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                       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, 2004

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

        For the transition period from ______________ to _______________

                        Commission File Number 000-28761

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

                            JAG MEDIA HOLDINGS, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                    Nevada                           88-0380546
     (State or Other Jurisdiction       (I.R.S. Employer Identification No.)
          of Incorporation)

       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:

                        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, 2004 was approximately
$253,000.

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 Common
Stock on November 8, 2004 as reported on the OTC Bulletin Board, was
approximately $9,987,075.

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                                            November 8, 2004
               -----                                            ----------------
Common Stock, par value $0.00001 per share                         44,235,299
Series 2 Class B Common Stock, par value $0.00001 per share           380,829
Series 3 Class B Common Stock, par value $0.00001 per share            21,500

                    DOCUMENTS INCORPORATED BY REFERENCE: None

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                            JAG MEDIA HOLDINGS, INC.
                         2004 FORM 10-KSB ANNUAL REPORT

                                TABLE OF CONTENTS

<TABLE>
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                                                                                                         PAGE
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<S>                  <C>                                                                                 <C>
PART I 1

         ITEM 1.     DESCRIPTION OF BUSINESS...............................................................1
         ITEM 2.     DESCRIPTION OF PROPERTIES............................................................24
         ITEM 3.     LEGAL PROCEEDINGS....................................................................24
         ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................................24

PART II...................................................................................................25

         ITEM 5.     MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                     ISSUER PURCHASES OF SECURITIES.......................................................25
         ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............................31
         ITEM 7.     FINANCIAL STATEMENTS.................................................................37
         ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                     DISCLOSURE...........................................................................37
         ITEM 8A.    DISCLOSURE CONTROLS AND PROCEDURES...................................................37
         ITEM 8B.    OTHER INFORMATION....................................................................38

PART III..................................................................................................39

         ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                     SECTION 16(a) OF THE EXCHANGE ACT....................................................39
         ITEM 10.    EXECUTIVE COMPENSATION...............................................................40
         ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER MATTERS......46
         ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................................47
         ITEM 13.    EXHIBITS, LIST AND REPORTS ON FORM 8-K:..............................................48
         ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES...............................................54

</TABLE>


<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, possible acquisitions, 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 1999, 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. 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.


<PAGE>

We have discontinued our efforts to market our Company Voice offering and in
April 2004 merged Jag Company Voice LLC into JAG Media LLC. We have also decided
to refocus our business on the institutional market, including professional
traders. We have also decided to expand our business and are seeking acquisition
candidates in both related and unrelated lines of business. See "-Our Business
Strategy".

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 of May 31, 2004, there were over 785 million Internet users worldwide,
including over 207 million users in the United States. See the Internet World
Stats web-site (http://www.internetworldstats.com/ top20.htm).

According to tracking surveys conducted by Pew Internet & American Life Project
from March 2000 to June 30, 2004, approximately 44% of those with Internet
access use the Internet to obtain financial information and approximately 12%
use the Internet to buy or sell stocks, bonds or mutual funds. According to
these surveys, approximately 12% of those with Internet access obtain financial
information on a typical day.

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.


                                       2
<PAGE>

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 8, 2004, 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
-----------                         ------
Harry Aloof                         Wall Street Trader's Column
Harry Boxer                         The Technical Trader
Hank Camp                           Program Trading Research
John Gabriel                        Stock Market Momentum
Douglas Hughes                      Small Bank Newsletter
Axxel Knutson                       Trading Weapon
Mark Likos                          The Likos Letter
Lawrence G. McMillan                Option Strategist
Bruce Norin                         Focus Stock Charts
David Schultz                       Sector Vue
Wealth Management
     News Service                   Wealth Management News Service

None of the above-referenced commentators has a written agreement 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 report gives our subscribers early, convenient access
to potentially market moving information. 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.



                                       3
<PAGE>

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. Our
current strategy involves phasing out these retail subscribers and refocusing on
institutional customers and professional traders.

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.

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. On April 8,
2004, JAG Company Voice LLC was merged with and into JAG Media LLC, with JAG
Media LLC as the surviving corporation.

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.


                                       4
<PAGE>

OUR BUSINESS STRATEGY

Our goal is to re-position JAG Media as a leading Internet-based provider of
fast breaking financial news and information to the institutional market and to
professional traders. In time, we hope that JAG Media will become an important
information resource for institutional investors, brokers, investment advisers
and professional traders. We believe that market offers an opportunity to
achieve higher revenues at lower per unit cost than the retail market we have
been pursuing.

The success of our business depends on our ability to obtain the requisite
financing and be able to: reverse the current downward trend of our revenues;

o    control costs to correspond with our revenues; and

o    pursue merger and other expansion opportunities.

We plan to focus on servicing the institutional segment of our business. To
assist us in this effort, we are investigating ways of using the internet more
effectively in distributing our product to the institutional market and helping
those customers in turn redistribute the product to their professionals.

o    Increase Revenues. Some avenues which we are exploring to reverse the
     current downward trend of our revenues include:

     o    Increasing our sales efforts to institutional subscribers by focusing
          our entire effort on reaching that market;

     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    Pursuing strategic affiliations, partnerships, joint ventures or other
          relationships with strategic partners, such as our current 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; and

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

o    Curtail Costs. We sold our webcasting business and discontinued our efforts
     to market our Company Voice product 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. Our new strategy of
     focusing on institutional customers will, we believe, also permit us to
     obtain more revenues per marketing dollar by focusing on a smaller number
     of customers and potential customers to whom we can sell our products.

o    Pursue Merger and Other Expansion Opportunities. While we intend to utilize
     our available resources as effectively as possible to increase revenues and
     reduce costs, we realize that it may take some time before revenues can be
     increased to a level where they can cover operating costs and then reach
     the level where they can cover general and administrative costs. Many of
     our general and administrative costs are related to being a public company
     and these costs are difficult to reduce in light of the recent
     Sarbanes-Oxley legislation and its new requirements. We have therefore
     concluded that it would be prudent to attempt to increase our revenue base
     more quickly than our basic business strategy of refocusing on
     institutional customers is likely to achieve, so that such administrative
     costs could be absorbed by a materially larger revenue stream.


                                       5
<PAGE>

     While we have looked at various possible acquisitions over the past two
     years, we have decided that we should increase our efforts to find a
     suitable merger candidate. The candidate would not be in our specific
     line of business, but could be in another line of business related to the
     stock market, such as stock brokerage, or it could be in an unrelated line
     of business. Our current strategy is to not foreclose any attractive
     candidate based upon its line of business, although a candidate which
     offered us synergistic opportunities would of course be carefully
     considered.

A merger is our preferred method of expansion, but we could also start our own
new lines of business if we have sufficient funding and believe there are
sufficient synergistic advantage in doing so.

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 12 of this
Annual Report on Form 10-KSB 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 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.


                                       6
<PAGE>

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

COMPETITION

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

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.

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.


                                       7
<PAGE>

INTELLECTUAL PROPERTY

We are the owner of pending federal trademark applications for JAG, JAGNOTES and
RUMOR ROOM, AHEAD OF THE MONEY, STREETSIDE and the BEAR CAVE. 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 July 31, 2004, we had five employees. As of that date, we had entered into
employment agreements with all of our employees, two of whom are officers and
directors of JAG Media.

EQUITY LINE OF CREDIT

As of April 9, 2002, we entered into, and on July 8, 2004 and July 21, 2004 we
amended, an agreement with Cornell Capital Partners, L.P. for a $10 million
equity line pursuant to which we are able to sell our shares of Common Stock to
Cornell Capital from time to time over a 48-month period ending on August 28,
2006. 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 July 31, 2004,
$4,035,000 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 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 Common Stock. Such shares of Series 2 Class B
Common Stock are non-voting, have dividend and liquidation rights equal to the
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.

For a further discussion of the foregoing lawsuit in Texas federal court against
various brokerage firms, see the disclosure under the heading "Legal
Proceedings" on page 24 of this Annual Report on Form 10-KSB.

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 July 31, 2004, Series 2 Class B Common Stock dividend
certificates had not yet been mailed to certain beneficial owners because as of
such date approximately 13 brokers 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.


                                       8
<PAGE>

RECAPITALIZATION

On or about January 8, 2004, we mailed a Proxy Statement to stockholders in
connection with our annual meeting (the "Annual Meeting") which was held on
February 11, 2004. At the Annual Meeting, our stockholders approved, among other
matters, a proposal to amend and restate Article Fourth of the Articles of
Incorporation of JAG Media to:

o    increase the aggregate authorized number of shares of all classes of stock
     from 200,000,000 to 300,440,000 of which (w) 250,000,000 shares shall be
     designated common stock, par value $0.00001 per share, (x) 400,000 shares
     shall be designated Series 2 Class B common stock, par value $0.00001 per
     share, (y) 40,000 shares shall be designated Series 3 Class B common stock,
     par value $0.00001 per share and (z) 50,000,000 shares shall be designated
     preferred stock, par value $0.00001 per share; and

o    reclassify each outstanding share of our existing Class A Common Stock and
     Series 1 Class B Common Stock into one share of Common Stock upon surrender
     of physical share certificates representing the existing Class A Common
     Stock and Series 1 Class B Common Stock for new Common Stock certificates.

The above-described recapitalization was effected on June 4, 2004 upon the
filing of a Certificate of Amendment to JAG Media's Articles of Incorporation
with the Secretary of State of the State of Nevada. Our amended Articles of
Incorporation also require that the new "certificate only" shares must bear the
name of the beneficial owner on the face of each stock certificate. As a result
of the recapitalization, the old shares of Class A Common Stock and Series 1
Class B Common Stock only represent the right to receive the applicable number
of shares of the new Common Stock. The holder of such shares not surrendered
will not have the right to vote or to receive any dividends or other
distributions payable by the Company after the Effective Date until such shares
have been exchanged for the new Common Stock.

APPOINTMENT OF NEW TRANSFER AGENT

Effective as of May 1, 2004, we retained Transfer Online, Inc. ("Transfer
Online") to serve as our transfer agent and registrar, replacing our former
transfer agent and registrar, Computershare Investor Services, Inc. Through its
proprietary software, Transfer Online will be able to provide the Company and
its shareholders with immediate access to their information. All shareholder
information will be available online. In addition, the Company will be able to
access a comprehensive suite of tools and reports at any time by logging into
TransferOnline.com.

RESIGNATION OF CHIEF EXECUTIVE OFFICER; EXECUTIVE REORGANIZATION

On April 2, 2004, we announced a reorganization of its management team. The
Board of Directors of JAG Media elected Thomas J. Mazzarisi, formerly Chief
Financial Officer, as its new Chief Executive Officer and Chairman of the Board
of Directors. Stephen J. Schoepfer, previously Executive Vice President, has
been elected President and Chief Financial Officer, while remaining Chief
Operating Officer of the Company. Effective as of such date, Gary Valinoti
stepped down from his Chief Executive Officer, President and Director positions
with the Company to refocus his efforts on the Company's pending lawsuit against
various brokerage firms. A description of Mr. Valinoti's Separation Agreement
with JAG Media is described elsewhere herein under "Employment
Contracts--Valinoti Separation Agreement."


                                       9
<PAGE>

FACILITIES

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 per month. We also currently rent space to house our executive and
administrative personnel and related administrative equipment in New Jersey at a
cost of $630 per month. 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.

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 removed to the United
States District Court for the Southern District of Texas. The plaintiffs
subsequently filed a motion in the United States District Court for the Southern
District of Texas to have the action remanded back to the state court where it
was originally commenced. That motion was denied and the action proceeded in the
federal district court. The discovery process was begun. On October 1, 2003, the
Court denied various motions to dismiss made on behalf of the defendants.
However, in its ruling, the Court indicated that all motions to dismiss could
have been granted in light of the defective pleadings made by plaintiffs and
allowed plaintiffs 20 days to file an amended complaint to comply with certain
pleading requirements of the Court. Plaintiffs filed an amended complaint within
the required period. Discovery was stayed while the motions to dismiss were
pending.

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

The Company has met with its attorneys and is currently evaluating with its
attorneys its options for recommencing an action against certain defendants and
possibly other parties in light of the court's order.

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.

WHERE YOU CAN FIND MORE INFORMATION ABOUT US

We are required to file annual, quarterly and special reports, proxy statements
and other information with the SEC. You can read and copy any of this
information at the SEC's public reference room in Washington, D.C. Please call
the SEC at (800) SEC-0330 if you would like further information on the public
information room. This information is also available from the SEC's web site at
http://www.sec.gov.


                                       10
<PAGE>

We also distribute annual reports containing audited financial statements and
other information to our stockholders after the end of each fiscal year. We do
not intend to regularly distribute quarterly reports to our stockholders, but we
will gladly send them to you upon your written request to Thomas J. Mazzarisi,
our Chairman, Chief Executive Officer and General Counsel, at 6865 S.W. 18th
Street, Suite B13, Boca Raton, Florida 33433.






                                       11
<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, 2004 we had incurred losses to date of $43,144,495. 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 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 refocus our business and search for appropriate merger
candidates 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 Common Stock.

WE MAY NOT BE ABLE TO STOP CONTRACTION OF OUR SUBSCRIBER REVENUES AND ATTRACT
SUFFICIENT INSTITUTIONAL CUSTOMERS.

Our subscriber base has been shrinking and we have determined that we cannot
expand our retail subscriber base. We believe we must refocus our subscriber
base on institutional customers to be successful. Our subscription revenues are
below the level they were a year ago. During the year ended July 31, 2004
subscription revenues decreased as compared to the year ended July 31, 2003 with
total subscription revenues for the comparable periods of approximately $253,000
and $386,000, respectively. Although we are attempting to refocus our subscriber
base, our efforts may be ineffective, our competitors may be more successful
than we are in attracting customers, or the number of institutional and other
professional 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 or refocus such base, we will have
little, if any, financial success.

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.

WE HAVE REFOCUSED OUR BUSINESS STRATEGY TO TARGET PRIMARILY SUBSCRIPTIONS BY
INSTITUTIONAL INVESTORS.

Our effort to include individual retail subscribers as part of our business
strategy has been unsuccessful, and we have therefore decided to refocus our
strategy on offering subscriptions solely to institutional investors and
professional traders. Due to the uncertain nature of this undertaking, our shift
in business strategy may not be successful and we may not realize any benefit
from it.


                                       12
<PAGE>

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 currently 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 refocus 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 NOT BE ABLE TO FIND SUITABLE MERGER OR ACQUISITION CANDIDATES.

We are actively looking for merger or acquisition candidates that would be
beneficial to our company. Over the past few years, we have entered into
negotiations and signed letters of intent or agreements with several companies,
but were not able to complete any of these acquisitions. We cannot assure you
that the market exists for us to find or consummate a favorable merger or
acquisition. Our business will be adversely affected if we are unable to find
suitable merger or acquisition candidates and complete a business combination.

WE MAY NOT BE ABLE TO ACQUIRE OR START A SUCCESSFUL BROKERAGE BUSINESS.

We may expand our business by acquiring or starting our own brokerage business
even though we have limited experience in this area. We cannot assure you that
we would be able to expand into this area as we may not be able to find or
consummate a favorable acquisition and we may face other difficulties in
starting our own brokerage business. Even if we are able to acquire or start our
own brokerage business, we cannot assure you that we would be able to operate
this business at a profit and we could incur substantial costs in pursuing or
developing this business, both of which could materially and adversely affect
our business, results of operations and financial condition.

WE MAY NOT BE ABLE TO ACQUIRE OR MANAGE A BUSINESS IN AN UNRELATED SECTOR.

We may expand our business by acquiring a business very different
from our current activities. In this case we would have no sector expertise and
may not be able to effectively manage such new business. If we were unable to
operate the new business at a profit or if we incurred substantial costs in
acquiring or developing the new business, either of such eventualities could
materially and adversely affect our business, results of operation and financial
condition.

                                       13
<PAGE>

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.

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.



                                       14
<PAGE>

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.

WE DEPEND ON KEY PEOPLE IN MANAGEMENT AND OPERATIONS.

We depend on our key employees' contacts within the professional financial
community for certain information that we provide to our subscribers.
Accordingly, our success will be largely dependent on our ability to retain Mr.
Thomas J. Mazzarisi, our Chairman, Chief Executive Officer and General Counsel,
and Mr. Stephen J. Schoepfer, our President, Chief Operating Officer, Chief
Financial Officer and Secretary. We may also need to attract and retain
additional qualified managers, officers and other key personnel in the future in
order to successfully manage our new strategy. 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 prior amended and restated employment agreements of Thomas J.
Mazzarisi, our Chairman, Chief Executive Officer and General Counsel, and
Stephen J. Schoepfer, our President, Chief Operating Officer, Chief Financial
Officer and Secretary, 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
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. Mazzarisi and
Schoepfer shall also be granted an option to acquire 1,000,000 shares of our
Common Stock at an exercise price equal to 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. Although the prior employment agreements have expired, we
anticipate that new agreements will have terms comparable to those described
above.

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.


                                       15
<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.

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 revenues. For example, if we were ever deemed
to be in non-compliance with applicable investment adviser regulations, we could
be subject to various penalties, including administrative or judicial
proceedings that might result in censure, fine, civil penalties (including
treble damages in the case of insider trading violations), the issuance of
cease-and-desist orders or other adverse consequences.


                                       16
<PAGE>

                          RISKS RELATED TO OUR INDUSTRY

OUR BUSINESS IS CURRENTLY 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 depends upon the continued
maintenance or growth of this interest. The recent downturn in the stock market
may have been in part responsible for an overall decrease in subscription
revenues since the end of our second fiscal quarter of 2001. Even though the
market has recovered to some extent, our revenues have continued to decline. 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 results of these companies. The burst of the dot.com bubble and
continued volatility of the stock market has made it difficult for many dot-com
companies to raise funds, and a number of such companies have gone bankrupt.
Such volatility presents 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 current 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 currently 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;


                                       17
<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
AND INDUSTRY RELATIONSHIPS 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.

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.

                     RISKS RELATED TO OUR CAPITAL STRUCTURE

THE MARKET FOR OUR STOCK IS LIMITED.

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

OUR RECENTLY IMPLEMENTED RECAPITALIZATION COULD LIMIT THE TRANSFERABILITY OF
YOUR SHARES.

On June 4, 2004, we filed a Certificate of Amendment to our Articles of
Incorporation which resulted in a reclassification of Class A common stock and
Series 1 Class B common stock into shares of new Common Stock on a one-for-one
basis. The Certificate of Amendment filed in the State of Nevada provides that
at all times the name of the beneficial owner of the shares of Common Stock must
be reflected on the face of the stock certificates issued therefor. Because of
this requirement, the recapitalization may be considered to have certain
disadvantages, including those set forth below.

o    Implementation of the recapitalization could 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 may have caused a reduction, and could cause a further reduction, in
     the volume of trading in our shares, which could also adversely affect the
     trading price of our common stock.


                                       18
<PAGE>

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

o    For so long as the trading in our shares is restricted to the Pink Sheets,
     trading volume in our shares may be adversely impacted, which may also
     adversely affect the market price of our common stock.

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    This new trading policy could also adversely affect the decision of certain
     investors, including institutional investors, that would otherwise consider
     investing in our 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    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.

o    We entered into a $10 million equity line financing arrangement with
     Cornell Capital Partners, L.P. on April 9, 2002 and amended this
     arrangement on July 8, 2004 to extend the term of the equity line. The
     equity line purchase agreement provides for the purchase by Cornell Capital
     of up to $10 million worth of our shares over a 48-month period ending on
     August 28, 2006. As of July 31, 2004, $4,035,000 of our existing equity
     line with Cornell Capital had been utilized with a balance of $5,965,000
     remaining available under the equity line. 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 Pink Sheets or 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.

o    The recapitalization may cause us to incur additional expenses in
     connection with the need to issue physical share certificates and maintain
     the books and records of the transfers of our new class of common stock.

o    The recapitalization could result in market makers being unwilling to quote
     our stock, and/or broker-dealers being unwilling to trade our 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.


                                       19
<PAGE>

o    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 our stock for risk management or other legitimate purposes.

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

o    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.

o    Finally, the Securities and Exchange Commission has proposed a new rule
     that would prohibit registered transfer agents from effecting any transfer
     of common stock that is registered with the Commission if the stock is
     subject to any restriction or prohibition on transfer to or from a
     securities intermediary, such as clearing agencies, banks or
     broker-dealers. If adopted by the Commission, the new rule could require
     us, in order to permit registered transfer agents to effect transfers of
     our Common Stock, to amend our Articles of Incorporation to remove the
     requirement that our Common Stock share certificates bear the name of the
     beneficial owner of shares held by a securities intermediary. If adopted as
     proposed, we would have 90 days from adoption to comply with the new rule.

A LARGE PERCENTAGE OF OUR STOCK IS OWNED BY RELATIVELY FEW PEOPLE, INCLUDING
OFFICERS AND DIRECTORS.

As of November 8, 2004, our named executive officers and directors beneficially
owned or controlled a total of approximately 935,000 shares, or approximately
2.1% 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 Common Stock, or approximately 31.1% 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 Common Stock in the public market at or
about the same time, such sales could cause the market price of our Common Stock
to decline. In addition, the sale of these shares could impair our ability to
raise capital through the sale of additional stock.

BECAUSE OUR STOCK CURRENTLY TRADES BELOW $5.00 PER SHARE, AND IS QUOTED ON THE
PINK SHEETS, OUR STOCK IS CONSIDERED BY THE SEC A "PENNY STOCK," WHICH CAN
ADVERSELY EFFECT ITS LIQUIDITY.

Our 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 Common Stock continues to be quoted on the Pink
Sheets or Nasdaq OTC Bulletin Board, and if the trading price of our Common
Stock remains less than $5.00 per share, our Common Stock is considered a "penny
stock," and trading in our Common Stock is subject to the requirements of Rule
15g-9 under the 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.


                                       20
<PAGE>

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.

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 and amended this arrangement on July 8,
2004 to extend the term of the equity line. As of July 31, 2004, $4,035,000 of
our existing equity line with Cornell Capital had been utilized. The equity line
purchase agreement, as amended, provides for the purchase by Cornell Capital of
up to $10 million worth of shares of our Common Stock over a 48-month period
ending on August 28, 2006. 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 Common Stock issuable to Cornell Capital at
the closing be authorized for trading on the Pink Sheets, 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 Common Stock on the Pink Sheets or 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 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 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.


                                       21
<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, 2004 was $402,674,
representing a net tangible book value per share of our Common Stock, based on
the number of such shares outstanding as of November 8, 2004 of $0.009.

<TABLE>
<CAPTION>

                                                                                          PERCENT OF       INCREASE IN NET
                 ADVANCE      INVESTOR        NET         NUMBER OF       PURCHASE       OUTSTANDING        TANGIBLE BOOK
 MARKET PRICE    AMOUNT(1)       FEE        PROCEEDS    SHARES ISSUED     PRICE(2)        SHARES(7)        VALUE PER SHARE
 ------------    ------       ---------     --------    -------------     --------       -----------       ---------------
<S>             <C>            <C>         <C>           <C>             <C>                <C>                 <C>
  $0.20(3)      $500,000       $25,000     $475,000      2,770,083       $0.19              6.7%                $0.01
  $0.15(4)      $500,000       $25,000     $475,000      3,759,399       $0.1425            9.2%                $0.009
  $0.10(5)      $500,000       $25,000     $475,000      5,263,158       $0.095             12.8%               $0.009
  $0.05(6)      $500,000       $25,000     $475,000     10,526,316       $0.0475            25.6%               $0.007

</TABLE>

(1)   Represents the maximum individual 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 Common Stock assuming our put right was
      exercised 5 Business Days before November 8, 2004.
(4)   Represents a 25% decline in the Market Price of our Common Stock.
(5)   Represents a 50% decline in the Market Price of our Common Stock.
(6)   Represents a 75% decline in the Market Price of our Common Stock.
(7)   Based on 44,235,299 shares of Common Stock issued and outstanding as of
      November 8, 2004.

THE RESALE BY CORNELL CAPITAL PARTNERS, L.P. OF OUR SHARES MAY LOWER THE MARKET
PRICE OF OUR COMMON STOCK.

The resale by Cornell Capital Partners, L.P. of the Common Stock that it
purchases from us will increase the number of our publicly traded shares, which
could lower the market price of our 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 Common Stock. The shares of our 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 Common Stock at the time of the sale. During July
2004, our Common Stock traded at an average of approximately $0.63 per share. If
we were to require Cornell Capital to purchase our Common Stock when our stock
price is low, our existing Common Stockholders would experience substantial
dilution.

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 Common Stock market price does decline, this could further accelerate
sales of our 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 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 Common
Stock. These factors could also make it more difficult for us to raise funds
through future offerings of Common Stock.


                                       22
<PAGE>

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. As of
July 31, 2004, $4,035,000 of our existing equity line with Cornell Capital had
been utilized with a balance of $5,965,000 remaining available under the equity
line. 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 Common Stock, if our
closing stock price is less than $0.31 per share on the day prior to the date of
sale, we will receive gross proceeds of less than $5,965,000, 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.

OUR AMENDED CHARTER CONTAINS PROVISIONS WHICH MAY DISCOURAGE AN UNAFFILIATED
PARTY TO TAKE US OVER.

On June 4, 2004, we effected a recapitalization of our capital stock. This
recapitalization involved the authorization of 100,440,000 additional shares of
stock. Without further stockholder action, the Board of Directors of JAG Media
could authorize the issuance of all or any part of such additional shares,
including 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.

THE VALUE OF YOUR INVESTMENT IN JAG MEDIA COULD DECREASE DUE TO NAKED SHORTING
OF OUR COMMON STOCK.

Our Board of Directors believes, but cannot confirm, that the price of the
shares of our Common Stock currently trading on the Pink Sheets 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 have engaged in a practice commonly known as a "naked
short" sale, which means that certain brokers may have permitted 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. The Securities and
Exchange Commission has recognized that abuses exist with respect to naked short
sales of OTC Bulletin Board stocks and has now proposed rules to address the
practice. Because naked shorting may result in an artificial depression of our
stock price, you could lose all or part of your investment in our Common Stock.


                                       23
<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 per month. We also currently rent space to house our executive and
administrative personnel and related administrative equipment in New Jersey at a
cost of $630 per month. 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 removed to the United
States District Court for the Southern District of Texas. The plaintiffs
subsequently filed a motion in the United States District Court for the Southern
District of Texas to have the action remanded back to the state court where it
was originally commenced. That motion was denied and the action proceeded in the
federal district court. The discovery process was begun. On October 1, 2003, the
Court denied various motions to dismiss made on behalf of the defendants.
However, in its ruling, the Court indicated that all motions to dismiss could
have been granted in light of the defective pleadings made by plaintiffs and
allowed plaintiffs 20 days to file an amended complaint to comply with certain
pleading requirements of the Court. Plaintiffs filed an amended complaint within
the required period. Discovery was stayed while the motions to dismiss were
pending.

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

The Company has met with its attorneys and is currently evaluating with its
attorneys its options for recommencing an action against certain defendants and
possibly other parties in light of the court's order.

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.



                                       24
<PAGE>


                                    PART II

         ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF SECURITIES

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 first
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 traded 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 Common Stock from April 9, 2002 through July
31, 2004. Such prices are inter-dealer quotations without retail mark-ups,
mark-downs or commissions, and may not represent actual transactions.

                                                               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, ending January 31, 2004...................     1.00      0.25
Third Quarter, ending April 30, 2004......................     1.45      0.51
Fourth Quarter, ending July 31, 2004......................     1.10      0.30


                                       25
<PAGE>

On June 4, 2004, we effected a second recapitalization pursuant to which each
share of our outstanding Class A Common Stock and Series 1 Class B Common Stock
was reclassified into one (1) share of new Common Stock.

From June 7, 2004 to August 11, 2004 our Common Stock traded in the
over-the-counter market on the Pink Sheets under the symbol JAGHV. Our Common
Stock trades in the over-the-counter market on the Pink Sheets under the symbol
JAGH. The following table reflects quarterly high and low sales prices of our
Common Stock from July 1, 2004 through July 31, 2004. Such prices are
inter-dealer quotations without retail mark-ups, mark-downs or commissions, and
may not represent actual transactions.

                                                              High      Low
                                                              ----      ---
July 1, 2004 through July 31, 2004........................    $0.89     $0.30

As of November 8, 2004, there were 3,296 stockholders of record of our new
Common Stock. On November 8, 2004, the closing bid price for our Common Stock
was $ 0.25.

RIGHTS OF SECURITY HOLDERS

We have the authority to issue three hundred million four hundred forty thousand
(300,440,000) shares, of which: (i) two hundred fifty million (250,000,000)
shares shall be Common Stock, par value $0.00001; (ii) four hundred forty
thousand (440,000) shares shall be Class B Common Stock, par value $0.00001, of
which 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) fifty million (50,000,000) shares shall be
preferred stock.

As of July 31, 2004, we had (i) 44,235,299 shares of Common Stock issued and
outstanding, (ii) 380,829 shares of Series 2 Class B Common Stock, (iii) 21,500
shares of Series 3 Class B Common Stock issued and outstanding, and (iv) no
shares of preferred stock issued and outstanding.

General. The rights, preferences, privileges and restrictions of the Common
Stock, Series 2 Class B Common Stock and Series 3 Class B Common Stock are set
forth in full in the form of Amended and Restated Articles of Incorporation of
JAG Media which are on file with the Secretary of State of the State of Nevada
and filed as an exhibit to this Annual Report on Form 10-KSB, and the following
description should be read in conjunction with, and is qualified in its entirety
by reference to, the Amended and Restated Articles of Incorporation of JAG
Media.

Voting Rights. Except as required by law, at every meeting of stockholders of
JAG Media, every holder of Common Stock shall be entitled to one vote, in person
or by proxy, for each share of Common Stock outstanding in such holder's name on
the stock transfer records of the Registrant. 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.

Distribution of Assets. Upon the dissolution, liquidation or winding up of JAG
Media, subject to the rights, if any, of the holders of any other of JAG Media's
securities, the holders of the Common Stock, Series 2 Class B Common Stock, and
Series 3 Class B Common Stock, will be entitled to receive all the assets of JAG
Media available for distribution to its stockholders ratably in proportion to
the number of shares held by them.


                                       26
<PAGE>

Dividends. Holders of Common Stock, Series 2 Class B Common Stock and Series 3
Class B Common Stock shall be entitled to receive, on an equal basis, such
dividends, payable in cash or otherwise, as may be declared thereon by the Board
of Directors from time to time out of the assets or funds of JAG Media legally
available therefor.

Share Certificates. Share certificates shall be issued to represent the Common
Stock, Series 2 Class B Common Stock and Series 3 Class B Common Stock which
will specify the number of shares represented by such certificate and the
name(s) of the record and beneficial owner(s) of such shares. Shares of Common
Stock, Series 2 Class B Common Stock and Series 3 Class B Common Stock may be
transferred only on the books of JAG Media in person or by duly authorized
attorney upon surrender of said certificate properly endorsed and specifying the
new beneficial owner. The Securities and Exchange Commission has proposed a new
rule that would prohibit registered transfer agents from effecting any transfer
of common stock that is registered with the Commission if the stock is subject
to any restriction or prohibition on transfer to or from a securities
intermediary, such as clearing agencies, banks or broker-dealers. If adopted by
the Commission, the new rule could require us, in order to permit registered
transfer agents to effect transfers of our Common Stock, to amend our Articles
of Incorporation to remove the requirement that our Common Stock share
certificates bear the name of the beneficial owner of shares held by a
securities intermediary. If adopted as proposed, we would have 90 days from
adoption to comply with the new rule.

Mandatory Redemption. Each share of 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 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.

Preemptive Rights. None of the 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 shares of JAG Media.

Preferred Stock. JAG Media's 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 JAG Media's Board of Directors.


                                       27
<PAGE>

Future Financings and Acquisitions. The Amended and Restated Articles of
Incorporation of JAG Media provide for 250,000,000 authorized shares of Common
Stock, 440,000 authorized shares of Class B common stock and 50,000,000
authorized shares of Preferred Stock. Therefore, our Board of Directors may
issue additional shares of 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 Common Stock or the
issuance of the Preferred Stock. The future issuance by us of shares of 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. The Amended and Restated Articles of Incorporation of JAG
Media could have a potential anti-takeover effect with respect to JAG Media. Our
recently implemented recapitalization involved the authorization of 100,440,000
additional shares of stock. Without further stockholder action, the Board of
Directors of JAG Media could authorize the issuance of all or any part of such
additional shares, including Preferred Stock with special voting rights by class
or with more than one vote per share, to a "white knight" in order to deter a
potential buyer of JAG Media. As a result, the recapitalization might have the
effect of preventing or discouraging an attempt by a party unable to obtain the
approval of the Board of Directors of JAG Media to take over or otherwise gain
control of JAG Media. As of the date of this Annual Report on Form 10-KSB,
except as disclosed elsewhere herein, management knows of no specific effort to
accumulate securities of JAG Media or to obtain control of JAG Media by means of
a merger, amalgamation, tender offer or solicitation in opposition to management
or otherwise.

OPTIONS

As of July 31, 2004, there were options outstanding to purchase an aggregate of
2,250,000 shares of our 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, 2004, the following warrants to purchase shares of our Common
Stock were outstanding:

o    warrants to purchase, at any time prior to March 15, 2005, 750,000 shares
     of Common Stock at $6.00 per share; and

o    warrants to purchase, at any time prior to June 12, 2005, 485,000 shares of
     our Common Stock at $2.00 per share; and

o    warrants to purchase, at any time prior to July 21, 2005, 100,000 shares of
     our Common Stock at $0.15 per share.

DIVIDEND POLICY

We have never paid any cash dividends on our Common Stock and anticipate that,
for the foreseeable future, no cash dividends will be paid on our Common Stock.
Payment of future cash dividends will be determined by our Board of Directors
based upon conditions then existing, including our financial condition, capital
requirements, cash flow, profitability, business outlook and other factors. In
addition, our future credit arrangements may restrict the payment of dividends.


                                       28
<PAGE>

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 Common Stock. For a further discussion of the
foregoing stock dividend see the disclosure under the heading "Stock Dividend"
on page 8 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:

During the fiscal year ended July 31, 2004, Cornell Capital Partners, L.P.
("Cornell Capital") was required to pay $2,150,000 and it received 2,506,274
shares of our Common Stock, par value $0.00001 per share ("Common Stock"), as a
result of the exercise of put options under our Equity Line Purchase Agreement,
dated as of April 9, 2002, and we received proceeds of $2,042,500 net of
$107,500 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:

Price Per Share                             Number of Shares Sold
---------------                             ---------------------
$0.67                                           179,104
$0.75                                           353,333
$0.84                                           386,905
$0.91                                           291,209
$0.97                                           515,464
$0.88                                           198,864
$0.86                                           581,395
-----                                           -------
$0.84 (Average Price)                         2,506,274 (Total Shares Sold)
=====================                         =============================

Pursuant to a Subscription Agreement, dated as of September 25, 2003, Kuekenhof
Partners purchased (a) 35,000 shares of our 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. The issuance of such securities was exempt from
registration under the Securities Act of 1933, as amended, pursuant to Section
4(2) thereof.

Pursuant to a Subscription Agreement, dated as of June 19, 2003, Bay Point
Investment Partners LLC purchased (a) 1,282,675 shares of our 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. 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 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.

Pursuant to a Subscription Agreement, dated as of December 10, 2002, Bay Point
Investment Partners LLC purchased 1,136,364 shares of our 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 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.


                                       29
<PAGE>

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 we can put to it our shares of Common Stock, once their resale
has been 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 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 sales of
our shares 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 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:

        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 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 sales of
our shares 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:

                                       30
<PAGE>

          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, was superseded by a
new agreement with Cornell Capital dated as of April 9, 2002.

PURCHASES OF EQUITY SECURITIES

There were no repurchases made for any class or series of securities in a month
within the fourth quarter of the fiscal year ended on July 31, 2004.

         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 for financial statements filed with the Securities and Exchange
Commission. 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, 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.


                                       31
<PAGE>

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 Emerging Issues Task Force 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.

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, were payable on April 30, 2004 and bore interest at an annual rate
of 9%. The loans were repaid in full, including interest, in March 2004.


                                       32
<PAGE>

YEAR ENDED JULY 31, 2004 AS COMPARED TO THE YEAR ENDED JULY 31, 2003

<TABLE>
<CAPTION>

                                                                     Year Ended July 31,
                                                               -------------------------------
                                                                    2004              2003              $ Change
                                                               -----------         -----------         -----------
<S>                                                            <C>                 <C>                 <C>
Revenues ..............................................        $   253,256         $   385,881         $  (132,625)
                                                               -----------         -----------         -----------

Operating expenses:
      Cost of revenues ................................            272,161             697,027            (424,866)
      Selling expenses ................................             13,698               3,174              10,524
      General and administrative expenses .............          1,951,876           2,225,597            (273,721)
                                                               -----------         -----------         -----------
         Totals .......................................          2,237,735           2,925,798            (688,063)
                                                               -----------         -----------         -----------

Loss from operations ..................................         (1,984,479)         (2,539,917)            555,438

Other income (expense):
      Interest income .................................              3,485               5,466              (1,981)
      Interest expense ................................            (23,930)            (44,284)             20,354
      Loss from retirement of assets ..................               (713)                                   (713)
                                                               -----------         -----------         -----------
Net loss ..............................................        ($2,005,637)        $(2,578,735)        $   573,098
                                                               ===========         ===========         ===========

</TABLE>

Revenues:

Revenues primarily consist of subscription revenues from annual, semi-annual,
quarterly and monthly subscriptions relating to our product "JAGNotes." 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. The decrease in subscription revenues during the year ended July 31, 2004
was due primarily 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.

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
commentators and employees for their reports that are posted on our web site.

During the year ended July 31, 2004, consulting fees were approximately $219,000
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 shares in exchange for services of
approximately $144,000 and $543,000 for the years ended July 31, 2004 and 2003,
respectively. The decrease in consulting fees is a result of the expiration of
consulting contracts associated with commentators for our jagnotes.com website.
In addition, costs associated with the transmission of our product over
telephone and fax lines and costs associated with the maintenance of our web
site decreased commensurate with our decrease in revenues.

Selling expenses:

Selling expenses consist primarily of advertising and other promotional
expenses. This increase results primarily from travel expenses incurred in
connection with the proposed Great Eastern and XeQute transactions (described
below) and other business development matters.

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. The decrease in general and administrative
expenses is attributable to our efforts to better contain costs. However,
included in general and administrative costs are increased costs associated with
$150,000 of severance payments in connection with the resignation of our CEO.


                                       33
<PAGE>

Interest expense:

The decrease results from the repayment of loans from two of our executive
officers.

Net loss:

Primarily as a result of the above, we had a net loss of approximately
$2,006,000 during the year ended July 31, 2004 as compared to a net loss of
approximately $2,579,000 during the year ended July 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

We only generated revenues of approximately $253,000 and $386,000 and we
incurred net losses of approximately $2,006,000 and $2,579,000 and cash flow
deficiencies from operating activities of approximately $1,700,000 and
$2,273,000 for the year ended July 31, 2004 and 2003, respectively. These
matters raise substantial doubt about our ability to continue as a going
concern.

Although our net losses included net noncash charges of approximately $397,000
and $1,104,000 for the year ended July 31, 2004 and 2003, respectively,
primarily for the amortization of unearned compensation and the issuance of
common stock and stock options in exchange for services, we believe that, in the
absence of a substantial increase in subscription revenues, it is probable that
the we will continue to incur losses and negative cash flows from operating
activities through at least July 31, 2005 and that we will need to obtain
additional equity or debt financing to sustain our operations until we can
either acquire a profitable business or market our services, expand our customer
base and achieve profitability.

As further explained below, we entered into an agreement with an investment
partnership pursuant to which we have, in effect, "put" options whereby, subject
to certain conditions, we are able to require the investment partnership to
purchase shares of our common stock from time to time at prices based on the
market value of our shares. The maximum aggregate purchase price under this
equity line is $10,000,000. The equity line became available in August 2002.
Effective July 21, 2004, the equity line was extended and expires in August
2006. As of July 31, 2004 and November 8, 2004, we had received gross proceeds
of $4,035,000, from the exercise of "put" options. Although the timing and
amount of the required purchases under the agreement are at our discretion, the
purchases are subject to certain conditions and the ability of the investment
partnership to fund the purchases.

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 Equity Line Agreement described below before it expires in
August 2006 or through other financing agreements to enable us to continue as a
going concern through at least July 31, 2005. 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, we 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, we 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.

                                       34
<PAGE>

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 January 17, 2004, we decided not to
pursue any further negotiations with XeQute and, accordingly, we are currently
pursuing other strategic alternatives.

On January 17, 2004 we entered into a Letter of Intent (the "Letter of Intent")
expiring March 31, 2004 to acquire Great Eastern Securities, Inc. ("Great
Eastern"), a privately held broker/dealer based in Syosset, New York. Great
Eastern offered a cost-efficient trading platform for brokers and traders,
including direct access trading, with individually tailored commission rates.

We did not enter into a definitive acquisition agreement with Great Eastern
before the term of the Letter of Intent expired on March 31, 2004, and we have
decided not to pursue any further negotiations with Great Eastern.

We declared a special stock dividend to our stockholders. To effect
such dividend, we designated a new series of Class B common stock which was
issuable by dividend to our stockholders of record as of the close of business
on April 14, 2003, the stated record date, in the ratio of one share of Series 2
Class B common stock for every 100 shares common stock. Such shares of Series 2
Class B common stock would be 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) 90% 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 stock dividend is intended
to insure that the principal benefits of our pending lawsuit (or any similar
subsequent lawsuit) accrue to our investors. As of July 31, 2004, we
have recorded $4 representing the par value of the 380,829 shares of Series 2
Class B common stock that are to be issued. For a further discussion of the
foregoing lawsuit in Texas federal court against various brokerage firms, see
the disclosure under the heading "Legal Proceedings" on page 24 of this Annual
Report on Form 10-KSB.

During the year ended July 31, 2004, we issued an additional 6,709 shares of
mandatorily redeemable Series 2 Class B common stock reflecting an adjustment to
the number of shares originally determined during the year ended July 31, 2003.

Our cash and cash equivalent position of approximately $386,000 as of July 31,
2004 results primarily from sales of shares of our common stock pursuant to an
equity line agreement and a private placement completed during the year ended
July 31, 2004 described below.

On April 9, 2002, we entered into an equity line purchase agreement (the "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 common stock from time
to time at an aggregate purchase price of $10,000,000. The Equity Line Agreement
became available to us on August 28, 2002, and will remain available through
August 28, 2006 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 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; (ii) at least five trading days
must elapse before we 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 common stock. In addition,
the obligation of Cornell Capital to complete its purchases under the Equity
Line Agreement 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, we
may not be able to force it to do so. We have issued 10,000 shares of our common
stock to a placement agent as of the effective date as consideration for their
services in connection with the Equity Line Agreement.

                                       35
<PAGE>

During the year ended July 31, 2004, we issued 2,506,274 shares of common stock
pursuant to the Equity Line Agreement for which we received proceeds of
$2,042,500, net of $107,500 of placement fees. As of July 31, 2004, we had the
ability to require Cornell Capital to purchase shares of our common stock
pursuant to the Equity Line Agreement at an aggregate purchase price of
$5,965,000 through August 28, 2006.

During the year ended July 31, 2004, we thought it would be prudent to diversify
our sources of financing beyond our current private equity line. On September
25, 2003, we sold 35,000 shares of common stock and 1,500 shares of Series 3
Class B common stock through a private placement intended to be exempt from
registration under the Securities Act of 1933 and received proceeds of $50,000.

In addition, during the year ended July 31, 2004, we issued 450,000 shares of
common stock with a fair value of $261,000 in exchange for services.

On February 11, 2004, our stockholders approved an amendment to the articles of
incorporation that authorized the implementation of changes related to a
recapitalization plan that was consummated on June 4, 2004. As a result of the
recapitalization, we became authorized to issue up to 250,000,000 shares of
common stock with a par value of $.00001 per share, and we issued 1 share of
common stock in exchange for every 1 share of Class A common stock and Series 1
Class B common stock outstanding prior to the recapitalization.

Prior to the recapitalization, each share of Series 1 Class B common stock was
immediately convertible into one share of Class A common stock and each share of
Class A common stock and Series 1 Class B common stock was equal in respect to
dividends and voting rights. Therefore, each share of Series 1 Class B common
stock was, in substance, equivalent to one share of Class A common stock for
financial reporting purposes prior to the recapitalization, and each share of
Class A common stock and each share of Series 1 Class B common stock is, in
substance, equivalent to 1 share of common stock after the recapitalization for
financial reporting purposes. Accordingly, the recapitalization, which has been
retroactively reflected in the consolidated financial statements and the notes,
did not have any effect on numbers of shares of common stock, the weighted
average number of common shares outstanding or any amounts per common share.

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, were payable on April 30, 2004 and bore interest at an annual rate
of 9%. The loans were repaid in full, including interest, in March 2004.

During the year ended July 31, 2004, we used cash of approximately $1,700,000 in
our operations of which approximately $90,000 was used to reduce accounts
payable and accrued expenses and the remainder to primarily fund our net loss.

During the year ended July 31, 2004, Cornell Capital was required to pay
$2,150,000 and it received 2,506,274 shares of common stock and we received
$2,042,500 net of $107,500 of placement fees as a result of the exercise by us
of put options pursuant to the Equity Line Agreement. As of November 8, 2004,
the Company had the ability to require Cornell Capital to purchase shares of its
common stock pursuant to the Equity Line Agreement at an aggregate purchase
price of $5,965,000 through August 28, 2006.


                                       36
<PAGE>

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, the Emerging Issues Task Force and the Accounting Standards Committee
of the American Institute of Certified Public Accountants had issued certain
accounting pronouncements as of July 31, 2004 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, 2004 and
2003 or that they will have a significant effect at the time they become
effective.

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, were payable on April 30, 2004 and bore interest at an annual rate
of 9%. The loans were repaid in full, including interest, in March 2004.

         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
                          -----------------------------
<TABLE>
<CAPTION>

                                                                                        Page
                                                                                        ----
<S>                                                                                     <C>
Report of Independent Registered Public Accounting Firm..................................F-2

Consolidated Balance Sheet July 31, 2004.................................................F-3

Consolidated Statements of Operations Years Ended July 31, 2004 and 2003.................F-4

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
Years Ended July 31, 2004 and 2003.......................................................F-5

Consolidated Statements of Cash Flows Years Ended July 31, 2004 and 2003.................F-6

Notes to Consolidated Financial Statements...............................................F-7

</TABLE>

                                      * * *

         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, 2004, 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.


                                       37
<PAGE>

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.

         ITEM 8B. OTHER INFORMATION

None.



                                       38
<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.

Thomas J. Mazzarisi, age 47, is our Chairman of the Board, Chief Executive
Officer and General Counsel. Previously, Mr. Mazzarisi served as our Executive
Vice President and General Counsel from March 1999 to April 2, 2004 and as our
Chief Financial Officer from November 9, 2001 to April 2, 2004. Mr. Mazzarisi
has been a member of our Board of Directors since July 1999. From 1997 until
joining 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 45, is our President, Chief Operating Officer, Chief
Financial Officer and Secretary. Previously, Mr. Schoepfer served as our
Executive Vice President, Chief Operating Officer and Secretary from July 1999
to April 2, 2004. Mr. Schoepfer has been a member of our Board of Directors
since July 1999. Prior to joining the Company in July 1999, he was a Financial
Advisor with the investment firm of Legg Mason Wood Walker. Prior to joining
Legg Mason, Mr. Schoepfer served as a Financial Advisor and Training Coordinator
at Prudential Securities. Mr. Schoepfer attended Wagner College.

             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 2004, or written representations from certain reporting
persons, to the best of our knowledge, all reports were filed on a timely basis.

                                 CODE OF ETHICS

We have adopted a Code of Ethics (our "Code of Ethics") that applies to our
chief executive officer and chief financial officer. We will gladly send you
a copy of our Code of Ethics upon written request to Thomas J. Mazzarisi, our
Chairman, Chief Executive Officer and General Counsel, at 6865 S.W. 18th Street,
Suite B13, Boca Raton, Florida 33433.

                                       39
<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, 2002, 2003 and
2004. Except as listed in the table below, no executive officer holding office
in fiscal year 2004 received total annual salary and bonus exceeding $100,000.
No such officers have been awarded any stock options, stock appreciation rights
or other long term or incentive compensation not reflected below.

                               Annual Compensation
<TABLE>
<CAPTION>

                                                                                        Long-Term
                                                                                      Compensation
                                                                                      Common Shares
                                                                        Other          Subject to
                                   Fiscal                              Annual            Options         All Other
Name and Principal Position         Year       Salary      Bonus    Compensation         Granted        Compensation
---------------------------        ------      ------      -----    ------------      --------------    ------------
<S>                                 <C>       <C>          <C>      <C>               <C>               <C>
Thomas J. Mazzarisi,                2004      $150,000         --            --                  --               --
Chairman of the Board,
Chief Executive Officer and         2003      $150,000         --            --                  --               --
General Counsel
                                    2002      $150,000         --            --          1,000,000(1)


Stephen J. Schoepfer,               2004      $150,000         --            --                  --               --
President, Chief Operating
Officer, Chief Financial Officer    2003      $150,000         --            --                  --               --
and Secretary
                                    2002      $150,000         --            --          1,000,000(1)


Gary Valinoti                       2004      $     --         --            --                  --         $150,000(2)
(Mr. Valinoti served as Chief
Executive Officer, President and    2003      $150,000         --            --                  --               --
director of JAG Media Holdings,
Inc. from March 1000 to April 2,    2002      $150,000         --            --          1,000,000(1)             --
2004, but is no longer employed
by JAG Media.)


Raymond G. Taylor                   2004             --         --            --                  --              --
(Mr. Taylor served as Chief
Financial Officer of JAG Media      2003             --         --            --                  --              --
Holdings, Inc. from April 1,
2001 to November 9, 2001, but is    2002        $25,000         --            --                  --              --
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) Lump-sum termination payment paid pursuant to a separation agreement
entered into by us and Gary Valinoti effective April 2, 2004.

OPTION GRANTS IN FISCAL YEAR 2004

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,
2004.

                                       40
<PAGE>

The following table sets forth information regarding options to acquire shares
of our Common Stock granted under our Long-Term Incentive Plan to Gary Valinoti
(our former Chief Executive Officer), Thomas J. Mazzarisi (our Chairman, Chief
Executive Officer and General Counsel) and Stephen J. Schoepfer (our President,
Chief Operating Officer, Chief Financial Officer and Secretary) as of July 31,
2004.

                OPTION GRANTS IN PERIOD BEGINNING AUGUST 1, 2003
                            AND ENDING JULY 31, 2004

<TABLE>
<CAPTION>

                                                  Percentage of
                                                 Total Options
                                                  Granted to
                                Number of       Employees in the
                               Securities       period beginning
                           Underlying Options    August 1, 2003      Exercise or
                                 Granted            and ended      Base Price Per    Market Price on     Expiration
Name                         Expiration Date      July 31, 2004       ($/Share)     the Date of Grant       Date
----                         ---------------      -------------       ---------     -----------------       ----
<S>                          <C>                  <C>                 <C>           <C>                     <C>
Gary Valinoti                       0                   *                 *                 *                 *
Thomas J. Mazzarisi                 0                   *                 *                 *                 *
Stephen J. Schoepfer                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 have granted these options at
exercise prices below the market price of our stock as a form of immediate
compensation to our executives.

We did not reprice any stock options during our fiscal year ended July 31, 2004.




                                       41
<PAGE>

EQUITY COMPENSATION PLAN INFORMATION AS OF JULY 31, 2004

<TABLE>
<CAPTION>

                                                                                                        Number of
                                                                                                       securities
                                                                                                        remaining
                                                                                                      available for
                                                                  Number of           Weighted       future issuance
                                                               securities to be       average         under equity
                                                                 issued upon       exercise price     compensation
                                                                 exercise of       of outstanding   plans (excluding
                                                                 outstanding          options,         securities
                                                              options, warrants     warrants and      reflected in
                                                                  and rights           rights          column (a))
                                                                     (a)                (b)                (c)
                                                              -----------------     -------------    ----------------
<S>                                                           <C>                   <C>              <C>
Equity compensation plans approved by security
holders..................................................       Not applicable      Not applicabl     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 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 2004

The following table sets forth certain information regarding the stock options
exercised during the fiscal year ended July 31, 2004 and the stock options held
as of July 31, 2004 by Gary Valinoti (our former Chief Executive Officer),
Thomas J. Mazzarisi (our Chairman, Chief Executive Officer and General Counsel)
and Stephen J. Schoepfer (our President, Chief Operating Officer, Chief
Financial Officer and Secretary).



                                       42
<PAGE>

                AGGREGATE OPTION EXERCISES IN 2004 OPTION VALUES

<TABLE>
<CAPTION>

                            Shares
                           Acquired                       Number of Shares Underlying                  Value of Unexercised
Name                     on Exercise   Value Realized   Unexercised Options at July 31, 2004   In-the-Money Options at July 31, 2004
----                     -----------   --------------   ------------------------------------   -------------------------------------
                                                          Exercisable     Unexercisable            Exercisable     Unexercisable
                                                          -----------     -------------            -----------     -------------
<S>                      <C>            <C>             <C>               <C>                     <C>              <C>
Gary Valinoti                     0               0        1,000,000            0                    $530,000             0
Thomas J. Mazzarisi               0               0          500,000            0                    $265,000             0
Stephen J. Schoepfer        250,000        $289,171          250,000            0                    $132,500             0

</TABLE>

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 Common Stock. As of July 31, 2004,
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.


                                       43
<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

MAZZARISI AND SCHOEPFER EMPLOYMENT AGREEMENTS

Our employment agreements with our executives expired on August 31, 2004.
However, the compensation of Messrs. Mazzarisi and Schoepfer is continuing per
the terms of their respective former employment agreements and we expect to
renew their employment agreements. Below is a description of our executives'
employment agreements, which were effective during the fiscal year ended
July 31, 2004.

On August 31, 2001, we entered into amended and restated three-year employment
agreements with each of Stephen J. Schoepfer (our President, Chief Operating
Officer, Chief Financial Officer and Secretary) and Thomas J. Mazzarisi (our
Chairman of the Board, Chief Executive 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 expired on August 31, 2004 and
provided for an annual base salary of $150,000. In addition, each executive was
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 was $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 was $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 was $3.00 or greater.

No shares of Common Stock were earned in years 1, 2 or 3.

In addition, each executive was 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 was also to be
granted an option to purchase a 5% ownership interest in any subsidiary that JAG
Media successfully creates and spins off during the term of their employment
contracts.

In addition, pursuant to these amended and restated employment agreements, each
of the above named executives is entitled to the same medical and other
benefits, including health and life insurance coverage, as were provided to
other employees of JAG Media. In the event JAG Media terminated the employment
of any of such executives without cause or such executive resigns for good
reason as defined in the employment agreements, such executive would have been
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 would have had to been made within 10 days of termination of
employment, and were not subject to offset for amounts earned by the executive
in respect of any subsequent employment, nor was the executive required to seek
any such subsequent employment.


                                       44
<PAGE>

Further, immediately prior to a "change in control" (as defined in our Long-Term
Incentive Plan) of JAG Media, the above-named executives would be granted
an option to acquire 1,000,000 shares of our Common Stock (subject to equitable
adjustments for stock splits, etc.) at an exercise price equal to 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 Common
Stock, (ii) Messrs. Mazzarisi and Schoepfer 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 approximately 17,400,000 shares of our 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 Common Stock and would
trigger the change in control provisions in the employment agreements of our
executive officers. As a result, each of Messrs. Mazzarisi and Schoepfer would
be granted an option to acquire 1,000,000 shares of our 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.

Pursuant to the terms and conditions of the amended and restated employment
agreements, we cancelled outstanding options granted to each of Messrs.
Mazzarisi and Schoepfer 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 on August 31, 2001 to each of Messrs. Mazzarisi and Schoepfer 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.


                                       45
<PAGE>

VALINOTI SEPARATION AGREEMENT

In connection with Gary Valinoti's resignation as our President and Chief
Executive Officer effective April 2, 2004, we entered into a separation
agreement whereby, in exchange for a release of all claims against us, Mr.
Valionti received a lump-sum termination payment equal to $150,000 and is
entitled to continued medical and life insurance coverage for the 12 month
period following the date of termination. The continuation of benefits is
subject to Mr. Valinoti's continued compliance with the "Company Policies" and
"Confidentiality" provisions contained in Mr. Valinoti's employment agreement
with Jagnotes.com, Inc., dated August 31, 2001. In addition, pursuant to the
terms of the separation agreement, Mr. Valinoti obtained ownership and title to
the computer, printer, mobile telephone, personal digital assistant, portable
digital dictation device and related equipment and software that Mr. Valinoti
was using at the time of his termination.

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.

         ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED
STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of
our Common Stock as of November 8, 2004 (except as otherwise indicated) by (i)
each person known by JAG Media to be the beneficial owner of more than 5% of our
Common Stock, (ii) each director and nominee to be a director, (iii) each named
executive officer and (iv) all directors and executive officers as a group.
Except as otherwise indicated below, each of the persons named in the table has
sole voting and investment power with respect to the shares set forth opposite
such person's name.

<TABLE>
<CAPTION>

Name and Address of Beneficial Owner                    Number of Shares Beneficially Owned        Percentage of Class
------------------------------------                    -----------------------------------        -------------------
<S>                                                     <C>                                        <C>
Gary Valinoti                                                   5,102,000(1)(2)(3)(4)                     11.3%
4 Page Drive
Red Bank, NJ 07701

Thomas Mazzarisi (Chairman of the Board,                          610,000(1)(5)                            1.4%
Chief Executive Officer and General Counsel)
6865 SW 18th Street, Suite B13,
Boca Raton, Florida 33433

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

All executive officers and directors as a                         935,000(1)(5)(6)                         2.1%
group (2 persons)

</TABLE>



                                       46
<PAGE>

--------------------------------
*  Less than one percent

(1)  Based on 44,235,299 shares of Common Stock issued and outstanding as of
     November 8, 2004, plus the number of shares of Common Stock which the
     beneficial owner has the right to acquire within 60 days, if any.

(2)  Includes 524,498 shares of Common Stock owned by Mr. Valinoti's wife,
     Cathleen Valinoti.

(3)  Includes 1,000,000 shares of Common Stock issuable upon the exercise of
     stock options.

(4)  Based on Form 5 filed on September 14, 2004.

(5)  Includes 500,000 shares of Common Stock issuable upon the exercise of stock
     options.

(6)  Includes 250,000 shares of Common Stock issuable upon the exercise of stock
     options.


         ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

LOANS FROM OFFICERS OF THE COMPANY

On April 1, 2002, Thomas J. Mazzarisi, our Chairman, Chief Executive Officer and
General Counsel, loaned us $200,000. The loan was subject to the terms and
conditions of an unsecured promissory note issued by us to Mr. Mazzarisi on such
date. The loan, which bore interest at 9.0% per annum, was repaid in full,
including interest, by JAG Media on March 29, 2004.

On April 1, 2002, Stephen J. Schoepfer, our President, Chief Operating Officer,
Chief Financial Officer and Secretary, loaned us $200,000. The loan was subject
to the terms and conditions of an unsecured promissory note issued by us to Mr.
Schoepfer on such date. The loan, which bore interest at 9.0% per annum, was
repaid in full, including interest, by JAG Media on March 29, 2004.

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


                                       47
<PAGE>

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

(a)(1) Financial Statements. See index to Financial Statements on page 37.

(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-B. The Exhibits designated by an asterisk (*) are management
contracts and compensation plans and arrangements required to be filed as
Exhibits to this Report.

<TABLE>
<CAPTION>

EXHIBIT NO.       DESCRIPTION
-----------       -----------
<S>               <C>
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 2 Class B Common Stock.  (26)

3.4               Certificate of Designation of the Series 3 Class B Common Stock.  (28)

3.5               Bylaws of Registrant.  (2)

3.6               Certificate of Amendment to Articles of Incorporation of Registrant as filed with the Secretary
                  of State of the State of Nevada on June 4, 2004.  (34)

3.6               Amendment to Bylaws of Registrant.  (23)

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)
</TABLE>



                                       48
<PAGE>

<TABLE>

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

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

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

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

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 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.  (27)

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.  (27)

</TABLE>



                                       49
<PAGE>

<TABLE>

<S>               <C>
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.  (29)

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.  (29)

4.26              Amendment, dated December 12, 2003, to Promissory Note, dated April 1, 2002 in the amount of
                  $200,000 issued to Thomas J. Mazzarisi.  (30)

4.27              Amendment, dated December 12, 2003, to Promissory Note, dated April 1, 2002 in the amount of
                  $200,000 issued to Stephen J. Schoepfer.  (30)

4.28              Amendment, dated as of January 31, 2004, to Promissory Note, dated April 1, 2002 in the amount
                  of $200,000 issued to Thomas J. Mazzarisi.  (32)

4.29              Amendment, dated as of January 31, 2004, to Promissory Note, dated April 1, 2002 in the amount
                  of $200,000 issued to Stephen J. Schoepfer.  (32)

4.30              Form of Common Stock Certificate  (34)

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)
</TABLE>


                                       50
<PAGE>

<TABLE>

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

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

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

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

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

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

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

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

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

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

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

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)
</TABLE>


                                       51
<PAGE>

<TABLE>

<S>               <C>
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.
                  (29)

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.  (29)

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.  (28)

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.  (28)

10.38             Asset Purchase Agreement, dated August 12, 2003, by and among the Registrant, Vertex
                  Interactive, Inc., XeQute Solutions PLC     and XeQute Solutions, Inc.  (28)

10.39             Subscription Agreement, dated as of September 25, 2003, between the Registrant and Kuekenhof
                  Equity Fund L.P.  (29)

10.40             Finder's Fee Agreement, dated as of January 5, 2004, between the Registrant and Flow Capital
                  Advisors, Inc.  (31).

10.41             Separation Agreement, dated April 2, 2004, between the Registrant and Gary Valinoti.  (33)

10.42             Letter Agreement, dated July 8, 2004, amending the Equity Line Purchase Agreement, dated as of
                  April 9, 2002, by and between the Registrant and Cornell Capital Partners, L.P. (35)

10.43             Letter Agreement, dated July 21, 2004, amending the Equity Line Purchase Agreement, dated as of
                  April 9, 2002, by and between the Registrant and Cornell Capital Partners, L.P. (35)

14.1              Code of Ethics. (29)

21.1              Subsidiaries of Registrant.  (29)

31.1              Section 302 Certification of Chief Executive Officer.

</TABLE>


                                       52
<PAGE>

<TABLE>

<S>               <C>
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)

99.2              Letter of Intent, dated January 16, 2004, by and among the Company, Great Eastern Securities,
                  Inc. and the stockholders of Great Eastern Securities, Inc.  (31)

</TABLE>

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

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

(2)  Previously filed as an exhibit to Amendment No. 1 to our Registration
     Statement on Form SB-2 filed on September 30, 1999.

(3)  Previously filed as an exhibit to Amendment No. 2 to our Registration
     Statement on Form SB-2 filed on October 26, 1999.

(4)  Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on June 16, 2000.

(5)  Previously filed as an exhibit to our Current Report on Form 8-K filed on
     June 16, 2000.

(6)  Previously filed as an exhibit to Post-Effective Amendment No. 2 to our
     Registration Statement on Form SB-2 filed on June 22, 2000.

(7)  Previously filed as an exhibit to our Registration Statement on Form SB-2
     filed on July 25, 2000.

(8)  Previously filed as an exhibit to our Annual Report on Form 10-KSB filed on
     November 14, 2000.

(9)  Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on December 20, 2000.

(10) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     February 2, 2001.

(11) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     March 1, 2001.

(12) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     April 9 2001.

(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 to our Registration
     Statement on Form SB-2 filed on February 24 2003.

(26) Previously filed as an exhibit to our Registration Statement on Form 8-A
     filed on April 10, 2003.

(27) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on June 16, 2003.

(28) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     August 13, 2003.

(29) Previously filed as an exhibit to our Annual Report on Form 10-KSB filed on
     November 13, 2003.

(30) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on December 19, 2003.

(31) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     January 20, 2004.

(32) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on March 22, 2004.


                                       53
<PAGE>


(33) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     April 5, 2004.

(34) Previously filed as an exhibit to our Registration Statement on Form 8-A
     filed on May 26, 2004.

(35) Previously filed as an exhibit to our Registration Statement on Form SB-2
     filed on August 5, 2004.

(b) Reports on Form 8-K

We filed the following Current Report on Form 8-K during the last quarter of the
fiscal year ended July 31, 2004:

     o    May 26, 2004: Form 8-K filed attaching press release relating to the
          extension of the effective date for recapitalization from May 21, 2004
          to June 4, 2004, form of Letter to Stockholders regarding the
          appointment of new transfer agent, Letter to Registered Holders of
          Class A common stock and Series 1 Class B common stock regarding
          exchange procedures and form of Letter of Transmittal.

         ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

The aggregate fees billed for the fiscal years ended July 31, 2003 and 2004 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 $67,634 and $66,793, respectively.

AUDIT-RELATED FEES

The aggregate fees billed for the fiscal years ended July 31, 2003 and 2004 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 $29,153 and
$25,678, respectively.

TAX FEES

The aggregate fees billed for the fiscal years ended July 31, 2003 and 2004 for
services rendered by J.H. Cohn LLP in connection with the preparation of our
federal and state tax returns were $3,855 and $4,000, respectively.

PRE-APPROVAL POLICIES AND PROCEDURES

The Board of Directors is required to pre-approve the rendering by our
independent auditor of audit or permitted non-audit services.




                                       54
<PAGE>


                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS
                          -----------------------------

<TABLE>
<CAPTION>

                                                                                        Page
                                                                                        ----
<S>                                                                                   <C>
Report of Independent Registered Public Accounting Firm..................................F-2

Consolidated Balance Sheet July 31, 2004.................................................F-3

Consolidated Statements of Operations Years Ended July 31, 2004 and 2003.................F-4

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
Years Ended July 31, 2004 and 2003.......................................................F-5

Consolidated Statements of Cash Flows Years Ended July 31, 2004 and 2003.................F-6

Notes to Consolidated Financial Statements...............................................F-7

</TABLE>

                                      * * *


                                      F-1
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------

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

We have audited the accompanying consolidated balance sheet of JAG Media
Holdings, Inc. and Subsidiaries as of July 31, 2004, and the related
consolidated statements of operations, changes in stockholders' equity
(deficiency) and cash flows for the years ended July 31, 2004 and 2003. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of JAG Media Holdings,
Inc. and Subsidiaries as of July 31, 2004, and their results of operations and
cash flows for the years ended July 31, 2004 and 2003, 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 cash flow deficiencies from operating
activities. Such matters raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans concerning these matters are
also described in Note 2. The accompanying consolidated financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.

                                  J.H. Cohn LLP

Roseland, New Jersey
November 8, 2004



                                      F-2
<PAGE>


                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                  JULY 31, 2004

<TABLE>
<CAPTION>

<S>                                                                                                   <C>
                                     Assets
                                     ------
Current assets:
    Cash and cash equivalents ...............................................................         $    386,283
    Accounts receivable, net of allowance for doubtful accounts of $7,500 ...................               12,240
    Other current assets ....................................................................               73,564
                                                                                                      ------------
                  Total current assets ......................................................              472,087

Equipment, net of accumulated depreciation of $75,648 .......................................               35,286
                                                                                                      ------------
                  Total .....................................................................         $    507,373
                                                                                                      ============

                      Liabilities and Stockholders' Equity
                      ------------------------------------
Current liabilities:
    Accounts payable and accrued expenses ...................................................         $     65,202
    Deferred revenues .......................................................................               39,493
                                                                                                      ------------
                  Total liabilities .........................................................              104,695
                                                                                                      ------------

Mandatorily redeemable Class B common stock, par value $.00001 per share:
    400,00 shares designated as Series 2; 380,829 shares issued and outstanding .............                    4
    40,000 shares designated as Series 3; 21,500 shares issued and outstanding ..............                    -
                                                                                                      ------------
                                                                                                                 4
                                                                                                      ------------
Commitments and Contingencies:
Stockholders' equity:
    Preferred stock; par value $.00001 per share; 50,000,000 shares authorized;
       none issued
    Common stock; par value $.00001 per share; 250,000,000 shares authorized;
       44,235,299 shares issued and outstanding .............................................                  442
    Additional paid-in capital ..............................................................           43,570,992
    Unearned compensation ...................................................................              (24,265)
    Accumulated deficit .....................................................................          (43,144,495)
                                                                                                      ------------

                  Total stockholders' equity ................................................              402,674
                                                                                                      ------------

                  Total .....................................................................         $    507,373
                                                                                                      ============
</TABLE>


                 See Notes to Consolidated Financial Statements.


                                      F-3
<PAGE>


                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       YEARS ENDED JULY 31, 2004 AND 2003

<TABLE>
<CAPTION>

                                                                              2004                   2003
                                                                          ------------           ------------
<S>                                                                       <C>                    <C>
Revenues .......................................................          $    253,256           $    385,881
                                                                          ------------           ------------
Operating expenses:
    Cost of revenues ...........................................               272,161                697,027
    Selling expenses ...........................................                13,698                  3,174
    General and administrative expenses ........................             1,951,876              2,225,597
                                                                          ------------           ------------

                  Totals .......................................             2,237,735              2,925,798
                                                                          ------------           ------------
Loss from operations ...........................................            (1,984,479)            (2,539,917)

Other income (expense):
    Interest income ............................................                 3,485                  5,466
    Interest expense ...........................................               (23,930)               (44,284)
    Loss from retirement of assets .............................                  (713)
                                                                          ------------           ------------

Net loss .......................................................          $ (2,005,637)          $ (2,578,735)
                                                                          ============           ============

Basic net loss per share .......................................          $       (.05)          $       (.07)
                                                                          ============           ============

Basic weighted average common shares outstanding ...............            42,696,349             37,709,338
                                                                          ============           ============
</TABLE>



                 See Notes to Consolidated Financial Statements.


                                      F-4
<PAGE>


                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
                       YEARS ENDED JULY 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                             Common Stock
                                          ---------------------------------------------------------------
                                                                    Class A             Series 1 Class B
                                                                -----------------      -------------------       Additional
                                           Number of            Number of               Number of                   Paid-in
                                            Shares     Amount    Shares     Amount       Shares    Amount          Capital
                                           ----------  ------  ----------   ------     ---------   ------       -------------
<S>                                       <C>         <C>     <C>          <C>        <C>          <C>          <C>
Balance, July 31, 2002                                         29,667,094   $ 296      1,681,155    $ 17         $ 37,697,274

Effects of recapitalization                31,348,249   $313  (29,667,094)   (296)    (1,681,155)    (17)

Sales of common stock pursuant
    to equity financing agreement,
    net of expenses of $101,750             5,633,266     57                                                        1,783,193

Sales of common stock
    and 20,000 shares of redeem-
    able Series 3 Class B common
    stock through private place-
    ments, net of expenses of
    $25,000                                 2,547,306     25                                                          896,975

Effects of issuance of common
    stock in exchange for services          1,395,604     14                                                          831,127

Options exercise                              319,600      3                                                            8,957

Amortization of unearned com-
    pensation

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

Net loss
                                           ------------  ----  ----------   -----      ---------    ----         ------------
Balance, July 31, 2003                     41,244,025     412         -         -            -         -          41,217,522

Sale of common stock
  and 1,500 shares
  of redeemable
  Series 3 Class
  B common stock
  through private placement                    35,000       -                                                         50,000

Effects of issuance of
   common stock in
   exchange for services                      450,000       5                                                        260,995

Amortization of
  unearned compensation

Sales of common stock
   pursuant to equity
   financing agreement,
   net of expenses of $107,500               2,506,274     25                                                      2,042,475

Net loss
                                           ------------  ----  ----------   -----      ---------    ----         ------------
Balance, July 31, 2004                      44,235,299   $442         -     $   -            -      $  -         $43,570,992
                                           ============  ====  ==========   =====      =========    ====         ============

<CAPTION>
                                                 Unearned       Accumulated
                                              Compensation       Deficit             Total
                                              ------------     ------------       ------------
<S>                                            <C>             <C>               <C>
Balance, July 31, 2002                          $(381,432)     $(38,560,123)      $(1,243,968)

Effects of recapitalization

Sales of common stock pursuant
    to equity financing agreement,
    net of expenses of $101,750                                                     1,783,250

Sales of common stock
    and 20,000 shares of redeem-
    able Series 3 Class B common
    stock through private place-
    ments, net of expenses of
    $25,000                                                                           897,000

Effects of issuance of common
    stock in exchange for services               (366,309)                            464,832

Options exercise                                                                        8,960

Amortization of unearned com-
    pensation                                     606,857                             606,857

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

Net loss                                                         (2,578,735)       (2,578,735)
                                                -----------    ------------       ------------
Balance, July 31, 2003                           (140,884)      (41,138,858)          (61,808)

Sale of common stock
  and 1,500 shares
  of redeemable
  Series 3 Class
  B common stock
  through private placement                                                            50,000

Effects of issuance of
   common stock in
   exchange for services                          (78,000)                            183,000

Amortization of
  unearned compensation                           194,619                             194,619

Sales of common stock
   pursuant to equity
   financing agreement,
   net of expenses of $107,500                                                      2,042,500

Net loss                                                          (2,005,637)      (2,005,637)
                                                -----------    -------------      -------------
Balance, July 31, 2004                          $   (24,265)    $(43,144,495)     $   402,674
                                                ===========    =============      =============


</TABLE>


                 See Notes to Consolidated Financial Statements


                                      F-5
<PAGE>



                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       YEARS ENDED JULY 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                                2004                2003
                                                                             -----------         -----------

<S>                                                                          <C>                 <C>
Operating activities:
Net loss ............................................................        $(2,005,637)        $(2,578,735)
Adjustments to reconcile net loss to net cash used in operating
    activities:
    Provision for doubtful accounts .................................                                  2,750
    Depreciation ....................................................             18,769              29,206
    Amortization of unearned compensation ...........................            194,619             606,857
    Loss on retirement of assets ....................................                713
    Effects of issuance of common stock and stock options in exchange                                464,832
       for services .................................................            183,000
    Changes in operating assets and liabilities:
       Accounts receivable ..........................................             (7,080)             11,415
       Other current assets .........................................             10,221             (15,000)
       Accounts payable and accrued expenses ........................            (89,527)           (743,770)
       Deferred revenues ............................................             (5,236)            (50,655)
                                                                             -----------         -----------
                  Net cash used in operating activities .............         (1,700,158)         (2,273,100)
                                                                             -----------         -----------

Investing activities - purchase of equipment ........................            (29,276)                 --
                                                                             -----------         -----------

Financing activities:
    Repayment of notes payable to officers ..........................           (400,000)
    Net proceeds from sales of common stock through:
                  Private placements ................................             50,000             897,000
                  Equity financing agreement ........................          2,042,500           1,783,250
                  Exercise of stock options .........................                                  8,960
                                                                             -----------         -----------

                  Net cash provided by financing activities .........          1,692,500           2,689,210
                                                                             -----------         -----------

Net increase (decrease) in cash and cash equivalents ................            (36,934)            416,110

Cash and cash equivalents, beginning of year ........................            423,217               7,107
                                                                             -----------         -----------

Cash and cash equivalents, end of year ..............................        $   386,283         $   423,217
                                                                             ===========         ===========

Interest paid .......................................................        $    71,810         $        --
                                                                             ===========         ===========
</TABLE>





                 See Notes to Consolidated Financial Statements.

                                      F-6

<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. 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
         ceased operations and had not conducted any significant operations
         and on April 1, 2004 it was merged with the Company's other subsidiary
         Jag Media LLC.

         On February 11, 2004, 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 June 4, 2004 (the "Recapitalization").
         As a result of the Recapitalization, the Company became authorized to
         issue up to 250,000,000 shares of common stock with a par value of
         $.00001 per share, and it issued 1 share of common stock in exchange
         for every 1 share of Class A common stock and Series 1 Class B common
         stock outstanding prior to the recapitalization.

         Prior to the Recapitalization, each share of Series 1 Class B common
         stock was immediately convertible into one share of Class A common
         stock and each share of Class A common stock and Series 1 Class B
         common stock was equal in respect to dividends and voting rights.
         Therefore, each share of Series 1 Class B common stock was, in
         substance, equivalent to one share of Class A common stock for
         financial reporting purposes prior to the Recapitalization, and each
         share of Class A common stock and each share of Series 1 Class B common
         stock is, in substance, equivalent to 1 share of common stock after the
         Recapitalization for financial reporting purposes. Accordingly, the
         Recapitalization, which has been retroactively reflected in the
         accompanying consolidated financial statements and these notes, did not
         have any effect on numbers of shares of common stock, the weighted
         average number of common shares outstanding or any amounts per common
         share.



                                      F-7
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $253,000 and $386,000
         and it incurred net losses of approximately $2,006,000 and $2,579,000
         and cash flow deficiencies from operating activities of approximately
         $1,700,000 and $2,273,000 for the year ended July 31, 2004 and 2003,
         respectively. These matters raise substantial doubt about the Company's
         ability to continue as a going concern.

         Although the Company's net losses included noncash charges of
         approximately $397,000 and $1,104,000 for the years ended July 31, 2004
         and 2003, respectively, primarily for the amortization of unearned
         compensation and the issuance of common stock and stock options in
         exchange for services, 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 cash flow deficiencies from
         operating activities through at least July 31, 2005 and that the
         Company will need to obtain additional equity or debt financing to
         sustain its operations until it can successfully market its services,
         expand its customer base and achieve profitability.

         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. The equity line became available in August 2002. Effective
         July 21, 2004, the equity line was extended and expires in August 2006
         (see Note 4).

         As of July 31, 2004 and November 8, 2004, the Company had received
         gross proceeds of $4,035,000, from the exercise of "put" options.
         Although the timing and amount of the required purchases under the
         agreement 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 prior to its expiration in August 2006 or
         through other financing agreements to enable it to continue as a going
         concern through at least July 31, 2005. 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.

                                      F-8

<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED):

         Use of estimates:

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

         Principles of consolidation:

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

         Revenue recognition:

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

         Cash equivalents:

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

         Equipment:

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

         Impairment of long-lived assets:

         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, are recognized when events or
         changes in circumstances indicate that the undiscounted cash flows
         estimated to be generated by such assets are less than their carrying
         value and, accordingly, all or a portion of such carrying value may not
         be recoverable. Impairment losses are then measured by comparing the
         fair value of assets to their carrying amounts.

         Income taxes:

         The Company accounts for income taxes pursuant to the asset and
         liability method which requires deferred income tax assets and
         liabilities to be computed annually for temporary differences between
         the financial statement and tax bases of assets and liabilities that
         will result in taxable or deductible amounts in the future based on
         enacted tax laws and rates applicable to the periods in

                                      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):

         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 of the Emerging Issues
         Task Force (the "EITF") of the Financial Accounting Standards Board
         (the "FASB") for 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.

         As of July 31, 2004, there were options and warrants outstanding for
         the purchase of a total of 3,585,000 shares of common stock (see Note 4
         herein). However, diluted per share amounts have not been presented in
         the accompanying consolidated statements of operations because the
         Company had a net loss in the years ended July 31, 2004 and 2003 and
         the assumed effects of the exercise of the Company's stock options and
         warrants that were outstanding during all or part of those periods
         would have been anti-dilutive.

                                      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):

         Recent accounting pronouncements:

         The FASB and EITF have issued certain accounting pronouncements as of
         July 31, 2004 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 2004 and 2003, 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, 2004, the Company had net operating loss carryforwards
         of approximately $27,252,000 available to reduce future Federal taxable
         income which will expire from 2019 through 2024.

         As of July 31, 2004 the Company's deferred tax assets consisted of the
         effects of temporary differences attributable to the following:

            Deferred revenues, net......................    $        16,000
            Unearned compensation.......................          2,123,000
            Net operating loss carryforwards............         10,884,000
                                                            ----------------
                                                                 13,023,000
            Less valuation allowance....................        (13,023,000)
                                                            ----------------
                  Total.................................    $            --
                                                            ================

         Due to the uncertainties related to, among other things, the changes in
         the ownership of the Company, which could subject its net operating
         loss carryforwards to substantial annual limitations, and the extent
         and timing of its future taxable income, the Company offset its net
         deferred tax assets by an equivalent valuation allowance as of July 31,
         2004.

         The Company had also offset the potential benefits from its net
         deferred tax assets by an equivalent valuation allowance during the
         years ended July 31, 2003 and 2002 of approximately $12,300,000 and
         $11,653,000. As a result of the increases in the valuation allowance of
         $723,000 and $647,000 during the years ended July 31, 2004 and 2003,
         there are no credits for income taxes reflected in the accompanying
         consolidated statements of operations to offset pre-tax losses.

NOTE 4 - EQUITY FINANCING AGREEMENT WITH CORNELL CAPITAL PARTNERS, L.P.:

         On April 9, 2002, the Company entered into an equity line purchase
         agreement (the "Equity Line Agreement") with Cornell Capital Partners,
         L.P. ("Cornell Capital") pursuant to which the Company has, in effect,
         put options whereby, subject to certain conditions, it can require
         Cornell Capital to purchase shares of its common stock from time to
         time at an aggregate purchase price of $10,000,000. The Equity Line
         Agreement 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 common stock to placement agents as of the effective date as
         consideration for their services in connection with the Equity Line
         Agreement. The term of the 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 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.


                                      F-11
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 - EQUITY FINANCING AGREEMENT WITH CORNELL CAPITAL PARTNERS, L.P.
         (CONTINUED):

         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
         common stock on the Nasdaq OTC Bulletin Board. In addition, the
         obligation of Cornell Capital to complete its purchases under the
         Equity Line Agreement 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, 2004, Cornell Capital was required to
         pay $2,150,000 and it received 2,506,274 shares of common stock and the
         Company received proceeds of $2,042,500, net of $107,500 of placement
         fees, as a result of the exercise by the Company of put options
         pursuant to the Equity Line Agreement. As of July 31, 2004, the Company
         had the ability to require Cornell Capital to purchase shares of its
         common stock pursuant to the Equity Line Agreement at an aggregate
         purchase price of $5,965,000 through August 28, 2006.

         During the year ended July 31, 2003, Cornell Capital was required to
         pay $1,885,000 and it received 5,623,266 shares of 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 Equity Line Agreement. The Company was also required to
         issue an additional 10,000 shares of common stock to placement agents
         in connection with the sale of the shares.

NOTE 5 - OTHER ISSUANCES OF COMMON STOCK AND STOCK OPTIONS:

         Amendments of articles of incorporation:

         As explained in Note 1, on February 11, 2004, 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 June 4, 2004 (the
         "Recapitalization").

         Pursuant to the Recapitalization, (i) the total number of shares of
         all classes of capital stock authorized for issuance by the Company
         increased from 200,000,000 shares to 300,440,000 shares with a par
         value of $.00001 per share, of which 50,000,000 shares are authorized
         for issuance as preferred stock, 250,000,000 shares are to be
         authorized for issuance as common stock, 400,000 shares are authorized
         for issuance as Series 2 Class B common stock and 40,000 shares are
         authorized for issuance as Series 3 Class B Common stock: and (ii) the
         Company issued 1 share of common stock in exchange for every 1 share
         of Class A common stock and Series 1 Class B common stock outstanding
         prior to the Recapitalization.


                                      F-12
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - OTHER ISSUANCES OF COMMON STOCK AND STOCK OPTIONS (CONTINUED):

         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 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 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. During the year ended July 31, 2004, the
         Company issued an additional 6,709 shares of its mandatorily redeemable
         Series 2 Class B common stock based on required adjustments to the
         number of shares originally issued in connection with a stock dividend
         affected during the year ended July 31, 2003. On June 30, 2003, the
         Company issued 20,000 shares of Series 3 Class B common stock in
         connection with the private placement of common stock, as further
         explained below.

         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. On September 6, 2004, the case was dismissed and
         management is currently evaluating its options.

         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' equity and total liabilities in
         the accompanying July 31, 2004 consolidated balance sheet pursuant to
         the rules and regulations of the Securities and Exchange Commission.


                                      F-13
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - OTHER ISSUANCES OF COMMON STOCK AND STOCK OPTIONS (CONTINUED):

         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, 2004 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.

         Equity financing agreement:

         As further explained in Note 4, Cornell Capital was required to pay
         $2,150,000 and it received 2,506,274 shares of common stock and the
         Company received proceeds of $2,042,500 net of $107,500 of placement
         fees as a result of the exercise by the Company of put options pursuant
         to the Equity Line Agreement.

         During the year ended July 31, 2003, Cornell Capital was required to
         pay $1,885,000 and it and a placement agent received 5,633,266 shares
         of 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 Equity Line Agreement.

         Shares sold through private placement:

         During the year ended July 31, 2004, the Company sold 35,000 shares of
         its 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.

         On December 10, 2002, the Company sold 1,136,364 shares of its 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 common stock
         and 20,000 shares of its Series 3 Class B common stock through a
         private placement and it received proceeds of $442,000. The Company
         issued 128,267 shares of its 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.

         Shares issued to pay salaries:

         During the year ended July 31, 2004, the Company agreed to issue a
         total of 300,000 shares of its common stock with an aggregate fair
         value of $183,000 to pay salaries, all of which was charged directly to
         expense.


                                      F-14
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         NOTE 5 - OTHER ISSUANCES OF COMMON STOCK AND STOCK OPTIONS (CONTINUED):

         Shares issued to consultants:

         During the year ended July 31, 2004, the Company issued a total of
         150,000 shares of its common stock with an aggregate fair value of
         $78,000 to pay for consulting services. The fair value of the shares
         was originally charged to unearned compensation and is being amortized
         to expense over the terms of the consulting agreements.

         Options and warrants issued for services:

         The Company has issued, from time to time, stock options and warrants
         for the purchase of common stock to employees as compensation and to
         other nonemployees, including investment analysts and commentators that
         have entered into agreements to provide the Company with financial
         information that is released to subscribers, as consideration for
         consulting, professional and other services. As explained in Note 2,
         the Company recognizes the cost of such issuances based on the fair
         value of the equity instruments issued over the periods in which the
         related services are rendered in accordance with the provisions of SFAS
         123.

         The following table reconciles the number of shares of common stock
         subject to options and warrants that were outstanding at August 1, 2002
         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, 2004 and sets forth other related information:

                                                     Number of Shares
                                                Class A           Range of
                                              Common Stock     Exercise Prices
                                              ------------     ---------------
          Options and warrants issued
          for services outstanding,
          August 1, 2002..................     4,104,600         $.02-$6.00

          Options cancelled...............      (200,000)        $2.00
          Options exercised (A)...........      (319,600)        $.02-$.05
                                               ---------

          Options and warrants
          issued for services
          outstanding, July 31, 2003
          and 2004 (B)(C).................     3,585,000         $.02-$6.00
                                               =========

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

         (B)    These options and warrants also include options for the purchase
                of 1,750,000 shares of 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 the Company's common stock. The number of
                shares of common stock that may be subject to all types of
                awards under the Incentive Plan as amended may not exceed
                6,000,000 shares.


                                      F-15
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - OTHER ISSUANCES OF COMMON STOCK AND STOCK OPTIONS (CONTINUED):


         (C)      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, 2004 as a result of issuances of those options and warrants
         to employees and nonemployees as compensation for services:


<TABLE>
<CAPTION>
                  Options and Warrants Outstanding                     Options and Warrants Exercisable
                  --------------------------------------------------   --------------------------------
  Exercise Prices          Number          Weighted       Weighted         Number           Weighted
                         Outstanding        Average        Average       Exercisable        Average
                                           Years of       Exercise                       Exercise Price
                                           Remaining        Price
                                          Contractual
                                             Life
<S>                       <C>                <C>        <C>               <C>           <C>
   $     .02              1,750,000          7.09       $    .02          1,750,000     $      .02
        2.00                585,000          1.18           2.00            585,000           2.00
        3.50                500,000          1.06           3.50            500,000           3.50
        6.00                750,000           .62           6.00            750,000           6.00
                      -------------                                      ---------
   $.02-$6.00             3,585,000          3.93       $    .34          3,585,000     $       .34
   ==========            ==========                        ========      ==========     ============
</TABLE>


         During 2003, the Company issued 1,395,604 shares of its 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.

         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 $194,619 and $606,857 was amortized
         during 2004 and 2003, respectively. The unamortized balance of $24,265
         and $140,884 has been reflected as a reduction of stockholders' equity
         as of July 31, 2004 and 2003, respectively.

                                      F-16
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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, were payable on June 30, 2004 and bore interest
         at an annual rate of 9%. The loans were repaid in full, including
         interest, in March 2004.

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 2004 and 2003.

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. 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, 2004.

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

         Employment agreements:

         Pursuant to amended and restated employment agreements between the
         Company and its two senior executives, each dated August 31, 2001, the
         Company became obligated to make cash payments of $150,000 to each of
         the two senior executives annually during the three year period
         ending August 31, 2004. As a result, the Company's obligations for cash
         payments under the employment agreements subsequent to July 31, 2004
         will total approximately $25,000 payable in the year ending July 31,
         2005.

         Each of the two senior executives were eligible to receive an option to
         purchase 500,000 shares of the Company's 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 common stock was $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. The agreements
         expired on August 31, 2004 and the Company was not required to issue
         any options.

                                      F-17
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - COMMITMENTS AND CONTINGENCIES (CONTINUED):


         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 $21,000 and
         $30,000 for 2004 and 2003, respectively. As of July 31, 2004, the
         Company was not subject to any significant noncancelable office leases.

         Litigation:

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

NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS:

         The Company's material financial instruments at July 31, 2004 for which
         disclosure of estimated fair value is required by certain accounting
         standards consisted of cash and cash equivalents, accounts receivable
         and accounts payable. In the opinion of management, the financial
         instruments were carried at values that approximated their fair values
         at July 31, 2004 because of their liquidity and/or their short-term
         maturities.


                                      F-18
<PAGE>

                    JAG MEDIA HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10 - PROPOSED ACQUISITIONS:

         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").

         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. The Asset Purchase Agreement
         was not closed by October 31, 2003. Accordingly, the parties were not
         required to close the transaction unless they chose to waive the
         closing date requirement. On January 17, 2004, the Company decided not
         to pursue any further negotiations with XeQute.

         On January 17, 2004, the Company entered into a Letter of Intent (the
         "Letter of Intent") expiring March 31, 2004 to acquire Great Eastern
         Securities, Inc. ("Great Eastern"), a privately held broker/dealer
         based in Syosset, New York. Great Eastern offers a cost-efficient
         trading platform for brokers and traders, including direct access
         trading, with individually tailored commission rates. The Company and
         Great Eastern did not enter into a definitive acquisition agreement
         before the term of the Letter of Intent expired on March 31, 2004, and
         management has decided not to pursue any further negotiations with
         Great Eastern.


                                      * * *


                                      F-19

<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.

                                   By:  /s/ Thomas J. Mazzarisi
                                        ------------------------------------
                                        Thomas J. Mazzarisi
                                        Chairman of the Board and
                                        Chief Executive Officer



Dated:   November 15, 2004

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/ Thomas J. Mazzarisi               Chairman of the Board, Chief Executive          November 15, 2004
------------------------------------------      Officer and General Counsel (Principal
            Thomas J. Mazzarisi                 Executive Officer)




         /s/ Stephen J. Schoepfer               President, Chief Operating Officer, Chief       November 15, 2004
------------------------------------------      Financial Officer, Secretary and Director
           Stephen J. Schoepfer                 (Principal Financial and Accounting
                                                Officer)
</TABLE>