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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the fiscal year ended July 31, 2007
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the transition period from to .
 Commission file number: 000-28761
 JAG MEDIA HOLDINGS, INC.
  Nevada
(State or other jurisdiction of 
incorporation or organization)
    
    88-0380546
(I.R.S. Employer
Identification Number)
 6865 S.W. 18th Street, Suite B-13, Boca Raton, Florida 33433   (866) 300-7410   Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock$0.00001 par value
    
    
    N/ASeries 2 Class B Common Stock$0.00001 par value
    
    
    N/ASeries 3 Class B Common Stock$0.00001 par value
    
    
    N/A
 Securities registered pursuant to Section 12(g) of the Act:
[None]
 o þ
 o þ
 þ o
 þ
  o o þ
 o þ




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Documents Incorporated by Reference:




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##### 



JAG MEDIA HOLDINGS, INC.
 ANNUAL REPORT ON FORM 10-K
 FOR THE FISCAL YEAR ENDED JULY 31, 2007
 TABLE OF CONTENTS
 PagePart IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    13Item 1B. Unresolved Staff Comments
    
    
    28Item 2. Properties
    
    
    28Item 3. Legal Proceedings
    
    
    28Item 4. Submission of Matters to a Vote of Security Holders
    
    
    28Part IIItem 5. Market for Registrants Common
Equity, Related Stockholder Matters and Issuer Purchases of Securities
    
    
    29Item 6. Selected Financial Data
    
    
    36Item 7. Managements Discussion and
Analysis or Plan of Operation
    
    
    37Item 7A. Quantitative and Qualitative
Disclosure About Market Risk
    
    
    46Item 8. Financial Statements and Supplementary Data
    
    
    46Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    46Item 9A(T). Controls and Procedures
    
    
    46Item 9B. Other Information
    
    
    47Part IIIItem 10. Directors, Executive Officers
and Corporate Governance
    
    
    48Item 11. Executive Compensation
    
    
    48Item 12. Security Ownership of Certain Beneficial Owners and
Related Stockholder Matters
    
    
    52Item 13. Certain Relationships and Related Transactions
    
    
    53Item 14.
Principal Accounting Fees and Services
    
    
    54Part IVItem 15. Exhibits, Financial Statement Schedules
    
    
    55SignaturesEX-10.6: AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENTEX-10.7: AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENTEX-10.37: LETTER AGREEMENTEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-99.13: AMENDMENT TO MERGER AGREEMENT
  i




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PART I
 
 ITEM 1. BUSINESS
   Overview
      1




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Our Industry
      2




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Our Products
        3




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Advertising Revenue
  Our Strategy
  
    
    improve its revenues;
    
    curtail costs to correspond with its revenues; and
    
    pursue merger and other expansion opportunities.
  4




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
    
    Increase Revenues.
    
    
    Curtail Costs.
   
    
    Pursue Merger and Other Expansion Opportunities.
  5




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6




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Regulation
    Competition
   
    
    Online financial news and information providers including Yahoo Finance,
Marketwatch, TheStreet.com, Forbes.com, Briefing.com, America Online Personal Finance,
Reuters and MotleyFool.com;
 7




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
    
    Internet portals and search engines such as AOL, MSN and Yahoo;
    
    Traditional media sources such as The Wall Street Journal, Investors Business
Daily, The Financial Times, Barrons, CNN/Money, and MSN Money/CNBC, all of which also
have an Internet presence;
    
    Terminal-based financial news providers including Bloomberg, Reuters and Dow Jones;
and
    
    Online brokerage firms such as TD Ameritrade, E*Trade Financial, Charles Schwab and
Fidelity.
    Intellectual Property
  Website Technical Information
   Employees
  Equity Line of Credit with YA Global
  8




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$2,000,000 Promissory Note
    Convertible Debentures
     9




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Warrants
    10




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Acquisition of Software Development Business
     Stock Dividend
  11




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Recapitalization
     Book
Entry Shares Permitted
  Increase
in Authorized Shares
  12




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Facilities
  Legal Proceedings
  Where You Can Find More Information About Us
  
 ITEM 1A. RISK FACTORS
  RISKS RELATED TO JAG MEDIAS BUSINESS
 JAG MEDIA HAS A HISTORY OF LOSSES, ANTICIPATES LOSSES FOR THE FORESEEABLE FUTURE AND MAY NEVER
ACHIEVE PROFITABILITY.
  JAG MEDIA WILL REQUIRE ADDITIONAL FUNDS TO MEET ITS CASH OPERATING EXPENSES AND ACHIEVE ITS CURRENT
BUSINESS STRATEGY.
   13




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JAG MEDIA HAS MATERIAL OUTSTANDING INDEBTEDNESS WHICH CAN ONLY BE REPAID BY ISSUING EQUITY.
  JAG MEDIA HAS NO ARRANGEMENTS CURRENTLY IN EFFECT, SUCH AS THE EQUITY LINE IT HAS HISTORICALLY
USED, TO PROVIDE IT WITH FUTURE LIQUIDITY.
  JAG MEDIA MAY NOT BE ABLE TO STOP CONTRACTION OF JAG MEDIA SUBSCRIBER REVENUES AND ATTRACT
SUFFICIENT INSTITUTIONAL CUSTOMERS.
   JAG MEDIA HAS BEEN FORCED TO DISCONTINUE ITS COMMENTATORS AND THE FREE PORTION OF ITS WEBSITE WHICH
MAY CAUSE JAG MEDIA TO LOSE SUBSCRIBERS.
  14




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JAG MEDIA HAS BEEN FORCED TO REDUCE ITS NUMBER OF EMPLOYEES WHICH MAY AFFECT THE QUALITY OF ITS
REMAINING PRODUCTS AND CAUSE JAG MEDIA TO LOSE SUBSCRIBERS.
  JAG MEDIA MAY NOT BE SUCCESSFUL IN ITS ATTEMPT TO REFOCUS ITS BUSINESS STRATEGY TO TARGET PRIMARILY
SUBSCRIPTIONS BY INSTITUTIONAL INVESTORS FOR ITS TRADITIONAL PRODUCT.
  JAG MEDIA MAY NOT BE SUCCESSFUL AT BUILDING BRAND AWARENESS OR BUILDING STRATEGIC RELATIONSHIPS.
  JAG MEDIA HAS NOT BEEN SUCCESSFUL IN SUFFICIENTLY REDUCING COSTS OR IN INCREASING REVENUES.
  JAG MEDIA MAY NOT BE ABLE TO FIND OR CONSUMMATE A SUITABLE MERGER OR ACQUISITION.
  15




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JAG MEDIA MAY BE EFFECTIVELY ACQUIRED AND MANAGED BY A BUSINESS WITH NO EXPERIENCE IN ITS SECTOR.
  JAG MEDIA MAY EXPERIENCE DIFFICULTIES IN DEVELOPING NEW AND ENHANCED SERVICES AND PRODUCTS.
    JAG MEDIAS FAILURE TO RESPOND TO RAPID CHANGES IN TECHNOLOGY AND ITS APPLICATIONS AND INTENSE
COMPETITION IN THE MOBILE SERVICES INDUSTRY PRODUCTS COULD MAKE JAG MEDIA SERVICES OBSOLETE.
  16




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JAG MEDIA MAY NOT SUCCESSFULLY ATTRACT OR MANAGE STRATEGIC ALLIANCES.
  JAG MEDIA MAY HAVE TO DEFEND AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AND LIBEL AND
DEFAMATION CLAIMS, WHICH MAY CAUSE SIGNIFICANT OPERATIONAL EXPENDITURES.
  FAILURE TO MAINTAIN JAG MEDIAS REPUTATION FOR TRUSTWORTHINESS MAY REDUCE THE NUMBER OF ITS USERS,
WHICH MAY HARM JAG MEDIAS BUSINESS.
  JAG MEDIA DEPENDS ON KEY PEOPLE IN MANAGEMENT AND OPERATIONS.
  CERTAIN TERMS OF THE EMPLOYMENT AGREEMENTS OF JAG MEDIAS EXECUTIVE OFFICERS COULD DISCOURAGE A
POTENTIAL TAKEOVER OF JAG MEDIA BY A THIRD PARTY.
  17




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JAG MEDIA MAY FACE DIFFICULTIES CONCERNING CONTINUED AVAILABILITY OF ITS SOURCES OF INFORMATION FOR
ITS PRODUCTS.
  JAG MEDIA MAY BECOME A PARTY TO VARIOUS LEGAL PROCEEDINGS RELATING TO THE DISSEMINATION OF RUMORS
AND OTHER INFORMATION OF QUESTIONABLE RELIABILITY.
  THE UNCERTAINTY OF FUTURE GOVERNMENT REGULATION OF THE INTERNET MAY ADD TO JAG MEDIAS OPERATING
COSTS.
  18




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JAG MEDIA COULD BE DEEMED TO BE AN INVESTMENT ADVISER SUBJECT TO FEDERAL OR STATE REGULATORY
OVERSIGHT.
  RISKS RELATED TO JAG MEDIAS INDUSTRY
 JAG MEDIAS BUSINESS IS CURRENTLY DEPENDENT ON THE CONTINUED PUBLIC INTEREST IN THE STOCK MARKET.
  JAG MEDIA STOCK  AND TECHNOLOGY AND INTERNET STOCKS GENERALLY  HAVE BEEN AND MAY CONTINUE TO BE
VOLATILE.
  MOST OF JAG MEDIAS CURRENT AND POTENTIAL COMPETITORS HAVE GREATER NAME RECOGNITION, FINANCIAL,
TECHNICAL AND MARKETING RESOURCES, AND MORE EXTENSIVE CUSTOMER BASES AND INDUSTRY RELATIONSHIPS
THAN JAG MEDIA DOES, ALL OF WHICH COULD BE LEVERAGED TO GAIN MARKET SHARE TO JAG MEDIAS DETRIMENT.
  19




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
    
    Online financial news and information providers including Yahoo Finance,
Marketwatch, TheStreet.com, Briefing.com, America Online Personal Finance, Reuters and
MotleyFool.com;
    
    Internet portals and search engines such as America Online, MSN and Yahoo;
    
    Traditional media sources such as The Wall Street Journal, Investors Business
Daily, The Financial Times, Barrons, CNN/Money, and MSN Money/CNBC, all of whom also
have an Internet presence;
    
    Terminal-based financial news providers including Bloomberg, Reuters and Dow Jones;
and
    
    Online brokerage firms such as TD Ameritrade, E*Trade Financial, Charles Schwab and
Fidelity.
 JAG MEDIA IS IN AN INTENSELY COMPETITIVE BUSINESS WITH LOW BARRIERS TO ENTRY.
  JAG MEDIA MAY NOT BE ABLE TO ADEQUATELY PROTECT ITSELF AGAINST SECURITY RISKS.
  RISKS RELATED TO JAG MEDIAS CAPITAL STRUCTURE
 SHAREHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION FROM THE CONVERSION OF THE SECURED CONVERTIBLE
DEBENTURES INTO JAG MEDIA COMMON STOCK.
   20




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Number of SharesIssuable on Conversion
    
    Percentage ofof Convertible
    
    Issued andConversion Price
    
    Debentures(1)
    
    Outstanding(2)$0.40
    
    
    4,800,000
    
    
    
    8
    %$0.30
    
    
    6,400,000
    
    
    
    11
    %$0.20
    
    
    9,600,000
    
    
    
    16
    %$0.15
    
    
    12,800,000
    
    
    
    20
    %$0.10
    
    
    19,200,000
    
    
    
    27
    %$0.05
    
    
    38,400,000
    
    
    
    43
    %
 
 (1)
    
    Represents the number of shares issuable if all principal amounts of all of the secured
convertible debentures were converted at the corresponding conversion price without regard to
any contractual or other restriction on the number of securities the selling stockholder may
own at any point in time.(2)
    
    Represents the percentage of JAG Media total outstanding common stock prior to conversion,
based on 51,783,163 shares issued and outstanding (excluding shares of JAG Media prior classes
of common stock exchangeable on presentation for shares of JAG Media current common stock) on
October 31, 2007, represented by the shares issuable on conversion of all the secured
convertible debentures as shown in the prior column. THE CONTINUOUSLY ADJUSTABLE CONVERSION PRICE FEATURE OF THE SECURED CONVERTIBLE DEBENTURES COULD
REQUIRE JAG MEDIA TO ISSUE A SUBSTANTIALLY GREATER NUMBER OF SHARES, WHICH WILL CAUSE DILUTION TO
JAG MEDIA EXISTING STOCKHOLDERS.
  SHAREHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION FROM THE EXERCISE OF THE WARRANTS TO PURCHASE JAG
MEDIA COMMON STOCK.
   21




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JAG MEDIA HAS LIMITED CASH RESOURCES WHICH EXPOSES JAG MEDIA TO CLAIMS.
  THE MARKET FOR JAG MEDIAS STOCK IS LIMITED.
  THE RESALE BY YA GLOBAL OF JAG MEDIAS SHARES MAY LOWER THE MARKET PRICE OF JAG MEDIAS COMMON
STOCK.
   A LARGE PERCENTAGE OF JAG MEDIAS STOCK COULD BE OWNED BY YA GLOBAL.
  22




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BECAUSE JAG MEDIAS STOCK CURRENTLY TRADES BELOW $5.00 PER SHARE, AND IS QUOTED ON THE PINK SHEETS,
JAG MEDIAS STOCK IS CONSIDERED BY THE SEC A PENNY STOCK, WHICH CAN ADVERSELY AFFECT ITS
LIQUIDITY.
  JAG MEDIAS AMENDED CHARTER CONTAINS PROVISIONS WHICH MAY DISCOURAGE AN UNAFFILIATED PARTY TO TAKE
JAG MEDIA OVER.
  YOUR OWNERSHIP OF SHARES IN JAG MEDIA COULD BE IN DOUBT DUE TO POSSIBLE NAKED SHORTING OF JAG MEDIA
COMMON STOCK.
  RISKS RELATED TO THE PROPOSED MERGER AND CRYPTOMETRICS BUSINESS
  OFFICERS AND DIRECTORS HAVE POTENTIAL CONFLICTS OF INTEREST IN THE MERGER.
  23




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MANAGEMENT OF THE BUSINESS AFTER THE MERGER.
  CRYPTOMETRICS STOCKHOLDERS WILL EXERCISE SIGNIFICANT CONTROL OVER JAG MEDIA AS A RESULT OF THE
MERGER.
  FUTURE ISSUANCES OF JAG MEDIAS COMMON STOCK COULD DILUTE CURRENT STOCKHOLDERS OR ADVERSELY AFFECT
THE MARKET.
   CRYPTOMETRICS HAS A HISTORY OF LOSSES AND ANTICIPATES THAT IT WILL INCUR CONTINUED LOSSES FOR THE
FORESEEABLE FUTURE. CRYPTOMETRICS DOES NOT HAVE A SIGNIFICANT SOURCE OF REVENUE AND MAY NEVER
GENERATE AN OPERATING PROFIT.
  24




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CRYPTOMETRICS MAY REQUIRE ADDITIONAL CAPITAL FOR ITS OPERATIONS AND OBLIGATIONS, WHICH IT MAY NOT
BE ABLE TO RAISE OR, EVEN IT IF DOES, COULD HAVE DILUTIVE AND OTHER NEGATIVE EFFECTS ON IT
STOCKHOLDERS.
   CRYPTOMETRICS MARKETS ARE EVOLVING AND CHARACTERIZED BY RAPID TECHNOLOGICAL CHANGE, WHICH IT MAY
NOT BE ABLE TO KEEP PACE WITH.
  CRYPTOMETRICS SUCCESS DEPENDS ON ITS KEY PERSONNEL WHOM IT MAY NOT BE ABLE TO RETAIN, AND IT MAY
NOT BE ABLE TO RECRUIT ADDITIONAL QUALIFIED PERSONNEL TO MEET ITS NEEDS, WHICH WOULD HARM ITS
BUSINESS.
   25




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CRYPTOMETRICS DEPENDS ON A LIMITED NUMBER OF CUSTOMERS FOR A SUBSTANTIAL PORTION OF ITS REVENUES.
THE LOSS OF ANY KEY CUSTOMER WITHOUT REPLACEMENT COULD SUBSTANTIALLY REDUCE CRYPTOMETRICS FUTURE
REVENUES.
  CRYPTOMETRICS DEPENDS ON APPLICATIONS AND PROPRIETARY RIGHTS, WHICH MAY OFFER ONLY LIMITED
PROTECTION AGAINST POTENTIAL INFRINGEMENT. IF CRYPTOMETRICS IS UNABLE TO PROTECT ITS PATENTS AND
PROPRIETARY RIGHTS, ITS BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WILL BE HARMED.
  CRYPTOMETRICS MAY FACE INTELLECTUAL PROPERTY INFRINGEMENT OR OTHER CLAIMS AGAINST IT OR ITS
CUSTOMERS THAT COULD BE COSTLY TO DEFEND AND RESULT IN LOSS OF SIGNIFICANT RIGHTS.
  26




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IF CRYPTOMETRICS PRODUCTS AND SERVICES DO NOT ACHIEVE MARKET ACCEPTANCE, ITS BUSINESS AND
OPERATIONS WOULD BE ADVERSELY AFFECTED.
  CRYPTOMETRICS MAY ULTIMATELY BE UNABLE TO COMPETE IN THE MARKETS FOR THE PRODUCTS AND SERVICES IT
OFFERS.
  RISKS OF A CONGLOMERATE BUSINESS
  RISKS RELATED TO NO FAIRNESS OPINION
  27




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RISKS OF NON-COMPLETION COSTS
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
     
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  28




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
SECURITIES
    High
    
    LowFiscal Year 2006First Quarter, ending October 31, 2005
    
    
    0.30
    
    
    
    0.02Second Quarter, ending January 31, 2006
    
    
    0.46
    
    
    
    0.14Third Quarter, ending April 30, 2006
    
    
    0.41
    
    
    
    0.19Fourth Quarter, ending July 31, 2006
    
    
    0.33
    
    
    
    0.20Fiscal Year 2007First Quarter, ending October 31, 2006
    
    
    0.30
    
    
    
    0.05Second Quarter, ending January 31, 2007
    
    
    0.45
    
    
    
    0.12Third Quarter, ending April 30, 2007
    
    
    0.60
    
    
    
    0.30Fourth Quarter, ending July 31, 2007
    
    
    1.45
    
    
    
    0.44
   RIGHTS OF SECURITY HOLDERS
  29




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General
  Voting Rights
  Distribution of Assets
  Dividends
  Mandatory Redemption
  30




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Preemptive Rights
  Preferred Stock
  Future Financings and Acquisitions
  Anti-Takeover Effects
   Options
  31




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Warrants
    Convertible Debentures
  Dividend Policy
   32




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Recent Sale of Unregistered Securities
         33




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Date
    
    Principal Amount Converted
    
    Number of SharesJune 28, 2006
    
    $
    25,000
    
    
    
    125,313July 21, 2006
    
    $
    50,000
    
    
    
    279,642August 3, 2006
    
    $
    50,000
    
    
    
    279,642August 15, 2006
    
    $
    50,000
    
    
    
    289,855September 14, 2006
    
    $
    50,000
    
    
    
    556,793September 18, 2006
    
    $
    50,000
    
    
    
    556,793November 20, 2006
    
    $
    150,000
    
    
    
    1,246,883November 30, 2006
    
    $
    105,000
    
    
    
    872,818January 5, 2007
    
    $
    100,000
    
    
    
    629,327August 23, 2007
    
    $
    500,000
    
    
    
    1,250,000August 28, 2007
    
    $
    420,000
    
    
    
    1,050,000September 25, 2007
    
    $
    550,000
    
    
    
    1,375,000September 28, 2007
    
    $
    130,000
    
    
    
    325,000
 34




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Purchases of Equity Securities
  35




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ITEM 6. SELECTED FINANCIAL DATA
  Year Ended
    
    
    Year Ended
    
    
    Year Ended
    
    
    Year Ended
    
    
    Year endedJuly 31, 2007
    
    
    July 31, 2006
    
    
    July 31, 2005
    
    
    July 31, 2004
    
    
    July 31, 2003STATEMENT OF OPERATIONS:Revenues
    
    $
    203,286
    
    
    $
    166,692
    
    
    $
    239,651
    
    
    $
    253,256
    
    
    $
    385,881Operating loss
    
    $
    (1,720,875
    )
    
    $
    (2,347,319
    )
    
    $
    (1,701,616
    )
    
    $
    (1,984,479
    )
    
    $
    (2,539,917
    )Net loss
    
    $
    (11,775,152
    )
    
    $
    (3,636,856
    )
    
    $
    (1,889,165
    )
    
    $
    (2,005,637
    )
    
    $
    (2,578,735
    )Net loss per common share
    
    $
    (0.25
    )
    
    $
    (0.08
    )
    
    $
    (0.04
    )
    
    $
    (0.05
    )
    
    $
    (0.07
    )Weighted average number of common
shares
    
    
    46,466,147
    
    
    
    42,891,017
    
    
    
    44,510,641
    
    
    
    42,696,349
    
    
    
    37,709,338BALANCE SHEET:Total assets
    
    $
    134,349
    
    
    $
    578,233
    
    
    $
    838,102
    
    
    $
    507,373
    
    
    $
    537,654Total liabilities
    
    $
    14,773,255
    
    
    $
    5,073,969
    
    
    $
    2,169,570
    
    
    $
    104,695
    
    
    $
    599,458Working Capital (deficit)
    
    $
    (12,086,797
    )
    
    $
    (2,545,349
    )
    
    $
    500,203
    
    
    $
    367,392
    
    
    $
    (87,296
    )Stockholders equity (deficiency)
    
    $
    (14,638,910
    )
    
    $
    (4,495,740
    )
    
    $
    (1,331,472
    )
    
    $
    402,674
    
    
    $
    (61,808
    )CASH FLOWS:Net cash used in operating activities
    
    $
    (448,538
    )
    
    $
    (2,194,376
    )
    
    $
    (1,524,128
    )
    
    $
    (1,700,158
    )
    
    $
    (2,273,100
    )Net cash used in investing activities
    
    $
    (15,573
    )
    
    $
    (40,871
    )
    
    $
    (51,290
    )
    
    $
    (29,276
    )
    
    
    Net cash provided by financing
activities
    
    $
    14,000
    
    
    $
    2,025,000
    
    
    $
    1,850,000
    
    
    $
    1,692,500
    
    
    $
    2,689,210
   Fiscal Year
    
    
    October 31,
    
    
    January 31,
    
    
    April 30,
    
    
    July 31,Revenues
    
    2007 (restated)*
    
    
    
    43,331
    
    
    
    57,806
    
    
    
    63,171
    
    
    
    38,9782006
    
    
    
    40,023
    
    
    
    45,075
    
    
    
    58,267
    
    
    
    23,327Gross profit
    
    2007 (restated)*
    
    
    
    18,681
    
    
    
    40,324
    
    
    
    44,649
    
    
    
    26,5852006
    
    
    
    14,150
    
    
    
    26,878
    
    
    
    46,413
    
    
    
    (1,856
    )Operating loss
    
    2007 (restated)*
    
    
    
    (272,431
    )
    
    
    (524,994
    )
    
    
    (615,343
    )
    
    
    (308,107
    )2006
    
    
    
    (521,886
    )
    
    
    (664,105
    )
    
    
    (704,759
    )
    
    
    (456,569
    )Net loss
    
    2007 (restated)*
    
    
    
    (247,652
    )
    
    
    (3,430,594
    )
    
    
    (1,212,086
    )
    
    
    (6,884,820
    )2006
    
    
    
    (594,554
    )
    
    
    (737,461
    )
    
    
    (776,250
    )
    
    
    (1,528,591
    )Net loss per common
share, basic and
diluted
    
    2007 (restated)*
    
    
    
    (0.01
    )
    
    
    (0.07
    )
    
    
    (0.03
    )
    
    
    (0.14
    )2006
    
    
    
    (0.01
    )
    
    
    (0.02
    )
    
    
    (0.02
    )
    
    
    (0.03
    )
 
 *
    
    See Note 11 of the Notes to the consolidated financial statements. 36




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
       37




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Year Ended July 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    203,286
    
    
    $
    166,692
    
    
    $
    239,651Operating expenses:Cost of revenues
    
    
    73,047
    
    
    
    85,585
    
    
    
    152,371Selling expenses
    
    
    97,029
    
    
    
    46,637
    
    
    
    43,441General and adminstrative expenses
    
    
    1,754,085
    
    
    
    2,381,789
    
    
    
    1,745,455Totals
    
    
    1,924,161
    
    
    
    2,514,011
    
    
    
    1,941,267Loss from operations
    
    
    (1,720,875
    )
    
    
    (2,347,319
    )
    
    
    (1,701,616
    )Other income (expense):(Loss) gain on change in value of derivative liability
    
    
    (8,524,813
    )
    
    
    1,094,246
    
    
    
    Loss on extinguishment of promissory notes
    
    
    
    
    
    
    (77,373
    )
    
    
    Writeoff of goodwill
    
    
    
    
    
    
    
    
    
    
    (50,400
    )Interest income
    
    
    54
    
    
    
    2,573
    
    
    
    8,357Finance charge for derivative liability in
excess of proceeds from convertible debentures
    
    
    
    
    
    
    (1,795,005
    )
    
    
    Interest expense
    
    
    (1,529,518
    )
    
    
    (513,978
    )
    
    
    (145,506
    )Net loss
    
    $
    (11,775,152
    )
    
    $
    (3,636,856
    )
    
    $
    (1,889,165
    )
   38




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39




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40




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##### Table of Contents



Acquisition of Software Development Business:
     Equipment
    
    $
    11,000Other Assets
    
    
    100Goodwill
    
    
    50,400Total
    
    $
    61,500
 41




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##### Table of Contents



Year ending
    
    AmountJuly 31, 2008
    
    $
    53,000
         42




---



##### Table of Contents



43




---



##### Table of Contents



44




---



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45




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A(T). CONTROLS AND PROCEDURES
   46




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##### Table of Contents



Material Weaknesses Identified
     Remediation
Plan regarding the Material Weaknesses
    Mitigating
Procedures Adopted to Ensure Accuracy of Financial Information for
the Year Ended July 31, 2007
     Changes
in Internal Controls
  
 ITEM 9B. OTHER INFORMATION
  47




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
     Section 16(a) Beneficial Ownership Reporting Compliance
   Code of Ethics
  
 ITEM 11. EXECUTIVE COMPENSATION
 Compensation Discussion & Analysis
  48




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##### Table of Contents




    
    1999 Long-Term Incentive Plan
  
    
    either incentive stock options or non-qualified stock options;
    
    stock appreciation rights;
    
    restricted or deferred stock;
    
    dividend equivalents;
    
    bonus shares and awards in lieu of our obligations to pay cash compensation; and
    
    other awards, the value of which is based in whole or in part upon the value of the
Common Stock.
     49




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##### Table of Contents




    
    Mazzarisi and Schoepfer Employment Agreements
       50




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##### Table of Contents



Annual Compensation
  Summary Compensation Table
 Name and Principal
    
    
    
    
    
    
    
    
    
    
    
    
    
    All otherPosition
    
    Fiscal Year
    
    Salary
    
    Bonus
    
    Compensation
    
    TotalThomas J. Mazzarisi,
    
    
    2007
    
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    $
    150,000Chairman of the Board,
    
    
    2006
    
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    $
    150,000Chief Executive
Officer
    
    
    2005
    
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    $
    150,000and General CounselStephen J. Schoepfer,
    
    
    2007
    
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    $
    150,000President, Chief
    
    
    2006
    
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    $
    150,000Operating Officer,
    
    
    2005
    
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    $
    150,000Chief Financial
Officer and Secretary
 Option Grants in Fiscal Year 2007
   Outstanding Equity Awards at July 31, 2007 Fiscal Year End
 Number of
    
    Number ofSecurities
    
    SecuritiesUnderlying
    
    Underlying
    
    Option Exercise orUnexercised
    
    Unexercised
    
    Base
    
    OptionOptions
    
    Options
    
    Price Per
    
    ExpirationName
    
    Exercisable
    
    Unexercisable
    
    ($/Share)
    
    DateThomas J. Mazzarisi
    
    
    500,000
    
    
    
    0
    
    
    
    0.02
    
    
    August 31, 2011Stephen J. Schoepfer
    
    
    250,000
    
    
    
    0
    
    
    
    0.02
    
    
    August 31, 2011
 51




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##### Table of Contents



Director Compensation
  Indemnification of Officers and Directors
    
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER MATTERS
  Number of Shares
    
    Percentage ofName & Address of Beneficial Owner
    
    Beneficiary Owned
    
    ClassThomas
Mazzarisi (Chairman of the Board Chief Executive Officer and General Counsel)
    
    
    610,000
    (1)(2)
    
    
    1.2
    %6865 SW 18th Street, Suite
B13, Boca Raton, Florida 33433Stephen
Schoepfer (President, Chief Operating Officer, Chief Financial Officer and Director)
    
    
    325,000
    (1)(3)
    
    
    *6865 SW 18th Street,
Suite B13, Boca Raton, Florida 33433All executive officers and directors as a group (2 persons)
    
    
    935,000
    (1)(2)(3)
    
    
    1.8
    %
 
 *
    
    Less than one percent(1)
    
    Based on 51,379,914 shares of Common Stock issued and outstanding as of October 31, 2007
(excluding shares of prior classes exchangeable for shares of Common Stock pursuant to our
recapitalizations), plus the number of shares of Common Stock which the beneficial owner has
the right to acquire within 60 days, if any. 52




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##### Table of Contents



(2)
    
    Includes 500,000 shares of Common Stock issuable upon the exercise of stock options.(3)
    
    Includes 250,000 shares of Common Stock issuable upon the exercise of stock options. Equity Compensation Plan Information as of July 31, 2007
 Number of securitiesremaining available forNumber of securities
    
    Weighted average
    
    future issuance underto be issued upon
    
    exercise price of
    
    equity compensationexercise of
    
    outstanding
    
    plans (excludingoutstanding options,
    
    options, warrants
    
    securities reflected inwarrants and rights
    
    and rights
    
    column (a))(a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    Not applicable
    
    Not applicable
    
    Not applicable1999 Long-Term
Incentive Plan (not
approved by
security holders)
    
    
    1,000,000
    
    
    $
    .02
    
    
    
    5,000,000Individual
Compensation
Arrangements (not
approved by
security holders)
    
    Not applicable
    
    Not applicable
    
    Not applicableTOTAL
    
    
    1,000,000
    (2)
    
    
    ___
    
    
    
    5,000,000
    (1)
 
 (1)
    
    The maximum number of shares that may be subject to outstanding awards under our 1999
Long-Term Incentive Plan is 6,000,000 shares of Common Stock. Because this limitation applies
only to outstanding awards under the plan, as the outstanding options included in column (a)
are either exercised, forfeited or expire pursuant to their terms, the number of shares
remaining available for future issuance in column (c) shall be increased by the number of
shares subject to such option so exercised, forfeited or expired.(2)
    
    See Note 6 to Financial Statements.  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
   53




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
 Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees
  Pre- Approval Policies and Procedures
   54




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 JAG Media Holdings, Inc. and Subsidiaries
 PAGEReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets July 31, 2007 and July 31, 2006
    
    
    F-3Consolidated Statements of Operations Years Ended July 31, 2007, 2006 and 2005
    
    
    F-4Consolidated Statement of Changes in Stockholders Deficiency Years
Ended July 31, 2007, 2006 and 2005
    
    
    F-5Consolidated Statements of Cash Flows Years Ended July 31, 2007, 2006 and 2005
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7/25Schedule II
 Valuation and Qualifying Accounts
    
    
    F-26
    Exhibit No.
    
    Description2.1
    
    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,
Inc., a New Jersey corporation, and JagNotes.com, Inc., a Nevada corporation (2)3.1
    
    Composite Amended and Restated Articles of Incorporation of JAG Media Holdings,
Inc. (18)3.2
    
    Bylaws of Registrant (2)3.3
    
    Amendment to Bylaws of Registrant (6)3.4
    
    Amendment to Bylaws of Registrant (12)4.1
    
    Form of Common Stock Certificate (15)4.2
    
    Form of Series 2 Class B Stock Certificate (15)4.3
    
    Promissory Note, dated January 25, 2005, by and between JAG Media Holdings, Inc.
and YA Global Investments, L.P., formerly known as Cornell Capital Partners, LP
(11)4.4
    
    Letter Agreement, dated August 5, 2005, extending maturity date of Promissory
Note dated January 25, 2005 by and between JAG Media Holdings, Inc. and YA Global
Investments, L.P., Cornell Capital Partners, LP (14)4.5
    
    Securities Purchase Agreement, effective May 25, 2006, by and between JAG Media
Holdings, Inc. and YA Global Investments, L.P., formerly known as Cornell Capital
Partners, LP (17)
 55




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##### Table of Contents



Exhibit No.
    
    Description4.6
    
    $1,900,000 Secured Convertible Debenture issued to YA Global Investments, L.P.,
formerly known as Cornell Capital Partners, LP, effective May 25, 2006 (17)4.7
    
    Security Agreement, effective May 25, 2006, by and between JAG Media Holdings,
Inc. and YA Global Investments, L.P., formerly known as Cornell Capital Partners,
LP (17)4.8
    
    Security Agreement, effective May 25, 2006, by and between JAG Media LLC and YA
Global Investments, L.P., formerly known as Cornell Capital Partners, LP (17)4.9
    
    $1,250,000 Secured Convertible Debenture issued to YA Global Investments, L.P.,
formerly known as Cornell Capital Partners, LP, effective May 25, 2006 (17)4.10
    
    Warrant No. CCP-1 for 2,000,000 shares of common stock issued to YA Global
Investments, L.P., formerly known as Cornell Capital Partners, LP, effective May
25, 2006 (17)4.11
    
    Warrant No. CCP-2 for 2,000,000 shares of common stock issued to YA Global
Investments, L.P., formerly known as Cornell Capital Partners, LP, effective May
25, 2006 (17)4.12
    
    Warrant No. CCP-3 for 2,000,000 shares of common stock issued to YA Global
Investments, L.P., formerly known as Cornell Capital Partners, LP, effective May
25, 2006 (17)4.13
    
    Warrant No. CCP-4 for 3,000,000 shares of common stock issued to YA Global
Investments, L.P., formerly known as Cornell Capital Partners, LP, effective May
25, 2006 (17)4.14
    
    Warrant No. CCP-5 for 3,000,000 shares of common stock issued to YA Global
Investments, L.P., formerly known as Cornell Capital Partners, LP, effective May
25, 2006 (17)4.15
    
    $1,000,000 Secured Convertible Debenture issued to YA Global Investments, L.P.,
formerly known as Cornell Capital Partners, LP, effective May 31, 2006 (17)10.1
    
    JAG Media Holdings, Inc. 1999 Long Term Incentive Plan, as amended* (4)10.2
    
    Amended and Restated Employment Agreement, dated August 31, 2001, by and between
Thomas J. Mazzarisi and Registrant* (3)10.3
    
    Amended and Restated Employment Agreement, dated August 31, 2001, by and between
Stephen J. Schoepfer and Registrant* (3)10.4
    
    Amendment to Amended and Restated Employment Agreement, dated as of November 3,
2005, by and between Registrant and Thomas J. Mazzarisi* (15)10.5
    
    Amendment to Amended and Restated Employment Agreement, dated as of November 3,
2005, by and between Registrant and Stephen J. Schoepfer* (15)10.6
    
    Amendment to Amended and Restated Employment Agreement, dated as of November 12,
2007, by and between Registrant and Thomas J. Mazzarisi* **10.7
    
    Amendment to Amended and Restated Employment Agreement, dated as of November 12,
2007, by and between Registrant and Stephen J. Schoepfer* **10.8
    
    Consulting Agreement, dated November 12, 2007, between JAG Media Holdings, Inc.
and Walsh Organization, Inc. (8)10.9
    
    Power of Attorney and Contingent Fee Contract, dated June 14, 2002, among JAG
Media Holdings, Inc., Gary Valinoti and the Law Firm of OQuinn, Laminack &
Pirtle (8)10.10
    
    Subscription Agreement, dated December 10, 2002, between JAG Media Holdings, Inc.
and Bay Point Investment Partners LLC (5)10.11
    
    Placement Agent Agreement, dated December 10, 2002, between JAG Media Holdings,
Inc. and RMC 1 Capital Markets, Inc. (5)10.12
    
    Placement Agent Agreement, dated as of June 19, 2003, between JAG Media Holdings,
Inc. and RMC 1 Capital Markets, Inc., as amended on August 12, 2003 (7)
 56




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##### Table of Contents



Exhibit No.
    
    Description10.13
    
    Subscription Agreement, dated as of June 19, 2003, between JAG Media Holdings,
Inc. and Bay Point Investment Partners LLC, as amended on August 12, 2003 (7)10.14
    
    Subscription Agreement, dated as of September 25, 2003, between JAG Media
Holdings, Inc. and Kuekenhof Equity Fund L.P. (8)10.15
    
    Non-Circumvention/Non-Disclosure Agreement, dated as of January 1, 2004 between
Flow Capital Advisors Inc. and JAG Media Holdings, Inc.(26)10.16
    
    Finders Fee Agreement, dated as of January 5, 2004, between JAG Media Holdings,
Inc. and Flow Capital Advisors, Inc. (9)10.17
    
    Business Sale Agreement dated November 24, 2004, by and among TComm Limited,
TComm (UK) Limited and JAG Media Holdings, Inc. (10)10.18
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings,
Inc. and Stuart McClean* (10)10.19
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings,
Inc. and Joanne McClean* (10)10.20
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings,
Inc. and Craig Hardcastle* (10)10.21
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings,
Inc. and Ian Hardcastle* (10)10.22
    
    Finders Fee Agreement, dated as of March 14, 2005, by and between JAG Media
Holdings, Inc. and Flow Capital Advisors, Inc.(26)10.23
    
    Company Voting and Lock Up Agreement dated as of December 27, 2005 by and among
JAG Media Holdings, Inc., Robert Barra and Michael Vitale (16)10.24
    
    Letter Agreement, effective May 25, 2006, by and between JAG Media Holdings, Inc.
and YA Global Investments, L.P., formerly known as Cornell Capital Partners, LP,
converting $2,000,000 Promissory Note dated January 25, 2005, as amended August
5, 2005, made by JAG Media Holdings, Inc. for the benefit of YA Global
Investments, L.P.(17)10.25
    
    Investor Registration Rights Agreement, effective May 25, 2006, by and between
JAG Media Holdings, Inc. and YA Global Investments, L.P., formerly known as
Cornell Capital Partners, LP (17)10.26
    
    Letter Agreement, effective May 25, 2006, by and between JAG Media Holdings, Inc.
and YA Global Investments, L.P., formerly known as Cornell Capital Partners, LP,
terminating Equity Line Agreement Purchase Agreement by and between JAG Media
Holdings, Inc. and YA Global Investments, L.P. dated as of April 9, 2002, as
amended on July 8, 2004 and July 21, 2004 (17)10.27
    
    Irrevocable Transfer Agent Instructions, effective May 25, 2006, by and among JAG
Media Holdings, Inc., Transfer Online, Inc. and YA Global Investments, L.P.,
formerly known as Cornell Capital Partners, LP (17)10.28
    
    Letter Agreement, dated January 24, 2007, by and among JAG Media Holdings, Inc.,
YA Global Investments, L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale (19)10.29
    
    Letter Agreement, dated February 26, 2007, by and among JAG Media Holdings, Inc.,
YA Global Investments,L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale(20)10.30
    
    Letter Agreement, dated April 2, 2007, by and among JAG Media Holdings, Inc., YA
Global Investments,L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale(21)
 57




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##### Table of Contents



Exhibit No.
    
    Description10.31
    
    Letter Agreement, dated April 20, 2007, by and among JAG Media Holdings, Inc., YA
Global Investments,L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale(22)10.32
    
    Letter Agreement, dated May 11, 2007, by and among JAG Media Holdings, Inc., YA
Global Investments,L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale(23)10.33
    
    Letter Agreement, dated May 18, 2007, by and among JAG Media Holdings, Inc., YA
Global Investments, L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale(24)10.34
    
    Letter Agreement, dated June 15, 2007, by and among JAG Media Holdings, Inc., YA
Global Investments,L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale(25)10.35
    
    Letter Agreement, dated July 16, 2007, by and among JAG Media Holdings, Inc., YA
Global Investments, L.P., formerly known as Cornell Capital Partners, LP,
Cryptometrics, Inc., Robert Barra and Michael Vitale(26)10.36
    
    Letter Agreement, dated September 10, 2007, by and among JAG Media Holdings,
Inc., YA Global Investments, L.P., Cryptometrics, Inc., Robert Barra and Michael
Vitale(27)10.37
    
    Letter Agreement, dated November 7, 2007, by and among JAG Media Holdings, Inc.,
YA Global Investments, L.P., Cryptometrics, Inc., Robert Barra and Michael
Vitale**14.1
    
    Code of Ethics (8)21.1
    
    Subsidiaries of Registrant(20)31.1
    
    Section 302 Certification of Chief Executive Officer**31.2
    
    Section 302 Certification of Chief Financial Officer**32.1
    
    Section 906 Certification of Chief Executive Officer and Chief Financial Officer**99.1
    
    Articles of Merger of JagNotes, Inc. into JagNotes.com, Inc. dated July 29, 1999
(including Certificate of Correction related thereto) (2)99.2
    
    Letter of Intent, dated September 9, 2005, by and among the Cryptometrics, Inc.
and JAG Media Holdings, Inc. (13)99.3
    
    Agreement and Plan of Merger, dated as of December 27, 2005, by and among JAG
Media Holdings, Inc., Cryptometrics Acquisition, Inc., Cryptometrics, Inc. and
the stockholders named therein (16)99.4
    
    Letter Agreement, dated as of January 24, 2007, by and among JAG Media Holdings,
Inc., Cryptometrics, Inc., Robert Barra, Michael Vitale, Cryptometrics
Acquisition, Inc., Karlen & Stolzar, LLP, Thomas J. Mazzarisi and Stephen J.
Schoepfer amending Agreement and Plan of Merger, (19)99.5
    
    Letter Agreement, dated as of February 26, 2007, by and among JAG Media Holdings,
Inc., Cryptometrics, Inc., Robert Barra, Michael Vitale, Cryptometrics
Acquisition, Inc., Karlen & Stolzar, LLP, Thomas J. Mazzarisi and Stephen J.
Schoepfer amending Agreement and Plan of Merger(20)99.6
    
    Amendment to Merger Agreement, dated as of April 2, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale, Thomas J. Mazzarisi and Stephen J.
Schoepfer(21)
 58




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##### Table of Contents



Exhibit No.
    
    Description99.7
    
    Amendment to Merger Agreement, dated as of April 20, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale, Thomas J. Mazzarisi and Stephen J.
Schoepfer(22)99.8
    
    Amendment to Merger Agreement, dated as of May 11, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale, Thomas J. Mazzarisi and Stephen J.
Schoepfer(23)99.9
    
    Amendment to Merger Agreement, dated as of May 18, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale,Thomas J. Mazzarisi and Stephen J.
Schoepfer(24)99.10
    
    Amendment to Merger Agreement, dated June 15, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale, Thomas J. Mazzarisi and Stephen J.
Schoepfer(25)99.11
    
    Amendment to Merger Agreement, dated July 16, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale, Thomas J. Mazzarisi and Stephen J.
Schoepfer(26)99.12
    
    Amendment to Merger Agreement, dated August 16, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale, Thomas J. Mazzarisi and Stephen J.
Schoepfer(27)99.13
    
    Amendment to Merger Agreement,
dated November 7, 2007, by and among JAG Media
Holdings, Inc., Cryptometrics, Inc., Cryptometrics Acquisition, Inc., Karlen &
Stolzar, LLP, Robert Barra, Michael Vitale, Thomas J. Mazzarisi and Stephen J.
Schoepfer**
 
 **
    
    Filed herewith.(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. 1 to our Registration Statement on Form SB-2
filed on September 26, 2001.(4)
    
    Previously filed as an exhibit to our Registration Statement on Form S-8 filed on May 1,
2002.(5)
    
    Previously filed as an exhibit to our Registration Statement on Form SB-2 filed on January 9,
2003.(6)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on January 27, 2003.(7)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on August 13, 2003.(8)
    
    Previously filed as an exhibit to our Annual Report on Form 10-KSB filed on November 13,
2003.(9)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on January 20, 2004.(10)
    
    Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed on December 20,
2004.(11)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on February 3, 2005(12)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on March 7, 2005.(13)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on September 14, 2005.(14)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on August 9, 2005.(15)
    
    Previously filed as an exhibit to our Annual Report on Form 10-KSB filed on November 8, 2005.(16)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on December 30, 2005.(17)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on June 1, 2006.(18)
    
    Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed on June 19, 2006(19)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on January 31, 2007(20)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on March 5, 2007 59




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##### Table of Contents



(21)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on April 6, 2007(22)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on April 25, 2007(23)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on May 11, 2007(24)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on May 23, 2007(25)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on June 21, 2007(26)
    
    Previously filed as an exhibit to our Current Report on Form 8-K filed on July 25, 2007(27)
    
    Previously filed as an exhibit to Amendment No. 2 to our Registration Statement on Form S-4
filed on September 13, 2007. 60




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##### Table of Contents



PAGEReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets July 31, 2007 and 2006
    
    F-3Consolidated Statements of Operations Years Ended July 31, 2007, 2006, and 2005
    
    F-4Consolidated Statements of Changes in Stockholders Deficiency Years Ended July 31, 2007, 2006, and 2005
    
    F-5Consolidated Statements of Cash Flows Years Ended July 31, 2007, 2006, and 2005
    
    F-6Notes to Consolidated Financial Statements
    
    F-7/25Schedule II
 Valuation and Qualifying Accounts
    
    F-26
  F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
      /s/ J.H. Cohn LLP
 
 F-2




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##### Table of Contents



July 31, 2007
    
    
    July 31, 2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    507
    
    
    $
    450,618Accounts receivable, net of allowance for doubtful accounts of $7,500
at both July 31, 2007 and 2006
    
    
    34,345
    
    
    
    15,580Other current assets
    
    
    44,426
    
    
    
    35,333Total current assets
    
    
    79,278
    
    
    
    501,531Equipment,
net of accumulated depreciation of $154,975 and $118,736 at July
31, 2007 and 2006, respectively
    
    
    55,071
    
    
    
    76,702Total
    
    $
    134,349
    
    
    $
    578,233Liabilities and Stockholders DeficiencyCurrent liabilities:Accounts payable and accrued expenses
    
    $
    1,088,819
    
    
    $
    234,682Deferred revenues
    
    
    18,695
    
    
    
    22,448Derivative liability
    
    
    11,058,561
    
    
    
    2,789,750Total current liabilities
    
    
    12,166,075
    
    
    
    3,046,880Convertible debentures payable, net of unamortized debt discount of
$912,820 and $2,047,911 at July 31, 2007 and 2006, respectively
    
    
    2,607,180
    
    
    
    2,027,089Total liabilities
    
    
    14,773,255
    
    
    
    5,073,969Mandatorily redeemable Class B common stock; par value $.00001 per share:400,000 shares designated as Series 2; 381,749 and 372,848 shares
issued and outstanding at July 31, 2007 and 2006, respectively
    
    
    4
    
    
    
    440,000 shares designated as Series 3; 21,500 shares issued and
outstanding at both July 31, 2007 and 2006
    
    
    
    
    
    
    4
    
    
    
    4Commitments and contingenciesStockholders deficiency:Preferred stock; par value $.00001 per share; 50,000,000 shares
authorized, none issued at both July 31, 2007 and 2006Common stock; par value $.00001 per share; 500,000,000 shares
authorized; 48,048,617 shares issued and outstanding and 42,896,506
shares issued and outstanding at July 31, 2007 and
2006,respectively
    
    
    480
    
    
    
    429Additional paid-in capital
    
    
    45,806,278
    
    
    
    44,209,217Unearned compensation
    
    
    
    
    
    
    (34,870
    )Accumulated deficit
    
    
    (60,445,668
    )
    
    
    (48,670,516
    )Total stockholders deficiency
    
    
    (14,638,910
    )
    
    
    (4,495,740
    )Total
    
    $
    134,349
    
    
    $
    578,233
  F-3




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##### Table of Contents



2007
    
    
    2006
    
    
    2005Revenues
    
    $
    203,286
    
    
    $
    166,692
    
    
    $
    239,651Operating expenses:Cost of revenues
    
    
    73,047
    
    
    
    85,585
    
    
    
    152,371Selling expenses
    
    
    97,029
    
    
    
    46,637
    
    
    
    43,441General and administrative expenses
    
    
    1,754,085
    
    
    
    2,381,789
    
    
    
    1,745,455Totals
    
    
    1,924,161
    
    
    
    2,514,011
    
    
    
    1,941,267Loss from operations
    
    
    (1,720,875
    )
    
    
    (2,347,319
    )
    
    
    (1,701,616
    )Other income (expense)(Loss) gain on change in value of derivative liability
    
    
    (8,524,813
    )
    
    
    1,094,246
    
    
    
    Loss on extinguishment of promissory note
    
    
    
    
    
    
    (77,373
    )
    
    
    Writeoff of goodwill
    
    
    
    
    
    
    
    
    
    
    (50,400
    )Interest income
    
    
    54
    
    
    
    2,573
    
    
    
    8,357Finance charge for derivative liability in
excess of proceeds from convertible debentures
    
    
    
    
    
    
    (1,795,005
    )
    
    
    Interest expense
    
    
    (1,529,518
    )
    
    
    (513,978
    )
    
    
    (145,506
    )Net loss
    
    $
    (11,775,152
    )
    
    $
    (3,636,856
    )
    
    $
    (1,889,165
    )Basic and diluted net loss per share
    
    $
    (0.25
    )
    
    $
    (0.08
    )
    
    $
    (0.04
    )Basic and diluted weighted average common shares
outstanding
    
    
    46,466,147
    
    
    
    42,891,017
    
    
    
    44,510,641
  F-4




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##### Table of Contents



Common StockNumber of
    
    
    
    
    
    
    Additional
    
    
    Unearned
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Paid-In Capital
    
    
    Compensation
    
    
    Deficit
    
    
    TotalBalance, August 1, 2004
    
    
    44,235,299
    
    
    $
    442
    
    
    $
    43,570,992
    
    
    $
    (24,264
    )
    
    $
    (43,144,495
    )
    
    $
    402,675Effect of issuance of options in exchange for services
    
    
    
    
    
    
    
    
    
    
    51,200
    
    
    
    (51,200
    )
    
    
    
    
    
    
    Amortization of unearned, stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,018
    
    
    
    
    
    
    
    35,018Effect of issuance of common stock for purchase of business
    
    
    250,000
    
    
    
    3
    
    
    
    42,497
    
    
    
    
    
    
    
    
    
    
    
    42,500Effect of issuance of common stock in exchange for services
and claim settlement
    
    
    262,500
    
    
    
    3
    
    
    
    77,498
    
    
    
    
    
    
    
    
    
    
    
    77,501Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,889,165
    )
    
    
    (1,889,165
    )Balance, July 31, 2005
    
    
    44,747,799
    
    
    
    448
    
    
    
    43,742,187
    
    
    
    (40,446
    )
    
    
    (45,033,660
    )
    
    
    (1,331,471
    )Effect of issuance of options in exchange for services
    
    
    
    
    
    
    
    
    
    
    56,000
    
    
    
    (56,000
    )
    
    
    
    
    
    
    Effect of return and retirement of shares
    
    
    (3,506,248
    )
    
    
    (35
    )
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    Amortization of unearned stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,576
    
    
    
    
    
    
    
    61,576Reclassification of derivative liability for nonemployee options
    
    
    
    
    
    
    
    
    
    
    (63,989
    )
    
    
    
    
    
    
    
    
    
    
    (63,989
    )Fair value of shares issued on conversion of
promissory notes payable
    
    
    1,250,000
    
    
    
    12
    
    
    
    399,988
    
    
    
    
    
    
    
    
    
    
    
    400,000Shares issued on conversion of convertible debentures
    
    
    404,955
    
    
    
    4
    
    
    
    74,996
    
    
    
    
    
    
    
    
    
    
    
    75,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,636,856
    )
    
    
    (3,636,856
    )Balance, July 31, 2006
    
    
    42,896,506
    
    
    
    429
    
    
    
    44,209,217
    
    
    
    (34,870
    )
    
    
    (48,670,516
    )
    
    
    (4,495,740
    )Amortization of unearned, stock-based compensation
    
    
    
    
    
    
    
    
    
    
    28,167
    
    
    
    
    
    
    
    
    
    
    
    28,167Reclassification of deferred compensation upon
adoption of SFAS 123R
    
    
    
    
    
    
    
    
    
    
    (34,870
    )
    
    
    34,870
    
    
    
    
    
    
    
    Effect of issuance of common stock in exchange
for services
    
    
    180,000
    
    
    
    2
    
    
    
    62,198
    
    
    
    
    
    
    
    
    
    
    
    62,200Effect of repricing of employee options
    
    
    
    
    
    
    
    
    
    
    70,946
    
    
    
    
    
    
    
    
    
    
    
    70,946Shares issued on conversion of convertible
debentures
    
    
    4,432,111
    
    
    
    44
    
    
    
    554,956
    
    
    
    
    
    
    
    
    
    
    
    555,000Shares issued on exercise of options
    
    
    540,000
    
    
    
    5
    
    
    
    43,395
    
    
    
    
    
    
    
    
    
    
    
    43,400Capital contribution from payment by prospective merger
partner of the Companys costs related to merger
    
    
    
    
    
    
    
    
    
    
    580,269
    
    
    
    
    
    
    
    
    
    
    
    580,269Reclassification of derivative liability upon exercise
of options for 340,000 shares
    
    
    
    
    
    
    
    
    
    
    292,000
    
    
    
    
    
    
    
    
    
    
    
    292,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,775,152
    )
    
    
    (11,775,152
    )Balance, July 31, 2007
    
    
    48,048,617
    
    
    $
    480
    
    
    $
    45,806,278
    
    
    $
    
    
    
    $
    (60,445,668
    )
    
    $
    (14,638,910
    )
  F-5




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##### Table of Contents



2007
    
    
    2006
    
    
    2005Operating activities:Net loss
    
    $
    (11,775,152
    )
    
    $
    (3,636,856
    )
    
    $
    (1,889,165
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    35,707
    
    
    
    23,785
    
    
    
    19,684Amortization of other assets
    
    
    
    
    
    
    36,426
    
    
    
    13,574Amortization of unearned, stock based compensation
    
    
    28,167
    
    
    
    61,576
    
    
    
    35,018Loss (gain) on change in value of derivative liability
    
    
    8,524,813
    
    
    
    (1,094,246
    )
    
    
    Loss on extinguishment of debt
    
    
    
    
    
    
    77,373
    
    
    
    Finance charge for derivative liability in excess of debt proceeds
    
    
    
    
    
    
    1,795,005
    
    
    
    Amortization of debt discount
    
    
    1,135,091
    
    
    
    243,266
    
    
    
    27,149Writeoff of goodwill
    
    
    
    
    
    
    
    
    
    
    50,400Costs of the Company paid by potential merger partner
    
    
    580,269
    
    
    
    
    
    
    
    Effects of issuance of common stock in exchange for services
    
    
    62,200
    
    
    
    0
    
    
    
    77,501Effects of repricing employee options of common stock for services
    
    
    70,946
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (18,765
    )
    
    
    (1,070
    )
    
    
    (2,270
    )Other current assets
    
    
    55,418
    
    
    
    32,123
    
    
    
    6,586Accounts payable and accrued expenses
    
    
    856,521
    
    
    
    275,025
    
    
    
    147,657Deferred revenues
    
    
    (3,753
    )
    
    
    (6,783
    )
    
    
    (10,262
    )Net cash used in operating activities
    
    
    (448,538
    )
    
    
    (2,194,376
    )
    
    
    (1,524,128
    )Investing activities:Equipment purchases
    
    
    (15,573
    )
    
    
    (40,871
    )
    
    
    (32,078
    )Cash paid for purchase of business
    
    
    
    
    
    
    
    
    
    
    (19,212
    )Net cash used in investing activities
    
    
    (15,573
    )
    
    
    (40,871
    )
    
    
    (51,290
    )Financing activities:Proceeds from notes and debentures
    
    
    
    
    
    
    2,025,000
    
    
    
    2,000,000Costs paid in connection with notes and debentures payable
    
    
    
    
    
    
    
    
    
    
    (150,000
    )Proceeds from issuance of common stock upon exercise of stock options,
net of receivable from employee
    
    
    14,000
    
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    14,000
    
    
    
    2,025,000
    
    
    
    1,850,000Net increase
(decrease) in cash and cash equivalents
    
    
    (450,111
    )
    
    
    (210,247
    )
    
    
    274,582Cash and cash equivalents, beginning of year
    
    
    450,618
    
    
    
    660,865
    
    
    
    386,283Cash and cash equivalents, end of year
    
    $
    507
    
    
    $
    450,618
    
    
    $
    660,865Supplemental disclosure of noncash financing activities:Noncash effects of convertible debentures and promissory notes converted to
common stock
    
    $
    555,000
    
    
    $
    325,000Receivable from employees for exercise of options
    
    $
    29,400
    
    
    $
    Reclassification of derivative liability
    
    $
    292,000Derivative liability of warrants issued equal to proceeds from debentures issued
    
    
    
    
    
    $
    2,025,000Reclassification fair market value of nonemployee options to derivative liability
    
    
    
    
    
    $
    63,990Effect of issuance of common stock for purchase of business
    
    
    
    
    
    
    
    
    
    $
    42,500
  F-6




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##### Table of Contents



Note 1 -
    
    Organization :JAG Media Holdings, Inc., a Nevada corporation, and its subsidiaries (the Company) gather
and compile financial and investment information from contacts with 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 and alerts, during the trading day, of rumors circulating on Wall
Street. The Company is also in the business of developing related software focused on
streaming video solutions, including the delivery of services already provided by the
Company. Management considers all of its activities to be within the same business segment.The Company commenced operations in 1989 and its subscribers were initially limited
primarily to institutional investors. During the year ended July 31, 2000, the Company
opened its web site and began targeting retail subscribers in an effort to expand its
subscriber base.On November 24, 2004, a newly established subsidiary of the Company, Pixaya (UK) Limited
(Pixaya) (formerly known as TComm (UK) Limited), a company organized in the United
Kingdom, acquired the business and assets of TComm Limited, a development stage company,
also organized in the United Kingdom, that was developing various mobile video streaming
products.
The Company is continuing to develop certain of these products
although such development has been
limited as a result of the Companys lack of financial resources and has added a new service
to this product line (See Note 5). However, the business acquired had not generated any significant
revenue as of the date of the acquisition or through July 31,
2007.The Company is actively pursuing potential mergers. As further discussed in Note 10 herein,
on December 27, 2005, the Company entered into an agreement and plan of merger that was
amended on various dates through September 18, 2007 (the Merger Agreement) with, among
others, Cryptometrics, Inc., a Delaware corporation (Cryptometrics), pursuant to which
Cryptometrics would merge with a newly created subsidiary of the Company. In consideration
of the merger, the stockholders of Cryptometrics would acquire shares of common stock of the
Company, which would, upon issuance, represent approximately 88% of the outstanding
shares of the Companys common stock, in exchange for all of the issued and outstanding
capital stock of Cryptometrics. There is no assurance that the proposed transaction will be
consummated.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 $203,000,
$167,000 and $240,000 and it incurred net losses of approximately
$11,775,000, $3,637,000 and
$1,889,000 and negative cash flows from operating activities of approximately $449,000,
$2,194,000 and $1,524,000 for the years ended July 31, 2007, 2006 and 2005, respectively.
In addition, as of July 31, 2007 the Company only had cash and cash equivalents available of
approximately $500 and a working capital deficiency of $12,087,000. These matters raise
substantial doubt about the Companys ability to continue as a going concern.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, 2008 and that the Company will need to obtain
additional equity or debt financing to sustain its operations.Management believes that the Company will be able to obtain sufficient financing directly
through the consummation of the merger with Cryptometrics or through the consummation of a
merger with another appropriate merger candidate that has such financing, to enable it to
continue as a going concern through at least July 31, 2008. However, if the Company cannot
obtain sufficient additional financing by that date, the Company may be forced thereafter to
restructure its operations, file for bankruptcy or entirely cease its operations.
 F-7




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##### Table of Contents



F-8




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##### Table of Contents



F-9




---



##### Table of Contents



July
312007
    
    
2006Deferred revenues, net
    
    $
    6,000
    
    
    $
    8,000Unearned compensation
    
    
    31,000
    
    
    
    54,000Net operating loss carryforwards
    
    
    13,262,000
    
    
    
    12,165,00013,299,000
    
    
    
    12,227,000Less valuation allowance
    
    
    (13,299,000
    )
    
    
    (12,227,000
    )Total
    
    $
    
    
    
    $
    
     F-10




---



##### Table of Contents



F-11




---



##### Table of Contents



F-12




---



##### Table of Contents



Equipment
    
    $
    11,000Other Assets
    
    
    100Goodwill
    
    
    50,400Total
    
    $
    61,500
 F-13




---



##### Table of Contents



F-14




---



##### Table of Contents



F-15




---



##### Table of Contents



WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicShares
    
    Prices
    
    Term
    
    ValueOptions outstanding, August 1, 2005
    
    
    2,510,000Granted
    
    
    450,000
    
    
    $
    .02Canceled
    
    
    (1,540,000
    )
    
    $
    1.17Options outstanding, July 31, 2006
    
    
    1,420,000
    
    
    $
    .12Granted
    
    
    200,000
    
    
    $
    .05Exercised
    
    
    (540,000
    )
    
    $
    .08Canceled
    
    
    (80,000
    )
    
    $
    .69Options outstanding, July 31, 2007
    
    
    1,000,000
    
    
    $
    .02
    
    
    
    5.08
    
    
    $
    930,000Options exercisable, July 31, 2007
    
    
    1,000,000
    
    
    $
    .02
    
    
    
    5.08
    
    
    $
    930,000
  Year Ended
    
    Year Ended
    
    Year EndedJuly 31, 2007
    
    July 31, 2006
    
    July 31, 2005Risk free interest rate
    
    6.00%
    
    6.00%
    
    4.50%Dividend yield
    
    0%
    
    0%
    
    0%Expected life
    
    5 years
    
    5 years
    
    5 yearsExpected volatility factor
    
    216.543%
    
    270.79% to  279.14%
    
    157.42% to 171.16%
        Warrants Outstanding
    
    
    Warrants ExercisableWeightedAverage Years
    
    
    Weightedof Remaining
    
    
    AverageNumber
    
    
    Contractual
    
    
    Exercise
    
    
    Number
    
    
    Weighted AverageExercise Prices
    
    
    Outstanding
    
    
    Life
    
    
    Price
    
    
    Exercisable
    
    
    Exercise Price$
    .40
    
    
    
    2,000,000
    
    
    
    3.82
    
    
    $
    .40
    
    
    
    2,000,000
    
    
    $
    .40.50
    
    
    
    2,000,000
    
    
    
    3.82
    
    
    
    .50
    
    
    
    2,000,000
    
    
    
    .50.60
    
    
    
    2,000,000
    
    
    
    3.82
    
    
    
    .60
    
    
    
    2,000,000
    
    
    
    .60.70
    
    
    
    3,000,000
    
    
    
    3.82
    
    
    
    .70
    
    
    
    3,000,000
    
    
    
    .70.80
    
    
    
    3,000,000
    
    
    
    3.82
    
    
    
    .80
    
    
    
    3,000,000
    
    
    
    .80$
    .40-$.80
    
    
    
    12,000,000
    
    
    
    3.82
    
    
    $
    .40-$.80
    
    
    
    12,000,000
    
    
    
    .63
 F-16




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##### Table of Contents



Other Equity TransactionsAs explained in Notes 1 and 10, the Company entered into the Merger Agreement with, among
others, Cryptometrics,  pursuant to which Cryptometrics would merge with a newly created
subsidiary of the Company. Pursuant to the terms of the Merger Agreement, Cryptometrics has
paid various legal and accounting costs, totaling approximately $580,000 on behalf of the
Company, that will not have to be repaid by the Company to Cryptometrics in the event that
the merger is not successfully completed. The costs paid by Cryptomertrics have been charged
to operating expenses and the amounts received by the Company have been recorded as a capital
contribution and included in additional paid-in capital.Note 7 -
    
    Employee benefit plans:The Company maintains a profit-sharing plan and a money purchase plan for the benefit of all
eligible employees. The Companys contributions to these defined contribution plans are made
on a discretionary basis. The Company made no contributions to the plans in 2007, 2006 and
2005.Note 8 -
    
    Commitments and contingencies:Concentrations of credit risk:Financial instruments that potentially subject the Company to concentrations of credit risk
consist primarily of cash and cash equivalents and accounts receivable. From time to time the
Companys cash account balances exceed the Federal insurance limit of $100,000. The Company
reduces its exposure to credit risk by maintaining its cash deposits with major financial
institutions and monitoring their credit ratings. Accordingly, management does not believe
that the Company was exposed to significant credit risk at July 31, 2007.In addition, the Company routinely assesses the financial strength of its customers and
establishes an allowance for doubtful accounts based upon factors surrounding the credit risk
of specific customers, historical trends and other information.Employment agreements:In connection with the acquisition of Pixaya, Pixaya entered into employment agreements on
November 24, 2004 with four individuals, all of whom were previously employed by Pixaya. The
employment agreements have a term of three years and automatically renew unless terminated by
either party. As a result, the Companys obligations for cash payments under the employment
agreements subsequent to July 31, 2007 are as follows:
 Year ending
    
    
    AmountJuly 31, 2008
    
    
    $
    53,000
 Leases:During 2007, 2006, and 2005, 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 $26,000, $29,000 and $15,000 for 2007, 2006 and
2005, respectively. As of July 31, 2007, the Company was not subject to any significant
noncancelable office leases.Litigation:The Company is a party to various claims and lawsuits incidental to its business. In the
opinion of management, it is probable that the resolution of such contingencies will not
materially affect the consolidated financial position or results of operations of the Company
in subsequent years.Bay Point Investment Partners, LLC (Bay Point) had threatened to commence litigation
against the Company, certain of its officers and directors and others. The Bay Point claim
related to its purchase of shares of the Companys stock in
private placements on December 10, 2002 and June 19, 2003. Bay Point alleged, among other
things, various disclosure failings as well as the Companys failure to register the shares
it purchased in the June 19, 2003 private placement by the date provided in the placement
agreement and to use the proceeds as Bay Point claims they were intended to be used. In May
2006, the Company settled its dispute with Bay Point by the payment of $250,000 for which it
has received releases from Bay Point and other claimants. The cost of the settlement has been
included in results of operations for the year ended July 31, 2006.Note 9 -
    
    Fair value of financial instruments:The Companys material financial instruments at July 31, 2007 for which disclosure of
estimated fair value is required by certain accounting standards consisted of cash and cash
equivalents, accounts receivable, accounts payable, and the loan payable to YA
 F-17




---



##### Table of Contents



Global. In the opinion of
management, the financial instruments other than the loan payable were carried at values that
approximated their fair values at July 31, 2007 because of their liquidity and/or their
short-term maturities.Note 10 -
    
    Cryptometrics merger:As explained in Note 1, the Company entered into the Merger Agreement on December 27, 2005,
that has been amended on various dates through September 18, 2007, with, among others,
Cryptometrics pursuant to which Cryptometrics would merge with a newly created subsidiary of
the Company. In consideration of the merger, the stockholders of Cryptometrics would acquire
shares of common stock of the Company, which would, upon issuance, represent approximately
89.66% of the combined companies outstanding shares of common stock, in exchange for all of
the issued and outstanding shares of common stock of Cryptometrics. The shares of common
stock to be received by the stockholders of Cryptometrics are being registered under the U.S.
Securities Act of 1933, as amended. If consummated, the proposed transaction would be
accounted for as a reverse acquisition in which Cryptometrics would be the acquirer for
accounting purposes.At the closing of the proposed transaction, the Companys current directors would resign as
directors of the Company and would also resign as officers and executives of the Company. The
Companys board of directors would be replaced with designees of Cryptometrics.Until the Company and Cryptometrics agree otherwise, the Merger Agreement, notwithstanding
approval by the Cryptometrics stockholders may be cancelled with or without any reason at
any time by either of them with no liability.In addition, the proposed transaction is still subject to various conditions being satisfied
prior to closing, including, among others, (i) the representations and warranties of the
parties being true and correct, (ii) the Companys common stock having been authorized for
trading on the OTC Bulletin Board or the OTC Pink Sheets, on the Nasdaq Capital Market, and
(iii) the Companys indebtedness not exceeding $4,350,000.There is no assurance that the Company or Cryptometrics will not cancel the Merger Agreement,
that the conditions of the proposed transaction will be fulfilled and that the proposed
transaction between the Company and Cryptometrics will be consummated. The Merger Agreement
has an automatic termination date which the parties to it have extended from time to time,
but they are under no obligation to do so.
As explained in Notes 1 and 6, pursuant to the terms of the Merger Agreement, Cryptometrics
has paid various legal and accounting costs on behalf of the
Company that will not have to be repaid by the Company to
Cryptometrics in the event that the merger is not successfully completed. The costs paid by
Cryptomertrics have been charged to operating expenses and the amounts received by the
Company have been recorded as a capital contribution and included in additional paid-in
capital. Pursuant to various amendments to the Merger
Agreement, if the transaction is terminated by the Company or for certain other reasons,
under certain conditions the Company has agreed to issue Cryptometrics up to 1,000,000 shares
of its common stock in consideration for various costs aggregating $580,000 advanced and to
be advanced by Cryptometrics for the account of the Company. In addition, in
consideration of $167,660 of such advances, the Company granted a non-exclusive, perpetual,
royalty free license to Cryptometrics to use certain of the intellectual property of Pixaya.In connection with the proposed merger, on various dates from January 24, 2007 through
September 18, 2007, the secured convertible debentures and warrants issued to YA Global were
amended. As a result, on the date the proposed merger between the Company and Cryptometrics
closes and becomes effective, (i) Cryptometrics will assume all of the rights and obligations
under those amended agreements on behalf of the post-merger, combined company, and (ii) the
secured
convertible debentures would become convertible at a discount of 5% to the lowest volume
weighted average price of the Companys common stock during the 30 trading days prior to the
conversion date and the warrants issued to YA Global would become convertible at a discount
of 12% to the average of the volume weighted average price of the Companys common stock
during the 30 trading days prior to the exercise date.Note 11 -
    
    Restatement of Unaudited Interim Financial StatementsIn connection with the preparation of the Annual Report on Form 10-K of the Company for the
fiscal year ended July 31, 2007, the Company's independent registered public accounting firm
brought to the attention of the management of the Company that certain of the Companys legal
and accounting costs which, pursuant to the terms of the Merger Agreement with Cryptometrics
were paid for by Cryptometrics, should have been charged to operating expenses and the amounts
received by the Company should have been recorded as capital contributions and included in
 additional paid-in capital in the periods in which the costs were incurred (see Note 6). As
a result, management completed an investigation focused on the Companys accounting for all
expenses paid for by Cryptometrics during the term of the Merger Agreement and determined that
certain of the expenses should have been recorded in each of the quarters ended October 31, 2006,
January 31, 2007 and April 30, 2007.
 F-18




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##### Table of Contents



In addition, the Companys independent registered public accounting firm brought to the
attention of the management of the Company that the expected volatility factors used to determine
the fair value of the derivative liabilities that were valued based on the Black-Scholes options
pricing model were overstated during each of the first three quarters of the year ended July 31,
2007. As a result, management completed an investigation and determined that the volatility
factors should have ranged from 223.697% to 229.281% instead of the 340.64% to 370.96% and,
accordingly, the derivative liabilities recorded at the end of each of the quarters ended
October 31, 2006, January 31, 2007 and April 30, 2007 were overstated and the gain or loss on
change in derivative liability for each of the quarters then ended was understated or overstated.Upon completion of these investigations, management has identified certain adjustments
related to the costs paid by Cryptometrics on behalf of the Company and the overstatement of the
volatility factors that necessitate the restatement of the Companys financial statements for each
of the first three quarters of fiscal 2007. Previously issued financial statements for those
quarters should not be relied upon. The following tables reflect the impact of the restatements
on each of the first three quarters in the fiscal year ended July 31, 2007.
 F-19




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##### Table of Contents



As Previously
    
    
    RestatementReported
    
    
    Adjustment
    
    
    As Restated10/31/2006
    
    
    10/31/2006
    
    
    10/31/2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    35,501
    
    
    $
    
    
    
    $
    35,501Accounts receivable, net of allowance for doubtful
accounts of $7,500
    
    
    20,960
    
    
    
    
    
    
    
    20,960Other current assets
    
    
    138,748
    
    
    
    
    
    
    
    138,748Total current assets
    
    
    195,209
    
    
    
    
    
    
    
    195,209Equipment, net of accumulated depreciation of $127,798
    
    
    83,214
    
    
    
    
    
    
    
    83,214Total
    
    $
    278,423
    
    
    $
    
    
    
    $
    278,423Liabilities and Stockholders DeficiencyCurrent liabilities:Accounts payable and accrued expenses
    
    $
    236,987
    
    
    $
    
    
    
    $
    236,987Deferred revenues
    
    
    19,444
    
    
    
    
    
    
    
    19,444Derivative liability
    
    
    2,466,660
    
    
    
    (133,861
    )
    
    
    2,332,799Total current liabilities
    
    
    2,723,091
    
    
    
    (133,861
    )
    
    
    2,589,230Convertible debentures payable, net of unamortized debt
discount of $1,678,813
    
    
    2,196,187
    
    
    
    
    
    
    
    2,196,187Total liabilities
    
    
    4,919,278
    
    
    
    (133,861
    )
    
    
    4,785,417Mandatorily redeemable Class B common stock; par value
$.00001 per share: 400,000 shares designated as
Series 2: 381,014 shares issued and outstanding
    
    
    4
    
    
    
    
    
    
    
    440,000 shares designated as Series 3; 21,500
shares issued and outstanding
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Commitments and contingenciesStockholders deficiency:Preferred stock; par value $.00001 per share;
50,000,000 shares authorized, none issuedCommon stock; par value $.00001 per share;
500,000,000 shares authorized; 44,579,589 shares
issued and outstanding
    
    
    446
    
    
    
    
    
    
    
    446Additional paid-in capital
    
    
    44,383,563
    
    
    
    27,161
    
    
    
    44,410,724Accumulated deficit
    
    
    (49,024,868
    )
    
    
    106,700
    
    
    
    (48,918,168
    )Total stockholders deficiency
    
    
    (4,640,859
    )
    
    
    133,861
    
    
    
    (4,506,998
    )Total
    
    $
    278,423
    
    
    $
    
    
    
    $
    278,423
 F-20




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##### Table of Contents



AsPreviously
    
    
    Restatement
    
    
    AsReported
    
    
    Adjustment
    
    
    RestatedRevenues
    
    $
    43,331
    
    
    $
    
    
    
    $
    43,331Operating expenses:Cost of revenues
    
    
    24,650
    
    
    
    
    
    
    
    24,650Selling expenses
    
    
    24,262
    
    
    
    
    
    
    
    24,262General and administrative expenses
    
    
    239,689
    
    
    
    27,161
    
    
    
    266,850Totals
    
    
    288,601
    
    
    
    27,161
    
    
    
    315,762Loss from operations
    
    
    (245,270
    )
    
    
    (27,161
    )
    
    
    (272,431
    )Other income (expense):Gain on change in value of derivative liability
    
    
    359,090
    
    
    
    133,861
    
    
    
    492,951Interest income
    
    
    77
    
    
    
    
    
    
    
    77Interest expense
    
    
    (468,249
    )
    
    
    
    
    
    
    (468,249
    )Net loss
    
    $
    (354,352
    )
    
    $
    106,700
    
    
    $
    (247,652
    )Basic and
diluted net loss per share
    
    $
    (0.01
    )
    
    
    
    
    
    $
    (0.01
    )Basic and
diluted weighted average common shares outstanding
    
    
    43,972,608
    
    
    
    
    
    
    
    43,972,608
 F-21




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##### Table of Contents



As Previously
    
    
    RestatementReported
    
    
    Adjustment
    
    
    As Restated1/31/2007
    
    
    1/31/2007
    
    
    1/31/2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    21,617
    
    
    $
    
    
    
    $
    21,617Accounts receivable, net of allowance for doubtful
accounts of $7,500
    
    
    17,120
    
    
    
    
    
    
    
    17,120Other current assets
    
    
    61,730
    
    
    
    
    
    
    
    61,730Total current assets
    
    
    100,467
    
    
    
    
    
    
    
    100,467Equipment, net of accumulated depreciation of $136,988
    
    
    73,058
    
    
    
    
    
    
    
    73,058Total
    
    $
    173,525
    
    
    $
    
    
    
    $
    173,525Liabilities and Stockholders DeficiencyCurrent liabilities:Accounts payable and accrued expenses
    
    $
    466,229
    
    
    $
    
    
    
    $
    466,229Deferred revenues
    
    
    21,520
    
    
    
    
    
    
    
    21,520Derivative liability
    
    
    4,823,317
    
    
    
    (192,532
    )
    
    
    4,630,785Total current liabilities
    
    
    5,311,066
    
    
    
    (192,532
    )
    
    
    5,118,534Convertible debentures payable, net of unamortized debt
discount of $1,163,300
    
    
    2,356,700
    
    
    
    
    
    
    
    2,356,700Total liabilities
    
    
    7,667,766
    
    
    
    (192,532
    )
    
    
    7,475,234Mandatorily
redeemable Class B common stock; par value $.00001 per share: 400,000 shares designated as
Series 2: 381,741 shares issued and outstanding
    
    
    4
    
    
    
    
    
    
    
    440,000 shares designated as Series 3; 21,500
shares issued and outstanding
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Commitments and contingenciesStockholders deficiency:Preferred stock; par value $.00001 per share;
50,000,000 shares authorized, none issuedCommon stock; par value $.00001 per share;
500,000,000 shares authorized; 47,508,617 shares
issued and outstanding
    
    
    475
    
    
    
    
    
    
    
    475Additional paid-in capital
    
    
    44,807,468
    
    
    
    239,106
    
    
    
    45,046,574Accumulated deficit
    
    
    (52,302,188
    )
    
    
    (46,574
    )
    
    
    (52,348,762
    )Total stockholders deficiency
    
    
    (7,494,245
    )
    
    
    192,532
    
    
    
    (7,301,713
    )Total
    
    $
    173,525
    
    
    $
    
    
    
    $
    173,525
 F-22




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##### Table of Contents



Six Months Ended January 31, 2007
    
    
    Three Months Ended January 31, 2007As
    
    
    
    
    
    
    
    
    
    
    AsPreviously
    
    
    Restatement
    
    
    As
    
    
    Previously
    
    
    Restatement
    
    
    AsReported
    
    
    Adjustment
    
    
    Restated
    
    
    Reported
    
    
    Adjustment
    
    
    RestatedRevenues
    
    $
    101,137
    
    
    $
    
    
    
    $
    101,137
    
    
    $
    57,806
    
    
    $
    
    
    
    $
    57,806Operating expenses:Cost of revenues
    
    
    42,132
    
    
    
    
    
    
    
    42,132
    
    
    
    17,482
    
    
    
    
    
    
    
    17,482Selling expenses
    
    
    59,816
    
    
    
    
    
    
    
    59,816
    
    
    
    35,554
    
    
    
    
    
    
    
    35,554General and administrative expenses
    
    
    557,508
    
    
    
    239,106
    
    
    
    796,614
    
    
    
    317,819
    
    
    
    211,945
    
    
    
    529,764Totals
    
    
    659,456
    
    
    
    239,106
    
    
    
    898,562
    
    
    
    370,855
    
    
    
    211,945
    
    
    
    582,800Loss from operations
    
    
    (558,319
    )
    
    
    (239,106
    )
    
    
    (797,425
    )
    
    
    (313,049
    )
    
    
    (211,945
    )
    
    
    (524,994
    )Other income (expense):Loss on change in value of derivative liability
    
    
    (1,997,567
    )
    
    
    192,532
    
    
    
    (1,805,035
    )
    
    
    (2,356,659
    )
    
    
    58,671
    
    
    
    (2,297,988
    )Interest income
    
    
    95
    
    
    
    
    
    
    
    95
    
    
    
    20
    
    
    
    
    
    
    
    20Interest expense
    
    
    (1,075,881
    )
    
    
    
    
    
    
    (1,075,881
    )
    
    
    (607,632
    )
    
    
    
    
    
    
    (607,632
    )Net loss
    
    $
    (3,631,672
    )
    
    $
    (46,574
    )
    
    $
    (3,678,246
    )
    
    $
    (3,277,320
    )
    
    $
    (153,274
    )
    
    $
    (3,430,594
    )Basic and
diluted net loss per share
    
    $
    (0.08
    )
    
    
    
    
    
    $
    (0.08
    )
    
    $
    (0.07
    )
    
    
    
    
    
    $
    (0.07
    )Basic and
diluted weighted average common shares
outstanding
    
    
    45,198,064
    
    
    
    
    
    
    
    45,198,064
    
    
    
    46,423,522
    
    
    
    
    
    
    
    46,423,522
 F-23




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##### Table of Contents



As Previously
    
    
    RestatementReported
    
    
    Adjustment
    
    
    As Restated4/30/2007
    
    
    4/30/2007
    
    
    4/30/2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,598
    
    
    $
    
    
    
    $
    5,598Accounts receivable, net of allowance for doubtful
accounts of $7,500
    
    
    30,959
    
    
    
    
    
    
    
    30,959Other current assets
    
    
    26,042
    
    
    
    
    
    
    
    26,042Total current assets
    
    
    62,599
    
    
    
    
    
    
    
    62,599Equipment, net of accumulated depreciation of $146,127
    
    
    63,919
    
    
    
    
    
    
    
    63,919Total
    
    $
    126,518
    
    
    $
    
    
    
    $
    126,518Liabilities and Stockholders DeficiencyCurrent liabilities:Accounts payable and accrued expenses
    
    $
    936,102
    
    
    $
    
    
    
    $
    936,102Deferred revenues
    
    
    21,630
    
    
    
    
    
    
    
    21,630Derivative liability
    
    
    5,114,349
    
    
    
    (213,891
    )
    
    
    4,900,458Total current liabilities
    
    
    6,072,081
    
    
    
    (213,891
    )
    
    
    5,858,190Convertible debentures payable, net of unamortized debt
discount of $1,038,060
    
    
    2,481,940
    
    
    
    
    
    
    
    2,481,940Total liabilities
    
    
    8,554,021
    
    
    
    (213,891
    )
    
    
    8,340,130Mandatorily redeemable Class B common stock; par value
$.00001 per share: 400,000 shares designated as
Series 2: 381,741 shares issued and outstanding
    
    
    4
    
    
    
    
    
    
    
    440,000 shares designated as Series 3; 21,500
shares issued and outstanding
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Commitments and contingenciesStockholders deficiency:Preferred stock; par value $.00001 per share;
50,000,000 shares authorized, none issuedCommon stock; par value $.00001 per share;
500,000,000 shares authorized; 47,708,617 shares
issued and outstanding
    
    
    477
    
    
    
    
    
    
    
    477Additional paid-in capital
    
    
    44,934,199
    
    
    
    412,606
    
    
    
    45,346,805Accumulated deficit
    
    
    (53,362,183
    )
    
    
    (198,715
    )
    
    
    (53,560,898
    )Total stockholders deficiency
    
    
    (8,427,507
    )
    
    
    213,891
    
    
    
    (8,213,616
    )Total
    
    $
    126,518
    
    
    $
    
    
    
    $
    126,518
 F-24




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##### Table of Contents



Nine Months Ended April 30, 2007
    
    
    Three Months Ended April 30, 2007As
    
    
    
    
    
    
    
    
    
    
    AsPreviously
    
    
    Restatement
    
    
    As
    
    
    Previously
    
    
    Restatement
    
    
    AsReported
    
    
    Adjustment
    
    
    Restated
    
    
    Reported
    
    
    Adjustment
    
    
    RestatedRevenues
    
    $
    164,308
    
    
    $
    
    
    
    $
    164,308
    
    
    $
    63,171
    
    
    $
    
    
    
    $
    63,171Operating expenses:Cost of revenues
    
    
    60,654
    
    
    
    
    
    
    
    60,654
    
    
    
    18,522
    
    
    
    
    
    
    
    18,522Selling expenses
    
    
    71,241
    
    
    
    
    
    
    
    71,241
    
    
    
    11,425
    
    
    
    
    
    
    
    11,425General and administrative expenses
    
    
    1,032,575
    
    
    
    412,606
    
    
    
    1,445,181
    
    
    
    475,067
    
    
    
    173,500
    
    
    
    648,567Totals
    
    
    1,164,470
    
    
    
    412,606
    
    
    
    1,577,076
    
    
    
    505,014
    
    
    
    173,500
    
    
    
    678,514Loss from operations
    
    
    (1,000,162
    )
    
    
    (412,606
    )
    
    
    (1,412,768
    )
    
    
    (441,843
    )
    
    
    (173,500
    )
    
    
    (615,343
    )Other income (expense):Loss on change in value of derivative liability
    
    
    (2,404,601
    )
    
    
    213,891
    
    
    
    (2,190,710
    )
    
    
    (407,032
    )
    
    
    21,359
    
    
    
    (385,673
    )Interest income
    
    
    97
    
    
    
    
    
    
    
    97
    
    
    
    
    
    
    
    
    
    
    
    Interest expense
    
    
    (1,287,001
    )
    
    
    
    
    
    
    (1,287,001
    )
    
    
    (211,070
    )
    
    
    
    
    
    
    (211,070
    )Net loss
    
    $
    (4,691,667
    )
    
    $
    (198,715
    )
    
    $
    (4,890,382
    )
    
    $
    (1,059,945
    )
    
    $
    (152,141)
    
    
    $
    (1,212,086
    )Basic and
diluted net loss per share
    
    $
    (0.10
    )
    
    
    
    
    
    $
    (0.11
    )
    
    $
    (0.02
    )
    
    
    
    
    
    $
    (0.03
    )Basic and
diluted weighted average common shares
outstanding
    
    
    46,001,871
    
    
    
    
    
    
    
    46,001,871
    
    
    
    47,663,673
    
    
    
    
    
    
    
    47,663,673
 F-25




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##### Table of Contents



SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
Years Ended July 31, 2007, 2006 and, 2005
 Balance at
    
    Charged to
    
    Write-offs
    
    Loss onBeginning of
    
    Cost and
    
    and
    
    Foreign
    
    Balance at EndPeriod
    
    Expense
    
    Recoveries
    
    Exchange
    
    of PeriodAllowance for doubtful accountsJuly 31, 2007
    
    $
    7,500
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    7,500June 31, 2006
    
    $
    7,500
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    7,500June 31, 2005
    
    $
    7,500
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    7,500Deferred tax asset valuation allowanceJuly 31, 2007
    
    $
    12,227,000
    
    
    $
    1,072,000
    (1)
    
    $
    
    
    
    $
    
    
    
    $
    13,299,000July 31, 2006
    
    $
    11,843,000
    
    
    $
    384,000
    (1)
    
    $
    
    
    
    $
    
    
    
    $
    12,227,000July 31, 2005
    
    $
    12,372,000
    
    
    $
    (529,000
    )(2)
    
    $
    
    
    
    $
    
    
    
    $
    11,843,000
 
 (1)
    
    Reflects the increase in the valuation allowance associated with net operating losses of the Company.(2)
    
    Reflects the increase in the valuation allowance associated with net operating losses of the
Company reduced by the effect of the decrease in the valuation allowance associated with the expiration of
options and warrants. F-26




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##### Table of Contents



SIGNATURES
  JAG MEDIA HOLDINGS, INC.By:
    /s/ Thomas J. MazzarisiThomas J. MazzarisiChairman of the Board and Chief Executive Officer   SIGNATURE
    
    TITLE
    
    DATE/s/ Thomas J. Mazzarisi
    
    Chairman of the Board, Chief Executive
    
    November 13, 2007Thomas J. Mazzarisi
    
    Officer and General Counsel (PrincipalExecutive Officer)/s/ Stephen J. Schoepfer
    
    President, Chief Operating Officer, Chief
    
    November 13, 2007Stephen J. Schoepfer
    
    Financial Officer, Secretary and Director(Principal Financial and Accounting Officer)