U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 205491

                                   FORM 10-QSB

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

      For the quarterly period ended September 30, 2004

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

      For the transition period from ______________ to ______________.

                         Commission File No.: 000-27777
                            INNOVATION HOLDINGS, INC.
                    (f/k/a Blagman Media International, Inc.)

             (Exact name of Registrant as specified in its Charter)

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


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

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

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

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

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

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

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]

<PAGE>

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                             PAGE

ITEM 1.     FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2004
(UNAUDITED) AND DECEMBER 31, 2003                                           1

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

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

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2004 (UNAUDITED)                                     5-10

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS    11-15

ITEM 3.   CONTROLS AND PROCEDURES                                          15

PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS                                                15

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS                        16

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                                  16

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

ITEM 5.   OTHER INFORMATION                                                17

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

SIGNATURES                                                                 17

CERTIFICATIONS                                                          18-20
<PAGE>

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

<PAGE>

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


                                                         CONTENTS



PAGE             1      CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER
                        30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

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

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

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

PAGES            5-10   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS
                        OF SEPTEMBER 30, 2004 (UNAUDITED)

<PAGE>

<TABLE>
<CAPTION>

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

                                     ASSETS

                                                                 September 30, 2004      December 31,
                                                                    (Unaudited)             2003
                                                                   ------------         ------------

CURRENT ASSETS
<S>                                                                <C>                  <C>
Cash and cash equivalents                                          $          2         $          2
Prepaid expenses, media and other current assets                         94,091                   --
Assets related to discontinued operations                                 9,645                9,645
                                                                   ------------         ------------
     Total Current Assets                                               103,738                9,647
                                                                   ------------         ------------

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

OTHER ASSETS
License agreement, net of amortization of $11,518 and
   $7,781 respectively                                                  630,476              141,687
                                                                   ------------         ------------

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

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

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

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

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

COMMITMENTS AND CONTINGENCIES                                                --                   --

STOCKHOLDERS' DEFICIENCY
 Preferred stock, series A, $.001 par value, super convertible
  redeemable preferred stock, 10,000,000 shares authorized, 0
  shares issued and outstanding                                              --                   --
 Preferred stock, series B, $.001 par value, super convertible
  redeemable preferred stock, 100 shares authorized, 100 shares
  issued and outstanding                                                      1                    1
 Common stock, $.001 par value, 25,000,000,000 shares authorized
  14,359,018 and 31,682,095 shares issued and outstanding,
  respectively                                                       14,359,018               31,682
 Additional paid-in capital                                          34,368,842           41,824,753
 Accumulated deficit                                                (60,380,146)         (57,051,362)
  Deferred stock based compensation                                  (3,352,316)                  --
                                                                   ------------         ------------

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

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                     $    787,275         $    225,085
                                                                   ============         ============

</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       1
<PAGE>

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

<TABLE>
<CAPTION>

                                      For the Three   For the Three  For the Nine   For the Nine
                                         Months          Months         Months         Months
                                         Ended           Ended          Ended          Ended
                                        Sept. 30,       Sept. 30,      Sept. 30,     Sept. 30,
                                          2004            2003           2004          2003
                                       -----------    -----------    -----------    -----------

<S>                                      <C>            <C>            <C>            <C>
REVENUES - NET                         $        --             --             --         83,652
                                       -----------    -----------    -----------    -----------

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

LOSS FROM OPERATIONS                    (1,394,997)    (2,100,252)    (3,633,695)    (5,105,328)

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

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

NET LOSS PER COMMON SHARE -
BASIC AND DILUTED                      $     (0.00)   $     (0.00)   $     (0.00)   $     (0.00)
                                       ===========    ===========    ===========    ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
- BASIC AND DILUTED                                 7,230,008,520                 1,155,511,877
                                       ===========  =============    ===========  =============

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       2
<PAGE>

<TABLE>
<CAPTION>


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

                                                                         Additional                    Deferred Stock
                      Preferred Stock            Common Stock              Paid-In        Accumulated      Based
                     Shares   Amount        Shares         Amount          Capital          Deficit     Compensation     Total
                    -------   -------   --------------   ------------    ------------    -------------  -----------    -----------

<S>                    <C>   <C>           <C>          <C>            <C>             <C>             <C>           <C>
Balance,
 December 31, 2003      100   $     1       31,682,095   $     31,682   $ 41,824,753    $ (57,051,362)  $       --    $(15,194,926)

Stock issued
 for prepaid
 expenses                --        --        2,000,000          2,000         98,000               --           --         100,000

Stock issued
 for legal fees          --        --      362,500,000        362,500        320,000               --           --         682,500

Stock issued
 for consulting          --        --    8,866,426,750     13,883,427     (8,511,901)              --           --       4,854,526

Stock issued for
 settlement of
 accrued expenses        --        --       23,659,250         23,659        247,615               --           --         271,274

Stock issued
 for board of
 directors fees          --        --       69,000,000         69,000        393,000               --           --         462,000

Stock issued
 for debt issuance       --        --        3,750,000          3,750         (2,625)              --           --           1,125

Stock issued for
 license agreement       --        --    5,000,000,000      5,000,000     (4,500,000)              --           --         500,000

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

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

Net loss                 --        --               --             --             --       (3,328,784)          --      (3,328,784)
                    -------   -------   --------------   ------------    ------------    -------------  -----------    -----------

BALANCE,
 SEPTEMBER 30, 2004     100   $     1   14,359,018,095   $ 14,359,018   $ 34,368,842    $ (60,380,146) $(3,352,316)   $(15,004,601)
                    =======   =======   ==============   ============    ============    =============  ===========   ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>

<TABLE>
<CAPTION>

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

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

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

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

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

During the period ended September 30, 2004, the Company issued  2,000,000 shares
of common stock having a fair market value of $100,000 to its legal  counsel for
future legal services recorded as a prepaid expense.

During the period ended  September  30,  2004,  the Company  issued  362,500,000
shares of common  stock  having a fair  market  value of  $682,500  to its legal
counsel for future legal services recorded as deferred stock compensation.

During the period ended  September 30, 2004,  the Company  issued  8,866,426,750
shares of common  stock  having a fair  market  value of  $4,854,526  to various
consultants for consulting fees recorded as deferred stock compensation which is
being expensed over the lives of the related consulting agreements.

During the period ended September 30, 2004, the Company issued 23,659,250 shares
of common stock in settlement of accrued expenses and accrued interest  totaling
$260,000 and $11,274, respectively.

During the period ended September 30, 2003, the Company issued  69,00,000 shares
of common stock having a fair market value of $462,000 to its Board  Members for
services rendered.

During the period ended September 30, 2004, the Company issued  3,750,000 shares
of common stock having a fair market value of $1,125 for debt issuance cost.


     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

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


NOTE 1 BASIS OF PRESENTATION

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

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

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

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

       The condensed consolidated balance sheet information at December 31, 2003
       was derived from the Company's audited consolidated  financial statements
       included in its Annual  Report Form 10-KSB.  The  accompanying  condensed
       consolidated  financial statements and the information included under the
       heading  "Management's  Discussion  and  Analysis  or Plan of  Operation"
       should be read in  conjunction  with the  Company's  Annual  Report  Form
       10-KSB for the year ended December 31, 2003, filed on May 19, 2004.

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

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

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

NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS

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


                                       5
<PAGE>

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

NOTE 3 DISCONTINUED OPERATIONS

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

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

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

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

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

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

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


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

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

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

                                       6
<PAGE>

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

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

NOTE 4 STOCKHOLDERS' DEFICIENCY

       In February 2003, the Board of Directors authorized a 5,000 for 1 reverse
       stock split. In April 2004, the Board of Directors authorized a 500 for 1
       reverse stock split.  All share and per share amounts in the accompanying
       condensed  consolidated  financial  statements  and  footnotes  have been
       restated to give effect to such reverse stock splits. (See Note 7).

       During the nine months  ended  September  30, 2004,  2,000,000  shares of
       common stock were issued to the  Company's  attorneys for an agreement to
       provide legal services  valued at $100,000.  The fair value of the issued
       shares was based upon the market price of the Company's stock on the date
       of grant.

       During the nine months ended  September 30, 2004,  362,500,000  shares of
       common stock were issued to the  Company's  attorneys for an agreement to
       provide legal services  valued at $682,500.  The fair value of the issued
       shares was based upon the market price of the Company's stock on the date
       of grant. The $682,500 is presented as deferred stock based  compensation
       in the accompanying condensed consolidated balance sheet.

       During the nine months  ended  September  30,  2004,  the Company  issued
       8,866,426,750  shares of common stock for consulting  services  valued at
       $4,854,526. The fair value of the issued shares was based upon the market
       price of the  Company's  stock on the date of grant.  Of the total value,
       $2,154,099  has been  expensed  to selling,  general  and  administrative
       expenses  in  the  accompanying   condensed   consolidated  statement  of
       operations for the nine months ended September 30, 2004 and $2,700,427 is
       presented  as  deferred  stock  based  compensation  in the  accompanying
       condensed consolidated balance sheet.

       During the nine months  ended  September  30,  2004,  the Company  issued
       69,000,000  shares of common stock for board of directors  fees valued at
       $462,000.  The fair value of the issued  shares was based upon the market
       price of the  Company's  stock  on the  date of  grant.  The  amount  was
       expensed  to  selling,   general  and  administrative   expenses  in  the
       accompanying  condensed statement of operations for the nine months ended
       September 30, 2004.

       During the nine months  ended  September  30,  2004,  the Company  issued
       23,659,250  shares of common stock valued at $271,274 to satisfy  certain
       liabilities  related to a legal  settlement  reached  in 2003.  (See Note
       5(d). The fair value of the issued shares was based upon the market price
       of the Company's stock on the date of grant.



                                       7
<PAGE>

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

       During the nine months  ended  September  30, 2004,  3,750,000  shares of
       common  stock  valued at $1,125 were issued for debt  issuance  for costs
       related to notes  payable.  The fair value of the issued shares was based
       upon the market price of the Company's stock on the date of grant.

       During the nine months ended September 30, 2004,  5,000,000,000 shares of
       common  stock were issued to a vendor for a license  agreement  valued at
       $500,000.  The fair value of the issued  shares was based upon the market
       price of the Company's stock on the date of grant.

NOTE 5 LITIGATION

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

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

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


                                       8
<PAGE>

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

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

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

(C)    A claim has been brought  against the Company by a corporation for breach
       of contract.  On January 30, 2004, this corporation was granted a summary
       judgment  in  the  amount  of  $203,064,  which  includes  interest  plus
       attorney's  fees and costs  incurred by the  corporation.  The  Company's
       current  attorney filed a motion to be relieved of the default as to this
       summary  judgment.  As of September  30,  2004,  the Company has recorded
       additional  liabilities  in the  amount of $51,064 in order to record the
       full liability of $203,064 as per the summary judgment. This liability is
       included in Liabilities from Discontinued  Operations in the accompanying
       consolidate  balance  sheet at September  30, 2004.  There are  currently
       cross-actions  in the case that are pending for  binding  arbitration  in
       November 2004.

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


                                       9
<PAGE>

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

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

NOTE 6 CAPITAL LEASE OBLIGATIONS

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

NOTE 7 GOING CONCERN

       The  Company's  condensed  consolidated  financial  statements  have been
       prepared on a going concern basis,  which contemplates the realization of
       assets and the  satisfaction of liabilities and commitments in the normal
       course of business.  The Company  incurred a net loss of $3,328,784 and a
       negative  cash flow from  operations  of  $3,633,695  for the nine months
       ended  September  30,  2004,  and has a  working  capital  deficiency  of
       $15,130,138 and a stockholders deficiency of $15,504,601 at September 30,
       2004 which  raises  substantial  doubt about its ability to continue as a
       going concern.  The Company's working capital  deficiency as of September
       30,  2004  may  not  enable  it to  meet  such  objectives  as  presently
       structured.  The  condensed  consolidated  financial  statements  do  not
       include  any  adjustments  that  might  result  from the  outcome of this
       uncertainty.

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

NOTE 8 SUBSEQUENT EVENTS

       In the fourth quarter of 2004, the Company issued 21,000,000 common
       shares, in the aggregate, to various consultants for consulting services
       to be provided over varying terms, which expire at various dates during
       the fiscal years 2005 and 2006.

       In the fourth  quarter of 2004,  a total of  70,000,000  shares of common
       stock were issued to the  Company's  Securities  and Exchange  Commission
       attorney as compensation for legal services rendered and for future legal
       services.

       In  October  2004,  the  Company's   Board  of  Directors   authorized  a
       six-thousand-for-one  reverse stock split of the Company's  common stock.
       In  December  2004,  the  Company's  Board  of  Directors   authorized  a
       one-thousand-for-one  reverse  split of the Company's  common stock.  The
       accompanying  condensed  consolidated  financial statements and footnotes
       have not been restated to give effect to such reverse stock splits.

                                       10
<PAGE>

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

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

General

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

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

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

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

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

In March 2002, we completed the  transaction  through a merger of a wholly-owned
special  purpose  subsidiary  into  Century in  exchange  for the payment of the
equivalent of $0.20 per share to the shareholders of Century ($0.025 in cash and
the  balance in shares of the  common  stock of the  parent  company  (hereafter
"Common  Shares"),  repayment of $749,778 in debentures  through the issuance of
Common  Shares,   and  the  recognition  of  debts.  As  a  result,  at  closing
approximately $600,000 in cash and $2.2 million in restricted Common Shares were
distributed to holders of existing Century shares, debentures, and certain stock
rights. Under the merger agreement, the Common Shares were valued at the closing
bid price over the seven days prior to the date of the agreement or  $0.0008857,
resulting in the issuance of  2,555,651,387  new Common Shares to the holders of
Century shares, debentures and certain stock rights. Century also had continuing
debt  obligations  due to  affiliates  and third parties of  approximately  $1.6
million, exclusive of trade and contingency obligations.  In connection with our
interest in the Century transaction,  we provided management services to Century
from late 2001 to early 2002,  essentially on a reimbursement basis. As a result
of the  overwhelming  debt and  departures  by members of Century,  we no longer
consider this acquisition  viable. We are in the process of resolving all issues
related to the Century acquisition.

                                       11
<PAGE>

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

The Company is required to have its consolidated  financial  statements reviewed
by its independent  accounts prior to filing.  As of the date of this report, we
have not submitted our financial  statements to our independent  accountants for
their review. We will file an amendment to this form 10-QSB when our independent
accountants complete their review of these financial statements.

RESULTS OF OPERATIONS

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

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

Total net revenues                     $        --          $        --

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

Loss from Operations                   $(1,394,997)         $(2,100,252)

Net Loss Per Share                     $     (0.01)         $     (2.74)

Net Revenues

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

Operating Expenses

Total operating  expenses  decreased 51.4% from $2,105,380 in 2003 to $1,024,997
in 2004 for the three months ending September 30. Included in operating expenses
are general and  administrative  expenses which  decreased 51.7% from $2,098,267
for the three month period ended  September 30, 2003 to $1,014,566 for the three
month period ended September 30, 2004.

Total operating  expenses  decreased 36.8% from $5,188,980 in 2003 to $3,283,695
in 2004 for the nine months ending September 30. Included in operating  expenses
are general and  administrative  expenses which  decreased 37.1% from $5,166,921
for the nine month period ended  September 30, 2003 to $3,251,794  for the three
month period ended September 30, 2004.

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

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

Other Income (Expenses)

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


                                       12
<PAGE>

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

Liquidity and Capital Resources

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

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

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

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

During 2003, we focused a significant  effort to the unwinding of Century Media.
While the Century  Media  transaction  adds  existing  debt and trade  payables,
management believes that these obligations are being contained and can be funded
from operations,  internal organic growth, increased billings, legal avenues and
extensive operating cost reductions and efficiencies.  We have departed from our
earlier  strategy to assist in funding selected aspects of the growth of Century
Media and new strategic  hires and alliances that will not  facilitate  positive
financial growth.

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

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


                                       13
<PAGE>

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

However,  the  Company  currently  has a  deficit.  As a result,  the  Company's
financial  statements for the period ended September 30, 2004 have been prepared
on a going concern basis which  contemplated  the  realization of assets and the
settlement of liabilities and commitments in the normal course of business.  The
Company  incurred  a net  loss of  $3,328,784  and a  negative  cash  flow  from
operations of $3,633,695 for the nine months ended September 30, 2004, and has a
working capital  deficiency of $15,130,138  and a stockholders  deficiency as of
September 30, 2004 of $15,004,601, and may not enable it to meet such objectives
as presently structured. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

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

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

Forward-Looking Statements

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

Critical Accounting Policies.

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

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

Revenue Recognition

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

                                       14
<PAGE>

Asset Impairment

The Company  reviews its  long-lived  assets and  identifiable  intangibles  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying  amount of the asset may not be  recoverable.  In performing the review
for  recoverability,  the Company  estimates  the future cash flows  expected to
result from the use of the asset and its eventual disposition. If the sum of the
expected future cash flows  (undiscounted  and without interest charges) is less
than the carrying amount of the asset, an impairment loss is recognized.

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

Item 3.   CONTROLS AND PROCEDURES

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

PART II. OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS.

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

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

(B)    In March  2002,  the  Company  advised  authorities,  market  members and
       regulators  and  initiated  an  internal   reconciliation   investigation
       relating  to a  substantial  amount  of  common  shares  of  the  Company
       improperly and fraudulently  issued and possibly  transferred,  including
       possible  improper  releases of restrictions  and transfers of restricted
       securities  warrant  negotiations  or  an  exemption  from  registration,
       without the knowledge of the Company  ("Curative  Review  Process").  The
       Curative  Review Process is continuing.  The Company filed a registration
       statement  on  Form  S-8  for a 2002  Employee  Stock  Compensation  Plan


                                       15
<PAGE>

       ("Registration  Statement")  effective August 2002 to register shares. In
       connection  with the Curative Review  Process,  the Company  subsequently
       placed  stop  transfer  orders on all of the  original  certificates  and
       derivatives   of  those   certificates,   advised   market   members  and
       depositories  of its actions and has been working with these  parties and
       its  transfer  agent and other  resources  to  ascertain  which shares of
       Common Stock need to remain in commerce to recognize the interests of the
       transferee,  which shares  should be cancelled or returned to the Company
       and  therefore  removed from  registration  ("Removed  Shares") and which
       shares are held by or were  delivered  to parties  who were  eligible  to
       receive and hold the same  pursuant to the Plan.  The Company  intends to
       file an amendment to this  Registration  Statement as soon as practicable
       when the  reconciliation  in the curative  Review  Process is complete to
       withdraw the Removed shares from  registration.  In connection with this,
       the Company has had suit filed  against them by a third party pending the
       circuit court of Cook County, Illinois. The Company has responded to this
       matter and is actively  cooperating in other  investigations  relating to
       the plaintiff and others. The Company expects additional  litigation from
       the  plaintiff  and  is  intending  to  assert  the  indemnification  and
       disgorgement  rights under its agreements  with the plaintiff.  As stated
       above, more information on issues related to the collateral damage of the
       company's  association with certain financial  advisors and organizations
       can be found on the  Securities  and Exchange  Commission  (SEC) website.
       Additional  lawsuits  may be filed by the  Company  against  all  parties
       involved in the fraud if any issues related to such fraud have an adverse
       effect on the company.  The Company has  initiated a complaint  against a
       third  party in the  Superior  court of  California  in the County of Los
       Angeles  for  breach  of   contract,   fraud  and   deceit,   intentional
       misrepresentation  of facts,  and  rescission.  The third  party  filed a
       general  denial  to the  complaint,  has  asserted  numerous  affirmative
       defenses,  and has filed a  cross-complaint  alleging  breach of  written
       contract,  breach of the implied covenant of good faith and fair dealing,
       conversion,  common counts, breach of fiduciary duties, fraud and deceit,
       negligent  misrepresentation,  imposition  of  constructive  trust and/or
       resulting  trust,  intentional  and  tortuous  inducement  to breach  and
       interference with contract and prospective economic advantage, and unfair
       trade  practices.   The  Company  has  filed  a  general  denial  to  the
       allegations. The parties are currently seeking a business settlement.

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

(C)    A claim has been brought  against the Company by a corporation for breach
       of contract.  On January 30, 2004, this corporation was granted a summary
       judgment  in  the  amount  of  $203,064,  which  includes  interest  plus
       attorney's  fees and costs  incurred by the  corporation.  The  Company's
       current  attorney filed a motion to be relieved of the default as to this
       summary  judgment.  As of September  30,  2004,  the Company has recorded
       additional  liabilities  in the  amount of $51,064 in order to record the
       full liability of $203,064 as per the summary judgment. This liability is
       included in Liabilities from Discontinued  Operations in the accompanying
       consolidate  balance  sheet at September  30, 2004.  There are  currently
       cross-actions  in the case that are pending for  binding  arbitration  in
       November 2004.

(D)    On November 11, 2003, the Company reached a settlement with a corporation
       as a result of a claim brought  against the corporation by the Company on
       May 6, 2002 and a cross  complaint  filed by the  corporation on June 14,
       2002. As part of the terms and conditions of the settlement,  the Company
       will pay to the  corporation  $260,000 and 10% simple  interest  over one
       year.  This will be  accomplished  by the issuance of 2 million shares of
       free  trading  stock 30 days after the  execution of the  agreement.  The
       shares  will be held in a trust  account  for the  purpose of selling the
       stock and paying the corporation on a continuous  basis. In the event the
       Company does not pay the  corporation  the total amount of the settlement
       on or  before  one  year  and 30  days  from  the  execution  date of the
       settlement agreement,  the corporation will enforce a stipulated judgment
       in the amount of $750,000 against the Company. The Company has recorded a
       liability of $260,000 and this amount is included in accounts payable and
       accrued  expenses in the  accompanying  consolidated  balance sheet as of
       December 31, 2003. As of September 30, 2004,  the liability has been paid
       in full.  The fair value of the  shares  issued was based upon the market
       price of the Company's common stock on the date of grant.


                                       16
<PAGE>

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

Item 2.   CHANGES IN SECURITIES.

None.

Item 3.   DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

Item 5.   OTHER INFORMATION.

None.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

None.

                                   SIGNATURES

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

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

Dated: December 20, 2004                       /s/ ROBERT BLAGMAN
                                               ---------------------------------
                                               Robert Blagman, President and CEO


                                       17
<PAGE>

                                  EXHIBIT LIST

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       18