<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, 2003

         OR

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

                        Commission File Number 000-28761

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

                            JAG Media Holdings, Inc.
             (Exact Name of Registrant as Specified in Its Charter)

                    Nevada                                    88-0380546
(State or Other Jurisdiction of Incorporation)            (I.R.S. Employer
                                                          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:

     Title of Each Class            Name of Each Exchange 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 par value
               Series 2 Class B Common Stock, $0.00001 par value
                                (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, 2003 was
approximately $386,000.

         The aggregate market value of voting and non-voting common equity held
by non-affiliates of the registrant, based upon the closing price of the Class A
Common Stock on November 5, 2003 as reported on the OTC Bulletin Board, was
approximately $15,318,495.

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


                                                                 Outstanding at
                             Class                              October 20, 2003

Class A Common Stock, par value $0.00001 per share                40,628,184
Series 1 Class B Common Stock, par value $0.00001 per share        1,018,224
Series 2 Class B Common Stock, par value $0.00001 per share         375,978
Series 3 Class B Common Stock, par value $0.00001 per share         20,000

                DOCUMENTS INCORPORATED BY REFERENCE: None

================================================================================

<PAGE>

                            JAG MEDIA HOLDINGS, INC.
                         2003 FORM 10-KSB ANNUAL REPORT

                                TABLE OF CONTENTS


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

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

ITEM 2.  DESCRIPTION OF PROPERTIES..........................................30

ITEM 3.  LEGAL PROCEEDINGS..................................................30

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................30

PART II  ...................................................................31

ITEM 5.  MARKET FOR THE REGISTRANT'S

         COMMON EQUITY AND RELATED STOCKHOLDER MATTERS......................31

ITEM 6.  MANAGEMENT'S DISCUSSION AND
         ANALYSIS OR PLAN OF OPERATION......................................38

ITEM 7.  FINANCIAL STATEMENTS...............................................44

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

ITEM 8A. CONTROLS AND PROCEDURES............................................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...................................55

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................56

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K.............................57

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.............................64




<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 undertook a corporate reorganization in January 2002 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. We intended for JAG Company Voice LLC
to carry out the operations of our "Company Voice" start-up business which aimed
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 expected to engage and the corporate
structure we intended to use to conduct that business, we changed our corporate
name from JagNotes.com Inc. to JAG Media Holdings, Inc. effective April 8, 2002.



                                       3
<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 demand for
financial information over the Internet to continue to increase.

According to an August 1, 2003 publication, as of 2002 there were approximately
604 million Internet users worldwide, including over 165 million users in the
United States. See The World Factbook
(http://www.odci.gov/cia/publications/factbook/rankorder/2153rank.html).

The first Internet-based trading systems were introduced in 1995. Since that
time, online trading has increased dramatically but not without setbacks. By the
first quarter of 2003, daily volume had declined to approximately 600,000 trades
daily (12 percent of Nasdaq and NYSE trading volume), and the total number of
online brokerages, which exceeded 200 in 2000, had shrunk to fewer than 75.
However, during the second quarter of 2003, online brokerages reported a
turnaround. Ameritrade alone handled an average daily volume of 154,300 trades,
up 32.7 percent from the first quarter. See "Online Revival Gathers Pace," Funds
International (September 30, 2003).

More consumers are going online to buy stocks and bonds and conduct personal
banking transactions and carry out a variety of other financial transactions
according to the Consumer Internet Barometer, which reported that nearly half of
Internet users conduct financial transactions online today as compared with 39%
in the fourth quarter 2001, and the proportion of consumers logging on primarily
to conduct financial transactions has also grown from 3% to 5%. More than
two-thirds of these Internet users log on daily to conduct financial
transactions. See "More Consumers Using Internet to Buy Stocks, Do Personal
Banking and Other Financial Transactions," Consumer Internet Barometer (October
6, 2003).

A July 2003 Consumer Internet Barometer survey reported that while about 43% of
users in 2002 indicated their major reason for going online was to engage in a
variety of personal communication activities, only 38% indicated that was true
in 2003. As of the date of the survey, approximately 17% were going online to do
personal research, up from about 15% in the prior year. See "Internet Usage on
the Rise, With More Consumers Logging on Daily," Consumer Internet Barometer
(July 2, 2003).



                                       4
<PAGE>

The Consumer Internet Barometer is produced by NFO WorldGroup, Forrester
Research and The Conference Board. Press releases relating to the foregoing
topics can be located online at
(http://www.consumerinternetbarometer.us/press.cfm).

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, 2003, JAG Media had eleven 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
---------------------------------  ---------------------------------
Mark Leibovit                      Volume Tracks
---------------------------------  ---------------------------------
David Schultz                      Sector Vue
---------------------------------  ---------------------------------
Hank Camp                          Program Trading Research
---------------------------------  ---------------------------------
Bruce Norrin                       Focus Stock Charts
---------------------------------  ---------------------------------
Harry Aloof                        Wall Street Trader's Column
---------------------------------  ---------------------------------


                                       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 provided through installments as information is received 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
$2,150 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.

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 user friendly 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.

                                       6
<PAGE>

Company Voice Service - Through our wholly owned subsidiary, JAG Company Voice
LLC, we began marketing our "Company Voice" service in 2003. We established the
Company Voice service in order to make available to publicly traded companies
production and distribution services that would enable them to deliver press
releases and other company messages to stockholders and potential investors in
streaming video/audio format. Our goal was to offer production and distribution
services such as directly contracting for studios in which Company Voice
segments would be taped; providing interviewers for each Company Voice segment;
assisting clients in preparing for each interview; encoding taped segments to
allow distribution via the Internet; and arranging for distribution and
streaming of finalized Company Voice segments on affiliate sites such as Lycos.

During 2003, we placed four Company Voice segments on our web site; however,
this service did not produce any material revenue for us. Therefore, we allowed
our Company Voice contract for streaming video to expire by its terms and are
not at this time actively marketing our Company Voice services.

We do still maintain an agreement with Lycos which is due to expire in summer
2004 if not terminated earlier as described below. Under the agreement, 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.

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.



                                       7
<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. We would not expect such
revenues to become material until (i) there is a major upturn from current
levels in Internet banner advertising generally or we are able to offer
advertisers various media advertising alternatives to banners and (ii) we have
been successful in increasing the number of unique visitors to our web site.

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        reverse the current downward trend of our revenues;

         o        control costs to correspond with our revenues; and

         o        pursue strategic alliances.

We plan to continue to service the institutional segment of our business and
intend to continue to place more emphasis on this segment. 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        Increase Revenues. Some avenues that we are exploring to
                  reverse the current downward trend of our revenues include:

                  o        Increasing our sales efforts with respect to
                           institutional subscribers;

                  o        To the extent funds permit, developing products
                           tailored to the needs of institutional subscribers
                           such as JAGNotes and Rumor pages delivered to company
                           intranets and featuring company branding;

                  o        Offering free trial subscriptions; and

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

                                       8
<PAGE>

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

         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. For example, we currently have an
                  arrangement with Track Data, a financial information platform
                  for professional traders, whereby Track Data offers our
                  JAGNotes report as part of its collection of subscriber
                  services to the professional trading community. We also are
                  currently pursuing alliances with a web portal and hope to do
                  so with others in an effort to obtain additional content,
                  expand our name recognition and increase our subscriber base.

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 14 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.

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 passed legislation that regulates certain aspects of the
Internet, including on-line content, copyright infringement, user privacy,
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.


                                       9
<PAGE>

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, many of
which provide their information without charge:

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

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

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

         o        Traditional stock market analysis distributed by investment
                  banks and brokerage houses, ranging from large, well known
                  institutions such as Merrill Lynch, Smith Barney and Morgan
                  Stanley to smaller brokerages;

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

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

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.

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.



                                       10
<PAGE>

In order for us to successfully compete in this business, we will need to
reliably provide valuable services to a greater number of institutional and
other subscribers who are willing to pay us fees sufficient to support such
services. We believe that a successful implementation of our business strategy
will allow us to compete successfully as a focused provider of timely investment
information to institutional and professional investors.

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, 2003, we had five 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. As of November 1, 2003,
$1,885,000 of our existing equity line with Cornell Capital had been utilized.

Stock Dividend

On March 18, 2003, we announced our intention to declare a special stock
dividend. To effect such dividend, we filed a Certificate of Designation with
the Secretary of State of the State of Nevada on April 11, 2003 which designated
a new series of Class B common stock, par value $0.00001 per share, which was
distributed by dividend to the our stockholders of record as of the close of
business on April 14, 2003 in the ratio of one share of Series 2 Class B common
stock for every 100 shares of Class A common stock. Such shares of Series 2
Class B common stock are non-voting, have dividend and liquidation rights equal
to the Class A common stock and are redeemable, which redemption by JAG Media is
mandatory to the fullest extent permitted by law within six months following
final resolution of our pending lawsuit in Texas federal court against various
brokerage firms (or any related successor lawsuit) at a redemption price which
is the greater of (a) par value or (b) ninety percent of the net proceeds to us
of such lawsuit after payment of fees and expenses incurred in connection with
such lawsuit and all taxes on net income accrued or paid with respect to such
net amount. The shares of Series 2 Class B common stock do not have a CUSIP
number.



                                       11
<PAGE>

Our transfer agent has completed the issuance and mailing of Series 2 Class B
common stock dividend certificates to all registered beneficial shareholders and
to all beneficial owners who appear on beneficial owner lists supplied by
brokers which are consistent with their share position with the Depository Trust
Company. As of November 1, 2003, Series 2 Class B common stock dividend
certificates had not yet been mailed to certain beneficial owners because as of
such date approximately 13 DTC participants either had failed to submit a
beneficial owner list to our transfer agent or the list they submitted did not
correspond to their official position in our shares as recorded by the
Depository Trust Company.

Proposed Acquisition of XeQute Solutions, Inc.

We announced on August 12, 2003 that we had entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement") with Vertex Interactive, Inc.
(OTCBB:VETX), a New Jersey corporation ("Vertex"), XeQute Solutions PLC, an
English company and wholly owned subsidiary of Vertex ("PLC"), and PLC's wholly
owned subsidiary, XeQute Solutions, Inc., a Delaware corporation ("XeQute" and
together with Vertex and PLC, the "Sellers"). XeQute, based in Paramus, New
Jersey, is a provider of supply chain management technologies and services,
including enterprise software systems and applications, software/hardware
maintenance services and consulting services, which enable its customers to more
effectively manage their order, inventory and warehouse requirements.

The Asset Purchase Agreement provides for a closing by October 31, 2003.
Accordingly, neither party would now be required to close the transaction unless
it chose to waive the closing date requirement. The parties have not
contractually extended the permitted closing date pending confirmation of the
availability of the financing described below. In the event that such financing
is confirmed and we and the Sellers set a new closing date, the provisions of
the Asset Purchase Agreement are described below.

There is no assurance (i) that an amendment extending the closing date (or a
waiver thereof) will be entered into by the parties to permit consummation of
the agreement, or (ii) if such amendment or waiver is provided, that the
conditions to the proposed transaction with XeQute will be met, or (iii) if such
conditions are met, that the transaction will be consummated.

Under the terms of the Asset Purchase Agreement, we would establish a newly
formed wholly owned subsidiary which would purchase the assets and assume
certain liabilities of XeQute.

Upon closing of the transaction, in consideration of the transfer of the assets
and liabilities of XeQute as described above, we would issue shares of our Class
A common stock, to XeQute, which upon issuance would represent 54.0% of our
outstanding common stock on a fully diluted basis. Such shares of Class A common
stock will be subject to a post-closing lock-up provision restricting the shares
from being registered for sale prior to one year after the closing of the
transaction. In addition, we will pay to the Sellers $3.5 million out of the
proceeds of an $8.0 million financing to be consummated at the closing upon
terms and conditions satisfactory to both us and the Sellers.


                                       12
<PAGE>

The closing is subject to various conditions, including, among others, XeQute
arranging the financing referred to above, the parties agreeing upon various
schedules to the Asset Purchase Agreement, and XeQute providing us with complete
audited financial statements for the business of XeQute for the two fiscal years
through September 30, 2003.

Shares of the JAG Media Holdings, Inc. to be offered and sold pursuant to the
Asset Purchase Agreement will not be registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United States absent
such registration or an applicable exemption from such registration
requirements. This disclosure shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the shares of
JAG Media Holdings,, Inc. in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
applicable securities laws, or absent the availability of an exemption from such
registration or qualification requirements.

At the closing of the transaction, our current management team consisting of
Gary Valinoti (Chief Executive Officer), Thomas J. Mazzarisi (Chief Financial
Officer, Executive Vice President and General Counsel) and Stephen J. Schoepfer
(Chief Operating Officer and Executive Vice President), would resign from their
positions as executive officers and directors of JAG Media Holdings, Inc. but
would continue to be involved as consultants or employees to our JAG Media LLC
operating subsidiary. The transaction with XeQute would also trigger the
change-in-control provisions in the existing employment agreements of our
current management team, resulting in the issuance of new options to acquire
shares of our stock and severance payments to such individuals.

Upon the closing, we would also take various corporate actions, including an
appropriate name change to better reflect the new overall business of the
company, the election of new XeQute nominees to the Board of Directors and a
recapitalization pursuant to which our Class A common stock and Series 1 Class B
common stock, par value $0.00001 per share, will be exchanged for a new Series 4
Class B common stock on a one-for-one basis. Shares of the new Series 4 Class B
common stock shall be issued and traded in certificated form only, may not be
registered in the name of a nominee such as Cede & Co. or The Depository Trust
Company and at all times the name of the beneficial owner of such shares shall
be reflected on the face of the certificate. The new shares of Series 4 Class B
common stock would also reflect our new corporate name and would have a new
CUSIP number and ticker symbol.




                                       13
<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, 2003 we had incurred losses to date of $41,138,858. 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 are
materially 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
stop declining and grow in the future or that additional financing will be made
available to us. 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 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.



                                       14
<PAGE>

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

Our subscriber base has been shrinking. We must reverse such trend and 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, 2003 subscription
revenues decreased as compared to the year ended July 31, 2002 with total
subscription revenues for the comparable periods of approximately $386,000 and
$625,000, respectively. Although we are still attempting to reverse such trend
and 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, perhaps at an increasing rate. Our current and potential
subscribers may be unwilling to pay for our service if they feel they can
receive comparable information for free. Because there is currently limited
potential for Internet banner advertising revenues, if we cannot reverse the
current shrinkage of 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 changed our name to JAG Media in April 2002 after
operating for almost three years under the name JagNotes.com. The JAG Media name
has only limited recognition within the financial community and little if any
recognition among the general public. We do not 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.



                                       15
<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 distribution. Pursuing such
transactions will entail a number of risks and difficulties. We compete with a
wide variety of information providers and there is substantial competition for
distribution channels. We can offer no guarantee that we will be able to locate
suitable candidates for alliances or risk sharing partners. If we are able to do
so, we will require a high level of managerial skill to successfully evaluate
and implement these transactions. While we have limited experience in evaluating
and implementing transactions of this type, we cannot guarantee that we will be
able to successfully pursue this strategy.

We may have to defend against intellectual property infringement claims and
libel and defamation claims, which may cause significant 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 subscribers,
which could materially adversely affect our business, results of operations and
financial condition.



                                       16
<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.



                                       17
<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 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.




                                       18
<PAGE>


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

Companies and individuals that provide financial advice to investors in the
United States are generally required to register as an investment adviser at
either the federal or state level, and are subject to extensive regulation. We
believe that our business consists of a publishing activity for which investment
adviser registration and regulation do not apply under applicable federal or
state law, and 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.



                                       19
<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, Reuters
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, Reuters
                  and MotleyFool.com;

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

                                       20
<PAGE>

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

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

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.



                                       21
<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 October 20, 2003, our named executive officers and directors beneficially
owned or controlled a total of approximately 6,022,000 shares, or approximately
14.1% 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 36.4% 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.



                                       22
<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.



                                       23
<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, 2003 was $(28,280),
representing a net negative tangible book deficit per share of our Class A
common stock, based on the number of such shares outstanding as of October 20,
2003, of $.002.

<TABLE>
<CAPTION>
                                                                                                       Change in
                                                          Number of      Purchase   Percent of        Tangible Net
Market Price  Advance Amount   Investor Fee Net Proceeds  Shares Issued   Price   Outstandng Shares  Value Per Share
------------  --------------   ------------ ------------  ------------- --------- ------------------ ---------------
<S>           <C>              <C>          <C>           <C>           <C>           <C>             <C>
$0.41         $500,000         $25,000      $475,000      1,283,697     $0.3895       3.2%            $.012
$0.3075       $500,000         $25,000      $475,000      1,711,596     $0.292125     4.2%            $.012
$0.205        $500,000         $25,000      $475,000      2,567,394     $0.19475      6.3%            $.012
$0.1025       $500,000         $25,000      $475,000      5,134,788     $0.097375     12.6%           $.011
</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 10, 2003.
(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 40,628,184 shares of Class A common stock issued and outstanding
       as of October 20, 2003

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. From September 22, 2003 through October 20, 2003, our Class A common
stock traded at an average of approximately $0.45 per share. 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.


                                       24
<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.



                                       25
<PAGE>

Implementation of our planned recapitalization could limit the transferability
of your shares.

         Our Asset Purchase Agreement with XeQute contemplates a post-closing
recapitalization pursuant to which our Class A common stock and Series 1 Class B
common stock will be exchanged for a new Series 4 Class B common stock on a
one-for-one basis. Shares of the new Series 4 Class B common stock would be
issued and traded in certificated form only, may not be registered in the name
of a nominee such as Cede & Co. or The Depository Trust Company and at all times
the name of the beneficial owner of such shares would be reflected on the face
of the certificate. As the new Series 4 Class B common stock would be issued and
traded in certificated form only, it may not be registered in the name of a
nominee such as Cede & Co. or The Depository Trust Company and at all times the
name of the beneficial owner of such shares would be reflected on the face of
the certificate. If implemented, the recapitalization may be considered to have
certain disadvantages, including those set forth below.

         o        Implementation of the recapitalization will restrict or limit
                  current or future stockholders from clearing purchases and
                  sales of our shares in the normal method used by
                  broker-dealers. Accordingly, implementation of this policy
                  could result in a reduction in the trading of our shares.

         o        The implementation of the recapitalization could result in
                  delays in the processing and clearing of transactions
                  involving the company's shares, which could delay efforts by
                  the company's current or future stockholders to timely dispose
                  of their shares or to take advantage of favorable market
                  conditions.

         o        A decline in the trading volume of our shares caused by a
                  transition to "custody only" trading might have the effect of
                  discouraging an attempt by a third party to take over or
                  otherwise gain control of the Company.

         o        If enacted, this new trading policy could also adversely
                  affect the decision of certain investors, including
                  institutional investors, that would otherwise consider
                  investing in our Class A common stock. As a result of the
                  practical implications of the proposal, our stock may be
                  deemed to be less attractive to certain investors, including
                  managers of certain institutional investors who may hold their
                  shares in bank nominee names.

         o        If you are not already a registered stockholder, your broker
                  may charge you a fee if you choose to obtain and/or hold or
                  process physical share certificates in your own name through
                  your broker. In addition, you would have to execute a transfer
                  document when you want to sell your shares. It is our
                  understanding that certain brokerage firms, such as
                  Ameritrade, have notified their clients that they will not
                  accept any new opening orders in the securities of companies
                  that implement "custody only" trading.

         o        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 our
                  shares over a 24-month period. It is a condition to the equity
                  line that on any given closing date, there shall be at least
                  one bid for our shares on the Nasdaq OTC Bulletin Board. If
                  this condition is 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 the market
                  for our shares diminishes as a result of the recapitalization,
                  Cornell Capital might refuse to honor its obligation to us
                  under the equity line and we may not be able to force it to do
                  so or be able to obtain an award for damages in a timely
                  manner. If we are unable to draw in whole or in part on the
                  equity line purchase agreement, our cash, cash equivalents,
                  and securities will not be sufficient to meet our anticipated
                  cash needs unless we obtain alternative financing. 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 JAG Media.

                                       26
<PAGE>

         o        The implementation of the recapitalization will require us to
                  incur additional expenses, including legal fees, printing
                  costs and transfer agent fees and expenses incurred in
                  connection with the need to issue physical share certificates
                  and maintain the books and records of the transfers of our
                  Series 4 Class B common stock.

         o        The implementation of the recapitalization could result in a
                  short-term decline in the trading price of our stock as a
                  result of sales of your securities by institutional investors
                  and others who are unwilling or who may find it impractical to
                  hold certificated positions.

         o        The implementation of the recapitalization could result in
                  market makers being unwilling to quote the company's stock,
                  and/or broker-dealers being unwilling to trade the company's
                  stock, thus affecting the ability of our current or future
                  stockholders to timely dispose of their shares or to take
                  advantage of favorable market conditions.

         o        The implementation of the recapitalization could limit the
                  ability of our current or future stockholders or others, such
                  as market makers, to take bona fide short positions in the
                  company's stock for risk management or other legitimate
                  purposes.

         o        The implementation of the recapitalization could increase the
                  risk of the physical certificates being lost in the mail
                  and/or stolen.

         o        Finally, the implementation of "the recapitalization could
                  lead to legal claims being brought against us and/or our
                  transfer agents by, among others, the Federal and state
                  securities regulators, the self regulatory organizations that
                  regulate the securities markets and securities market
                  professionals, and persons or entities currently holding
                  positions in the company's securities in uncertificated or
                  book entry form and/or the nominees through which those
                  persons hold those positions.

Implementation of our proposed stock dividend could also limit the
transferability of your shares.

We recently declared a special stock dividend, described elsewhere in this
Annual Report on Form 10-KSB, pursuant to which a new series of Class B common
stock has been distributed by dividend to our stockholders of record in the
ratio of one share of Series 2 Class B common stock for every 100 shares of
Class A common stock. We do not expect a market for the shares issued in the
stock dividend to develop because the shares of Series 2 Class B common stock do
not have a CUSIP number and certificates for such shares specify the beneficial
owner. Accordingly, the stock dividend is expected to inhibit short selling of
our shares unless the sellers are able to deliver the shares they sell as the
stock dividend will only be payable to actual stockholders as of the record date
for the dividend. Therefore the dividend presents the same risks to stockholders
associated with "custody only" trading described above.



                                       27
<PAGE>

There are several risks associated with our proposed acquisition of XeQute
Solutions, Inc.

If our Asset Purchase Agreement with XeQute Solutions, Inc. (described elsewhere
in this Annual Report on Form 10-KSB) is amended and made effective and if our
proposed acquisition of XeQute is subsequently consummated, such acquisition may
present the following risks to our stockholders:

         o        Our existing stockholders' interest and voting power in our
                  company would be significantly reduced as a result of the
                  transaction because we will be issuing Vertex Interactive Inc.
                  shares of our Class A common stock representing 54% of the
                  post-closing outstanding shares of JAG Media on a fully
                  diluted basis, and in addition it would trigger the
                  change-in-control provisions in the employment agreements of
                  Messrs. Valinoti, Mazzarisi and Schoepfer, resulting in the
                  issuance of new options to acquire shares of Class A common
                  stock.

         o        The existing JAG Media management team would also be entitled
                  to severance payments upon a change-in-control of the company,
                  the payment of which could adversely affect our financial
                  condition.

         o        Because XeQute is engaged in a different line of business than
                  JAG Media, our operations may not be easily integrated and the
                  combined business may never achieve profitability. The
                  business strategy of the combined companies may not be
                  received well by the financial community, and we may have
                  difficulty raising additional capital in the future. If we
                  require additional funding and do not obtain it, we may be
                  forced to restructure, file for bankruptcy or cease
                  operations.

         o        We depend on the contacts of the existing JAG Media management
                  team within the professional financial community for certain
                  information that we provide to our subscribers. If these
                  individuals resign from their executive officer and director
                  positions in connection with the merger as anticipated and if
                  they do not otherwise continue to be associated with the JAG
                  Media business, our JAG Media business may suffer and we may
                  be unable to attract, hire, train and retain qualified
                  officers to manage this business and your investment in JAG
                  Media could be adversely affected as a result.

         o        If, as anticipated, a new board of directors consisting
                  entirely of XeQute appointees is elected in connection with
                  the merger, such persons may not possess the industry
                  expertise necessary to build our subscriber base, offer new
                  services or otherwise expand the JAG Media business.

If any of the foregoing risks are realized as a result of the transaction, you
could lose all or part of your investment in our Class A common stock.



                                       28
<PAGE>


The value of your investment in JAG Media could decrease due to naked shorting
of our Class A common shares.

Our Board of Directors believes, but cannot confirm, that the price of the
shares of our Class A common stock currently trading on the Nasdaq OTC Bulletin
Board may be artificially depressed due to abnormally high short selling by
speculators who are not stockholders of JAG Media. Furthermore, our Board of
Directors believes that speculators may be engaging in a practice commonly known
as a "naked short" sale, which means that certain brokers may be permitting
their short selling customers to sell shares their customers do not own and may
have failed to borrow and therefore deliver the shares sold to the purchaser of
the shares. Consequently, there may be a substantial number of purchasers who
believe they are stockholders of JAG Media but who in fact would not be
stockholders since their brokers may never have received any shares of JAG Media
for their account. Naked short selling can be illegal if done with the conscious
intention of leaving the short position as a paper entry indefinitely. On June
20, 2002, we 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. Because naked
shorting may result in an artificial depression of our stock price, you could
lose all or part of your investment in our Class A common stock.



                                       29
<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 Holdings, Inc. 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. The
plaintiffs subsequently filed a motion in the United States District Court for
the Southern District of Texas to have the action remanded back to the state
court where it was originally commenced. That motion was denied and the action
is proceeding in the federal district court. The discovery process has begun,
and the plaintiffs are currently pursuing document production and the names and
locations of certain fact witnesses and corporate representatives. On October 1,
2003, the Court denied various motions to dismiss made on behalf of the
defendants. However, in its ruling, the Court indicated that all motions to
dismiss could have been granted in light of the defective pleadings made by
plaintiffs and allowed plaintiffs 20 days to file an amended complaint to comply
with certain pleading requirements of the Court. Plaintiffs filed an amended
complaint within the required period.

In this action, the plaintiffs seek an immediate accounting of all short
positions, an accounting of all profits made by defendants in trading JAG Media
stock, disgorgement of any profits made by the defendants, actual damages
incurred as a result of the defendant's 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 procedures.

There are no currently pending material lawsuits 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.

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.


                                       30
<PAGE>

                                     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.



                                       31
<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, ending January 31, 2003                1.48           0.25
Third Quarter, ending April 30, 2003                   0.97           0.41
Fourth Quarter, ending July 31, 2003                   0.87           0.34

Fiscal Year 2004
----------------
First Quarter, ending October 31, 2003                 0.67           0.30
Second Quarter, through November 5, 2003               0.49           0.40

As of October 20, 2003, there were 1,535 stockholders of record of our Class A
common stock. On November 5,2003, the closing bid price for our Class A common
stock was $0.43.

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, four hundred thousand
(400,000) shares have been designated Series 2 Class B common stock, and forty
thousand (40,000) shares have been designated Series 3 Class B common stock; and
(iii) fifteen million (15,000,000) shares shall be preferred stock.

As of July 31, 2003, we had (i) 40,212,882 shares of Class A common stock issued
and outstanding, (ii) 1,031,143 shares of Series 1 Class B common stock issued
and outstanding, (iii) 374,120 shares of Series 2 Class B common stock issued
and outstanding, (iv) 20,000 shares of Series 3 Class B common stock issued and
outstanding, and (v) 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.



                                       32
<PAGE>

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. The holders of shares of Series 2 Class B common
stock and Series 3 Class B common stock are not entitled or permitted to vote on
any matter required or permitted to be voted upon by the stockholders of JAG
Media.

Mandatory Redemption. Each share of the Series 2 Class B common stock and Series
3 Class B common stock must be redeemed by JAG Media, to the fullest extent
permitted by law, within six months (or as soon thereafter as permitted by law)
following final resolution of our lawsuit against certain brokerage firms (JAG
Media Holdings, Inc. v. A.G. Edwards & Sons et al) which is, as of the date of
this resolution, pending in U.S. District Court for the Southern District of
Texas or any successor or other lawsuit relating to the subject matter thereof
in which JAG Media is named as a plaintiff, which date shall be determined by
the Board of Directors. The redemption price for each share of the Series 2
Class B common stock shall be equal to the greater of (i) par value or (ii) the
amount obtained by dividing (a) ninety percent of the net proceeds to us of the
lawsuit after payment of fees and expenses incurred in connection with such
lawsuit and all taxes on net income accrued or paid with respect to such amount,
by (b) the total number of shares of Series 2 Class B common stock issued and
outstanding as of the redemption date, which amount shall be rounded to the
nearest whole cent. The redemption price for each share of the Series 3 Class B
common stock shall be equal to the greater of (i) par value or (ii) .0025% of
ten percent of the net proceeds to JAG Media of the lawsuit after payment of
fees and expenses incurred in connection with such lawsuit and all taxes on net
income accrued or paid with respect to such amount, which amount shall be
rounded to the nearest whole cent. Redemption of the Series 2 Class B common
stock and Series 3 Class B common stock would be subject to the restrictions set
forth in Section 78.288 of the Nevada Revised Statutes which provides that a
corporation may not make a distribution to its stockholders if, after giving it
effect, the corporation would not be able to pay its debts as they become due in
the usual course of business or the corporation's total assets would be less
than the sum of its total liabilities. Share certificates shall be issued to
represent the Series 2 Class B common stock and Series 3 Class B common stock
which specify the number of shares represented by such certificate and the name
of the beneficial owner of such shares. Shares of Series 2 Class B common stock
and Series 3 Class B common stock may be transferred only on our books in person
or by duly authorized attorney upon surrender of said certificate properly
endorsed and specifying the new beneficial owner.

Dividends and Distributions. Each share of Class A common stock, Series 1 Class
B common stock, Series 2 Class B common stock and Series 3 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.



                                       33
<PAGE>

Mergers, Consolidations and Liquidation. Each holder of Class A common stock,
Series 1 Class B common stock, Series 2 Class B common stock and Series 3 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, Series 1 Class B common
stock, Series 2 Class B common stock or Series 3 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, Series 2 Class B common stock and Series 3 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, 400,000
shares have been designated as Series 2 Class B common stock and 40,000 shares
have been designated as Series 3 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.


                                       34
<PAGE>


Options

As of July 31, 2003, there were options outstanding to purchase an aggregate of
2,204,545 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, 2003, 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 Class A common stock and anticipate
that, for the foreseeable future, no cash dividends will be paid on our Class A
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.

On March 18, 2003, we announced our intention to declare a special stock
dividend.. To effect such dividend, we filed a Certificate of Designation with
the Secretary of State of the State of Nevada on April 11, 2003 which designated
a new series of Class B common stock, par value $0.00001 per share, which was
distributed by dividend to the our stockholders of record as of the close of
business on April 14, 2003 in the ratio of one share of Series 2 Class B common
stock for every 100 shares of Class A common stock. For a further discussion of
the foregoing stock dividend see the disclosure under the heading "Stock
Dividend" on page 12 of this Annual Report on Form 10-KSB.

Recent Sale of Unregistered Securities

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

Pursuant to a Subscription Agreement, dated as of September 25, 2003, Kuekenhof
Partners purchased (a) 35,000 shares of our Class A common stock and (b) 1,500
shares of our Series 3 Class B common stock, par value $0.00001 per share, for a
total consideration of $50,000.00. The issuance of such securities was exempt
from registration under the Securities Act of 1933, as amended, pursuant to
Section 4(2) thereof.



                                       35
<PAGE>

Pursuant to a Subscription Agreement, dated as of June 19, 2003, Bay Point
Investment Partners LLC purchased (a) 1,282,675 shares of our Class A common
stock and (b) 20,000 shares of our Series 3 Class B common stock, par value
$0.00001 per share, for a total consideration of $422,000.00. In connection with
the Bay Point private placement, we entered into a placement agent agreement
pursuant to which we issued 128,267 shares of our Class A common stock as a
placement agent fee. The issuance of such securities was exempt from
registration under the Securities Act of 1933, as amended, pursuant to Section
4(2) thereof. We have agreed to register the Class A common stock issued
pursuant to the Subscription Agreement and Placement Agent Agreement on a
registration statement to be filed with the Securities and Exchange Commission
by the earlier of (a) ten (10) business days following the closing of the
Company's proposed transaction with XeQute; (b) ten (10) business days following
the termination of the XeQute transaction; or (c) one hundred twenty (120) days
after the date of the Subscription Agreement. Accordingly, we are currently
required to file a registration statement with the SEC registering the Class A
shares issued to Bay Point pursuant to this Subscription Agreement.

Pursuant to a Subscription Agreement, dated as of December 10, 2002, Bay Point
Investment Partners LLC purchased 1,136,364 shares of our Class A common stock
for a total consideration of $500,000. The issuance of such securities was
exempt from registration under the Securities Act of 1933, as amended, pursuant
to Section 4(2) thereof. Bay Point represented and warranted to us that it was
acquiring the shares of Class A common stock solely for its own account for
investment, and not as a nominee for any other party, and not with a view to the
distribution thereof or with any present intention of selling any thereof. Bay
Point also represented to us that it was an "accredited investor" as defined in
Rule 501 under the Securities Act.

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 have been made in reliance upon
Regulation D.

During the fiscal year ended July 31, 2003, Cornell Capital was required to pay
$1,885,000 and it received 5,623,266 shares of Class A common stock as a result
of the exercise of put options under the equity line, and we received proceeds
of $1,783,250, net of $101,750 of placement fees. The per share prices and the
number of shares sold under the equity line during the period covered by this
report are as follows:


                                       36
<PAGE>

             ------------------------------ --------------------------------
             Price Per Share             Number of Shares Sold
             --------------------------- --------------------------------
             $0.33                       757,576
             --------------------------- --------------------------------
             $0.27                       1,111,111
             --------------------------- --------------------------------
             $0.21                       2,380,952
             --------------------------- --------------------------------
             $0.456                      131,579
             --------------------------- --------------------------------
             $0.532                      939,850
             --------------------------- --------------------------------
             $0.91                       302,198
             --------------------------- --------------------------------
             $0.45 (Average Price)       5,623,266 (Total Shares Sold)
             --------------------------- --------------------------------

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)
       -------------------------------- --------------------------------

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.



                                       37
<PAGE>


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".

Critical Accounting Policies and Estimates

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

We have adopted the provisions of Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment of Long-Lived Assets" ("SFAS 144").
Under SFAS 144, impairment losses on long-lived assets, 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 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.

                                       38
<PAGE>

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

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,
as amended, are payable on December 17, 2003 and bear interest at an annual rate
that was retroactively increased from 2.69% to 9%. The additional interest
resulting from the retroactive increase in the interest rate, which was not
material, was recorded in the fourth quarter of the year ended July 31, 2003.

Year ended July 31, 2003 as compared to the year ended July 31, 2002

Revenues:

Revenues primarily consist of subscription revenues from annual, semi-annual,
quarterly and monthly subscriptions relating to our product "JAGNotes,"
including revenues generated from our strategic alliance with Track Data whereby
Track Data offers its end users access to our JAGNotes product as part of a
group of subscription services. 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 began the process of changing our focus to also include
the retail investor by providing a variety of investment information including
but not limited to JAGNotes through our web site. During the year ended July 31,
2003, subscription revenues decreased as compared to the year ended July 31 2002
with total subscription revenues for the comparable periods of approximately
$386,000 and $625,000, respectively. This decrease is due to a lack of
advertising and continued customer awareness.

While our revenues do include revenues from other sources, these other revenues
are not material to our operations as a whole. In addition, we did not generate
any significant revenues from our subsidiary, JAG Company Voice LLC ("Company
Voice"), during the year ended July 31, 2003. Company Voice was formed to
provide production and distribution services to small and medium sized publicly
traded companies, but is not currently being actively marketed by us.



                                       39
<PAGE>

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 and payments to employees.
During the year ended July 31, 2003, cost of revenues decreased by approximately
$449,000 to approximately $697,000 from approximately $1,146,000 during the year
ended July 31, 2002.

During the year ended July 31, 2002, consulting fees were approximately $802,000
as compared to approximately $592,000 for the year ended July 31, 2003. Such
fees included non-cash charges associated with the amortization of unearned
compensation arising from the issuance of options and warrants of approximately
$720,000 and $543,000 for the years ended July 31, 2002 and 2003, respectively.
The decrease in consulting fees is a result of the expiration of consulting
contracts associated with commentators for our JagNotes website offset by new
consulting agreements associated with the anticipated launch of the Company
Voice.

Costs associated with the maintenance and amortization of our website decreased
by approximately $208,000 from $241,000 for the year ended July 31, 2002 to
approximately $33,000 for the year ended July 31, 2003. The decrease results
primarily from the fact that capitalized web site development costs were fully
amortized or written off as of July 31, 2002 and, accordingly, we did not have a
similar type charge during the year ended July 31, 2003.

In addition, costs associated with the transmission of our product over
telephone and fax lines decreased from approximately $102,000 for the year ended
July 31, 2002 to approximately $33,000 during the year ended July 31, 2003. Such
decrease is associated with our overall decrease in fax subscription revenues.

Selling expenses:

Selling expenses consist primarily of advertising and other promotional
expenses. During the year ended July 31, 2003, selling expenses decreased
approximately $34,000 to approximately $3,000 from their level of approximately
$37,000 during the year ended July 31, 2002. This decrease results solely from
our efforts to better contain costs.

General and administrative expenses:

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 $969,000 during the year ended July 31, 2003 to approximately
$2,226,000 from approximately $3,195,000 during the year ended July 31, 2002.

The decrease in general and administrative expenses is primarily attributable to
the fact that during the year ended July 31, 2002 we recognized a non-cash
charge of approximately $705,000 associated with the amortization of unearned
compensation resulting from stock options granted to investment bankers during
the year ended July 31, 2001 in exchange for exploring business expansion
opportunities on our behalf.

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

                                       40
<PAGE>

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 Broadband LLC, a former operating subsidiary, 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 under accounting
principles generally accepted in the United States of America.

Net loss:

Primarily as a result of the above, we had a net loss of approximately
$2,579,000 during the year ended July 31, 2003 as compared to a net loss of
approximately $4,021,000 during the year ended July 31, 2002.

Liquidity and Capital Resources:

We only generated revenues of approximately $386,000 and $625,000 and incurred
net losses of approximately $2,579,000 and $4,021,000 during the years ended
July 31, 2003 and 2002, respectively. Our net losses include noncash charges
for, among other things, the depreciation of equipment, the amortization of
unearned compensation, the amortization and write-off of capitalized web site
development costs and the issuance of common stock and stock options in exchange
for services. Although we had net noncash charges totaling approximately
$1,104,000 and $2,239,000 for the years ended July 31, 2003 and 2002,
respectively, we still had cash flow deficiencies from operating activities of
approximately $2,273,000 and $1,184,000 for the year ended July 31, 2003 and
2002, respectively. In addition, we believe that we will continue to incur net
losses and cash flow deficiencies from operating activities through at least
July 31, 2004. 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, 2004 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 2002 Equity Line Agreement described below or through other
financing agreements to enable us to continue as a going concern through at
least July 31, 2004. 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.

On August 12, 2003, the Company entered into an Asset Purchase Agreement (the
"Asset Purchase Agreement") with Vertex Interactive, Inc. ("Vertex") and its
wholly-owned subsidiary, XeQute Solutions, Inc. ("XeQute"). Under the terms of
the Asset Purchase Agreement, the Company would establish a newly formed
wholly-owned subsidiary which would acquire the business of XeQute through the
purchase of its assets and the assumption of its liabilities. XeQute is a
provider of supply chain management technologies and services, including
enterprise software systems and applications, software/hardware maintenance
services and consulting services, which enable its customers to more effectively
manage their order, inventory and warehouse requirements.

                                       41
<PAGE>

The Asset Purchase Agreement provides for a closing by October 31, 2003.
Accordingly, neither party would now be required to close the transaction unless
it chose to waive the closing date requirement. The parties have not
contractually extended the permitted closing date pending confirmation of the
availability of the financing described below. In the event that such financing
is confirmed and we and the Sellers set a new closing date, the provisions of
the Asset Purchase Agreement are described below.

Management of the Company cannot assure (i) an amendment extending the closing
date (or a waiver thereof) will be entered into by the parties to permit
consummation of the agreement, or (ii) if such amendment or waiver is provided,
that the conditions to the proposed transaction with XeQute will be met, or
(iii) if such conditions are met, that the transaction will be consummated.

The closing of the Asset Purchase Agreement is subject to various conditions,
including, among others, XeQute's ability to arrange a financing from which the
Company will obtain $8,000,000 of proceeds upon terms and conditions
satisfactory to the Company, Vertex and XeQute, the provision of specified
financial information to the Company by XeQute and the ability of the parties to
agree upon various specific terms of the Asset Purchase Agreement.

As consideration for the transfer of the assets and liabilities of XeQute, the
Company would issue shares of its Class A common stock which upon issuance would
represent 54% of its outstanding common stock on a fully diluted basis, and it
would pay $3,500,000 out of proceeds of an $8,000,000 financing to be arranged
by XeQute. The recipients of the shares of the Company's Class A common stock
will be restricted from registering those shares for sale prior to one year
after the closing of the financing agreements.

If the acquisition of XeQute is consummated, all of the executive officers and
directors of the Company would resign from those positions. Although the
executive officers and directors of the Company would become employees of or
consultants to the combined companies, the combined companies would be managed
and effectively controlled by the executive officers and directors of XeQute. In
addition, the acquisition of 54% of the outstanding common stock of the Company
on a fully diluted basis by Vertex would result in a change in control of the
Company and, accordingly, the three senior executives of the Company would be
entitled to specified severance payments and additional stock options (see Note
8).

We designated a new series of Class B common stock which was issued by dividend
to our stockholders of record as of the close of business on April 14, 2003 in
the ratio of one share of Series 2 Class B common stock for every 100 shares of
Class A common stock. Such shares of Series 2 Class B common stock are
redeemable, which redemption by us shall be mandatory to the fullest extent
permitted by laws within six months following final resolution of our pending
lawsuit in Texas federal court against various brokerage firms at a redemption
price which is the greater of (a) par value or (b) ninety percent of the net
proceeds to us of such lawsuit after payment of fees and expenses incurred in
connection with such lawsuit and all taxes on net income accrued or paid with
respect to such net amount. As of July 31, 2003, we have recorded $4
representing the par value of the 374,120 shares of Series 2 Class B common
stock that are to be issued.

                                       42
<PAGE>

Our cash and cash equivalent position of approximately $423,000 as of July 31,
2003 results primarily from sales of shares of our common stock pursuant to an
equity line agreement and to two private placements completed during the year
ended July 31, 2003 described below.

On April 9, 2002, we entered into an equity line purchase agreement (the "2002
Equity Line Agreement") with Cornell Capital Partners L.P. ("Cornell Capital")
pursuant to which we have, in effect, 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 2002 Equity Line Agreement became available to us on August 28, 2002, and
will remain available for a period of 24 months thereafter unless it is
terminated earlier by us in our sole 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 a placement agent as of the
effective date as consideration for their services in connection with the 2002
Equity Line Agreement.

During the year ended July 31, 2003, Cornell Capital was required to pay
$1,885,000 and it received 5,633,266 shares of Class A common stock and we
received proceeds of $1,783,250 net of $101,750 of placement fees as a result of
the exercise by us of put options pursuant to the 2002 Equity Line Agreement. As
of July 31, 2003, we had the ability to require Cornell Capital to purchase
shares of our common stock pursuant to the 2002 Equity Line Agreement at an
aggregate purchase price of $8,115,000 through August 28, 2004.

During the first fiscal quarter of this year, we thought it would be prudent to
diversify our sources of financing beyond our current private equity line. On
December 10, 2002, we sold 1,136,364 shares of Class A common stock through a
private placement and received proceeds of $475,000, net of a $25,000 placement
fee.

On June 30, 2003, we sold 1,282,675 shares of Class A common stock and 20,000
shares of Series 3 Class B common stock through a second private placement and
received proceeds of $422,000. In connection with the private placement, we
issued 128,267 shares of Class A common stock as a placement fee.

In connection with the second private placement, we designated a new series of
Class B common stock. Such shares of Series 3 Class B common stock are
redeemable, which redemption by us shall be mandatory to the fullest extent
permitted by laws within six months following final resolution of our pending
lawsuit in Texas federal court against various brokerage firms at a redemption
price which is the greater of (i) par value or (ii) .0025% of ten percent of the
net proceeds to the Corporation of the Lawsuit after payment of fees and
expenses incurred in connection with such lawsuit and all taxes on net income
accrued or paid with respect to such amount.



                                       43
<PAGE>

During the year ended July 31, 2003, options to purchase 319,600 shares of Class
A common stock were exercised resulting in proceeds of $8,960.

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,
as amended, are payable on December 17, 2003 and bear interest at an annual rate
that was retroactively increased from 2.69% to 9%. The additional interest
resulting from the retroactive increase in the interest rate, which was not
material, was recorded in the fourth quarter of the year ended July 31, 2003.

In addition, during the year ended July 31, 2003, we issued 1,395,604 shares of
Class A common stock with a fair value of $831,141 in exchange for services.

During the year ended July 31, 2003, we used cash of approximately $2,273,000 in
our operations of which approximately $744,000 was used to reduce accounts
payable and accrued expenses and the remainder to primarily fund our net loss.

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, 2003 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, 2003 and 2002 or that they will have a
significant effect at the time they become effective.


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, 2003                                                        F-3

Consolidated Statements of Operations
     Years Ended July 31, 2003 and 2002                                   F-4

Consolidated Statements of Changes in Stockholders'
  Equity (Deficiency)
     Years Ended July 31, 2003 and 2002                                 F-5/6

Consolidated Statements of Cash Flows
     Years Ended July 31, 2003 and 2002                                   F-7

Notes to Consolidated Financial Statements                              F-8/26


                                      * * *



                                       44
<PAGE>

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

None.

ITEM 8A. DISCLOSURE CONTROLS AND PROCEDURES.

As of the end of the fiscal year ended July 31, 2003, our Chief Executive
Officer and Chief Financial Officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures that we have in place with respect to the accumulation and
communication of information to management and the recording, processing
summarizing and recording thereof. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective in alerting them in a timely manner to
material information relating to the company (including its consolidated
subsidiaries) required to be included in our periodic SEC filings.

In designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

During the most recent fiscal quarter, there has not occurred any change in JAG
Media's internal control over financial reporting that has materially affected,
or is reasonably likely to materially affect, JAG Media's internal control over
financial reporting.


                                       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 45, 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 46, 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 44, 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 2003, or written representations from certain reporting
persons, to the best of our knowledge, all reports were filed on a timely basis.

                                 CODE OF ETHICS

We have adopted a Code of Ethics (our "Code of Ethics") that applies to our
chief executive officer and chief financial officer. Our Code of Ethics is
located on our website (www.jagnotes.com) . Any amendments or waivers to our
Code of Ethics will be promptly disclosed on our web site as required by
applicable laws, rules and regulations of the Securities and Exchange
Commission.





                                       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, 2001, 2002 and
2003. Except as listed in the table below, no executive officer holding office
in fiscal year 2003 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.


<TABLE>
<CAPTION>

                                                          Annual Compensation
                                                          --------------------
                                                                                                 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,           2003           $150,000         --             --              --                  --
Chief Executive Officer,
President and director              2002           $150,000         --             --          1,000,000(1)

                                    2001           $150,000         --             --            900,000(2)            (3)


Stephen J. Schoepfer,               2003           $150,000         --             --              --                  --
Executive Vice President,
Chief Operating Officer and         2002           $150,000         --             --          1,000,000(1)
Secretary
                                    2001           $150,000          --            --            900,000(2)            (3)


Thomas J. Mazzarisi,                2003           $150,000         --             --              --                  --
Executive Vice President,
Chief Financial Officer and         2002           $150,000         --             --          1,000,000(1)            --
General Counsel
                                    2001           $150,000         --             --            900,000(2)            (3)


Raymond G. Taylor,                  2003                 --         --             --             --                   --
(Mr. Taylor served as Chief
Financial Officer of JAG            2002            $25,000         --             --             --                   --
Media Holdings, Inc. from
April 1, 2001 to November 9,        2001            $65,000          --            --             --                   --
2001, but is no longer
employed by JAG Media.)
</TABLE>


         (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.

                                       48
<PAGE>

         (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 2003

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,
2003.

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, 2003.

                OPTION GRANTS IN PERIOD BEGINNING AUGUST 1, 2002
                            AND ENDING JULY 31, 2003

<TABLE>
<CAPTION>
                                              Percentage of
                                                  Total
                                           Options Granted to
                                                Employees
                                              in the period
                              Number of         beginning
                              Securities   August 1, 2002 and
                              Underlying          ended             Exercise or
                               Options           July 31,          Base Price Per     Market Price on
Name                           Granted             2003             ($/Share)         the Date of Grant    Expiration Date
----                           -------     ------------------       ---------         -----------------    ---------------

<S>                           <C>          <C>                     <C>              <C>                  <C>
Gary Valinoti                        0                *                  *                  *                    *
Stephen J. Schoepfer                 0                *                  *                  *                    *
Thomas J. Mazzarisi                  0                *                  *                  *                    *
</TABLE>

------------------
*        Not applicable.


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.

We did not reprice any stock options during our fiscal year ended July 31, 2003.



                                       49
<PAGE>


Equity Compensation Plan Information as of July 31, 2003.

<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)....................................     1,750,000             $ .02                  4,250,000(1)
----------------------------------------------------- --------------------- --------------------- --------------------
Individual Compensation Arrangements (not approved
by security holders).................................     1,835,000(2)          $4.04                          0
----------------------------------------------------- --------------------- --------------------- --------------------
                  Total..............................     3,585,000             $ .34                  4,250,000(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 5 to Financial Statements.

Option Exercises in Fiscal Year 2003.


The following table sets forth certain information regarding the stock options
exercised during the fiscal year ended July 31, 2003 and the stock options held
as of July 31, 2003 by our Chief Executive Officer and our other three executive
officers.



                AGGREGATE OPTION EXERCISES IN 2003 OPTION VALUES

<TABLE>
<CAPTION>
-------------------------- ------------ ------------- ------------------------------------- -----------------------------------
                             Shares                     Number of Shares Underlying         Value of Unexercised In-the-Money
                            Acquired                Unexercised Options at July 31, 2003       Options at July 31, 2003
                             on          Value      ------------------------------------    ----------------------------------
          Name             Exercise     Realized    Exercisable       Unexercisable         Exercisable      Unexercisable
          ----             ---------    --------    -----------       -------------         -----------      -------------
<S>                       <C>          <C>          <C>               <C>            <C>                   <C>
Gary Valinoti              0            0                1,000,000           0                 $520,000              0
Stephen J. Schoepfer       250,000      $289,171          250,000            0                  $62,500              0
Thomas J. Mazzarisi        0            0                 500,000            0                 $260,000              0
-------------------------- ------------ ------------- -------------- ------------------- ---------------- ------------------
</TABLE>

                                       50
<PAGE>


During January 2003, Mr. Schoepfer exercised options to purchase 250,000 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:

         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,
2003, there were a total of 1,750,000 shares of common stock subject to
outstanding options granted under the plan. These options have an exercise price
of $0.02 per share. As a result of the recapitalization which was effected on
April 8, 2002, the foregoing options are now exercisable into 1,750,000 shares
of Class A common stock.



                                       51
<PAGE>

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).

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.



                                       52
<PAGE>

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.

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.



                                       53
<PAGE>

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.

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.




                                       54
<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 October 20, 2003 (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)                    5,087,000(1)(3)(4)                          12.1%
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433

Thomas Mazzarisi (Executive Vice President,                      610,000(1)(5)                              1.5%
Chief Financial Officer, General Counsel and
Director)
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433

Stephen Schoepfer (Executive Vice President,                     325,000(1)(6)                                 *
Chief Operating Officer and Director)
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433

All executive officers and directors as a                        6,022,000                                14.1%
group (3 persons)
</TABLE>
-----------------------------
*  Less than one percent

         (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 40,628,184 shares of Class A common stock issued and
                  outstanding as of October 20, 2003, 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.

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



                                       55
<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. On October 14, 2003, Mr. Mazzarisi
agreed to extend the maturity date of the note to the earlier of (i) December
17, 2003 or (ii) the effective date of a "Change in Control" of JAG Media, as
such term is defined in our Long-Term Incentive Plan. In exchange for this
extension, we agreed to increase the interest rate of the notes from 2.69% to
9.0% retroactively to April 1, 2002.

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. On October 14, 2003, Mr. Schoepfer agreed to extend the
maturity date of the note to the earlier of (i) December 17, 2003 or (ii) the
effective date of a "Change in Control" of JAG Media, as such term is defined in
our Long-Term Incentive Plan. In exchange for this extension, we agreed to
increase the interest rate of the notes from 2.69% to 9.0% retroactively to
April 1, 2002.

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.

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.



                                       56
<PAGE>

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.


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.

                                       57
<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      Certificate of Designation of the Series 3 Class B Common Stock (27)

3.4      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)



                                       58
<PAGE>

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

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. (21)

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)

4.20     Amendment, dated January 31, 2003 to Promissory Note, dated April 1,
         2002 in the amount of $200,000 issued to Thomas J. Mazzarisi. (25)

4.21     Amendment, dated January 31, 2003, to Promissory Note, dated April 1,
         2002 in the amount of $200,000 issued to Stephen J. Schoepfer. (25)

4.22     Amendment, dated March 31, 2003, to Promissory Note, dated April 1,
         2002 in the amount of $200,000 issued to Thomas J. Mazzarisi. (26)

4.23     Amendment, dated March 31, 2003, to Promissory Note, dated April 1,
         2002 in the amount of $200,000 issued to Stephen J. Schoepfer. (26)

4.24     Amendment, dated October 14, 2003, to Promissory Note, dated April 1,
         2002 in the amount of $200,000 issued to Thomas J. Mazzarisi.



                                       59
<PAGE>

4.25     Amendment, dated October 14, 2003, 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)

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)



                                       60
<PAGE>

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)

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)



                                       61
<PAGE>

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)

10.31    Consulting Agreement, dated June 12, 2002, between the Registrant and
         Walsh Organization, Inc.

10.32    Power of Attorney and Contingent Fee Contract, dated June 14, 2002,
         among the Registrant, Gary Valinoti and the Law Firm of O'Quinn,
         Laminack & Pirtle.

10.33    Subscription Agreement, dated December 10, 2002, between the Registrant
         and Bay Point Investment Partners LLC. (22)

10.34    Placement Agent Agreement, dated December 10, 2002, between the
         Registrant and RMC 1 Capital Markets, Inc. (22)

10.35    Letter Agreement, dated December 9, 2002, between the Registrant and
         HPC Capital Management. (24)

10.36    Subscription Agreement, dated as of June 19, 2003, between the
         Registrant and Bay Point Investment Partners LLC, as amended on August
         12, 2003. (27)

10.37    Placement Agent Agreement, dated as of June 19, 2003, between the
         Registrant and RMC 1 Capital Markets, Inc. , as amended on August 12,
         2003. (27)

10.38    Asset Purchase Agreement, dated August 12, 2003, by and among the
         Registrant, Vertex Interactive, Inc., XeQute Solutions PLC and XeQute
         Solutions, Inc. (27)

10.39    Subscription Agreement, dated as of September 25, 2003, between the
         Registrant and Kuekenhof Equity Fund L.P.

14.1     Code of Ethics.

21.1     Subsidiaries of Registrant.

31.1     Section 302 Certification of Chief Executive Officer.

31.2     Section 302 Certification of Chief Financial Officer.

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

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

(1)      Previously filed as an exhibit to our Registration Statement on Form
         SB-2 filed on July 30, 1999.

                                       62
<PAGE>

(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.

(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.

(21)     Previously filed as an exhibit to our Annual Report on Form 10-KSB
         filed on November 13, 2002.

(22)     Previously filed as an exhibit to our Registration Statement on Form
         SB-2 filed on January 9, 2003.

(23)     Previously filed as an exhibit to our Current Report on Form 8-K filed
         on January 27, 2003.

(24)     Previously filed as an exhibit to our Current Report on Form 8-K filed
         on February 18, 2003.

(25)     Previously filed as an exhibit to Amendment No. 1 t our Registration
         Statement on Form SB-2 filed on February 24 2003.

(26)     Previously filed as an exhibit to our Quarterly Report on Form 10-QSB
         filed on June 16, 2003. (27) Previously filed as an exhibit to our
         Current Report on Form 8-K filed on August 13, 2003.

(b)      Reports on Form 8-K

We filed the following four Current Reports on Form 8-K during the last quarter
of the fiscal year ended July 31, 2003:

         o        May 1, 2003: Form 8-K filed attaching press release relating
                  to status of stock dividend and amendment to Letter of Intent
                  with OIL@WORK Group, Inc.

         o        May 28, 2003: Form 8-K filed attaching press release relating
                  to status of stock dividend.

         o        May 30, 2003: Form 8-K filed attaching amendment to Letter of
                  Intent with OIL@WORK Group, Inc.

         o        August 13, 2003: Form 8-K filed attaching Asset Purchase
                  Agreement relating to XeQute acquisition, press release
                  regarding same, Certificate of Designation for Series 3 Class
                  B common stock, Subscription Agreement with Bay Point
                  Investment Partners LLC and Placement Agent Agreement with RMC
                  1 Capital Markets, Inc.

         o        August 21, 2003:Form 8-K/A filed attaching corrected version
                  of Asset Purchase Agreement.



                                       63
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees.

The aggregate fees billed for the fiscal years ended July 31, 2002 and 2003 for
professional services rendered by J.H. Cohn LLP for the audit of the our annual
financial statements and the review of the financial statements included in our
quarterly reports on Form 10-QSB were $82,580 and $67,634, respectively.

Audit Related Fees.

The aggregate fees billed for the fiscal years ended July 31, 2002 and 2003 for
assurance and related services rendered by J.H. Cohn LLP related to the
performance of the audit or review of our financial statements were $51,700 and
$29,153, respectively.

Tax Fees.

The aggregate fees billed for the fiscal years ended July 31, 2002 and 2003 for
services rendered by J.H. Cohn LLP in connection with the preparation of our
federal and state tax returns were $8,525 and $3,855, respectively.


                                       64
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries




                          Index to Financial Statements


                                                                    PAGE
                                                                    ----

Report of Independent Public Accountants                             F-2

Consolidated Balance Sheet
     July 31, 2003                                                   F-3

Consolidated Statements of Operations
     Years Ended July 31, 2003 and 2002                              F-4

Consolidated Statements of Changes in Stockholders'
  Equity (Deficiency)
     Years Ended July 31, 2003 and 2002                            F-5/6

Consolidated Statements of Cash Flows
     Years Ended July 31, 2003 and 2002                              F-7

Notes to Consolidated Financial Statements                         F-8/26



                                      * * *





                                      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. and Subsidiaries as of July 31, 2003, and the related
consolidated statements of operations, changes in stockholders' equity
(deficiency) and cash flows for the years ended July 31, 2003 and 2002. 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, 2003, and their results of operations and
cash flows for the years ended July 31, 2003 and 2002, 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 working capital and stockholders'
deficiencies as of July 31, 2003. 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
November 1, 2003






                                      F-2
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                           Consolidated Balance Sheet
                                  July 31, 2003

               Assets
               ------

Current assets:
    Cash and cash equivalents                                      $    423,217
    Accounts receivable, net of allowance for doubtful accounts
        of $7,500                                                         5,160
    Other current assets                                                 83,785
                                                                   ------------
           Total current assets                                         512,162

Equipment, net of accumulated depreciation of $145,065                   25,492
                                                                   ------------

           Total                                                   $    537,654
                                                                   ============

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

Current liabilities:
    Accounts payable and accrued expenses                          $    154,729
    Deferred revenues                                                    44,729
    Notes payable to officers                                           400,000
                                                                   ------------
           Total liabilities                                            599,458
                                                                   ------------

Mandatorily redeemable Class B common stock; par value $.00001
    per share:
    400,000 shares designated as Series 2; 374,120 shares
        issued and outstanding                                                4
    40,000 shares designated as Series 3; 20,000 shares issued
        and outstanding                                                       -
                                                                   ------------
           Total                                                              4
                                                                   ------------

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; 40,212,882 shares
        issued and outstanding                                              402
    Class B common stock, par value $.00001 per share;
        30,000,000 shares authorized; 3,000,000 shares designated
        as Series 1; 1,031,143 shares issued and outstanding                 10
    Additional paid-in capital                                       41,217,522
    Unearned compensation                                              (140,884)
    Accumulated deficit                                             (41,138,858)
                                                                   ------------
           Total stockholders' deficiency                               (61,808)
                                                                   ------------

           Total                                                   $    537,654
                                                                   ============


See Notes to Consolidated Financial Statements.





                                      F-3
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                      Consolidated Statements of Operations
                       Years Ended July 31, 2003 and 2002



                                                       2003            2002
                                                   ------------    ------------
Revenues                                           $    385,881    $    624,674
                                                   ------------    ------------

Operating expenses:
    Cost of revenues                                    697,027       1,146,351
    Selling expenses                                      3,174          36,952
    General and administrative expenses               2,225,597       3,194,874
    Write-off of capitalized web site
      development costs                                                 263,754
                                                   ------------    ------------
        Totals                                        2,925,798       4,641,931
                                                   ------------    ------------

Loss from operations                                 (2,539,917)     (4,017,257)

Other income (expense):
    Interest income                                       5,466
    Interest expense                                    (44,284)         (3,596)
                                                   ------------    ------------

Net loss                                           $ (2,578,735)   $ (4,020,853)
                                                   ============    ============


Basic net loss per share                           $       (.07)   $       (.15)
                                                   ============    ============


Basic weighted average common shares outstanding     37,709,338      26,644,876
                                                   ============    ============


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, 2003 and 2002

<TABLE>
<CAPTION>
                                                 Common Stock
                                    ---------------------------------------
                                          Class A        Series 1 Class B
                                    -------------------- ------------------  Additional
                                     Number of           Number of             Paid-in     Unearned     Accumulated
                                      Shares      Amount   Shares    Amount    Capital    Compensation     Deficit        Total
                                    ----------    ------ ----------  ------  -----------  ------------  ------------   ------------
<S>                               <C>            <C>    <C>           <C>  <C>           <C>           <C>           <C>
Balance, August 1, 2001              17,557,097   $176   1,755,710     $17  $35,669,723   $(975,090)    $(34,539,270) $   155,556

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>




                                      F-5
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

     Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
                       Years Ended July 31, 2003 and 2002

<TABLE>
<CAPTION>

                                                Common Stock
                                    -------------------------------------
                                         Class A         Series 1 Class B
                                    ------------------  -----------------   Additional
                                    Number of           Number of            Paid-in      Unearned     Accumulated
                                     Shares     Amount   Shares    Amount    Capital     Compensation    Deficit          Total
                                    ----------  ------  ---------  ------  ------------  ------------   ------------    ---------
<S>                                 <C>         <C>     <C>        <C>     <C>           <C>            <C>             <C>
Sales of common stock pursuant
    to equity financing agreement,
    net of expenses of $101,750       5,633,266  $  57                     $  1,783,193                                $ 1,783,250

Sales of Class A common stock
    and 20,000 shares of redeemable
    Series 3 Class B common stock
    through private placements,
    net of expenses of $25,000        2,547,306     25                          896,975                                    897,000

Effects of issuance of common
    stock in exchange for services    1,395,604     14                          831,127   $(366,309)                       464,832

Options exercised                       319,600      3                            8,957                                      8,960

Amortization of unearned
    compensation                                                                            606,857                        606,857

Effects of conversion of Series 1
    Class B common stock into
    Class A common stock                650,012      7    (650,012)   $(7)

Stock dividend payable in
    374,120 shares of redeemable
    Series 2 Class B
    common stock                                                                     (4)                                        (4)

Net loss                                                                                                 $ (2,578,735)  (2,578,735)
                                    -----------   ----   ---------    ---   -----------   ----------     -------------  -----------
Balance, July 31, 2003               40,212,882   $402   1,031,143    $10   $41,217,522   $(140,884)     $(41,138,858)  $  (61,808)
                                    ===========   ====   =========    ===   ===========   ==========     =============  ===========
</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, 2003 and 2002


<TABLE>
<CAPTION>
                                                                      2003           2002
                                                                  -----------    -----------
<S>                                                               <C>            <C>
Operating activities:
     Net loss                                                     $(2,578,735)   $(4,020,853)
     Adjustments to reconcile net loss to net cash used in
         operating activities:
         Provision for doubtful accounts                                2,750          4,750
         Depreciation                                                  29,206         38,910
         Amortization of unearned compensation                        606,857      1,013,958
         Amortization of capitalized web site development costs                       87,917
         Write-off of capitalized web site development costs                         263,754
         Effects of issuances of common stock and stock options
              in exchange for services                                464,832        829,634
         Changes in operating assets and liabilities:
              Accounts receivable                                      11,415         17,009
              Other current assets                                    (15,000)        30,835
              Accounts payable and accrued expenses                  (743,770)       634,998
              Deferred revenues                                       (50,655)       (84,980)
                                                                  -----------    -----------
                  Net cash used in operating activities            (2,273,100)    (1,184,068)
                                                                  -----------    -----------

Financing activities:
     Proceeds from notes payable to officers                                         400,000
     Net proceeds from private placements of common stock
         and warrants                                               2,680,250        632,884
     Proceeds from exercise of stock options                            8,960        144,853
                                                                  -----------    -----------
                  Net cash provided by financing activities         2,689,210      1,177,737
                                                                  -----------    -----------

Net increase (decrease) in cash and cash equivalents                  416,110         (6,331)

Cash and cash equivalents, beginning of year                            7,107         13,438
                                                                  -----------    -----------

Cash and cash equivalents, end of year                            $   423,217    $     7,107
                                                                  ===========    ===========
</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. During the year ended July 31, 2001, the Company started and
             sold advertiser-based webcast operations. On January 4, 2002, a
             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, 2003.

             Prior to February 21, 2002, JAG Media Holdings, Inc. was known as
             JagNotes.com Inc. As further explained in Note 5, 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.

             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.




                                      F-8
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 1 - Organization and business (concluded):

             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 $386,000 and $625,000, and it incurred net losses of
             approximately $2,579,000 and $4,021,000 and cash flow deficiencies
             from operating activities of approximately $2,273,000 and
             $1,184,000 during 2003 and 2002, respectively. The Company had a
             cash balance of only $423,000, a working capital deficiency of
             $87,000 and a stockholders' deficiency of approximately $62,000 as
             of July 31, 2003. 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, 2004. These matters
             raise substantial doubt about the Company's ability to continue as
             a going concern.

             The reduction of approximately $1,442,000 in the net loss for the
             year ended July 31, 2003 from the net loss for the year ended July
             31, 2002 was primarily as a result of management's efforts to
             better control costs and expenses and nonrecurring charges recorded
             in the prior year. The net losses included net noncash charges of
             approximately $1,104,000 and $2,239,000 for the years ended July
             31, 2003 and 2002, respectively, primarily for the depreciation of
             equipment, the amortization of unearned compensation, the
             amortization and write-off of capitalized web site development
             costs and the issuance of common stock and stock options in
             exchange for services.

             Although the Company's net losses have been substantially reduced
             and those net losses included substantial net noncash charges,
             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, 2004 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.





                                      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 (concluded):
             As further explained in Note 4, the Company entered into an
             agreement with an investment partnership pursuant to which it has,
             in effect, "put" options whereby, subject to certain conditions, it
             is able to require the investment partnership to purchase shares of
             its common stock from time to time at prices based on the market
             value of its shares. The maximum aggregate purchase price under
             this equity line is $10,000,000. This equity line became available
             in August 2002 and expires in August 2004. As of July 31, 2003, the
             Company had received gross proceeds of $1,885,000 from the exercise
             of "put" options under this equity line. Although the timing and
             amount of the required purchases under the agreement, as amended,
             are at the Company's discretion, the purchases are subject to
             certain conditions as also explained in Note 4 and the ability of
             the investment partnership to fund the purchases.

             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, 2004. 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.




                                      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):

          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.

          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.

           Impairment of long-lived assets:
             The Company has adopted the provisions of Statement of Financial
             Accounting Standards No. 144, "Accounting for the Impairment of
             Long-Lived Assets" ("SFAS 144"). Under SFAS 144, impairment losses
             on long-lived assets, 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.




                                      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):

           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.

             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.

           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, were issued during
             the period and the treasury stock method had been applied to the
             proceeds from their exercise.



                                      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
           (concluded):

           Net earnings (loss) per share (concluded):
             As of July 31, 2003, there were options and warrants outstanding
             for the purchase of a total of 3,585,000 shares of Class A and
             Series 1 Class B common stock (see Note 5). However, diluted per
             share amounts have not been presented in the accompanying
             consolidated statements of operations because the Company had a net
             loss in 2003 and 2002 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 would have been
             anti-dilutive.

             As explained in Note 1, the recapitalization in April 2002 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:
             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 have
             issued certain accounting pronouncements as of July 31, 2003 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 2003 and
             2002, 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 - Income taxes:
             As of July 31, 2003, the Company had net operating loss
             carryforwards of approximately $25,436,000 available to reduce
             future Federal and state taxable income which will expire from 2019
             through 2023.

             As of July 31, 2003, the Company's deferred tax assets consisted of
             the effects of temporary differences attributable to the following:

                     Deferred revenues, net             $     18,000
                     Unearned compensation                 2,123,000
                     Net operating loss carryforwards     10,159,000
                                                        ------------
                                                          12,300,000
                     Less valuation allowance            (12,300,000)
                                                        ------------
                         Total                          $       --
                                                        ============



                                      F-13
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 3 - Income taxes (concluded):
             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, 2003.

             The Company had also offset the potential benefits of approximately
             $11,653,000 and $13,749,000 from its net deferred tax assets by
             equivalent valuation allowances as of July 31, 2002 and 2001,
             respectively. As a result of an increase in the valuation allowance
             of approximately $647,000 during 2003 and a decrease in the
             valuation allowance of $2,096,000 during 2002, 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 5) and the related reduction in
             temporary differences attributable to the amounts of unearned
             compensation recorded for financial statement and tax purposes.


Note 4 - 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.




                                      F-14
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 4 - Equity financing agreements with Cornell Capital Partners, L.P.
           (continued):
             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.

             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.






                                      F-15
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements




Note 4 - Equity financing agreements with Cornell Capital Partners, L.P.
           (concluded):
             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 Securities Act of 1933 (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. 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.

             During the year ended July 31, 2003, Cornell Capital was required
             to pay $1,885,000 and it received 5,623,266 shares of Class A
             common stock and the Company received proceeds of $1,783,250, net
             of $101,750 of placement fees as a result of the exercise by the
             Company of put options pursuant to the New Equity Line Agreement.
             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 July 31, 2003, 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 $8,115,000 through August 28, 2004.





                                      F-16
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 5 - Other 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.

           Mandatorily redeemable Class B common stock:
             On March 18, 2003 and June 30, 2003, the Company's Board of
             Directors approved the designation of 400,000 shares and 40,000
             shares of Class B common stock, par value $.00001 per share, as
             "Series 2 Class B common stock" and "Series 3 Class B common
             stock," respectively. The Company's Board of Directors also
             declared a special stock dividend on March 18, 2003 for the
             distribution of shares of Series 2 Class B common stock to owners
             of the Company's Class A common stock as of the record date, April
             14, 2003, in a ratio of one share of Series 2 Class B common stock
             for every 100 shares of Class A common stock owned. As of July 31,
             2003, a total of 374,120 shares of Series 2 Class B common stock
             were outstanding as a result of the stock dividend. On June 30,
             2003, the Company issued 20,000 shares of Series 3 Class B common
             stock in connection with the private placement of Class A common
             stock, as further explained below.




                                      F-17
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements



Note 5 - Other issuances of common stock, warrants and stock options
           (continued): Mandatorily redeemable Class B common stock (concluded):
             The shares of Series 2 and Series 3 Class B common stock will be
             nonvoting, have dividend and liquidation rights equal to the Class
             A common stock and be redeemable. Redemption by the Company shall
             be mandatory within six months following final resolution of the
             Company's lawsuit against various brokerage firms currently pending
             in U.S. District Court for the Southern District of Texas (or as
             soon thereafter as legally permissible). The redemption price per
             share of the Series 2 Class B common stock will be the greater of
             (i) the par value of each share or (ii) the amount obtained by
             dividing (a) 90% of the net proceeds to the Company of such lawsuit
             after payment of fees and expenses incurred in connection with such
             lawsuit and all taxes on net income accrued or paid with respect to
             such net amount divided by (b) the total number of shares of Series
             2 Class B common stock outstanding. The redemption price per share
             of the Series 3 Class B common stock will be the greater of (i) the
             par value of each share or (ii) .0025% of 10% of the net proceeds
             to the Company of such lawsuit after payment of fees and expenses
             incurred in connection with such lawsuit and all taxes on net
             income accrued or paid with respect to such net amount.

             Since the value of the Series 2 and Series 3 Class B common stock
             is contingent upon the outcome of the pending litigation, the
             Company recorded the shares of Series 2 and Series 3 Class B common
             stock that were issuable as of July 31, 2003 at their total par
             value of $4.20. Since the Company will be required to distribute
             substantially all of the proceeds of the pending litigation to the
             holders of Series 2 and Series 3 Class B common stock, the Company
             has classified the shares as the equivalent of mandatorily
             redeemable preferred stock and excluded their carrying value from
             stockholders' deficiency and total liabilities in the accompanying
             July 31, 2003 consolidated balance sheet pursuant to the rules and
             regulations of the Securities and Exchange Commission.

             In May 2003, the Financial Accounting Standards Board issued
             Statement of Financial Accounting Standards No. 150, "Accounting
             for Certain Financial Instruments with Characteristics of both
             Liabilities and Equity" ("SFAS 150"). Pursuant to SFAS 150, a
             financial instrument issued in the form of shares that are
             mandatorily redeemable because they embody an unconditional
             obligation requiring the issuer to redeem them by transferring its
             assets at a specified or determinable date or upon an event that is
             certain to occur must be classified as a liability. The redemption
             of shares of Series 2 and Series 3 Class B common stock issued by
             the Company as of July 31, 2003 is contingent upon the occurrence
             of a future event and, accordingly, such shares do not have to be
             classified as a liability pursuant to SFAS 150. However, the shares
             would have to be reclassified should the Company prevail in its
             lawsuit against various brokerage firms.




                                      F-18
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 5 - Other issuances of common stock, warrants and stock options
           (continued):

           Equity financing agreements:
             As further explained in Note 4, Cornell Capital was required to pay
             $1,885,000 and it and a placement agent received 5,633,266 shares
             of Class A common stock and the Company received proceeds of
             $1,783,250, net of $101,750 of placement fees, as a result of the
             exercise of put options under the New Equity Line Agreement during
             the year ended July 31, 2003. Cornell Capital was also 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) and the Company received proceeds of $632,884, net of
             $38,575 of placement fees, as a result of the exercise of put
             options under the Original Equity Line Agreement during the year
             ended July 31, 2002.

           Shares sold through private placements:
             On December 10, 2002, the Company sold 1,136,364 shares of its
             Class A common stock through a private placement and it received
             proceeds of $475,000, net of a $25,000 placement fee.

             On June 30, 2003, the Company sold 1,282,675 shares of its Class A
             common stock and 20,000 shares of its Series 3 Class B common stock
             through a private placement and it received proceeds of $422,000.
             The Company issued 128,267 shares of its Class A common stock as a
             placement fee in connection with this private placement.

             The private placements were intended to be exempt from registration
             under the Act.

           Options, warrants and shares issued for services:
             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.





                                      F-19
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Other issuances of common stock, warrants and stock options
           (continued):

           Options, warrants and shares issued for services (continued):
             The following table reconciles the number of shares of common stock
             subject to options and warrants that were outstanding at August 1,
             2001 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, 2003 and sets forth other related
             information:

<TABLE>
<CAPTION>
                                                                    Number of Shares
                                                                -------------------------
                                                                                 Series 1
                                                                 Class A         Class B      Range of
                                                                 Common          Common       Exercise
                                                                 Stock           Stock         Prices
                                                                ----------    ----------    -----------
             <S>                                                <C>           <C>           <C>
             Options and warrants issued for services
                 outstanding, August 1, 2001 (A)                 8,356,227       227,273     $.10-$6.00
             Options granted to employees and
                 consultants (B)                                 4,936,725                   $.001-$.10
             Options and warrants cancelled (B)                 (5,925,773)      (62,727)    $.05-$2.00
             Options exercised (C)                              (3,427,125)                  $.001-$.25
                                                                ----------    ----------    -----------
             Options and warrants issued for services
                 outstanding, July 31, 2002                      3,940,054       164,546     $.02-$6.00
             Options cancelled                                    (200,000)                 $      2.00
             Options exercised (D)                                (319,600)                   $.02-$.05
                                                                ----------    ----------    -----------
             Options and warrants issued for services
                 outstanding, July 31, 2003 (E) (F)              3,420,454       164,546     $.02-$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, 2001 was $975,090.

           (B)    On August 31, 2001, pursuant to amended and restated
                  employment agreements between the Company and its three senior
                  executives (see Note 8), 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.




                                      F-20
<PAGE>


                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements



Note 5 - Other issuances of common stock, warrants and stock options
           (continued):

           Options, warrants and shares issued for services (continued):
                  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.

           (C)    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.

           (D)    During 2003, the Company issued 319,600 shares of Class A
                  common stock upon the exercise of options and received
                  proceeds of $8,960.

           (E)    These options and warrants also include options for the
                  purchase of 1,750,000 shares of, effectively, Class A common
                  stock granted pursuant to the Company's 1999 Long-term
                  Incentive Plan (the "Incentive Plan") which provides for
                  individual awards to officers, employees, directors,
                  consultants and certain other individuals that may take the
                  form of stock options and certain other types of awards for
                  which the value is based in whole or in part upon the fair
                  market value of, 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)    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, 2003 as a result of issuances of those options and
           warrants to employees and nonemployees as compensation for services:





                                      F-21
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 5 - Other issuances of common stock, warrants and stock options
           (continued):

           Options, warrants and shares issued for services (continued):

<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         1,750,000            8.09           $ .02          1,750,000          $  .02
                  2.00           585,000            2.18            2.00            585,000            2.00
                  3.50           500,000            2.06            3.50            500,000            3.50
                  6.00           750,000            1.62            6.00            750,000            6.00
                               ---------                                          ---------
           $.02 - $6.00        3,585,000            4.93           $ .34          3,585,000          $  .34
           ============        =========            ====           ======         =========          ======

</TABLE>

           During 2002, a total of $561,544 was charged directly to compensation
           and consulting expense as a result of the issuance of options as
           compensation to employees and as consideration for consulting,
           professional and other services in the transactions described above.

           During 2003, the Company issued 1,395,604 shares of its Class A
           common stock 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 $831,127, of which $464,818 was
           charged directly to compensation and consulting expense and $366,309
           was charged to unearned compensation during 2003.

           During 2002, the Company also 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.

           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 $606,857 and
           $1,013,958 was amortized during 2003 and 2002, respectively. The
           unamortized balance of $140,884 and $381,432 has been reflected as a
           reduction of stockholders' equity as of July 31, 2003 and 2002,
           respectively.





                                      F-22
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements



Note 5 - Other issuances of common stock, warrants and stock options
           (concluded):

           Options, warrants and shares issued for services (concluded):
              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 Black-Scholes option-pricing model. The fair values were
              determined in 2003 and 2002 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 6 - Notes payable to officers:
              On April 1, 2002, two executive officers loaned the Company a
              total of $400,000 subject to the terms and conditions of unsecured
              promissory notes that, as amended, are payable on December 17,
              2003 and bear interest at an annual rate that was retroactively
              increased from 2.69% to 9%. The additional interest resulting from
              the retroactive increase in the interest rate, which was not
              material, was recorded in the fourth quarter of the year ended
              July 31, 2003.


Note 7 - 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 2003 and 2002.


Note 8 - 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. From time to time the Company's cash account balances
              exceed the Federal insurance limit of $100,000 although there was
              no such excess at July 31, 2003. The Company reduces its exposure
              to credit risk by maintaining its cash deposits with major
              financial institutions and monitoring their credit ratings.
              Accordingly, management does not believe that the Company was
              exposed to significant credit risk at July 31, 2003.




                                      F-23
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements



Note 8 - Commitments and contingencies (continued):
           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, 2003
              will total approximately $488,000, of which $450,000 and $38,000
              will be payable in the years ending July 31, 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.

              In addition, upon a change in control of the Company, the three
              senior executives would be entitled to specified severance
              payments and additional stock options.

              If a senior executive resigns upon a change in control of the
              Company (as defined), the senior executive would be entitled to,
              among other things, (i) a lump sum cash payment equal to the
              executive's highest rate of annual salary in effect during the
              term of the agreement multiplied by the severance period (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 of
              the agreement); (ii) accelerated vesting of all of the senior
              executive's outstanding stock options; and (iii) an option to
              acquire 1,000,000 shares of the Company's 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.

            Leases:
              The Company has 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 $30,000 and $77,000 for 2003 and 2002, respectively.
              As of July 31, 2003, the Company was not subject to any
              significant noncancelable office leases.





                                      F-24
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements


Note 8 - 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 9 - Fair value of financial instruments:
              The Company's material financial instruments at July 31, 2003 for
              which disclosure of estimated fair value is required by certain
              accounting standards consisted of cash and cash equivalents,
              accounts receivable, accounts payable and notes payable to
              officers. In the opinion of management, the financial instruments
              were carried at values that approximated their fair values at July
              31, 2003 because of their liquidity and/or their short-term
              maturities.


Note 10- Subsequent events:
              On August 12, 2003, the Company entered into an Asset Purchase
              Agreement (the "Asset Purchase Agreement") with Vertex
              Interactive, Inc. ("Vertex") and its wholly-owned subsidiary,
              XeQute Solutions, Inc. ("XeQute"). Under the terms of the Asset
              Purchase Agreement, the Company would establish a newly formed
              wholly-owned subsidiary which would acquire the business of XeQute
              through the purchase of its assets and the assumption of its
              liabilities. XeQute is a provider of supply chain management
              technologies and services, including enterprise software systems
              and applications, software/hardware maintenance services and
              consulting services, which enable its customers to more
              effectively manage their order, inventory and warehouse
              requirements.

              Closing of the Asset Purchase Agreement was subject to the
              satisfaction of various conditions by October 31, 2003, including,
              among others, XeQute's ability to arrange financing from which the
              Company will obtain $8,000,000 of proceeds upon terms and
              conditions satisfactory to the Company, Vertex and XeQute, the
              provision of specified financial information to the Company by
              XeQute and the ability of the parties to agree upon various
              specific terms of the Asset Purchase Agreement.

              The Asset Purchase Agreement was not closed by October 31, 2003.
              Accordingly, the parties are not required to close the transaction
              unless they choose to waive the closing date requirement. As of
              November 1, 2003, the parties had not contractually extended the
              permitted closing date pending confirmation of the availability of
              the financing described above. The provisions of the Asset
              Purchase Agreement described below would become effective in the
              event that such financing is confirmed and the parties set a new
              closing date.

                                      F-25
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 10- Subsequent events (concluded):

              As consideration for the transfer of the assets and liabilities of
              XeQute, the Company would issue shares of its Class A common stock
              which upon issuance would represent 54% of its outstanding common
              stock on a fully diluted basis, and it would pay $3,500,000 out of
              the proceeds of the $8,000,000 financing to be arranged by XeQute.
              The recipients of the shares of the Company's Class A common stock
              will be restricted from registering those shares for sale prior to
              one year after the closing of the financing agreements.

              If the acquisition of XeQute is consummated, all of the executive
              officers and directors of the Company would resign from those
              positions. Although the executive officers and directors of the
              Company would become employees of or consultants to the combined
              companies, the combined companies would be managed and effectively
              controlled by the executive officers and directors of XeQute. In
              addition, the acquisition of 54% of the outstanding common stock
              of the Company on a fully diluted basis by Vertex would result in
              a change in control of the Company and, accordingly, the three
              senior executives of the Company would be entitled to specified
              severance payments and additional stock options (see Note 8).

              Management of the Company cannot assure (i) that an amendment
              extending the closing date (or a waiver thereof) will be entered
              into by the parties to permit consummation of the agreement, or
              (ii) if such amendment or waiver is provided, that the conditions
              to the proposed transaction with XeQute will be met, or (iii) if
              such conditions are met, that the transaction will be
              consummated."

              During the period from August 1, 2003 through October 20, 2003,
              the Company sold 35,000 shares of its Class A common stock and
              1,500 shares of its Series 3 Class B common stock through a
              private placement and it received proceeds of $50,000. In
              addition, the Company issued $400,000 shares of its Cass A common
              stock with an approximate aggregate fair value of $200,000 in
              exchange for various services.


                                      * * *





                                      F-26
<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, 2003


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>
/s/ Gary Valinoti                              Chief Executive Officer, President and
-----------------------------------            Director (Principal Executive Officer)           November 13, 2003
Gary Valinoti

                                               Chief Financial Officer, Executive Vice
                                               President, General Counsel and Director
/s/ Thomas J. Mazzarisi                        (Principal Financial and Accounting
-----------------------------------            Officer)                                         November 13, 2003
Thomas J. Mazzarisi

/s/ Stephen J. Schoepfer                       Chief Operating Officer and Executive
-----------------------------------            Vice President and Director                      November 13, 2003
Stephen J. Schoepfer

</TABLE>




<PAGE>

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

         4.24     Amendment, dated October 14, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Thomas J.
                  Mazzarisi.

         4.25     Amendment, dated October 14, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Stephen J.
                  Schoepfer.

         10.31    Consulting Agreement, dated June 12, 2002, between the
                  Registrant and Walsh Organization, Inc.

         10.32    Power of Attorney and Contingent Fee Contract, dated June 14,
                  2002, among the Registrant, Gary Valinoti and the Law Firm of
                  O'Quinn, Laminack & Pirtle.

         10.39    Subscription Agreement, dated as of September 25, 2003,
                  between the Registrant and Kuekenhof Equity Fund L.P.

         14.1     Code of Ethics.

         21.1     Subsidiaries of Registrant.

         31.1     Section 302 Certification of Chief Executive Officer.

         31.2     Section 302 Certification of Chief Financial Officer.

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