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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-KSB
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended July 31, 2006
 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
    
    88-0380546(State or Other Jurisdiction
    
    (I.R.S. Employerof Incorporation)
    
    Identification No.)6865 S.W. 18th Street, Suite B-13Boca Raton, Florida
    
    33433(Address of Principal Executive Offices)
    
    (Zip Code)
 
 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 Title of Each Class
    
    Name of Each Exchange on which Registered
  SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
 (Title of Class)
 o þ
 o
 o þ
    Outstanding atClass
    
    
    February 14, 2007Common Stock, par value $0.00001 per share
    
    
    47,481,898Series 2 Class B Common Stock, par value $0.00001 per share
    
    
    392,658Series 3 Class B Common Stock, par value $0.00001 per share
    
    
    21,500




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##### 



JAG MEDIA HOLDINGS, INC.
2006 FORM 10-KSB ANNUAL REPORT
 TABLE OF CONTENTS
 PART I
    
    
    1ITEM 1. DESCRIPTION OF BUSINESS
    
    
    1ITEM 2. DESCRIPTION OF PROPERTIES
    
    
    24ITEM 3. LEGAL PROCEEDINGS
    
    
    24ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    25PART II
    
    
    26ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF SECURITIES
    
    
    26ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
    
    
    31ITEM 7. FINANCIAL STATEMENTS
    
    
    38ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    38ITEM 8A. DISCLOSURE CONTROLS AND PROCEDURES
    
    
    38ITEM 8B. OTHER INFORMATION
    
    
    39PART III
    
    
    40ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
    
    
    40ITEM 10. EXECUTIVE COMPENSATION
    
    
    41ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER MATTERS
    
    
    45ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    45ITEM 13. EXHIBITS
    
    
    45ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    48EX-10.25: LETTER AGREEMENTEX-21.1: SUBSIDIARIESEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-99.5: LETTER AGREEMENT AMENDING AGREEMENT AND PLAN OF MERGER
  -ii-




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PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS
  OVERVIEW OF OUR BUSINESS
        1




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OUR INDUSTRY GENERALLY
 
 http://www.pewinternet.org/trends/UsageOverTime.xls http://www.pewresearch.org/obdeck/?obdeck
  http://www.mda-mobiledata.org
 http://www.mobiletechnews.com/info/2006/08/03/104744.html
  2004  2007 U.S. Spending for Municipal Wireless Networks
 2004
    
    2005
    
    2006
    
    2007Spending ($ Millions)
    
    $
    31.5
    
    
    $
    76.5
    
    
    $
    177.7
    
    
    $
    405.6YTY Growth Rate
    
    
    N/A
    
    
    
    142
    %
    
    
    132
    %
    
    
    128
    %
 http://www.muniwireless.com
 OUR PRODUCTS
   2




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3




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ADVERTISING REVENUE
  OUR BUSINESS STRATEGY
  o
    
    reverse the current downward trend of our revenues;o
    
    curtail costs to correspond with our revenues; ando
    
    pursue merger and other expansion opportunities.
   o
    
    Increase Revenues.
    4




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o
    
    Curtail Costs.
   o
    
    Pursue Merger and Other Expansion Opportunities.
         5




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REGULATION
    COMPETITION
   o
    
    Online financial news and information providers including Yahoo Finance, Marketwatch,
TheStreet.com, Forbes.com, Briefing.com, America Online Personal Finance, Reuters and
MotleyFool.com;o
    
    Internet portals and search engines such as AOL, MSN and Yahoo;o
    
    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;
 6




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o
    
    Terminal-based financial news providers including Bloomberg, Reuters and Dow Jones; ando
    
    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 CORNELL CAPITAL
  $2,000,000 PROMISSORY NOTE
  7




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CONVERTIBLE DEBENTURES
         8




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WARRANTS
    ACQUISITION
OF SOFTWARE DEVELOPMENT BUSINESS
    9




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STOCK DIVIDEND
   RECAPITALIZATION
     2005 SHAREHOLDERS MEETING
  10




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2006 SHAREHOLDERS MEETING
  FACILITIES
 See Item 2.  Description of Properties.
 LEGAL PROCEEDINGS
 See Item 3.  Legal Proceedings
 WHERE YOU CAN FIND MORE INFORMATION ABOUT US
   11




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RISK FACTORS
  RISKS RELATED TO OUR BUSINESS
 WE HAVE A HISTORY OF LOSSES, ANTICIPATE LOSSES FOR THE FORESEEABLE FUTURE AND MAY NEVER ACHIEVE
PROFITABILITY.
  WE WILL REQUIRE ADDITIONAL FUNDS TO MEET OUR CASH OPERATING EXPENSES AND ACHIEVE OUR CURRENT
BUSINESS STRATEGY.
   WE HAVE MATERIAL OUTSTANDING INDEBTEDNESS WHICH CAN ONLY BE REPAID BY ISSUING EQUITY.
  WE HAVE NO ARRANGEMENTS CURRENTLY IN EFFECT, SUCH AS THE EQUITY LINE WE HAVE HISTORICALLY USED, TO
PROVIDE US WITH FUTURE LIQUIDITY.
  12




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WE MAY NOT BE ABLE TO STOP CONTRACTION OF OUR SUBSCRIBER REVENUES AND ATTRACT SUFFICIENT
INSTITUTIONAL CUSTOMERS.
   WE HAVE BEEN FORCED TO DISCONTINUE OUR COMMENTATORS AND THE FREE PORTION OF OUR WEBSITE WHICH MAY
CAUSE US TO LOSE SUBSCRIBERS.
  WE HAVE BEEN FORCED TO TERMINATE MANY EMPLOYEES WHICH MAY AFFECT THE QUALITY OF OUR REMAINING
PRODUCTS AND CAUSE US TO LOSE SUBSCRIBERS.
  WE MAY NOT BE SUCCESSFUL IN OUR ATTEMPT TO REFOCUS OUR BUSINESS STRATEGY TO TARGET PRIMARILY
SUBSCRIPTIONS BY INSTITUTIONAL INVESTORS FOR OUR TRADITIONAL PRODUCT.
  WE MAY NOT BE SUCCESSFUL AT BUILDING BRAND AWARENESS OR BUILDING STRATEGIC RELATIONSHIPS.
  WE HAVE NOT BEEN SUCCESSFUL IN SUFFICIENTLY REDUCING COSTS OR IN INCREASING REVENUES.
  13




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WE MAY NOT BE ABLE TO FIND OR CONSUMMATE A SUITABLE MERGER OR ACQUISITION.
  WE MAY BE EFFECTIVELY ACQUIRED AND MANAGED BY A BUSINESS WITH NO EXPERIENCE IN OUR SECTOR.
  WE MAY EXPERIENCE DIFFICULTIES IN DEVELOPING NEW AND ENHANCED SERVICES AND PRODUCTS.
    OUR FAILURE TO RESPOND TO RAPID CHANGES IN TECHNOLOGY AND ITS APPLICATIONS AND INTENSE COMPETITION
IN THE MOBILE SERVICES INDUSTRY PRODUCTS COULD MAKE OUR SERVICES OBSOLETE.
  WE MAY NOT SUCCESSFULLY ATTRACT OR MANAGE STRATEGIC ALLIANCES.
  14




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WE MAY HAVE TO DEFEND AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AND LIBEL AND DEFAMATION
CLAIMS, WHICH MAY CAUSE SIGNIFICANT OPERATIONAL EXPENDITURES.
  FAILURE TO MAINTAIN OUR REPUTATION FOR TRUSTWORTHINESS MAY REDUCE THE NUMBER OF OUR USERS, WHICH
MAY HARM OUR BUSINESS.
  WE DEPEND ON KEY PEOPLE IN MANAGEMENT AND OPERATIONS.
  CERTAIN TERMS OF THE EMPLOYMENT AGREEMENTS OF OUR EXECUTIVE OFFICERS COULD DISCOURAGE A POTENTIAL
TAKEOVER OF JAG MEDIA BY A THIRD PARTY.
  WE MAY FACE DIFFICULTIES CONCERNING CONTINUED AVAILABILITY OF OUR SOURCES OF INFORMATION FOR OUR
PRODUCTS.
  15




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WE 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 OUR OPERATING COSTS.
  WE COULD BE DEEMED TO BE AN INVESTMENT ADVISER SUBJECT TO FEDERAL OR STATE REGULATORY OVERSIGHT.
  RISKS RELATED TO OUR INDUSTRY
 OUR BUSINESS IS CURRENTLY DEPENDENT ON THE CONTINUED PUBLIC INTEREST IN THE STOCK MARKET.
  16




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OUR STOCK  AND TECHNOLOGY AND INTERNET STOCKS GENERALLY  HAVE BEEN AND MAY CONTINUE TO BE
VOLATILE.
  MOST OF OUR CURRENT AND POTENTIAL COMPETITORS HAVE GREATER NAME RECOGNITION, FINANCIAL, TECHNICAL
AND MARKETING RESOURCES, AND MORE EXTENSIVE CUSTOMER BASES AND INDUSTRY RELATIONSHIPS THAN WE DO,
ALL OF WHICH COULD BE LEVERAGED TO GAIN MARKET SHARE TO OUR DETRIMENT.
        WE ARE IN AN INTENSELY COMPETITIVE BUSINESS WITH LOW BARRIERS TO ENTRY.
  WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OURSELVES AGAINST SECURITY RISKS.
  17




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RISKS RELATED TO OUR CAPITAL STRUCTURE
 SHAREHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION FROM THE CONVERSION OF THE SECURED CONVERTIBLE
DEBENTURES INTO OUR COMMON STOCK.
   NUMBER OFSHARES ISSUABLEON CONVERSION OFCONVERTIBLE
    
    PERCENTAGE OF ISSUEDCONVERSION PRICE
    
    DEBENTURES(1)
    
    AND OUTSTANDING(2)$0.40
    
    
    10,375,000
    
    
    
    23
    %$0.30
    
    
    13,833,333
    
    
    
    30
    %$0.20
    
    
    20,750,000
    
    
    
    46
    %$0.15
    
    
    27,666,666
    
    
    
    61
    %$0.10
    
    
    41,500,000
    
    
    
    91
    %$0.05
    
    
    83,000,000
    
    
    
    182
    %
 
 (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 our total outstanding common stock prior to conversion, based on
45,506,370 shares issued and outstanding (excluding shares of our prior classes of common stock
exchangeable on presentation for shares of our current common stock) on February 14, 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 US TO ISSUE A SUBSTANTIALLY GREATER NUMBER OF SHARES, WHICH WILL CAUSE DILUTION TO OUR
EXISTING STOCKHOLDERS.
  18




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SHAREHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION FROM THE EXERCISE OF THE WARRANTS TO PURCHASE OUR
COMMON STOCK.
   WE HAVE LIMITED CASH RESOURCES WHICH EXPOSES US TO CLAIMS.
  THE MARKET FOR OUR STOCK IS LIMITED.
  THE RESALE BY CORNELL CAPITAL OF OUR SHARES MAY LOWER THE MARKET PRICE OF OUR COMMON STOCK.
   A LARGE PERCENTAGE OF OUR STOCK COULD BE OWNED BY CORNELL CAPITAL.
  19




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BECAUSE OUR STOCK CURRENTLY TRADES BELOW $5.00 PER SHARE, AND IS QUOTED ON THE PINK SHEETS, OUR
STOCK IS CONSIDERED BY THE SEC A PENNY STOCK, WHICH CAN ADVERSELY AFFECT ITS LIQUIDITY.
  OUR AMENDED CHARTER CONTAINS PROVISIONS WHICH MAY DISCOURAGE AN UNAFFILIATED PARTY TO TAKE US OVER.
  YOUR OWNERSHIP OF SHARES IN JAG MEDIA COULD BE IN DOUBT DUE TO POSSIBLE NAKED SHORTING OF OUR
COMMON STOCK.
  RISKS RELATED TO THE PROPOSED MERGER AND CRYPTOMETRICS BUSINESS.
  OFFICERS AND DIRECTORS HAVE POTENTIAL CONFLICTS OF INTEREST IN THE MERGER.
  20




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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 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.
  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 ITS
STOCKHOLDERS.
   21




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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.
   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.
  22




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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.
   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.
  23




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RISKS OF A CONGLOMERATE BUSINESS
  RISKS RELATED TO NO FAIRNESS OPINION
  RISKS OF NON-COMPLETION COSTS
  
 ITEM 2. DESCRIPTION OF PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
     24




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  25




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PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES
OF SECURITIES
    High
    
    LowFiscal Year 2005First Quarter, ending October 31, 2004
    
    
    1.10
    
    
    
    0.15Second Quarter, ending January 31, 2005
    
    
    0.65
    
    
    
    0.15Third Quarter, ending April 30, 2005
    
    
    0.52
    
    
    
    0.11Fourth Quarter, ending July 31, 2005
    
    
    0.30
    
    
    
    0.001Fiscal 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
    
    
    
    0.20
   RIGHTS OF SECURITY HOLDERS
    26




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27




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OPTIONS
  WARRANTS
    CONVERTIBLE DEBENTURES
  DIVIDEND POLICY
  28




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RECENT SALE OF UNREGISTERED SECURITIES
   Price Per Share
    
    Number of Shares Sold
    
    Date Sold$0.67
    
    179,104
    
    January 29, 2004$0.75
    
    353,333
    
    February 11, 2004$0.84
    
    386,905
    
    February 25, 2004$0.91
    
    291,209
    
    March 8, 2004$0.97
    
    515,464
    
    March 16, 2004$0.88
    
    198,864
    
    March 24, 2004$0.86
    
    581,395
    
    April 1, 2004$0.84 (Average Price)
    
    2,506,274 (Total Shares Sold)
      29




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PURCHASES OF EQUITY SECURITIES
  
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  Critical Accounting Policies and Estimates
      31




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Related Party Transactions:
  Off-Balance Sheet Arrangements:
  Results of Operations:
  Revenues:
  Cost of revenues:
   Selling expenses:
  General and administrative expenses:
  Gain
on change in value of derivative liability:
  Loss on extinguishment of promissory note:
  32




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Finance charge for derivative liability in excess of proceeds from convertible debentures:
  Other interest expense:
       Acquisition
of Software Development Business:
  33




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Equipment
    
    $
    11,000Other Assets
    
    
    100Goodwill
    
    
    50,400Total
    
    $
    61,500
    Year ending
    
    
    AmountJuly 31, 2007
    
    $
    160,000July 31, 2008
    
    $
    53,000Total
    
    $
    213,000
 34




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Liquidity and Capital Resources:
              35




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36




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Seasonality:
  Recent
Accounting Pronouncements:
    RECENT EVENTS
  37




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ITEM 7. FINANCIAL STATEMENTS
  Index to Financial Statements
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheet July 31, 2006
    
    F-3Consolidated Statements of Operations Years Ended July 31, 2006 and 2005
    
    F-4Consolidated Statements of Changes in Stockholders Equity (Deficiency)Years Ended July 31, 2006 and 2005
    
    F-5Consolidated Statements of Cash Flows Years Ended July 31, 2006 and 2005
    
    F-6Notes to Consolidated Financial Statements
    
    F-7 - F-17
  
 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 8A. DISCLOSURE CONTROLS AND PROCEDURES
  38




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ITEM 8B. OTHER INFORMATION
  39




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PART III
 
 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT
         
 40




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ITEM 10. EXECUTIVE COMPENSATION
 COMPENSATION OF EXECUTIVE OFFICERS
  ANNUAL COMPENSATION
 Long-TermCompensationOther
    
    Common SharesName and Principal
    
    Fiscal
    
    
    
    
    
    Annual
    
    Subject to Options
    
    All otherPosition
    
    Year
    
    Salary
    
    Bonus
    
    Compensation
    
    Granted
    
    CompensationThomas J.
Mazzarisi, Chairman
of the Board, 
Chief
Executive Officer
and General Counsel
    
    2006
2005
2004
    
    $150,000
$150,000
$150,000
    
    
    
    
    
    
    
    Stephen J.
Schoepfer, 
President, Chief 
Operating Officer, 
Chief Financial
Officer and
Secretary
    
    2006
2005
2004
    
    $150,000
$150,000
$150,000
    
    
    
    
    
    
    
    
 OPTION GRANTS IN FISCAL YEAR 2006
   OPTION GRANTS IN PERIOD BEGINNING AUGUST 1, 2005
 AND ENDING JULY 31, 2006
 Percentage ofTotal OptionsGranted toEmployees in theNumber of
    
    period beginningSecurities
    
    August 1, 2005
    
    Exercise or BaseUnderlying
    
    and ended July 31,
    
    Price Per
    
    Market Price on
    
    ExpirationName
    
    Options Granted
    
    2006
    
    ($/Share)
    
    the Date of Grant
    
    DateThomas J. Mazzarisi
    
    
    0
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Stephen J. Schoepfer
    
    
    0
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
 
 *
    
    Not Applicable REPORT ON REPRICING OF OPTIONS
   41




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EQUITY COMPENSATION PLAN INFORMATION AS OF JULY 31, 2006
 Number of securitiesremaining availablefor future issuanceWeighted average
    
    
    under equityNumber of securities to
    
    
    exercise price of
    
    
    compensation plansbe issued upon exercise
    
    
    outstanding
    
    
    (excluding securitiesof outstanding options,
    
    
    options, warrants
    
    
    reflected in columnwarrants and rights
    
    
    and rights
    
    
    (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)
    
    
    1,420,000
    
    
    $
    .12
    
    
    
    4,580,000Individual Compensation Arrangements (not
approved by security holders)
    
    Not applicable
    
    Not Applicable
    
    Not ApplicableTOTAL
    
    
    1,420,000
    (2)
    
    
    
    
    
    
    4,580,000
    (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.  OPTION EXERCISES IN FISCAL YEAR 2006
  AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
 Shares
    
    
    
    
    
    Number of Shares UnderlyingAcquired
    
    
    
    
    
    Unexercised Options at July 31,
    
    Value of Unexercised In-the-on
    
    Value
    
    2006
    
    money Options at July 31, 2006Name
    
    Exercise
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableThomas J. Mazzarisi
    
    
    0
    
    
    
    0
    
    
    
    500,000
    
    
    
    0
    
    
    $
    90,000
    
    
    
    0Stephen J. Schoepfer
    
    
    0
    
    
    
    0
    
    
    
    250,000
    
    
    
    0
    
    
    $
    45,000
    
    
    
    0
 DIRECTOR COMPENSATION
  1999 LONG-TERM INCENTIVE PLAN
  42




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o
    
    either incentive stock options or non-qualified stock options;o
    
    stock appreciation rights;o
    
    restricted or deferred stock;o
    
    dividend equivalents;o
    
    bonus shares and awards in lieu of our obligations to pay cash compensation; ando
    
    other awards, the value of which is based in whole or in part upon the value of the Common Stock.
     EMPLOYMENT CONTRACTS
 MAZZARISI AND SCHOEPFER EMPLOYMENT AGREEMENTS
     43




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INDEMNIFICATION OF OFFICERS AND DIRECTORS
   44




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##### Table of Contents



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER MATTERS
  Name & Address of Beneficial Owner
    
    Number of Shares Beneficiary Owned
    
    Percentage of ClassThomas Mazzarisi (Chairman of the Board
Chief Executive Officer and General
Counsel)
6865 SW 18th Street, Suite B13,
Boca Raton, Florida 33433
    
    
    610,000
    (1) (2)
    
    
    1.3
    %Stephen Schoepfer (President, Chief
Operating Officer, Chief Financial
Officer and Director)
6865 SW 18th Street, Suite B13,
Boca Raton, Florida 33433
    
    
    325,000
    (1) (3)
    
    
    **All executive officers and directors
as a group
(2 persons)
    
    
    935,000
    (1)(2)(3)
    
    
    2.1
    %*
 
 *
    
    Less than one percent(1)
    
    Based on 45,506,370 shares of Common Stock issued and outstanding as of February 14, 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).(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. 
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 13. EXHIBITS
    45




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##### Table of Contents



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
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 Cornell Capital Partners,
LP (14)4.5
    
    Securities Purchase Agreement, effective May 25, 2006, by and between JAG Media
Holdings, Inc. and Cornell Capital Partners, LP (17)4.6
    
    $1,900,000 Secured Convertible Debenture issued to 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
Cornell Capital Partners, LP (17)4.8
    
    Security Agreement, effective May 25, 2006, by and between JAG Media LLC and Cornell
Capital Partners, LP (17)4.9
    
    $1,250,000 Secured Convertible Debenture issued to 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 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 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 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 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 Cornell Capital
Partners, LP effective May 25, 2006 (17)4.31
    
    $1,000,000 Secured Convertible Debenture issued to 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
    
    Consulting Agreement, dated June 12, 2002, between JAG Media Holdings, Inc. and Walsh
Organization, Inc. (8)10.7
    
    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)10.8
    
    Subscription Agreement, dated December 10, 2002, between JAG Media Holdings, Inc. and
Bay Point Investment Partners LLC (5)10.9
    
    Placement Agent Agreement, dated December 10, 2002, between JAG Media Holdings, Inc. and
RMC 1 Capital Markets, Inc. (5)10.10
    
    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)10.11
    
    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)
 46




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##### Table of Contents



Exhibit No.
    
    Description10.12
    
    Subscription Agreement, dated as of September 25, 2003, between JAG Media Holdings, Inc.
and Kuekenhof Equity Fund L.P. (8)10.13
    
    Finders Fee Agreement, dated as of January 5, 2004, between JAG Media Holdings, Inc.
and Flow Capital Advisors, Inc. (9)10.14
    
    Business Sale Agreement dated November 24, 2004, by and among TComm Limited, TComm (UK)
Limited and JAG Media Holdings, Inc. (10)10.15
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings, Inc.
and Stuart McClean (10)10.16
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings, Inc.
and Joanne McClean (10)10.17
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings, Inc.
and Craig Hardcastle (10)10.18
    
    Employment Agreement, dated November 24, 2004, by and between JAG Media Holdings, Inc.
and Ian Hardcastle (10)10.19
    
    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)10.20
    
    Letter Agreement, effective May 25, 2006, by and between JAG Media Holdings, Inc. and
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
Cornell Capital Partners, LP (17)10.21
    
    Investor Registration Rights Agreement, effective May 25, 2006, by and between JAG Media
Holdings, Inc. and Cornell Capital Partners, LP (17)10.22
    
    Letter Agreement, effective May 25, 2006, by and between JAG Media Holdings, Inc. and
Cornell Capital Partners, LP terminating Equity Line Agreement Purchase Agreement by and
between JAG Media Holdings, Inc. and Cornell Capital Partners, LP dated as of April 9,
2002, as amended on July 8, 2004 and July 21, 2004 (17)10.23
    
    Irrevocable Transfer Agent Instructions, effective May 25, 2006, by and among JAG Media
Holdings, Inc., Transfer Online, Inc. and Cornell Capital Partners, LP (17)10.24
    
    Letter Agreement, dated January 24, 2007, by and among JAG Media Holdings, Inc., Cornell
Capital Partners, LP, Cryptometrics, Inc., Robert Barra and Michael Vitale (19)10.25
    
    Letter Agreement, dated February 26, 2007, by and among JAG Media Holdings, Inc.,
Cornell Capital Partners, LP, Cryptometrics, Inc., Robert Barra and Michael Vitale *14.1
    
    Code of Ethics (8)21.1
    
    Subsidiaries of Registrant *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 *
 
 *
    
    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. 47




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##### Table of Contents



(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 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 AUDIT FEES
  AUDIT-RELATED FEES
  TAX FEES
  ALL OTHER FEES
  PRE-APPROVAL POLICIES AND PROCEDURES
   48




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##### Table of Contents



PAGEReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheet July 31, 2006
    
    F-3Consolidated Statements of Operations Years Ended July 31, 2006 and 2005
    
    F-4Consolidated Statement of Changes in Stockholders Equity (Deficiency) Years Ended July 31, 2006 and 2005
    
    F-5Consolidated Statements of Cash Flows Years Ended July 31, 2006 and 2005
    
    F-6Notes to Consolidated Financial Statements
    

F-7/17
  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



AssetsCurrent assets:Cash and cash equivalents
    
    $
    450,618Accounts receivable, net of allowance for doubtful accounts of $7,500
    
    
    15,580Other current assets
    
    
    35,333Total current assets
    
    
    501,531Equipment, net of accumulated depreciation of $118,736
    
    
    76,702Total
    
    $
    578,233Liabilities and Stockholders DeficiencyCurrent liabilities:Accounts payable and accrued expenses
    
    $
    234,682Deferred revenues
    
    
    22,448Derivative liability
    
    
    2,789,750Total current liabilities
    
    
    3,046,880Convertible debentures payable, net of unamortized debt discount of $2,047,911
    
    
    2,027,089Total liabilities
    
    
    5,073,969Mandatorily redeemable Class B common stock; par value $.00001 per share:400,000 shares designated as Series 2; 372,848 shares issued and
outstanding
    
    
    440,000 shares designated as Series 3; 21,500 shares issued and
outstanding
    
    
    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; 42,896,506 shares
issue and outstanding
    
    
    429Additional paid-in capital
    
    
    44,209,217Unearned compensation
    
    
    (34,870
    )Accumulated deficit
    
    
    (48,670,516
    )Total stockholders deficiency
    
    
    (4,495,740
    )Total
    
    $
    578,233
  F-3




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##### Table of Contents



2006
    
    
    2005Revenues
    
    $
    166,692
    
    
    $
    239,651Operating expenses:Cost of revenues
    
    
    85,585
    
    
    
    152,371Selling expenses
    
    
    46,637
    
    
    
    43,441General and administrative expenses
    
    
    2,381,789
    
    
    
    1,745,455Totals
    
    
    2,514,011
    
    
    
    1,941,267Loss from operations
    
    
    (2,347,319
    )
    
    
    (1,701,616
    )Other income (expense)Gain on change in value of derivative liability
    
    
    1,094,246
    
    
    
    Loss on
extinguishment of promissory notes
    
    
    (77,373
    )
    
    
    Writeoff of goodwill
    
    
    
    
    
    
    (50,400
    )Interest income
    
    
    2,573
    
    
    
    8,357Finance charge for derivative liability in
excess of proceeds from convertible debentures
    
    
    (1,795,005
    )
    
    
    Other interest expense
    
    
    (513,978
    )
    
    
    (145,506
    )Net loss
    
    $
    (3,636,856
    )
    
    $
    (1,889,165
    )Basic net loss per share
    
    $
    (0.08
    )
    
    $
    (0.04
    )Basic weighted average common shares outstanding
    
    
    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 compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,018
    
    
    
    
    
    
    
    35,018Effect of issuance of common stock for
purchase of business
    
    
    250,000
    
    
    
    3
    
    
    
    42,497
    
    
    
    
    
    
    
    
    
    
    
    42,500Effects 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 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
    )
  F-5




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##### Table of Contents



2006
    
    
    2005Operating activities:Net loss
    
    $
    (3,636,856
    )
    
    $
    (1,889,165
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    23,785
    
    
    
    19,684Amortization of other assets
    
    
    36,426
    
    
    
    13,574Amortization of unearned compensation
    
    
    61,576
    
    
    
    35,018Gain on change in value of derivative liability
    
    
    (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
    
    
    243,266
    
    
    
    27,149Writeoff of goodwill
    
    
    
    
    
    
    50,400Effects of issuance of common stock in exchange
for services and claim settlement
    
    
    
    
    
    
    77,501Changes in operating assets and liabilities:Accounts receivable
    
    
    (1,070
    )
    
    
    (2,270
    )Other current assets
    
    
    32,123
    
    
    
    6,586Accounts payable and accrued expenses
    
    
    275,025
    
    
    
    147,657Deferred revenues
    
    
    (6,783
    )
    
    
    (10,262
    )Net cash used in operating activities
    
    
    (2,194,376
    )
    
    
    (1,524,128
    )Investing activities:Equipment purchases
    
    
    (40,871
    )
    
    
    (32,078
    )Cash paid for purchase of business
    
    
    
    
    
    
    (19,212
    )Net cash used in investing activities
    
    
    (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
    )Net cash provided by financing activities
    
    
    2,025,000
    
    
    
    1,850,000Net increase (decrease) in cash and cash equivalents
    
    
    (210,247
    )
    
    
    274,582Cash and cash equivalents, beginning of year
    
    
    660,865
    
    
    
    386,283Cash and cash equivalents, end of year
    
    $
    450,618
    
    
    $
    660,865Supplemental disclosure of noncash financing activities:Noncash effect of promissory notes converted to common stock
    
    $
    325,000Derivative liability of warrants issued equal to proceeds from debentures issued
    
    $
    2,025,000Reclassification of 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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F-7




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##### Table of Contents



F-8




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##### Table of Contents



F-9




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##### Table of Contents



Deferred revenues, net
    
    $
    8,000Unearned compensation
    
    
    54,000Net operating loss carryforwards
    
    
    12,165,00012,227,000Less valuation allowance
    
    
    (12,227,000
    )Total
    
    $
    
       F-10




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##### Table of Contents



F-11




---



##### Table of Contents



F-12




---



##### Table of Contents



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




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##### Table of Contents



Number of Shares
    
    
    Range ofCommon Stock
    
    
    Exercise PricesOptions outstanding, August 1, 2004
    
    
    3,585,000
    
    
    $
    .02-$6.00Options issued (A)
    
    
    260,000
    
    
    $
    .50-$1.00Options cancelled
    
    
    (1,335,000
    )
    
    $
    .15-$6.00Options outstanding, July 31, 2005
    
    
    2,510,000
    
    
    $
    .02-$3.50Options issued (B)
    
    
    450,000
    
    
    $
    .02-$1.00Options canceled
    
    
    (1,540,000
    )
    
    $
    .02-$3.50Options outstanding,
July 31, 2006 (C) (D)
    
    
    1,420,000
    
    
    $
    .02-$1.00
 
 (A)
    
    During 2005, the Company granted options to purchase 260,000 shares of common
stock to employees of Pixaya (see Note 5). These options had per share exercise prices
ranging from $.50 to $1.00, will expire in March 2015 and had an aggregate fair value of
$51,200.(B)
    
    During 2006, the Company granted options to purchase 450,000 shares of common
stock to employees and consultants. These options had per share exercise prices ranging
from $.02 to $1.00, will expire at various dates from August 2011 through September 2015
and had an aggregate fair value of $56,000.(C)
    
    Includes options for the purchase of 1,420,000 shares of, effectively, common
stock granted pursuant to the Companys 1999 Long-term Incentive Plan (the Incentive
Plan) which provides for individual awards to officers, employees, directors,
consultants and certain other individuals that may take the form of stock options and
certain other types of awards for which the value is based in whole or in part upon the
fair market value of, effectively, the Companys common stock. The number of shares of
common stock that may be subject to all types of awards under the Incentive Plan as
amended may not exceed 6,000,000 shares. The options typically vest upon grant but in no
case later than two and one-half years after grant and expire the earlier of the tenth
anniversary of the date of grant or the 90th day following termination of
employment; provided that during such 90 day period the option will be exercisable only
to the extent it was vested as of the date of such termination. F-14




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##### Table of Contents



(D)
    
    These options will expire at various dates from August 2011 through September 2015.  Options Outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options ExercisableWeighted
    
    
    WeightedAverage Years
    
    
    AverageNumber
    
    
    of Remaining
    
    
    Exercise
    
    
    
    
    
    
    Weighted AverageExercise Prices
    
    Outstanding
    
    
    Contractual Life
    
    
    Price
    
    
    Number Exercisable
    
    
    Exercise Price$.02
    
    
    1,200,000
    
    
    
    6.59
    
    
    $
    .02
    
    
    
    1,200,000
    
    
    $
    .02.50
    
    
    110,000
    
    
    
    8.32
    
    
    
    .50
    
    
    
    110,000
    
    
    
    .50.75
    
    
    55,000
    
    
    
    8.32
    
    
    
    .75
    
    
    
    0
    
    
    
    01.00
    
    
    55,000
    
    
    
    8.32
    
    
    
    1.00
    
    
    
    0
    
    
    
    0$.02-$1.00
    
    
    1,420,000
    
    
    
    6.86
    
    
    $
    .02-$1.00
    
    
    
    1,310,000
    
    
    
    .60
     Warrants Outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    Warrants ExercisableWeighted
    
    
    WeightedAverage Years
    
    
    AverageNumber
    
    
    of Remaining
    
    
    Exercise
    
    
    
    
    
    
    Weighted AverageExercise Prices
    
    Outstanding
    
    
    Contractual Life
    
    
    Price
    
    
    Number Exercisable
    
    
    Exercise Price$.40
    
    
    2,000,000
    
    
    
    4.82
    
    
    $
    .40
    
    
    
    2,000,000
    
    
    $
    .40.50
    
    
    2,000,000
    
    
    
    4.82
    
    
    
    .50
    
    
    
    2,000,000
    
    
    
    .50.60
    
    
    2,000,000
    
    
    
    4.82
    
    
    
    .60
    
    
    
    2,000,000
    
    
    
    .60.70
    
    
    3,000,000
    
    
    
    4.82
    
    
    
    .70
    
    
    
    3,000,000
    
    
    
    .70.80
    
    
    3,000,000
    
    
    
    4.82
    
    
    
    .80
    
    
    
    3,000,000
    
    
    
    .80$.40-$.80
    
    
    12,000,000
    
    
    
    4.82
    
    
    $
    .40-$.80
    
    
    
    12,000,000
    
    
    
    .63
  F-15




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##### Table of Contents



Year ending
    
    AmountJuly 31, 2007
    
    $
    160,000July 31, 2008
    
    
    53,000Total
    
    $
    213,000
       
  F-16




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##### Table of Contents



F-17




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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
    
    March 2, 2007Thomas J. Mazzarisi
    
    Executive Officer and General
Counsel (Principal Executive
Officer)/s/ Stephen J. Schoepfer
    
    President, Chief Operating
    
    March 2, 2007Stephen J. Schoepfer
    
    Officer, Chief Financial
Officer, Secretary and Director(Principal Financial andAccounting Officer)