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

                                   FORM 10-QSB

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

      For the quarterly period ended June 30, 2004

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

      For the transition period from ______________ to ______________.

                         Commission File No.: 000-27777

                            INNOVATION HOLDINGS, INC.
                    (f/k/a Blagman Media International, Inc.)
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

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

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

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

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

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

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: ____________ shares of common stock
as of September 23, 2004.

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

<PAGE>


                                TABLE OF CONTENTS

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

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

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

CONDENSED CONSOLIDATED STATEMENT OF CHANGES ON
STOCKHOLDERS' DEFICIENCY FOR THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED)
                                                                                              3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2004
AND 2003 (UNAUDITED)                                                                          4

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2004 (UNAUDITED)
                                                                                             5-9
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
              OPERATIONS                                                                   10-14

ITEM 3.     CONTROLS AND PROCEDURES                                                          15

PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS                                                                15

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS                                        16

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES                                                  16

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

ITEM 5.     OTHER INFORMATION                                                                17

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

SIGNATURES                                                                                   17

CERTIFICATIONS                                                                             19-20
</TABLE>


<PAGE>

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


<PAGE>

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


                                    CONTENTS


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

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

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

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

PAGES 5-9    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF
             JUNE 30, 2004 (UNAUDITED)


<PAGE>

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

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

PROPERTY & EQUIPMENT - NET                                               59,755          73,751
                                                                   ------------    ------------

OTHER ASSETS
License agreement, net of amortization of $11,518 and
   $7,781 respectively                                                  134,213         141,687
                                                                   ------------    ------------

TOTAL ASSETS                                                       $    297,706    $    225,085
                                                                   ============    ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
 Notes and loans payable - current portion                         $    374,725    $    359,725
 Accounts payable                                                       779,559         830,006
 Accrued expenses                                                       779,396         950,018
 Accrued compensation - officers                                      2,182,344       1,897,344
 Due to officer                                                         100,342          68,406
 Capital lease obligation - current portion                              33,540          33,540
 Liabilities related to discontinued operations                      10,835,472      10,835,472
                                                                   ------------    ------------
     Total Current Liabilities                                       15,085,378      14,974,511
                                                                   ------------    ------------

LONG-TERM LIABILITIES
 Notes and loans payable - long-term portion                            525,500         445,500
                                                                   ------------    ------------

TOTAL LIABILITIES                                                    15,610,878      15,420,011
                                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES                                                --              --

STOCKHOLDERS' DEFICIENCY
 Preferred stock, series A, $.001 par value, super convertible
  redeemable preferred stock, 10,000,000 shares authorized,
  0 shares issued and outstanding                                            --              --
 Preferred stock, series B, $.001 par value, super convertible
  redeemable preferred stock, 100 shares authorized, 100 shares
  issued and outstanding                                                      1               1
 Common stock, $.001 par value, 20,000,000,000 shares authorized
  532,268,095 and 31,682,095 shares issued and outstanding,
  respectively                                                          532,268          31,682
 Additional paid-in capital                                          45,873,467      41,824,753
 Accumulated deficit                                                (59,323,148)    (57,051,362)
  Deferred stock based compensation                                  (2,395,760)             --
                                                                   ------------    ------------

     Total Stockholders' Deficiency                                 (15,313,172)    (15,194,926)
                                                                   ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                     $    297,706    $    225,085
                                                                   ============    ============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                      -1-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                              For the Six
                                              For the          For the           Months
                                           Three Months     Three Months         Ended         For the Six
                                               Ended            Ended           June 30,      Months Ended
                                           June 30, 2004    June 30, 2003         2004        June 30, 2003
                                           -------------    -------------    -------------    -------------
<S>                                        <C>              <C>              <C>              <C>
REVENUES - NET                             $          --    $          --               --           78,524
                                           -------------    -------------    -------------    -------------

OPERATING EXPENSES
 Selling, general and administrative           1,893,165        2,187,621        2,217,228        3,068,655
 Depreciation                                     10,735            7,228           21,470           14,945
                                           -------------    -------------    -------------    -------------
     Total Operating Expenses                  1,903,900        2,194,849        2,238,698        3,083,600
                                           -------------    -------------    -------------    -------------

LOSS FROM OPERATIONS                          (1,903,900)      (2,194,849)      (2,238,698)      (3,005,076)

OTHER INCOME (EXPENSE)
 Interest expense, net                           (16,597)          (6,592)         (33,088)         (26,864)
                                           -------------    -------------    -------------    -------------
        Total Other Income (Expense)             (16,597)          (6,592)         (33,088)         (28,864)
                                           -------------    -------------    -------------    -------------

Loss from continuing operations               (1,920,497)      (2,201,441)      (2,271,786)      (3,031,940)
Loss from discontinued operations                     --               --               --               --
                                           -------------    -------------    -------------    -------------

NET LOSS                                   $  (1,920,497)   $  (2,201,441)   $  (2,271,786)   $  (3,031,940)
                                           =============    =============    =============    =============

NET LOSS PER COMMON SHARE -
BASIC AND DILUTED                          $       (0.01)   $       (2.74)   $       (0.02)   $       (3.75)
                                           =============    =============    =============    =============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC AND DILUTED              258,417,546          802,090      147,928,370          808,159
                                           =============    =============    =============    =============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                      -2-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                           Deferred
                                 Preferred Stock        Common Stock          Additional                     Stock
                                 ---------------  -----------------------      Paid-In      Accumulated      Based
                                 Shares   Amount      Shares       Amount       Capital        Deficit    Compensation    Total
                                 ------   ------  ------------  ---------   ------------   ------------   ----------   ------------
<S>                                 <C>   <C>       <C>         <C>         <C>            <C>            <C>          <C>
Balance, December 31, 2003          100   $    1    31,682,095  $  31,682   $ 41,824,753   $(57,051,362)          --   $(15,194,926)

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

Stock issued for legal fees          --       --    62,500,000     62,500        550,000             --           --        612,500

Stock issued for consulting          --       --   343,426,750    343,427      2,760,099             --           --      3,103,526

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

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

Deferred stock compensation          --       --            --         --             --             --   (3,096,726)    (3,096,726)

Amortization of deferred stock
 compensation                        --       --            --         --             --             --      700,966        700,966

Net loss                             --       --            --         --             --     (2,271,786)          --     (2,271,786)
                                 ------   ------  ------------  ---------   ------------   ------------   ----------   ------------

BALANCE, JUNE 30, 2004              100   $    1   532,268,095  $ 532,268   $ 45,873,467   $(59,323,148)  (2,395,760)  $(15,313,172)
                                 ======   ======  ============  =========   ============   ============   ==========   ============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                      -3-
<PAGE>

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

<TABLE>
<CAPTION>
                                                        For the Six       For the Six
                                                     Months Ended June    Months Ended
                                                          30, 2004       June 30, 2003
                                                       -----------        -----------
<S>                                                    <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                              $(2,271,786)       $(3,031,940)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation and amortization                             21,470             16,946
  Stock issued for compensation and services             1,782,266          2,404,607
 Changes in operating assets and liabilities:
  (Increase) decrease in:
    Accounts receivable                                         --            (18,013)
    Prepaid expenses, media and other current assets         5,909             97,451
    Deposits                                                    --              4,576
  Increase (decrease) in:
    Accounts payable and accrued expenses                   50,205            (15,641)
    Deferred revenue                                            --              4,982
    Accrued compensation - officer                         285,000            340,846
                                                       -----------        -----------
         Net Cash Used In  Operating Activities           (126,936)          (196,186)
                                                       -----------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Cash overdraft - (decrease) increase                           --            (11,782)
 Proceeds from officer                                      31,936                 --
 Payments to officer                                            --            (36,426)
 Proceeds from notes payable                                95,000            249,225
 Payments under capital lease obligation                        --             (4,796)
                                                       -----------        -----------
         Net Cash Provided By Financing Activities         126,936            196,221
                                                       -----------        -----------

NET INCREASE (DECREASE) IN CASH                                 --                 35

CASH - BEGINNING OF PERIOD                                       2                 --
                                                       -----------        -----------

CASH - END OF PERIOD                                   $         2        $        35
                                                       ===========        ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid                                          $        --        $    26,868
                                                       ===========        ===========
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

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

During the period ended June 30, 2004, the Company issued  334,140,750 shares of
common stock having a fair market value of $1,971,226 to various consultants for
consulting fees recorded as deferred stock compensation.

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

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


     See accompanying notes to condensed consolidated financial statements.

                                      -4-
<PAGE>

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


NOTE 1 BASIS OF PRESENTATION

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

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

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

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

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

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

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

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

NOTE 2 DISCONTINUED OPERATIONS

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

                                      -5-
<PAGE>

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

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

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

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

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

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

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

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

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

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

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


                                      -6-
<PAGE>

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


NOTE 3 STOCKHOLDERS' DEFICIENCY

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

       During the six months  ended June 30, 2004,  62,000,000  shares of common
       stock were issued to the  Company's  attorney for an agreement to provide
       legal  services  valued at $585,000.  The fair value of the issued shares
       was based upon the  market  price of the  Company's  stock on the date of
       grant.

       During the six months ended June 30, 2004, the Company issued 343,426,750
       shares of common stock for consulting services valued at $3,103,526.  The
       fair  value of the issued  shares was based upon the market  price of the
       Company's  stock on the date of grant.  Of the total value,  $707,766 has
       been  expensed to selling,  general  and  administrative  expenses in the
       accompanying  condensed  consolidated statement of operations for the six
       months ended June 30, 2004 and  $2,395,760 is presented as deferred stock
       based  compensation in the accompanying  condensed  consolidated  balance
       sheet.

NOTE 4 LITIGATION

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

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

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


                                      -7-
<PAGE>

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


         Statement  on Form  S-8 for a 2002  Employee  Stock  Compensation  Plan
         ("Registration Statement") effective August 2002 to register shares. In
         connection with the Curative Review Process,  the Company  subsequently
         placed stop  transfer  orders on all of the original  certificates  and
         derivatives   of  those   certificates,   advised  market  members  and
         depositories of its actions and has been working with these parties and
         its transfer  agent and other  resources  to ascertain  which shares of
         Common Stock need to remain in commerce to recognize  the  interests of
         the  transferee,  which  shares  should be cancelled or returned to the
         Company and therefore removed from registration  ("Removed Shares") and
         which shares are held by or were delivered to parties who were eligible
         to receive and hold the same pursuant to the Plan. The Company  intends
         to  file  an  amendment  to  this  Registration  Statement  as  soon as
         practicable when the  reconciliation  in the curative Review Process is
         complete  to  withdraw  the  Removed  shares  from   registration.   In
         connection  with this, the Company has had a suit filed against them by
         a third party pending the circuit court of Cook County,  Illinois.  The
         Company has  responded  to this matter and is actively  cooperating  in
         other investigations  relating to the plaintiff and others. The Company
         expects  additional  litigation  from the plaintiff and is intending to
         assert the indemnification and disgorgement rights under its agreements
         with the plaintiff. As stated above, more information on issues related
         to the  collateral  damage of the  company's  association  with certain
         financial advisors and organizations can be found on the Securities and
         Exchange Commission (SEC) website.  Additional lawsuits may be filed by
         the Company  against  all  parties  involved in the fraud if any issues
         related  to such  fraud  have an  adverse  effect on the  company.  The
         Company has initiated a complaint against a third party in the Superior
         court  of  California  in the  County  of Los  Angeles  for  breach  of
         contract, fraud and deceit, intentional misrepresentation of facts, and
         rescission.  The third party filed a general  denial to the  complaint,
         has  asserted   numerous   affirmative   defenses,   and  has  filed  a
         cross-complaint  alleging  breach of  written  contract,  breach of the
         implied  covenant of good faith and fair  dealing,  conversion,  common
         counts,  breach  of  fiduciary  duties,  fraud  and  deceit,  negligent
         misrepresentation,  imposition of constructive  trust and/or  resulting
         trust,  intentional and tortuous  inducement to breach and interference
         with  contract and  prospective  economic  advantage,  and unfair trade
         practices.  The Company has filed a general denial to the  allegations.
         The parties are currently seeking a business settlement.

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

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

  (D)    On  November  11,  2003,  the  Company  reached  a  settlement  with  a
         corporation as a result of a claim brought  against the  corporation by
         the  Company  on  May  6,  2002  and a  cross  complaint  filed  by the
         corporation  on June 14, 2002.  As part of the terms and  conditions of


                                      -8-
<PAGE>

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


         the settlement,  the Company will pay to the  corporation  $260,000 and
         10% simple  interest over one year.  This will be  accomplished  by the
         issuance of 2 million  shares of free  trading  stock 30 days after the
         execution of the agreement.  The shares will be held in a trust account
         for the  purpose of selling the stock and paying the  corporation  on a
         continuous basis. In the event the Company does not pay the corporation
         the total  amount of the  settlement  on or before one year and 30 days
         from the execution date of the settlement  agreement,  the  corporation
         will  enforce a stipulated  judgment in the amount of $750,000  against
         the Company.  The Company has recorded a liability of $260,000 and this
         amount is included in accrued expenses in the accompanying consolidated
         balance  sheet  as of  December  31,  2003.  As of June 30,  2004,  the
         liability was $210,000. (See Note 3) As of the date of this report, the
         liability has been paid in full.

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

NOTE 5 CAPITAL LEASE OBLIGATIONS

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

NOTE 6 GOING CONCERN

       The  Company's  condensed  consolidated  financial  statements  have been
       prepared on a going concern basis,  which contemplates the realization of
       assets and the  satisfaction of liabilities and commitments in the normal
       course of business.  The Company  incurred a net loss of $2,271,786 and a
       negative  cash flow from  operations of $126,936 for the six months ended
       June 30, 2004, and has a working capital  deficiency of $14,871,640 and a
       stockholders  deficiency  of  $15,313,172  at June 30, 2004 which  raises
       substantial  doubt about its ability to continue as a going concern.  The
       Company's  working capital  deficiency as of June 30, 2004 may not enable
       it to  meet  such  objectives  as  presently  structured.  The  condensed
       consolidated  financial  statements do not include any  adjustments  that
       might result from the outcome of this uncertainty.

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

NOTE 7 SUBSEQUENT EVENTS

       In the third  quarter of 2004,  the Company  issued  6,023,750,000  comon
       shares, in the aggregate,  to various consultants for consulting services
       to be provided over varying  terms,  which expire at various dates during
       the fiscal years 2005 and 2006.

       In August 2004, a total of 500,000,000 shares of common stock were issued
       to  the  Company's   Securities  and  Exchange   Commission  attorney  as
       compensation for legal services rendered and for future legal services.

       In August  2004,  5,000,000,000  shares of common  stock  were  issued to
       satisfy  an  obligation  to a  licensor  per the  terms  of an  agreement
       consummated in June 2003.

       In August  2004,  the Company  signed a letter of intent to acquire a 49%
       equity interest in Ironwood Furnishings,  Inc., a wholesale  distribution
       center of  furniture.  Ironwood's  business  plan is to open 12 furniture
       retail  stores in the next 18 months at a price point of no more than $99
       per piece.

                                      -9-
<PAGE>

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

GENERAL

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

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

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

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

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

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


                                      -10-
<PAGE>

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

RESULTS OF OPERATIONS

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

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

       Total net revenues                        $        --    $        --

       Operating Expenses:
       General and Administrative                $ 1,893,165    $ 2,187,621

       Net Loss from Operations                  $(1,903,900)   $(2,194,849)

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


Net Revenues

There were no net  revenues for the three months ended June 30, 2004 and for the
  three months  ended June 30, 2003.  Net revenues for the six months ended June
  30, 204 as compared to the six months ended June 30, 2003 decreased
from $78,524 to $0.


Operating Expenses

Total operating  expenses  decreased 13.3% from $2,194,849 in 2003 to $1,903,900
in 2004 for the three months ending June 30. Included in operating  expenses are
general and  administrative  expenses which  decreased 13.5% from $2,187,621 for
the three month  period  ended June 30, 2003 to  $1,893,165  for the three month
period ended June 30, 2004.

Total operating  expenses  decreased 27.4% from $3,083,600 in 2003 to $2,238,698
in 2004 for the six months  ending June 30.  Included in operating  expenses are
general and  administrative  expenses which  decreased 27.8% from $3,068,655 for
the six month  period  ended June 30,  2003 to  $2,217,228  for the three  month
period ended June 30, 2004.

The total net loss of the Company  for the  three-month  period  ending June 30,
2004 was $(1,920,497) compared to $(2,201,441) for 2003, a 12.8% decrease.

The total net loss of the company for the six-month  period ending June 30, 2004
was $(2,271,786) compared to $(3,031,940) for 2003, a 25.1% decrease.


Other Income (Expenses)

Other income (expenses) for the three-month period ending June 30 increased from
$(6,592) in 2003 to $(16,597) (151.8%) in 2004 due to higher interest expenses.

Other income  (expenses) for the six-month  period ending June 30 increased from
$(26,868) in 2003 to $(33,088) (23.2%) in 2004 due to higher interest expenses.


                                      -11-
<PAGE>

Liquidity and Capital Resources

The  Company's  current  assets  increased  from $9,647 at December  31, 2003 to
$103,738 for the three month period ended June 30, 2004,  due to the issuance of
stock  valued at $100,000 as a retainer  for legal  counsel and $100,000 for the
prepaid portion of accrued consulting fees.

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

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

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

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

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

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


                                      -12-
<PAGE>

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

However,  the  Company  currently  has a  deficit.  As a result,  the  Company's
financial  statements for the period ended June 30, 2004 have been prepared on a
going  concern  basis  which  contemplated  the  realization  of assets  and the
settlement of liabilities and commitments in the normal course of business.  The
Company  incurred a net loss of  $1,330,784  for the three months ended June 30,
2004, and has a working  capital  deficiency of  $15,200,758  and a stockholders
deficiency at June 30, 2004 of  $15,248,169,  and may not enable it to meet such
objectives as presently structured.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

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


FORWARD-LOOKING STATEMENTS

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


CRITICAL ACCOUNTING POLICIES.

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

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

Revenue Recognition

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

Asset Impairment

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


                                      -13-
<PAGE>

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

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


ITEM 3.   CONTROLS AND PROCEDURES

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

PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS.

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

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

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


                                      -14-
<PAGE>

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

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

(C)      A claim has been  brought  against  the  Company by a  corporation  for
         breach of contract. On January 30, 2004, this corporation was granted a
         summary  judgment in the amount of $203,064,  which  includes  interest
         plus  attorney's  fees  and  costs  incurred  by the  corporation.  The
         Company's current attorney filed a motion to be relieved of the default
         as to this  summary  judgment.  As of March 31,  2004,  the Company has
         recorded  additional  liabilities  in the amount of $51,064 in order to
         record the full liability of $203,064 as per the summary judgment. This
         liability is included in Liabilities  from  Discontinued  Operations in
         the accompanying  consolidate balance sheet at June 30, 2004. There are
         currently  cross-actions  in the case  that  are  pending  for  binding
         arbitration in November 2004.

(D)      On  November  11,  2003,  the  Company  reached  a  settlement  with  a
         corporation as a result of a claim brought  against the  corporation by
         the  Company  on  May  6,  2002  and a  cross  complaint  filed  by the
         corporation  on June 14, 2002.  As part of the terms and  conditions of
         the settlement,  the Company will pay to the  corporation  $260,000 and
         10% simple  interest over one year.  This will be  accomplished  by the
         issuance of 2 million  shares of free  trading  stock 30 days after the
         execution of the agreement.  The shares will be held in a trust account
         for the  purpose of selling the stock and paying the  corporation  on a
         continuous basis. In the event the Company does not pay the corporation
         the total  amount of the  settlement  on or before one year and 30 days
         from the execution date of the settlement  agreement,  the  corporation
         will  enforce a stipulated  judgment in the amount of $750,000  against
         the Company.  The Company has recorded a liability of $260,000 and this
         amount is  included in  accounts  payable  and accrued  expenses in the
         accompanying  consolidated balance sheet as of December 31, 2003. As of
         March 31, 2004,  the  liability  was  $210,000.  As of the date of this
         report,  the  liability  has been paid in full.  The fair  value of the
         shares issued was based upon the market price of the  Company's  common
         stock on the date of grant.

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


                                      -15-
<PAGE>

ITEM 2.   CHANGES IN SECURITIES.

None.


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

None.


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

None.


ITEM 5.   OTHER INFORMATION.

None.


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

None.



                                   SIGNATURES


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

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



Dated: September 24, 2004                  /s/ ROBERT BLAGMAN
                                           ---------------------------------
                                           Robert Blagman, President and CEO




                                      -16-
<PAGE>

                                  EXHIBIT LIST

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



                                      -17-