10-KSB
(Mark One)

|X|      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
                    For the fiscal year ended July 31, 2002

                                       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                           (I.R.S. Employer
      of Incorporation)                                Identification No.)

  6865 S.W. 18th Street, Suite B-13
         Boca Raton, Florida                                 33433
(Address of Principal Executive Offices)                   (Zip Code)

                                 (561) 393-0605
              (Registrant's telephone number, including area code)

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

                                                       Name of Each Exchange
 Title of Each Class                                    on which Registered
        None                                                   None

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

                    Class A Common Stock, $0.00001 par value
               Series 1 Class B Common Stock, $0.00001 per share
                                (Title of Class)

                                 --------------

         Check 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
past 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 |X| No |_|

         Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. |X|

         The issuer's revenue for the fiscal year ended July 31, 2002 was
approximately $625,000.

         The aggregate market value of voting common equity held by
non-affiliates of the registrant, based upon the closing price of the Class A
Common Stock on November 8, 2002 as reported on the OTC Bulletin Board, was
approximately $10,422,792.

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

          Class                            Outstanding at November 1, 2002
          -----                            -------------------------------
     Class A Common Stock,
 par value $0.00001 per share                         34,739,488
Series 1 Class B Common Stock,
 par value $0.00001 per share                          1,540,141

                    DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>

                            JAG MEDIA HOLDINGS, INC.
                         2002 FORM 10-KSB ANNUAL REPORT

                                TABLE OF CONTENTS

                                                                       Page
                                                                       ----
PART I..................................................................3

ITEM 1.  DESCRIPTION OF BUSINESS........................................3

ITEM 2.  DESCRIPTION OF PROPERTIES.....................................25

ITEM 3.  LEGAL PROCEEDINGS.............................................25

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........26

PART II  ..............................................................26

ITEM 5.  MARKET FOR THE REGISTRANT'S
         COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................26

ITEM 6.  MANAGEMENT'S DISCUSSION AND
         ANALYSIS OR PLAN OF OPERATION.................................32

ITEM 7.  FINANCIAL STATEMENTS..........................................45

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH
         ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE............45

PART III...............................................................46

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
         PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE
         EXCHANGE ACT..................................................46

ITEM 10. EXECUTIVE COMPENSATION........................................48

ITEM 11. SECURITY OWNERSHIP OF CERTAIN
         BENEFICIAL OWNERS AND MANAGEMENT..............................56

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................57

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K........................59

<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

The information in this report 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. 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. For example,
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, 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
"Risk Factors."

Overview of Our Business

We have been providing financial and investment information within 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
U.S. web site. At www.jagnotes.com, we offer timely financial data and reports
and commentary from the financial community.

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 us, 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
its name to JagNotes.com, Inc. JagNotes, Inc. remained a wholly-owned subsidiary
of JagNotes.com Inc. until August 16, 1999 when it merged with and into
JagNotes.com Inc.

Until recently, we targeted only a limited audience of financial professionals
and we did not engage in organized sales and marketing efforts. As discussed in
more detail below, in 1999 we decided to change our focus by expanding onto the
Internet and targeting retail subscribers with the hope of expanding our
subscriber base and our business. In September 2000 we started an
advertiser-based financial webcast which we sold on February 1, 2001 as we were
unable to continue to fund its operating losses.

We have recently undertaken a corporate reorganization in order to distinguish
and better manage our areas of business. On January 4, 2002, JAG Media LLC was
formed as a Delaware limited liability company and a wholly owned subsidiary of
JagNotes. The assets and liabilities of our current fax and Internet
subscription business were transferred to JAG Media LLC. Also on January 4,
2002, JAG Company Voice LLC was formed as a Delaware limited liability company
and a wholly owned subsidiary of JagNotes. JAG Company Voice LLC will carry out
the operations of our "Company Voice" start-up business which aims to provide
small to medium size publicly-traded companies with production and distribution
services for delivering press releases and other company information over the
Internet in streaming video format. The web site for our Company Voice business
is located at www.thecompanyvoice.com. In order to better reflect the overall
business in which we expect to engage and the corporate structure we intend to
use to conduct that business, we changed our corporate name from JagNotes.com
Inc. to JAG Media Holdings, Inc. effective April 8, 2002.


<PAGE>

Our jagnotes.com web site currently consists of free and subscription-based
portions. The free portion provides users with access to market commentary and
selected financial data. The subscription-based portion provides more timely
reports, including breaking news and potentially market moving information. We
currently derive our revenues primarily from the sale of subscriptions.

We are a Nevada corporation. Our address is 6865 S.W. 18th Street, Suite B13,
Boca Raton, Florida 33433, and our telephone number is 561-393-0605.

Our Industry Generally

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. As
more and more investors begin to trade online, we expect the demands for
financial information over the Internet to increase significantly.

The first Internet-based trading systems were introduced in 1995. Since that
time, online trading has increased dramatically. According to a January 2001
estimate, there were 7.8 million individuals trading online, making 807,000
trades per day. As of January 2001, there were over 200 broker-dealers providing
retail investors with the ability to trade online. See Securities and Exchange
Commission, Office of Compliance Inspections and Examinations: Examinations of
Broker-Dealers Offering Online Trading: Summary of Findings and Recommendations
(January 25, 2001).

According to a February 2002 report by the U.S Commerce Department, as of
September 2001 approximately 143 million or 53.9% of Americans used the
Internet. This represents an increase of 26 million during the period of August
2000 to September 2001. Additionally, Internet users grow at a rate of 2 million
per month. This report also indicates that 8.8% of all Internet users above the
age of 15, or approximately 9.75 million users, engage in online trading of
stocks, bonds and mutual funds. See U.S. Department of Commerce, A Nation
Online: How Americans Are Expanding Their Use of the Internet (February
2002)(available at www.commerce.gov).

According to J.D. Power & Associates' 2001 Future Online Market Penetration
Study, the number of online investors could double in the period between
November 2001 and November 2002. Depending on economic conditions, offline
investors are expected to migrate online for at least some of their investing
activities. The study also stated that the increase of Internet use among
Americans could create a surge of new investors in the online trading market.
See J.D. Power & Associates Reports, Online Trading Expected to Nearly Double in
Next 12 Months: Heavy Trader Population Still Growing (November 1,
2001)(available at www.jdpa.com).


                                       4
<PAGE>

A J.D. Power & Associates report published in March 2002 states that 90% of
online investors surveyed indicated that they intended to continue investing
online. A third of those investors surveyed also indicated their intention to
increase their volume of online trades. The survey did find, however, that there
was only a 2% increase in new investors during the period between September 2001
and March 2002. Over this period, online investing among 25-34 year-olds
declined; however, the number of seniors (55 years of age and over) who
identified themselves as online traders increased. See J.D. Power & Associates
Reports, Online Investors Optimistic Despite Caution After September 11 (March
26, 2002)(available at www.jdpa.com).


Our Products

We have been providing financial and investment information within 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
U.S. web site. At www.jagnotes.com, we offer timely financial data and reports
and commentary from the financial community.

Our jagnotes.com web site currently consists of free and subscription-based
portions.

On the free portion of our site, we offer commentaries from experienced
journalists, money managers, analysts and other Wall Street professionals as
well as selected financial data targeted at the active investor and trader.

The commentary on our web site is provided by journalists, money managers,
analysts and other Wall Street professionals. Their reports range from analysis
of individual stocks and industry sector performance to analysis of broad market
and economic matters. In many cases our commentators also provide and analyze
technical financial and market data. We select our commentators to offer our
subscribers a broad range of analysis to appeal to a broad range of investment
and trading styles. The topics of these commentaries vary daily. Although we
have no set criteria for choosing our commentators, we look for individuals who:

         o        are well respected by members of the Wall Street community,
                  including traders, economists, investment bankers and other
                  institutional investors; and

         o        have experience either as a journalist, money manager or
                  financial analyst and/or have an educational background in
                  business, finance or economics.

As of November 1, 2002, JAG Media had 12 commentators who provide technical
analysis and commentary for our web site. The names of these commentators and
the columns they write are as follows:


Commentator                        Column
-----------                        ------
Paul Merriman                      Managing Your Mutual Funds

Lawrence G. McMillan               Option Strategist

Mark Likos                         The Likos Letter

Harry Boxer                        The Technical Trader

John Gabriel                       Stock Market Momentum

Douglas Hughes                     Small Bank Newsletter

Axxel Knutson                      Trading Weapon

Mark Leibovit                      Volume Tracks

David Schultz                      Sector Vue

Bruce Norrin                       Focus Stock Charts

Harry Aloof                        Wall Street Trader's Column

Mark Camp                          Program Trading Research


                                       5
<PAGE>

None of the above-referenced commentators have written agreements with JAG
Media. Accordingly, they are free to cease providing their commentary at any
time.

On our subscription-based portion of our web site, we offer our subscribers two
targeted products:

JAGNotes Upgrade/Downgrade Report - The JAGNotes upgrade/downgrade 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 early, convenient access to potentially market moving
information gives our subscribers access to some of the information
traditionally available when the market opens to institutional investors,
professional traders and high net worth individuals. This report is updated from
time to time during the trading day.

The JAG Media Rumor Report - Because rumors can move equities, we have
established the "Rumor Room" where we post rumors about various stocks that have
been heard on the street. When we hear rumors, we post the information in the
Rumor Report and indicate the date and time of the rumor. We also attempt to
contact the company or companies involved in the rumors for a comment and post
the results of this inquiry with the rumor. While we realize that rumors are
inherently unreliable as indicated by a cautionary note introducing this portion
of our site, we believe that every trader and investor - large and small -
should have access to this information to determine its usefulness. The JAGMedia
Rumor Report is available to our subscribers and updated throughout the day.

These two products are accessible only to paid subscribers. Subscriptions are
offered 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.

We also maintain our original JAGNotes fax-based service for a limited number of
mostly institutional subscribers. Through this service, we provide these
subscribers faxed copies of our daily JAGNotes upgrade/downgrade report, which
is updated two or three times every weekday morning before the stock market
opens. We also allow these subscribers access to our Internet-based information
by providing them with a specified number of access codes. The price for this
combined service is approximately $1,500 to $2,000 per year.

The content of our web site contains all of the information provided in the
faxed reports as well as the Rumor Report and commentaries described above and
other product offerings which do not appear in our faxed reports.


                                       6
<PAGE>

We intend to continue providing our combined fax/Internet service in the future
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 efficient means of receiving the
information or because their employees do not have direct Internet access. We
are also examining the potential for implementing other product offerings and
subscription structures which may be attractive to institutional subscribers.

Company Voice Service - Through our wholly owned subsidiary, JAG Company Voice
LLC, we have begun marketing our "Company Voice" service. The Company Voice
makes available to publicly traded companies production and distribution
services that enable them to deliver press releases and other company messages
to stockholders and potential investors in streaming video/audio format. The
production and distribution services provided in connection with the Company
Voice service include:

         o        directly contracting for studios in which Company Voice
                  segments will be taped;

         o        providing interviewers for each Company Voice segment;

         o        assisting clients in preparing for each interview;

         o        encoding taped segments to allow distribution via the
                  Internet; and

         o        arranging for distribution and streaming of finalized Company
                  Voice segments on affiliate sites such as Lycos

The premium services that will be made available to clients of the Company Voice
include:

         o        preparation of CD-ROM's containing Company Voice segments
                  which clients can use for other investor and public relations
                  purposes; and

         o        opt-in e-mail campaigns whereby a client can select the size
                  of its e-mail campaign and the e-mails will include a link to
                  a Company Voice segment selected by the client

We are currently assembling a network of sites through which the Company Voice
will be distributed and have, to date, entered into distribution agreements with
Lycos, FreeRealTime and Zacks. The Company Voice will be initially marketed to
clients as part of a package of four video/audio segments, each approximately
2-10 minutes in duration, which will be distributed through The Company Voice
network of affiliated web sites, which will include Lycos Finance
(www.lycos.finance.com), FreeRealTime (www.freerealtime.com), Zacks.com
(www.zacks.com) and Zacks Advisor (www.zacksadvisor.com). Clients will be
charged an introductory fee for each basic video/audio package and will be given
the opportunity to upgrade their packages with various premium services that
will be offered through affiliates of The Company Voice network.

As of November 1, 2002, our Company Voice service had not been officially
launched. Based upon our most recent discussions with Lycos, we anticipate a
launch date during the second quarter of our fiscal year ending July 31, 2003
but note that our agreement with Lycos provides that Lycos has the sole right to
determine the timing of the launch date of its distribution of the Company Voice
service. We expect Lycos to be our major distribution channel and therefore do
not intend to provide our service on the Zacks and FreeRealTime sites until our
service is operational on the Lycos Finance site. Our agreement with Lycos is
for a two year term commencing on the launch date. For each video package
provided by us to Lycos, we have agreed to pay Lycos the greater of $3,000 or
ten percent of the revenue received by us for creating such video package.
During the term of the agreement, we have agreed not to provide any of the video
content in any form or manner nor grant any license to such content to America
Online, Inc., Yahoo! Inc. or Microsoft Corporation. Pursuant to the agreement
Lycos shall have the exclusive right to sell advertising on the site where it
makes the content available and to retain all revenue generated therefrom.


                                       7
<PAGE>

Pursuant to the terms of the contract, both Lycos and we have the right to
terminate the agreement if the other party either becomes insolvent or files for
bankruptcy or materially breaches a material provision of the contract and does
not cure such breach within 30 days of receiving notice of such breach. In
addition, Lycos may unilaterally terminate the agreement for any or no reason on
30 days written notice, and we may unilaterally terminate the agreement for any
or no reason on 60 days written notice provided that we pay to Lycos any
outstanding placement fees due under the agreement. Lycos may also terminate the
agreement or suspend its performance thereunder if the content provided by us
violates or fails to comply with any applicable law or regulation, or violates
the rights of any third party. In addition, if we fail to pay to Lycos any
amount due Lycos under the agreement when such amount is due, Lycos may
terminate the agreement immediately by providing us with a written notice of
termination.

Furthermore, Lycos and we have agreed to indemnify and hold harmless the other
party and the other party's officers, directors, shareholders, employees, agents
and affiliates from and against any and all third party claims, damages,
liabilities, costs and expenses arising out of or related to any breach of any
warranty, representation, covenant or agreement made by the indemnifying party
in the agreement. In addition, we have agreed to defend, indemnify and hold
harmless Lycos and its officers, directors, shareholders, employees, agents and
affiliates against any and all third party claims, damages, liabilities, costs
and expenses arising out of or related to the development, operation or
maintenance of the video service and the content and the use or misuse of, or
reliance on, the content by any user.

Excite and iWon have also offered to serve as distribution channels for the
Company Voice upon payment by us of a placement fee of $60,000. We intend to use
the proceeds from our equity line agreement with Cornell Capital to fund the
placement fee and therefore do not expect to commence providing our services on
these sites until the second quarter of our fiscal year 2003. Although we are in
discussions with several companies and investor relations firms who have
expressed interest in buying Company Voice packages, we have not yet signed
placement agreements with any clients.




                                       8
<PAGE>

Advertising Revenue

While we expect the primary source of our revenue from our jagnotes.com web site
to be subscriptions, we may supplement this with advertising revenue. Such
revenues have, however, not been meaningful to date and we would not expect such
revenues to become material until there is a major upturn in Internet banner
advertising generally, or we are able to offer advertisers various media
advertising alternatives to banners.

Our Business Strategy

Our goal is to position JAG Media as a leading Internet-based provider of fast
breaking financial news and information. In time, we hope that JAG Media will
become an important information resource for institutional investors and the
general public alike.

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

o        expand our subscriber base in the United States;

o        pursue acquisitions and strategic alliances; and

o        control costs to correspond with subscription revenues.

We plan to continue to service the institutional segment of our business and
intend to place more emphasis on this segment in the coming months. We will use
an integrated marketing model to attract new subscribers and, to the extent
funding (not now available) permits, will employ a mix of communications media
to increase name awareness in the institutional and retail market and increase
visits by potential subscribers with a view to ultimately generating new
subscribers.

         o        Expand Subscriber Base. Some avenues that we are exploring to
                  attract new subscribers include:

                  o        Introducing limited on-demand and live streaming
                           audio and video programming as our financing permits;

                  o        Offering free trial subscriptions;

                  o        Traditional public relations;

                  o        Using our good reputation among financial
                           professionals to attract new subscribers to our web
                           site;

                  o        Offering products tailored to the needs of
                           institutional subscribers such as JAGNotes and Rumor
                           pages delivered to company intranets and featuring
                           company branding;


                                       9
<PAGE>

                  o        Pursuing distribution arrangements with third party
                           information providers that service financial
                           institutions and individual investors; and

                  o        Pursuing strategic alliances with, or acquisition of,
                           existing web-based information providers and other
                           media companies.

         o        Pursue Strategic Alliances. We believe that we can effectively
                  grow our business by pursuing strategic affiliations,
                  partnerships, joint ventures or other relationships with
                  strategic partners. We are currently pursuing alliances with
                  investment firms, online brokerage houses, market news
                  providers, webcasting services and web portals in an effort to
                  obtain additional content, expand our name recognition and
                  increase our subscriber base.

         o        Curtail Costs. We sold our webcasting business to reduce our
                  cash flow requirements. In addition, we have discontinued
                  various commentators in order to save costs where we concluded
                  that the cost was not justified by our subscribers' interest.

We will require additional funds in order to implement our business strategy. 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
strategy. Accordingly, we will need to raise additional funds through public or
private financing, strategic relationships or other arrangements. There can be
no assurances that we will be able to do so.

Note: These are our strategies, goals and targets. We believe in them, but 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. In
addition we are dependent on having sufficient cash to carry out our strategy.
Alternatively, we may have to continue to reduce services to a level subscribers
may not find valuable. Please read "Risk Factors" beginning on page 9 before
making any investment decision.

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
does not apply under applicable federal or state law, and thus we are not
registered 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.


                                       10
<PAGE>

In addition, we operate in an environment of tremendous uncertainty about
potential government regulation of the Internet and Internet-based service
providers. We believe that our business is not currently subject to direct
regulation other than regulations applicable to businesses generally. However,
the Internet is evolving rapidly, and governmental agencies have not yet been
able to adapt all existing regulations to the Internet environment. The United
States Congress has recently passed legislation that regulates certain aspects
of the Internet, including on-line content, copyright infringement, user
privacy, taxation, access charges, liability for third-party activities and
jurisdiction. In addition, federal, state, local and foreign governmental
organizations also are considering other legislative and regulatory proposals
that would regulate the Internet.

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.

Competition

Providing financial information and analysis over the Internet is a relatively
new business, but it is already intensely competitive. 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 competition.

We provide a variety of categories of information to our subscribers, including
daily financial news, technical analysis of stock activity and selected
financial data of corporations. Each of these components of our business
competes to a different degree with the following information sources:

         o        Online financial news and information providers including
                  Yahoo Finance, CBSMarketwatch.com, TheStreet.com,
                  Briefing.com, America Online Personal Finance Channel,
                  WebFN.com, Reuters PLC and MotleyFool.com;

         o        Internet portals and search engines such as America Online,
                  MSN and Yahoo;

         o        Traditional media sources such as The Wall Street Journal, The
                  Financial Times, Barrons, CNNfn, CNBC and FOX financial news
                  programming, all of whom also have an Internet presence;

         o        Webcasts of financial news, including WebFN;

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

         o        Online brokerage firms such as E*Trade, Charles Schwab or CSFB
                  Direct.

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.


                                       11
<PAGE>

The barriers to entry into our business are relatively low - i.e., it is not
difficult for new competitors to enter the market. Much of the information we
provide is publicly 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, content, creative or other advantages over the
services we provide.

In order for us to successfully compete in this business, we will need to
reliably provide valuable services at a competitive price to a large subscriber
base. We believe that a successful implementation of our business strategy will
allow us to do so and to compete successfully as a leading financial and
investment information provider.

Intellectual Property

We are the owner of pending federal trademark applications for JAG, JAGNOTES and
RUMOR ROOM. We do not consider these trademarks to be material to our business.

Web Site Technical Information

We lease two web servers, which are the computer systems on which all content
for our web sites are maintained and through which we operate our web sites. Our
U.S. servers are maintained by Woodbourne Solutions and are located in their
facility in Germantown, Maryland. Our two back-up servers are maintained by
Above.net and PC Communications and are located in San Jose, California and
Jersey City, New Jersey.

Our web site was redesigned in July 2000 by Zero-G at a cost of approximately
$500,000. Subsequent redesigns have been handled internally and by Woodbourne
Solutions, a technical consultant to JAG Media.

Employees

As of November 1, 2002, we had ten employees. As of that date, we had entered
into employment agreements with three of our employees, each of whom is an
officer and director of JAG Media.

Equity Line of Credit

As of April 9, 2002, we entered into an agreement with Cornell Capital Partners,
L.P. for a $10 million equity line pursuant to which are able to sell our shares
of Class A common stock to Cornell Capital from time to time over a 24-month
period. The purpose of the offering is to provide general working capital for
JAG Media, including working capital which might be required by virtue of our
strategic plan. This agreement superseded our original equity line purchase
agreement with Cornell Capital, dated August 17, 2001.


                                       12
<PAGE>

                                  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 you could lose all or part of your investment.

                          Risks Related to Our Business

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

As of July 31, 2002 we had incurred losses to date of $38,560,123. We may never
achieve profitability. We have made, and will continue to make, very significant
expenditures well before our revenues increase sufficiently to cover these
additional costs. We are not able to estimate when, if ever, our revenues will
increase sufficiently to cover these costs. Internet users have only been
attracted to subscription sites in limited areas. Our subscription revenues have
recently fluctuated but are below the level of a year ago. 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. Recently, many dot-com companies have found it difficult to
raise funds, and a number of such companies have gone bankrupt. If we require
additional funding and do not obtain it, we may be forced to restructure, file
for bankruptcy or cease operations, any of which could cause you to lose all or
part of your investment in our Class A common stock.

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

We will require more capital to meet our current operating expenses and achieve
our current business strategy. As we require additional funds to sustain our
operations as well as the expansion of our business we will have to seek
additional equity or other financing. Such financing is very difficult to
achieve under current market conditions and may not be available. Even if it is,
it may be on terms that are materially adverse to your interests with respect to
dilution of book value, dividend preferences, liquidation preferences, or other
terms.

We cannot guarantee that we will be able to obtain additional financing as we
need it. When our operations require additional financing, if we are unable to
obtain it on reasonable terms, we would be forced to restructure, file for
bankruptcy or cease operations, any of which could cause you to lose all or part
of your investment in our Class A common stock.

We recently have been forced to discontinue various commentators and curtail
certain services which may cause us to lose subscribers.

In order to attempt to reduce costs to a level commensurate with our
subscription revenues, we have been forced to discontinue various well known
commentators and curtail our international and other expansion plans.
Accordingly, we run the risk that existing and potential subscribers may not
find the site valuable.


                                       13
<PAGE>

We may not be able to adequately expand our subscriber base because many of our
competitors offer free financial information.

We must expand our subscriber base to be successful. Our subscription revenues
are below the level they were a year ago. During the year ended July 31, 2002
subscription revenues decreased as compared to the year ended July 31, 2001 with
total subscription revenues for the comparable periods of approximately $625,000
and $1,001,000, respectively. Although we are still attempting to expand our
subscriber base, our efforts may be ineffective, our competitors may be more
successful than we are in attracting customers, or the number of Internet users
seeking or willing to pay for financial information may not increase or may even
decrease. Any of these would adversely affect us. Moreover, many of our
competitors offer financial information for free and are likely to continue to
do so 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. Because there is currently limited potential for Internet
banner advertising revenues, if we cannot expand our subscriber base, we will
have little, if any, financial success.

All of our commentators have competing web sites.

All of our commentators have their own web sites on which they provide financial
information. If current or potential future subscribers were to turn to these
sites for financial information in lieu of jagnotes.com, our business and
financial condition could be adversely affected.

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 have recently changed our name to JAG Media 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 allocate any of our working capital to
marketing and advertising but rather rely solely upon strategic alliances to
increase our name recognition. Our ability to build our subscriber base, offer
new services or otherwise expand the business will be limited if we cannot
increase that name recognition. We cannot guarantee that we will be successful
in doing so.

We may experience difficulties in developing new and enhanced services and
features for our web site.

We believe that our web site 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 web site, but adequate
financing is not currently available.

We may experience other difficulties that could delay or prevent us from
introducing new enhanced services. We may encounter technological problems in
enhancing our web sites. We may need to modify significantly the design of these
services on our web sites. Our business could be adversely affected if we
experience difficulties in introducing or maintaining new services, if these new
services are not accepted by users or if their cost exceeds the revenue they
generate.


                                       14
<PAGE>

If we introduce enhanced service 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.

We may not successfully attract or manage strategic alliances.

We currently intend to evaluate strategic alliances, partnerships or joint
ventures, as a means of acquiring additional sources of content, distribution
and investment. Pursuing such transactions will entail a number of risks and
difficulties. We compete with a wide variety of information providers and there
may be competition for content providers, distribution channels and funding. 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. We have little experience in evaluating and implementing
transactions of this type, and 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 operational
expenditures.

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 web sites. Much of the content on our web sites comes from
third parties, so to protect ourselves against such claims, our license
agreements with third party content providers generally require that the content
providers defend, indemnify and hold us harmless with respect to any claim by a
third party that the licensed content they have provided infringes on any
proprietary right. While we endeavor to have commentators defend, indemnify and
hold us harmless with respect to any third party claim for libel or defamation
in connection with our commentators' work product, commentators do not often
agree to provide us with such protection. Even where we are successful in making
commentators agree to provide us such protections, we cannot assure you that
these measures will be adequate to protect us from such claims. 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 for trustworthiness may reduce the number of
our users, which may harm our business.

It is very important that we maintain our reputation as a trustworthy provider
of financial news and commentary. The occurrence of events, including our
misreporting a news story or the non-disclosure of stock ownership by one or
more of our commentators, could harm our reputation for trustworthiness. These
events could result in a significant reduction in the number of our readers,
which could materially adversely affect our business, results of operations and
financial condition.


                                       15
<PAGE>

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.
Valinoti, our President and Chief Executive Officer, Mr. Stephen J. Schoepfer,
our Executive Vice President and Chief Operating Officer and Thomas J.
Mazzarisi, our Executive Vice President, Chief Financial Officer and General
Counsel. We may also need to attract and retain additional qualified managers,
officers and other key personnel in the future in order to successfully manage
our planned growth. We cannot guarantee that we will be able to do so. If we
lose the services of any of our key personnel or are unable to attract, hire,
train and retain qualified officers, managers and operating, marketing and
financial personnel, our business, and your investment, could be adversely
affected.

Certain terms of the employment agreements of our executive officers could
discourage a potential takeover of JAG Media by a third party.

Pursuant to the amended and restated employment agreements of Gary Valinoti, our
President and Chief Executive Officer, Stephen J. Schoepfer, our Executive Vice
President and Chief Operating Officer and Thomas J. Mazzarisi, our Executive
Vice President, Chief Financial Officer and General Counsel, each executive may
resign upon a change-in-control of JAG Media. 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 Class A common stock. If such
executive opts to resign from his position at JAG Media, 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. Valinoti, Schoepfer and Mazzarisi shall also
be granted an option to acquire 1,000,000 shares of our Class A common stock at
an exercise price equal to 25% of the closing bid price of the stock immediately
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 JAG
Media or reduce the price which such a party is willing to pay for JAG Media.

We may face difficulties concerning continued availability of our sources of
information for certain products.

Certain products that we offer through our site, including JAGNotes and the
Rumor Room, rely on information from independent third party sources. We do not
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 these products on our site. If information
from these sources is altered, curtailed or discontinued this could adversely
affect the viability of these products. This, in turn, could decrease the demand
for our site or otherwise materially adversely affect our business.


                                       16
<PAGE>

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

Information posted in the JAG Media Rumor Report consists of rumors and other
information received from third party sources that may have no reasonable
factual basis. We realize that that rumors are inherently unreliable, and we
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, fraudulent or intentionally erroneous
information, however, and the law relating to our 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 information. These claims, even without merit, could cause
us to expend significant financial and managerial resources, which could
adversely affect our business operations.

The uncertainty of 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 government regulation of the Internet and e-commerce. We believe that
we are not currently subject to direct regulation of online commerce, other than
regulations applicable to businesses generally. However, the Internet has
rapidly emerged as a commerce medium, and governmental agencies have not yet
been able to adapt all existing regulations to the Internet environment. 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, access charges, content and quality of products
and services, advertising, intellectual property rights and information
security. For example, if the government determines that our web site and the
types of activities engaged in by visitors and/or subscribers to our web site
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 adviser subject to federal or state
regulatory oversight.


                                       17
<PAGE>

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 we 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 profitability. 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.


                                       18
<PAGE>


                          Risks Related to Our Industry

Our business is dependent on the continued public interest 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 as retail financial
information providers depends upon the continued maintenance or growth of this
interest. The recent downturn in the stock market may be responsible for an
overall decrease in subscription revenues since the end of our second fiscal
quarter of 2001. It is not clear what impact the recent downturn in the stock
market will ultimately have on our business. A number of factors that are out of
our control could lead to a stagnate or depressed stock market which 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 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 success of these companies. The volatility of the stock market in
recent months has made it difficult for many dot-com companies to raise funds,
and a number of 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 therefor, such suits are costly and we could be
adversely affected if such a suit were brought against us.

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

Our web site's primary competitors provide financial news, commentary and
analysis on the Internet such as Yahoo Finance, CBSMarketwatch.com,
TheStreet.com, Briefing.com, America Online Personal Finance Channel, WebFN.com,
Reuters PLC and MotleyFool.com. Providing financial information and analysis
over the Internet is a relatively new business, but it is already intensely
competitive. 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 such competitors have substantially greater financial and other resources
than we have.

Our major competitors include:

         o        Online financial news and information providers including
                  Yahoo Finance, CBSMarketwatch.com, TheStreet.com,
                  Briefing.com, America Online Personal Finance Channel,
                  WebFN.com, Reuters PLC and MotleyFool.com;


                                       19
<PAGE>

         o        Internet portals and search engines such as America Online,
                  MSN and Yahoo;

         o        Traditional media sources such as The Wall Street Journal, The
                  Financial Times, Barrons, CNNfn, and CNBC, all of whom also
                  have an Internet presence;

         o        Webcasts of financial news, including WebFN;

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

         o        Online brokerage firms such as E*Trade, Charles Schwab or CSFB
                  Direct.

Most of our current and potential competitors have greater name recognition,
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.

The barriers to entry into our business are relatively low - i.e., it is not
difficult for new competitors to enter the market. Much of the information we
provide is publicly 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.

System slowdowns or failures could hurt our business.

In order for our business to be successful, we must provide consistently fast
and reliable access to our web sites. Slowdowns, breakdowns or failures in our
computer and communication systems, or of the Internet generally, are often
beyond our control and could jeopardize access to our site at any time. In
addition, heavy traffic on our site or on the Internet generally could severely
slow access to, and the performance of, our site. Repeated system slowdowns will
likely impair our ability to service and maintain our existing subscriber base
and attract new subscribers. Failures of or damage to our computer or
communications systems could render us unable to operate our site or even our
business for extended periods of time.

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, we would
face significant unexpected costs and a risk of material loss, either of which
could adversely affect our business.


                                       20
<PAGE>

                     Risks Related to Our Capital Structure

A large percentage of our stock is owned by relatively few people, including
officers and directors.

As of November 1, 2002, our named executive officers and directors beneficially
owned or controlled a total of approximately 6,209,500 shares, or approximately
16.8% of our issued and outstanding capital stock. Taking into account shares
issuable pursuant to our equity line purchase agreement with Cornell Capital, we
estimate that Cornell Capital Partners, L.P. could beneficially own up to
20,000,000 shares of our Class A common stock, approximately 36.5% of our issued
and outstanding capital stock. If all or most of these shares are issued to, and
held by, Cornell Capital, these persons, acting in concert, could be able to
control the disposition of any matter submitted to a vote of stockholders. This
concentration of ownership may also have the effect of delaying or preventing a
change of control of us. In addition, if these persons choose to sell all or a
substantial number of shares of our Class A common stock in the public market at
or about the same time, such sales could cause the market price of our Class A
common stock to decline. In addition, the sale of these shares could impair our
ability to raise capital through the sale of additional stock.

The market for our stock is limited.

Our Class A common stock is traded on the Nasdaq OTC Bulletin Board. 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 OTC Bulletin Board.

Because our stock currently trades below $5.00 per share, and is quoted on the
Nasdaq OTC Bulletin Board, our stock is considered by the SEC a "penny stock,"
which can adversely effect its liquidity.

Our Class A common stock does not currently qualify for listing on the Nasdaq
Stock Market, and we do not anticipate that we will qualify for such a listing
in the foreseeable future. If our Class A common stock continues to be quoted on
the Nasdaq OTC Bulletin Board, and if the trading price of our Class A common
stock remains less than $5.00 per share, our Class A common stock is considered
a "penny stock," and trading in our Class A common stock is subject to the
requirements of Rule 15g-9 under the Securities Exchange Act of 1934. 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
high price fluctuations.


                                       21
<PAGE>

We may not be able to draw in whole or in part on the equity line purchase
agreement with Cornell Capital, which would adversely affect our liquidity.

We entered into a $10 million equity line financing arrangement with Cornell
Capital Partners, L.P. on April 9, 2002. The equity line purchase agreement
provides for the purchase by Cornell Capital of up to $10 million worth of
shares of our Class A common stock over a 24-month period. There are limitations
on the amount of our equity line draws under the equity line purchase agreement
with Cornell Capital. The maximum dollar amount we can draw on the equity line
at any one time is $500,000. Cornell Capital's obligation to purchase our shares
under the equity line purchase agreement is also dependent upon various
conditions being satisfied. The most significant condition to closing is that
the registration statement covering the shares issuable to Cornell Capital
pursuant to the equity line must remain effective at all times and not be
subject to any actual or threatened stop order or subject to any actual or
threatened suspension at any time prior to any closing date. In addition, it is
a condition to closing under the equity line that the shares of Class A common
stock issuable to Cornell Capital at the closing be authorized for trading on
the Nasdaq OTC Bulletin Board or another market or exchange and such trading
shall not have been suspended at any time by the SEC, Nasdaq or other regulatory
authority from the date we deliver our put notice to Cornell Capital through the
closing date of the drawdown. It is also a condition that on any given closing
date, there shall be at least one bid for the Class A common stock on the Nasdaq
OTC Bulletin Board. We are also required to have performed, satisfied and
complied in full with all covenants set forth in the transaction documents and
our representations and warranties set forth in those agreements must be true
and correct at closing. If these conditions are not satisfied, we cannot require
Cornell Capital to purchase our shares. In addition, we note that the obligation
of Cornell Capital to complete its purchases under the equity line is not
secured or guaranteed. If Cornell Capital does not have available funds at the
time it is required to make a purchase or if Cornell Capital otherwise refuses
to honor its obligation to us, we may not be able to force it to do so. If we
are unable to draw in whole or in part on the equity line purchase agreement for
any of the above-referenced reasons, our cash, cash equivalents, and securities
will not be sufficient to meet our anticipated cash needs unless we obtain
alternative financing. There can be no assurance that such financing will be
available to us.

Shareholders may experience significant dilution from our sale of shares to
Cornell Capital Partners, L.P.

As the market price for our Class A common stock decreases, the number of shares
that may be sold to Cornell Capital Partners, L.P. pursuant to our equity line
purchase agreement will increase. If we were to require Cornell Capital to
purchase our shares at a time when our stock price is depressed, our existing
shareholders' interest in our company will be significantly reduced. We have
registered 20,000,000 shares for sale to Cornell Capital pursuant to the equity
line purchase agreement. If we determine to sell Cornell Capital more than a
total of 20,000,000 shares under the equity line purchase agreement, we would
need to file an additional registration statement. Shareholders will experience
significant dilution if, as the result of a declining market price of our Class
A common stock, we are forced to sell most or all of these shares to Cornell
Capital. In addition, if Cornell Capital is unable to resell the shares we issue
to it under the equity line, Cornell Capital could obtain a controlling interest
in JAG Media.


                                       22
<PAGE>

To illustrate this potential for dilution, the following table shows, based on
the hypothetical variables shown in the table, (i) the fee payable to Cornell
Capital, (ii) the net proceeds to be received by us, (iii) the number of shares
we would issue to Cornell Capital, (iv) the price Cornell Capital would pay for
those shares, (v) the percentage of our currently outstanding shares represented
by the number of shares issued to Cornell Capital and (vi) the amount of
decrease in the net tangible book value per share that would occur as a result
of such issuance. Our net tangible book value as of July 31, 2002 was
$(1,243,968), representing a net tangible book value per share of our Class A
common stock, based on the number of such shares outstanding as of November 1,
2002, of $(.0364).

<TABLE>
<CAPTION>

                                                                                  Percent of      Change in
                                                          Number of     Purchase  Outstanding     Tangible Net
Market Price  Advance Amount   Investor Fee Net Proceeds  Shares Issued Price     Shares Value    Per Share
------------  --------------   ------------ ------------  ------------- -------- -------------   ---------------
<S>           <C>              <C>          <C>           <C>           <C>           <C>        <C>
$0.24         $500,000         $25,000      $475,000      2,192,983     $0.228        6.3%       $0.016
$0.18         $500,000         $25,000      $475,000      2,923,977     $0.171        8.4%       $0.016
$0.12         $500,000         $25,000      $475,000      4,385,965     $0.114        12.6%      $0.016
$0.06         $500,000         $25,000      $475,000      8,771,930     $0.057        25.3%      $0.017
</TABLE>

(1)      Represents the maximum advance amount under the equity line purchase
         agreement.
(2)      Represents 95% of Market Price (as defined in the equity line purchase
         agreement).
(3)      Represents the Market Price of our Class A common stock assuming our
         put right was exercised on October 24, 2002.
(4)      Represents a 25% decline in the Market Price of our Class A common
         stock
(5)      Represents a 50% decline in the Market Price of our Class A common
         stock.
(6)      Represents a 75% decline in the Market Price of our Class A common
         stock.
(7)      Based on 34,739,488 shares of Class A common stock issued and
         outstanding as of November 1 2002.

The resale by Cornell Capital Partners, L.P. of our shares may lower the market
price of our Class A common stock

The resale by Cornell Capital Partners, L.P. of the Class A common stock that it
purchases from us will increase the number of our publicly traded shares, which
could lower the market price of our Class A common stock. Moreover, the shares
that we sell to Cornell Capital will be available for immediate resale. There
are no contractual restrictions on the ability of Cornell Capital to offer
shares issued to it pursuant to the equity line. If we continue to exercise our
put right under the equity line purchase agreement every five trading days and
Cornell Capital continues to immediately resell such shares, our market price
could decrease significantly and you could experience significant dilution. In
addition, the mere prospect of this transaction could by itself lower the market
price for our Class A common stock. The shares of our Class A common stock
issuable to Cornell Capital under the equity line facility will be sold at a 5%
discount to the defined market price of our Class A common stock at the time of
the sale. During October 2002, our Class A common stock was trading at an
average of approximately $0.36. If we were to require Cornell Capital to
purchase our Class A common stock when our stock price is low, our existing
Class A common stockholders would experience substantial dilution.

                                       23
<PAGE>

Because Cornell Capital is purchasing our shares at a discount, it will have an
incentive to sell immediately so that it can realize a gain on the difference.
If our Class A common stock market price does decline, this could further
accelerate sales of our Class A common stock and would require us to sell more
shares under the equity line to raise the same amount of money. In addition, the
perceived risk of dilution and the resulting downward pressure on our stock
price could encourage third parties to engage in short sales of our Class A
common stock. By increasing the number of shares offered for sale, material
amounts of short selling could further contribute to progressive price declines
in our Class A common stock. These factors could also make it more difficult for
us to raise funds through future offerings of Class A common stock.

We may not receive all of the proceeds that we anticipate from our agreement
with Cornell Capital Partners, L.P.

Our equity line purchase agreement requires Cornell Capital Partners, L.P. to
purchase up to $10,000,000 of our shares, as we elect from time to time. We have
registered 20,000,000 shares to sell to Cornell Capital under such agreement.
Since the price at which we will sell our shares to Cornell Capital is at a 5%
discount to the average market price of our Class A common stock, if our closing
stock price is less than $0.53 per share on the day prior to the date of sale,
we will receive gross proceeds of less than $10,000,000, unless we determine to
file an additional registration statement. In addition, depending on the trading
volume and market price of our shares, we may not be able to raise funds through
the sale of shares to Cornell Capital as fast as we would like or as much as we
would like.

Investors will be relying on our management's judgment regarding the use of
proceeds from our sale of shares to Cornell Capital.

Our management will have broad discretion with respect to the use of the net
proceeds from our sale of shares to Cornell Capital under the equity line, and
investors will be relying on the judgment of our management regarding the
application of those proceeds. We intend to use the funds we receive from
Cornell Capital to provide general working capital for JAG Media, including
working capital which might be required by our current or any new subsidiaries
we may establish, and to repay certain officer loans.

Our recently amended charter contains provisions which may discourage an
unaffiliated party to take us over.

We recently implemented a recapitalization which involved the authorization of
100,000,000 additional shares of stock. Without further stockholder action, our
Board of Directors could authorize the issuance of all or any part of such
additional shares, including a new series of Class B common stock and/or
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 of JAG Media.
As a result, the recapitalization might have the effect of preventing or
discouraging an attempt by a party unable to obtain the approval of the Board of
Directors of JAG Media to take over or otherwise gain control of JAG Media.


                                       24
<PAGE>


ITEM 2. DESCRIPTION OF PROPERTIES

Our executive and administrative headquarters is currently located at 6865 SW
18th Street, Suite B13, in Boca Raton, Florida. We rent this space at a cost of
$1,050.00 per month. We are in the process of seeking a suitable space to house
our executive and administrative personnel and related administrative equipment
in the New York/New Jersey metropolitan area. The servers for our web site are
housed at separate locations as indicated above (see "Web Site Technical
Information"). We believe that we will be able to locate suitable new office
space and obtain a suitable replacement for our Florida office space, if our
lease is not renewed, on commercially reasonable terms.

ITEM 3. LEGAL PROCEEDINGS


On June 20, 2002, JAG Media and its 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 JAG Media stock. The original lawsuit was
subsequently amended on June 24, 2002 and was recently removed to the United
States District Court for the Southern District of Texas. In this action, the
plaintiffs seek an immediate accounting of all short positions, an accounting of
all profits made by the defendants in trading JAG Media stock, disgorgement of
any profits made by those defendants, actual damages incurred as a result of the
defendants' trading activities, exemplary damages for the defendants'
intentional conduct and attorneys fees and costs incurred as a result of this
litigation. In our view, unusual patterns of trading suggest a substantial
illegal short position in our shares, which we hope to verify through various
pre-trial discovery procedures.

On July 29, 2002, the same plaintiffs filed a related complaint against the same
defendants in the United States District Court for the District of Nevada. This
action alleges violations of various securities laws, including but not limited
to, sections 9 (a) and 10 (b) of the Securities Exchange Act of 1934, violations
of 18 U.S.C.A. 1962 and 1964 (commonly known as the Racketeer Influenced and
Corrupt Organizations Act), common law fraud, conspiracy and negligent
misrepresentation by the defendants. In this action, the plaintiffs seek an
accounting of all profits made by the defendants in trading JAG Media stock,
disgorgement of any profits made by those defendants, actual damages incurred as
a result of the defendants' trading activities, exemplary damages for the
defendants' intentional conduct, treble damages for the defendants' alleged RICO
violations and attorneys fees and costs incurred as a result of this litigation.
In our view, unusual patterns of trading suggest an illegal coordinated effort
to affect the price of our shares, which we hope to verify through various
pre-trial discovery procedures.

There are no currently pending material law suits or similar administrative
proceedings against JAG Media and, to the best of our knowledge, there is
presently no basis for any other suit or proceeding.


                                       25
<PAGE>

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 THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

From March 26, 1999 through April 8, 2002, our common stock was traded in the
over-the-counter market on the Nasdaq OTC Bulletin Board under the symbol JNOT.
Prior to that date, the stock was traded under the symbol PFSS with only limited
and sporadic trading.

The following table reflects quarterly high and low sales prices of our common
stock from March 26, 1999 through April 8, 2002, the date of our
recapitalization. Such prices are inter-dealer quotations without retail
mark-ups, mark-downs or commissions, and may not represent actual transactions.

                                                      High            Low
                                                      ----            ---

Fiscal Year 2000
----------------
First Quarter, ending October 31, 1999               $8.19            $5.38
Second Quarter, ending January 31, 2000               8.00             3.38
Third Quarter, ending April 30, 2000                  5.50             1.50
Fourth Quarter, ending July 31, 2000                  2.88             0.81

Fiscal Year 2001
----------------
First Quarter, ending October 31, 2000                2.13             0.94
Second Quarter, ending January 31, 2001               1.16             0.13
Third Quarter, ending April 30, 2001                  0.27             0.04
Fourth Quarter, ending July 31, 2001                  0.45             0.04

Fiscal Year 2002
----------------
First Quarter, ending October 31, 2001                0.32             0.05
Second Quarter, ending January 31, 2002               0.49             0.05
Third Quarter, through April 8 2002                   1.40             0.34

On April 8, 2002, we effected a recapitalization of our common stock pursuant to
which each one and one-tenth (1.1) shares of our outstanding common stock was
reclassified into one (1) share of Class A common stock and one-tenth (1/10th)
of a share of Series 1 Class B common stock.

Our Class A common stock trades in the over-the-counter market on the Nasdaq OTC
Bulletin Board under the symbol JGMHA. The following table reflects quarterly
high and low sales prices of our Class A common stock from April 9, 2002 through
July 31, 2002. Such prices are inter-dealer quotations without retail mark-ups,
mark-downs or commissions, and may not represent actual transactions.


                                       26
<PAGE>

                                                       High            Low
                                                       ----            ---

April 9, 2002 through April 30, 2002                  $1.50           $0.50
Fourth Quarter, ending July 31, 2002                   0.82            0.23

Fiscal Year 2003
----------------
First Quarter, ending October 31, 2002                 0.51            0.21
Second Quarter, through November 8, 2002               0.37            0.32

As of November 1, 2002, there were 1,244 stockholders of record of our Class A
common stock. On November 8, 2002, the closing bid price for our Class A common
stock was $0.325.

Rights of  Security Holders

We have the authority to issue two hundred million (200,000,000) shares, of
which: (i) one hundred fifty-five million (155,000,000) shares shall be Class A
common stock, par value $0.00001; (ii) thirty million (30,000,000) shares shall
be Class B common stock, par value $0.00001, of which three million (3,000,000)
shares have been designated Series 1 Class B common stock; and (iii) fifteen
million (15,000,000) shares shall be preferred stock.

As of November 1, 2002, we had (i) 34,739,488 shares of Class A common stock
issued and outstanding, (ii) 1,540,141 shares of Series 1 Class B common stock
issued and outstanding, and (iii) no shares of preferred stock issued and
outstanding.

General. Except as otherwise required by the laws of the State of Nevada or as
otherwise provided in our Articles of Incorporation, as amended, each share of
Class A common stock will have identical rights, preferences, privileges and
restrictions as the existing common stock. The Series 1 Class B common stock
will have identical rights, preferences, privileges and restrictions as the
existing common stock except that each full share of Series 1 Class B common
stock will be convertible, at the option of the holder, into one share of Class
A common stock. In addition, all shares of Series 1 Class B common stock will be
redeemable by JAG Media at any time. The redemption price for each share of
Series 1 Class B common stock is equal to the closing price of one share of
Class A common stock for the business day immediately prior to the date of
redemption as quoted on the Nasdaq OTC Bulletin Board. At the option of our
Board of Directors, we may pay the redemption price in either cash, shares of
Class A common stock valued at the closing price of one share of Class A common
stock for the business day immediately prior to the date of redemption or a
combination thereof.. Our Board of Directors is also authorized to issue other
series of Class B common stock and preferred stock with the designation of each
series and their rights, preferences, privileges and restrictions to be
determined by our Board of Directors. All outstanding shares of Class A common
stock, Series 1 Class B common stock and preferred stock, when validly issued,
will be fully paid and non-assessable.

Voting. All shares of Class A common stock will be entitled to one vote on any
matter to be voted on by the stockholders of JAG Media. Each share of Series 1
Class B common stock will be entitled to one vote on any matter to be voted on
by the stockholders of JAG Media and shall vote together with the Class A common
stock, except as provided by law. There is no provision in our Articles of
Incorporation permitting cumulative voting. Under our Articles of Incorporation
and the laws of the State of Nevada, only the affirmative vote of the holders
representing a majority of the outstanding voting power of Class A common stock
and Series 1 Class B common stock entitled to vote will be required to amend our
Articles of Incorporation.


                                       27
<PAGE>

Dividends and Distributions. Each share of Class A common stock and Series 1
Class B common stock will be equal in respect to dividends and other
distributions in cash, stock or property, including distributions in connection
with any recapitalization and upon liquidation, dissolution, or winding up of
JAG Media.

Mergers, Consolidations and Liquidation. Each holder of Class A common stock and
Series 1 Class B common stock will be entitled to receive an equal amount per
share consideration in the event of a merger, consolidation or liquidation.

Preemptive Rights. None of the Class A common stock or Series 1 Class B common
stock will carry any preemptive rights enabling a holder to subscribe for or
receive shares of JAG Media of any class or any other securities convertible
into any class of our shares.

Other Series of Class B Common Stock. Our Board of Directors is authorized to
issue new series of Class B common stock other than the Series 1 Class B common
stock and the terms of any new series of Class B common stock, including
dividend rates, conversion prices, voting rights, redemption prices and similar
matters, shall be determined by our Board of Directors.

Preferred Stock. Our Board of Directors is authorized to issue the preferred
stock and the terms of the preferred stock, including dividend rates, conversion
prices, voting rights, redemption prices and similar matters, shall be
determined by our Board of Directors.

Future Financings and Acquisitions. We have authorized 155,000,000 shares of
Class A common stock, 30,000,000 shares of Class B common stock, of which
3,000,000 shares have been designated as Series 1 Class B common stock, and
15,000,000 shares of preferred stock. Therefore, our Board of Directors may
issue additional shares of Class A common stock and Class B common stock and
shares of preferred stock, from time to time in the future, for any proper
corporate purpose, including public and private equity offerings, convertible
debt offerings, stock splits, stock dividends, acquisitions, warrants, stock
option plans, and funding of employee benefit plans. No further action or
authorization by our stockholders would be necessary prior to the issuance of
additional shares of Class A common stock or Class B common stock or the
issuance of the preferred stock. The future issuance by us of shares of Class A
common stock, Class B common stock or preferred stock may dilute the equity
ownership position and the rights, preferences and privileges of existing
stockholders. Unissued shares of common stock or preferred stock could be issued
in circumstances that would serve to preserve control of our existing
management.

Anti-Takeover Effects. We recently implemented a recapitalization which involved
the authorization of 100,000,000 additional shares of stock. Without further
stockholder action, our Board of Directors could authorize the issuance of all
or any part of such additional shares, including a new series of Class B common
stock and/or 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
of JAG Media. As a result, the recapitalization might have the effect of
preventing or discouraging an attempt by a party unable to obtain the approval
of the Board of Directors of JAG Media to take over or otherwise gain control of
JAG Media. As of the date of this annual report on Form 10-KSB, management knows
of no specific effort to accumulate securities of JAG Media or to obtain control
of JAG Media by means of a merger, amalgamation, tender offer or solicitation in
opposition to management or otherwise.


                                       28
<PAGE>

Options

As of July 31, 2002, there were options outstanding to purchase an aggregate of
2,724,145 shares of our Class A common stock and 45,455 shares of our Series 1
Class B common stock at exercise prices ranging from $0.02 to $3.50 per share,
subject to certain vesting requirements, at any time prior to various dates
through March 2012, provided, however, that certain of these options will expire
prior to such dates upon the termination of certain contracts with us.

Warrants

As of July 31, 2002, the following warrants to purchase shares of our Class A
common stock and Series 1 Class B common stock were outstanding:

         o        warrants to purchase, at any time prior to March 15, 2005,
                  681,818 shares of Class A common stock and 68,182 shares of
                  Series 1 Class B common stock at $6.00 per share;

         o        warrants to purchase, at any time prior to June 12, 2005,
                  25,000 shares of our Class A common stock at $2.00 per share;
                  and

         o        warrants to purchase, at any time prior to July 21, 2005,
                  509,091 shares of our Class A common stock and 50,909 shares
                  of Series 1 Class B common stock at $2.00 per share.

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.
Payment of future cash dividends will be determined by our Board of Directors
based upon conditions then existing, including our financial condition, capital
requirements, cash flow, profitability, business outlook and other factors. In
addition, our future credit arrangements may restrict the payment of dividends.

Recent Sale of Unregistered Securities

We have made the following sales of unregistered securities within the last
three years:

As of April 9, 2002, we entered into a $10,000,000 Equity Line Purchase
Agreement with Cornell Capital Partners, L.P., a limited partnership managed by
Yorkville Advisors Management, LLC, a Delaware limited liability company,
pursuant to which it can put its shares of Class A common stock, once registered
with the SEC, from time to time, at a purchase price equal to 95% of the lowest
closing bid price for such shares over the five trading days preceding the sale
of such shares. In connection with this Equity Line Purchase Agreement, we
issued Westrock Advisors, Inc. a placement agent fee of 10,000 shares of its
Class A common stock. We also have agreed to pay a 5% cash fee to Cornell
Capital payable out of each drawdown under the equity line. The investments
under this Equity Line Purchase Agreement will be made in reliance upon
Regulation D.


                                       29
<PAGE>

On December 31, 2001, we entered into a consulting agreement with FAS Holdings,
Inc. pursuant to which we agreed to issue a warrant to acquire 1,000,000 shares
of its common stock to FAS in exchange for financial advisory services to be
provided by a subsidiary of FAS. The warrant was issued on April 9, 2002. The
issuance of such securities was exempt from registration under the Securities
Act of 1933 pursuant to Section 4(2) thereof. The warrant was subsequently
assigned on April 12, 2002 to First Allied Capital Group, LLC, an affiliate of
FAS Holdings. On April 10, 2002, First Allied Capital Group, LLC exercised the
warrant in full. The issuance of such securities was exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2) thereof.

On October 5, 2001, we entered into a Settlement Agreement with Strategic Growth
International, Inc., pursuant to which we agreed to issue to Strategic Growth
International 441,807 shares of our common stock in lieu of $57,434.52 in cash
payments which were owed to Strategic Growth International under an investor
relations services agreement.

On August 17, 2001, we entered into a $10,000,000 Equity Line Purchase Agreement
with Cornell Capital Partners, L.P., a limited partnership managed by Yorkville
Advisors Management, LLC, a Delaware limited liability company, pursuant to
which it can put its shares, once registered with the SEC, from time to time, at
a purchase price equal to 95% of the lowest closing bid price for such shares
over the five trading days preceding the sale of such shares. In connection with
this Equity Line Purchase Agreement, we issued Cornell Capital an investor's fee
of 1,500,000 shares of its common stock. We also have agreed to pay a 5% cash
fee to Cornell Capital payable out of each drawdown under the equity line. The
investments under this Equity Line Purchase Agreement were made in reliance upon
Regulation D. From August 17, 2001 through July 31, 2002, Cornell Capital was
required to pay $671,459 and it received 5,661,510 shares of common stock as a
result of the exercise of put options under the equity line, and the Company
received proceeds of $632,884, net of $38,575 of placement fees. The per share
prices and the number of shares sold under the equity line are as follows:

            Price Per Share                 Number of Shares Sold
            ---------------                 ---------------------
            $0.10                           316,873

            $0.057                          555,918

            $0.052                          480,769

            $0.0475                         526,316

            $0.1045                         956,938

            $0.1948                         513,347

            $0.1615                         522,916

            $0.1567                         538,934

            $0.1425                         663,796

            $0.1615                         585,703
            -------                         -------
            $.1178 (Average Price)          5,661,510 (Total Shares Sold)


                                       30
<PAGE>

Our equity line purchase agreement, dated August 17, 2001, has been superseded
by a new agreement with Cornell Capital dated as of April 9, 2002.

On July 21, 2000, we entered into a consulting agreement with The May Davis
Group, Inc. pursuant to which we issued warrants to acquire an aggregate of
1,250,000 shares of our common stock to May Davis and five of its affiliates in
exchange for investment banking services. The issuance of such securities was
exempt from registration under the Securities Act of 1933 pursuant to Section
4(2) thereof.

On June 14, 2000, we entered into a $10,000,000 Equity Line of Credit Agreement
with CALP II, a Bermuda limited partnership, pursuant to which we could put our
shares, from time to time, at a purchase price equal to 85% of the average of
the five lowest closing bid prices for such shares over the ten trading days
preceding the sale of such shares, subject to volume limitations based upon
current trading volumes and market price per share. In connection with the
Equity Line of Credit Agreement, we issued CALP II a five-year stock purchase
warrant to purchase 428,571 shares of our common stock. We agreed to pay a 10%
finders' fee and issue warrants to acquire 250,000 shares of our common stock to
certain placement agents in connection with this transaction. The investments
under the Equity Line of Credit Agreement were made in reliance upon Regulation
S. In the equity line of credit agreement, CALP II, a Bermuda limited
partnership, represented to us that it was qualified to make the investments
described in the agreement under the provisions of Regulation S. CALP II further
represented that it was an "accredited investor" as that term is defined in Rule
501(a)(3) of Regulation D of the Securities Act. In the agreement, CALP II
agreed not to transfer any of the securities it was issued under the equity line
in the United States or to a "U.S. Person" (as defined in Regulation S), except
pursuant to an effective registration statement under the Securities Act or an
exemption from such registration and in compliance with any applicable U.S.
securities laws or blue sky laws. Discussions with the control person of CALP II
regarding the equity line took place while such person was outside of the United
States. The issuance of warrants to the placement agents for this transaction
was exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) thereof.

On June 12, 2000, we closed a private sale of a convertible debenture in the
principal amount of $2,500,000 due June 12, 2003 and bearing interest at 8% per
year, which was convertible into shares of our common stock, to CALP II, a
Bermuda limited partnership. The issuance of such securities was exempt from
registration under the Securities Act of 1933, as amended, pursuant to
Regulation S promulgated thereunder. In the securities purchase agreement with
CALP II, the parties acknowledged that the debenture was being offered to CALP
II through Thomson Kernaghan & Company, Ltd. only outside of the United States
and to a purchaser that is not a citizen or resident of the United States. Also
in the agreement, CALP II, a Bermuda limited partnership, represented to us that
it was buying the debenture, and upon conversion of the debenture it would
acquire the underlying shares of common stock, for its own account for
investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or
exempt under the Securities Act. CALP II further represented that it was an
"accredited investor" as that term is defined in Rule 501(a)(3) of Regulation D
of the Securities Act. The legend on the face of the debenture states that the
securities are restricted and may not be offered or sold in the United States or
to U.S. Persons (as such term is defined in Regulation S) unless registered
under the Securities Act, pursuant to Regulation S or pursuant to available
exemptions from the registration requirements of the Securities Act. The legend
further states that the investor will provide to us an opinion of counsel or
other information as we may reasonably require to confirm that such exemptions
are available. Discussions with the control person of CALP II regarding the sale
of the convertible debenture took place while such person was outside of the
United States.


                                       31
<PAGE>

On March 15, 2000, we entered into a consulting agreement with M.S. Farrell &
Co. pursuant to which we issued warrants to acquire 750,000 shares of our common
stock to M.S. Farrell in exchange for investment banking services. The issuance
of such securities was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) thereof.

On March 14, 2000, we entered into an agreement with Strategic Growth
International, Inc. pursuant to which we granted options to acquire 500,000
shares of our common stock to Strategic Growth International in exchange for
investor relations services. The issuance of such securities was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) thereof.

In January 2000, we closed a private sale of 785,715 shares of common stock to
Reliant Limited, a corporation organized under the laws of the Isle of Man, for
cash consideration of $2,750,000. The issuance of such securities was exempt
from registration under the Securities Act of 1933, as amended, pursuant to
Regulation S promulgated thereunder. Reliant executed an Offshore Securities
Subscription Agreement dated January 17, 2000 in which it represented to us that
(i) it was not a U.S. Person (as defined in Regulation S), (ii) the common stock
was not offered to Reliant in the United States and that, at the time of
execution and delivery of the agreement, Reliant was outside the United States,
(iii) to the knowledge of Reliant, we did not conduct any "directed selling
efforts" (as defined in Regulation S), (iv) all offers and sales of the
securities prior to the expiration of a period commencing on the closing and
ending one year thereafter (as prescribed by Rule 903(b) of Regulation S) would
not be made to U.S. Persons or for the account or benefit of such persons and
(v) all offers and sales of the securities would be made in compliance with the
provisions of Regulation S. Reliant further represented that it was an
accredited investor (as such term in defined in Regulation D) and that it was
purchasing the shares for its own account for investment and not with a view
toward distribution. The shares issued to Reliant contained a legend which
clearly stated that the shares could not be transferred other than in compliance
with Regulation S.



ITEM 6. 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-KSB. 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-KSB, particularly in "Risk Factors."


                                       32
<PAGE>

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. 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. We base our
estimates on historical experience and on other assumptions that are believed to
be reasonable under the circumstances. Accordingly, actual results could differ
from these estimates under different assumptions or conditions. This section
summarizes the critical accounting policies and the related judgments involved
in their application.

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.

We have adopted the provisions of Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" ("SFAS 121"). Under SFAS 121, impairment losses on
long-lived assets, such as equipment and capitalized web site development costs,
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. We do not expect that a new
pronouncement amending SFAS 121 will have any material effects on our financial
statements at the time it becomes effective. During the year ended July 31,
2002, we recognized a charge of approximately $264,000 for the write off of
unamortized web site development costs that had been capitalized when we
redesigned our web site during the year ended July 31, 2000. Those costs were
deemed to have been totally impaired as a result of a declining subscriber base
and our decision to terminate our efforts to commercially develop real time
video programming. In addition, during the year ended July 31, 2001 we
determined that our investments in two companies that were carried at a cost of
$500,000 were impaired since these companies never commenced significant
operations and, accordingly, we recorded an impairment charge of $500,000 during
the year then ended.

We account for stock options, common stock and similar equity instruments issued
to employees as compensation using fair value based methods pursuant to
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). Accordingly, we estimate the fair value of options
using an option-pricing model (generally, the Black Scholes model) that meets
the criteria set forth in SFAS 123 and common stock using the market value of
our stock. We record such value through charges to compensation cost and
corresponding credits to equity. The charges to compensation cost are amortized
to expense over the vesting period. In accordance with SFAS 123, all other
issuances of common stock, stock options or other equity instruments to
employees and nonemployees as consideration for goods or services received by us
are accounted for based on the fair value of the consideration received or the
fair value of the equity instrument, whichever is more readily measurable. Such
fair value is measured at an appropriate date pursuant to the guidance in the
consensus reached for EITF Issue No. 96-18 (generally, the earlier of the date
the other party becomes committed to provide goods or services or the date the
performance by the other party is complete) and capitalized or expensed as if we
had paid cash for the goods or services. For purposes of determining the fair
value of options and warrants using the Black-Scholes option pricing model we
have estimated the life of options and/or warrants to be five years. Given an
active trading market for our common stock, we estimate the volatility of our
stock based on week ending closing prices over a historical period of not less
than one year.


                                       33
<PAGE>

From time to time we issue stock at a discount and other equity instruments,
such as warrants and options, as incentives for companies to enter equity
financing agreements with us, as more fully described below in liquidity and
capital resources. We do not record the fair value of such incentives since
recording such value would only result in an equivalent increase and decrease in
additional paid-in capital and would not result in a charge to any asset,
liability or expense account. However such incentives do have an economic value
to the recipient and to us and they also result in the dilution of the equity of
the interests of other holders of our equity securities.

Due to uncertainties related to, among other things, potential changes in
ownership which could subject our net operating loss carryforwards to
substantial annual limitations, and 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.

Related party transactions

As more fully described elsewhere in this document, concurrent with the sale of
JAGfn Broadband LLC we entered into a one-year services agreement with JAGfn for
shared facilities and administrative services. Pursuant to the terms of the
agreement, JAGfn agreed to pay the salary under the existing employment
agreements between us and each of our executive officers who continued to be
responsible for managing both companies and we agreed to reimburse JAGfn for 10%
of such salary costs. In addition, they agreed to provide us with office space
and provide technical support for our web site as well as bookkeeping, telephone
and fax services. During the period from February 1, 2001 through July 31, 2001
reimbursements of such costs to JAGfn totaled approximately $110,000. Management
believes that the terms of the services agreement resulted in a reasonable
allocation of common expenses.

On April 1, 2002 two of our executive officers loaned JAG Media a total of
$400,000 subject to the terms and conditions of unsecured promissory notes that
bear interest at an annual rate of 2.69% that were due and payable on July 1,
2002. The maturity dates of these notes were extended to August 15, 2002 by
amendments dated June 26, 2002. On August 15, 2002, the notes were again amended
and the maturity date was extended to the earlier of (i) January 31, 2003 or
(ii) the effective date of a "change in control" of JAG Media as defined in our
Long-Term Incentive Plan.


                                       34
<PAGE>

Year ended July 31, 2002 as compared to the year ended July 31, 2001

Revenues:

Revenues primarily consist of subscription revenues from annual, semi-annual,
quarterly and monthly subscriptions relating to our product "JAG Notes."
JAGNotes 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. Until May 1999, JAGNotes was
faxed to a limited audience of financial professionals at an average monthly
charge of $150. During the year ended July 31, 1999 we were in the process of
changing our focus to also include the retail investor by providing a variety of
investment information including but not limited to the JAGNotes through our web
site. During the year ended July 31, 2002 subscription revenues decreased as
compared to the year ended July 31, 2001 with total subscription revenues for
the comparable periods of approximately $625,000 and $1,001,000, respectively.

As explained above in previous filings it was originally our intention to
increase subscription revenues through international expansion and increased
awareness of our U.S. web site. In addition, commensurate with the establishment
of JAGfn Broadband L.L.C., effective August 1, 2000 we began focusing much of
our efforts on the establishment of our webcasting or real time streaming video
programming through our web site. It was our hope that this additional service
would have provided our primary source of revenues in the form of advertising
income on a going forward basis and that subscription income would have been
ancillary to our operations as a whole. However, during the year ended July 31,
2001 we halted our international expansion plans and did not receive any
advertising income in connection with our real time streaming video programming.
As a result JAGfn was sold on February 1, 2001 resulting in a gain of
approximately $197,000. As a result of this change in focus we suffered a
significant decrease in subscription revenue. We have once again re-focused our
efforts on building the awareness of our JAGNotes product and our web site in an
attempt to increase subscription revenues.

While our revenues do include revenues from other sources, such as advertising,
these other revenues are not material to our operations as a whole. In addition,
we did not generate any revenues from our subsidiary JAG Company Voice LLC
("Company Voice") during the year ended July 31, 2002. Company Voice was formed
to provide production and distribution services to small and medium sized
publicly traded companies.

Cost of revenues:

Cost of revenues includes the cost to transmit the product over the telephone
and fax lines, on-line service charges for our web site, costs in connection
with the development and maintenance of the web site, payments to commentators
and employees for their reports that are posted on our web site and broadcast on
our webcast and salaries associated with the production of our webcast. During
the year ended July 31, 2002 cost of revenues decreased by approximately
$5,759,000 to approximately $1,146,000 from approximately $6,905,000 during the
year ended July 31, 2001.

The primary causes for this decrease were as follows:


                                       35
<PAGE>


         o        A decrease of approximately $2,994,000 in costs for our
                  commentators and consultants associated with our web site from
                  approximately $3,796,000 during the year ended July 31, 2001
                  to approximately $802,000 during the year ended July 31, 2002.
                  Such amounts included cash consideration of $82,000 and
                  $1,302,000 and non-cash charges related to the amortization of
                  unearned compensation and the issuance of stock options in
                  exchange for services of $720,000 and $2,494,000 during the
                  year ended July 31, 2002 and 2001, respectively. The decrease
                  in such costs is commensurate with the expiration of
                  consulting agreements entered into in prior years that were
                  not renewed. In addition, we were relieved of substantially
                  all of our obligations under various consulting agreements as
                  part of the sale of JAGfn effective February 1, 2001.

         o        During the year ended July 31, 2001 we incurred salary charges
                  of approximately $2,488,000 in connection with the production
                  of the JAGfn webcast. We were relieved of such costs
                  concurrent with the sale of JAGfn effective February 1, 2001.

         o        A decrease in costs associated with the development and
                  maintenance of our web site of approximately $263,000 from
                  approximately $504,000 during the year ended July 31, 2001 to
                  approximately $241,000 during the year ended July 2002. The
                  decrease results from the fact that during the year ended July
                  31, 2000 and continuing into the year ended July 31, 2001 we
                  re-designed our web site to integrate the JAGfn webcast and as
                  a result incurred additional costs.

The remainder of the decrease results from a decrease in telephone and fax costs
which coincides with the decrease on our fax subscriber base.

Selling expenses:

Selling expenses consist primarily of advertising and other promotional
expenses. During the year ended July 31, 2002 selling expenses decreased
approximately $110,000 to approximately $37,000 from their level of
approximately $147,000 during the year ended July 31, 2001. The major components
of this decrease are:

         o        An approximate $46,000 decrease in advertising and promotional
                  costs from approximately $49,000 during the year ended July
                  31, 2001 to approximately $3,000 during the year ended July
                  31, 2002.

         o        An approximate $64,000 decrease in business travel and
                  entertainment related expenses from approximately $98,000
                  during the year ended July 31, 2001 to approximately $34,000
                  during the year ended July 31, 2002.

The decrease in both of these expense categories results from our efforts to
better contain costs as we attempt to build our subscription base.

General and administrative expenses:


                                       36
<PAGE>

General and administrative expenses consist primarily of compensation and
benefits for the officers, other compensation, occupancy costs, professional
fees and other office expenses. General and administrative expenses decreased
approximately $5,303,000 during the year ended July 31, 2002 to approximately
$3,195,000 from approximately $8,498,000 during the year ended July 31, 2001.
The decrease in general and administrative expenses is primarily attributable to
the following:

         o        A decrease of approximately $1,196,000 in rent expense from
                  approximately $1,212,000 during the year ended July 31, 2001
                  to approximately $16,000 during the year ended July 31, 2002.
                  The decrease in rent expense is attributable to the lease
                  costs that were associated with our webcasting studio and
                  offices in New York City, which we no longer have.

         o        A decrease of approximately $4,166,000 in amortization of
                  unearned compensation, a non-cash charge, from approximately
                  $4,871,000 during the year ended July 31, 2001 to
                  approximately $705,000 during the year ended July 31, 2002.
                  These costs were associated with the issuance of common stock
                  options and warrants to investment bankers and other parties
                  for exploring business expansion opportunities on our behalf
                  during the fiscal year ended July 31, 2001. As of July 31,
                  2001 a significant portion of these costs had been fully
                  amortized thus resulting in the significant decrease.

These decreases were partially offset by an increase in professional fees of
approximately $178,000 from approximately $658,000 during the year ended July
31, 2001 to approximately $836,000 during the year ended July 31, 2002 and an
increase in data processing expenses of approximately $107,000 from
approximately $9,000 during the year ended July 31, 2001 to approximately
$116,000 during the year ended July 31, 2002. These increases are attributable
to various SEC filings in connection with our recapitalization and the
termination of JAGfn's activities resulting in the elimination of shared data
processing costs.

The remainder of the decrease is attributable to our efforts to better contain
costs.

Write-off of capitalized web site development costs:

During the year ended July 31, 2002, we recognized a charge of approximately
$264,000 associated with the write-off of our capitalized web site development
costs. Our web site was redesigned during 2001 to accommodate our webcast. As a
result of the sale of JAGfn, and the fact that we continue to incur net
operating losses, the carrying value of the capitalized web site costs was
deemed to be impaired in accordance with accounting principles generally
accepted in the United States of America.

Other income and expenses:

During the year ended July 31, 2001 we recognized a gain of approximately
$197,000 relating to the sale of JAGfn and wrote off approximately $500,000 of
investments in other companies.

Interest expense:


                                       37
<PAGE>

During the year ended July 31, 2001 we incurred interest expense of
approximately $1,827,000 of which $1,679,000 was associated with the
amortization of deferred financing costs and debt discounts associated with
outstanding convertible debentures. The remaining $148,000 was a result of
accrued interest on the outstanding principal balance of such debentures. These
debentures were assumed and/or cancelled concurrent with the sale of JAGfn.
During the year ended July 31, 2002 we incurred interest expense of
approximately $3,600 associated with short-term loans from two officers.

Net loss:

Primarily as a result of the above, we had a net loss of approximately
$3,795,000 during the year ended July 31, 2002 as compared to a net loss of
approximately $16,665,000 during the year ended July 31, 2001.

Liquidity and Capital Resources

During the years ended July 31, 2002 and 2001 we only generated revenues of
approximately $625,000 and $1,001,000 and incurred net losses of approximately
$4,021,000 and $16,665,000 and had cash flow deficiencies from operating
activities of approximately $1,184,000 and $5,563,000, respectively. As a
result, we had a cash balance of only $7,000, a working capital deficiency of
$1,299,000 and a stockholders' deficiency of approximately $1,244,000 as of
July 31, 2002. In addition, we believe that we will continue to incur net losses
and cash flow deficiencies from operating activities through at least July 31,
2003. These matters raise substantial doubt about our ability to continue as a
going concern.

We believe that, in the absence of a substantial increase in subscription
revenues, it is probable that we will continue to incur losses and negative cash
flows from operating activities through at least July 31 2003 and that we will
need to obtain additional equity or debt financing to sustain our operations
until we can successfully market our services, expand our customer base and
achieve profitability.

We believe that we will be able to generate sufficient revenues from our
remaining facsimile transmission and web site operations and obtain sufficient
financing from our New Equity Line Agreement described below or through other
financing agreements to enable us to continue as a going concern through at
least July 31, 2003. However, if we cannot generate sufficient revenues and/or
obtain sufficient additional financing, if necessary, by that date, we may be
forced thereafter to restructure our operations, file for bankruptcy or entirely
cease our operations.

Our cash and cash equivalent position of approximately $7,000 as of July 31,
2002 resulted primarily from a series of private placements.

On June 12, 2000, we sold CALP II Limited Partnership (the "Investor") a
convertible debenture that had a principal balance of $2,500,000, matured June
12, 2003 and bore interest at an annual rate of 8%. We received gross proceeds
from the sale of $2,500,000. The Investor also received a five-year stock
purchase warrant to purchase 428,571 shares of our common stock (389,610 and
38,961 of Class A and Series 1 Class B shares, respectively) at a price of $1.75
per share. Placement agents and their counsel received a fee of 10% of the
principal amount of the debenture as well as five-year stock purchase warrants
to purchase 275,000 shares of our


                                       38
<PAGE>

common stock (250,000 and 25,000 of Class A and Series 1 Class B shares,
respectively) at $2.00 per share. The aggregate fair value of the warrant issued
to the investor of $934,285 was recorded as a debt discount, and the fair value
of the warrants issued to placement agents and their counsel of $599,500 plus
cash of $285,000 was initially recorded as deferred finance costs. During the
year ended July 31, 2001 the Investor converted $1,052,000 of principal (which
had a carrying value net of debt discounts of approximately $715,000) and
approximately $37,000 of accrued interest into 3,376,952 shares of common stock.
(3,069,956 and 306,996 of Class A and Series 1 Class B shares, respectively).
The fair value of the Company's common stock on June 12, 2000 was $2.25 per
share, which exceeded the conversion price for the Debenture. Pursuant to the
consensus for EITF Issue No. 98-5, such excess constituted a beneficial
conversion feature or right for which the value was measured as of that date by
the difference between the aggregate conversion price and the fair value of the
common stock into which the securities are convertible, multiplied by the number
of shares into which the securities are convertible (the intrinsic value
method). Accordingly, the beneficial conversion rights attributable to the
issuance of the Debenture had a fair value of approximately $1,794,000, which
equaled the excess of the aggregate proceeds the Investor would have received if
the Investor had converted the Debenture and sold the 1,908,397 shares of common
stock (the amount of shares that would have been received if conversion occurred
on June 12, 2000) for approximately $4,294,000 based on the fair market value of
$2.25 per share on June 12, 2000. Since the Debenture became convertible upon
issuance, the Company recorded a charge of $1,565,715 to interest expense for
the beneficial conversion rights (the charge was limited to the principal
balance of the Debenture of $2,500,000 net of the fair value of $934,285
allocated to the warrants) and a corresponding increase in additional paid-in
capital on June 12, 2000.

Pursuant to the applicable guidance in the consensus for EITF Issue No. 00-27
which became effective on November 16, 2000, the Company was required to
determine the value of the beneficial conversion feature using the effective
conversion price instead of the intrinsic value method described above. Although
the application of EITF 00-27 and the use of the effective conversion price
would have increased the value of the beneficial conversion feature from
approximately $1,794,000 to $2,728,000, the incremental amount was not recorded
because of the limit of $1,565,715 imposed by EITF 98-5 and, accordingly, no
retroactive adjustments were made.

As of June 14, 2000, we entered into another financing agreement with the
Investor pursuant to which we could have required the Investor to purchase
shares of our common stock from time to time at an aggregate purchase price of
$10,000,000. We also agreed to issue to the Investor on each date on which the
Investor advanced funds to us under the Equity Line of Credit Agreement a
warrant to purchase a number of shares equal to 20% of the number of shares that
are subject to the advance. The exercise price for these warrants was equal to
110% of the highest reported bid price of the common stock for the five trading
days preceding the date on which an advance was made to us by the Investor. In
addition, the placement agents and their counsel received a fee equal to 10% of
the proceeds from the sale of any shares made pursuant to the Equity Line of
Credit Agreement. During the year ended July 31, 2001, we issued 1,135,850
shares of common stock (1,032,591 and 103,259 of Class A and Series 1 Class B
shares, respectively) and warrants to purchase 227,168 shares of common stock
(206,516 and 20,652 of Class A and Series 1 Class B shares, respectively) to the
Investor and received proceeds of $1,050,000, net of placement fees of $116,670,
pursuant to the Equity Financing Agreement. The warrants were exercisable at
prices ranging from $1.21 to $1.94 per share through September 2005.


                                       39
<PAGE>

On October 20, 2000, the Investor agreed to provide us with additional financing
totaling $3,000,000 through periodic purchases of a total of six additional
debentures during the period from October 20, 2000 to December 1, 2000. Each of
the six debentures had a principal balance of $500,000, bore interest at an
annual rate of 8% and matured three years from the date of its issuance. As
additional consideration in connection with the sale of the New Debentures, we
paid a 10% fee to placement agents and we also issued a warrant to the Investor
for the purchase of 3,000,000 shares of our common stock (2,727,272 and 272,728
of Class A and Series 1 Class B shares, respectively) at $1.25 per share that
was exercisable through October 20, 2005. The warrant issued to the Investor had
an estimated fair value of $3,450,000, as determined by the Black-Scholes
option-pricing model method pursuant to the provisions of SFAS 123, of which
$3,000,000 (which equals the principal balance of the debentures) was recorded
as debt discount and/or deferred financing costs. In January 2001, the Investor
purchased two additional convertible debentures, each of which had a principal
balance of $200,000. Since these debentures were convertible immediately upon
issuance, the fair value of beneficial conversion rights of $217,770 was charged
to interest expense during the year ended July 31, 2001.

Our obligations to repay the Investor under the terms of the convertible
debentures were discharged in connection with the sale of JAGfn and the warrants
issued in connection with the convertible debenture were cancelled. In addition,
the terms of the Equity Line of Credit Agreement and the warrants issued in
connection with it were cancelled as well.

On February 1, 2001, we sold our 85% interest in JAGfn to the Investor for
consideration comprised primarily of (i) a payment of approximately $1,002,000
in cash, (ii) an agreement to cancel our obligation our obligations to repay the
Investor under the convertible debentures, and the accrued interest thereon. The
Investor also agreed to, among other things, assume substantially all our
contractual obligations including, but not limited to, our leases, employment
and consulting agreements; the cancellation of warrants to purchase 3,912,000
shares of our common stock; the cancellation of the Equity Financing Agreement;
and the issuance of an option to us for the purchase of a 10% membership
interest in JAGfn for $5,000,000 at any time prior to July 31, 2002. We also
agreed to cancel JAGfn's obligation to repay intercompany advances.

The assets and liabilities of JAGfn as of January 31, 2001 are summarized below:


Current assets-prepaid expenses                                  $ 225,000

Equipment, net                                                     567,343
Capitalized web site development costs, net                         64,224
Other assets                                                        96,793
                                                              ------------
           Total assets                                            953,360
                                                              ------------

Current liabilities:
        Accounts payable and accrued expenses                     (341,044)
        Current portion of capital lease obligations               (47,186)
        Intercompany advances                                   (4,553,373)
                                                              ------------
           Total current liabilities                            (4,941,603)

Capital lease obligations, net of current portion                  (20,743)
                                                              ------------
           Total liabilities                                    (4,962,346)
                                                              ------------

Members' deficiency (A)                                       $ (4,008,986)
                                                              ============


                                       40
<PAGE>

         (A) The members' deficiency at January 31, 2001 is equivalent to
JAGfn's operating loss and net loss from the inception of its operations on
August 1, 2000 through January 31, 2001. JAGfn did not generate any revenues
through January 31, 2001.

As a result of the sale we recorded a gain during the year ended July 31, 2001
of $196,959 as shown below:

Cash paid by purchaser                                       $1,002,147
Net carrying value of cancelled convertible notes
           payable to purchaser (B)                           1,399,405
Members' deficiency of JAGfn                                  4,008,986
                                                             ----------
           Total                                              6,410,538
                                                             ----------

Less write off of:
        Intercompany advances                                $4,553,373
        Unearned compensation (A)                             1,660,206
                                                             ----------
               Total                                          6,213,579
                                                             ----------

Net gain                                                     $  196,959
                                                             ==========

         (A) Represents the balance of unamortized unearned compensation
associated with consulting and employment agreements assumed by JAGfn.

         (B) Represents the principal balance of the convertible debentures of
$4,848,000 and the accrued interest thereon of $133,173 less the related
unamortized deferred finance costs associated with the convertible debentures of
$405,626 and the unamortized debt discount associated with the convertible
debentures of $3,176,142

During year ended July 31, 2001 we used approximately $5,563,000 in our
operations. The major uses of this cash was to fund our net loss for the year
ended July 31, 2001. In addition, during the year ended July 31, 2001 we
incurred non-cash charges of approximately $7,881,000 related to the
amortization of unearned compensation and approximately $1,679,000 of non-cash
interest expense charges in connection with the convertible debentures.

During the year ended July 31, 2001 we received approximately $657,000 from
investing activities. In connection with the sale of JAGfn we received cash
proceeds of approximately $1,002,000. Such proceeds were offset by the use of
cash for the purchase of equipment, construction of our real time video studios
and additions to our web sites.


                                       41
<PAGE>

During year ended July 31, 2002 we used approximately $1,184,000 in our
operations. Although we had a net loss of approximately $4,021,000 for the year
ended July 31, 2002 such loss included net non-cash charges of approximately
$2,238,900 primarily associated with depreciation and amortization of our
equipment and capitalized web site development costs, amortization of unearned
compensation, the write-off of capitalized web site development costs and the
issuance of stock options in exchange for services. In addition we financed our
operations in part by an increase in trade accounts payable of approximately
$635,000.

On August 17, 2001, we entered into an equity line purchase agreement (the
"Original Equity Line Agreement") with Cornell Capital Partners, L.P. ("Cornell
Capital") pursuant to which we had, in effect, "put" options whereby, subject to
certain conditions, we had been able to require the investment partnership to
purchase shares of our common stock from time to time at prices based on the
market value and average daily trading volume of our shares. The maximum
aggregate purchase price under the Original Equity Line Agreement was
$10,000,000. The Original Equity Line Agreement was initially scheduled to
expire on September 27, 2004. However, it was terminated in April 2002 and was
replaced by another agreement with the investment partnership as further
described below.

Cornell Capital received 1,500,000 shares of our common stock (equivalent to
1,363,637 and 136,363 Class A and Series 1 Class B shares, respectively) of as
of August 17, 2001 as additional consideration for entering into the Original
Equity Line Agreement. Certain principals of Cornell Capital agreed to surrender
for cancellation outstanding warrants for the purchase of a total of 690,000
shares of the Company's common stock (equivalent to 627,273 and 62,727 Class A
and Series 1 Class B shares, respectively) that had been issued for consulting
services (the fair value of those warrants of $1,415,000, as determined by the
Black-Scholes option-pricing model at the date of issuance, had already been
charged to expense). Cornell Capital was also entitled to a cash fee equal to 5%
of the gross proceeds received by the Company in connection with each put. The
1,500,000 shares of the Company's common stock issued to Cornell Capital had an
approximate fair market value of $240,000 and the warrants for the purchase of
690,000 shares that were cancelled had an approximate fair market value of
$110,000 as of August 17, 2001. However, the Company did not record the fair
values of the 1,500,000 shares that were issued and the warrants to purchase
690,000 shares that were cancelled in connection with the Original Equity Line
Agreement since recording such values would have resulted in equivalent
increases and decreases in additional paid-in capital and would not have
resulted in a charge to any asset, liability or expense account.

During the year ended July 31, 2002, Cornell Capital was required to pay
$671,459 and it received 5,661,510 shares of common stock (5,146,828 and 514,682
Class A and Series 1 Class B shares, respectively) as a result of the exercise
of put options under the Original Equity Line Agreement, and we received
proceeds of $632,884, net of $38,575 of placement fees. The placement fees of
$38,575 represent primarily a discount of 5% from the gross purchase price for
the shares of $671,459. The gross purchase price was 95% of an amount determined
based on the market value and average daily trading volume of the Company's
shares. The difference between the market value of the shares and the gross
purchase price of the shares based on the terms of the Original Equity Line
Agreement was approximately $39,000.


                                       42
<PAGE>

On April 9, 2002, we entered into a new equity line purchase agreement (the "New
Equity Line Agreement") with Cornell Capital pursuant to which we will have, in
effect, new put options whereby, subject to certain conditions, we can require
Cornell Capital to purchase shares of our Class A common stock from time to time
at an aggregate purchase price of $10,000,000. The term of the New Equity Line
Agreement will extend for 24 months. It became available to us on August 28,
2002, the date a registration statement under the Securities Act of 1933 filed
by us for the registration of the shares issuable to Cornell Capital became
effective, unless the New Equity Line Agreement is terminated earlier at our
discretion. The purchase price will be 95% of the lowest closing bid price of
our Class A common stock over a specified number of trading days commencing on
specified dates. Cornell Capital shall be entitled to a cash fee equal to 5% of
the gross proceeds received by the Company from Cornell Capital in connection
with each put. The timing and amount of the required purchases shall be at our
discretion subject to certain conditions including (i) a maximum purchase price
to be paid by Cornell Capital for each put of $500,000 and (ii) a requirement
that at least five trading days must elapse before we can deliver a new put
notice to Cornell Capital. We have issued 10,000 shares of our Class A common
stock to placement agents as of the effective date as consideration for their
services in connection with the New Equity Line Agreement.

During the period from August 1, 2002 through October 28, 2002, Cornell Capital
was required to pay $1,050,000 and it received 4,249,639 shares of Class A
common stock and we received proceeds of $990,000 net of $60,000 of placement
fees as a result of the exercise by the Company of put options pursuant to the
New Equity Line Agreement. We were also required to issue an additional 10,000
shares of Class A common stock to placement agents in connection wit the sale of
the shares.

During the year ended July 31, 2002, options to purchase 3,427,125 shares of
Class A common stock were exercised resulting in proceeds of $144,853.

On April 1, 2002 two of our executive officers loaned the Company a total of
$400,000 subject to the terms and conditions of unsecured promissory notes that
bear interest at an annual rate of 2.69%. The maturity date of the notes has
recently been extended to August 15, 2002. At this time we do not have the means
to repay these notes. However, Cornell Capital has agreed to waive the covenant
in the New Equity Line that would have prohibited proceeds from being used to
repay debt and thereby allow for such officer loans to be repaid.

On August 15, 2002, the notes were again amended and the maturity date was
extended to the earlier of (i) January 31, 2003 or (ii) the effective date of a
"change in control" of JAG Media as defined in our Long-Term Incentive Plan.

In addition, during the year ended July 31, 2002, we issued 1,446,807 shares of
common stock (1,338,066 and 108,801 Class A and Series 1 Class B shares,
respectively) with a fair value of $877,390 and issued options to purchase
4,936,725 shares of Class A common stock with a fair value of $561,544 in
exchange for services.

At various times, during the period from August 1, 2002 through October 28,
2002, we issued a total of 635,604 shares of Class A common stock with an
aggregate fair value of $240,391 in satisfaction of $169,969 of accrued payroll
and issued 100,000 shares of Class A common stock with an aggregate fair value
of $37,500 to consultants for services provided to Company Voice.



                                       43
<PAGE>

On February 21, 2002, our stockholders approved an amendment to the articles of
incorporation pursuant to which the name of the Company was changed to JAG Media
Holdings, Inc. The stockholders also approved another amendment that authorized
the implementation of changes related to a recapitalization plan for the Company
that was consummated on April 8, 2002. Pursuant to the recapitalization plan,
(i) the total number of shares of all classes of capital stock authorized for
issuance was increased from 100,000,000 shares to 200,000,000 shares with a par
value of $.00001 per share, of which 15,000,000 shares became authorized for
issuance as preferred stock, 155,000,000 shares became authorized for issuance
as Class A common stock and 30,000,000 shares became authorized for issuance as
Class B common stock; and (ii) we issued 1 share of Class A common stock and .1
share of Class B common stock designated as Series 1 Class B common stock in
exchange for every 1.1 shares of common stock outstanding prior to the
recapitalization.

In addition, holders of stock options that were entitled to receive shares of
common stock upon exercise of stock options issued pursuant to the our incentive
stock option plan became entitled to receive an equivalent number of shares of
Class A common stock at the same exercise price upon exercise; holders of all
other stock options and warrants became entitled to receive a proportional
number of shares of Class A common stock and Series 1 Class B common stock at a
proportional exercise price upon exercise.

Each share of Series 1 Class B common stock is immediately convertible into one
share of Class A common stock. Each share of Series 1 Class B common stock also
may be redeemed by us at any time for either one share of Class A common stock
or equivalent cash value. Each share of Class A common stock and Series 1 Class
B common stock will be equal in respect to dividends and voting rights.
Therefore, each share of Series 1 Class B common stock is, for financial
reporting purposes, equivalent to one share of Class A common stock. In
addition, 1 share of Class A common stock and .1 share of Series 1 Class B
common stock is equivalent to 1.1 shares of common stock that were outstanding
before the recapitalization for financial reporting purposes

The recapitalization was effectively equivalent to a stock split and the numbers
of shares of common stock outstanding before the recapitalization have been
retroactively restated in the accompanying management discussion and analysis.

We do not believe that our business is subject to 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.

The FASB and the Accounting Standards Committee of the American Institute of
Certified Public Accountants had issued certain accounting pronouncements as of
July 31, 2002 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 years ended July 31, 2002 and 2001 or that they will have a
significant affect at the time they become effective.


                                       44
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

The financial statements of JAG Media provided pursuant to Item 7 of Form 10-KSB
are attached separately at the rear of this Annual Report on Form 10-KSB. Please
see the index below.

                          Index to Financial Statements
                          -----------------------------

                                                                          PAGE

Report of Independent Public Accountants                                  F-2

Consolidated Balance Sheet
     July 31, 2002                                                        F-3

Consolidated Statements of Operations
     Years Ended July 31, 2002 and 2001                                   F-4

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
     Years Ended July 31, 2002 and 2001                                   F-5/6

Consolidated Statements of Cash Flows
     Years Ended July 31, 2002 and 2001                                   F-7

Notes to Consolidated Financial Statements                                F-8/31



                                      * * *


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.



                                       45
<PAGE>


                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Following is certain information about our executive officers and directors.

Gary Valinoti, age 44, was a co-founder of the predecessor to JAG Media
Holdings, Inc. and has served as our President and Chief Executive Officer and
as a member of our Board of Directors since March 1999. Mr. Valinoti has been a
member of our Board of Directors since July 1999. From August 1992 until March
1999 Mr. Valinoti served as President, and as a member of the Board of
Directors, of JagNotes, Inc., the company that produced the JAGNotes fax service
throughout that period. Prior to his involvement with JagNotes, Inc., Mr.
Valinoti held positions with various firms in the securities industry including
Mosely, Hallgarten, Estabrook & Weeden where he was involved in institutional
and currency trading, and started the firm's arbitrage department. Mr. Valinoti
attended Wagner College.

Thomas J. Mazzarisi, age 45, has served as our Executive Vice President and
General Counsel since March 1999. Mr. Mazzarisi has also served as our Chief
Financial Officer since November 9, 2001. Mr. Mazzarisi has been a member of our
Board of Directors since July 1999. From 1997 until joining JAG Media Holdings,
Inc., Mr. Mazzarisi practiced law from his own firm in New York, specializing in
international commercial transactions. From 1988 until 1997, Mr. Mazzarisi was a
Senior Associate at the 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 43, has served as our Executive Vice President, Chief
Operating Officer and Secretary since July 1999. 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.



                                       46
<PAGE>


         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 at the Securities and Exchange Commission. Specific due dates for
these forms have been established, and we are required to disclose in this
report any failure to file by these dates.

Based solely on our review of the copies of such forms received by it with
respect to fiscal 2002, or written representations from certain reporting
persons, to the best of our knowledge, all reports were filed on a timely basis.


                                       47
<PAGE>


ITEM 10. EXECUTIVE COMPENSATION

Compensation of Executive Officers

The following table sets forth certain summary information regarding
compensation paid to our Chief Executive Officer and certain executive officers
for services rendered during the fiscal years ended July 31, 2000, 2001 and
2002. Except as listed in the table below, no executive officer holding office
in fiscal year 2002 received total annual salary and bonus exceeding $100,000.
No such officers have been awarded any stock options, stock appreciation rights
or other long term or incentive compensation not reflected below.

                               Annual Compensation
                               -------------------
<TABLE>
<CAPTION>
                                                                                                     Long-Term
                                                                                                    Compensation
                                                                                                   Common Shares
                                                                                  Other              Subject to
                                    Fiscal                                        Annual               Options          All Other
Name and Principal Position          Year         Salary          Bonus        Compensation            Granted        Compensation
---------------------------          ----         ------          -----        ------------            -------        ------------

<S>                                 <C>            <C>           <C>            <C>                 <C>                  <C>
Gary Valinoti, President,           2002           $150,000            --             --            1,000,000(1)           --
Chief Executive Officer,
President and director              2001           $150,000            --             --              900,000(2)           (3)

                                    2000           $100,000            --             --               --                  --

Stephen J. Schoepfer,               2002           $150,000            --             --            1,000,000(1)           --
Executive Vice President,
Chief Operating Officer and         2001           $150,000            --             --              900,000(2)           (3)
Secretary
                                    2000           $100,000        $50,000            --               --                  --

Thomas J. Mazzarisi,                2002           $150,000            --             --            1,000,000(1)           --
Executive Vice President,
Chief Financial Officer and         2001           $150,000            --             --              900,000(2)           (3)
General Counsel
                                    2000           $100,000            --             --               --                  --

Raymond G. Taylor,                  2002            $25,000            --             --               --                  --
(Mr. Taylor served as Chief
Financial Officer of JAG            2001            $65,000            --             --               --                  --
Media Holdings, Inc. from
April 1, 2001 to November 9,        2000                 --            --             --               --                  --
2001, but is no longer
employed by JAG Media.)

Stephen R. Russo                    2002                 --            --             --               --                  --
(Mr. Russo served as Chief
Financial Officer of JAG            2001                 --            --             --               --                  --
Media Holdings, Inc. until
April 2001, but is no longer        2000            $20,000            --             --               --                  --
employed by JAG Media.)

Jeffrey Goss (Mr. Goss              2002                 --            --             --               --                  --
served as Secretary and Vice
President of JAG Media              2001                 --            --             --               --                  --
Holdings, Inc. until June
2000, but is no longer              2000            $86,997            --             --               --                  --
employed by JAG Media.)
</TABLE>


                                       48
<PAGE>


         (1)      In lieu of the 900,000 options granted to the executive on
                  December 14, 2000, which options were cancelled effective
                  August 31, 2001, the executive was granted options to purchase
                  1,000,000 shares of our common stock at an exercise price of
                  $0.02 per share pursuant to an amended and restated employment
                  agreement dated August 31, 2001.

         (2)      Received a grant of options to purchase 900,000 shares of our
                  common stock at an exercise price of $0.25 per share on
                  December 14, 2000, pursuant to the terms of an employment
                  agreement with us, which options were cancelled effective
                  August 31, 2001.

         (3)      Received grant of a 5% equity interest in JAGfn Broadband LLC,
                  our former webcast subsidiary, on December 14, 2000 which had
                  no value at the time of grant.

Option Grants in Fiscal Year 2002.

No freestanding SARs or restricted stock awards were granted to, or exercised
by, any of our named executive officers during the fiscal year ended July 31,
2002.

The following table sets forth information regarding options to acquire shares
of our common stock granted under our Long-Term Incentive Plan to our Chief
Executive Officer and our other three executive officers as of July 31, 2002.

                OPTION GRANTS IN PERIOD BEGINNING AUGUST 1, 2001
                            AND ENDING JULY 31, 2002

<TABLE>
<CAPTION>



                                              Percentage of
                                                  Total
                                           Options Granted to
                                                Employees
                                                in the period
                              Number of         beginning
                              Securities   August 1, 2001 and
                              Underlying          ended             Exercise or
                               Options          July 31,          Base Price Per     Market Price on
Name                           Granted            2002               ($/Share)      the Date of Grant    Expiration Date
----                           -------            ----               ---------      -----------------    ---------------

<S>                   <C>                        <C>                <C>                   <C>            <C>   <C>
Gary Valinoti         1,000,000 (1)(2)            29.2%              $0.02(1)              $0.08          08/31/11(1)
Stephen J. Schoepfer   1,000,000(1)(2)            29.2%               0.02(1)               0.08          08/31/11(1)
Thomas J. Mazzarisi    1,000,000(1)(2)            29.2%               0.02(1)               0.08          08/31/11(1)
Raymond G. Taylor            0                    0%                     *                   *                *
</TABLE>

*        Not applicable.

(1) On August 31, 2001 we granted to each of Messrs. Valinoti, Schoepfer and
Mazzarisi options to purchase 1,000,000 shares of our common stock exercisable
at a price per share of $0.02. Each of these stock options vested immediately on
August 31, 2001 and terminate on the earlier of August 31, 2011 or the 90th day
following the termination of such executive's employment with us.


                                       49
<PAGE>

(2) Options are subject to the terms of our 1999 Long-Term Incentive Plan, as
amended, and can be exercised, in whole or in part, by the executive on a
cashless basis.


Report on Repricing of Options.

Our Board believes that the retention of executives who possess an in depth
knowledge of our operations, contacts within the professional financial
community for certain information that we provide to our subscribers and the
skills and expertise required to lead our organization is vital to our
competitive strength. It is the policy of our Board to award stock options to
our executive officers in order to align their interests with those of our
long-term investors and to help attract and retain these persons. It is our
Board's goal to preserve this incentive as an effective tool in compensating,
motivating and retaining our executives. We grant these options at exercise
prices below the market price of our stock in order to provide an immediate form
of compensation to our executives. To that end, there is ongoing review by the
Board of the market price of our common stock and the grant price of options.

For the reasons described above, when we entered into amended and restated
employment agreements on August 31, 2001 with our three key executive officers,
Messrs. Valinoti, Schoepfer and Mazzarisi, we agreed to grant each of them new
immediately exercisable stock options to acquire 1,000,000 shares of our common
stock at an exercise price of $0.02 per share, representing 25% of the closing
bid price of our common stock on the date of grant. In exchange for these new
options, each of Messrs. Valinoti, Schoepfer and Mazzarisi surrendered for
cancellation the options to acquire 900,000 shares of our common stock at $0.25
per share that we granted to them on December 14, 2000 pursuant to the terms and
conditions of their original employment agreements. The closing bid price of our
common stock on December 14, 2000 was $0.3125 per share.


Equity Compensation Plan Information as of July 31, 2002.
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------
                                                                                                           Number of
                                                                                                          securities
                                                                                                           remaining
                                                                                                         available for
                                                        Number of                                    future issuance
                                                     securities to be                                    under equity
                                                       issued upon            Weighted average        compensation plans
                                                       exercise of           exercise price of            (excluding
                                                       outstanding              outstanding               securities
                                                    options, warrants        options, warrants           reflected in
                                                        and rights               and rights               column (a))
                                                           (a)                      (b)                       (c)
-----------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                     <C>                      <C>
Equity compensation plans approved by
security holders.....................                Not applicable          Not applicable            Not applicable
-----------------------------------------------------------------------------------------------------------------------
1999 Long-Term Incentive Plan (not approved by
security holders)..........................          2,269,600               $0.297                    3,730,400 (1)
-----------------------------------------------------------------------------------------------------------------------
Individual Compensation Arrangements (not
approved by security holders)..............          1,835,000 (2)           $3.94                             0
-----------------------------------------------------------------------------------------------------------------------
                  Total....................          4,104,600               $0.39                     3,730,400 (1)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

(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 Class A 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.

(2) See Note 7 to Financial Statements.


                                       50
<PAGE>

Option Exercises in Fiscal Year 2002.


The following table sets forth certain information regarding the stock options
exercised during the fiscal year ended July 31, 2002 and the stock options held
as of July 31, 2002 by our Chief Executive Officer and our other three executive
officers.

                AGGREGATE OPTION EXERCISES IN 2002 OPTION VALUES
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------------
                          Shares                     Number of Shares Underlying                    Value of Unexercised
     Name                Acquired       Value            Unexercised Options at                    In-the-Money Options at
                       on Exercise    Realized              July 31, 2002                                July 31, 2002


                                                           Exercisable       Unexercisable      Exercisable      Unexercisable
                                                           -----------       -------------      -----------      -------------
<S>                        <C>          <C>                 <C>                    <C>            <C>                   <C>
Gary Valinoti              0            0                   1,000,000              0              $390,000              0

Stephen J. Schoepfer       500,000      $437,721             500,000               0              $195,000              0

Thomas J. Mazzarisi        500,000      $522,719             500,000               0              $195,000              0

Raymond G. Taylor          100,000      $35,475                 0                  0                 $0                 0
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Mr. Taylor resigned from his position as Chief Financial Officer of JAG Media
effective November 9, 2001 and subsequently exercised his options into shares of
common stock. To our knowledge, Mr. Taylor no longer owns any shares of JAG
Media stock.

During March 2002, Mr. Mazzarisi and Mr. Schoepfer each exercised options to
purchase 500,000 shares of our common stock.

As a result of the recapitalization of our common stock into Class A shares and
Class B shares, all outstanding options entitling the holders thereof to
purchase shares of our common stock now enable such holders to purchase, upon
exercise of their options, the same number of shares of Class A common stock.

Director Compensation

We currently do not compensate our directors for their services in such
capacity.

1999 Long-Term Incentive Plan

In October, 1999 the Board of Directors approved the 1999 Long-Term Incentive
Plan. This plan was most recently amended in April 2002. The purpose of the plan
is to allow us to attract and retain officers, employees, directors, consultants
and certain other individuals and to compensate them in a way that provides
additional incentives and enables such individuals to increase their ownership
interests in JAG Media. Individual awards under the plan may take the form of:


                                       51
<PAGE>

         o        either incentive stock options or non-qualified stock options;

         o        stock appreciation rights;

         o        restricted or deferred stock;

         o        dividend equivalents;

         o        bonus shares and awards in lieu of our obligations to pay cash
                  compensation; and

         o        other awards, the value of which is based in whole or in part
                  upon the value of the common stock.

The plan will generally be administered by a committee appointed by the board of
directors, except that the board will itself perform the committee's functions
under the plan for purposes of grants of awards to directors who serve on the
committee. The board may also perform any other function of the committee. The
committee generally is empowered to select the individuals who will receive
awards and the terms and conditions of those awards, including exercise prices
for options and other exercisable awards, vesting and forfeiture conditions,
performance conditions, the extent to which awards may be transferable and
periods during which awards will remain outstanding. Awards may be settled in
cash, shares, other awards or other property, as the committee may determine.

The maximum number of shares that may be subject to outstanding awards under the
plan will not exceed 6,000,000 shares of Class A common stock. As of July 31,
2002, there were a total of 2,269,600 shares of common stock subject to
outstanding options granted under the plan. These options have an exercise price
ranging from $0.02 to $2.00 per share. As a result of the recapitalization which
was effected on April 8, 2002, the foregoing options are now exercisable into
2,269,600 shares of Class A common stock.

The plan will remain in effect until terminated by the board of directors. The
plan may be amended by the board of directors without the consent of our
stockholders, except that any amendment, although effective when made, will be
subject to stockholder approval if required by any Federal or state law or
regulation or by the rules of any stock exchange or automated quotation system
on which our common stock may then be listed or quoted. The number of shares
reserved or deliverable under the plan, the annual per-participant limits, the
number of shares subject to options automatically granted to non-employee
directors, and the number of shares subject to outstanding awards are subject to
adjustment in the event of stock splits, stock dividends and other extraordinary
corporate events.

We generally will be entitled to a tax deduction equal to the amount of
compensation realized by a participant through awards under the plan, except no
deduction is permitted in connection with incentive stock options if the
participant holds the shares acquired upon exercise for the required holding
periods; and deductions for some awards could be limited under the $1.0 million
deductibility cap of Section 162(m) of the Internal Revenue Code. This
limitation, however, should not apply to certain options, stock appreciation
rights and performance-based awards granted thereafter if JAG Media complies
with certain requirements under Section 162(m).


                                       52
<PAGE>

Employment Contracts

On August 31, 2001, we entered into amended and restated three-year employment
agreements with each of Gary Valinoti (our President and Chief Executive
Officer), Stephen J. Schoepfer (our Executive Vice President and Chief Operating
Officer) and Thomas J. Mazzarisi (our Executive Vice President, Chief Financial
Officer and General Counsel). These agreements amended and superseded the
original employment agreements, dated December 14, 2000, between us and the
executives named above. Each of these amended and restated employment agreements
expires on August 31, 2004 and provides for an annual base salary of $150,000.
In addition, each executive is entitled to receive annual incentive stock
bonuses as follows:

         o        500,000 shares of common stock if the average closing bid
                  price of our common stock for year 1 under the contract is
                  $1.00 or greater;

         o        500,000 shares of common stock if the average closing bid
                  price of our common stock for year 2 under the contract is
                  $2.00 or greater; and

         o        500,000 shares of common stock if the average closing bid
                  price of our common stock for year 3 under the contract is
                  $3.00 or greater.

As a result of the recapitalization of our common stock, each of the annual
incentive stock bonuses referred to above will, if earned, be issued as shares
of Class A common stock.

In addition, each executive is entitled to receive a 5% non-dilutable interest
(i.e., a constant percentage ownership interest) in any subsidiary established
by JAG Media for its Hispanic/Latin operations. The executives shall also be
granted an option to purchase a 5% ownership interest in any subsidiary that JAG
Media successfully creates and spins off during the term of their employment
contracts.

In addition, pursuant to these amended and restated employment agreements, each
of the above named executives is entitled to the same medical and other
benefits, including health and life insurance coverage, as are provided to other
employees of JAG Media. In the event JAG Media terminates the employment of any
of such executives without cause or such executive resigns for good reason as
defined in the executive agreements, such executive 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 10 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.


                                       53
<PAGE>

Further, immediately prior to a "change in control" (as defined in our Long-Term
Incentive Plan) of JAG Media, the above-named executives shall also be granted
an option to acquire 1,000,000 shares of our Class A common stock (subject to
equitable adjustments for stock splits, etc.) at an exercise price equal to 25%
of the closing bid price of the stock immediately 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
Long-Term Incentive Plan a "change in control" shall be deemed to have occurred
(i) if there is an acquisition 30% or more of our then outstanding shares of
Class A common stock, (ii) Messrs. Valinoti, Schoepfer and Mazzarisi cease for
any reason to constitute at least a majority of the members of our Board, 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 the voting securities of JAG
Media outstanding immediately after such transaction being beneficially owned by
at least 75% of the holders of outstanding voting securities of JAG Media
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.

In the unlikely event that we issue to Cornell Capital under the equity line
more than 12,600,000 shares of our Class A common stock and Cornell Capital does
not sell any such shares and we issue no other shares, such issuance to Cornell
Capital would result in the acquisition by Cornell Capital of more than 30% of
our then outstanding shares of Class A common stock and would trigger the change
in control provisions in the employment agreements of our executive officers. As
a result, each of Messrs. Valinoti, Schoepfer and Mazzarisi would be granted an
option to acquire 1,000,000 shares of our Class A common stock at an exercise
price equal to 25% of the closing bid price of the stock immediately prior to
such change in control, which option would be fully vested and immediately
exercisable in full and expire on a date which would be the earlier of ten years
from such change in control and three years after termination of such person's
employment. The occurrence of the change of control would also permit each
executive to resign from JAG Media if they so chose and be entitled to all of
the severance benefits described above, including medical and life insurance
coverage, accelerated vesting of outstanding stock options and certain lump sum
cash payments.

As part of the sale of our 85% stake in JAGfn Broadband LLC to CALP II Limited
Partnership, we entered into a services agreement with JAGfn. pursuant to which
it was agreed that JAGfn would pay the salary payable under the existing
employment agreements, dated December 14, 2000, between us and each of Messrs.
Valinoti, Schoepfer and Mazzarisi and we agreed to reimburse JAGfn for 10% of
such salary cost. As a result of JAGfn's reincorporation as Financial Broadband
Network, Inc. following the sale, Financial Broadband Network assumed such
obligations and made such payments from February 1, 2001 through August 24,
2001. See "Certain Relationships and Related Transactions--Services Agreement."

Pursuant to the terms and conditions of the amended and restated employment
agreements, we cancelled outstanding options granted to each of Messrs.
Valinoti, Schoepfer and Mazzarisi to purchase an aggregate of 900,000 shares of
our common stock exercisable at a price per share of $0.25. In lieu of these
options, we have granted to each of Messrs. Valinoti, Schoepfer and Mazzarisi to
purchase an aggregate of 1,000,000 shares of our common stock exercisable at a
price per share of $0.02, all of which vested immediately upon the execution of
the amended and restated agreements. These options are subject to the terms of
our 1999 Long-Term Incentive Plan, as amended, and may be exercised, in whole or
in part, by the executives on a cashless basis.


                                       54
<PAGE>

In connection with our recapitalization on April 8, 2002 we amended our
Long-Term Incentive Plan to provide that all stock options issued pursuant to
the plan, including each of the executive options referred to above, would be
exercisable into shares of Class A common stock in lieu of common stock.

Indemnification of Officers and Directors

Our 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 JAG Media's best interest. In the case of an action brought by or in the
right of JAG Media, 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 JAG Media, unless
the deciding court determines that, notwithstanding such liability, that person
is fairly entitled to indemnity in light of all the relevant 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.


                                       55
<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of
our Class A common stock as of November 1, 2002 (except as otherwise indicated)
by (i) each person known by JAG Media to be the beneficial owner of more than 5%
of our Class A 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. The address of each of the beneficial owners
named below is: c/o JAG Media Holdings, Inc., 6865 SW 18th Street, Suite B-13,
Boca Raton, Florida 33433.

<TABLE>
<CAPTION>

Name and Address of Beneficial Owner                  Number of Shares Beneficially Owned       Percentage of Class(2)
------------------------------------                  -----------------------------------       ----------------------

<S>                                                            <C>                                       <C>
Gary Valinoti (President, CEO and Director)                    5,024,500(1)(3)(4)                          14.0%
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433

Thomas Mazzarisi (Executive Vice President,                      610,000(1)(5)                              1.7%
Chief Financial Officer, General Counsel and
Director)
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433

Stephen Schoepfer (Executive Vice President,                     575,000(1)(5)                              1.6%
Chief Operating Officer and Director)
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433

All executive officers and directors as a                      6,209,500                                   16.8%
group (3 persons)
</TABLE>

         (1)      Assumes the conversion of all Series 1 Class B common shares
                  into Class A common shares on a one-for-one basis.

         (2)      Based on 34,739,488 shares of Class A common stock issued and
                  outstanding as of November 1, 2002, plus the number of shares
                  of Class A common stock which the beneficial owner has the
                  right to acquire within 60 days, if any.

         (3)      Includes 476,818 shares of Class A common stock and 47,682
                  shares of Series 1 Class B common stock (convertible on a
                  one-for-one basis into Class A shares) owned by Mr. Valinoti's
                  wife, Cathleen Valinoti.

         (4)      Includes 1,000,000 shares of Class A common stock issuable
                  upon the exercise of stock options.

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


                                       56
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Loans from Officers of the Company.

On April 1, 2002, Thomas J. Mazzarisi, our Executive Vice President, Chief
Financial Officer and General Counsel, loaned us $200,000 out of proceeds that
he received from the sale of shares of our common stock in the open market. The
loan is subject to the terms and conditions of an unsecured promissory note
issued by us to Mr. Mazzarisi on such date. The note bears interest at a rate of
2.69% per annum and can be prepaid in whole or part at any time without premium
or penalty. Pursuant to an amendment dated June 26, 2002, the maturity date of
the note was extended from July 1, 2002 to August 15, 2002. Pursuant to a
subsequent amendment dated August 15, 2002, the maturity date of the note was
further extended from August 15, 2002 to the earlier of (i) January 31, 2003 or
(ii) the effective date of a "Change in Control" of JAG Media, as such term is
defined in the JAG Media Long-Term Incentive Plan, as amended to date. The note
remains issued and outstanding as of the date of this filing.

On April 1, 2002, Stephen J. Schoepfer, our Executive Vice President and Chief
Operating Officer, loaned us $200,000 out of proceeds that he received from the
sale of shares of our common stock in the open market. The loan is subject to
the terms and conditions of an unsecured promissory note issued by us to Mr.
Schoepfer on such date. The note bears interest at a rate of 2.69% per annum and
can be prepaid in whole or part at any time without premium or penalty. Pursuant
to an amendment dated June 26, 2002, the maturity date of the note was extended
from July 1, 2002 to August 15, 2002. Pursuant to a subsequent amendment dated
August 15, 2002, the maturity date of the note was further extended from August
15, 2002 to the earlier of (i) January 31, 2003 or (ii) the effective date of a
"Change in Control" of JAG Media, as such term is defined in the JAG Media
Long-Term Incentive Plan, as amended to date. The note remains issued and
outstanding as of the date of this filing.

We have used the proceeds of these loans to fund existing payables and for
general corporate purposes.

Sale of JAG fn Broadband Subsidiary; Interest of Certain Officers and Directors
in Financial Broadband Holdings and Financial Broadband Network.

Pursuant to the terms and conditions of a Securities Purchase Agreement, dated
as of February 1, 2001, by and among us, JAGfn Broadband LLC and CALP II Limited
Partnership, we effected a sale of our 85% membership interest in our webcast
subsidiary JAGfn to CALP II. As of the date of the sale CALP II had been our
primary source of financing since June 2000 when it entered into an equity line
of credit agreement with us. The equity line of credit agreement was terminated
in connection with this transaction.


                                       57
<PAGE>

As consideration for the purchase of the membership interest in JAGfn, CALP II
delivered to us at the closing $1,002,146.81 in immediately available funds and
a non-interest bearing promissory note in the amount of $500,000 payable in full
on February 22, 2001, which is secured by the membership interest. This note was
subsequently amended and then canceled. Such $1,500,000 represented the amount
we required in order to pay our outstanding current liabilities as of February
1, 2001. In addition, CALP II agreed to discharge us from all of our obligations
in connection with $4,350,000 principal amount outstanding of convertible
debentures and to cancel, and discharge us from our obligations under, that
certain warrant to purchase 3,000,000 shares of our common stock issued to CALP
II on October 30, 2000.

Pursuant to the Securities Purchase Agreement, we agreed to contribute all
intercompany indebtedness owed to us by JAGfn to the capital of JAGfn. JAGfn
agreed to assume our obligations under certain debentures and to issue to CALP
II a five-year warrant to purchase a two percent membership interest in JAGfn.
JAGfn also agreed to assume our on-going liabilities under our lease and other
agreements related to our webcast activities.

Our key executive officers and directors, Messrs. Valinoti, Schoepfer and
Mazzarisi, retained their 5% membership interests in JAGfn, but agreed as a
condition of the transaction that their interests would no longer be
non-dilutable. Mr. Valinoti received an additional 2.5% membership interest
pursuant to a subsequent transfer by CALP II.

Following the closing of this transaction, JAGfn was reincorporated in Delaware
as Financial Broadband Network, Inc., a wholly owned subsidiary of Financial
Broadband Holdings, Inc. In connection with this reorganization, Messrs.
Valinoti, Schoepfer and Mazzarisi received shares of common stock and preferred
stock of Financial Broadband Holdings, representing, in the aggregate, 17.5% of
the issued and outstanding shares of capital stock of that company.

From February 1, 2001 through August 24, 2001, Messrs. Valinoti, Shoepfer and
Mazzarisi also served as officers of Financial Broadband Network, Inc. Mr.
Valinoti also served as a director of Financial Broadband Holdings and Financial
Broadband Network during that period. Financial Broadband Holdings and Financial
Broadband Network ceased conducting operations in August 2001. At that time,
Messrs. Valinoti, Schoepfer and Mazzarisi resigned from their respective
positions in those entities and their shares in Financial Broadband Holdings
became worthless.

Services Agreement.

In connection with the sale of JAGfn Broadband LLC to CALP II Limited
Partnership. we entered into a one-year services agreement, dated as of February
1, 2001, with JAGfn for shared facilities and administrative services to help
reduce our costs. Pursuant to the agreement,. JAGfn agreed to pay the salary
payable under the existing employment agreements between us and each of Messrs.
Valinoti, Schoepfer and Mazzarisi and we agreed to reimburse JAGfn for 10% of
such salary costs. Financial Broadband Network assumed such obligations and made
such payments from February 1, 2001 through August 24, 2001. In addition, during
this period Financial Broadband Network provided us with office space at its
Chelsea studio location in New York City and provided technical support for our
web site as well as bookkeeping, telephone and fax services. This agreement
ceased to be of further force and effect when Financial Broadband Network ceased
conducting operations in August 2001 and defaulted in its performance under the
agreement.


                                       58
<PAGE>


ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K:

(a)(1) Financial Statements. See index to Financial Statements on page 45.

(a)(2) All other schedules are omitted because they are not applicable, not
required or the required information is in the Financial Statements or the Notes
thereto.

(a)(3) The following Exhibits are filed as part of this Report as required by
Regulation S-K. The Exhibits designated by an asterisk (*) are management
contracts and compensation plans and arrangements required to be filed as
Exhibits to this Report.


                                       59
<PAGE>

Exhibit No.     Description
-----------     -----------

2.1             Agreement and Plan of Reorganization dated March 16, 1999
                between Professional Perceptions, Inc. (now known as
                JagNotes.com Inc.); Harold Kaufman, Jr., an officer, director
                and principal stockholder thereof; NewJag, Inc.; and the
                stockholders of NewJag, Inc. (1)

2.2             Agreement and Plan of Merger dated as of July 29, 1999 by and
                among JagNotes Notes, Inc., a New Jersey corporation, and
                JagNotes.com, Inc., a Nevada corporation. (2)

3.1             Articles of Incorporation of Registrant. (2)

3.2             Certificate of Amendment to Articles of Incorporation of
                Registrant as filed with the Secretary of State of the State of
                Nevada on April 8, 2002. (16)

3.3             Bylaws of Registrant (2)

4.1             Form of Common Stock Purchase Warrant issued in connection with
                May 1999 private placement. (6)

4.2             Stock Option to acquire 500,000 shares of common stock granted
                to Strategic Growth International, Inc. on March 14, 2000,
                included in Exhibit 10.2. (4)

4.3             Stock Purchase Warrant to acquire 750,000 shares of common stock
                issued to M.S. Farrell & Co., Inc. on March 15, 2000, included
                in Exhibit 10.3. (4)

4.4             2000 8% Convertible Debenture, due June 12, 2003. (5)

4.5             Form of Stock Purchase Warrant issued in connection with June
                2000 private placement. (5)

4.6             Form of Stock Purchase Warrant issued in connection with May
                Davis Consulting Agreement, included in Exhibit 10.9. (7)

4.7             Form of 8% Convertible Debenture issued in connection with
                October 2000 private placement. (9)

4.8             Stock Purchase Warrant to acquire 3,000,000 shares of common
                stock issued to CALP II Limited Partnership as of October 30,
                2000. (9)

4.9             First Amendment, dated as of October 30, 2000, to 2000 8%
                Convertible Debenture, due June 12, 2003. (9)


                                       60
<PAGE>

4.10            Amended and Restated Secured Promissory Note issued February 22,
                2001 in the amount of U.S.$500,000 by CALP II Limited
                Partnership payable to the order of the Registrant. (11)

4.11            Form of Class A Common Stock Certificate. (15)

4.12            Form of Series 1 Class B Common Stock Certificate. (15)

4.13            Promissory Note, dated April 1, 2002 in the amount of $200,000
                issued to Thomas J. Mazzarisi. (16)

4.14            Promissory Note, dated April 1, 2002 in the amount of $200,000
                issued to Stephen J. Schoepfer. (16)

4.15            Stock Purchase Warrant to acquire 1,000,000 shares of common
                stock issued to FAS Holdings, Inc. as of April 9, 2002. (18)

4.16            Amendment, dated June 26, 2002, to Promissory Note, dated April
                1, 2002 in the amount of $200,000 issued to Thomas J. Mazzarisi.
                (20)

4.17            Amendment, dated June 26, 2002, to Promissory Note, dated April
                1, 2002 in the amount of $200,000 issued to Stephen J.
                Schoepfer. (20)

4.18            Amendment, dated August 15, 2002, to Promissory Note, dated
                April 1, 2002 in the amount of $200,000 issued to Thomas J.
                Mazzarisi.

4.19            Amendment, dated August 15, 2002, to Promissory Note, dated
                April 1, 2002 in the amount of $200,000 issued to Stephen J.
                Schoepfer.

10.1            JAG Media Holdings, Inc. 1999 Long Term Incentive Plan, as
                amended. (17)

10.2            Agreement, dated as of March 14, 2000, by and between Registrant
                and Strategic Growth International, Inc. (4)

10.3            Consulting Agreement, dated as of March 15, 2000, by and between
                Registrant and M.S. Farrell & Co., Inc. (4)

10.4            Securities Purchase Agreement, dated as of June 12, 2000, by and
                between Registrant and CALP II Limited Partnership. (5)

10.5            Equity Line of Credit Agreement, dated as of June 14, 2000, by
                and between Registrant and CALP II Limited Partnership. (5)

10.6            First Amendment, dated July 19, 2000, to Equity Line of Credit
                Agreement, dated as of June 14, 2000, between Registrant and
                CALP II Limited Partnership. (7)

10.7            Second Amendment, dated October 31, 2000, to Equity Line of
                Credit Agreement, dated as of June 14, 2000 (as amended),
                between Registrant and CALP II Limited Partnership. (8)

10.8            Placement Agency Agreement, dated as of June 12, 2000, by and
                between Registrant and Thomson Kernaghan and Co., Ltd. (5)


                                       61
<PAGE>

10.9            Placement Agency Agreement, dated as of June 12, 2000, by and
                between Registrant and May Davis Group, Inc. (5)

10.10           Consulting Agreement, dated as of July 21, 2000, by and between
                Registrant and May Davis Group, Inc. (7)

10.11           Letter Agreement, dated October 30, 2000, by and between
                Registrant and Thomson Kernaghan & Co., Ltd. (8)

10.12           Employment Agreement, dated as of December 14, 2000, by and
                between Registrant and Thomas J. Mazzarisi. (9)

10.13           Employment Agreement, dated as of December 14, 2000, by and
                between Registrant and Stephen J. Schoepfer. (9)

10.14           Employment Agreement, dated as of December 14, 2000, by and
                between Registrant and Gary Valinoti. (9)

10.15           Securities Purchase Agreement, dated as of February 1, 2001, by
                and among the Registrant, CALP II Limited Partnership and JAGfn
                Broadband LLC. (10)

10.16           Termination Agreement, dated April 6, 2001, by and among the
                Registrant, CALP II Limited Partnership and Thomson Kernaghan &
                Co. Ltd. (12)

10.17           Equity Line Purchase Agreement, dated August 17, 2001, by and
                between the Registrant and Cornell Capital Partners, L.P. (13)

10.18           Registration Rights Agreement, dated August 17, 2001, by and
                between the Registrant and Cornell Capital Partners, L.P. (13)

10.19           Amended and Restated Employment Agreement, dated August 31,
                2001, by and between the Registrant and Gary Valinoti. (14)

10.20           Amended and Restated Employment Agreement, dated August 31,
                2001, by and between the Registrant and Stephen J. Schoepfer.
                (14)

10.21           Amended and Restated Employment Agreement, dated August 31,
                2001, by and between the Registrant and Thomas J. Mazzarisi.
                (14)

10.22           Settlement Agreement, dated October 5, 2001, by and between the
                Registrant and Strategic Growth International Inc. (18)



                                       62
<PAGE>

10.23           Equity Line Purchase Agreement, dated as of April 9, 2002, by
                and between the Registrant and Cornell Capital Partners, L.P.
                (18)

10.24           Registration Rights Agreement, dated as of April 9, 2002, by and
                among the Registrant, Cornell Capital Partners, L.P., and
                Westrock Advisors, Inc. (18)

10.25           Placement Agent Agreement, dated as of April 9, 2002, by and
                among the Registrant, Cornell Capital Partners, L.P., and
                Westrock Advisors, Inc. (18)

10.26           Consulting Agreement, dated December 31, 2001, by and between
                the Registrant and First Allied, as amended by Letter Agreement
                dated February 1, 2002. (18)

10.27           Content Agreement, dated as of February 14, 2002, by and between
                Lycos Inc. and JAG Company Voice LLC. (19)

10.28           Affiliate Order, dated February 22, 2002, by and between JAG
                Company Voice LLC and Freerealtime.com Inc. (19)

10.29           Affiliate Order, dated February 21, 2002, by and between JAG
                Company Voice LLC and Zacks Investment Research. (19)

10.30           Waiver of Section 5.5 of Equity Line Purchase Agreement, dated
                June 18, 2002, executed by Cornell Capital Partners, L.P. (20)

21.1            Subsidiaries of Registrant.

99.1            Articles of Merger of JagNotes, Inc. into JagNotes.com, Inc.
                (including Certificate of Correction related thereto). (2)

99.2            Section 906 Certification of Chief Executive Officer and Chief
                Financial Officer.

(1)      Previously filed as an exhibit to our Registration Statement on Form
         SB-2 filed on July 30, 1999.
(2)      Previously filed as an exhibit to Amendment No. 1 to our Registration
         Statement on Form SB-2 filed on September 30, 1999.
(3)      Previously filed as an exhibit to Amendment No. 2 to our Registration
         Statement on Form SB-2 filed on October 26, 1999.
(4)      Previously filed as an exhibit to our Quarterly Report on Form 10-QSB
         filed on June 16, 2000.
(5)      Previously filed as an exhibit to our Current Report on Form 8-K filed
         on June 16, 2000.
(6)      Previously filed as an exhibit to Post-Effective Amendment No. 2 to our
         Registration Statement on Form SB-2 filed on June 22, 2000.
(7)      Previously filed as an exhibit to our Registration Statement on Form
         SB-2 filed on July 25, 2000.
(8)      Previously filed as an exhibit to our Annual Report on Form 10-KSB
         filed on November 14, 2000.
(9)      Previously filed as an exhibit to our Quarterly Report on Form 10-QSB
         filed on December 20, 2000.
(10)     Previously filed as an exhibit to our Current Report on Form 8-K filed
         on February 2, 2001.
(11)     Previously filed as an exhibit to our Current Report on Form 8-K filed
         on March 1, 2001.
(12)     Previously filed as an exhibit to our Current Report on Form 8-K filed
         on April 9 2001.


                                       63
<PAGE>

(13)     Previously filed as an exhibit to our Current Report on Form 8-K filed
         on August 17, 2001.
(14)     Previously filed as an exhibit to Amendment No. 1 to our Registration
         Statement on Form SB-2 filed on September 26, 2001.
(15)     Previously filed as an exhibit to our Registration Statement on Form
         8-A filed on March 25, 2002.
(16)     Previously filed as an exhibit to our Current Report on Form 8-K filed
         on April 17, 2002.
(17)     Previously filed as an exhibit to our Registration Statement on Form
         S-8 filed on May 1, 2002.
(18)     Previously filed as an exhibit to our Registration Statement on Form
         SB-2 filed on May 7, 2002.
(19)     Previously filed as an exhibit to Amendment No. 1 to our Registration
         Statement on Form SB-2 filed on July 8, 2002.
(20)     Previously filed as an exhibit to Amendment No. 2 to our Registration
         Statement on Form SB-2 filed on August 2, 2002.

(b)      Reports on Form 8-K

We filed one Current Report on Form 8-K during the last quarter of the fiscal
year ended July 31, 2002. The Report, which was filed with the SEC on May 1,
2002, attached an Unaudited Condensed Pro Forma Balance Sheet showing the
effects of the assumption that JAG Media's recapitalization had been effected as
of January 31, 2002.


                                       64
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries
                  (Formerly JagNotes.com Inc. and Subsidiaries)


                          Index to Financial Statements
                          -----------------------------


                                                                         PAGE
                                                                         ----

Report of Independent Public Accountants                                  F-2

Consolidated Balance Sheet
     July 31, 2002                                                        F-3

Consolidated Statements of Operations
     Years Ended July 31, 2002 and 2001                                   F-4

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
     Years Ended July 31, 2002 and 2001                                   F-5/6

Consolidated Statements of Cash Flows
     Years Ended July 31, 2002 and 2001                                   F-7

Notes to Consolidated Financial Statements                                F-8/31



                                      * * *




                                      F-1
<PAGE>






                    Report of Independent Public Accountants
                    ----------------------------------------


To the Board of Directors and Stockholders
JAG Media Holdings, Inc.


We have audited the accompanying consolidated balance sheet of JAG Media
Holdings, Inc. (formerly JagNotes.com Inc.) and Subsidiaries as of July 31,
2002, and the related consolidated statements of operations, changes in
stockholders' equity (deficiency) and cash flows for the years ended July 31,
2002 and 2001. 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 auditing standards generally accepted
in the United States of America. 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, 2002, and their results of operations and
cash flows for the years ended July 31, 2002 and 2001, 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 it had a working capital and stockholders'
deficiencies as of July 31, 2002. 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.



                                                                   J.H. Cohn LLP

Roseland, New Jersey
October 28, 2002


                                      F-2
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                           Consolidated Balance Sheet
                                  July 31, 2002




                                     Assets
                                     ------

Current assets:
    Cash and cash equivalents                                      $      7,107
    Accounts receivable, net of allowance for doubtful accounts
        of $4,750                                                        19,325
    Other current assets                                                 68,785
                                                                   ------------
           Total current assets                                          95,217

Equipment, net of accumulated depreciation of $115,860                   54,698
                                                                   ------------

           Total                                                   $    149,915
                                                                   ============


                    Liabilities and Stockholders' Deficiency
                    ----------------------------------------

Current liabilities:
    Accounts payable and accrued expenses                          $    898,499
    Deferred revenues                                                    95,384
    Notes payable to officers                                           400,000
                                                                   ------------
           Total liabilities                                          1,393,883
                                                                   ------------

Commitments and contingencies

Stockholders' deficiency:
    Preferred stock; par value $.00001 per share; 15,000,000
        shares authorized; none issued                                        -
    Class A common stock, par value $.00001 per share;
        155,000,000 shares authorized; 29,667,094 shares
        issued and outstanding                                              296
    Class B common stock, par value $.00001 per share;
        30,000,000 shares authorized; 1,681,155 shares of
        Series 1 issued and outstanding                                      17
    Additional paid-in capital                                       37,697,274
    Unearned compensation                                              (381,432)
    Accumulated deficit                                             (38,560,123)
                                                                   ------------
           Total stockholders' deficiency                            (1,243,968)
                                                                   ------------
           Total                                                   $    149,915
                                                                   ============


See Notes to Consolidated Financial Statements.


                                      F-3
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                      Consolidated Statements of Operations
                       Years Ended July 31, 2002 and 2001




<TABLE>
<CAPTION>

                                                              2002               2001
                                                          -------------      -------------

Revenues                                                  $     624,674      $   1,001,463
                                                          -------------      -------------
<S>                                                           <C>                <C>
Operating expenses:
    Cost of revenues                                          1,146,351          6,905,174
    Selling expenses                                             36,952            147,300
    General and administrative expenses                       3,194,874          8,497,629
    Write-off of capitalized web site development costs         263,754
                                                          -------------      -------------
        Totals                                                4,641,931         15,550,103
                                                          -------------      -------------

Loss from operations                                         (4,017,257)       (14,548,640)

Other income (expense):
    Interest income                                                                 13,223
    Interest expense                                             (3,596)        (1,826,811)
    Gain on sale of subsidiary                                                     196,959
    Write-off of investments in other companies                                   (500,000)
                                                          -------------      -------------

Net loss                                                  $  (4,020,853)     $ (16,665,269)
                                                          =============      =============

Basic net loss per share                                  $        (.15)     $       (.93)
                                                          -------------      -------------

Basic weighted average common shares outstanding             26,644,876         17,853,515
                                                          =============      =============
</TABLE>




See Notes to Consolidated Financial Statements.


                                      F-4
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

     Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
                       Years Ended July 31, 2002 and 2001

<TABLE>
<CAPTION>

                                            Common Stock
                    ---------------------------------------------------------
                                              Class A        Series 1 Class B
                                       -------------------- -----------------   Additional
                    Number of           Number of           Number of           Paid-in      Unearned      Accumulated
                     Shares     Amount   Shares      Amount  Shares    Amount   Capital    Compensation      Deficit        Total
                   ----------   ------ ----------    ------  ------    ------   -------    ------------      -------        -----
<S>                <C>         <C>     <C>           <C>   <C>         <C>    <C>           <C>           <C>           <C>
Balance,
August 1, 2000     14,800,005   $148                                          $28,677,530   $(8,880,551)  $(17,874,001)  $1,923,126

Effects of
recapitalization  (14,800,005)  (148)  13,454,550    $135  1,345,455    $13

Sales of common
 stock and
 warrants
 pursuant to
 equity financing
 agreement, net
 of expenses of
 $116,670                               1,032,591      10    103,259      1     1,049,989                                 1,050,000

Partial
 conversion of
 convertible
 debenture                              3,069,956      31    306,996      3     1,088,564                                 1,088,598

Effects of
 issuance of
 stock options
 in exchange
 for services                                                                   1,635,870    (1,635,870)

Effects
 of issuance
 of beneficial
 conversion rights
 and warrants
 in connection
 with private
 placement of
 convertible
 debentures                                                                     3,217,770                                 3,217,770

Amortization of
  unearned
  compensation                                                                                7,881,124                   7,881,124

Effects of sale
 of subsidiary                                                                                1,660,207                   1,660,207

Net loss                                                                                                 (16,665,269)   (16,665,269)
                 --------     ---    ----------     ----   ---------   ----    ----------   -----------  -----------    -----------
Balance,
 July 31, 2001          -       -    17,557,097      176   1,755,710     17    35,669,723      (975,090) (34,539,270)       155,556
</TABLE>


                                      F-5
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

     Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
                       Years Ended July 31, 2002 and 2001


<TABLE>
<CAPTION>

                                            Common Stock
                    ---------------------------------------------------------
                                              Class A        Series 1 Class B
                                       -------------------- -----------------   Additional
                    Number of           Number of           Number of           Paid-in      Unearned     Accumulated
                     Shares     Amount   Shares      Amount  Shares    Amount   Capital    Compensation     Deficit        Total
                   ----------   ------ ----------    ------  ------    ------   -------    ------------     -------        -----
<S>                <C>         <C>     <C>           <C>    <C>         <C>    <C>           <C>          <C>           <C>
Sales of
 common stock
 pursuant
 to equity
 financing
 agreement,
 net of expenses
 of $38,575                             6,510,465   $ 65     651,045    $ 7     $ 632,812                               $   632,884

Effects of
 issuance of
 common stock
 in exchange
 for services                           1,338,006     13     108,801      1       877,376    $(609,300)                     268,090

Effects of
 issuance of
 stock options
 in exchange
 for services                                                                     561,544                                   561,544

Options exercised                       3,427,125     34                          144,819                                   144,853

Effects of
 cancellation of
 stock options
 previously
 issued in
 exchange for
 services                                                                        (189,000)     189,000

Amortization of
 unearned
 compensation                                                                                1,013,958                    1,013,958

Effects of
 conversion of
 Series 1 Class B
 common stock into
 Class A common
 Stock                                   834,401       8    (834,401)    (8)

Net loss                                                                                                 $ (4,020,853)  $(4,020,853)
                 --------     ---    ----------     ----   ---------   ----   -----------  -----------   ------------   -----------
 Balance,
 July 31, 2002          -     $ -    29,667,094     $296   1,681,155    $17   $37,697,274  $  (381,432)  $(38,560,123)  $(1,243,968)
                =========     ===    ==========     ====   =========   ====   -==========  ===========   ============   ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.



                                      F-6
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows
                       Years Ended July 31, 2002 and 2001
<TABLE>
<CAPTION>

                                                                                              2002                 2001
                                                                                          -----------          ------------
<S>                                                                                       <C>                  <C>
Operating activities:
    Net loss                                                                              $(4,020,853)         $(16,665,269)
    Adjustments to reconcile net loss to net cash used in
        operating activities:
        Provision for doubtful accounts                                                         4,750
        Depreciation                                                                           38,910               114,429
        Amortization of unearned compensation                                               1,013,958             7,881,124
        Amortization of capitalized web site development costs                                 87,917               199,578
        Write-off of capitalized web site development costs                                   263,754
        Write-off of investments in other companies                                                                 500,000
        Effects of issuances of common stock and stock options
           in exchange for services                                                           829,634
        Charges to interest expense for:
           Issuance of beneficial conversion rights                                                                 217,770
           Amortization of deferred financing costs and debt discount                                             1,461,234
        Gain on sale of subsidiary                                                                                 (196,959)
        Changes in operating assets and liabilities:
           Accounts receivable                                                                 17,009                 8,950
           Other current assets                                                                30,835               661,306
           Other assets                                                                                             (22,540)
           Accounts payable and accrued expenses                                              634,998               295,345
           Deferred revenues                                                                  (84,980)             (162,336)
           Noncurrent accrued interest payable                                                                      144,771
                                                                                          -----------          ------------
               Net cash used in operating activities                                       (1,184,068)           (5,562,597)
                                                                                          -----------          ------------

Investing activities:
    Purchases of equipment                                                                                         (268,575)
    Web site development costs capitalized                                                                          (77,068)
    Proceeds from sale of subsidiary                                                                              1,002,147
                                                                                                               ------------
               Net cash provided by investing activities                                                            656,504
                                                                                                               ------------

Financing activities:
    Proceeds from notes payable to officers                                                   400,000
    Payments of capital lease obligations                                                                           (37,055)
    Proceeds from private placement of convertible debentures                                                     3,400,000
    Costs paid in connection with private placement of
        convertible debentures                                                                                     (300,000)
    Net proceeds from private placements of common stock
        and warrants                                                                          632,884             1,050,000
    Proceeds from exercise of stock options                                                   144,853
                                                                                          -----------          ------------
               Net cash provided by financing activities                                    1,177,737             4,112,945
                                                                                          -----------          ------------

Net decrease in cash and cash equivalents                                                      (6,331)             (793,148)
Cash and cash equivalents, beginning of year                                                   13,438               806,586
                                                                                          -----------          ------------
Cash and cash equivalents, end of year                                                    $     7,107          $     13,438
                                                                                          ===========          ============

Supplemental disclosure of cash flow data:
    Interest paid                                                                         $         -          $          -
                                                                                          ===========          ============
    Income taxes paid                                                                     $         -          $          -
                                                                                          ===========          ============
</TABLE>


See Notes to Consolidated Financial Statements.


                                      F-7
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

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 at 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. Management considers all of the financial
                  services provided to subscribers 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. In September 2000, a
                  subsidiary, JAGfn Broadband, L.L.C. ("JAGfn"), started an
                  advertiser-based financial webcast which was sold on February
                  1, 2001 (see Note 6). Another subsidiary, JagNotes.Euro.com
                  Ltd. ("Euro"), was attempting to generate foreign revenues.
                  Euro's activities were terminated prior to January 31, 2002.
                  On January 4, 2002, another subsidiary, JAG Company Voice LLC
                  was formed to provide small to medium sized companies with
                  production and distribution services for delivering press
                  releases and other company information over the Internet in
                  streaming video format; however, it had not conducted any
                  significant operations as of July 31, 2002.

                  Prior to February 21, 2002, JAG Media Holdings, Inc. was known
                  as JagNotes.com Inc. As further explained in Note 7, on
                  February 21, 2002, the stockholders of the Company approved an
                  amendment to the articles of incorporation pursuant to which
                  the name of the Company was changed and another amendment that
                  authorized the implementation of changes related to a
                  recapitalization plan for the Company that was consummated on
                  April 8, 2002. Pursuant to the recapitalization plan, the
                  Company issued 1 share of Class A common stock and .1 share of
                  Class B common stock designated as Series 1 Class B common
                  stock in exchange for every 1.1 shares of common stock
                  outstanding prior to the recapitalization.

                  In addition, holders of stock options that were entitled to
                  receive shares of common stock upon exercise of stock options
                  issued pursuant to the Company's incentive stock option plan
                  became entitled to receive an equivalent number of shares of
                  Class A common stock at the same exercise price upon exercise;
                  holders of all other stock options and warrants became
                  entitled to receive a proportional number of shares of Class A
                  common stock and Series 1 Class B common stock at a
                  proportional exercise price upon exercise.


                                      F-8
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 1 - Organization and business (concluded):

                  Each share of Series 1 Class B common stock is immediately
                  convertible into one share of Class A common stock. Each share
                  of Class A common stock and Series 1 Class B common stock will
                  be equal in respect to dividends and voting rights. Therefore,
                  each share of Series 1 Class B common stock is, in substance,
                  equivalent to one share of Class A common stock for financial
                  reporting purposes. In addition, each share of Class A common
                  stock and each share of Series 1 Class B common stock is
                  equivalent to one share of common stock that was outstanding
                  before the recapitalization for financial reporting purposes.

                  The recapitalization was effectively equivalent to a stock
                  split and the numbers of shares of common stock outstanding
                  before the recapitalization have been retroactively restated
                  in the accompanying consolidated financial statements and
                  these notes as an equivalent number of shares of Class A
                  common stock and Series 1 Class B common stock. However, the
                  numbers of common shares and the per share amounts reflected
                  in the accompanying consolidated financial statements and
                  these notes prior to the recapitalization are equivalent to
                  the numbers of Class A common shares and the per share amounts
                  after the recapitalization on a fully diluted basis assuming
                  the conversion of the Series 1 Class B common stock and,
                  accordingly, the recapitalization did not have any overall
                  effect on per share amounts.


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 $625,000 and $1,001,000, and it incurred net
                  losses of approximately $4,021,000 and $16,665,000 and cash
                  flow deficiencies from operating activities of approximately
                  $1,184,000 and $5,563,000 during 2002 and 2001, respectively.
                  As a result, the Company had a cash balance of only $7,100, a
                  working capital deficiency of $1,299,000 and a stockholders'
                  deficiency of approximately $1,244,000 as of July 31, 2002. In
                  addition, management believes that the Company will continue
                  to incur net losses and cash flow deficiencies from operating
                  activities through at least July 31, 2003. These matters raise
                  substantial doubt about the Company's ability to continue as a
                  going concern.


                                      F-9
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 2 - Basis of presentation and summary of significant accounting policies
         (continued):

               Basis of presentation (continued):

                  Primarily as a result of the sale of the advertiser-based
                  financial webcast operations and the termination of its
                  efforts to generate foreign revenues during the year ended
                  July 31, 2002, the Company's net loss was reduced to
                  approximately $4,021,000 for the year ended July 31, 2002 from
                  approximately $16,665,000 for the year ended July 31, 2001.
                  The net losses included net noncash charges of approximately
                  $8,238,900 and $10,177,000 for the years ended July 31, 2002
                  and 2001, respectively, primarily for the depreciation of
                  equipment, the amortization of unearned compensation, the
                  amortization and write-off of capitalized web site development
                  costs, the write-off of investments in other companies, the
                  issuance of common stock and stock options in exchange for
                  services, the issuance of beneficial conversion rights and the
                  amortization of debt financing costs and discount.

                  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, 2003 and
                  that the Company will need to obtain additional equity or debt
                  financing to sustain its operations until it can market its
                  services, expand its customer base and achieve profitability.

                  As further explained in Note 5, the Company entered into an
                  agreement with an investment partnership on August 17, 2001
                  pursuant to which the Company had, in effect, "put" options
                  whereby, subject to certain conditions, it had been able to
                  require the investment partnership to purchase shares of its
                  common stock from time to time at prices based on the market
                  value and average daily trading volume of its shares. The
                  maximum aggregate purchase price under this equity line was
                  $10,000,000.

                  The original agreement with the investment partnership was
                  initially scheduled to expire on September 27, 2004. As also
                  explained in Note 5, the agreement was terminated in April
                  2002 and was replaced by another agreement with the investment
                  partnership that provides for a new $10,000,000 equity line
                  that became available in September 2002 when an appropriate
                  registration statement pursuant to the Securities Act of 1933
                  (the "Act") covering the shares issuable under the new equity
                  line was declared effective by the Securities and Exchange
                  Commission. Although the timing and amount of the required
                  purchases under the new agreement are at the Company's
                  discretion, the purchases are subject to certain conditions as
                  explained in Note 5 and the ability of the investment
                  partnership to fund the purchases.


                                      F-10
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
         (continued):

         Basis of presentation (concluded):

                  Management believes that the Company will be able to generate
                  sufficient revenues from its remaining facsimile transmission
                  and web site operations and obtain sufficient financing from
                  its agreement with the investment partnership or through other
                  financing agreements to enable it to continue as a going
                  concern through at least July 31, 2003. However, if the
                  Company cannot generate sufficient revenues and/or obtain
                  sufficient additional financing, if necessary, by that date,
                  the Company may be forced thereafter to restructure its
                  operations, file for bankruptcy or entirely cease its
                  operations.

                  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.


                                      F-11
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
         (continued):

         Web site development costs:

                  The Company accounts for costs incurred in connection with the
                  development of a web site in accordance with Statement of
                  Position 98-1, "Accounting for Costs of Computer Software
                  Developed or Obtained for Internal Use" and Emerging Issues
                  Task Force Issue No. 00-2, "Accounting for Web Site
                  Development Costs." Accordingly, all costs incurred in
                  planning the development of a web site are expensed as
                  incurred. Costs, other than general and administrative and
                  overhead costs, incurred in the web site application and
                  infrastructure development stage, which involves acquiring or
                  developing hardware and software to operate the web site, are
                  capitalized. Fees paid to an Internet service provider for
                  hosting a web site on its server(s) connected to the Internet
                  are expensed over the estimated period of benefit. Other costs
                  incurred during the operating stage, such as training,
                  administration and maintenance costs, are expensed as
                  incurred. Costs incurred during the operating stage for
                  upgrades and enhancements of a web site are capitalized if it
                  is probable that they will result in added functionality.
                  Capitalized web site development costs are amortized on a
                  straight-line basis over their estimated useful life.

                  The Company capitalized costs of approximately $527,000 in
                  2001 that were incurred in connection with the acquisition and
                  development of software in the application and infrastructure
                  development stage and the enhancement of its web sites.

                  As a result of the Company's continuing losses and the
                  uncertainties related to its ability to generate income in
                  future periods, management determined on January 31, 2002 that
                  the value of the Company's capitalized web site development
                  costs had been impaired and, accordingly, the remaining
                  unamortized balance of approximately $264,000 as of that date
                  was written off.

         Debt issuance costs and debt discount:

                  Loan fees and other debt issuance costs are deferred and
                  amortized to interest expense over the term of the related
                  loan on a straight-line basis. Debt discount is offset against
                  the principal balance and amortized using the interest method
                  over the term of the related loan.


                                      F-12
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
         (continued):

         Impairment of long-lived assets:

                  The Company has adopted the provisions of Statement of
                  Financial Accounting Standards No. 121, "Accounting for the
                  Impairment of Long-Lived Assets and for Long-Lived Assets to
                  be Disposed of" ("SFAS 121"). Under SFAS 121, impairment
                  losses on long-lived assets, such as equipment and capitalized
                  web site development costs, 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.

         Advertising:

                  The Company expenses the cost of advertising and promotions as
                  incurred. Advertising costs charged to operations amounted to
                  approximately $3,000 and $49,000 in 2002 and 2001,
                  respectively.

         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.

         Stock based compensation:

                  The Company accounts for stock options, common stock and other
                  similar equity instruments issued to employees as compensation
                  using fair value based methods pursuant to Statement of
                  Financial Accounting Standards No. 123, "Accounting for
                  Stock-Based Compensation" ("SFAS 123"). Accordingly, the
                  Company estimates the fair value of stock options using an
                  option-pricing model (generally, the Black-Scholes model) that
                  meets criteria set forth in SFAS 123 and common stock using
                  its market value. It records such value through charges to
                  compensation cost and corresponding credits to equity. The
                  charges to compensation cost are amortized to expense over the
                  vesting period.


                                      F-13
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
         (continued):

         Stock based compensation (concluded):

                  In accordance with SFAS 123, all other issuances of common
                  stock, stock options or other equity instruments to employees
                  and nonemployees as the consideration for goods or services
                  received by the Company are accounted for based on the fair
                  value of the consideration received or the fair value of the
                  equity instruments issued, whichever is more reliably
                  measurable. Such fair value is measured as of an appropriate
                  date pursuant to the guidance in the consensus for EITF Issue
                  No. 96-18 (generally, the earlier of the date the other party
                  becomes committed to provide goods or services or the date
                  performance by the other party is complete) and capitalized or
                  expensed as if the Company had paid cash for the goods or
                  services.

                  The Company accounts for the intrinsic value of beneficial
                  conversion rights arising from the issuance of convertible
                  debt instruments with nondetachable conversion options that
                  are in-the-money at the commitment date pursuant to the
                  consensuses for EITF Issue No. 98-5 and EITF Issue No. 00-27.
                  Such value is allocated to additional paid-in capital and the
                  resulting debt discount is amortized to interest expense using
                  the effective yield method over the period to the debt
                  instrument's earliest conversion date. Such value is
                  determined after first allocating an appropriate portion of
                  the proceeds received to any other detachable instruments
                  included in the exchange.

         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 convertible debentures, were issued during the
                  period, the treasury stock method had been applied to the
                  proceeds from the exercise of the options and warrants and the
                  interest costs applicable to the convertible debentures had
                  been added back to the numerator.

                  Diluted per share amounts have not been presented in the
                  accompanying consolidated statements of operations because the
                  Company had a net loss in 2002 and 2001 and the assumed
                  effects of the exercise of all of the Company's stock options
                  and warrants that were outstanding during all or part of those
                  years and the conversion of the convertible debentures that
                  had been outstanding during part of 2001 would have been
                  anti-dilutive.


                                      F-14
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
         (concluded):

         Net earnings (loss) per share (concluded):

                  As explained in Note 1, the recapitalization was effectively
                  equivalent to a stock split. However, the numbers of common
                  shares and the per share amounts reflected in the accompanying
                  consolidated financial statements and these notes prior to the
                  recapitalization are equivalent to the numbers of Class A
                  common shares and the per share amounts after the
                  recapitalization on a fully diluted basis assuming the
                  conversion of the Series 1 Class B common stock and,
                  accordingly, the recapitalization did not have any overall
                  effect on per share amounts.

         Recent accounting pronouncements:

                  In August 2001, the Financial Accounting Standards Board
                  issued Statement of Financial Accounting Standards No. 144,
                  "Accounting for the Impairment or Disposal of Long-Lived
                  Assets" ("SFAS 144"). SFAS 144 addresses financial accounting
                  and reporting for the impairment or disposal of long-lived
                  assets. Among other things, SFAS 144 provides guidance on the
                  implementation of SFAS 121 and other previous pronouncements
                  related to when and how to measure impairment losses and how
                  to account for discontinued operations. Management does not
                  believe that the adoption of SFAS 144 will have a material
                  impact on the Company's consolidated financial position or
                  results of operations.

                  The Financial Accounting Standards Board, the Emerging Issues
                  Task Force (the "EITF") and the Accounting Standards Executive
                  Committee of the American Institute of Certified Public
                  Accountants had issued certain other accounting pronouncements
                  as of July 31, 2002 that will become effective in subsequent
                  periods; however, management of the Company does not believe
                  that any of those pronouncements would have significantly
                  affected the Company's financial accounting measurements or
                  disclosures had they been in effect during 2002 and 2001, and
                  it does not believe that any of those pronouncements will have
                  a significant impact on the Company's consolidated financial
                  statements at the time they become effective.

Note 3 - Investments in other companies:

                  During 2000, the Company purchased a 7% equity interest in
                  another Internet-based provider of financial and investment
                  information and a 2.5% equity interest in a company that had
                  developed software that management believed had the potential
                  to facilitate access to the Company's web sites through web
                  sites maintained by other providers of financial and
                  investment information. The investees were not public
                  companies and, accordingly, these investments were accounted
                  for pursuant to the cost method. The aggregate carrying value
                  of the investments was $500,000 as of July 31, 2000. During
                  the fourth quarter of 2001, management determined that the
                  Company would not be able to recover any portion of these
                  investments and, accordingly, the aggregate carrying value of
                  $500,000 was written off.


                                      F-15
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 4 - Income taxes:

                 As of July 31, 2002, the Company had net operating loss
                 carryforwards of approximately $23,449,000 available to reduce
                 future Federal and state taxable income which will expire from
                 2019 through 2022.

                 As of July 31, 2002, the Company's deferred tax assets
                 consisted of the effects of temporary differences attributable
                 to the following:

                    Deferred revenues, net                        $     30,000
                    Unearned compensation                            2,254,000
                    Net operating loss carryforwards                 9,369,000
                                                                  ------------
                                                                    11,653,000
                    Less valuation allowance                       (11,653,000)
                                                                  ------------
                        Total                                     $          -
                                                                  ============

                  Due to the uncertainties related to, among other things, the
                  changes in the ownership of the Company, which could subject
                  its net operating loss carryforwards to substantial annual
                  limitations, and 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, 2002.

                  The Company had also offset the potential benefits of
                  approximately $13,749,000 and $7,093,000 from its net deferred
                  tax assets by equivalent valuation allowances as of July 31,
                  2001 and 2000, respectively. As a result of a decrease in the
                  valuation allowance of approximately $2,096,000 during 2002
                  and an increase in the valuation allowance of $6,656,000
                  during 2001, there are no credits for income taxes reflected
                  in the accompanying consolidated statements of operations to
                  offset pre-tax losses.

                  Although the Company had a net loss in 2002, net deferred tax
                  assets and the offsetting valuation allowance decreased during
                  that period primarily as a result of the cancellation of
                  unexercised options and warrants (see Note 7) and the related
                  reduction in temporary differences attributable to the amounts
                  of unearned compensation recorded for financial statement and
                  tax purposes.

Note 5 - Financing agreements:

         Convertible debentures sold to CALP II Limited Partnership:

                  On June 12, 2000, the Company sold CALP II Limited Partnership
                  (the "Investor") a convertible debenture (the "Debenture")
                  that had a principal balance of $2,500,000, was initially
                  scheduled to mature on June 12, 2003 and bore interest at an
                  annual rate of 8%. The Company received gross proceeds of
                  $2,500,000 from the sale, which was made through a private
                  placement that was intended to be exempt from registration
                  under the Act. The principal balance of, and interest accrued
                  on, the Debenture was convertible, in whole or in part, at the
                  option of the Investor into shares of the Company's common
                  stock at the lesser of $1.31 per share or 75% of the average
                  of the lowest closing bid prices for such shares over a
                  specified period. The Company had the option to require such
                  conversion in amounts that depended on the market price and
                  daily trading volume of the shares over a specified period.


                                      F-16
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing agreements (continued):

         Convertible debentures sold to CALP II Limited Partnership (continued):

                  As additional consideration in connection with the sale of the
                  Debenture, the Company also issued a warrant to the Investor
                  for the purchase of 428,571 shares of the Company's common
                  stock (389,610 and 38,961 Class A and Series 1 Class B shares,
                  respectively) at $1.75 per share that was initially scheduled
                  to be exercisable through June 12, 2005. The Company also
                  issued warrants for the purchase of 275,000 shares of the
                  Company's common stock (252,273 and 22,727 Class A and Series
                  1 Class B shares, respectively) at $2.00 per share that were
                  initially scheduled to be exercisable through June 12, 2005 as
                  consideration for legal and other professional services
                  received in connection with the sale of the Debenture. The
                  Company valued the warrant issued to the Investor at $934,285
                  and the warrants issued for legal and other professional
                  services at $599,500 based on estimated fair values determined
                  by using the Black-Scholes option-pricing model pursuant to
                  the provisions of SFAS 123. Accordingly, the Company initially
                  increased additional paid-in capital by $1,533,785 for the
                  fair value of all of the warrants and reduced the carrying
                  value of the Debenture by $934,285 from the principal balance
                  of $2,500,000 to $1,565,715 for the debt discount attributable
                  to the fair value of the warrant issued to the Investor and
                  increased deferred financing costs by $599,500 for the fair
                  value of the warrants issued for services. The Company also
                  increased deferred financing costs by $285,000 for other
                  payments made for legal and other professional services
                  received in connection with the sale of the Debenture.

                  The fair value of the Company's common stock on June 12, 2000
                  was $2.25 per share which exceeded the conversion price for
                  the Debenture. Pursuant to the consensus for EITF Issue No.
                  98-5, such excess constituted a beneficial conversion feature
                  or right for which the value was measured as of that date by
                  the difference between the aggregate conversion price and the
                  fair value of the common stock into which the securities are
                  convertible, multiplied by the number of shares into which the
                  securities are convertible (the intrinsic value method).
                  Accordingly, the beneficial conversion rights attributable to
                  the issuance of the Debenture had a fair value of
                  approximately $1,794,000, which equaled the excess of the
                  aggregate proceeds the Investor would have received if the
                  Investor had converted the Debenture and sold the 1,908,397
                  shares of common stock (the amount of shares that would have
                  been received if conversion occurred on June 12, 2000) for
                  approximately $4,294,000 based on the fair market value of
                  $2.25 per share on June 12, 2000. Since the Debenture became
                  convertible upon issuance, the Company recorded a charge of
                  $1,565,715 to interest expense for the beneficial conversion
                  rights (the charge was limited to the principal balance of the
                  Debenture of $2,500,000 net of the fair value of $934,285
                  allocated to the warrants) and a corresponding increase in
                  additional paid-in capital on June 12, 2000.


                                      F-17
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing agreements (continued):

         Convertible debentures sold to CALP II Limited Partnership (continued):

                  Pursuant to the applicable guidance in the consensus for EITF
                  Issue No. 00-27 which became effective on November 16, 2000,
                  the Company was required to determine the value of the
                  beneficial conversion feature using the effective conversion
                  price instead of the intrinsic value method described above.
                  Although the application of EITF 00-27 and the use of the
                  effective conversion price would have increased the value of
                  the beneficial conversion feature from approximately
                  $1,794,000 to $2,728,000, the incremental amount was not
                  recorded because of the limit of $1,565,715 imposed by EITF
                  98-5 and, accordingly, no retroactive adjustments were made.

                  During the period from October 20, 2000 to December 1, 2000,
                  the Company sold the Investor convertible debentures (the "New
                  Debentures") that had an aggregate principal balance of
                  $3,000,000, were initially scheduled to mature at various
                  dates through December 1, 2003 and bore interest at an annual
                  rate of 8%. The Company received gross proceeds of $3,000,000
                  from the sale, which was made through a private placement that
                  was intended to be exempt from registration under the Act. The
                  principal balance of, and interest accrued on, each of the New
                  Debentures was convertible, in whole or in part, at the option
                  of the Investor into shares of the Company's common stock at
                  the lesser of $.80 per share or 75% of the average of the
                  lowest closing bid prices for such shares over a specified
                  period. The Company had the option to require such conversion
                  in amounts that depended on the market price and daily volume
                  of the shares over a specified period.

                  In connection with the sales of all of the New Debentures, the
                  Company also issued a warrant to the Investor for the purchase
                  of 3,000,000 shares of the Company's common stock (2,727,273
                  and 272,727 Class A and Series 1 Class B shares, respectively)
                  at $1.25 per share that was initially scheduled to be
                  exercisable through October 20, 2005. Although the estimated
                  fair value of the warrant was $3,450,000, as determined by the
                  Black-Scholes option-pricing model, the Company only received
                  gross proceeds of $3,000,000 from the sale of the New
                  Debentures. Accordingly, the amount of debt discount and
                  additional paid-in capital recorded by the Company in
                  connection with the issuance of the warrant was limited to the
                  gross proceeds of the New Debentures of $3,000,000. The
                  Company also paid a party related to the Investor a 10%
                  placement fee for each New Debenture issued and, accordingly,
                  the Company charged a total of $300,000 to deferred financing
                  costs in connection with the sales of all of the New
                  Debentures. The debt discount and the deferred financing costs
                  were to be amortized to interest expense over the related
                  terms of the New Debentures.


                                      F-18
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing agreements (continued):

         Convertible debentures sold to CALP II Limited Partnership (continued):

                  As additional consideration in connection with the sale of the
                  New Debentures, the Company also reduced the conversion price
                  for the Debenture to the lesser of $1.31 per share to $.80 per
                  share or 75% of the average of the lowest closing bid prices
                  for such shares over a specified period, which was also the
                  conversion price for the New Debentures. The fair value of the
                  Company's common stock on October 20, 2000 was $1.25 per share
                  which exceeded the adjusted conversion price for the Debenture
                  and the conversion price for the New Debentures of $.80 per
                  share. Such excess constituted beneficial conversion rights
                  for which the value was measured, as explained above, by the
                  difference between the aggregate conversion price and the fair
                  value of the common stock into which the securities were
                  convertible, multiplied by the number of shares into which the
                  securities were convertible. The beneficial conversion rights
                  had an aggregate fair value of $2,800,000 at October 20, 2000,
                  of which approximately $1,600,000 and $1,200,000 applied to
                  the Debenture and the New Debentures, respectively. However,
                  the Company did not record any additional charges for the fair
                  values of the beneficial conversion rights since the fair
                  values of the beneficial conversion rights and/or warrants
                  previously issued to the Investor in connection with the
                  Debenture and the fair value of the warrants issued to the
                  Investor in connection with the New Debentures had already
                  offset the proceeds allocated to the Debenture and the New
                  Debentures.

                  The Company also agreed to issue to the Investor on each date
                  on which the Investor converted any portion of a New Debenture
                  a warrant to purchase a number of shares of common stock equal
                  to 20% of the number of shares issued upon conversion of that
                  portion of the New Debenture. The exercise price for these
                  warrants was to be equal to 110% of the average bid price of
                  the Company's common stock over a specified period preceding
                  the date of conversion.

                  In January 2001, the Investor purchased two additional
                  convertible debentures each of which had a principal balance
                  of $200,000 (the "Additional Debentures"). The sales of the
                  Additional Debentures were made through private placements
                  intended to be exempt from registration under the Act. The
                  terms for the conversion of the Additional Debentures were the
                  same as those for the Debenture and the New Debentures. The
                  fair value of the Company's common stock on the dates of
                  issuance exceeded the adjusted conversion price for the
                  Additional Debentures. Such excess constituted beneficial
                  conversion rights which had a fair value of $217,770, for
                  which the value was measured, as explained above, by the
                  difference between the aggregate conversion price and the fair
                  value of the common stock into which the securities were
                  convertible, multiplied by the number of shares into which the
                  securities were convertible. Since the Additional Debentures
                  were convertible immediately upon issuance, the fair value of
                  the beneficial conversion rights attributable to the issuance
                  of the Additional Debentures was charged to interest expense
                  during January 2001.


                                      F-19
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing agreements (continued):

         Convertible debentures sold to CALP II Limited Partnership (concluded):

                  The issuances of the beneficial conversion rights and the
                  warrants in connection with the sales of the Debenture, the
                  New Debentures and the Additional Debentures were noncash
                  transactions and, accordingly, they are not reflected in the
                  accompanying consolidated statements of cash flows.

                  The Debenture, the New Debentures and the Additional
                  Debentures were all cancelled concurrent with the sale of
                  JAGfn on February 1, 2001 (see Note 6).

                  During the portion of 2001 prior to the sale of JAGfn,
                  amortization of deferred financing costs and debt discount
                  applicable to the Debenture, the New Debentures and the
                  Additional Debentures totaled $742,020 and $719,214,
                  respectively. Amortization of deferred financing costs and
                  debt discount applicable to the Debenture totaled $36,854 and
                  $38,929, respectively, prior to 2001.

                  During the portion of 2001 prior to the sale of JAGfn and the
                  cancellation of the Debenture, the Investor received 3,376,952
                  shares of the Company's common stock (3,069,956 and 306,996
                  Class A and Series 1 Class B shares, respectively) upon the
                  conversion of a portion of the Debenture with an aggregate
                  principal balance of $1,052,000 and a carrying value, net of
                  debt discount, of $715,043 and the conversion of accrued
                  interest of $36,598.

                  The issuances of the warrants in connection with the sales of
                  the Debentures and the New Debentures and the issuances of the
                  shares upon the partial conversion of the Debenture were
                  transactions intended to be exempt from registration under the
                  Act.

                  As of February 1, 2001, the date of their cancellation, the
                  Debenture, the New Debentures and the Additional Debentures
                  had an aggregate principal balance of $4,848,000 and a
                  carrying value of $1,399,406, net of unamortized debt issuance
                  costs of $405,626 and unamortized debt discount $3,176,142. In
                  addition, accrued interest of $71,418 applicable to the
                  Debenture, the New Debentures and the Additional Debentures
                  was cancelled as of February 1, 2001.

         Equity financing agreement with CALP II Limited Partnership:

                  As of June 14, 2000, the Company entered into another
                  financing agreement (the "Equity Financing Agreement") with
                  the Investor pursuant to which it could have required the
                  Investor to purchase shares of the Company's common stock from
                  time to time at an aggregate purchase price of $10,000,000 and
                  a price per share equal to 85% of the average of the lowest
                  closing bid prices for such shares over a specified period
                  preceding the date of each required purchase. The Company also
                  agreed to: (i) issue to the Investor on each date on which the
                  Investor advanced funds to the Company under the Equity
                  Financing Agreement a warrant to purchase a number of shares
                  equal to 20% of the number of shares that were subject to the
                  advance with an exercise price of 110% of the highest closing
                  bid price for such shares over a specified period preceding
                  the date of each advance; and (ii) pay a fee to the placement
                  agents and their counsel equal to 10% of the proceeds from the
                  sale of any shares made pursuant to the Equity Financing
                  Agreement.


                                      F-20
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing agreements (continued):

         Equity financing agreement with CALP II Limited Partnership
         (continued):

                  The Equity Financing Agreement was originally due to expire in
                  December 2002; however, it was cancelled concurrent with the
                  sale of JAGfn on February 1, 2001 (see Note 6).

                  During the period from June 14, 2000 through February 1, 2001,
                  the Investor paid a total of $1,166,670 pursuant to the Equity
                  Financing Agreement for 1,135,850 shares of common stock
                  (1,032,591 and 103,259 Class A and Series 1 Class B shares,
                  respectively) and warrants to purchase 227,168 shares of
                  common stock (206,516 and 20,652 Class A and Series 1 Class B
                  shares, respectively), all of which remained outstanding until
                  they were cancelled concurrent with the sale of JAGfn. As a
                  result, the Company received proceeds of $1,050,000, net of
                  $116,670 of placement fees. The issuances of such shares and
                  warrants were transactions intended to be exempt from
                  registration under the Act.

         Equity financing agreements with Cornell Capital Partners, L.P.:

                  On August 17, 2001, the Company entered into an equity line
                  purchase agreement (the "Original Equity Line Agreement") with
                  Cornell Capital Partners, L.P. ("Cornell Capital") pursuant to
                  which the Company had, in effect, "put" options whereby,
                  subject to certain conditions, it had been able to require the
                  investment partnership to purchase shares of its common stock
                  from time to time at prices based on the market value and
                  average daily trading volume of its shares. The maximum
                  aggregate purchase price under the Original Equity Line
                  Agreement was $10,000,000. The Original Equity Line Agreement
                  was initially scheduled to expire on September 27, 2004.
                  However, it was terminated and replaced by another agreement
                  with the investment partnership on April 9, 2002 as further
                  described below.

                  Cornell Capital received 1,500,000 shares of the Company's
                  common stock (1,363,637 and 136,363 Class A and Series 1 Class
                  B shares, respectively) as of August 17, 2001 as additional
                  consideration for entering into the Original Equity Line
                  Agreement and certain principals of Cornell Capital agreed to
                  surrender for cancellation outstanding warrants for the
                  purchase of a total of 690,000 shares of the Company's common
                  stock (627,273 and 62,727 Class A and Series 1 Class B shares,
                  respectively) that had been issued for consulting services
                  (the fair value of those warrants of $1,415,000, as determined
                  by the Black-Scholes option-pricing model at the date of
                  issuance, had already been charged to expense). Cornell
                  Capital was also entitled to a cash fee equal to 5% of the
                  gross proceeds received by the Company in connection with each
                  put. The 1,500,000 shares of the Company's common stock issued
                  to Cornell Capital had an approximate fair market value of
                  $240,000 and the warrants for the purchase of 690,000 shares
                  that were cancelled had an approximate fair market value of
                  $90,000 as of August 17, 2001. However, the Company did not
                  record the fair values of the 1,500,000 shares that were
                  issued and the warrants to purchase 690,000 shares that were
                  cancelled in connection with the Original Equity Line
                  Agreement since recording such values would have resulted in
                  equivalent increases and decreases in additional paid-in
                  capital and would not have resulted in a charge to any asset,
                  liability or expense account.


                                      F-21
<PAGE>

                  JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing agreements (concluded):

         Equity financing agreements with Cornell Capital Partners, L.P.
         (concluded):

                  During the period from August 17, 2001 to April 9, 2002,
                  Cornell Capital was required to pay $671,459 and it received
                  5,661,510 shares of common stock (5,146,828 and 514,682 Class
                  A and Series 1 Class B shares, respectively) as a result of
                  the exercise of put options under the Original Equity Line
                  Agreement, and the Company received proceeds of $632,884, net
                  of $38,575 of placement fees. The placement fees of $38,575
                  represent primarily a discount of 5% from the gross purchase
                  price for the shares of $671,459. The gross purchase price was
                  95% of an amount determined based on the market value and
                  average daily trading volume of the Company's shares. The
                  difference between the market value of the shares and the
                  gross purchase price of the shares based on the terms of the
                  Original Equity Line Agreement was approximately $39,000.

                  On April 9, 2002, the Company entered into a new equity line
                  purchase agreement (the "New Equity Line Agreement") with
                  Cornell Capital pursuant to which the Company has, in effect,
                  new put options whereby, subject to certain conditions, it can
                  require Cornell Capital to purchase shares of its Class A
                  common stock from time to time at an aggregate purchase price
                  of $10,000,000. The New Equity Line became available on
                  August 28, 2002 when a registration statement under the Act
                  filed by the Company for the registration of the shares
                  issuable to Cornell Capital became effective. The Company was
                  required to issue 10,000 shares of its Class A common stock to
                  placement agents as of the effective date as consideration for
                  their services in connection with the New Equity Line
                  Agreement (see Note 12). The term of the New Equity Line
                  Agreement will extend for 24 months unless it is terminated
                  earlier at the discretion of the Company. The purchase price
                  will be 95% of the lowest closing bid price of the Company's
                  Class A common stock over a specified number of trading days
                  commencing on specified dates. Cornell Capital shall be
                  entitled to a cash fee equal to 5% of the gross proceeds
                  received by the Company from Cornell Capital in connection
                  with each put.

                  The timing and amount of the required purchases shall be at
                  the Company's discretion subject to certain conditions
                  including (i) a maximum purchase price to be paid by Cornell
                  Capital for each put of $500,000; (ii) at least five trading
                  days must elapse before the Company can deliver a new put
                  notice to Cornell Capital; (iii) the registration statement
                  covering the shares issuable to Cornell Capital pursuant to
                  the equity line must remain effective at all times and (iv) on
                  any given closing date, there shall be at least one bid for
                  the Class A common stock on the Nasdaq OTC Bulletin Board. In
                  addition, the obligation of Cornell Capital to complete its
                  purchases under the New Equity Line is not secured or
                  guaranteed and, accordingly, if Cornell Capital does not have
                  available funds at the time it is required to make a purchase,
                  the Company may not be able to force it to do so.


                                      F-22
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 6 - Disposition of JAGfn:

                  During 2001, the Company transferred a total of 15% of the
                  membership interests in JAGfn to three of its executives
                  pursuant to the terms of their employment contracts.
                  Management believes that the fair value of the interests
                  transferred was immaterial and, accordingly, the Company did
                  not record any charges in connection with the transfers.

                  On February 1, 2001, the Company sold its remaining 85%
                  interest in JAGfn to the Investor for consideration comprised
                  primarily of (i) a payment of approximately $1,002,000 in
                  cash, and (ii) an agreement to cancel the Company's obligation
                  to repay the Debenture, the New Debentures and the Additional
                  Debentures and the accrued interest thereon. The Investor also
                  agreed to, among other things, assume substantially all of the
                  Company's contractual obligations including, but not limited
                  to, those under its lease, employment and consulting
                  agreements; the cancellation of certain warrants to purchase
                  shares of the Company's common stock; the cancellation of the
                  Equity Financing Agreement; and the issuance of an option to
                  the Company for the purchase of a 10% membership interest in
                  JAGfn for $5,000,000 at any time prior to January 31, 2002.
                  The Company also agreed to cancel JAGfn's obligation to repay
                  intercompany advances.

                  The assets and liabilities of JAGfn as of January 31, 2001 are
                  summarized below:

               Current assets - prepaid expenses                   $    225,000
               Equipment, net                                           567,343
               Capitalized web site development costs, net               64,224
               Other assets                                              96,793
                                                                   ------------
                      Total assets                                      953,360
                                                                   ------------
               Current liabilities:
                   Accounts payable and accrued expenses                341,044
                   Current portion of capital lease obligations          47,186
                   Intercompany advances                              4,553,373
                                                                   ------------
                      Total current liabilities                       4,941,603
               Capital lease obligations, net of current portion         20,743
                                                                   ------------
                      Total liabilities                               4,962,346
                                                                   ------------
               Members' deficiency                                 $ (4,008,986)
                                                                   ============

                  The members' deficiency at January 31, 2001 was equivalent to
                  JAGfn's operating loss and net loss from the inception of its
                  operations on August 1, 2000 through January 31, 2001. JAGfn
                  did not generate any revenues through January 31, 2001.


                                      F-23
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 6 - Disposition of JAGfn (concluded):

                 As a result of the sale, the Company recorded a gain during
                 2001 of $196,959 as shown below:

                    Cash paid by purchaser                          $ 1,002,147
                    Net carrying value of cancelled convertible
                        notes payable to the Investor (Note 5)        1,399,406
                    Members' deficiency of JAGfn                      4,008,986
                                                                   ------------
                        Total                                         6,410,539
                                                                   ------------
                    Less write-off of:
                        Intercompany advances                         4,553,373
                        Unearned compensation (A)                     1,660,207
                                                                   ------------
                        Total                                         6,213,580
                                                                   ------------
                    Net gain                                        $   196,959
                                                                   ============

                      (A)  This amount represented the balance as of January 31,
                           2001 of the unamortized unearned compensation
                           associated with consulting and employment agreements
                           assumed by JAGfn (see Note 7).

                  The sale of JAGfn in exchange for the consideration shown
                  above involved, in part, noncash transactions that are not
                  reflected in the accompanying consolidated statement of cash
                  flows for 2001.


Note 7 - Issuances of common stock, warrants and stock options:
         Amendments to articles of incorporation:
                  On February 21, 2002, the stockholders of the Company approved
                  an amendment to the articles of incorporation that authorized
                  the implementation of changes related to a recapitalization
                  plan for the Company that was consummated on April 8, 2002.
                  Pursuant to the recapitalization plan, (i) the total number of
                  shares of all classes of capital stock authorized for issuance
                  by the Company increased from 100,000,000 shares to
                  200,000,000 shares with a par value of $.00001 per share, of
                  which 15,000,000 shares became authorized for issuance as
                  preferred stock, 155,000,000 shares became authorized for
                  issuance as Class A common stock and 30,000,000 shares became
                  authorized for issuance as Class B common stock; and (ii) the
                  Company issued 1 share of Class A common stock and .1 share of
                  Class B common stock designated as Series 1 Class B common
                  stock in exchange for every 1.1 shares of common stock
                  outstanding prior to the recapitalization. As explained in
                  Note 1, the recapitalization was effectively equivalent to a
                  stock split and the numbers of shares of common stock
                  outstanding before the recapitalization have been
                  retroactively restated in the accompanying consolidated
                  financial statements and these notes as an equivalent number
                  of shares of Class A common stock and Series 1 Class B common
                  stock.


                                      F-24
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 7 - Issuances of common stock, warrants and stock options (continued):

         Private placements of common stock and warrants:

                  As further explained in Note 5, during the period from August
                  17, 2001 to April 9, 2002, Cornell Capital was required to pay
                  $671,459 and it received 5,661,510 shares of common stock
                  (5,146,828 and 514,682 Class A and Series 1 Class B shares,
                  respectively) as a result of the exercise of put options under
                  the Original Equity Line Agreement, and the Company received
                  proceeds of $632,884, net of $38,575 of placement fees.

                  As further explained in Note 5, the Company issued to the
                  Investor 3,376,952 shares of common stock (3,069,956 and
                  306,996 Class A and Series 1 Class B shares, respectively)
                  upon the conversion of a portion of the Debenture with an
                  aggregate principal balance of $1,052,000 and accrued interest
                  of $36,598 and 1,135,850 shares (1,032,591 and 103,259 Class A
                  and Series 1 Class B shares, respectively) and warrants to
                  purchase 227,168 shares (206,516 and 20,652 Class A and Series
                  1 Class B shares, respectively) pursuant to the Equity
                  Financing Agreement for which it received net proceeds of
                  $1,050,000 during 2001. The Company also issued to the
                  Investor a warrant for the purchase of 3,000,000 shares
                  (2,727,273 and 272,727 Class A and Series 1 Class B shares,
                  respectively) at $1.25 per share in connection with the sale
                  of the New Debentures in 2001 and a warrant for the purchase
                  of 428,571 shares (389,610 and 38,961 Class A and Series 1
                  Class B shares, respectively) at $1.75 per share in connection
                  with the sale of the Debenture in 2000. All of the warrants
                  issued to the Investor were cancelled concurrent with the sale
                  of JAGfn on February 1, 2001. The issuances of such shares and
                  warrants were transactions intended to be exempt from
                  registration under the Act.

         Options, warrants and other equity instruments issued for services:

                  In addition to the warrants issued to the Investor and sold
                  through the private placement described above, the Company has
                  issued, from time to time, stock options, warrants and/or
                  shares of common stock to employees as compensation and to
                  other 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 recognizes
                  the cost of such issuances based on the fair value of the
                  equity instruments issued over the periods in which the
                  related services are rendered in accordance with the
                  provisions of SFAS 123.

                  The following table reconciles the number of shares of common
                  stock subject to options and warrants that were outstanding at
                  August 1, 2000 as a result of issuances of those options and
                  warrants to employees and nonemployees as compensation for
                  services to the number outstanding at July 31, 2002 and sets
                  forth other related information:


                                      F-25
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 7 - Issuances of common stock, warrants and stock options (continued):

         Options, warrants and other equity instruments issued for services
         (continued):

<TABLE>
<CAPTION>

                                                                Number of Shares
                                                       ---------------------------------
                                                                                Series 1
                                                                     Class A     Class B        Range of
                                                        Common       Common      Common          Exercise
                                                        Stock         Stock       Stock           Prices
                                                      ----------   ----------  ----------   -------------
<S>                                                    <C>           <C>         <C>        <C>
          Options and warrants issued for services
              outstanding, August 1, 2000 (A)           4,874,500                            $1.50 - $6.00
          Effects of recapitalization (B)              (4,874,500)   4,624,500    250,000    $1.50 - $6.00
          Options granted to employees, investment
              analysts and commentators (C)                          3,959,000               $ .10 - $2.00
          Warrants cancelled (D)                                      (227,273)   (22,727)           $2.00
                                                       ----------   ----------  ---------
          Options and warrants issued for services
              outstanding, July 31, 2001                     -       8,356,227    227,273    $ .10 - $6.00
          Options granted to employees and
              consultants (E)                                        4,936,725               $.001 - $ .10
          Options and warrants cancelled (E)                        (5,925,773)   (62,727)   $ .05 - $2.00
          Options exercised (F)                                     (3,427,125)              $.001 - $ .25
                                                       ----------   ----------  ---------

          Options and warrants issued for services
              outstanding, July 31, 2002 (G) (H)        -            3,940,054    164,546    $.001 - $6.00
                                                       ==========   ==========  =========    =============
</TABLE>

         (A)      The cost of the options and warrants, determined based on
                  their aggregate estimated fair values at the respective dates
                  of issuance, was initially charged directly to expense or to
                  unearned compensation to be amortized to expense. The balance
                  of unearned compensation as of August 1, 2000 was $8,880,551.

         (B)      In connection with the Recapitalization, holders of stock
                  options that were entitled to receive shares of common stock
                  upon exercise of stock options issued pursuant to the
                  Company's 1999 Long-term Incentive Plan (the "Incentive Plan")
                  became entitled to receive an equivalent number of shares of
                  Class A common stock at the same exercise price upon exercise;
                  holders of all other stock options and warrants became
                  entitled to receive a proportional number of shares of Class A
                  common stock and Series 1 Class B common stock at a
                  proportional exercise price upon exercise.

         (C)      The cost of the options of $1,635,870, determined based on
                  their aggregate estimated fair values at the respective dates
                  of issuance, was initially charged to unearned compensation in
                  2001, as further explained below.


                                      F-26
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements



Note 7 - Issuances of common stock, warrants and stock options (continued):
         Options, warrants and other equity instruments issued for services
         (continued):

         (D)      These warrants were effectively cancelled as a result of the
                  sale of JAGfn to the Investor.

         (E)      On August 31, 2001, pursuant to amended and restated
                  employment agreements between the Company and its three senior
                  executives (see Note 10), each dated August 31, 2001, the
                  Company granted options to purchase 1,000,000 shares of,
                  effectively, Class A common stock at $.02 per share to each of
                  the three senior executives as additional compensation for
                  services to be rendered under such contracts. Options
                  previously granted to the three senior executives pursuant to
                  their original employment agreements, which gave each
                  executive the right to purchase 900,000 shares of,
                  effectively, Class A common stock at an exercise price of $.25
                  per share, were cancelled. In accordance with the provisions
                  of SFAS 123, the Company charged $24,000 to compensation
                  expense in 2002, which represented the excess of the aggregate
                  fair value of the options to purchase 1,000,000 shares of
                  Class A common stock granted to each executive on August 31,
                  2001 over the aggregate fair value of the options to purchase
                  900,000 shares of Class A common stock previously granted to
                  each of the executives immediately prior to the cancellation
                  of those options.

                  In addition, during 2002, the Company issued options for the
                  purchase of 1,936,725 shares of, effectively, Class A common
                  stock at exercise prices ranging from $.001 to $.10 per share
                  to employees and consultants that did not have employment or
                  other contractual agreements. The aggregate estimated fair
                  value of the options at the respective dates of issuance of
                  $537,544 was charged directly to compensation and consulting
                  expense during 2002, as further explained below.

                  As a result of the cancellation of certain other options
                  during 2002, the Company reversed the unamortized balance of
                  $189,000 for charges recorded as unearned compensation in
                  connection with the original issuances of options to employees
                  and consultants.

         (F)      During 2002, the Company issued 3,427,125 shares of,
                  effectively, Class A common stock upon the exercise of options
                  and received proceeds of $144,853.

         (G)      These options and warrants also include options for the
                  purchase of 2,269,600 shares of, effectively, Class A common
                  stock granted pursuant to 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, effectively, the Company's Class A common
                  stock. The number of shares of Class A common stock that may
                  be subject to all types of awards under the Incentive Plan as
                  amended may not exceed 6,000,000 shares.


                                      F-27
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 7 - Issuances of common stock, warrants and stock options (continued):

         Options, warrants and other equity instruments issued for services
         (continued):

         (H)      These options and warrants will expire at various dates from
                  July 2005 through March 2012.

                  The following table summarizes information about the number of
                  shares of common stock subject to options and warrants that
                  were outstanding at July 31, 2001 as a result of issuances of
                  those options and warrants to employees and nonemployees as
                  compensation for services:
<TABLE>
<CAPTION>

                                                                                                 Options and
                                  Options and Warrants Outstanding                           Warrants Exercisable
                  -------------------------------------------------------------------     --------------------------
                                                        Weighted
                                                        Average
                                                        Years of        Weighted                           Weighted
                                                       Remaining        Average                            Average
                      Exercise          Number        Contractual       Exercise              Number       Exercise
                       Prices         Outstanding         Life           Price             Exercisable      Price
                  --------------      -----------     ------------     ---------           ----------      --------

<S>                                  <C>                <C>          <C>                  <C>            <C>
                    $        .02       2,000,000          9.09         $     .02            2,000,000      $    .02
                         .05-.10          69,600          9.31               .06               69,600           .06
                            2.00         785,000          4.36              2.00              785,000          2.00
                            3.50         500,000          3.06              3.50              500,000          3.50
                            6.00         750,000          2.68              6.00              750,000          6.00
                                     -----------                                           ----------

                    $.02 - $6.00       4,104,600          5.79         $     .39            4,104,600      $    .39
                    ============     ===========      ========         =========           ==========      ========
</TABLE>

                  A total of $561,544 was charged directly to compensation and
                  consulting expense during 2002 and $1,635,870 was charged to
                  unearned compensation during 2001 as a result of the options
                  issued as compensation to employees and as consideration for
                  consulting, professional and other services in the
                  transactions described above. Unearned compensation is being
                  amortized to expense on a straight-line basis over the period
                  in which the related services are rendered (such period is
                  limited to the initial term of any related employment or
                  consulting agreement). A total of $1,013,958 and $7,881,124
                  was amortized during 2002 and 2001, respectively. The
                  unamortized balance of $381,432 and $975,090 has been
                  reflected as a reduction of stockholders' equity as of July
                  31, 2002 and 2001, respectively.

                  Unearned compensation of $1,660,207 as of January 31, 2002 was
                  attributable to compensation for employees of, and consulting,
                  professional and other services provided to, JAGfn and,
                  accordingly, that amount was charged against the proceeds from
                  the sale of JAGfn on February 1, 2001 in connection with the
                  determination of the gain from that sale, as explained in Note
                  6.


                                      F-28
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements



Note 7 - Issuances of common stock, warrants and stock options (concluded):

         Options, warrants and other equity instruments issued for services
         (concluded):

                  In addition, during 2002, the Company issued 1,446,867 shares
                  of its common stock (1,338,066 and 108,801 Class A and Series
                  1 Class B shares, respectively) to employees and consultants
                  as compensation to employees and as consideration for
                  consulting, professional and other services. The aggregate
                  estimated fair value of the shares at the respective dates of
                  issuance was $877,390, of which $268,090 was charged directly
                  to compensation and consulting expense and $609,300 was
                  charged to unearned compensation during 2002.

                  The fair values of the options, warrants and shares issued
                  and/or transferred as compensation to employees and as
                  consideration for consulting, professional and other services
                  in the transactions described above were determined in
                  accordance with SFAS 123 using the "minimum value method"
                  through October 31, 1999 (due to the limited amount of trading
                  of the Company's shares through that date) and the
                  Black-Scholes option-pricing model thereafter. The fair values
                  were determined in 2002 and 2001 based on the following
                  assumptions:

                         Expected years of option life:                       5
                         Risk-free interest rate:                     4.5% - 6%
                         Dividend yield:                                     0%
                         Volatility                                 110% - 361%


Note 8 - Notes payable to officers:

                  On April 1, 2001, two executive officers loaned the Company a
                  total of $400,000 subject to the terms and conditions of
                  unsecured promissory notes that bear interest at an annual
                  rate of 2.69% and were to become payable on August 15, 2002
                  (see Note 12).


Note 9 - 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 2002 and 2001.



                                      F-29
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 10- 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 balances exceed Federal insurance limits
                  although there was no such excess at July 31, 2002. The
                  Company reduces its exposure to credit risk by maintaining its
                  cash deposits with major financial institutions and monitoring
                  their credit ratings.

                  The Company extends credit to its customers. Generally, it
                  does not require any collateral. The Company closely monitors
                  the extension of credit while maintaining appropriate
                  allowances for potential credit losses. Accordingly,
                  management does not believe that the Company was exposed to
                  significant credit risk at July 31, 2002.

         Employment agreements:

                  Pursuant to amended and restated employment agreements between
                  the Company and its three senior executives, each dated August
                  31, 2001, the Company became obligated to make cash payments
                  of $150,000 to each of the three senior executives annually
                  during the three year period ending August 31, 2004. As a
                  result, the Company's obligations for cash payments under all
                  of the employment agreements during periods subsequent to July
                  31, 2002 will total approximately $1,483,000, of which
                  $450,000, $450,000 and $38,000 will be payable in the years
                  ending July 31, 2003, 2004 and 2005, respectively.

                  Each of the three senior executives will also receive an
                  option to purchase 500,000 shares of the Company's Class A
                  common stock at a price equal to 25% of the closing bid price
                  on the last day of trading in each of the three years in the
                  period ending August 31, 2004 if the average closing bid price
                  of the Company's Class A common stock is $1.00 per share or
                  greater for the first year, $2.00 per share or greater for the
                  second year and $3.00 per share or greater for the third year.

         Leases:

                  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 $77,000 and $1,212,000 for 2002 and 2001,
                  respectively. As of July 31, 2002, the Company was not subject
                  to any significant noncancelable office leases.

                  Prior to the sale of JAGfn, the Company had used computer
                  equipment under lease agreements that were classified as
                  capital leases. The Company effectively acquired equipment at
                  a cost of $46,315 in 2001 by incurring capital lease
                  obligations. These noncash transactions are not reflected in
                  the accompanying 2001 consolidated statement of cash flows.


                                      F-30
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 10- Commitments and contingencies (concluded):

         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 11- Fair value of financial instruments:

                  The Company's material financial instruments at July 31, 2002
                  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, cash and cash equivalents, accounts
                  receivable and accounts payable were carried at values that
                  approximated their fair values at July 31, 2002 because of
                  their liquidity and/or their short-term maturities.


Note 12- Subsequent events:

         Sales of common stock pursuant to the New Equity Line Agreement:

                  During the period from August 1, 2002 through October 28,
                  2002, Cornell Capital was required to pay $1,050,000 and it
                  received 4,249,639 shares of Class A common stock and the
                  Company received proceeds of $990,000 net of $60,000 of
                  placement fees as a result of the exercise by the Company of
                  put options pursuant to the New Equity Line Agreement (see
                  Note 5). The Company was also required to issue an additional
                  10,000 shares of Class A common stock to placement agents in
                  connection with the sale of the shares. As of October 28,
                  2002, the Company had the ability to require Cornell Capital
                  to purchase shares of its common stock pursuant to the New
                  Equity Line Agreement at an aggregate purchase price of
                  $8,950,000 through August 28, 2004.

         Shares issued to pay accrued expenses:

                  During the period from August 1, 2002 through October 28,
                  2002, the Company agreed to issue a total of 635,604 shares of
                  its Class A common stock with an aggregate fair value of
                  $240,391 to pay accrued salaries of $169,969.

         Shares issued to consultants:

                  During the period from August 1, 2002 through October 28,
                  2002, the Company issued a total of 100,000 shares of its
                  Class A common stock with an aggregate fair value of $37,500
                  in exchange for the consulting services.

         Changes in terms of notes payable to officers:

                  Pursuant to amendments dated August 15, 2002, the maturity
                  date of the Company's notes payable to officers (see Note 8)
                  was extended from August 15, 2002 to the earlier of (i)
                  January 31, 2003 or (ii) the effective date of a "change in
                  control" of the Company, as defined.

                                      * * *

                                      F-31
<PAGE>

                                   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.


                                                     /s/ Gary Valinoti
                                                     ---------------------------
                                                     Gary Valinoti
                                                     Chief Executive Officer

Dated: November 13, 2002


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.

<TABLE>
<CAPTION>
                Signature                          Title                          Date
                ---------                          -----                          ----
<S>                             <C>                                        <C>
                                 Chief Executive Officer, President and
/s/ Gary Valinoti                Director (Principal Executive Officer)     November 13, 2002
----------------------------
Gary Valinoti

                                 Chief Financial Officer, Executive Vice
                                 President, General Counsel and Director
                                 (Principal Financial and Accounting
/s/ Thomas J. Mazzarisi          Officer)                                   November 13, 2002
----------------------------
Thomas J. Mazzarisi

                                 Chief Operating Officer and Executive
/s/Stephen J. Schoepfer          Vice President and Director                November 13, 2002
-----------------------
Stephen J. Schoepfer
</TABLE>

<PAGE>

                                 CERTIFICATIONS

         I, Gary Valinoti, Chief Executive Officer of JAG Media Holdings, Inc.,
certify that:

         1. I have reviewed this annual report on Form 10-KSB of JAG Media
Holdings, Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.

Date: November 13, 2002


                                    /s/  Gary Valinoti
                                    ------------------------------
                                    Name: Gary Valinoti
                                    Title: Chief Executive Officer


         I, Thomas J. Mazzarisi, Chief Financial Officer of JAG Media Holdings,
Inc., certify that:

         1. I have reviewed this annual report on Form 10-KSB of JAG Media
Holdings, Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.

Date: November 13, 2002


                                    /s/ Thomas J. Mazzarisi
                                    ------------------------------
                                    Name: Thomas J. Mazzarisi
                                    Title: Chief Financial Officer

<PAGE>



                                  EXHIBIT INDEX
                                  -------------


Exhibit No.         Description
-----------         -----------

4.18            Amendment, dated August 15, 2002, to Promissory Note, dated
                April 1, 2002 in the amount of $200,000 issued to Thomas J.
                Mazzarisi.

4.19            Amendment, dated August 15, 2002, to Promissory Note, dated
                April 1, 2002 in the amount of $200,000 issued to Stephen J.
                Schoepfer.

21.1            Subsidiaries of Registrant.

99.2            Section 906 Certification of Chief Executive Officer and
                Chief Financial Officer.