<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                  FORM 10-KSB
                                   (Mark One)
|X|           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934
                     For the fiscal year ended July 31, 2001

                                       OR

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

        For the transition period from                to
                                       --------------    ---------------

                        Commission File Number   000-28761
                                               --------------
                               JagNotes.com Inc.
             (Exact name of Registrant as Specified in Its Charter)

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

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

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

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

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
                                (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. |_|

         The issuer's revenue for the fiscal year ended July 31, 2001 was
approximately $1,001,000.

         The aggregate market value of voting common equity held by
non-affiliates of the registrant, based upon the closing bid price of the Common
Stock on October 22, 2001 as reported on the OTC Bulletin Board, was
approximately $1,418,014.

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

                  Class                        Outstanding at October 22, 2001
                  -----                        ---------------------------------
Common Stock, par value $0.00001 per share                21,815,598


                      DOCUMENTS INCORPORATED BY REFERENCE.
                                      None.



<PAGE>


                                JAGNOTES.COM INC.
                         2001 FORM 10-KSB ANNUAL REPORT

                                TABLE OF CONTENTS

                                                                         Page
                                                                         ----
PART I ...............................................................      3
ITEM 1.  DESCRIPTION OF BUSINESS .....................................      3
Item 2.  DESCRIPTION OF Properties ...................................     20
ITEM 3.  LEGAL PROCEEDINGS ...........................................     20
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .........     20

PART II ..............................................................     21
ITEM 5.  MARKET FOR THE REGISTRANT'S
         COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ...............     21
ITEM 6.  MANAGEMENT'S DISCUSSION AND
         ANALYSIS OR PLAN OF OPERATION ...............................     25
Item 7.  FINANCIAL STATEMENTS ........................................     34
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH
         ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ..........     35

PART III .............................................................     36
ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT ...........     36
ITEM 10. EXECUTIVE COMPENSATION ......................................     38
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
         BENEFICIAL OWNERS AND MANAGEMENT ............................     44
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ..............     45
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K ......................     45



<PAGE>





                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

         The information in this report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements are based upon current expectations that involve risks
and uncertainties. Any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. For example,
words such as "may," "will," "should," "estimates," "predicts," "potential,"
"continue," "strategy," "believes," "anticipates," "plans," "expects," "intends"
and similar expressions are intended to identify forward-looking statements. Our
discussions relating to our liquidity and capital resources, our subscription
and advertising revenues, our business strategy, our competition, and the future
of the Internet and webcasting over the Internet, among others, contain such
statements. Our actual results and the timing of certain events may differ
significantly from the results discussed in the forward-looking statements.
Factors that might cause or contribute to such a discrepancy include, but are
not limited to, those discussed elsewhere in this report in the section entitled
"Risk Factors."

Overview of Our Business

         We have been providing financial and investment information within the
investment community since 1989. In May 1999, we began offering our services on
a subscription fee basis to the general public for the first time through our
U.S. web site. At www.jagnotes.com, we offer timely financial data and reports
and commentary from the financial community.

         From 1989 to 1992, we operated as an unincorporated business entity. In
1992, we incorporated in the State of New Jersey as New Jag, Inc. On December
14, 1993, JagNotes, Inc. merged with and into us, and we changed our name to
JagNotes, Inc. We operated as JagNotes, Inc. until March 1999 when we were
acquired by Professional Perceptions, Inc., a Nevada corporation, which
subsequently changed its name to JagNotes.com, Inc. JagNotes, Inc. remained a
wholly-owned subsidiary of JagNotes.com, Inc. until August 16, 1999 when it
merged with and into JagNotes.com Inc.

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

         Our 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.


<PAGE>

Our Industry Generally

         The growth of the Internet has changed the way investors seek
information and manage their portfolios. Individual investors are increasingly
seeking access to information that was formerly available only to financial
professionals. Professional investors who have traditionally relied on print and
other media for information are demanding faster information and greater
accessibility. As more and more investors begin to trade online, we expect the
demands for financial information over the Internet to increase significantly.

         The first Internet-based trading systems were introduced in 1995. Since
that time, online trading has increased dramatically. According to a January
2001 estimate, there were 7.8 million individuals trading online, making 807,000
trades per day. As of January 2001, there were over 200 broker-dealers providing
retail investors with the ability to trade online. (See Securities and Exchange
Commission, Office of Compliance Inspections and Examinations: Examinations of
Broker-Dealers Offering Online Trading: Summary of Findings and Recommendations
(January 25, 2001). In an article posted on Web Finance on April 2, 2001, Jerry
Minkoff noted that there had been "a 6% growth in online trading households in
the past six months compared to a 22% growth in the preceding six-month period."
According to Minkoff, "New investors are shying away at this time but Internet
usage has increased by 30%, leaving a potential online investing pool available
for acquisition." (See Jerry Minkoff, Online Brokerages Struggle as Market
Indexes Sag, Web Finance (April 2, 2001). However, a recent J.D. Power survey,
dated March 27, 2001, indicates that the "online trading population has declined
by approximately 20 percent." (See J.D. Power and Associates Reports, Online
Brokerage Firms Continue to Have a Strong Hold on Current Investment Pool; Study
Shows Many Online Investors Plan to Maintain, or Increase Trading Volume (March
27, 2001)).


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

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

         The commentary on our web site is provided by experienced 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



                                       4
<PAGE>

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.

     Various commentaries are updated pursuant to a schedule set forth on our
web site while others are posted from time to time.

         As of the date of this annual report on Form 10-KSB, JagNotes.com has
more than 25 commentators who provide technical analysis and commentary for our
web site.

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

         JAGNotes Upgrade/Downgrade Report - The JAGNotes upgrade/downgrade
report is a daily consolidated investment report that summarizes newly issued
research, analyst opinions, upgrades, downgrades and analyst coverage changes
from various investment banks and brokerage houses. Each morning we gather this
information, then compile and release it in a concise, easy to read format
before the markets open. We believe that this early, convenient access to
potentially market moving information gives our subscribers access to some of
the information traditionally available when the market opens to institutional
investors, professional traders and high net worth individuals. This report is
updated from time to time during the trading day.

         The JagNotes 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 JAGfn
Rumor Report is available to our subscribers and updated throughout the day.

         These two products are accessible only to paid subscribers.
Subscriptions are offered at the rate of $9.95 per month, or $99.95 per year. We
have offered free trial subscriptions at times in the past and may do so in the
future.

         We also maintain our original JAGNotes fax-based service for a limited
number of mostly institutional subscribers. Through this service, we provide
these subscribers faxed copies of our daily JAGNotes upgrade/downgrade report,
which is updated two or three times every weekday morning before the stock
market opens. We also allow these subscribers access to our Internet-based


                                       5
<PAGE>

information by providing them with a specified number of access codes. The price
for this combined service is approximately $1,500 to $2,000 per year.

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

         We intend to continue providing our combined fax/Internet service in
the future primarily to institutional subscribers. We believe that some
financial institutions are willing to pay a higher price for this combined
service because they consider a faxed report to be a more efficient means of
receiving the information or because their employees do not have direct Internet
access.

Advertising Revenue

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

Our Business Strategy

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

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

         o        expand our subscriber base in the United States;

         o        pursue acquisitions and strategic alliances; and

         o        control costs to correspond with subscription revenues.

         We plan to continue to service the institutional segment of our
business, but we recognize that retail subscribers and viewers represent our
largest potential market and are the key to our development. We will use an
integrated marketing model to attract new subscribers and, to the extent funding
permits, will employ a mix of communications media to increase name awareness in
the retail market and increase visits by potential subscribers with a view to
ultimately generating new subscribers.

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

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

                                       6
<PAGE>

                  o        Offering free trial subscriptions;

                  o        Traditional public relations;

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

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

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

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

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

         o        Curtail Costs. We have recently sold our webcasting business
                  to reduce our cash flow requirements. In addition, we have
                  discontinued various commentators in order to save costs where
                  we concluded that the cost was not justified by our
                  subscribers' interest. We will continue to look for more cost
                  cutting opportunities where consistent with our business
                  strategy of attracting more subscribers.

         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
8 before making any investment decision.



                                       7
<PAGE>


Competition

         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. In addition, cable television is an increasingly important source of
competition.

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

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

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

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

         o        Webcasts of financial news, including Yahoo Finance Vision and
                  WebFN;

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

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

         Because there is not a readily defined market in which we compete, we
cannot predict which information source or sources will be our primary
competition in the future. However, we expect competition from each of the above
information sources to intensify and increase in the future. Most of our current
and potential competitors have greater name recognition, larger financial,
technical and marketing resources, and more extensive customer bases than we do,
all of which could be leveraged to gain market share to our detriment.

         The barriers to entry into our business are relatively low - i.e., it
is not difficult for new competitors to enter the market. Much of the
information we provide is publicly available and we do not have any patented or
otherwise protected technologies that would preclude or inhibit competitors from
entering our markets. Our current and future competitors may develop or offer
services that have significant price, content, creative or other advantages over
the services we provide.

         In order for us to successfully compete in this business, we will need
to reliably provide valuable services at a competitive price to a large


                                        8
<PAGE>

subscriber base. We believe that a successful implementation of our business
strategy will allow us to do so and to compete successfully as a leading
financial and investment information provider.

Recent Developments


Sale of Broadband Subsidiary.

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

         As consideration for the purchase of the membership interest in JAGfn,
CALP II delivered to us at the closing $1,002,146.81 in immediately available
funds and a non-interest bearing promissory note in the amount of $500,000
payable in full on February 22, 2001, which is secured by the membership
interest. This note was subsequently amended and then canceled (See Termination
of Indebtedness below). Such $1,500,000 represented the amount we required in
order to pay our outstanding current liabilities as of February 1, 2001. In
addition, CALP II agreed to discharge us from all of our obligations in
connection with $4,350,000 principal amount outstanding of convertible
debentures and to cancel, and discharge us from our obligations under, that
certain warrant to purchase 3,000,000 shares of our common stock issued to CALP
II on October 30, 2000. We were also granted a one-year option to purchase a ten
percent membership interest in JAGfn exercisable at a price of $5,000,000.

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

         Our key executive officers and directors, Messrs. Valinoti, Schoepfer
and Mazzarisi, retained their 5% membership interests in JAGfn, but such
interests are no longer non-dilutable. Mr. Valinoti received an additional 2.5%
membership interest pursuant to a subsequent transfer by CALP II. In connection
with this transaction, CALP II also agreed to terminate the lock-up agreement
relating to Mr. Valinoti's shares of JagNotes common stock.

         Following the closing of this transaction, JAGfn was reincorporated as
a wholly owned subsidiary of Financial Broadband Holdings, Inc., a Delaware
corporation.

Termination of Certain Indebtedness.

         On April 6, 2001, we entered into a termination agreement with CALP II
and Thomson Kernaghan & Co., Ltd. Pursuant to the Termination Agreement, we
released CALP II from its obligations, including payment of accrued interest,
under an amended and restated secured promissory note, dated February 22, 2001,
in the amount of $500,000 in exchange for the termination of (i) a convertible


                                       9
<PAGE>

debenture, dated December 1, 2000, issued by us to CALP II in the principal
amount of $500,000, (ii) four warrants issued by us to CALP II to purchase an
aggregate amount of 661,740 shares of our common stock and (iii) one warrant
issued by the us to Thomson Kernaghan to purchase an aggregate amount of 250,000
shares of our common stock.

Appointment of New Chief Financial Officer.

         Effective April 1, 2001, Stephen R. Russo resigned as our Chief
Financial Officer. On such date, the Board of Directors accepted Mr. Russo's
resignation and appointed Raymond Taylor as Chief Financial Officer of JagNotes
to hold office at the pleasure of the Board of Directors.

Equity Line of Credit.

         On August 17, 2001, we entered into an agreement with Cornell Capital
Partners, L.P. for a $10 million equity line pursuant to which we will be able
to sell our shares of common stock to Cornell Capital from time to time over a
36-month period.

         The purpose of the offering is to provide general working capital for
JagNotes, including working capital which might be required by virtue of our
strategic plan.

Web Site Technical Information

         We lease two web servers, which are the computer systems on which all
content for our web site is maintained and through which we operate that web
site. 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
John Fendrick, a technical consultant to JagNotes.

Employees


         As of October 22, 2001, we had 18 employees. As of that date, we had
entered into employment agreements with three of our employees, each of whom is
an officer and director of JagNotes.



                                       10
<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, 2001 we had incurred losses to date of approximately
$34,539,000. We may never achieve profitability. We have made, and will continue
to make, very significant expenditures well before our revenues increase
sufficiently to cover these additional costs. We are not able to estimate when,
if ever, our revenues will increase sufficiently to cover these costs. Internet
users have only been attracted to subscription sites in limited areas. Our
subscription revenues have recently fluctuated but are below the level of a year
ago. We will continue to incur significant losses for the foreseeable future and
cannot assure you that our revenue will grow in the future or that additional
financing will be made available to us. Recently, many dot-com companies have
found it difficult to raise funds, and a number of such companies have gone
bankrupt. If we require additional funding and do not obtain it, we may be
forced to restructure, file for bankruptcy or cease operations, any of which
could cause you to lose all or part of your investment in our common stock.


We will require additional funds to meet our cash operating expenses.


         We will require more capital to meet our current operating expenses.
Since February 1, 2001, our former webcast subsidiary, Financial Broadband
Network, Inc., has shared facilities and administrative costs with us, helping
to reduce such costs by as much as 90%. Financial Broadband Network has a
limited operating history and has never achieved profitability. If Financial
Broadband Network is unsuccessful in achieving profitability and as a result is
no longer able to provide these services to us, our costs would increase and our
business could suffer.

         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 will require additional funds to achieve our current business strategy.

         We will require more capital to achieve our current business strategy.
As we require additional funds to sustain our operations as well as the
expansion of our business we will have to seek additional equity or other
financing. Such financing is very difficult to achieve under current market
conditions and may not be available. Even if it is, it may be on terms that are


                                       11
<PAGE>

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

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

We rely on relationships with third parties for necessary administrative
services that may not continue in the future.

         We have entered into a short-term services agreement with Financial
Broadband Network, Inc., the successor to our former webcast subsidiary, JAGfn,
for shared facilities and administrative services which help reduce our costs.
In addition to providing us with office space at its Chelsea studio location in
New York City, Financial Broadband Network also provides technical support for
our web site as well as bookkeeping, telephone and fax services. Financial
Broadband Network has a limited operating history and has never achieved
profitability. If Financial Broadband Network is unsuccessful in achieving
profitability and as a result is no longer able to provide these services to us,
our costs would increase and our business could suffer.

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

         We must expand our subscriber base to be successful. Our subscriber
base has grown more slowly than anticipated. Although our subscription revenues
have recently fluctuated but are below the level they were at a year ago.
Although we are still attempting to expand our subscriber base, our efforts may
be ineffective, our competitors may be more successful than we are in attracting
customers, or the number of Internet users seeking or willing to pay for
financial information may not increase or may decrease. Any of these would
adversely affect us. Moreover, many of our competitors offer financial
information for free and are likely to continue to do so at an increasing rate.
Our current and potential subscribers may be unwilling to pay for our service if
they feel they can receive comparable information for free. Because there is
currently limited potential for Internet banner advertising revenues, if we
cannot expand our subscriber base, we will have little, if any, financial
success.

Many of our commentators may have competing web sites.

         Most of our commentators have their own web sites on which they provide
financial information. Specifically, Elaine Garzarelli, James Canton and Mark


                                       12
<PAGE>

Leibovit all currently have competing web sites, and most of the commentators
offer free financial information and commentary on their web sites. 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 JagNotes name. The JagNotes name has only limited recognition
within the financial community and little if any recognition among the general
public. We do not allocate any of our working capital to marketing and
advertising but rather rely solely upon strategic alliances to increase our name
recognition. Our ability to build our subscriber base, offer new services or
otherwise expand the business will be limited if we cannot increase that name
recognition. We cannot guarantee that we will be successful in doing so.

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

         We believe that our web site will be more attractive to subscribers if
we introduce additional or enhanced services in the future in order to retain
our current users and attract new users. Our first attempt to introduce
streaming audio and video was not financially successful and the business was
sold. We are considering various new enhanced services for our web site, subject
to adequate financing being available.

         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 also experience difficulties that could delay or prevent us from
introducing new enhanced services. Such difficulties may include the lack of
financing to implement or continue new services. We may also 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.

We may not successfully attract or manage strategic alliances.

         We currently intend to evaluate strategic alliances, partnerships or
joint ventures, as a means of acquiring additional sources of content,
distribution and investment. Pursuing such transactions will entail a number of
risks and difficulties. We compete with a wide variety of information providers
and there may be competition for content providers, distribution channels and
funding. We can offer no guarantee that we will be able to locate suitable
candidates for alliances or risk sharing partners. If we are able to do so, we
will require a high level of managerial skill to successfully evaluate and
implement these transactions. We have little experience in evaluating and
implementing transactions of this type, and we cannot guarantee that we will be
able to successfully pursue this strategy.




                                       13
<PAGE>

We may have to defend against intellectual property infringement claims and
libel and defamation claims, which may cause significant operational
expenditures.

         Parties may assert claims against us that we have violated a patent or
infringed a copyright, trademark or other proprietary right belonging to them.
Parties could also bring libel, defamation or similar claims based on the
content published on our web sites. Much of the content on our web sites comes
from third parties, so to protect ourselves against such claims, our license
agreements with third party content providers generally require that the content
providers defend, indemnify and hold us harmless with respect to any claim by a
third party that the licensed content they have provided infringes on any
proprietary right. While we endeavor to have commentators defend, indemnify and
hold us harmless with respect to any third party claim for libel or defamation
in connection with our commentators' work product, commentators do not often
agree to provide us with such protection. Even where we are successful in making
commentators agree to provide us such protections, we cannot assure you that
these measures will be adequate to protect us from such claims. Any such claims,
whether meritorious or not, could result in the expenditure of significant
financial and managerial resources on our part, which could materially adversely
affect our business, results of operations and financial condition.

Failure to maintain our reputation for trustworthiness may reduce the number of
our users, which may harm our business.

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

We depend on key people in management and operations.

         We depend on our president's and other 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 our president and other key personnel. We may also need to
attract and retain additional qualified managers, officers and other key
personnel in the future in order to successfully manage our planned growth. We
cannot guarantee that we will be able to do so. If we lose the services of any
of our key personnel or are unable to attract, hire, train and retain qualified
officers, managers and operating, marketing and financial personnel, our
business, and your investment, could be adversely affected.

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.


                                       14
<PAGE>


                          Risks Related to Our Industry

Our business is dependent on the continued public interest in the stock market.

         The recent volatility of the stock market has generated unprecedented
public interest in the stock market and trading. Our success as retail financial
information providers depends upon the continued maintenance or growth of this
interest. The recent downturn in the stock market may be responsible for an
overall decrease in subscription revenues since the end of our second fiscal
quarter. It is not clear what impact the recent downturn in the stock market
will ultimately have on our business. A number of factors that are out of our
control could lead to a stagnate or depressed stock market which would likely
decrease the public's interest in stock trading and financial information. If
this were to happen, it is likely that we would lose a significant percentage of
our then current and potential subscriber base.

Our stock - and technology and Internet stocks generally - have been and may
continue to be volatile.

         The market for our stock has been and is likely to continue to be
highly volatile and subject to wide price and volume fluctuations. These
variations are the result of many factors, most of which are beyond our control.
Furthermore, Internet and technology related stocks generally have been subject
to wide fluctuations in price and volume that often appear to be unrelated to
the operating success of these companies. The volatility of the stock market in
recent months has made it difficult for many dot-com companies to raise funds,
and a number of companies have gone bankrupt. Such volatility can present risks
for investors. Moreover, such volatility often leads to securities litigation
brought by investors who are seeking to recoup losses resulting from rapid and
significant drops in price and/or volume. While we are not aware of any pending
or threatened suit or basis therefor, such suits are costly and we could be
adversely affected if such a suit were brought against us.

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

         Our web site's primary competitors provide financial news, commentary
and analysis on the Internet such as Yahoo Finance, CBSMarketwatch.com,
TheStreet.com, Briefing.com, America Online Personal Finance Channel, WebFN.com,
Reuters PLC and MotleyFool.com. Providing financial information and analysis
over the Internet is a relatively new business, but it is already intensely
competitive. An increasing number of web-based financial information providers
are competing for subscribers, customers, advertisers, content providers,
analysts, commentators and staff, and we continue to face competition from
traditional news and information sources including television and print. We
expect competition from both sources to intensify and increase in the future.
Many such competitors have substantially greater financial and other resources
than we have.

         Our major competitors include:

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

                                       15
<PAGE>

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

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

         o        Webcasts of financial news, including Yahoo Finance Vision and
                  WebFN;

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

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

         Most of our current and potential competitors have greater name
recognition, financial, technical and marketing resources, and more extensive
customer bases than we do, all of which could be leveraged to gain market share
to our detriment.

         The barriers to entry into our business are relatively low - i.e., it
is not difficult for new competitors to enter the market. Much of the
information we provide is publicly available and we do not have any patented or
otherwise protected technologies that would preclude or inhibit competitors from
entering our markets. Our current and future competitors may develop or offer
services that have significant price, substantive, creative or other advantages
over the services we provide. If they do so and we are unable to respond
satisfactorily, our business and financial condition will likely be adversely
affected.

System slowdowns or failures could hurt our business.

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

We may not be able to adequately protect ourselves against security risks.

         All Internet businesses are subject to electronic and computer security
risks. We have taken steps to protect ourselves from unauthorized access to our
systems and use of our site, but we cannot guarantee that these measures will be
effective. If our security measures are ineffective, unauthorized parties could
alter, misappropriate, or otherwise disrupt our service or information. If such
unauthorized parties were able to access certain of our, or our customers',
proprietary information, including subscribers' credit card numbers, we would
face significant unexpected costs and a risk of material loss, either of which
could adversely affect our business.


                                       16
<PAGE>

                     Risks Related to Our Capital Structure

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


         As of October 22, 2001, our named executive officers and directors
beneficially owned or controlled a total of approximately 6,739,500 shares, or
approximately 27.05% of our outstanding common 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
61,500,000 shares, or more than three times the currently outstanding shares of
our common stock.


The market for our stock is limited.

         Our stock is traded on the Nasdaq OTC Bulletin Board. Trading activity
since that time has fluctuated and at times been limited. We cannot guarantee
that a consistently active trading market for our stock will continue,
especially while we remain on the OTC Bulletin Board.

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 which 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 60,000,000 shares for sale to Cornell Capital pursuant to the
equity line purchase agreement and 1,500,000 shares which have been issued to
Cornell Capital as an investor's fee in connection with such agreement. If we
determine to sell Cornell Capital more than a total of 60,000,000 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 JagNotes 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 JagNotes.

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 under the prospectus covering such shares. If we continue to exercise our
put right under the equity line purchase agreement every 10 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.

                                       17
<PAGE>

We may not be able to obtain payment from Cornell Capital Partners, L.P.


         Cornell Capital Partners, L.P.'s obligation to purchase our shares
under the equity line purchase agreement is dependent upon various conditions
being satisfied. If these conditions are not satisfied, we cannot require
Cornell Capital to purchase our shares. Since the obligation of Cornell Capital
to complete its purchase 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.


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


         Our equity line purchase agreement requires Cornell Capital Partners,
L.P. to purchase up to $10,000,000 of our shares, as we elect from time to time.
We have registered 60,000,000 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 $.18 per share on the day prior to the date of
sale, we will receive gross proceeds of less than $10,000,000, unless we
determine to file an additional registration statement. In addition, depending
on the trading volume and market price of our shares, we may not be able to
raise funds through the sale of shares to Cornell Capital as fast as we would
like or as much as we would like.

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

         Our management will have broad discretion with respect to the use of
the net proceeds received from Cornell Capital in connection with the equity
line, and investors will be relying on the judgment of our management regarding
the application of these proceeds. We intend to use such funds to provide
general working capital for JagNotes, including working capital which might be
required by any new subsidiaries we may establish.





                                       18
<PAGE>



Item 2.           DESCRIPTION OF PROPERTIES


         We are currently relocating our New York office, which houses most of
our executive and administrative personnel and related administrative equipment,
to more suitable space in the New York/New Jersey metropolitan area. We also
maintain an executive and administrative office at 6865 SW 18th Street, Suite
B13 in Boca Raton, Florida at a rental cost of $1,050.00 per month. Neither
office houses the servers for the site, which are housed at separate locations
as indicated above (see "Web Site Technical Information" on page 10). We believe
that we will be able to locate suitable new office space and obtain suitable
replacements for our Florida office space, if our lease is not renewed, on
commercially reasonable terms.


ITEM 3.           LEGAL PROCEEDINGS

         May Davis Group, Inc. filed a complaint in Supreme Court of the State
of New York, County of New York on December 27, 2000, alleging a breach of the
Placement Agency Agreement, dated as of June 12, 2000, by and between us and May
Davis. May Davis seeks a placement agent fee of $90,000, representing 3% of the
gross proceeds received by us in connection with the sale of certain convertible
debentures to CALP II pursuant to that certain letter agreement dated October
30, 2000 between us and Thomson Kernaghan & Co., Ltd.

         Pursuant to a letter agreement dated August 6, 2001, May Davis agreed
to settle the above-referenced lawsuit, with prejudice, in consideration of
JagNotes reducing from $2.00 to $.30 the exercise price of the warrant held by
May Davis Group, Inc. for 100,000 shares of our common stock, which warrant
expires July 21, 2005.

         On July 16, 2001, Bernard Shusman filed a complaint in the Supreme
Court of the State of New York, County of New York, alleging a breach of his
employment contract by JagNotes arising from the termination of Mr. Shusman's
employment on June 4, 2001 and seeking in excess of $100,000 in damages.
Pursuant to a settlement agreement dated September 10, 2001 between Mr. Shusman
and JagNotes, Mr. Shusman has agreed to settle all claims which he may have
against JagNotes in exchange for the agreed upon cash payments pursuant to the
settlement agreement.

         There are no other currently pending material law suits or similar
administrative proceedings 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.



                                       19
<PAGE>

                                     PART II

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

         Our common stock has been traded in the over-the-counter market on the
OTC Bulletin Board under the symbol JNOT since approximately March 26, 1999.
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 since March 26, 1999. 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, through October 22, 2001               0.32          0.05
                                                       =======       ======

        As of October 22, 2001, there were 91 stockholders of record of our
common stock. On October 22, 2001, the closing bid price for our common stock
was $.065.




                                       20
<PAGE>


Rights of  Security Holders

Common Stock


         Our Articles of Incorporation authorize the issuance of 100,000,000
shares of common stock, $.00001 par value, of which 21,815,598 shares were
outstanding as of October 22, 2001.


         Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders and are not entitled to
cumulate their votes in the election of directors. Holders of shares of common
stock are entitled to share ratably in dividends, if any, as may be declared
from time to time by the Board of Directors in its discretion, from funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of JagNotes, the holders of shares of common stock are entitled to
share pro rata all assets remaining after payment in full of all liabilities.
Holders of common stock have no preemptive or other subscription rights, and
there are no conversion rights or redemption or sinking fund provisions with
respect to such shares.

Options

         As of July 31, 2001, there were options outstanding to purchase an
aggregate of 5,617,500 shares of our common stock at exercise prices ranging
from $0.10 to $3.50 per share, subject to certain vesting requirements, at any
time prior to various dates through March 14, 2005, 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, 2001, 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;

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


         o        warrants to purchase 1,250,000 shares of our common stock at
                  $2.00 per share, at any time prior to July 21, 2005 of which
                  warrants to purchase 690,000 shares of our common stock have
                  been subsequently canceled.


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.



                                       21
<PAGE>

Recent Sale of Unregistered Securities

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

                  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 we can put our 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 the Equity Line Purchase Agreement, we issued Cornell
Capital an investor's fee of 1,500,000 shares of our common stock. We also have
agreed to pay a 5% cash fee to Cornell Capital payable out of each drawdown
under the equity line. The investments under the Equity Line Purchase Agreement
will be made in reliance upon Regulation D.

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

         On June 12, 2000, we closed a private sale of a convertible debenture
in the principal amount of $2,500,000 due June 12, 2003 and bearing interest at
8% per year, which is convertible into shares of our common stock, to CALP II, a
Bermuda limited partnership. The issuance of such securities was exempt from
registration under the Securities Act of 1933, as amended, pursuant to
Regulation S promulgated thereunder.

         On June 14, 2000, we entered into a $10,000,000 Equity Line of Credit
Agreement with CALP II, a Bermuda limited partnership, pursuant to which we can
put our shares, once registered with the SEC, from time to time, at a purchase
price equal to 85% of the average of the five lowest closing bid prices for such
shares over the ten trading days preceding the sale of such shares, subject to
volume limitations based upon current trading volumes and market price per
share. In connection with the Equity Line of Credit Agreement, we issued CALP II
a five-year stock purchase warrant to purchase 428,571 shares of our common
stock. We have agreed to pay a 10% finders' fee and issue warrants to acquire
250,000 shares of our common stock to certain placement agents in connection
with this transaction. The investments under the Equity Line of Credit Agreement
will be made in reliance upon Regulation S.

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

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


                                       22
<PAGE>

         In January 2000, we closed a private sale of 785,715 shares of common
stock to Reliant Limited, a corporation organized under the laws of the Isle of
Man, for cash consideration of $2,750,000, $1,500,000 of which was paid to us on
January 17, 2000 and $1,250,000 of which was paid to us during the three month
period ended April 30, 2000. A 10% fee was paid to the placement agent out of
the each drawdown. The issuance of such securities was exempt from registration
under the Securities Act of 1933, as amended, pursuant to Regulation S
promulgated thereunder.

         In May 1999, we closed a private sale of 1,665,390 shares of common
stock and 555,130 warrants to 27 accredited investors for cash consideration of
approximately $7,327,000 received in March and April of 1999. The issuance of
such securities was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) thereof and Rule 506 of Regulation D promulgated
thereunder.

         In May 1999, we issued 20,000 shares of its common stock to one person
in exchange for services. The issuance of such shares was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) thereof
and/or Rule 506 of Regulation D promulgated thereunder.

         In March 1999, the Company (then known as Professional Perceptions,
Inc.) issued a total of 4,990,000 shares of common stock to 9 sophisticated
investors for cash consideration of $940,000. The issuance of such securities
was exempt from registration under the Securities Act of 1933 pursuant to Rule
504 of Regulation D promulgated thereunder.

         In March 1999 the Company (then known as Professional Perceptions,
Inc.) issued 3,500,000 shares of common stock to the stockholders of JagNotes,
Inc. in exchange for all of the outstanding shares of JagNotes, Inc. The
issuance of such securities was exempt from registration under the Securities
Act of 1933 pursuant to Section 4(2) thereof and Regulation D promulgated
thereunder.

         In March and April 1998 the Company (then known as Professional
Perceptions, Inc.) sold 720,900 shares of common stock to approximately 30
investors for cash consideration totaling approximately $70,000. The issuance of
such securities was exempt from registration under the Securities Act of 1933
pursuant to Rule 504 of Regulation D promulgated thereunder.

         In December 1997 the Company (then known as Professional Perceptions,
Inc.) sold 3,100,000 shares of common stock to the three founders of the Company
in exchange for $5,275. The issuance of such securities was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) thereof
and Regulation D promulgated thereunder.





                                       23
<PAGE>

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

The following discussion should be read in conjunction with the consolidated
financial statements and the notes to those statements that appear elsewhere in
this annual report on Form 10-KSB. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this annual report on Form 10-KSB, particularly in "Risk Factors."


                              RESULTS OF OPERATIONS

Year ended July 31, 2001 as compared to the year ended July 31, 2000

Revenues:


Revenues primarily consist of subscription revenue and is derived from annual,
semi-annual, quarterly and monthly subscriptions relating to our product "JAG
Notes". JAGNotes is a daily consolidated investment report that summarizes newly
issued research, analyst opinions, upgrades, downgrades, and analyst coverage
changes from various investment banks and brokerage houses. Until May 1999,
JAGNotes was faxed to a limited audience of financial professionals at an
average monthly charge of $150. During the year ended July 31, 1999 we were in
the process of changing our focus to also include the retail investor by
providing a variety of investment information including but not limited to the
JAGNotes through our web site. During the year ended July 31, 2001 subscription
revenues decreased as compared to the year ended July 31, 2000 with total
subscription revenues for the comparable periods of approximately $1,001,000 and
$1,042,000, respectively. The decrease in our revenues can be attributed to two
factors as follows; (i) during the year ended July 31, 2000 we had an
infomercial airing on television that provided us with a large temporary
increase in subscribers, and (ii) as more fully described below during the
latter part of fiscal year ended July 31, 2000 and continuing through the first
six months of fiscal year ended July 31, 2001 we focussed much of our efforts on
the establishment of our real time streaming video programming through our web
site.


As explained in previous filings, it was originally our intention to increase
subscription revenues through international expansion and increased awareness of
our United States of America web site. In addition, commensurate with the
establishment of JAGfn Broadband L.L.C. ("JAGfn") effective August 1, 2000 we
focussed much of our efforts on the establishment of our webcasting or real time
streaming video programming through our web site. It was our hope that this
additional service would provide for our primary source of revenues in the form
of advertising income on a going forward basis and that subscription income
would be ancillary to our operations as a whole. During the six months ended
January 31, 2001 we halted all of our international expansion plans, and had not
received advertising income in connection with our real time streaming video
programming. Accordingly, as more fully explained in liquidity and capital
resources, we sold our interests in JAGfn effective February 1, 2001.



                                       24
<PAGE>

Cost of revenues:

Cost of revenues includes the cost to transmit the product over the telephone
and fax lines, on-line service charges for our web site, costs in connection
with the development and maintenance of the web site, payments to commentators
and employees for their reports that are posted on our web site and broadcasted
on our webcast and salaries associated with the production of our webcast.
During the year ended July 31, 2001 cost of revenues decreased by approximately
$927,000 to approximately $7,205,000 from approximately $8,132,000 during the
year ended July 31, 2000.

The primary causes for this decrease were as follows:

         o        A decrease of approximately $2,697,000 in costs for our
                  commentators and consultants associated with our web site from
                  approximately $6,793,000 during the year ended July 31, 2000
                  to approximately $4,096,000 during the year ended July 31,
                  2001. Such amounts included cash consideration of $1,302,000
                  and $2,314,000 and non-cash charges related to the
                  amortization of unearned compensation of $2,794,000 and
                  $4,893,000 during the years ended July 31, 2001 and 2000,
                  respectively. Included in the cash and non-cash charges during
                  the year ended July 31, 2001 were charges of $350,000 and
                  $1,139,000, respectively, associated with the halting of our
                  international expansion plans. The decrease in such costs is
                  commensurate with the expiration of consulting agreements
                  entered into during fiscal year ended July 31, 2000 that were
                  not renewed. In addition, we were relieved of substantially
                  all of our obligations under various consulting agreements as
                  part of the sale of JAGfn effective February 1, 2001.

         o        A decrease in costs associated with the development and
                  maintenance of our web-site of approximately $641,000 from
                  approximately $1,145,000 during the year ended July 31, 2000
                  to approximately $504,000 during the year ended July 31, 2001.
                  The decrease results from the fact that during the year ended
                  July 31, 2000 we began the process of re-designing our web
                  site in anticipation of our webcast and accordingly during the
                  year ended July 31, 2000 wrote off approximately $407,000 of
                  capitalized web site development costs.

Such decreases were partially offset by an increase of approximately $2,488,000
for additional salaries incurred during the year ended July 31, 2001. Such
additional salaries were incurred in connection with the production of the
webcast. We paid cash for these expenses of approximately $2,182,000 and
incurred approximately $306,000 of charges related to the amortization of
unearned compensation, a non-cash charge.

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

Selling expense:

Selling expenses consist primarily of advertising and other promotional
expenses. During the year ended July 31, 2001 selling expenses decreased
approximately $1,718,000 to approximately $147,000 from its level of
approximately $1,865,000 during the year ended July 31, 2000. The major
components of this decrease are:



                                       25
<PAGE>

An approximate $1,247,000 decrease in advertising and promotional costs from
approximately $1,296,000 during the year ended July 31, 2000 to approximately
$49,000 during the year ended July 31, 2001. During the year ended July 31, 2000
we spent substantial amounts to promote the launch of our web site including the
production and airing of an infomercial. Such costs were not repeated during the
year ended July 31, 2001.

An approximate $464,000 decrease in business travel related expenses from
$562,000 during the year ended July 31, 2000 to approximately $98,000 during the
year ended July 31, 2001. During the year ended July 31, 2000 significant travel
was done by management to promote our web site and to explore opportunities in
other countries. Similar travel was not done during the year ended July 31,
2001.

General and administrative expenses:

General and administrative expenses consist primarily of compensation and
benefits for the officers, other compensation, occupancy costs, professional
fees and other office expenses. General and administrative expenses increased
approximately $2,944,000 during the year ended July 31, 2001 to $8,498,000 from
approximately $5,554,000 during the year ended July 31, 2000. The increase in
general and administrative expenses is primarily attributable to the following:

         o        An increase of approximately $446,000 in rent expense from
                  approximately $766,000 during the year ended July 31, 2000 to
                  approximately $1,212,000. The increase in rent expense is
                  attributable to the lease costs associated with our webcasting
                  studio and offices in New York City.

         o        An increase of approximately $3,913,000 in amortization of
                  unearned compensation, a non-cash charge from approximately
                  $958,000 during the year ended July 31, 2000 to approximately
                  $4,871,000. These costs were associated with the issuance of
                  common stock options and warrants to investment bankers and
                  other parties exploring business expansion opportunities on
                  our behalf.

         o        A decrease in professional fees of approximately $814,000 from
                  approximately $1,472,000 to approximately $658,000. The
                  decrease results from significant attorneys' fees incurred
                  during the year ended July 31, 2000 relating to general
                  corporate matters such as, SEC filings and related matters and
                  reviewing and negotiating contracts with consultants and other
                  parties.

         o        A decrease in payroll and payroll related expenses of
                  approximately $643,000 from approximately $1,607,000 during
                  the year ended July 31, 2000 to approximately $964,000 during
                  the year ended July 31, 2001. The decrease results from the
                  fact that during the year ended July 31, 2001 we allocated
                  more salaries to cost of revenues as more time was spent by
                  employees in development of our webcast operations. In
                  addition, commensurate with the sale of JAGfn on February 1,
                  2001 substantially all salaries were assumed by the purchaser.



                                       26
<PAGE>

Other income:

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

Interest expense:

We incurred interest charges aggregating approximately $1,527,000 and $1,895,000
during the year ended July 31, 2001 and 2000, respectively. These charges
consist of the following related primarily to convertible debentures as more
thoroughly discussed within liquidity and capital resources below:

         o        Approximately $1,161,000 and $76,000, during the year ended
                  July 31, 2001 and 2000, respectively, related to noncash
                  charges resulting from amortization of deferred finance costs
                  and debt discount.

         o        Approximately $218,000 and $1,794,000, during the year ended
                  July 31, 2001 and 2000, respectively, related to noncash
                  charges resulting from recording beneficial conversion rights.

         o        Approximately $148,000 and $25,000, during the year ended July
                  31, 2001 and 2000, respectively, of interest accrued on the
                  outstanding principal of the convertible debt, a portion of
                  which was converted into common stock and the remainder of
                  which was assumed by the purchaser of JAGfn.


Net loss:


Primarily as a result of the above, the net loss of approximately $16,665,000
for the year ended July 31, 2001 was approximately the same as net loss of
approximately $16,664,000 for the year ended July 31, 2000 or a basic net loss
per share of $.93 and $1.18 based on a basic weighted average common shares
outstanding of 17,853,515 and 14,166,218 for the years ended July 31, 2001 and
2000, respectively.


In addition, as a result of our decision to sell JAGfn and terminate our foreign
operations, we were able to reduce our net losses from $14,111,000 during the
first six months of the fiscal year to $2,554,000 during the second six months
of the fiscal year ended July 31, 2001.

                         Liquidity and Capital Resources

During the years ended July 31, 2001 and 2000 we only generated revenues of
approximately $1,001,000 and $1,042,000, and incurred net losses of
approximately $16,665,000 and $16,664,000 and had cash flow deficiencies from
operating activities of approximately $5,563,000 and $8,460,000, respectively.
As a result, we had a cash balance of only $13,000, a working capital deficiency
of $290,000 and an accumulated deficit of approximately $34,539,000 as of July
31, 2001. In addition, we believe that we will continue to incur net losses and
cash flow deficiencies from operating activities through at least July 31, 2002.
These matters raise substantial doubt about our ability to continue as a going
concern.



                                       27
<PAGE>

Our net losses in 2001 and 2000 included noncash operating expenses of
approximately $10,177,000 and $8,355,000, respectively. Primarily as a result of
the sale of the advertiser-based financial webcast operations of JAGfn as of the
beginning of the six months ended July 31, 2001 and the termination of our
efforts to generate foreign revenues prior to January 31, 2001, we reduced our
net loss from approximately $14,111,000 for the six months ended January 31,
2001 to $2,554,000 for the six months ended July 31, 2001. The net loss of
approximately $2,554,000 for the six months ended July 31, 2001 included noncash
charges for depreciation and amortization of approximately $1,441,000. We
believe that, in the absence of a substantial increase in subscription revenues,
it is probable that we will continue to incur losses and negative cash flows
from operating activities through at least July 31, 2002 and that we will need
to obtain additional equity or debt financing to sustain our operations until we
can market our services, expand our customer base and achieve profitability.

Subsequent to July 31, 2001 we entered into an agreement with an investment
partnership pursuant to which we have, in effect, "put" options whereby, subject
to certain conditions, we can require the investment partnership to purchase
shares of our common stock from time to time at an aggregate purchase price of
$10,000,000. We will be able to exercise the put options over a period of up to
36 months beginning on September 27, 2001, the date on which a registration
statement under the Securities Act of 1933 (the "Act") filed with the Securities
and Exchange Commission (the "SEC") by us for the registration of the shares
issuable to the investment partnership became effective. During the 12-month
period following the effective date of the registration statement, the minimum
amount of funding to be provided by the investment partnership will be $100,000
per month. Our ability to obtain additional amounts will depend, among other
things, on the market value and average daily trading volume of our shares and
the ability of the investment partnership to fund its commitment.

Management believes that the Company will be able to generate sufficient
revenues from its remaining facsimile transmission and web site operations and
obtain sufficient financing from its agreement with the investment partnership
or through other financing agreements to enable it to continue as a going
concern through at least July 31, 2002. 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.

Our cash and cash equivalent position of approximately $13,000 as of July 31,
2001 results primarily from a series of private placements that occurred from
June 2000 through January 31, 2001.

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


                                       28
<PAGE>

to purchase 275,000 shares of our common stock at $2.00 per share. The aggregate
fair value of the warrant issued to the investor of $934,285 was recorded as a
debt discount, and the fair value of the warrants issued to placement agents and
their counsel of $599,500 plus cash of $285,000 was initially recorded as
deferred finance costs. During the year ended July 31, 2001 the Investor
converted $1,052,000 of principal (which had a carrying value net of debt
discounts of approximately $715,000) and approximately $37,000 of accrued
interest into 3,376,952 shares of common stock.

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

On October 20, 2000, Thomson Kernaghan & Co., Ltd. agreed to provide us with
additional financing totaling $3,000,000 through periodic purchases of a total
of six additional debentures during the period from October 20, 2000 to December
1, 2000. Subsequently, Thomson Kernaghan assigned its rights and obligations to
the Investor. Each of the six debentures had a principal balance of $500,000,
bore interest at an annual rate of 8% and matured three years from the date of
its issuance. As additional consideration in connection with the sale of the New
Debentures, we paid a 10% fee to Thomson Kernaghan and we also issued a warrant
to the Investor for the purchase of 3,000,000 shares of our common stock at
$1.25 per share that was exercisable through October 20, 2005. The warrant
issued to the Investor had an estimated fair value of $3,450,000, as determined
by the Black-Scholes option-pricing model method pursuant to the provisions of
SFAS 123, of which $2,700,000 (which equals the principal balance of the
debentures less the 10% fee paid to Thomson Kernaghan) was recorded as debt
discount and/or deferred financing costs. In January 2001, the Investor
purchased two additional convertible debentures, each of which had a principal
balance of $200,000. Since these debentures were convertible immediately upon
issuance, the fair value of beneficial conversion rights of $217,770 was charged
to interest expense during the year ended July 31, 2001.

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

Through July 31, 2001 we have entered into agreements with approximately
[eighty-five] commentators, employees and other consultants expiring through
December 2003. Through July 31, 1999 aggregate consideration paid under these
agreements consisted of cash payments of $564,000, the issuance of 120,000
shares of common stock with a fair value of $1,460,000, the grant of options to


                                       29
<PAGE>

purchase 235,000 shares of common stock at $2.00 per share with a fair value of
$1,661,850 and the grant of options to purchase 100,000 shares of common stock
at $16.25 per share with a fair value of $165,000. During the year ended July
31, 2000, we paid cash consideration of approximately $2,656,000 and granted
options and warrants to purchase 4,282,500 shares of common stock at prices
ranging from $1.50-$6.00 per share with a fair value of approximately
$11,189,000 in connection with all our employment and consulting agreements. In
addition, during the year ended July 31, 2000 pursuant to an amended consulting
agreement, we cancelled options to purchase 100,000 shares of common stock at
$16.25 per share and issued the consultant options to purchase 200,000 shares of
common stock at $2.00 share with a fair value of $894,000. The fair value of the
original options was $165,000. Accordingly, during the year ended July 31, 2000
we recorded additional unearned compensation of $729,000. During the year ended
July 31, 2001 we paid aggregate cash consideration of approximately $1,272,000
pursuant to such contracts. In addition, during the year ended July 31, 2001 we
granted options and warrants for the purchase of 3,959,000 shares of common
stock at prices ranging from $.10 to $2.00 per share with a fair value of
approximately $1,949,000 and recognized a charge for amortization of unearned
compensation of approximately $8,181,124. The fair value of the options and
warrants granted are computed in accordance with FASB 123 "Accounting for Stock
Based Compensation." The unearned compensation will be amortized as a non-cash
charge to operations on a straight-line basis over the life of the applicable
agreements.



Pursuant to the terms of the purchase agreement for the sale of JAGfn, our
obligations under substantially all of the above consulting and employment
agreements were assumed by the Investor. As a result, unearned compensation of
approximately $1,660,000 was charged against the sale of JAGfn.


During year ended July 31, 2001 we used approximately $5,563,000 in our
operations. The major uses of this cash was to fund our net loss for the year
ended July 31, 2001. In addition, during the year ended July 31, 2001 we
incurred non-cash charges of approximately $8,181,000 related to the
amortization of unearned compensation and approximately $1,379,000 of non-cash
interest expense charges in connection with the convertible debentures.

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


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



                                       30
<PAGE>

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



  Current assets-prepaid expenses                                 $ 225,000
  Equipment, net                                                    567,343
  Capitalized web site development costs, net                        64,224
  Other assets                                                       96,793
                                                              -------------
             Total assets                                           953,360
                                                               ------------

  Current liabilities:
          Accounts payable and accrued expenses                    (341,044)
          Current portion of capital lease obligations              (47,186)
          Intercompany advances                                  (4,553,373)
                                                               -------------
             Total current liabilities                           (4,941,603)
  Capital lease obligations, net of current portion                 (20,743)
                                                             ---------------
             Total liabilities                                   (4,962,346)
                                                               ------------
  Members' deficiency (A)                                       $(4,008,986)
                                                                ===========





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





                                       31
<PAGE>

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





Cash paid by purchaser                                     $1,002,147

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

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

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



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



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


We do not believe that our business is subject to seasonal trends or inflation.
On an ongoing basis, we will attempt to minimize any effect of inflation on our
operating results by controlling operating costs and whenever possible, seeking
to insure that subscription rates reflect increases in costs due to inflation.

The FASB and the Accounting Standards Committee of the American Institute of
Certified Public Accountants had issued certain accounting pronouncements as of
July 31, 2001 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 2001 and 2000 or that they will have a significant affect at the time
they become effective.



                                       32
<PAGE>



Item 7.           FINANCIAL STATEMENTS

The financial statements of JagNotes provided pursuant to Item 7 of Form 10-KSB
are attached separately at the rear of this Annual Report on Form 10-KSB.



                                       33
<PAGE>




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

         None.




                                       34
<PAGE>

                                    PART III

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

Following is certain information about our executive officers and directors.

         Gary Valinoti, age 43, was a co-founder of the predecessor to
JagNotes.com Inc. and has served as the President and Chief Executive Officer of
JagNotes.com Inc. since March 1999. Mr. Valinoti is also a member of JagNotes'
Board of Directors. From August 1992 - March 1999 Mr. Valinoti served as
President, and as a member of the Board of Directors, of JagNotes, Inc., the
company that produced the JagNotes fax service throughout that period. Prior to
his involvement with JagNotes, Inc., Mr. Valinoti held positions with various
firms in the securities industry including Mosely, Hallgarten, Estabrook &
Weeden where he was involved in institutional and currency trading, and started
the firm's arbitrage department. Mr. Valinoti attended Wagner College.

         Thomas J. Mazzarisi, age 44, has served as JagNotes' Executive Vice
President and General Counsel since March 1999 and is also a member of the
JagNotes' Board of Directors. From 1997 until joining JagNotes 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 42, is our Executive Vice President, Chief
Operating Officer and Secretary and is on our Board of Directors. Prior to
joining JagNotes 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.

         Raymond G. Taylor, age 42, is our Chief Financial Officer. Prior to
becoming our Chief Financial Officer on April 1, 2001, Mr. Taylor was Vice
President, Finance & Business Affairs of JagNotes since July 1999. Prior to
joining JagNotes, Mr. Taylor held various finance-related positions, including,
Chief Financial Officer of his own privately held company from 1987 to 1999,
Controller of Worldwide Holdings Real Estate Partnership from 1986 to 1987,
Senior Auditor of Kenneth Lebenthal Company from 1983 to 1986, and Auditor of
Murphy, Hauser, O'Conner and Quinn, CPA from 1981 to 1983. Mr. Taylor received a
B.S. degree in accounting from Manhattan College.




                                       35
<PAGE>



         SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Under the securities laws of the United States, our directors,
executive officers and any person holding more than 10% of our common stock are
required to file initial forms of ownership of our common stock and reports of
changes in that ownership at the Securities and Exchange Commission. Specific
due dates for these forms have been established, and we are required to disclose
in this report any failure to file by these dates.

         Based solely on our review of the copies of such forms received by it
with respect to fiscal 2001, or written representations from certain reporting
persons, to the best of our knowledge, all reports were filed on a timely basis
except that Chief Financial Officer, Raymond G. Taylor, reported his Form 3
late.

                                       36

<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, 1999, 2000 and
2001. Except as listed in the table below, no executive officer holding office
in fiscal year 2001 received total annual salary and bonus exceeding $100,000.
No such officers have been awarded any stock options, stock appreciation rights
or other long term or incentive compensation not reflected below.

<TABLE>
<CAPTION>
------------------------------ --------- ------------------------------------------------------ --------------------
                                                          Annual Compensation
                                         ------------------------------------------------------
                                                                                 Other
                               Fiscal                                            Annual             All Other
Name and Principal Position     Year            Salary           Bonus          Compensation        Compensation
------------------------------ --------- ------------------- ------------- -------------------- --------------------
<S>                            <C>            <C>             <C>           <C>                 <C>
Gary Valinoti, President,      2001           $150,000            --                 --                 (1)(2)
Chief Executive Officer  and   2000           $100,000            --                 --                   --
director                       1999           $110,550            --                 --                   --
------------------------------ --------- ------------------- ------------- -------------------- --------------------
Stephen J. Schoepfer,          2001           $150,000            --                 --                 (1)(2)
Executive Vice President,      2000           $100,000       $50,000                 --                   --
Chief Operating Officer and    1999              --               --                 --                   --
Secretary
------------------------------ --------- ------------------- ------------- -------------------- --------------------
Thomas J. Mazzarisi,           2001           $150,000            --                 --                 (1)(2)
Executive Vice President and   2000           $100,000            --                 --                   --
General Counsel                1999              --               --                 --                   --
------------------------------ --------- ------------------- ------------- -------------------- --------------------
Raymond G. Taylor,             2001            $65,000            --                 --                   --
Chief Financial Officer        2000              --               --                  --                  --
                               1999              --               --                 --                   --
------------------------------ --------- ------------------- ------------- -------------------- --------------------
Stephen R. Russo               2001              --               --                 --                   --
(Mr. Russo served as Chief     2000            $20,000            --                 --                   --
Financial Officer of           1999              --               --                 --                   --
JagNotes.com Inc. until
April 2001, but is no longer
employed by JagNotes.).
------------------------------ --------- ------------------- ------------- -------------------- --------------------
</TABLE>

                                       37
<PAGE>

<TABLE>
<S>                            <C>            <C>             <C>           <C>                 <C>
------------------------------ --------- ------------------- ------------- -------------------- --------------------
Jeffrey Goss (Mr. Goss         2001              --              --              --                   --
served as Secretary and Vice   2000           $ 86,997           --              --                   --
President of JagNotes.com      1999           $110,550           --              --                   --
Inc. until June 2000, but is
no longer employed by
JagNotes.).
------------------------------ --------- ------------------- ------------- -------------------- --------------------
Anthony Salandra (Mr.          2001              --              --              --                   --
Salandra served as President   2000              --              --              --                   --
and director of JagNotes.com   1999           $110,550           --              --                   --
Inc. during fiscal year
1999, but is no longer
employed by JagNotes).
------------------------------ --------- ------------------- ------------- -------------------- --------------------
Barry Belzer (Mr. Belzer       2001              --              --               --                   --
served as Secretary and        2000              --              --               --                   --
director of JagNotes, Inc.     1999           $110,550           --               --                   --
during fiscal year 1999, but
is no longer employed by
JagNotes).
------------------------------ --------- ------------------- ------------- -------------------- --------------------
</TABLE>


(1)      Received 5.0% equity interest in JAGfn Broadband LLC, our former
         webcast subsidiary.

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

We expect that executive compensation will increase for the fiscal year ending
July 31, 2002.

Director Compensation

         We currently do not compensate our directors.



                                       38
<PAGE>

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 December 2000. 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 JagNotes. 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 of common stock that may be subject to
outstanding awards under the plan will not exceed 6,000 ,000 shares of common
stock. At July 31, 2001, the number of shares deliverable upon exercise of
incentive stock options was limited to 2,096,444. As of July 31, 2001, there
were a total of 5,117,500 shares of common stock subject to outstanding options
granted under the plan. The foregoing options have an exercise price ranging
from $0.10 to $3.50 per share.

         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


                                       39
<PAGE>

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 JagNotes complies with
certain requirements under Section 162(m).

Option Grants



         The following table sets forth information regarding options to acquire
shares of our common stock granted under our Long-Term Incentive Plan to our
Chief Executive Officer and our other three executive officers as of August 31,
2001.



    Option Grants in Period beginning August 1, 2000 and ending July 31, 2001

<TABLE>
<CAPTION>

                                           Percentage of
                                               Total
                                         Options Granted to
                                             Employees
                                              (net of
                                            forfeitures)
                                           in the period
                            Number of        beginning
                            Securities   August 1, 2000 and
                            Underlying         ended            Exercise or
                             Options         August 31,       Base Price Per     Market Price on
Name                         Granted            2001             ($/Share)      the Date of Grant   Expiration Date
----                        --------     -------------------  --------------    -----------------   ---------------
<S>                         <C>          <C>                  <C>               <C>                 <C>
Gary Valinoti               1,000,000          19.53%              $0.02              $0.085             8/31/11
Stephen J. Schoepfer        1,000,000          19.53%               0.02               0.085             8/31/11
Thomas J. Mazzarisi         1,000,000          19.53%               0.02               0.085             8/31/11
Raymond G. Taylor             100,000           2.00%               0.10               0.045             5/1/11
</TABLE>


Employment Contracts

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

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

                                       40
<PAGE>

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

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

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

         In addition, pursuant to these executive agreements, each of the above
named executives is entitled to the same medical and other benefits, including
health and life insurance coverage, as are provided to other employees of
JagNotes. In the event JagNotes terminates the employment of any of such
executives "without cause" or such executive resigns for "good reason" as
defined in the executive agreements, such executive shall be entitled to receive
(i) continued medical and life insurance coverage for a period equal to the
greater of one year or the number of years and fractions thereof between the
date of such termination and the end of the term (the "Severance Period"), (ii)
a lump sum cash payment equal to the executive's highest rate of annual salary
in effect during the term multiplied by the Severance Period, (iii) a lump sum
cash payment equal to the number of accrued and unused vacation days calculated
at the executive's then current salary rate and (iv) accelerated vesting of all
of the executive's outstanding stock options. Such cash payments will be made
within 10 days of termination of employment, and shall not be subject to offset
for amounts earned by the executive in respect of any subsequent employment, nor
is the executive required to seek any such subsequent employment.

         Further, immediately prior to a "change in control" of JagNotes (as
defined in our Long-Term Incentive Plan), the above-named executives shall also
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.

         From February 1, 2001 through August 24, 2001, Financial Broadband
assumed 90% of the salary payable under the above-described executive
agreements.

         Pursuant to the terms and conditions of these executive agreements, we
have cancelled outstanding options granted to each of Messrs. Valinoti,
Schoepfer and Mazzarisi to purchase an aggregate of 900,000 shares of our common
stock exercisable at a price per share of $0.25. In lieu of these options, we
have granted to each of Messrs. Valinoti, Schoepfer and Mazzarisi to purchase an
aggregate of 1,000,000 shares of our common stock exercisable at a price per
share of $0.02, all of which vested immediately upon the execution of the
executive 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.



                                       41
<PAGE>

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 JagNotes' best interest. In the case of an action brought by or in the
right of JagNotes, 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 JagNotes, 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.


                                       42
<PAGE>



ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information with respect to
beneficial ownership of the common stock as of the date of this annual report on
Form 10-KSB by (i) each person known by JagNotes to be the beneficial owner of
more than five percent of the common stock, (ii) each executive officer and
director of JagNotes, and (iii) all executive officers and directors of JagNotes
as a group.

See also "Directors and Executive Officers of the Registrant" and "Executive
Compensation."


<TABLE>
<CAPTION>
---------------------------------------------- -------------------------------------------- ------------------------
Name and Address of Beneficial Owner           Number of Shares Beneficially Owned          Percentage of Class(1)
---------------------------------------------- -------------------------------------------- ------------------------
<S>                                            <C>                                          <C>
Gary Valinoti (President, CEO and Director)                  4,454,500(2) (3)                       19.52%
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433
---------------------------------------------- -------------------------------------------- ------------------------
Raymond Taylor (Chief Financial Officer)                         100,000  (4)                          *
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433
---------------------------------------------- -------------------------------------------- ------------------------
Thomas Mazzarisi  (Executive Vice President,                  1,110,000(3)                           4.87%
General Counsel and Director)
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433
---------------------------------------------- -------------------------------------------- ------------------------
Stephen Schoepfer (Executive Vice President,                  1,075,000(3)                           4.71%
Chief Operating Officer and Director)
6865 SW 18th Street, Suite B13, Boca Raton,
Florida 33433
---------------------------------------------- -------------------------------------------- ------------------------
All executive officers and directors as a                       6,739,500                           27.05%
group (4 persons)
---------------------------------------------- -------------------------------------------- ------------------------
</TABLE>


*Less than 1%.

(1)      Based on 21,815,598 shares outstanding as of September 19, 2001, plus
         the number of shares which the beneficial owner has the right to
         acquire within 60 days, if any.

(2)      Includes 444,500 shares owned Mr. Valinoti's wife, Cathleen Valinoti.

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

(4)      Includes 100,000 shares issuable upon the exercise of stock options.


                                       43
<PAGE>



ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Several of our officers and directors, including Gary Valinoti (our Chief
Executive Officer, President and director), Stephen J. Schoepfer (our Executive
Vice President, Chief Operating Officer, Secretary and director), Thomas J.
Mazzarisi (our Executive Vice President, General Counsel and director) and
Raymond G. Taylor (our Chief Financial Officer) also served during part of
fiscal year 2001 as officers of Financial Broadband Holdings, Inc. and its
wholly owned subsidiary, Financial Broadband Network, Inc. Mr. Valinoti also
served as a director of both Financial Broadband Holdings and Financial
Broadband Network. The principal business of Financial Broadband Network is our
former webcast business which was sold to CALP II Limited Partnership on
February 1, 2001. Each of Messrs. Valinoti, Schoepfer, Mazzarisi and Taylor
resigned from their respective board and officer positions at Financial
Broadband Holdings and Financial Broadband Network in August 2001. We understand
that Financial Broadband Holdings and Financial Broadband Network have ceased
operations.


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


(a)(1)   Financial Statements.  See index to Financial Statements on page 33.


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

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

     Exhibit No.  Description
     -----------  ------------
         2.1      Agreement and Plan of Reorganization dated March 16, 1999
                  between Professional Perceptions, Inc. (now known as
                  JagNotes.com Inc.); Harold Kaufman, Jr., an officer, director
                  and principal stockholder thereof; NewJag, Inc.; and the
                  stockholders of NewJag, Inc. (1)

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

         3.1      Articles of Incorporation of Registrant, as amended. (2)

         3.2      Bylaws of Registrant (2)

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

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

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

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

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

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

                                       44
<PAGE>

         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)


         10.1     1999 Long Term Incentive Plan, as amended. (9)

         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)

                                       45
<PAGE>

         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)

         21.1     List of Subsidiaries.


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

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

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

(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.



                                       46
<PAGE>

(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.


(b)      Reports on Form 8-K

         We filed one Current Report on Form 8-K during the last quarter of the
fiscal year ended July 31, 2001. Our Current Report on Form 8-K, dated June 21,
2000, reported that we had entered into a letter of intent to acquire from
Canadian Advantage Limited Partnership, Advantage Bermuda Fund Limited, VC
Advantage L.P., VC Advantage (Bermuda Fund) Ltd. and Ashton Technology Group,
Inc. an aggregate of 84.88% of the outstanding capital stock of Financial
Broadband Holdings, Inc. On August 27, 2001, we announced that management had
decided not to proceed with, or entertain further discussions regarding, the
proposed acquisition of Financial Broadband Holdings, Inc.



                                       47
<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.

                            JAGNOTES.COM, INC.


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


Dated: October 24, 2001



         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.


<TABLE>
<CAPTION>

                Signature                                        Title                                Date
<S>                                            <C>                                             <C>
                                               Chief Executive Officer, President and
/s/ Gary Valinoti                              Director (Principal Executive Officer)          October 24, 2001
------------------------------------------
Gary Valinoti

/s/ Stephen J. Schoepfer                       Chief Operating Officer and Director            October 24, 2001
------------------------------------------
Stephen J. Schoepfer

                                               Chief Financial Officer (Principal
/s/ Raymond G. Taylor                          Financial and Accounting Officer)               October 24, 2001
------------------------------------------
Raymond G. Taylor

                                               Executive Vice President, General Counsel
/s/ Thomas J. Mazzarisi                        and Director                                    October 24, 2001
------------------------------------------
Thomas J. Mazzarisi

</TABLE>



                                       48
<PAGE>


                       JagNotes.com Inc. and Subsidiaries




                          Index to Financial Statements


                                                                       PAGE
                                                                       ----

Report of Independent Public Accountants                                F-2

Consolidated Balance Sheet
     July 31, 2001                                                      F-3

Consolidated Statements of Operations
     Years Ended July 31, 2001 and 2000                                 F-4

Consolidated Statements of Changes in Stockholders' Equity
     Years Ended July 31, 2001 and 2000                                 F-5

Consolidated Statements of Cash Flows
     Years Ended July 31, 2001 and 2000                                 F-6

Notes to Consolidated Financial Statements                            F-7/25



                                      *  *  *



                                      F-1
<PAGE>


                    Report of Independent Public Accountants


To the Board of Directors and Stockholders
JagNotes.com Inc.


We have audited the accompanying consolidated balance sheet of JagNotes.com Inc.
and Subsidiaries as of July 31, 2001, and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for the years ended
July 31, 2001 and 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of JagNotes.com Inc.
and Subsidiaries as of July 31, 2001, and their results of operations and cash
flows for the years ended July 31, 2001 and 2000, in conformity with accounting
principles generally accepted in the United States of America.

The consolidated financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As further discussed
in Note 2 to the consolidated financial statements, the Company's operations
have generated recurring losses and it had a working capital deficiency and an
accumulated deficit as of July 31, 2001. 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
September 12, 2001



                                      F-2
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                           Consolidated Balance Sheet
                                  July 31, 2001
<TABLE>
<CAPTION>
                                               Assets

<S>                                                                            <C>
Current assets:
    Cash and cash equivalents                                                   $     13,438
    Accounts receivable                                                               41,084
    Other current assets                                                              99,620
                                                                                ------------
           Total current assets                                                      154,142

Equipment, net of accumulated depreciation of $76,950                                 93,608
Capitalized web site development costs, net of accumulated
    amortization of $175,830                                                         351,671
                                                                                ------------

           Total                                                                $    599,421
                                                                                ============


                                Liabilities and Stockholders' Equity

Current liabilities:
    Accounts payable and accrued expenses                                       $    263,501
    Deferred revenues                                                                180,364
                                                                                ------------
           Total liabilities                                                         443,865
                                                                                ------------

Commitments and contingencies

Stockholders' equity:
    Common stock, par value $.00001 per share; 19,312,807
        shares issued and outstanding                                                    193
    Additional paid-in capital                                                    35,669,723
    Unearned compensation                                                           (975,090)
    Accumulated deficit                                                          (34,539,270)
                                                                                ------------
           Total stockholders' equity                                                155,556
                                                                                ------------

           Total                                                                $    599,421
                                                                                ============
</TABLE>
See Notes to Consolidated Financial Statements.


                                      F-3
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                      Consolidated Statements of Operations
                       Years Ended July 31, 2001 and 2000
<TABLE>
<CAPTION>
                                                               2001               2000
                                                           ------------      -------------
<S>                                                        <C>               <C>
Revenues                                                   $  1,001,463      $   1,042,033
                                                           ------------      -------------

Operating expenses:
    Cost of revenues                                          7,205,174          8,132,400
    Write-off of capitalized web site costs                                        407,375
    Selling expenses                                            147,300          1,865,212
    General and administrative expenses                       8,497,629          5,553,837
                                                           ------------      -------------
        Totals                                               15,850,103         15,958,824
                                                           ------------      -------------

Loss from operations                                        (14,848,640)       (14,916,791)

Other income (expense):
    Interest income                                              13,223            147,809
    Gain on sale of subsidiary                                  196,959
    Write-off of investments in other companies                (500,000)
    Interest expense                                         (1,526,811)        (1,894,676)
                                                           ------------      -------------

Net loss                                                   $(16,665,269)     $ (16,663,658)
                                                           ============      =============


Basic net loss per share                                          $(.93)            $(1.18)
                                                                  =====             ======


Basic weighted average common shares outstanding             17,853,515         14,166,218
                                                           ============      =============
</TABLE>
See Notes to Consolidated Financial Statements.



                                      F-4
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

           Consolidated Statements of Changes in Stockholders' Equity
                       Years Ended July 31, 2001 and 2000
<TABLE>
<CAPTION>
                                                  Common Stock
                                             ----------------------   Additional
                                              Number of                Paid-in        Unearned      Accumulated
                                               Shares       Amount     Capital      Compensation      Deficit         Total
                                              ---------     ------    ----------    ------------    -----------   -------------
<S>                                         <C>            <C>      <C>            <C>             <C>            <C>
Balance, August 1, 1999                      13,996,290      $140    $10,920,215    $(3,015,388)    $(1,210,343)   $  6,694,624

Sales of common stock through
    private placement, net of
    expenses of $275,040                        785,715         8      2,474,952                                      2,474,960

Exercise of stock options                        18,000                   36,000                                         36,000

Effects of issuance of stock
    options and warrants in
    exchange for services                                             11,918,685    (11,918,685)

Effects of issuance of beneficial
    conversion rights and warrants
    in connection with private place-
    ment of convertible debenture                                      3,327,678                                      3,327,678

Amortization of unearned com-
    pensation                                                                         6,053,522                       6,053,522

Net loss                                                                                            (16,663,658)    (16,663,658)
                                             ----------      ----    -----------    -----------    ------------    ------------
Balance, July 31, 2000                       14,800,005       148     28,677,530     (8,880,551)    (17,874,001)      1,923,126

Sales of common stock and
    warrants pursuant to equity
    financing agreement, net of
    expenses of $116,670                      1,135,850        11      1,049,989                                      1,050,000

Partial conversion of convertible
    debentures                                3,376,952        34      1,088,564                                      1,088,598

Effects of issuance of stock
    options and warrants in
    exchange for services                                              1,935,870     (1,935,870)

Effects of issuance of beneficial
    conversion rights and warrants
    in connection with private place-
    ment of convertible debentures                                     2,917,770                                      2,917,770

Amortization of unearned com-
    pensation                                                                         8,181,124                       8,181,124

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

Net loss                                                                                            (16,665,269)    (16,665,269)
                                             ----------      ----    -----------    -----------    ------------    ------------
Balance, July 31, 2001                       19,312,807      $193    $35,669,723    $  (975,090)   $(34,539,270)   $    155,556
                                             ==========      ====    ===========    ===========    ============    ============
</TABLE>
See Notes to Consolidated Financial Statements.


                                      F-5
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows
                       Years Ended July 31, 2001 and 2000
<TABLE>
<CAPTION>
                                                                                                2001               2000
                                                                                            ------------       ------------
<S>                                                                                        <C>                <C>
Operating activities:
    Net loss                                                                                $(16,665,269)      $(16,663,658)
    Adjustments to reconcile net loss to net cash used in
        operating activities:
        Depreciation                                                                             114,429             24,076
        Amortization of capitalized web site development costs                                   199,578
        Write-off of capitalized web site development costs                                                         407,375
        Write-off of investments in other companies                                              500,000
        Amortization of unearned compensation                                                  8,181,124          6,053,522
        Gain on sale of subsidiary                                                              (196,959)
        Charges to interest expense for:
           Issuance of beneficial conversion rights                                              217,770          1,793,893
           Amortization of deferred financing costs and debt discount                          1,161,234             75,783
        Changes in operating assets and liabilities:
           Accounts receivable                                                                     8,950            (31,134)
           Other current assets                                                                  661,306           (382,394)
           Other assets                                                                          (22,540)
           Accounts payable and accrued expenses                                                 295,345            177,805
           Deferred revenues                                                                    (162,336)            59,478
           Noncurrent accrued interest payable                                                   144,771             25,000
                                                                                            ------------       ------------
               Net cash used in operating activities                                          (5,562,597)        (8,460,254)
                                                                                            ------------       ------------

Investing activities:
    Purchases of equipment                                                                      (268,575)          (385,740)
    Web site development costs capitalized                                                       (77,068)          (702,500)
    Proceeds from sale of subsidiary                                                           1,002,147
    Investments in other companies                                                                                 (350,000)
    Purchases of other assets                                                                                       (62,248)
                                                                                            ------------       ------------
               Net cash provided by (used in) investing activities                               656,504         (1,500,488)
                                                                                            ------------       ------------

Financing activities:
    Payments of capital lease obligations                                                        (37,055)           (37,554)
    Proceeds from private placement of convertible debentures                                  3,400,000          2,500,000
    Costs paid in connection with private placement of
        convertible debentures                                                                  (300,000)          (285,000)
    Net proceeds from private placements of common stock
        and units of common stock and warrants                                                 1,050,000          2,474,960
    Proceeds from exercise of stock options                                                                          36,000
                                                                                            ------------       ------------
               Net cash provided by financing activities                                       4,112,945          4,688,406
                                                                                            ------------       ------------

Net decrease in cash and cash equivalents                                                       (793,148)        (5,272,336)
Cash and cash equivalents, beginning of year                                                     806,586          6,078,922
                                                                                            ------------       ------------

Cash and cash equivalents, end of year                                                      $     13,438       $    806,586
                                                                                            ============       ============

Supplemental disclosure of cash flow data:
    Interest paid                                                                           $          -       $          -
                                                                                            ============       ============
    Income taxes paid                                                                       $          -       $          -
                                                                                            ============       ============
</TABLE>
See Notes to Consolidated Financial Statements.


                                      F-6
<PAGE>



                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 1 - Organization and business:
                JagNotes.com Inc., a Nevada corporation, and its subsidiaries
                (the "Company") gather and compile financial and investment
                information from contacts at financial institutions, experienced
                journalists, money managers, analysts and other Wall Street
                professionals and generate revenues by releasing such
                information to subscribers on a timely basis through facsimile
                transmissions and a web site, www.Jagnotes.com. Subscribers
                receive, among other things, a daily early-morning investment
                report that summarizes newly issued research, analyst opinions,
                upgrades, downgrades and analyst coverage changes from various
                investment banks and brokerage houses. Management considers all
                of the financial services provided to subscribers to be within
                the same business segment.

                The Company commenced operations in 1989 and its subscribers
                were initially limited primarily to institutional investors.
                During the year ended July 31, 2000, the Company opened its web
                site and began targeting retail subscribers in an effort to
                expand its subscriber base. In September 2000, a subsidiary,
                JAGfn Broadband, L.L.C. ("JAGfn"), started an advertiser-based
                financial webcast which was sold on February 1, 2001 (see Note
                6). Another subsidiary, JagNotes.Euro.com Ltd. ("Euro"), was
                attempting to generate foreign revenue. Euro's activities were
                terminated prior to January 31, 2001.

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 $920,000 and $1,042,000, and it incurred net
                    losses of approximately $16,665,000 and $16,664,000 and cash
                    flow deficiencies from operating activities of approximately
                    $5,563,000 and $8,460,000 during 2001 and 2000,
                    respectively. As a result, the Company had a cash balance of
                    only $13,000, a working capital deficiency of $290,000 and
                    an accumulated deficit of approximately $34,539,000 as of
                    July 31, 2001. In addition, management believes that the
                    Company will continue to incur net losses and cash flow
                    deficiencies from operating activities through at least July
                    31, 2002. These matters raise substantial doubt about the
                    Company's ability to continue as a going concern.



                                      F-7
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
        (continued):
             Basis of presentation (concluded):
                    The Company's net losses in 2001 and 2000 included noncash
                    operating expenses of approximately $8,995,000 and
                    $6,485,000, respectively. Primarily as a result of the sale
                    of the advertiser-based financial webcast operations of
                    JAGfn as of the beginning of the six months ended July 31,
                    2001 and the termination of its efforts to generate foreign
                    revenues prior to January 31, 2001, the Company reduced its
                    net loss from approximately $14,111,000 for the six months
                    ended January 31, 2001 to $2,554,000 for the six months
                    ended July 31, 2001. The net loss of approximately
                    $2,554,000 for the six months ended July 31, 2001 included
                    noncash charges for depreciation and amortization of
                    approximately $1,441,000. Management believes that, in the
                    absence of a substantial increase in subscription revenues,
                    it is probable that the Company will continue to incur
                    losses and negative cash flows from operating activities
                    through at least July 31, 2002 and that the Company will
                    need to obtain additional equity or debt financing to
                    sustain its operations until it can market its services,
                    expand its customer base and achieve profitability.

                    As further explained in Note 11, the Company entered into an
                    agreement with an investment partnership pursuant to which
                    the Company has, in effect, "put" options whereby, subject
                    to certain conditions, it can require the investment
                    partnership to purchase shares of its common stock from time
                    to time at an aggregate purchase price of $10,000,000. The
                    Company will be able to exercise the put options over a
                    period of up to 36 months from the date a registration
                    statement under the Securities Act of 1933 (the "Act") filed
                    with the Securities and Exchange Commission (the "SEC") by
                    the Company for the registration of the shares issuable to
                    the investment partnership becomes effective. During the
                    12-month period following the effective date of the
                    registration statement, the minimum amount of funding to be
                    provided by the investment partnership will be $100,000 per
                    month. The Company's ability to obtain additional amounts
                    will depend, among other things, on the market value and
                    average daily trading volume of its shares and the ability
                    of the investment partnership to fund its commitment.

                    Management believes that the Company will be able to
                    generate sufficient revenues from its remaining facsimile
                    transmission and web site operations and obtain sufficient
                    financing from its agreement with the investment partnership
                    or through other financing agreements to enable it to
                    continue as a going concern through at least July 31, 2002.
                    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>


                       JagNotes.com 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 JagNotes.com 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.

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


                                      F-9
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
        (continued):
                Web site development costs (concluded):
                    The Company capitalized costs of approximately $527,000 and
                    $702,000 in 2001 and 2000, respectively, that were incurred
                    in connection with the acquisi-tion and development of
                    software in the application and infrastructure development
                    stage and the enhancement of its web sites. The Company also
                    redesigned the software it initially developed for its web
                    site and wrote down previously capitalized web site
                    development costs of approximately $407,000 during 2000.

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

                Impairment of long-lived assets:
                    The Company has adopted the provisions of Statement of
                    Financial Accounting Standards No. 121, "Accounting for the
                    Impairment of Long-Lived Assets and for Long-Lived Assets to
                    be Disposed of" ("SFAS 121"). Under SFAS 121, impairment
                    losses on long-lived assets, such as equipment and
                    capitalized web site development costs, are recognized when
                    events or changes in circumstances indicate that the
                    undiscounted cash flows estimated to be generated by such
                    assets are less than their carrying value and, accordingly,
                    all or a portion of such carrying value may not be
                    recoverable. Impairment losses are then measured by
                    comparing the fair value of assets to their carrying
                    amounts.

                Advertising:
                    The Company expenses the cost of advertising and promotions
                    as incurred. Advertising costs charged to operations
                    amounted to $49,164 and $1,296,386 in 2001 and 2000,
                    respectively.

                Income taxes:
                    The Company accounts for income taxes pursuant to the asset
                    and liability method which requires deferred income tax
                    assets and liabilities to be computed annually for temporary
                    differences between the financial statement and tax bases of
                    assets and liabilities that will result in taxable or
                    deductible amounts in the future based on enacted tax laws
                    and rates applicable to the periods in which the differences
                    are expected to affect taxable income. Valuation allowances
                    are established when necessary to reduce deferred tax assets
                    to the amount expected to be realized. The income tax
                    provision or credit is the tax payable or refundable for the
                    period plus or minus the change during the period in
                    deferred tax assets and liabilities.



                                      F-10
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 2 - Basis of presentation and summary of significant accounting policies
        (concluded):
                Stock options:
                    In accordance with the provisions of Statement of Financial
                    Accounting Standards No. 123, "Accounting for Stock-Based
                    Compensation" ("SFAS 123"), the Company recognizes the cost
                    of options, warrants and other equity instruments issued to
                    employees and nonemployees as consideration for services to
                    expense over the periods in which the related services are
                    rendered by a charge to compensation cost and a
                    corresponding credit to equity (additional paid-in capital).
                    Generally, cost is accrued based on the fair value of the
                    equity instruments at the date of issuance, which is
                    estimated based on the Black-Scholes or another
                    option-pricing model that meets criteria set forth in SFAS
                    123, and the assumption that all of the options or other
                    equity instruments will ultimately vest. The effect of
                    actual forfeitures is recognized as they occur.

                Net earnings (loss) per share:
                    The Company presents "basic" earnings (loss) per share and,
                    if applicable, "diluted" earnings per share pursuant to the
                    provisions of Statement of Financial Accounting Standards
                    No. 128, "Earnings per Share." Basic earnings (loss) per
                    share is calculated by dividing net income or loss by the
                    weighted average number of common shares outstanding during
                    each period. The calculation of diluted earnings per share
                    is similar to that of basic earnings per share, except that
                    the denominator is increased to include the number of
                    additional common shares that would have been outstanding if
                    all potentially dilutive common shares, such as those
                    issuable upon the exercise of stock options and warrants and
                    the conversion of convertible debentures, were issued during
                    the period, the treasury stock method had been applied to
                    the proceeds from the exercise of the options and warrants
                    and the interest costs applicable to the convertible
                    debentures had been added back to the numerator.

                    Diluted per share amounts have not been presented in the
                    accompanying consolidated statements of operations because
                    the Company had a net loss in 2001 and 2000 and the assumed
                    effects of the exercise of all of the Company's stock
                    options and warrants and the conversion of the convertible
                    debentures would have been anti-dilutive.

Note 3 - Investments in other companies:
                During 2000, the Company purchased a 7% equity interest in
                another Internet-based provider of financial and investment
                information and a 2.5% equity interest in a company that had
                developed software that management believed had the potential to
                facilitate access to the Company's web sites through web sites
                maintained by other providers of financial and investment
                information. The investees were not public companies and,
                accordingly, these investments were accounted for pursuant to
                the cost method. The aggregate carrying value of the investments
                was $500,000 as of July 31, 2000. During the fourth quarter of
                2001, management determined that the Company would not be able
                to recover any portion of these investments and, accordingly,
                the aggregate carrying value of $500,000 was written off.


                                      F-11
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 4 - Income taxes:
                As of July 31, 2001, the Company had net operating loss
                carryforwards of approximately $19,850,000 available to reduce
                future Federal taxable income which will expire from 2019
                through 2021.

                As of July 31, 2001, the Company's deferred tax assets consisted
                of the effects of temporary differences attributable to the
                following:


                    Deferred revenues, net                         $     72,000
                    Unearned compensation                             5,747,000
                    Net operating loss carryforwards                  7,930,000
                                                                   ------------
                                                                     13,749,000
                    Less valuation allowance                        (13,749,000)
                                                                   ------------

                        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, 2001.

                The Company had also offset the potential benefits of
                approximately $7,093,000 and $440,000 from its net deferred tax
                assets by equivalent valuation allowances as of July 31, 2000
                and 1999, respectively. As a result of the increase in the
                valuation allowance of $6,686,000 and $6,553,000 during 2001 and
                2000, respectively, there are no credits for income taxes
                reflected in the accompanying consolidated statements of
                operations to offset pre-tax losses.


Note 5 - Financing provided by CALP II Limited Partnership:
                Convertible debentures:
                    On June 12, 2000, the Company sold CALP II Limited
                    Partnership (the "Investor") a convertible debenture (the
                    "Debenture") that had a principal balance of $2,500,000, was
                    initially scheduled to mature on June 12, 2003 and bore
                    interest at an annual rate of 8%. The Company received gross
                    proceeds of $2,500,000 from the sale, which was made through
                    a private placement that was intended to be exempt from
                    registration under the Act. The principal balance of, and
                    interest accrued on, the Debenture was convertible, in whole
                    or in part, at the option of the Investor into shares of the
                    Company's common stock at the lesser of $1.31 per share or
                    75% of the average of the lowest closing bid prices for such
                    shares over a specified period. The Company had the option
                    to require such conversion in amounts that depended on the
                    market price and daily trading volume of the shares over a
                    specified period.


                                      F-12
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing provided by CALP II Limited Partnership (continued):
                Convertible debentures (continued):
                    As additional consideration in connection with the sale of
                    the Debenture, the Company also issued a warrant to the
                    Investor for the purchase of 428,571 shares of the Company's
                    common stock at $1.75 per share that was initially scheduled
                    to be exercisable through June 12, 2005. The Company also
                    issued warrants for the purchase of 275,000 shares of the
                    Company's common stock at $2.00 per share that were
                    initially scheduled to be exercisable through June 12, 2005
                    as consideration for legal and other professional services
                    received in connection with the sale of the Debenture. The
                    Company valued the warrant issued to the Investor at
                    $934,285 and the warrants issued for legal and other
                    professional services at $599,500 based on estimated fair
                    values determined by using the Black-Scholes option-pricing
                    model method pursuant to the provisions of SFAS 123.
                    Accordingly, the Company initially increased additional
                    paid-in capital by $1,533,785 for the fair value of all of
                    the warrants and reduced the carrying value of the Debenture
                    by $934,285 for the debt discount attributable to the fair
                    value of the warrant issued to the Investor and increased
                    deferred financing costs by $599,500 for the fair value of
                    the warrants issued for services. The Company also increased
                    deferred financing costs by $285,000 for other payments made
                    for legal and other professional services received in
                    connection with the sale of the Debenture.

                    The fair value of the Company's common stock on June 12,
                    2000 was $2.25 per share which exceeded the conversion price
                    for the Debenture. Pursuant to interpretations issued by the
                    staff of the Securities and Exchange Commission, such excess
                    constituted a beneficial conversion feature or right for
                    which the value is measured by the difference between the
                    aggregate conversion price and the fair value of the common
                    stock into which the securities are convertible, multiplied
                    by the number of shares into which the securities are
                    convertible. Accordingly, the beneficial conversion rights
                    attributable to the issuance of the Debenture had a fair
                    value of approximately $1,794,000, which equaled the excess
                    of the aggregate proceeds the Investor would have received
                    if the Investor had converted the Debenture and sold the
                    1,908,397 shares of common stock (the amount of shares that
                    would have been received if conversion occurred on June 12,
                    2000) for approximately $4,294,000 based on the fair market
                    value of $2.25 per share on June 12, 2000. Since the
                    Debenture became convertible upon issuance, the Company
                    recorded a charge of $1,794,000 to interest expense for the
                    beneficial conversion rights and a corresponding increase in
                    additional paid-in capital on June 12, 2000.

                                      F-13
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing provided by CALP II Limited Partnership (continued):
                Convertible debentures (continued):
                    During the period from October 20, 2000 to December 1, 2000,
                    the Company sold an affiliate of the Investor convertible
                    debentures (the "New Debentures") that had an aggregate
                    principal balance of $3,000,000, were initially scheduled to
                    mature at various dates through December 1, 2003 and bore
                    interest at an annual rate of 8%. The Company received gross
                    proceeds of $3,000,000 from the sale, which was made through
                    a private placement that was intended to be exempt from
                    registration under the Act. Subsequently, the affiliate
                    assigned its rights and obligations to the Investor. The
                    principal balance of, and interest accrued on, each of the
                    New Debentures was convertible, in whole or in part, at the
                    option of the Investor into shares of the Company's common
                    stock at the lesser of $.80 per share or 75% of the average
                    of the lowest closing bid prices for such shares over a
                    specified period. The Company had the option to require such
                    conversion in amounts that depended on the market price and
                    daily volume of the shares over a specified period.

                    As additional consideration in connection with the sales of
                    all of the New Debentures, the Investor received a 10% fee
                    for each New Debenture issued. The Company also issued a
                    warrant to the Investor for the purchase of 3,000,000 shares
                    of the Company's common stock at $1.25 per share that was
                    initially scheduled to be exercisable through October 20,
                    2005. The estimated fair value of the warrant was
                    $3,450,000, as determined by the Black-Scholes
                    option-pricing model method. Since the Company only received
                    net proceeds from the sale of the New Debentures of
                    $2,700,000 (which equaled the principal balance of the New
                    Debentures net of the 10% fee paid to the Investor), it only
                    recorded $2,700,000 of the estimated fair value of the
                    warrant as debt discount which was to be amortized to
                    interest expense over the related terms of the New
                    Debentures. Accordingly, the Company had received net
                    proceeds from the sale of New Debentures of $2,700,000 and
                    had initially recorded an equivalent amount of debt
                    discount.

                                      F-14
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing provided by CALP II Limited Partnership (continued):
                Convertible debentures (continued):
                    As additional consideration in connection with the sale of
                    the New Debentures, the Company also reduced the conversion
                    price for the Debenture to the lesser of $1.31 per share to
                    $.80 per share or 75% of the average of the lowest closing
                    bid prices for such shares over a specified period, which
                    was also the conversion price for the New Debentures. The
                    fair value of the Company's common stock on October 20, 2000
                    was $1.25 per share which exceeded the adjusted conversion
                    price for the Debenture and the conversion price for the New
                    Debentures of $.80 per share. Such excess constituted
                    beneficial conversion rights for which the value was
                    measured, as explained above, by the difference between the
                    aggregate conversion price and the fair value of the common
                    stock into which the securities were convertible, multiplied
                    by the number of shares into which the securities were
                    convertible. The beneficial conversion rights had an
                    aggregate fair value of $2,800,000 at October 20, 2000, of
                    which approximately $1,600,000 and $1,200,000 applied to the
                    Debenture and the New Debentures, respectively. However, the
                    Company did not record any additional charges for the fair
                    values of the beneficial conversion rights since the fair
                    values of the beneficial conversion rights and/or warrants
                    previously issued to the Investor in connection with the
                    Debenture and the fair value of the warrants issued to the
                    Investor in connection with the New Debentures had already
                    offset the proceeds allocated to the Debenture and the New
                    Debentures.

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

                    In January 2001, the Investor purchased two additional
                    convertible debentures each of which had a principal balance
                    of $200,000 (the "Additional Debentures"). The sales of the
                    Additional Debentures were made through private placements
                    intended to be exempt from registration under the Act. The
                    terms for the conversion of the Additional Debentures were
                    the same as those for the Debenture and the New Debentures.
                    The fair value of the Company's common stock on the dates of
                    issuance exceeded the adjusted conversion price for the
                    Additional Debentures. Such excess constituted beneficial
                    conversion rights which had a fair value of $217,770, for
                    which the value was measured, as explained above, by the
                    difference between the aggregate conversion price and the
                    fair value of the common stock into which the securities
                    were convertible, multiplied by the number of shares into
                    which the securities were convertible. Since the Additional
                    Debentures were convertible immediately upon issuance, the
                    fair value of the beneficial conversion rights attributable
                    to the issuance of the Additional Debentures was charged to
                    interest expense during the six months ended January 31,
                    2001.


                                      F-15
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing provided by CALP II Limited Partnership (continued):
                Convertible debentures (concluded):
                    The issuances of the beneficial conversion rights and the
                    warrants in connection with the sales of the Debenture, the
                    New Debentures and the Additional Debentures were noncash
                    transactions and, accordingly, they are not reflected in the
                    accompanying consolidated statements of cash flows.

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

                    During the portion of 2001 prior to the sale of JAGfn,
                    amortization of deferred financing costs and debt discount
                    applicable to the Debenture, the New Debentures and the
                    Additional Debentures totaled $442,020 and $719,214,
                    respectively. During 2000, amortization of deferred
                    financing costs and debt discount applicable to the
                    Debenture totaled $36,854 and $38,929, respectively.

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

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

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

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

                                      F-16
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 5 - Financing provided by CALP II Limited Partnership (concluded):
                Equity financing agreement (concluded):
                    The Equity Financing Agreement was originally due to expire
                    in December 2002; however, it was cancelled concurrent with
                    the sale of JAGfn on February 1, 2001 (see Note 6).

                    During the period from June 14, 2001 through April 30, 2001,
                    the Investor paid a total of $1,166,670 pursuant to the
                    Equity Financing Agreement for 1,135,850 shares of common
                    stock and warrants to purchase 227,168 shares of common
                    stock (all of which remained outstanding until they were
                    cancelled concurrent with the sale of JAGfn) and, as a
                    result, the Company received proceeds of $1,050,000, net of
                    $116,670 of placement fees. The issuances of such shares and
                    warrants were transactions intended to be exempt from
                    registration under the Act.

Note 6 - Disposition of JAGfn:
                During 2001, the Company transferred a total of 15% of the
                membership interests in JAGfn to three of its executives
                pursuant to the terms of their employment contracts. Management
                believes that the fair value of the interests transferred was
                immaterial and, accordingly, the Company did not record any
                charges in connection with the transfers.

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

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

                 Current assets - prepaid expenses                  $   225,000
                 Equipment, net                                         567,343
                 Capitalized web site development costs, net             64,224
                 Other assets                                            96,793
                                                                    -----------
                        Total assets                                    953,360
                                                                    -----------

                 Current liabilities:
                     Accounts payable and accrued expenses              341,044
                     Current portion of capital lease obligations        47,186
                     Intercompany advances                            4,553,373
                                                                    -----------
                        Total current liabilities                     4,941,603
                 Capital lease obligations, net of current portion       20,743
                                                                    -----------
                        Total liabilities                             4,962,346
                                                                    -----------

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


                                      F-17
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 6 - Disposition of JAGfn (concluded):
                The members' deficiency at January 31, 2001 was equivalent to
                JAGfn's operating loss and net loss from the inception of its
                operations on August 1, 2000 through January 31, 2001. JAGfn did
                not generate any revenues through January 31, 2001.

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

                 Cash paid by purchaser                          $1,002,147
                 Net carrying value of cancelled convertible
                      notes payable to the Investor (Note 5)      1,399,406
                 Members' deficiency of JAGfn                     4,008,986
                                                                 ----------
                        Total                                     6,410,539
                                                                 ----------

                 Less write-off of:
                     Intercompany advances                        4,553,373
                     Unearned compensation (A)                    1,660,207
                                                                 ----------
                        Total                                     6,213,580
                                                                 ----------

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

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

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


Note 7 - Issuances of common stock, warrants and stock options:
                Private placements of common stock and warrants:
                    As further explained in Note 5, the Company issued to the
                    Investor 3,376,952 shares of common stock upon the
                    conversion of a portion of the Debenture with an aggregate
                    principal balance of $1,052,000 and accrued interest of
                    $36,598 and 1,135,850 shares and warrants to purchase
                    227,168 shares pursuant to the Equity Financing Agreement
                    for which it received net proceeds of $1,050,000 during
                    2001. The Company also issued to the Investor a warrant for
                    the purchase of 3,000,000 shares at $1.25 per share in
                    connection with the sale of the New Debentures in 2001 and a
                    warrant for the purchase of 428,571 shares at $1.75 per
                    share in connection with the sale of the Debenture in 2000.
                    All of the warrants issued to the Investor were cancelled
                    concurrent with the sale of JAGfn on February 1, 2001. The
                    issuances of such shares and warrants were transactions
                    intended to be exempt from registration under the Act.


                                      F-18
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 7 - Issuances of common stock, warrants and stock options (continued):
                Private placements of common stock and warrants (concluded):
                    During 2000, the Company received proceeds of $2,474,960,
                    net of related costs and expenses of $275,040, from the sale
                    of 785,715 shares of common stock to other investors through
                    private placements intended to be exempt from registration
                    under the Act.

                    During 1999, the Company issued warrants to purchase 555,130
                    shares of common stock at $14.00 per share in connection
                    with a private placement of units of common stock and
                    warrants intended to be exempt from registration under the
                    Act. All of those warrants expired in April 2000.

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

                    The following table reconciles the number of shares of
                    common stock subject to options and warrants that were
                    outstanding at August 1, 1999 as a result of issuances 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, 2001 and sets forth other
                    related information:
<TABLE>
<CAPTION>
                                                                                             Range of
                                                                             Number          Exercise
                                                                           of Shares          Prices
                                                                           ---------      --------------
<S>                                                                       <C>            <C>
                        Options and warrants issued for services
                           outstanding, August 1, 1999 (A)                   335,000      $2.00 - $16.25
                        Warrants issued for legal and other
                           professional services (B)                         275,000              $ 2.00
                        Options and warrants granted to employees,
                           investment analysts and commentators (C)        4,382,500      $1.50 - $ 6.00
                        Options cancelled (C)                               (100,000)             $16.25
                        Options exercised                                    (18,000)             $ 2.00
                                                                           ---------
                        Options and warrants issued for services
                           outstanding, August 1, 2000                     4,874,500      $1.50 - $ 6.00
                        Options granted to employees, investment
                           analysts and commentators (C)                   3,959,000      $ .10 - $ 2.00
                        Warrants cancelled (D)                              (250,000)             $ 2.00
                                                                           ---------
                        Options and warrants issued for services
                           outstanding, July 31, 2001 (E) (F)              8,583,500      $ .10 - $ 6.00
                                                                           =========
</TABLE>

                                      F-19
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 7 - Issuances of common stock, warrants and stock options (continued):
                Options, warrants and other equity instruments issued for
                services (concluded):
                    (A)    The cost of these options and warrants of $1,826,850,
                           determined based on their aggregate estimated fair
                           values at the respective dates of issuance, was
                           initially charged to unearned compensation in 1999.

                    (B)    The warrants were issued for services received in
                           connection with the sale of the Debenture. The cost
                           of the warrants of $599,500, determined based on
                           their aggregate estimated fair value at the date of
                           issuance, was initially charged to debt financing
                           costs in 2000 as further explained in Note 5.

                    (C)    The cost of the options and warrants of $1,935,870
                           and $11,918,685, determined based on their aggregate
                           estimated fair values at the respective dates of
                           issuance, was initially charged to unearned
                           compensation in 2001 and 2000, respectively, as
                           further explained below. The aggregate cost for 2000
                           includes $729,000 for the incremental cost of options
                           to purchase 200,000 shares at $2.00 per share that
                           were issued pursuant to an amendment to an agreement
                           with an investment analyst that also provided for the
                           cancellation of options granted in 1999 to purchase
                           100,000 shares at $16.25 per share. The incremental
                           cost represents the fair value of the options to
                           purchase 200,000 shares at the date of grant in 2000
                           of $894,000, net of the fair value of the options to
                           purchase 100,000 shares cancelled at the original
                           date of grant in 1999 of $165,000.

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

                    (E)    These options and warrants also include options for
                           the purchase of 5,741,500 shares granted pursuant to
                           the Company's 1999 Long-term Incentive Plan (the
                           "Incentive Plan") which was approved by the Board of
                           Directors on October 1, 1999. The Incentive Plan
                           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 may not
                           exceed 6,000,000 shares. As of July 31, 2001, the
                           options for the purchase of all of the 5,741,500
                           shares remained outstanding.

                    (F)    These options and warrants will expire at various
                           dates from June 2005 through July 2011.


                                      F-20
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 7 - Issuances of common stock, warrants and stock options (continued):
                Options, warrants and other equity instruments issued for
                services (continued):
                    The following table summarizes information about the number
                    of shares of common stock subject to options and warrants
                    that were outstanding at July 31, 2001 as a result of
                    issuances of those options and warrants to employees and
                    nonemployees as compensation for services:
<TABLE>
<CAPTION>
                                                                                                  Options and
                                   Options and Warrants Outstanding                           Warrants Exercisable
                     ----------------------------------------------------------------       ------------------------
                                                             Weighted
                                                             Average
                                                             Years of        Weighted                      Weighted
                                                            Remaining        Average                        Average
                      Exercise             Number          Contractual       Exercise          Number      Exercise
                       Prices           Outstanding           Life            Price         Exercisable      Price
                      --------          -----------        -----------       --------       -----------    ---------
<S>                                    <C>                <C>               <C>            <C>            <C>
                     $    .10               550,000            9.75            $ .10           550,000       $ .10
                      .25-.38             2,880,000            9.36              .25         2,880,000         .25
                         1.50                50,000            8.92             1.50            50,000        1.50
                         2.00             3,853,500            7.12             2.00         3,691,407        2.00
                         3.50               500,000            3.63             3.50           500,000        3.50
                         6.00               750,000            3.63             6.00           515,625        6.00
                                          ---------                                          ----------

                     $.10 - $6.00         8,583,500            7.54            $1.73         8,187,032       $1.60
                     ============         =========            ====            =====         =========       =====
</TABLE>
                    A total of $1,935,870 and $11,918,685 was charged to
                    unearned compensation during 2001 and 2000, respectively, as
                    a result of the options, warrants and shares issued and/or
                    transferred as compensation to employees and as
                    consideration for consulting, professional and other
                    services in the transactions described above. 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 $8,181,124 and $6,053,552 was amortized during 2001
                    and 2000, respectively. The unamortized balance of $975,090
                    and $8,880,551 has been reflected as a reduction of
                    stockholders' equity as of July 31, 2001 and 2000,
                    respectively.

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


                                      F-21
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 7 - Issuances of common stock, warrants and stock options (concluded):
                Options, warrants and other equity instruments issued for
                services (concluded):
                    The fair values of the options, warrants and shares issued
                    and/or transferred as compensation to employees and as
                    consideration for consulting, professional and other
                    services in the transactions described above were determined
                    in accordance with SFAS 123 using the "minimum value method"
                    through October 31, 1999 (due to the limited amount of
                    trading of the Company's shares through that date) and the
                    Black-Scholes option-pricing model thereafter. The fair
                    values were determined in 2001 and 2000 based on the
                    following assumptions:

                         Expected years of option life:                      5
                         Risk-free interest rate:                            6%
                         Dividend yield:                                     0%
                         Volatility:
                            February 1, 2000 through April 30, 2000        110%
                            May 1, 2000 through July 31, 2000              154%
                            August 1, 2000 through October 31, 2000        161%
                            November 1, 2000 through April 30, 2001        191%
                            May 1, 2001 through July 31, 2001              263%


Note 8 - 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 2001 and 2000.


Note 9 - Commitments and contingencies:
                Concentrations of credit risk:
                    Financial instruments that potentially subject the Company
                    to concentrations of credit risk consist primarily of cash
                    and cash equivalents and accounts receivable. From time to
                    time the Company's cash balances exceed Federal insurance
                    limits although there was no such excess at July 31, 2001.
                    The Company reduces its exposure to credit risk by
                    maintaining its cash deposits with major financial
                    institutions and monitoring their credit ratings.

                    The Company extends credit to its customers. Generally, it
                    does not require any collateral. The Company closely
                    monitors the extension of credit while maintaining
                    appropriate allowances for potential credit losses.
                    Accordingly, management does not believe that the Company
                    was exposed to significant credit risk at July 31, 2001.

                Consulting and employment agreements:
                    As of July 31, 2001, the Company was obligated to make
                    approximate cash payments under consulting and employment
                    agreements totaling approximately $1,370,000, of which
                    $639,000, $581,000 and $150,000 is payable in the years
                    ending July 31, 2002, 2003 and 2004, respectively (see Note
                    11).


                                      F-22
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 9 - Commitments and contingencies (concluded):
                Leases:
                    The Company had been leasing office space under
                    month-to-month leases and noncancelable leases. Rent expense
                    under all such leases, which were classified as operating
                    leases, totaled approximately $1,212,000 and $766,000 for
                    2001 and 2000, respectively. As of July 31, 2001, the
                    Company was not subject to any significant noncancelable
                    office leases.

                    Prior to the sale of Jagfn, the Company had used computer
                    equipment under lease agreements that were classified as
                    capital leases. The Company effectively acquired equipment
                    at a cost of $46,315 and $96,223 in 2001 and 2000,
                    respectively, by incurring capital lease obligations. These
                    noncash transactions are not reflected in the accompanying
                    consolidated statements of cash flows.

                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 10 - Fair value of financial instruments:
                The Company's material financial instruments at July 31, 2001
                for which disclosure of estimated fair value is required by
                certain accounting standards consisted of cash and cash
                equivalents, accounts receivable and accounts payable. In the
                opinion of management, cash and cash equivalents, accounts
                receivable and accounts payable were carried at values that
                approximated their fair values at July 31, 2001 because of their
                liquidity and/or their short-term maturities.



                                      F-23
<PAGE>


                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

Note 11 - Subsequent events:
                On August 17, 2001, 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 term of the Equity Line
                Agreement will extend for 36 months from the date 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 becomes effective, 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 from Cornell
                Capital in connection with each put. The timing and amount of
                the required purchases shall be at the Company's discretion
                subject to certain conditions. For each put exercised, there
                shall be two closing dates five trading days apart. The number
                of shares to be purchased at each closing of a put shall be
                equal to 150% of the average daily trading volume of the
                Company's common stock over a specified period. At least 10
                trading days must elapse before the Company can deliver a new
                put notice to Cornell Capital. However, during the 12-month
                period following the effective date of the registration
                statement, the amount of each advance, net of any cash fees
                payable to Cornell Capital pursuant to the terms of the Equity
                Line Agreement, must be at least $50,000 per put and the minimum
                amount of funding to be provided by Cornell Capital will be
                $100,000 per month. Cornell Capital received 1,500,000 shares of
                the Company's common stock as of August 17, 2001 as additional
                consideration for entering into the Equity Line Agreement.
                Certain principals of Cornell Capital agreed to surrender for
                cancellation outstanding warrants, dated July 21, 2000, for the
                purchase of a total of 690,000 shares of the Company's common
                stock.

                Pursuant to amended and restated employment agreements between
                the Company and its three senior executives, each dated August
                31, 2001, the Company will be obligated to make cash payments of
                $150,000 to each of the three senior executives annually during
                the three year period ending August 31, 2004. As a result of the
                amendments, the Company's obligations for cash payments under
                all of its consulting and employment agreements during periods
                subsequent to July 31, 2001 will increase from approximately
                $1,370,000, as set forth in Note 9, to approximately $1,483,000,
                of which $545,000, $450,000, $450,000 and $38,000 will be
                payable in the years ending July 31, 2002, 2003, 2004 and 2005,
                respectively.


                                      F-24
<PAGE>



                       JagNotes.com Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements



Note 11 - Subsequent events (concluded):
                The Company also granted options to purchase 1,000,000 shares of
                its common stock at $.02 per share to each of the three senior
                executives as additional compensation for services to be
                rendered under such contracts. The various options granted to
                the three senior executives pursuant to their original
                employment agreements, which gave each executive the right to
                purchase 900,000 shares of common stock at an exercise price of
                $.25 per share, were cancelled. Each of the three senior
                executives will also receive an additional 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 is $1.00
                per share or greater for the first year, $2.00 per share or
                greater for the second year and $3.00 per share or greater for
                the third year.


                                      *  *  *

                                      F-25