U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10-QSB/A

|X|   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the quarterly period ended September 30, 2004

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

      For the transition period from ______________ to ______________.

                         Commission File No.: 000-27777
                               INNOVATION HOLDINGS
                    (f/k/a Blagman Media International, Inc.)
             ------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

            Nevada                                              91-1923501
-------------------------------                           ----------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)

 14622 Ventura Blvd., Suite 1015
       Sherman Oaks, CA                                           91403
---------------------------------------                         -----------
(Address of Principal Executive Offices)                        (Zip Code)

        Registrant's telephone number, including area code: 818-426-8737

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

           Securities registered pursuant to Section 12(G) of the Act:
                         COMMON STOCK -- $.001 PAR VALUE

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES |X| NO |_|

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 11,235,455 shares of common stock as
of December 15, 2004.

Transitional Small Business Disclosure Format (check one): YES |_|  NO |X|

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                           PAGE
                                                                                         ----
<S>                                                                                      <C>
ITEM 1.     FINANCIAL STATEMENTS

CONDENSED Consolidated Balance SheetS As Of SEPTEMBER 30, 2004 (Unaudited) AND
DECEMBER 31, 2003                                                                           1

CONDENSED CONSOLIDATED Statements Of Operations For The Three AND NINE Months Ended
SEPTEMBER 30, 2004 AND 2003 (Unaudited)                                                     2

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' DEFICIENCY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)
                                                                                            3
CONDENSED CONSOLIDATED Statements Of Cash Flows For The NINE Months Ended SEPTEMBER
30, 2004 AND 2003 (Unaudited)                                                               4

Notes To CONDENSED CONSOLIDATED Financial Statements                                      5-10

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
             OPERATIONS                                                                  11-14

ITEM 3.      CONTROLS AND PROCEDURES                                                        14

PART II -    OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS                                                              14

ITEM 2.      CHANGES IN SECURITIES AND USE OF PROCEEDS                                      17

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES                                                17

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY                                    17
             HOLDERS

ITEM 5.      OTHER INFORMATION                                                              17

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K                                               17

SIGNATURES                                                                                  17

CERTIFICATIONS                                                                            18-20
</TABLE>

<PAGE>

                               INNOVATION HOLDINGS
                  (FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
                                AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            AS OF SEPTEMBER 30, 2004


<PAGE>

                      INNOVATION HOLDINGS AND SUBSIDIARIES
                  (FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)

                                    CONTENTS
<TABLE>
<CAPTION>
<S>              <C>        <C>
PAGE             1          CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
                            SEPTEMBER 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

PAGE             2          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                            SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)

PAGE             3          CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR THE NINE
                            MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)

PAGE             4          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                            2004 AND 2003 (UNAUDITED)

PAGES            5-10       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>

<PAGE>

                               INNOVATION HOLDINGS
                  (FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
                                AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS
                                                                                September 30, 2004    December 31,
                                                                                  (Unaudited)             2003
                                                                                 ---------------    ---------------
<S>                                                                              <C>                <C>
CURRENT ASSETS
Cash and cash equivalents                                                        $             2    $             2
Prepaid expenses, media and other current assets                                          94,091                 --
Assets related to discontinued operations                                                  9,645              9,645
                                                                                 ---------------    ---------------
     Total Current Assets                                                                103,738              9,647
                                                                                 ---------------    ---------------

PROPERTY & EQUIPMENT - NET                                                                53,061             73,751
                                                                                 ---------------    ---------------

OTHER ASSETS
License agreement, net of amortization of $18,992 and
   $7,781 respectively                                                                   630,476            141,687
                                                                                 ---------------    ---------------

TOTAL ASSETS                                                                     $       787,275    $       225,085
                                                                                 ===============    ===============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
 Notes and loans payable - current portion                                       $       374,725    $       359,725
 Accounts payable                                                                        760,321            830,006
 Accrued expenses                                                                        803,117            950,018
 Accrued compensation - officers                                                       2,324,844          1,897,344
 Due to officer                                                                          101,857             68,406
 Capital lease obligation - current portion                                               33,540             33,540
 Liabilities related to discontinued operations                                       10,835,472         10,835,472
                                                                                 ---------------    ---------------
     Total Current Liabilities                                                        15,233,876         14,974,511
                                                                                 ---------------    ---------------

LONG-TERM LIABILITIES
 Notes and loans payable - long-term portion                                             558,000            445,500
                                                                                 ---------------    ---------------

Total Liabilities                                                                     15,791,876         15,420,011
                                                                                 ---------------    ---------------

COMMITMENTS AND CONTINGENCIES                                                                 --                 --

STOCKHOLDERS' DEFICIENCY
 Preferred stock, series A, $.001 par value, super convertible redeemable
  preferred stock, 10,000,000 shares authorized, 0
  shares issued and outstanding                                                               --                 --
 Preferred stock, series B, $.001 par value, super convertible
  redeemable preferred stock, 100 shares authorized, 100 shares
  issued and outstanding                                                                       1                  1

 Common stock, $.001 par value, 40,000,000 shares authorized 2,393
  and 5 shares issued and outstanding, respectively                                            8                  1
 Additional paid-in capital                                                           48,727,852         41,856,434
 Accumulated deficit                                                                 (60,380,146)       (57,051,362)
  Deferred stock based compensation                                                   (3,352,316)                --
                                                                                 ---------------    ---------------

     Total Stockholders' Deficiency                                                  (15,004,601)       (15,194,926)
                                                                                 ---------------    ---------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                   $       787,275    $       225,085
                                                                                 ===============    ===============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                      -1-
<PAGE>

                               INNOVATION HOLDINGS
                  (FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
                                AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                             For the Three       For the Three     For the Nine      For the Nine
                                                Months             Months            Months            Months
                                                Ended              Ended             Ended             Ended
                                              Sept. 30,           Sept. 30,         Sept. 30,         Sept. 30,
                                                2004               2003              2004               2003
                                           --------------    --------------    --------------    --------------
<S>                                        <C>               <C>               <C>               <C>
REVENUES - NET                             $           --    $        5,128    $           --    $       83,652
                                           --------------    --------------    --------------    --------------

OPERATING EXPENSES
 Selling, general and administrative            1,014,566         2,098,267         3,251,794         5,166,921
 Depreciation and amortization                     10,431             7,113            31,901            22,059
                                           --------------    --------------    --------------    --------------
     Total Operating Expenses                   1,024,997         2,105,380         3,283,695         5,188,980
                                           --------------    --------------    --------------    --------------

LOSS FROM OPERATIONS                           (1,024,997)       (2,100,252)       (3,283,695        (5,105,328)

OTHER INCOME (EXPENSE)
 Interest expense                                 (12,001)          (10,249)          (45,089)          (37,113)
                                           --------------    --------------    --------------    --------------
        Total Other Income (Expense)              (12,001)          (10,249)          (45,089)          (37,113)
                                           --------------    --------------    --------------    --------------

NET LOSS                                   $   (1,036,998)   $   (2,110,501)   $   (3,328,784)   $   (5,142,441)
                                           ==============    ==============    ==============    ==============

NET LOSS PER COMMON SHARE -
BASIC AND DILUTED                          $         (947)   $     (703,500)   $       (8,669)   $   (5,142,441)
                                           ==============    ==============    ==============    ==============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC AND DILUTED                     1,095                 3               384                 1
                                           ==============    ==============    ==============    ==============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                      -2-
<PAGE>

                               INNOVATION HOLDINGS
                  (FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
                                AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENT OF CHANGES ON STOCKHOLDERS' DEFICIENCY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                         Preferred Stock                Common Stock           Additional
                                     -------------------------   --------------------------     Paid-In        Accumulated
                                       Shares        Amount         Shares        Amount        Capital         Deficit
                                     ----------   ------------   -----------   ------------   ------------    ------------

<S>                                         <C>   <C>                  <C>     <C>            <C>             <C>
Balance, December 31, 2003                  100   $          1             5   $          1   $ 41,856,434    $(57,051,362)

Stock issued for prepaid expenses            --             --             1              1         99,999              --

Stock issued for legal fees                  --             --            60              1        682,499              --

Stock issued for consulting                  --             --         1,478              1      4,854,525              --

Stock issued for settlement of
  accrued expenses                           --             --             4              1        271,273              --

Stock issued for board of
    directors fees                           --             --            11              1        461,999              --

Stock issued for debt issuance               --             --             1              1          1,124              --

Stock issued for license agreement           --             --           833              1        499,999              --

Deferred stock compensation                  --             --            --             --             --              --

Amortization of deferred stock
 compensation                                --             --            --             --             --              --

Net loss                                     --             --            --             --             --      (3,328,784)
                                     ----------   ------------   -----------   ------------   ------------    ------------
BALANCE,
------------
 SEPTEMBER 30, 2004                         100   $          1         2,393   $          8   $ 48,727,852    $(60,380,146)
 -----------------
                                     ==========   ============   ===========   ============   ============    ============

<CAPTION>
                                    Deferred Stock
                                       Based
                                     Compensation      Total
                                     ------------    ------------

<S>                                    <C>           <C>
Balance, December 31, 2003                     --    $(15,194,926)

Stock issued for prepaid expenses              --         100,000

Stock issued for legal fees                    --         682,500

Stock issued for consulting                    --       4,854,526

Stock issued for settlement of
  accrued expenses                             --         271,274

Stock issued for board of
    directors fees                             --         462,000

Stock issued for debt issuance                 --           1,125

Stock issued for license agreement             --         500,000

Deferred stock compensation            (4,917,726)     (4,917,726)

Amortization of deferred stock
 compensation                           1,565,410       1,565,410

Net loss                                       --      (3,328,784)
                                     ------------    ------------
BALANCE,
------------
 SEPTEMBER 30, 2004                    (3,352,316)   $(15,004,601)
 -----------------
                                     ============    ============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                      -3-
<PAGE>

                               INNOVATION HOLDINGS
                  (FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
                                AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  For the Nine      For the Nine
                                                                                  Months Ended       Months Ended
                                                                             September 30, 2004  September 30, 2003
                                                                               ---------------    ---------------
<S>                                                                            <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                                      $    (3,328,784)   $    (5,142,441)
 Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and amortization                                                         31,901             22,059
  Provision for bad debt                                                                    --             75,147
  Stock issued for compensation and services                                         2,712,838          3,939,274
 Changes in operating assets and liabilities:
  (Increase) decrease in:
    Accounts receivable                                                                     --            (43,368)
    Prepaid expenses, media and other current assets                                        --            105,142
    Deposits                                                                                --              4,576
  Increase (decrease) in:
    Accounts payable and accrued expenses                                               (4,406)           364,767
    Deferred revenue                                                                        --                 --
    Accrued compensation - officer                                                     427,500            452,452
                                                                               ---------------    ---------------
         Net Cash Used In  Operating Activities                                       (160,951           (222,392)
                                                                               ---------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Cash overdraft - (decrease) increase                                                       --            (11,782)
 Due to officer                                                                         33,451            (63,253)
 Proceeds from officer                                                                                         --
 Payments to officer                                                                        --
 Proceeds from notes payable                                                           127,500            302,225
 Payments under capital lease obligation                                                    --             (4,796)
                                                                               ---------------    ---------------
         Net Cash Provided By Financing Activities                                     160,951            222,394
                                                                               ---------------    ---------------

NET INCREASE  IN CASH                                                                       --                  2
Cash - beginning of Period                                                                   2                 --
                                                                               ---------------    ---------------
Cash - end of Period                                                           $             2    $             2
--------------------                                                           ===============    ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
-------------------------------------------------
Interest paid                                                                  $            --    $            --
                                                                               ===============    ===============
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

During the period ended September 30, 2004, the Company issued 1 share of common
stock having a fair market value of $100,000 to its legal counsel for future
legal services recorded as a prepaid expense.

During the period ended September 30, 2004, the Company issued 60 shares of
common stock having a fair market value of $682,500 to its legal counsel for
future legal services recorded as deferred stock compensation.

During the period ended September 30, 2004, the Company issued 1,478 shares of
common stock having a fair market value of $4,854,526 to various consultants for
consulting fees recorded as deferred stock compensation which is being expensed
over the lives of the related consulting agreements.

During the period ended September 30, 2004, the Company issued 4 shares of
common stock in settlement of accrued expenses and accrued interest totaling
$260,000 and $11,274, respectively.

During the period ended September 30, 2004, the Company issued 11 shares of
common stock having a fair market value of $462,000 to its Board Members for
services rendered.

During the period ended September 30, 2004, the Company issued 1 share of common
stock having a fair market value of $1,125 for debt issuance cost.

     See accompanying notes to condensed consolidated financial statements.


                                      -4-
<PAGE>

                               INNOVATION HOLDINGS
                  (FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
                                AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 BASIS OF PRESENTATION

      On February 10, 2003, the stockholders of the Blagman Media International,
      Inc. approved an amendment to the articles of incorporation to change its
      name to Innovation Holdings.

      The accompanying unaudited condensed consolidated financial statements
      include the accounts of Innovation Holdings, Inc. and its subsidiaries
      (the "Company"). All significant inter-company transactions and balances
      have been eliminated in consolidation.

      The accompanying unaudited condensed consolidated financial statements
      have been prepared in accordance with accounting principles generally
      accepted in the United States of America and the rules and regulations of
      the Securities and Exchange Commission for interim financial information.
      Accordingly, they do not include all the information necessary for a
      comprehensive presentation of financial position and results of
      operations.

      It is management's opinion, however, that all material adjustments
      (consisting of normal recurring adjustments) have been made which are
      necessary for a fair financial statement presentation. The results for the
      interim period are not necessarily indicative of the results to be
      expected for the year.

      The condensed consolidated balance sheet information at December 31, 2003
      was derived from the Company's audited consolidated financial statements
      included in its Annual Report Form 10-KSB. The accompanying condensed
      consolidated financial statements and the information included under the
      heading "Management's Discussion and Analysis or Plan of Operation" should
      be read in conjunction with the Company's Annual Report Form 10-KSB for
      the year ended December 31, 2003, filed on May 24, 2004.

      In February 2003, the Board of Directors authorized a 5,000 for 1 reverse
      stock split. In April 2004, the Board of Directors authorized a 500 for 1
      reverse stock split. All share and per share amounts in the accompanying
      condensed consolidated financial statements and footnotes have been
      restated to give effect to such reverse stock splits.

      In preparing financial statements in conformity with generally accepted
      accounting principles, management is required to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      the disclosure of contingent assets and liabilities at the date of the
      financial statements and revenues and expenses during the reported period.
      Actual results could differ from those estimates.

      Certain reclassifications have been made to the prior period consolidated
      financial statements to conform to the current presentation.

      Basic loss per common share is based on net loss divided by the weighted
      average number of common shares outstanding. Common stock equivalents were
      not included in the calculation of diluted loss per share because their
      effect would be anti-dilutive.

NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS

      In March 2004, the U.S. Securities and Exchange Commission's Office of the
      Chief Accountant and the Division of Corporate Finance released Staff
      Accounting Bulletin ("SAB") No. 105, "Loan commitments Accounted for as
      Derivative Instruments." This bulletin contains specific guidance on the
      inputs to a valuation-recognition model to measure loan commitments
      accounted for at fair value, and requires that fair-value measurement
      include only differences between the guaranteed interest rate in the Loan
      commitment and market interest rate, excluding any expected future cash
      flows related to the customer relationship or loan servicing. In addition,
      SAB 105 requires the disclosure of the accounting policy for loan
      commitments, including methods and assumptions used to estimate the fair
      value of loan commitments and any associated hedging strategies. SAB 105
      is effective for derivative instruments entered into subsequent to March
      31, 2004 and should also be applied to existing instruments as
      appropriate. The Company has not yet completed its evaluation of SAB 105,
      but does not anticipate a material impact on its financial statements.

                                      -5-
<PAGE>

NOTE 3 DISCONTINUED OPERATIONS

      Pursuant to an Agreement and Plan of Reorganization dated March 4, 2002,
      effective March 22, 2002, the Company acquired 100% of the outstanding
      stock of Century Media, Inc., a California corporation ("Century") by
      merging Blagman USA, Inc., into Century. Pursuant to the transaction, the
      Company acquired all of the capital stock of Century for cash and common
      stock of the Company, assumed current debt obligations and unexercised
      option and stock appreciation rights of Century and assumed accrued and
      ongoing trade and other ordinary course obligations and relationships.
      Prior to the closing, the parties negotiated with the holders of portions
      of the outstanding Century debt to restructure the term and payments of
      such debt and in certain cases, to allow for the issuance of shares of
      common stock of the Company in lieu of cash payments. Currently, the
      Company remains obligated on certain contingent obligations including
      $1.25 million from the TMT Media Corporation acquisition by Century in
      2000. (See Note 5(A)).

      At closing, holders of Century shares received twenty cents per Century
      share, of which two and one-half cents was payable in cash and the balance
      of seventeen and one-half cents was payable by the delivery of shares of
      common stock of the Company, for a total of $903,292 and 14,377 options.

      In relation to the acquisition, the Company recorded goodwill in the
      amount of $3,048,484 and recorded an intangible asset of $5,855,286
      related to the customer list acquired. The Company evaluated the customer
      list and assigned it a three-year life.

      The Company's management performs on-going business reviews based on
      quantitative and qualitative measures and assesses the need to record
      impairment losses when impairment indicators are identified. In the third
      quarter of 2002, the review made by management of the Company determined
      that the goodwill related to Century's business and the customer list
      acquired in the acquisition were not recoverable. The Company then
      recorded impairment charges of $3,048,484 and $5,599,007 (net of
      amortization) related to the goodwill and customer list, respectively.

      In December 2002, management of the Company determined that it would no
      longer invest its capital and human resources into Century and entered
      into a plan to discontinue and abandon the operations of Century.
      Effective with the fourth quarter of 2002, this operating entity is
      reflected as a discontinued operation.

      For the nine months ended September 30, 2004, Century was not operating
      and therefore did not have any revenues or operating expenses.

      Assets and liabilities of the discontinued operations as of September 30,
2004 were as follows:

Assets
 Cash                                        $           313
 Prepaid expenses                                      7,005
 Deposits                                              2,327
                                             ---------------
     Total Assets                            $         9,645
                                             ---------------

Liabilities
 Accounts payable                            $     5,606,399
 Accrued expenses                                  1,478,352
 Deferred revenue                                  1,364,866
 Notes payable                                     2,356,575
 Capital lease obligation                             29,280
                                             ---------------
     Total Liabilities                            10,835,472
                                             ---------------

Net liabilities of discontinued operations   $    10,825,827
                                             ===============

                                      -6-
<PAGE>

      The creditors of Century Media have filed various actions for breach of
      contract. Said actions arose out of obligations incurred by Century Media
      prior to the merger with the Company. The Company disputes these claims
      and is actively seeking to resolve these matters.

NOTE 4 STOCKHOLDERS' DEFICIENCY

      During the nine months ended September 30, 2004, 1 share of common stock
      was issued to the Company's attorneys for an agreement to provide legal
      services valued at $100,000. The fair value of the issued shares was based
      upon the market price of the Company's stock on the date of grant.

      During the nine months ended September 30, 2004, 60 shares of common stock
      were issued to the Company's attorneys for an agreement to provide legal
      services valued at $682,500. The fair value of the issued shares was based
      upon the market price of the Company's stock on the date of grant. The
      $682,500 is presented as deferred stock based compensation in the
      accompanying condensed consolidated balance sheet.

      During the nine months ended September 30, 2004, the Company issued 1,478
      shares of common stock for consulting services valued at $4,854,526. The
      fair value of the issued shares was based upon the market price of the
      Company's stock on the date of grant. Of the total value, $2,154,099 has
      been expensed to selling, general and administrative expenses in the
      accompanying condensed consolidated statement of operations for the nine
      months ended September 30, 2004 and $2,700,427 is presented as deferred
      stock based compensation in the accompanying condensed consolidated
      balance sheet.

      During the nine months ended September 30, 2004, the Company issued 11
      shares of common stock for board of directors fees valued at $462,000. The
      fair value of the issued shares was based upon the market price of the
      Company's stock on the date of grant. The amount was expensed to selling,
      general and administrative expenses in the accompanying condensed
      statement of operations for the nine months ended September 30, 2004.

      During the nine months ended September 30, 2004, the Company issued 4
      shares of common stock valued at $271,274 to satisfy certain liabilities
      related to a legal settlement reached in 2003. (See Note 5(D). The fair
      value of the issued shares was based upon the market price of the
      Company's stock on the date of grant.

      During the nine months ended September 30, 2004, 1 share of common stock
      valued at $1,125 was issued for debt issuance for costs related to notes
      payable. The fair value of the issued shares was based upon the market
      price of the Company's stock on the date of grant.

      During the nine months ended September 30, 2004, 833 shares of common
      stock were issued to a vendor for a license agreement valued at $500,000.
      The fair value of the issued shares was based upon the market price of the
      Company's stock on the date of grant.

                                      -7-
<PAGE>

NOTE 5 LITIGATION

(A)   Subsequent to the Blagman/Century merger transaction described in Note 2,
      TMT Media Corporation ("TMT") has asserted that under the April 2000
      acquisition agreement (whereby Century acquired TMT), as a result of the
      transaction between the Company and Century, it is entitled, as of April
      22, 2002, to the $1,250,000 contingent amount and to the payment in full
      of the balance of $609,564 due on the $700,000 note delivered in the 2000
      acquisition by Century.

      The Company and Century dispute this position and are seeking to resolve
      the matter. In May 2002, TMT initiated a proceeding, TMT MEDIA CORPORATION
      vs. BLAGMAN CENTURY MEDIA, INC. et al. (Superior court of California,
      County of Los Angeles, Case BC273368) against the Company, Century and a
      shareholder personally, claiming the accelerated amount of $1,859,564.
      Management has filed a general denial to TMT's allegations and has
      asserted numerous affirmative defenses and plans to begin mediation in
      June to resolve this case. In December 2003, TMT was granted a Summary
      Judgment against the Company in the accelerated amount of $2,242,975,
      which includes additional interest on the $1,250,000 contingent amount and
      the $609,564 note plus attorney's fees and costs incurred by TMT. The
      Company's former attorney failed to file any opposition to the summary
      judgment motion. The Company's current attorney filed a motion to be
      relieved of the default as to this summary judgment. On July 6, 2004, the
      judgment of $2,242,975 was set aside and vacated by the court. The Company
      can now properly defend the matter to either a successful conclusion or
      settlement. As of September 30, 2004, the Company has recorded additional
      liabilities in the amount of $383,411 in order to record the full
      liability of $2,242,975 as per the summary judgment. This liability is
      included in Liabilities related to Discontinued Operations in the
      accompanying consolidated balance sheet at September 30, 2004.

(B)   In March 2002, the Company advised authorities, market members and
      regulators and initiated an internal reconciliation investigation relating
      to a substantial amount of common shares of the Company improperly and
      fraudulently issued and possibly transferred, including possible improper
      releases of restrictions and transfers of restricted securities warrant
      negotiations or an exemption from registration, without the knowledge of
      the Company ("Curative Review Process"). The Curative Review Process is
      continuing. The Company filed a Registration Statement on Form S-8 for a
      2002 Employee Stock Compensation Plan ("Registration Statement") effective
      August 2002 to register shares. In connection with the Curative Review
      Process, the Company subsequently placed stop transfer orders on all of
      the original certificates and derivatives of those certificates, advised
      market members and depositories of its actions and has been working with
      these parties and its transfer agent and other resources to ascertain
      which shares of Common Stock need to remain in commerce to recognize the
      interests of the transferee, which shares should be cancelled or returned
      to the Company and therefore removed from registration ("Removed Shares")
      and which shares are held by or were delivered to parties who were
      eligible to receive and hold the same pursuant to the Plan. The Company
      intends to file an amendment to this Registration Statement as soon as
      practicable when the reconciliation in the curative Review Process is
      complete to withdraw the Removed shares from registration. In connection
      with this, the Company has had a suit filed against them by a third party
      pending the circuit court of Cook County, Illinois. The Company has
      responded to this matter and is actively cooperating in other
      investigations relating to the plaintiff and others. The Company expects

                                      -8-
<PAGE>

      additional litigation from the plaintiff and is intending to assert the
      indemnification and disgorgement rights under its agreements with the
      plaintiff. As stated above, more information on issues related to the
      collateral damage of the company's association with certain financial
      advisors and organizations can be found on the Securities and Exchange
      Commission (SEC) website. Additional lawsuits may be filed by the Company
      against all parties involved in the fraud if any issues related to such
      fraud have an adverse effect on the company. The Company has initiated a
      complaint against a third party in the Superior Court of California in the
      County of Los Angeles for breach of contract, fraud and deceit,
      intentional misrepresentation of facts, and rescission. The third party
      filed a general denial to the complaint, has asserted numerous affirmative
      defenses, and has filed a cross-complaint alleging breach of written
      contract, breach of the implied covenant of good faith and fair dealing,
      conversion, common counts, breach of fiduciary duties, fraud and deceit,
      negligent misrepresentation, imposition of constructive trust and/or
      resulting trust, intentional and tortuous inducement to breach and
      interference with contract and prospective economic advantage, and unfair
      trade practices. The Company has filed a general denial to the
      allegations. The parties are currently seeking a business settlement.

      On March 31, 2003, the SEC filed a complaint for injunctive and other
      equitable relief, obtained a temporary restraining order and has frozen
      the assets of this third party. The SEC complaint specifically alleges
      that this third party and his associates forged stock issuance resolutions
      and entered into bogus consulting agreements in an effort to wrongfully
      convert the Company's S-8 shares. The SEC has alleged that this third
      party and his associates stole approximately 2,160 shares of the Company's
      stock valued at $3,300,000.

(C)   A claim has been brought against the Company by a corporation for breach
      of contract. On January 30, 2004, this corporation was granted a summary
      judgment in the amount of $203,064, which includes interest plus
      attorney's fees and costs incurred by the corporation. The Company's
      current attorney filed a motion to be relieved of the default as to this
      summary judgment. This liability is included in Liabilities from
      Discontinued Operations in the accompanying consolidate balance sheet at
      September 30, 2004. There were cross-actions in the case that were pending
      for binding arbitration in November 2004. The November date was continued
      until December 2004. The corporation failed to appear in court for
      arbitration as predetermined for December 2004. Innovation was in court on
      the date selected. The corporation now must wait four months to re-file.

(D)   On November 11, 2003, the Company reached a settlement with a corporation
      as a result of a claim brought against the corporation by the Company on
      May 6, 2002 and a cross complaint filed by the corporation on June 14,
      2002. As part of the terms and conditions of the settlement, the Company
      will pay to the corporation $260,000 and 10% simple interest over one
      year. This will be accomplished by the issuance of 2 million shares of
      free trading stock 30 days after the execution of the agreement. The
      shares will be held in a trust account for the purpose of selling the
      stock and paying the corporation on a continuous basis. In the event the
      Company does not pay the corporation the total amount of the settlement on
      or before one year and 30 days from the execution date of the settlement
      agreement, the corporation will enforce a stipulated judgment in the
      amount of $750,000 against the Company. This liability has been paid in
      full as of September 30, 2004.

      Other than the litigation discussed in the above paragraphs, the Company
      is a party to a number of lawsuits and claims that the Company believes
      will ultimately have a favorable outcome and are not material in dollar
      amounts.

                                      -9-
<PAGE>

NOTE 6 CAPITAL LEASE OBLIGATIONS

      The Company is in default of its capital lease agreement at September 30,
      2004. The Company is also in discussions with the lessor to settle the
      matter. Due to the default, the entire amount due under the lease has been
      classified as current in the accompanying condensed consolidated balance
      sheet.

NOTE 7 GOING CONCERN

      The Company's condensed consolidated financial statements have been
      prepared on a going concern basis, which contemplates the realization of
      assets and the satisfaction of liabilities and commitments in the normal
      course of business. The Company incurred a net loss of $3,328,784 and a
      negative cash flow from operations of $160,951 for the nine months ended
      September 30, 2004, and has a working capital deficiency of $15,130,138
      and a stockholders deficiency of $15,504,601 at September 30, 2004 which
      raises substantial doubt about its ability to continue as a going concern.
      The Company's working capital deficiency as of September 30, 2004 may not
      enable it to meet such objectives as presently structured. The condensed
      consolidated financial statements do not include any adjustments that
      might result from the outcome of this uncertainty.

      The ability of the Company to continue as a going concern is dependent on
      the Company's ability to raise additional capital and implement its
      business plan. Management believes that actions presently taken to obtain
      additional funding provide the opportunity for the Company to continue as
      a going concern. The Company is also actively seeking businesses to
      acquire.

NOTE 8 SUBSEQUENT EVENTS

      In the fourth quarter of 2004, the Company issued 11,010,000 common
      shares, in the aggregate, to various consultants for consulting services
      to be provided over varying terms, which expire at various dates during
      the fiscal years 2005 and 2006.

      In the fourth quarter of 2004, a total of 12 shares of common stock were
      issued to the Company's Securities and Exchange Commission attorney as
      compensation for legal services rendered and for future legal services.

      In October 2004, the Company's Board of Directors authorized a
      six-thousand-for-one reverse stock split of the Company's common stock. In
      December 2004, the Company's Board of Directors authorized a
      one-thousand-for-one reverse split of the Company's common stock. The
      accompanying condensed consolidated financial statements and footnotes
      have been restated to give effect to such reverse stock splits. Any
      fractional shares were rounded to one.

      In October 2004 the Company announced it was moving forward on its letter
      of intent to acquire an equity interest in Ironwood Furnishings, Inc., a
      privately-held corporation in the business of wholesale distribution of
      furniture. Due to the Company's inability to raise capital, it has been
      unable to complete the acquisition and the plans have been put on hold.


                                      -10-
<PAGE>

Item 2.0 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

General

Innovation Holdings f/k/a Blagman Media International, Inc. is a Nevada
corporation (collectively with its subsidiaries, the "Company"), which is the
successor to a corporation founded in 1961. We are a direct marketing, direct
response and media enterprise based in Century City, California which
principally provides direct market services and media buying for our clients and
their products and services through television, radio, Internet, print and
outdoor advertising media. In addition, we organize direct response media
campaigns on radio, television and in print and provide assistance in backend
marketing and creative production.

We began operations in 1994 as a sole proprietorship and formed a corporation,
Blagman Media International, Inc., in early 1999. On August 2, 1999, we
completed a reverse acquisition with Unisat, Inc., an inactive, public
non-reporting company, founded in 1961 and formerly known as Combined Companies,
Inc. On the same date, Unisat, Inc. changed its name to Blagman Media
International, Inc. and we therefore have two Nevada entities with the same
name. The transaction was structured as a share exchange, in which Robert
Blagman exchanged all of his shares in the privately held entity for 8,200,000
common shares of Unisat, Inc. In April 2000, we entered into a share exchange
agreement with MNS Eagle Equity Group I, an inactive, reporting Nevada
corporation, which resulted in our becoming the parent reporting company.

The primary purpose of these transactions was to give us access to a public
market, to create a new corporate vehicle with which to build a more expansive
media-buying infrastructure, thereby allowing us to leverage our direct
marketing and direct response efforts. Currently, we are actively pursuing
acquisitions and various strategic and working relationships which, if
successful, will allow us to create a "network" of alliance partners with the
capacity to deliver a broader range of services in a more cost-efficient manner.

In 2001, internally we focused on our core competencies by making quantitative
media buys and in assisting our clients in implementing traditional radio,
television and out of home media strategies. Given the general uncertainties in
Internet advertising and Internet business models that developed in late 2000,
and which continue, we plan to monitor the use and styles of Internet
advertising. In this way, we can assess the opportunities available to us in
Internet advertising while not making any firm financial commitments to an
Internet strategy. In addition to considering merger and acquisition
opportunities for consolidation and industry growth, we are continuing to pursue
an expansion in the television production field through strategic alliances.

In 2001, we also actively pursued acquisitions and completed our first industry
acquisition transaction in March 2002 when Century Media, Inc. ("Century")
became a wholly-owned subsidiary under the name Blagman-Century Media, Inc.
("Blagman-Century"), subsequently renamed Century Media, Inc. We had been
negotiating since early 2001 to acquire Century Media, a Santa Monica based
advertising agency in business for over ten years with historical billings and
placements that ranged from $35 million to $110 million. In 2001, we entered
into agreements to acquire all of the outstanding stock of Century, but certain
requirements were not satisfied. In October 2001, we concluded that the purchase
price for Century, which was then set at $5.7 million cash plus the assumption
of significant debt, needed to be substantially reduced as a result of our due
diligence conclusions.

In March 2002, we completed the transaction through a merger of a wholly-owned
special purpose subsidiary into Century in exchange for the payment of the
equivalent of $0.20 per share to the shareholders of Century ($0.025 in cash and
the balance in shares of the common stock of the parent company (hereafter
"Common Shares"), repayment of $749,778 in debentures through the issuance of
Common Shares, and the recognition of debts. As a result, at closing
approximately $600,000 in cash and $2.2 million in restricted Common Shares were
distributed to holders of existing Century shares, debentures, and certain stock
rights. Under the merger agreement, the Common Shares were valued at the closing
bid price over the seven days prior to the date of the agreement or $0.0008857,
resulting in the issuance of 426 new Common Shares to the holders of Century
shares, debentures and certain stock rights. Century also had continuing debt
obligations due to affiliates and third parties of approximately $1.6 million,
exclusive of trade and contingency obligations. In connection with our interest
in the Century transaction, we provided management services to Century from late
2001 to early 2002, essentially on a reimbursement basis. As a result of the
overwhelming debt and departures by members of Century, we no longer consider
this acquisition viable. We continue to resolve all issues related to the
Century acquisition.

                                      -11-
<PAGE>

Following the acquisition of Century Media in March 2002, the Company has
determined that Century Media was not strategic to the Company's ongoing
objectives and has discontinued capital and human resource investment in Century
Media effective as of December 2002.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2004 Compared to Three Months Ended September
30, 2003

                                          2004                 2003
                                    ---------------    ---------------

       Total net revenues           $            --    $            --

       Operating Expenses:
       General and Administrative   $     1,024,997    $     2,105,380

       Loss from Operations         $    (1,024,997)   $    (2,105,380)

       Net Loss Per Share           $          (947)   $      (703,500)

Net Revenues

There were no net revenues for the three months ended September 30, 2004 and
$5,128 for the three months ended September 30, 2003. Net revenues for the nine
months ended September 30, 2004 as compared to the nine months ended September
30, 2003 decreased from $83,652 to $0.

Operating Expenses

Total operating expenses decreased 51.4% from $2,105,380 in 2003 to $1,024,997
in 2004 for the three months ending September 30. Included in operating expenses
are general and administrative expenses which decreased 51.7% from $2,098,267
for the three month period ended September 30, 2003 to $1,014,566 for the three
month period ended September 30, 2004 primarily because there was less business
due to seasonal changes in the advertising and marketing industries.

Total operating expenses decreased 36.8% from $5,188,980 in 2003 to $3,283,695
in 2004 for the nine months ending September 30. Included in operating expenses
are general and administrative expenses which decreased 37.1% from $5,166,921
for the nine month period ended September 30, 2003 to $3,251,794 for the nine
month period ended September 30, 2004 primarily because there was less business
due to seasonal changes in the advertising and marketing industries.


The total net loss of the Company for the three-month period ending September
30, 2004 was $(1,036,998) compared to $(2,110,501) for 2003, a 50.9% decrease.

The total net loss of the company for the nine-month period ending September 30,
2004 was $(3,328,784) compared to $(5,142,441) for 2003, a 35.3% decrease.

Other Income (Expenses)

Other income (expenses) for the three-month period ending September 30 increased
from $(10,249) in 2003 to $(12,001) in 2004, a 17.1% increase due to higher
interest expenses.

Other income (expenses) for the nine-month period ending September 30 increased
from $(37,113) in 2003 to $(45,089) in 2004, a 21.5% increase due to higher
interest expenses.

                                      -12-
<PAGE>

Liquidity and Capital Resources

The Company's current assets increased from $9,647 at December 31, 2003 to
$103,738 for the nine month period ended September 30, 2004, mainly due to the
issuance of stock valued at $100,000 as a retainer for legal counsel.

In connection with the various initiatives being pursued by management to expand
the Company's operations internally and through strategic alliances or
acquisitions with other industry partners, additional capital funding will be
required. The Company hopes to raise these funds through an increase in general
business profits due to a shift in the main focus of its core business. The
Company plans to pass low profit making activity such as media buying to third
party contracted companies. The Company also plans to invest in product
ownership and development as well as actively pursue opportunities to expand the
marketing aspects of these products. As the advertising industry goes through
its transitions, the Company plans to react by adjusting its focus away from
pure media buying to product development. Product development continues to be a
strong avenue for the direct response advertising business. Affiliations and
associations with other advertising agencies will also expand the Company's
ability to increase cash flow and revenues without adding staff. The Company
also plans to investigate the possibility of additional acquisitions that will
allow the Company to become a holding company in name only. By diversifying and
expanding its base operations The Company will endeavor to create a more
productive future.

During 2003 and in the current quarter, the market price of our common shares
has continued to drop precipitously. We believe that there are two underlying
causes. First, we apparently were one of the companies targeted in an organized
pattern of depressing prices through "shorting" by a group pursuing a
coordinated effort to effect and profit from a falling share price and from
attempts to extort favorable stock issuances from the Company without fair
consideration. Management initiated referrals to appropriate regulatory agencies
for their action. While actions from these referrals may reduce future
manipulation, it cannot eliminate the impact of the downward price spiral. The
second factor apparently affecting our price was the market reaction to the
increase in authorized and issued common shares which we undertook to compensate
consultants in our industry, to support Company growth to effect the Century
transaction. Following the acquisition of Century Media in March 2002, the
Company has determined that Century Media was not strategic to the Company's
ongoing objectives and has discontinued capital and human resource investment in
Century Media effective as of December 2002.

Management unwound the Century transaction, is evaluating other opportunities
and pursuing other initiatives to expand the Company's operations internally and
through strategic alliances or acquisitions with other industry partners. These
endeavors will be funded in part from operations but will also require
additional capital funding which the Company hopes to raise through debt or
equity financing arrangements, if appropriate financing is available, on
reasonable and acceptable terms.

While the Century Media transaction added existing debt and trade payables,
management believes that these obligations are being contained and can be funded
from operations, internal organic growth, increased billings, legal avenues and
extensive operating cost reductions and efficiencies. We have departed from our
earlier strategy to assist in funding selected aspects of the growth of Century
Media and new strategic hires and alliances that will not facilitate positive
financial growth.

The Company intends to continue to seek additional working capital to meet its
operating requirements and to provide further capital for expansion,
acquisitions or strategic alliances with businesses that are complementary to
the Company's long-term business objectives. Additional capital will be needed
to maintain the growth plans of the Company. In addition negotiations and
payment plans will be established for preexisting Century debt.

Another factor which has taken a substantial amount of time and funding to
overcome is the Company's victimization at the hands of a specific financial
firm now under investigation with the SEC. More details are available at
http://www.sec.gov/litigation/complaints/comp18057.htm.

If substantial additional working capital does not become available, management
believes that the active search and completion of key acquisitions along with
proper legal restructuring and planning will be sufficient to meet essential
capital requirements for the next 12 months but will not support growth.

However, the Company currently has a deficit. As a result, the Company's
financial statements for the period ended September 30, 2004 have been prepared
on a going concern basis which contemplated the realization of assets and the
settlement of liabilities and commitments in the normal course of business. The

                                      -13-
<PAGE>

Company incurred a net loss of $3,328,784 and a negative cash flow from
operations of $160,951 for the nine months ended September 30, 2004, and has a
working capital deficiency of $15,130,138 and a stockholders deficiency as of
September 30, 2004 of $15,004,601, and may not enable it to meet such objectives
as presently structured. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

In October 2004 the Company announced it was moving forward on its letter of
intent to acquire an equity interest in Ironwood Furnishings, Inc., a
privately-held corporation in the business of wholesale distribution of
furniture. Due to the Company's inability to raise capital, it has been unable
to complete the acquisition and the plans have been put on hold.

The Company intends to continue to seek additional working capital to meet its
operating requirements and to provide further capital for expansion,
acquisitions or strategic alliances with businesses that are complementary to
the Company's long-term business objectives. Additional capital will be needed
to maintain the growth plans of the Company.

Forward-Looking Statements

Safe Harbor statement under the Private Securities Litigation Reform Act of
1995: Except for historical information contained herein, the matters discussed
in this filing are forward-looking statements that involve risks and
uncertainties, including but not limited to economic, competitive, governmental
and technological factors affecting the Company's operations, markets, products
and prices and other factors discussed in the Company's various filings with the
Securities and Exchange Commission.

Critical Accounting Policies.

The Securities and Exchange Commission ("SEC") recently issued Financial
Reporting release No. 60, "Cautionary Advice Regarding Disclosure About Critical
Accounting Policies" (FRR 60"), suggesting companies provide additional
disclosure and commentary on their most critical accounting policies. In FRR 60,
the SEC defined the most critical accounting policies as the ones that are most
important to the portrayal of a company's financial condition and operating
results, and require management to make its most difficult and subjective
judgments, often as a result of the need to make estimates of matters that are
inherently uncertain.

Based upon the foregoing definition, the registrant's most critical accounting
policies include:

Revenue Recognition

The Company has historically recognized revenue from the sale of media time to
advertising clients. Included in the monies received from advertising clients
are amounts which represent the reimbursement of media time purchased on behalf
of the customer for the related advertisements. These media purchase
reimbursements have been accounted for as an offset to the related media
purchases for the respective advertisement and not as gross revenues as required
under EITF 99-19 and SAB 101. Monies received prior to the broadcast of the
related advertisement are recorded as deferred revenue. In addition, the Company
has earned commissions in connection with the procurement of media time on
behalf of advertising clients in the past. Such commissions are also considered
earned when the underling advertisement is broadcasted. Additionally, the
Company has entered into contractual agreements with other advertising firms to
share revenues based upon the terms of the specific agreements. The income
produced by these revenue-sharing contracts are recognized as media or
commission income depending upon the nature of the income earned from the
agreement.

Asset Impairment

The Company reviews its long-lived assets and identifiable intangibles for
impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. In performing the review
for recoverability, the Company estimates the future cash flows expected to

                                      -14-
<PAGE>

result from the use of the asset and its eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest charges) is less
than the carrying amount of the asset, an impairment loss is recognized.

Otherwise, an impairment loss is not recognized. Measurement of an impairment
loss for long-lived assets and identifiable intangibles would be based on the
fair value of the asset.

Item 3.0 CONTROLS AND PROCEDURES

Our Chief Executive Officer and Chief Financial Officer, in consultation with
advisors as appropriate, carried out an evaluation of the effectiveness of our
disclosure controls and procedures as of the end of the period covered by this
Quarterly Report on Form 10-QSB/A pursuant to Rule 13a-15(e) promulgated under
the Securities and Exchange Act of 1934 ("Exchange Act"). Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of the date of the evaluation, our disclosure controls and procedures
are effective in making known to them on a timely basis material information
relating to our company (including any consolidated subsidiaries) required to be
included in this report. There were no significant changes to our internal
controls or in other factors that could significantly affect these controls,
known to our Chief Executive Officer or Chief Financial Officer, subsequent to
the date of the evaluation, including any significant deficiencies or material
weaknesses that would require corrective action.

PART II. OTHER INFORMATION

Item 1.0 LEGAL PROCEEDINGS.

(A)   Subsequent to the Blagman/Century merger transaction described in Note 2,
      TMT Media Corporation ("TMT") has asserted that under the April 2000
      acquisition agreement (whereby Century acquired TMT), as a result of the
      transaction between the Company and Century, it is entitled, as of April
      22, 2002, to the $1,250,000 contingent amount and to the payment in full
      of the balance of $609,564 due on the $700,000 note delivered in the 2000
      acquisition by Century.

      The Company and Century dispute this position and are seeking to resolve
      the matter. In May 2002, TMT initiated a proceeding, TMT MEDIA CORPORATION
      vs. BLAGMAN CENTURY MEDIA, INC. et al. (Superior court of California,
      County of Los Angeles, Case BC273368) against the Company, Century and a
      shareholder personally, claiming the accelerated amount of $1,859,564.
      Management has filed a general denial to TMT's allegations and has
      asserted numerous affirmative defenses and plans to begin mediation in
      June to resolve this case. In December 2003, TMT was granted a Summary
      Judgment against the Company in the accelerated amount of $2,242,975,
      which includes additional interest on the $1,250,000 contingent amount and
      the $609,564 note plus attorney's fees and costs incurred by TMT. The
      Company's former attorney failed to file any opposition to the summary
      judgment motion. The Company's current attorney filed a motion to be
      relieved of the default as to this summary judgment. On July 6, 2004, the
      judgment of $2,242,975 was set aside and vacated by the court. The Company
      can now properly defend the matter to either a successful conclusion or
      settlement. As of September 30, 2004, the Company has recorded additional
      liabilities in the amount of $383,411 in order to record the full
      liability of $2,242,975 as per the summary judgment. This liability is
      included in Liabilities related to Discontinued Operations in the
      accompanying consolidated balance sheet at September 30, 2004.

(B)   In March 2002, the Company advised authorities, market members and
      regulators and initiated an internal reconciliation investigation relating
      to a substantial amount of common shares of the Company improperly and
      fraudulently issued and possibly transferred, including possible improper
      releases of restrictions and transfers of restricted securities warrant
      negotiations or an exemption from registration, without the knowledge of
      the Company ("Curative Review Process"). The Curative Review Process is
      continuing. The Company filed a Registration Statement on Form S-8 for a
      2002 Employee Stock Compensation Plan ("Registration Statement") effective
      August 2002 to register shares. In connection with the Curative Review
      Process, the Company subsequently placed stop transfer orders on all of
      the original certificates and derivatives of those certificates, advised
      market members and depositories of its actions and has been working with
      these parties and its transfer agent and other resources to ascertain

                                      -15-
<PAGE>

      which shares of Common Stock need to remain in commerce to recognize the
      interests of the transferee, which shares should be cancelled or returned
      to the Company and therefore removed from registration ("Removed Shares")
      and which shares are held by or were delivered to parties who were
      eligible to receive and hold the same pursuant to the Plan. The Company
      intends to file an amendment to this Registration Statement as soon as
      practicable when the reconciliation in the curative Review Process is
      complete to withdraw the Removed shares from registration. In connection
      with this, the Company has had a suit filed against them by a third party
      pending the circuit court of Cook County, Illinois. The Company has
      responded to this matter and is actively cooperating in other
      investigations relating to the plaintiff and others. The Company expects
      additional litigation from the plaintiff and is intending to assert the
      indemnification and disgorgement rights under its agreements with the
      plaintiff. As stated above, more information on issues related to the
      collateral damage of the company's association with certain financial
      advisors and organizations can be found on the Securities and Exchange
      Commission (SEC) website. Additional lawsuits may be filed by the Company
      against all parties involved in the fraud if any issues related to such
      fraud have an adverse effect on the company. The Company has initiated a
      complaint against a third party in the Superior Court of California in the
      County of Los Angeles for breach of contract, fraud and deceit,
      intentional misrepresentation of facts, and rescission. The third party
      filed a general denial to the complaint, has asserted numerous affirmative
      defenses, and has filed a cross-complaint alleging breach of written
      contract, breach of the implied covenant of good faith and fair dealing,
      conversion, common counts, breach of fiduciary duties, fraud and deceit,
      negligent misrepresentation, imposition of constructive trust and/or
      resulting trust, intentional and tortuous inducement to breach and
      interference with contract and prospective economic advantage, and unfair
      trade practices. The Company has filed a general denial to the
      allegations. The parties are currently seeking a business settlement.

      On March 31, 2003, the SEC filed a complaint for injunctive and other
      equitable relief, obtained a temporary restraining order and has frozen
      the assets of this third party. The SEC complaint specifically alleges
      that this third party and his associates forged stock issuance resolutions
      and entered into bogus consulting agreements in an effort to wrongfully
      convert the Company's S-8 shares. The SEC has alleged that this third
      party and his associates stole approximately 2,160 shares of the Company's
      stock valued at $3,300,000.

(C)   A claim has been brought against the Company by a corporation for breach
      of contract. On January 30, 2004, this corporation was granted a summary
      judgment in the amount of $203,064, which includes interest plus
      attorney's fees and costs incurred by the corporation. The Company's
      current attorney filed a motion to be relieved of the default as to this
      summary judgment. This liability is included in Liabilities from
      Discontinued Operations in the accompanying consolidate balance sheet at
      September 30, 2004. There were cross-actions in the case that were pending
      for binding arbitration in November 2004. The November date was continued
      until December 2004. The corporation failed to appear in court for
      arbitration as predetermined for December 2004. Innovation was in court on
      the date selected. The corporation now must wait four months to re-file.

(D)   On November 11, 2003, the Company reached a settlement with a corporation
      as a result of a claim brought against the corporation by the Company on
      May 6, 2002 and a cross complaint filed by the corporation on June 14,
      2002. As part of the terms and conditions of the settlement, the Company
      will pay to the corporation $260,000 and 10% simple interest over one
      year. This will be accomplished by the issuance of 2 million shares of
      free trading stock 30 days after the execution of the agreement. The
      shares will be held in a trust account for the purpose of selling the
      stock and paying the corporation on a continuous basis. In the event the
      Company does not pay the corporation the total amount of the settlement on
      or before one year and 30 days from the execution date of the settlement
      agreement, the corporation will enforce a stipulated judgment in the
      amount of $750,000 against the Company. This liability has been paid in
      full as of September 30, 2004.

      Other than the litigation discussed in the above paragraphs, the Company
      is a party to a number of lawsuits and claims that the Company believes
      will ultimately have a favorable outcome and are not material in dollar
      amounts.

                                      -16-
<PAGE>

Item 2.   CHANGES IN SECURITIES.

None.

Item 3.   DEFAULTS UPON SENIOR SECURITIES.

None.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

Item 5.   OTHER INFORMATION.

None.

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K

None.

                                  EXHIBIT LIST

2.11  Agreement and Plan of Reorganization (Incorporated by reference; Form 8-K
      filed on March 11, 2002)

3.1   Articles of Incorporation (Incorporated by reference; Form 8-K of MNS
      Eagle Equity Group I, Inc. filed on April 27, 2000)

3.2   Bylaws (Incorporated by reference; Form 8-K of MNS Eagle Equity Group I,
      Inc. filed on April 27, 2000)

3.3   Certificate of Designation for Series B Convertible Preferred Stock
      (Incorporated by reference; Form 8-K of MNS Eagle Equity Group I, Inc.
      filed on April 27, 2000)

10.1  Employment Agreement with Robert Blagman (Incorporated by reference; Form
      10-KSB/A filed on April 30, 2001)

10.2  Employment Agreement with Leslie Blagman (Incorporated by reference; Form
      10-KSB/A filed on April 30, 2001)

10.3  Equity Line of Credit Agreement dated July 12, 2001 with GazelleGroup LLP
      and DRH Investment Company LLP (Incorporated by reference; Form SB-2/A
      filed on November 1, 2001)

10.4  Registration Rights Agreement dated July 12, 2001 with GazelleGroup LLP
      and DRH Investment Company LLP (Incorporated by reference; Form SB-2/A
      filed on November 1, 2001)

10.5  Securities Purchase Agreement dated July 12, 2001 with certain named
      buyers (Incorporated by reference; Form SB-2/A filed on November 1, 2001)

10.6  Placement Agent Agreement dated July 12, 2001 with May Davis Group, Inc.
      (Incorporated by reference; Form SB-2/A filed on November 1, 2001)

10.7  Registration Rights Agreement dated July 12, 2001 with certain named
      persons (Incorporated by reference; Form SB-2/A filed on November 1, 2001)

10.8  2000 Employee Stock Compensation Plan (Incorporated by reference; Form S-8
      for MNS Eagle Equity Group I, Inc. filed on September 11, 2000)

10.9  2001 Employee Stock Option Plan (Incorporated by reference; Form S-8 filed
      on August 27, 2001)

10.10 1-for-500 stock split and marketing rights agreement (Incorporated by
      reference; Form 8-K filed on April 26, 2004)

21.1  List of Subsidiaries (Incorporated by reference, Form 10-KSB, as amended
      filed on April 15, 2002)

31    Certification Pursuant to Section 302, of the Sarbanes-Oxley Act Of 2002
      (filed herewith)

32    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      section 906 of the Sarbanes-Oxley act of 2002

                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Issuer has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

                                   INNOVATION HOLDINGS, INC. F/K/A BLAGMAN MEDIA
                                   INTERNATIONAL, INC.

Dated:  January 12, 2005           /s/ ROBERT BLAGMAN
                                   ---------------------------------------------
                                   Robert Blagman, President and CEO


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