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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               __________________

                                   FORM 10-KSB
(Mark One)
  [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                     For the fiscal year ended July 31, 2005

  [ ]  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.
             (Exact Name of Registrant as Specified in Its Charter)

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

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

                                 (866) 300-7410
              (Registrant's telephone number, including area code)


           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

    Title of Each Class                Name of Each Exchange on which Registered
           None                                        None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                        Common Stock, $0.00001 par value
                Series 2 Class B Common Stock, $0.00001 par value
                                (Title of Class)
                               __________________

Check whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, during
the past 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]


<PAGE>

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes [ ]  No [X]

The issuer's revenue for the fiscal year ended July 31, 2005 was approximately
$239,651.

The aggregate market value of voting and non-voting common equity held by
non-affiliates of the registrant, based upon the closing price of the Common
Stock on October 26, 2005 as reported on the OTC Bulletin Board, was
approximately $8,100,000.

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

                                                                Outstanding at
                        Class                                  October 26, 2005
                        -----                                  ----------------
Common Stock, par value $0.00001 per share                       44,751,212
Series 2 Class B Common Stock, par value $0.00001 per share         380,829
Series 3 Class B Common Stock, par value $0.00001 per share          21,500

                    DOCUMENTS INCORPORATED BY REFERENCE: None

================================================================================


<PAGE>
                            JAG MEDIA HOLDINGS, INC.
                         2005 FORM 10-KSB ANNUAL REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                              PAGE
                                                                                                              ----
<S>                                                                                                           <C>
PART I...........................................................................................................1

         ITEM 1.           DESCRIPTION OF BUSINESS...............................................................1

         ITEM 2.           DESCRIPTION OF PROPERTIES............................................................25

         ITEM 3.           LEGAL PROCEEDINGS....................................................................25

         ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................................27

PART II.........................................................................................................28

         ITEM 5.           MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
                           PURCHASES OF SECURITIES..............................................................28

         ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............................33

         ITEM 7.           FINANCIAL STATEMENTS.................................................................40

         ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                           DISCLOSURE...........................................................................40

         ITEM 8A.          DISCLOSURE CONTROLS AND PROCEDURES...................................................40

         ITEM 8B.          OTHER INFORMATION....................................................................41

PART III........................................................................................................42

         ITEM 9.           DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                           SECTION 16(a) OF THE EXCHANGE ACT....................................................42

         ITEM 10.          EXECUTIVE COMPENSATION...............................................................43

         ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER MATTERS......49

         ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................................50

         ITEM 13.          EXHIBITS.............................................................................51

         ITEM 14.          PRINCIPAL ACCOUNTANTS FEES AND SERVICES .............................................55
</TABLE>

<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

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

OVERVIEW OF OUR BUSINESS

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

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

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

We undertook a corporate reorganization in January 2002 in order to distinguish
and better manage our areas of business. On January 4, 2002, JAG Media LLC was
formed as a Delaware limited liability company and a wholly owned subsidiary of
JagNotes.com, Inc. The assets and liabilities of our current fax and Internet
subscription business were transferred to JAG Media LLC. In order to better
reflect the overall business in which we expected to engage and the corporate
structure we intended to use to conduct that business, we changed our corporate
name from JagNotes.com Inc. to JAG Media Holdings, Inc. effective April 8, 2002.

Our jagnotes.com website currently consists of a subscription-based service that
offers two specific products, the JAGNotes (Upgrade/Downgrade) Report and the
Rumor Room, providing timely market reports, including breaking news and
potentially market moving information. We currently derive our revenues
primarily from the sale of subscriptions.


<PAGE>
We purchased certain development stage software and related assets in the United
Kingdom on November 24, 2004, now being developed by our subsidiary, Pixaya (UK)
Limited. We are continuing to finance the development by Pixaya of certain
software products, including those which we believe will facilitate the delivery
to customers through their mobile phones of our fast breaking financial
information services.

We have also decided to expand our business and are seeking acquisition
candidates which may be engaged in unrelated lines of business. See "- Our
Business Strategy".

We are a Nevada corporation. Our address is 6865 S.W. 18th Street, Suite B13,
Boca Raton, Florida 33433, and our telephone number is 866-300-7410.

OUR INDUSTRY GENERALLY

The growth of the Internet has changed the way investors seek information and
manage their portfolios. Individual investors are increasingly seeking access to
information that was formerly available only to financial professionals.
Professional investors who have traditionally relied on print and other media
for information are demanding faster information and greater accessibility.

As of September 30, 2005, there were over 957 million Internet users worldwide,
including over 203 million users in the United States. See Internet World Stats
website (http://www.internetworldstats.com ).

According to tracking surveys conducted by Pew Internet & American Life Project
as of November 2004, approximately 44% of those with Internet access use the
Internet to obtain financial information and approximately 13% use the Internet
to buy or sell stocks, bonds or mutual funds. According to these surveys,
approximately 8% of those with Internet access obtain financial information on a
typical day.

With respect to our Pixaya business unit, the mobile and wireless industries are
experiencing significant growth and changing the way businesses operate and
people communicate. Both industries are also giving rise to new forms of mobile
entertainment and information not available just a few short years ago.

The following statistics provide some insight into the impact of the mobile and
wireless industries:

o  As of October 25, 2005 there were more than 197 million wireless subscribers
   in the U.S.
o  Reported wireless minutes of use exceeded 675 billion in June 2005.
o  It is estimated that U.K. mobile phone users will send up to 30 billion text
   messages during 2005.

See Cellular Telecommunications and Internet Association (http://www.ctia.org.);
See Mobile Data News, The Official Newsletter of the Mobile Data Association,
Volume 5, No. 1, January/February 2005 (http://www.mda-mobiledata.org).

New forms of wireless are also experiencing significant growth. For example,
municipal wireless networks, which provide wireless coverage to large portions
of municipal areas, have seen significant growth over the past year and that
growth is generally expected to continue in the near term. See Municipal
Wireless State of the Market Report September 2005
(http://www.muniwireless.com).

                                       2
<PAGE>
2004 - 2007 U.S. Spending for Municipal Wireless Networks

                            2004           2005          2006           2007
                            ----           ----          ----           ----
Spending ($ Millions)       $31.5          $76.5         $177.7         $405.6

YTY Growth Rate             N/A            142%          132%           128%

See Municipal Wireless State of the Market Report September 2005
(http://www.muniwireless.com).

OUR PRODUCTS

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

Our jagnotes.com website consists solely of a subscription-based service. During
the last fiscal year, we discontinued the free portion of the Company's website.

We offer our subscribers two targeted products: The JAGNotes (Upgrade/Downgrade)
Report, targeted primarily at institutional subscribers, and the Rumor Room,
targeted primarily at retail individual customers. These two products are
accessible only to paid subscribers. Subscriptions are offered to individuals at
the rate of $9.95 per month, or $99.95 per year. We have offered free trial
subscriptions at times in the past and may do so in the future.

JAGNOTES (UPGRADE/DOWNGRADE) REPORT - The JAGNotes Report is a daily
consolidated investment report that summarizes newly issued research, analyst
opinions, upgrades, downgrades and analyst coverage changes from various
investment banks and brokerage houses. Each morning we gather this information,
then compile and release it in a concise, easy to read format before the markets
open. We believe that this report gives early, convenient access to our
subscribers of potentially market moving information which was traditionally not
available in a convenient format when the market opens. This report is updated
from time to time during the trading day.

Our current strategy involves phasing out retail subscribers for our JAGNotes
Report and refocusing on institutional customers and professional traders. We
have always maintained our original JAGNotes fax-based service for a limited
number of mostly institutional subscribers. Through this service, we provide
these subscribers faxed copies of our daily JAGNotes Report, which is provided
through installments as information is received every weekday morning before the
stock market opens. We also allow these subscribers access to our Internet-based
information by providing them with a specified number of access codes. The price
for this combined service is approximately $1,500 to $2,150 per year. The
content of our website contains substantially all of the information provided in
the faxed reports as well as updates of such information and the Rumor Room
described below.

We intend to continue providing our combined fax/Internet service in the future
primarily to institutional subscribers. We believe that some financial
institutions are willing to pay a higher price for this combined service because
they consider a faxed report to be a more user friendly means of receiving the
information even if their employees have direct Internet access. We are also
examining the potential for implementing other product offerings and
subscription structures which may be attractive to institutional subscribers.

                                       3
<PAGE>
While we intend to focus our efforts exclusively on offering the JAGNotes Report
to institutional customers, we recognize that it remains of interest to some
retail customers as well. However, to avoid the cost of accessing such
individuals we expect to do so almost exclusively through strategic affiliations
such as our current arrangement with Track Data, as described under "Our
Business Strategy", below.

THE RUMOR ROOM - Because rumors can move equities, we have established the Rumor
Room where we post rumors that have been heard on the street about various
stocks. When we hear rumors, we post the information in the Rumor Room and
indicate the date and time of the rumor. While we realize that rumors are
inherently unreliable as indicated by a cautionary note introducing this portion
of our site, we believe that every trader and investor - large and small -
should have access to this information to determine its usefulness. The Rumor
Room is available to our subscribers and updated throughout the day.

Although targeted primarily at individual subscribers, the Rumor Room is also
made available through our website to institutional investors as described
above. As described below, once our English subsidiary, Pixaya, has completed
development of its Pixaya Mobile software product, which delivers on-demand
video/audio clips and text messages to mobile phones, we intend to try to
distribute the Rumor Room through mobile phones as well. We believe such a
distribution channel might better access our target audience. There can be no
assurance, however, that such development will be successfully completed or, if
completed, that customers will embrace this new mode of distribution.

PIXAYA - On November 24, 2004, through our English subsidiary now named Pixaya
(UK) Limited, we purchased certain development stage software and related assets
from TComm Limited, a company also organized in the United Kingdom. At the time
of acquisition, TComm Limited was in various stages of development of four
software products. We have continued developing Pixaya Mobile (previously known
as TComm TV), which delivers on-demand video/audio clips and text messages to
various Java-based and Symbian-based mobile phones, and SurvayaCam (previously
CCMTV), which consists of software programs and related hardware intended to
permit field personnel to send real-time video streams from the field to a
central location where they can be viewed by one or more persons. We
discontinued our support of a network-based internal communications system for
business that enables employees to communicate securely face-to-face from their
own desks and a network-based instant video messaging platform that allows
employees of an organization to communicate securely in real-time within their
offices and from remote locations, as neither fit within our strategic plan
focused on distribution of content such as the Rumor Room service through mobile
phones and other wireless solutions which would, for example support SurvayaCam.
In addition, we are supporting development of a new mobile phone product named
"SOS Guides," which are mobile travel guides that will be made available to
users through their mobile phones. We intend to market the "SOS Guides" to
travel agents, metropolitan tourist bureaus and other travel related companies.

COMPANY VOICE SERVICE - We have discontinued offering this service. Through our
wholly owned subsidiary, JAG Company Voice LLC, we began marketing our Company
Voice service in 2003. We established the Company Voice service in order to make
available to publicly traded companies production and distribution services that
would enable them to deliver press releases and other company messages to
stockholders and potential investors in streaming video/audio format. Our goal
was to offer production and distribution services such as directly contracting
for studios in which Company Voice segments would be taped; providing
interviewers for each Company Voice segment; assisting clients in preparing for
each interview; encoding taped segments to allow distribution via the Internet;
and arranging for distribution and streaming of finalized Company Voice segments
on affiliate sites such as Lycos.

                                       4
<PAGE>
During 2003, we placed four Company Voice segments on our website and attempted
to obtain distribution of Company Voice segments through other websites;
however, this service did not produce any material revenue for us. Therefore, we
allowed our Company Voice contract for streaming video to expire by its terms
and are no longer marketing our Company Voice services. On April 8, 2004, JAG
Company Voice LLC was merged into JAG Media LLC.

ADVERTISING REVENUE

While we expect the primary source of our revenue to be from subscriptions for
our JAGNotes Report and the Rumor Room, we may supplement this with advertising
revenue. Such revenues have, however, not been meaningful to date. We would not
expect such revenues to become material until (i) there is a major upturn from
current levels in Internet banner advertising generally or we are able to offer
advertisers various media advertising alternatives to banners and (ii) we have
been successful in increasing the number of unique visitors to our website.

OUR BUSINESS STRATEGY

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

o        reverse the current downward trend of our revenues;

o        curtail costs to correspond with our revenues; and

o        pursue merger and other expansion opportunities.

In order to successfully achieve our strategy, we intend to re-position JAG
Media's two key products so they are targeted more effectively at their
respective markets: institutional customers (JAGNotes Report) and retail
customers (the Rumor Room). In time, we hope that by refocusing our products on
specific customer groups, JAG Media will become an important information
resource both for institutional customers (investors, brokers and investment
advisers) and for individual retail customers.

We believe the institutional market for the JAG Notes Report offers an
opportunity to achieve higher revenues at lower per unit cost than the retail
market we have been pursuing, but at the same time we believe that developing
technologies, such as mobile phones, may give us a better distribution channel
which can make the individual customer market for the Rumor Room cost effective
as well. With respect to our JAGNotes Report, we plan to focus on servicing the
institutional segment of our business. To assist us in this effort, we are
investigating ways of using the Internet more effectively in distributing our
product to the institutional market and helping those customers in turn
redistribute the product to their professional employees. With respect to our
Rumor Room service, we are actively exploring the feasibility of using mobile
phones as a new distribution channel.

o      Increase Revenues.

Some avenues which we are exploring with respect to the JAGNotes Report to
reverse the current downward trend of our revenues include:

     o   Increasing our sales efforts for the JAGNotes Report to institutional
         subscribers by focusing our entire effort on reaching that market;

                                       5
<PAGE>

     o   To the extent funds permit, developing related products tailored to the
         needs of institutional subscribers such as JAGNotes delivered to
         company intranets and featuring company branding;

     o   In order to access individual professional traders without incurring
         excessive marketing costs, pursuing strategic affiliations,
         partnerships, joint ventures or other relationships with strategic
         partners, such as our current arrangements with Track Data, Cantex,
         Inc. and Acquire Media Corporation, financial information platforms for
         professional traders, whereby they offer our JAGNotes Report as part of
         their collection of subscriber services to the professional trading
         community; and

     o   Pursuing distribution arrangements with third party information
         providers that service financial institutions.

Some avenues which we are exploring with respect to the Rumor Room to reverse
the current downward trend of our revenues include:

     o   To the extent funds permit, further developing our Pixaya mobile
         software product to allow distribution of stock rumors to mobile phones
         via text messaging and on-demand video/audio clips;

     o   To the extent funds permit, developing related products tailored to the
         needs of individual retail customers;

     o   Pursuing distribution arrangements with third party information
         providers that service individual retail customers.

o    Curtail Costs. We sold our webcasting business and discontinued our efforts
     to market our Company Voice product to reduce our cash flow requirements.
     In addition, we have discontinued various commentators and employees in
     order to save costs where we concluded that the cost was not justified by
     our subscribers' interest and current revenue levels. Our new strategy of
     focusing our marketing efforts on institutional customers for our JAGNotes
     Report will, we believe, also permit us to obtain more revenues per
     marketing dollar by focusing on a smaller number of customers and potential
     customers to whom we can sell our products.

o    Pursue Merger and Other Expansion Opportunities. While we intend to utilize
     our available resources as effectively as possible to increase revenues and
     reduce costs, we realize that it may take some time before revenues can be
     increased to a level where they can cover operating costs and then reach
     the level where they can cover general and administrative costs. Many of
     our general and administrative costs are related to being a public company
     and these costs are difficult to reduce in light of the recent
     Sarbanes-Oxley legislation and its new requirements. We have therefore
     concluded that it would be prudent to attempt to increase our revenue base
     more quickly than our basic business strategy of refocusing our two
     different products on their respective customer bases is likely to achieve,
     so that such administrative costs could be absorbed by a materially larger
     revenue stream.

While we have looked at various possible acquisitions over the past three years,
we have decided that we should increase our efforts to find a compatible merger
candidate and even consider dividing our business to help jump start its growth
and have access to more funding sources. A merger candidate need not be in our
specific line of business, but could be in another line of business related to
the stock market or it could be in an unrelated line of business. Our current
strategy is to not foreclose any attractive candidate based upon its line of
business.

                                       6
<PAGE>
We also are pursuing the possibility of spinning off one of our two major
services in order to maximize the chances of successfully developing both such
services and focus them on their respective target customer bases.

Pursuant to the above strategy, we have located a possible merger candidate,
Cryptometrics, Inc. While there can be no assurance that final documentation
will be agreed or executed or a transaction ever consummated, on September 9,
2005 we entered into a non-binding letter of intent with Cryptometrics pursuant
to which we and Cryptometrics would enter into a merger agreement under 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 our Common Stock which would, upon issuance, represent 88% of our
outstanding Common Stock, in exchange for all of the issued and outstanding
capital stock of Cryptometrics. In such case, our existing public stockholders
would experience significant dilution from the issuance of these shares to the
stockholders of Cryptometrics. If consummated, the transaction would be
accounted for as a reverse acquisition in which Cryptometrics would be deemed
the acquirer.

If a merger agreement is executed, it is anticipated that the proposed
transaction would be subject to various conditions being satisfied prior to the
closing.

Except for certain provisions, the letter of intent is non-binding. As noted
above, there is no assurance that the definitive documentation called for in the
letter of intent will ever be executed, or if executed, that the proposed merger
between the Company and Cryptometrics will be consummated, or if it is
consummated, that it will be pursuant to the terms described above.

The letter of intent was filed as Exhibit 99.1 to a Form 8-K filed with the SEC
on September 14, 2005 and should be reviewed for further information regarding a
possible transaction with Crytpometrics.

We are also considering a possible spin off of either the Rumor Room, together
with our related Pixaya mobile phone software development business, or the
JagNotes Report. Any such spin off might possibly be done in connection with a
merger with another enterprise which may be an unrelated line of business. We
believe our two products might be better repositioned and developed as their own
corporate entities which might also appeal to different investors. We have not
made a final decision as to any spin off or entered into any term sheet in
connection with any merger related to such a spin off. There can be no assurance
that any such spin off, with or without a merger, will prove feasible or be
consummated.

We will require additional funds in order to implement our business strategy. At
our current usage rate of cash, the cash generated from our operations will not
be sufficient to fund the liquidity requirements of our current business
strategy. Accordingly, we will need to raise additional funds through public or
private financing, strategic relationships, mergers or other arrangements. There
can be no assurances that we will be able to do so.

Note: These are our strategies, goals and targets. We believe in them, but we
cannot guarantee that we will be successful in implementing them or that, even
if implemented, they will be effective in creating a profitable business.
Strategies that in the past we thought would be successful have not proven
effective. In addition we are dependent on having sufficient cash to carry out
our strategy. Alternatively, we may have to continue to reduce services to a
level subscribers may not find valuable. Please read "Risk Factors" beginning on
page 14 of this Annual Report on Form 10-KSB before making any investment
decision.

                                       7
<PAGE>
REGULATION

The securities industry is subject to extensive regulation under federal and
state laws in the United States, and companies that provide financial advice to
investors are generally required to register as investment advisers at either
the federal or state level. We believe that our business consists of a
publishing activity for which investment adviser registration and regulation
does not apply under applicable federal or state law, and thus we are not
registered as an investment adviser with either the SEC or any of the various
states. The regulatory environment in which we operate is subject to change,
however, and we could be required to register as an investment adviser with an
appropriate regulatory agency at some point in the future.

In addition, we operate in an environment of tremendous uncertainty about
potential government regulation of the Internet and Internet-based service
providers. We believe that our business is not currently subject to direct
regulation other than regulations applicable to businesses generally. However,
the Internet is evolving rapidly, and governmental agencies have not yet been
able to adapt all existing regulations to the Internet environment. The United
States Congress has passed legislation that regulates certain aspects of the
Internet, including on-line content, copyright infringement, user privacy,
liability for third-party activities and jurisdiction. Specifically, with
respect to one aspect of copyright law, on October 28, 1998, the United States
Congress passed the Digital Millennium Copyright Act ("DMCA"). The DMCA includes
statutory licenses for the performance of sound recordings and for the making of
recordings to facilitate transmissions. Under these statutory licenses,
depending on our future business activities, we and our customers may be
required to pay licensing fees in connection with digital sound recordings we
deliver to our customers. Additionally, federal, state, local and foreign
governmental organizations also are considering other legislative and regulatory
proposals that would regulate the Internet. Although we are only contemplating
distribution by mobile phone, that sector is also regulated and there is
currently a focus on regulation in that sector, so that changes can be
anticipated.

We cannot predict what new laws will be enacted or how courts will interpret
both existing and new laws. As a result, we are uncertain as to how new laws or
the application of existing laws may affect our business. For example, while we
are not aware of any pending laws or regulations that would restrict our ability
to disseminate market-based rumors and other information of unsubstantiated
reliability, it is possible that such laws or regulations may be passed in the
future. Increased regulation in this area could decrease the demand for our
services, increase our cost of doing business or otherwise have a material
adverse effect on our business, results of operations and financial condition.

COMPETITION

Providing financial information and analysis over the Internet is a relatively
new business, but it is already intensely competitive. A large number of
web-based financial information providers are competing for subscribers,
customers, advertisers, content providers, analysts, commentators and staff. In
addition, cable television is an increasingly important source of competition.

We provide a variety of categories of information to our subscribers, including
daily financial news, technical analysis of stock activity and selected
financial data of corporations. Each of these components of our business
competes to a different degree with the following information sources, many of
which provide their information without charge:

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;

                                       8
<PAGE>
o     Internet portals and search engines such as America Online, MSN and Yahoo;

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

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

o     Online brokerage firms such as Ameritrade, E*Trade Financial, Charles
      Schwab, Fidelity, Harrisdirect and TD Waterhouse.

Because there is not a readily defined market in which we compete, we cannot
predict which information source or sources will be our primary competition in
the future. However, we expect competition from each of the above information
sources to intensify and increase in the future. Most of our current and
potential competitors have greater name recognition, larger financial, technical
and marketing resources, and more extensive customer bases than we do, all of
which could be leveraged to gain market share to our detriment. Such advantages
would also permit our competitors to enter new sectors such as distribution
through mobile phones, more easily than we will be able to do.

It is not difficult for new competitors to enter the market. Much of the
information we provide is publicly available and we do not have any patented or
otherwise protected technologies that would preclude or inhibit competitors from
entering our markets. Our current and future competitors may develop or offer
services that have significant price, content, creative or other advantages over
the services we provide.

In order for us to successfully compete in this business, we will need to
reliably provide valuable services to a greater number of institutional and
other subscribers who are willing to pay us fees sufficient to support such
services. We believe that over time a successful implementation of our business
strategy will allow us to compete successfully as a focused provider of timely
investment information to institutional and retail customers.

INTELLECTUAL PROPERTY

We are the owner of the trademarks AHEAD OF THE MONEY, STREETSIDE AND STREETSIDE
WITH DAN DORFMAN. Each of the foregoing trademarks was approved in 2002 and has
a duration period of ten years, at which time each of the trademarks must be
renewed or they will expire. We are also the owner of eight pending trademark
applications. We do not consider these trademarks to be material to our
business.

WEBSITE TECHNICAL INFORMATION

We lease two web servers, which are the computer systems on which all the
content for our jagnotes.com website is maintained and through which we operate
our jagnotes.com website. Our U.S. servers are maintained by Woodbourne
Solutions and are located at their facility in Germantown, Maryland. Our two
back-up servers are maintained by Above.net and PC Communications and are
located in San Jose, California and Jersey City, New Jersey.

Our jagenotes.com website was redesigned in July 2000 by Zero-G at a cost of
approximately $500,000. Subsequent redesigns have been handled internally and by
Woodbourne Solutions, a technical consultant to JAG Media.

                                       9
<PAGE>
Our Pixaya website is hosted by InnoTech. InnoTech has offices located in
southern California and Raleigh, North Carolina. Its Internet data center is
located in Orange County, California. The Pixaya website is maintained
internally by Pixaya employees.

EMPLOYEES

As of July 31, 2005, we had twelve employees. As of that date, we had entered
into employment agreements with eight of our employees and had informally
extended (now formally extended) the expired employment agreements with our two
executives.

EQUITY LINE OF CREDIT

As of April 9, 2002, we entered into, and on July 8, 2004 and July 21, 2004, we
amended, an Equity Line Purchase Agreement with Cornell Capital Partners, L.P.
for a $10 million equity line pursuant to which we are able to sell our shares
of Common Stock to Cornell Capital from time to time over a 48-month period
ending on August 28, 2006. The purpose of the offering is to provide general
working capital for JAG Media, including working capital which might be required
by virtue of our strategic plan. This agreement superseded our original equity
line purchase agreement with Cornell Capital, dated August 17, 2001. As of July
31, 2005 and September 16, 2005, $4,035,000 of our existing equity line with
Cornell Capital had been utilized.

PROMISSORY NOTE

On February 2, 2005 we borrowed $2,000,000 from Cornell Capital Partners, L.P.
The $2,000,000 loan is evidenced by a Promissory Note dated as of January 25,
2005 executed by the Company and Cornell Capital, the repayment of which was
subsequently extended on August 5, 2005. The Company intends to use the proceeds
of the loan for working capital and general corporate purposes.

Under the terms of the Promissory Note, the face amount of the Promissory Note
and interest on the amount from time to time outstanding at a rate of 12% per
year will be payable either (i) out of the net proceeds to be received by the
Company upon delivery of put notices under the Equity Line Purchase Agreement or
(ii) in full by the Company within 753 calendar days of January 25, 2005
regardless of the availability of proceeds under the Equity Line Purchase
Agreement, unless an extension is mutually agreed to by the parties in writing.

Pursuant to the Promissory Note, the Company has agreed to deposit in escrow 35
put notices under the Equity Line Purchase Agreement in an amount not less than
$60,000 each and one request for a put under the Equity Line Purchase Agreement
in an amount not less than $181,016.99. Under the terms of the Promissory Note,
as amended, the put notices held in escrow will be released every fourteen (14)
days commencing November 4, 2005. Cornell Capital has, however, recently
informed the Company that it is returning the puts for the Company's shares that
it currently holds while it discusses with the Company the restructuring of the
Promissory Note. The Company has also agreed to reserve out of its authorized
but unissued shares of Common Stock, 3,500,000 shares of Common Stock to be
delivered to Cornell Capital under the Equity Line Purchase Agreement upon
delivery of put notices by the Company. The Company paid to Cornell Capital a
fee of $100,000 in connection with this transaction and has also agreed to pay a
$5,000 documentation fee.

                                       10
<PAGE>
The Company has provided irrevocable transfer agent instructions dated January
25, 2005 to Transfer Online, Inc., the Company's transfer agent, instructing
Transfer Online to reserve the Common Stock allocable for issuance to Cornell
Capital pursuant to the put notices in a designated account, thereby reducing
the number of shares available to the Company for future issuances for other
purposes. The instructions also provide directives to the transfer agent
regarding the issuance, from time to time, of the Common Stock to Cornell
Capital. When delivered to Cornell Capital, the Common Stock may be resold by
Cornell Capital pursuant to the Company's registration statement on Form SB-2
(Reg. No. 333-118029). The use of the registration statement may be temporarily
suspended by the Company in certain specified circumstances. In the event the
proceeds from the sale of the Common Stock are insufficient to repay all amounts
due under the Promissory Note, the Company has agreed to reserve additional
shares of its Common Stock for issuance to Cornell Capital.

The Company has the option to repay the amounts due under the Promissory Note
and to withdraw any put notices yet to be effected provided that each repayment
is in amount not less than $25,000. In addition, the Company has the right to
accelerate the delivery of one or more put notices and to select the specific
put notice to be so accelerated.

Upon an event of default, as defined in the Promissory Note, the entire
principal balance and accrued interest of the Promissory Note, and all other
obligations of the Company under the Promissory Note, would become immediately
due and payable without any action on the part of Cornell Capital.

 As permitted by the terms of the Promissory Note, the Company opted to make 3
interest payments to Cornell Capital, each in the amount of $20,000, paid in a
single lump sum of $60,000 on August 5, 2005. If the Promissory Note is not paid
in full when due, the outstanding principal owed thereunder will be due and
payable in full together with interest at a rate of 14% per year or the highest
permitted by applicable law, if lower.

ACQUISITION OF DEVELOPMENT STAGE SOFTWARE

On November 24, 2004, the Company entered into a Business Sale Agreement with
TComm Limited, a company organized in the United Kingdom, and Pixaya (UK)
Limited (formerly known as TComm (UK) Limited), a company organized in the
United Kingdom and a wholly-owned subsidiary of the Company. Effective October
3, 2005, TComm (UK) Limited formally changed its name to Pixaya (UK) Limited.

The transactions contemplated by the Business Sale Agreement were consummated on
November 24, 2004. Under the Business Sale Agreement, Pixaya purchased TComm
Limited's software development business which is focused on streaming video
solutions and all of its assets related to that business. The business acquired
has not generated any significant revenue as of the date of the acquisition or
through July 31, 2005.

The acquired product lines the Company intends to continue to develop include:
(1) Pixaya Mobile (previously known as TComm TV), which delivers on-demand
video/audio clips to various java-based and Symbian-based mobile phones and (2)
SurvayaCam (previously known as CCMTV), which is currently under development and
will consist of software programs (and related hardware) intended to enable
field personnel to send real-time video streams from the field to a central
point where they can be viewed by one or more persons. Because the acquired
product lines are still under development, it is difficult for the Company to
estimate the amount of resources that will be required to complete the
development of these product lines.

                                       11
<PAGE>
The purchase price paid to TComm Limited consisted of (i) 250,000 shares of the
Company's Common Stock, having a value based on the closing price of the
Company's Common Stock as of the close of business on the day prior to the
acquisition, equal to approximately $42,500 and (ii) the payment of
approximately $19,200 in cash. In addition, TComm Limited has agreed not to
compete with the business conducted by Pixaya for a period of two years from the
closing date of the transaction. The Business Sale Agreement also contains
customary representations and warranties. TComm Limited has agreed to indemnify
Pixaya for any damages which may result from a breach of its warranties but only
if the damages exceed approximately $20,000. TComm Limited has entered into a
lockup agreement with the Company pursuant to which it has agreed not to sell or
otherwise transfer the Common Stock for a period of one year.

In connection with entering into the Business Sale Agreement, Pixaya entered
into employment agreements on November 24, 2004 with four individuals, all of
whom were previously employed by the TComm Limited. The employment agreements
have a term of three years and automatically renew unless terminated by either
party.

STOCK DIVIDEND

On March 18, 2003, we announced our intention to declare a special stock
dividend. To effect such dividend, we filed a Certificate of Designation with
the Secretary of State of the State of Nevada on April 11, 2003 which designated
a new series of Class B Common Stock, par value $0.00001 per share, which was
distributed by dividend to the stockholders of record as of the close of
business on April 14, 2003 in the ratio of one share of Series 2 Class B Common
Stock for every 100 shares of Common Stock. Such shares of Series 2 Class B
Common Stock are non-voting, have dividend and liquidation rights equal to the
Common Stock and are redeemable, which redemption by JAG Media is mandatory to
the fullest extent permitted by law within six months following final resolution
of our lawsuit in Texas federal court against various brokerage firms (or any
related successor lawsuit) at a redemption price which is the greater of (a) par
value or (b) ninety percent of the net proceeds to us of such lawsuit after
payment of fees and expenses incurred in connection with such lawsuit and all
taxes on net income accrued or paid with respect to such net amount. The shares
of Series 2 Class B Common Stock do not have a CUSIP number.

Our transfer agent has completed the issuance and mailing of Series 2 Class B
Common Stock dividend certificates to all registered beneficial shareholders and
to all beneficial owners who appear on beneficial owner lists supplied by
brokers which are consistent with their share position with the Depository Trust
Company. As of July 31, 2005, Series 2 Class B Common Stock dividend
certificates had not yet been mailed to certain beneficial owners because as of
such date approximately 12 brokers had failed to submit a beneficial owner list
to our transfer agent.

RECAPITALIZATION

At the Annual Meeting on February 11, 2004, our stockholders approved, among
other matters, a proposal to amend and restate Article Fourth of the Articles of
Incorporation of JAG Media to:

o    increase the aggregate authorized number of shares of all classes of stock
     from 200,000,000 to 300,440,000 of which (w) 250,000,000 shares shall be
     designated common stock, par value $0.00001 per share, (x) 400,000 shares
     shall be designated Series 2 Class B common stock, par value $0.00001 per
     share, (y) 40,000 shares shall be designated Series 3 Class B common stock,
     par value $0.00001 per share and (z) 50,000,000 shares shall be designated
     preferred stock, par value $0.00001 per share; and

o    reclassify each outstanding share of our existing Class A Common Stock and
     Series 1 Class B Common Stock into one share of Common Stock upon surrender
     of physical share certificates representing the existing Class A Common
     Stock and Series 1 Class B Common Stock for new Common Stock certificates.

                                       12
<PAGE>
The above-described recapitalization was effected on June 4, 2004 upon the
filing of a Certificate of Amendment to JAG Media's Articles of Incorporation
with the Secretary of State of the State of Nevada. As a result of the
recapitalization, the old shares of Class A Common Stock Series 1 Class B Common
Stock only represent the right to receive the applicable number of shares of the
new Common Stock. The holder of such shares not surrendered will not have the
right to vote or to receive any dividends or other distributions payable by the
Company after the Effective Date until such shares have been exchanged for the
new Common Stock.

2005 SHAREHOLDERS MEETING

Our Articles of Incorporation as amended on June 4, 2004, also required that the
new "certificate only" shares must bear the name of the beneficial owner on the
face of each stock certificate. As required by SEC regulation Rule 17Ad-20 which
was adopted November 30, 2004 and became effective March 7, 2005, this
requirement was deleted by a further amendment of our Articles of Incorporation
at our shareholders meeting on February 24, 2005. Accordingly, our shares of
Common Stock can now trade in certificate form or in book entry form through the
Depository Trust Company.

FACILITIES

See Item 2. - Description of Properties.

LEGAL PROCEEDINGS

See Item 3. - Legal Proceedings

WHERE YOU CAN FIND MORE INFORMATION ABOUT US

We are required to file annual, quarterly and special reports, proxy statements
and other information with the SEC. You can read and copy any of this
information at the SEC's Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. This information is
also available from the SEC's website at http://www.sec.gov.

We also distribute annual reports containing audited financial statements and
other information to our stockholders after the end of each fiscal year. We do
not intend to regularly distribute quarterly reports to our stockholders, but we
will gladly send them to you upon your written request to Thomas J. Mazzarisi,
our Chairman, Chief Executive Officer and General Counsel, at 6865 S.W. 18th
Street, Suite B13, Boca Raton, Florida 33433.

                                       13
<PAGE>
                                  RISK FACTORS

An investment in our company involves a high degree of risk. You should
carefully consider the risks below, together with the other information
contained in this report, before you decide to invest in our company. If any of
the following risks occur, our business, results of operations and financial
condition could be harmed, the trading price of our common stock could decline,
and you could lose all or part of your investment.

                          RISKS RELATED TO OUR BUSINESS

WE HAVE A HISTORY OF LOSSES, ANTICIPATE LOSSES FOR THE FORESEEABLE FUTURE AND
MAY NEVER ACHIEVE PROFITABILITY.

As of July 31, 2005 we had incurred losses to date of $45,033,660. We may never
achieve profitability. We have made, and will continue to make, very significant
expenditures well before our revenues increase sufficiently to cover these
additional costs. We are not able to estimate when, if ever, our revenues will
increase sufficiently to cover these costs. Internet users have only been
attracted to subscription sites in limited areas. Our subscription revenues are
materially below the level of a year ago. We will continue to incur significant
losses for the foreseeable future and cannot assure you that our revenue will
stop declining and grow in the future or that additional financing will be made
available to us. Many dot-com companies have found it difficult to raise funds,
and a number of such companies have gone bankrupt. If we require additional
funding and do not obtain it, we may be forced to restructure, file for
bankruptcy or cease operations, any of which could cause you to lose all or part
of your investment in our Common Stock.

WE WILL REQUIRE ADDITIONAL FUNDS TO MEET OUR CASH OPERATING EXPENSES AND ACHIEVE
OUR CURRENT BUSINESS STRATEGY.

We will require more capital to meet our current operating expenses as well as
any non-recurring costs or liabilities and to achieve our current business
strategy. As we require additional funds to sustain our operations as well as
refocus our business and search for appropriate merger candidates we will have
to seek additional equity or other financing. Such financing is very difficult
to achieve under current market conditions and may not be available. Even if it
is, it may be on terms that are materially adverse to your interests with
respect to dilution of book value, dividend preferences, liquidation
preferences, or other terms.

We cannot guarantee that we will be able to obtain additional financing as we
need it. When our operations require additional financing, if we are unable to
obtain it on reasonable terms, we would be forced to restructure, file for
bankruptcy or cease operations, any of which could cause you to lose all or part
of your investment in our Common Stock.

WE HAVE BEEN FORCED TO DISCONTINUE OUR COMMENTATORS AND THE FREE PORTION OF OUR
WEBSITE WHICH MAY CAUSE US TO LOSE SUBSCRIBERS.

In order to attempt to reduce costs to a level commensurate with our
subscription revenues, we have been forced to discontinue all our commentators
as well as the entire free portion of our website. Accordingly, we run the risk
that existing and potential subscribers may not find the site valuable.
Moreover, many of our competitors offer financial information for free and are
likely to continue to do so, perhaps at an increasing rate. Our current and
potential subscribers may be unwilling to pay for our service if they feel they
can receive comparable information for free.

                                       14
<PAGE>
WE HAVE REFOCUSED OUR BUSINESS STRATEGY TO TARGET PRIMARILY SUBSCRIPTIONS BY
INSTITUTIONAL INVESTORS FOR OUR TRADITIONAL PRODUCT.

Our effort to include individual retail subscribers as part of our strategy to
increase sales of our flagship JagNotes Report has been unsuccessful, and we
have therefore decided to refocus our strategy on offering subscriptions solely
to institutional investors and professional traders. Due to the uncertain nature
of this undertaking, our shift in business strategy may not be successful and we
may not realize any benefit from it.

WE MAY NOT BE ABLE TO STOP CONTRACTION OF OUR SUBSCRIBER REVENUES AND ATTRACT
SUFFICIENT INSTITUTIONAL CUSTOMERS.

Our subscriber base has been shrinking and we have determined that we cannot
expand our retail subscriber base for our traditional product. We believe we
must refocus our subscriber base on institutional customers to be successful.
Our subscription revenues are below the level they were a year ago. During the
year ended July 31, 2005 subscription revenues decreased to $240,000 from the
prior year subscription revenues of $253,000. Although we are attempting to
refocus our key subscriber base, our efforts may be ineffective, our competitors
may be more successful than we are in attracting customers, or the number of
institutional and other professional users seeking or willing to pay for
financial information may not increase or may even decrease. Any of these would
adversely affect us. Because there is currently limited potential for Internet
banner advertising revenues, if we cannot reverse the current shrinkage of our
subscriber base or refocus such base, we will have little, if any, financial
success.

WE MAY NOT BE SUCCESSFUL AT BUILDING BRAND AWARENESS OR BUILDING STRATEGIC
RELATIONSHIPS.

Our growth and success depends in part on our ability to build awareness of the
JAG Media name. We have changed our name to JAG Media in April 2002 after
operating for almost three years under the name JagNotes.com. The JAG Media name
has only limited recognition within the financial community and little if any
recognition among the general public. We do not currently allocate any of our
working capital to marketing and advertising the JAG Media name but rather rely
solely upon strategic alliances to increase our name recognition. Our ability to
refocus our subscriber base, offer new services or otherwise expand the business
will be limited if we cannot increase that name recognition. We cannot guarantee
that we will be successful in doing so.

WE MAY NOT BE ABLE TO FIND OR CONSUMMATE A SUITABLE MERGER OR ACQUISITION.

We are actively looking for merger or acquisition candidates that would be
beneficial to our company. Over the past few years, we have entered into
negotiations and signed letters of intent or agreements with several companies,
but were able to complete only one very small acquisition. We cannot assure you
that the market exists for us to find or consummate a suitable merger or
acquisition. Even if we complete a merger or acquisition, the resulting business
may not prove viable or result in losses. Our business will be adversely
affected if we are unable to find suitable merger or acquisition candidates and
complete a business combination.

WE MAY BE EFFECTIVELY ACQUIRED AND MANAGED BY A BUSINESS WITH NO EXPERIENCE IN
OUR SECTOR.

In order to expand our business substantially, we may have to "acquire" a
business very different from our current activities, but to do so, we may have
to issue many more of our shares than are now outstanding. Our shareholders
would have their holdings greatly diluted by such a transaction. In addition,
the company we acquired would be in control and may have no expertise permitting
it to effectively manage our current business. Alternatively, we may not be able
to find or we may not select a target company with management who are able to
manage effectively our new combined business or their own business. If we are
unable to operate the new combined businesses at a profit or if we incurred
substantial costs in merging the businesses, either of such eventualities could
materially and adversely affect our business, results of operation and financial
condition.

                                       15
<PAGE>
WE MAY EXPERIENCE DIFFICULTIES IN DEVELOPING NEW AND ENHANCED SERVICES AND
PRODUCTS.

We believe that our JAGNotes website will be more attractive to subscribers if
we introduce additional or enhanced services in the future in order to retain
our current users and attract new users. Our first attempt to introduce
streaming audio and video was not financially successful and the business was
sold. We are considering various new enhanced services for our JAGNotes website,
as well as new products for our Pixaya business unit, but adequate financing is
not currently available.

We may experience other difficulties that could delay or prevent us from
introducing such enhanced services. We may encounter technological problems in
enhancing our websites and developing new products or enhancements to current
products in our Pixaya business unit. We may need to modify significantly the
design of these services on our websites and modify significantly (or
discontinue, as we have already had to do) certain products and services being
offered through our Pixaya business unit. Our business could be adversely
affected if we experience difficulties in introducing or maintaining new
services and products, if these new services and products are not accepted by
users or if their cost exceeds the revenue they generate.

If we introduce enhanced service on our JAGNotes website that is not favorably
received, our current users may not continue using our service as frequently.
New users could also choose a competitive service over ours.

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.

Our Pixaya business unit develops software for the mobile phone and wireless
environment. The mobile and wireless services industries are subject to rapid
and substantial technological development and product innovations. To be
successful, we must respond to new developments in technology, new applications
of existing technology and new treatment methods in our Pixaya business unit.
Our response may be hindered if we require, but cannot secure, rights to
essential third party intellectual property. We compete against numerous
companies offering alternative treatment systems to ours, most of which have
much greater financial, marketing and technical resources to utilize in pursuing
technological development. Our financial condition and operating results could
be adversely affected if our mobile services or wireless services fail to
compete favorably with these technological developments or if we fail to be
responsive on a timely and effective basis to competitors' new prices or
strategies.

WE MAY NOT SUCCESSFULLY ATTRACT OR MANAGE STRATEGIC ALLIANCES.

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

                                       16
<PAGE>
WE MAY HAVE TO DEFEND AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AND
LIBEL AND DEFAMATION CLAIMS, WHICH MAY CAUSE SIGNIFICANT OPERATIONAL
EXPENDITURES.

Parties may assert claims against us that we have violated a patent or infringed
a copyright, trademark or other proprietary right belonging to them. Parties
could also bring libel, defamation or similar claims based on the content
published on our websites. Any such claims, whether meritorious or not, could
result in the expenditure of significant financial and managerial resources on
our part, which could materially adversely affect our business, results of
operations and financial condition.

FAILURE TO MAINTAIN OUR REPUTATION FOR TRUSTWORTHINESS MAY REDUCE THE NUMBER OF
OUR USERS, WHICH MAY HARM OUR BUSINESS.

It is very important that we maintain our reputation as a trustworthy provider
of financial news. The occurrence of events, including our misreporting a news
story, could harm our reputation for trustworthiness. These events could result
in a significant reduction in the number of our subscribers, which could
materially adversely affect our business, results of operations and financial
condition.

WE DEPEND ON KEY PEOPLE IN MANAGEMENT AND OPERATIONS.

We depend on our key employees' contacts within the professional financial
community for certain information that we provide to our subscribers.
Accordingly, our success will be largely dependent on our ability to retain Mr.
Thomas J. Mazzarisi, our Chairman, Chief Executive Officer and General Counsel,
and Mr. Stephen J. Schoepfer, our President, Chief Operating Officer, Chief
Financial Officer and Secretary. We may also need to attract and retain
additional qualified officers, software developers and other key personnel in
the future in order to successfully manage our new strategy. Although we have
recently attracted a team of employees at our Pixaya business unit and a new
employee to execute our acquisition strategy for JAG Media LLC, we cannot
guarantee that we will be able to continue to attract the requisite personnel.
If we lose the services of any of our key personnel or are unable to attract,
hire, train and retain qualified officers, software developers and other key
personnel, our business, and your investment, could be adversely affected.

CERTAIN TERMS OF THE EMPLOYMENT AGREEMENTS OF OUR EXECUTIVE OFFICERS COULD
DISCOURAGE A POTENTIAL TAKEOVER OF JAG MEDIA BY A THIRD PARTY.

Pursuant to the amended and restated employment agreements of Thomas J.
Mazzarisi, our Chairman, Chief Executive Officer and General Counsel, and
Stephen J. Schoepfer, our President, Chief Operating Officer, Chief Financial
Officer and Secretary, each executive may resign upon a change-in-control of JAG
Media. A "change in control" shall be deemed to have occurred if, among other
things, there is an acquisition of 30% or more of our then outstanding shares of
Common Stock. If such executive opts to resign from his position at JAG Media,
he shall be entitled to receive (i) continued medical and life insurance
coverage for a severance period equal to the greater of one year or the number
of years and fractions thereof between the date of such termination and the end
of the term, (ii) a lump sum cash payment equal to the executive's highest rate
of annual salary in effect during the term multiplied by the severance period,
(iii) a lump sum cash payment equal to the number of accrued and unused vacation
days calculated at the executive's then current salary rate and (iv) accelerated
vesting of all of the executive's outstanding stock options. Furthermore,
immediately prior to a change-in-control, each of Messrs. Mazzarisi and
Schoepfer shall also be granted an option to acquire 1,000,000 shares of our
Common Stock at an exercise price equal to the fair market value of the stock
prior to such change in control, which option shall be fully vested and
immediately exercisable in full and expire on a date which is the earlier of ten
years from such change in control and three years after termination of
employment. Any or all of these provisions may have the effect of preventing or
discouraging an attempt by a party to take over or otherwise gain control of JAG
Media or reduce the price which such a party is willing to pay for JAG Media.

                                       17
<PAGE>
WE MAY FACE DIFFICULTIES CONCERNING CONTINUED AVAILABILITY OF OUR SOURCES OF
INFORMATION FOR CERTAIN PRODUCTS.

Certain products that we offer through our site, including JAGNotes and the
Rumor Room, rely on information from independent third party sources. We do not
maintain written agreements with these sources to provide this information, so
we cannot guarantee that any of these sources will continue to provide the
information necessary to maintain these products on our site. If information
from these sources is altered, curtailed or discontinued this could adversely
affect the viability of these products. This, in turn, could decrease the demand
for our site or otherwise materially adversely affect our business.

WE MAY BECOME A PARTY TO VARIOUS LEGAL PROCEEDINGS RELATING TO THE DISSEMINATION
OF RUMORS AND OTHER INFORMATION OF QUESTIONABLE RELIABILITY.

Information posted in the Rumor Room consists of rumors and other information
received from third party sources that may have no reasonable factual basis. We
realize that rumors are inherently unreliable, and we provide a cautionary note
on this portion of our site reminding subscribers that cyberfraud is prevalent
and that rumors should not be relied upon when making investment decisions.
There can be no assurance that we will be able to prevent the unlawful posting
of misleading, fraudulent or intentionally erroneous information, however, and
the law relating to our potential liability relating to such activity is
currently unsettled. The potential imposition of liability for unlawful
activities of subscribers to our site could require us to implement measures to
reduce our exposure to such liability, which may require us, among other things,
to spend substantial resources and/or to discontinue certain service offerings.
In addition, it is possible that we could become subject to various legal
proceedings alleging, among other things, that we have intentionally
disseminated or have aided and abetted others in intentionally disseminating
false information. These claims, even without merit, could cause us to expend
significant financial and managerial resources, which could adversely affect our
business operations.

THE UNCERTAINTY OF FUTURE GOVERNMENT REGULATION OF THE INTERNET MAY ADD TO OUR
OPERATING COSTS.

Like many businesses engaging in Internet-related activities, we may face
unanticipated operating costs because of the current uncertainty surrounding
potential government regulation of the Internet and e-commerce. We believe that
we are not currently subject to direct regulation of online commerce, other than
regulations applicable to businesses generally. However, the Internet has
rapidly emerged as a commerce medium, and governmental agencies have not yet
been able to adapt all existing regulations to the Internet environment. Laws
and regulations may be introduced and court decisions reached that affect the
Internet or other online services, covering issues such as user pricing, user
privacy, freedom of expression, access charges, content and quality of products
and services, advertising, intellectual property rights and information
security. For example, if the government determines that our website and the
types of activities engaged in by visitors and/or subscribers to our website
should be subject to new or existing rules or regulations, our business model
may be adversely affected and our operating costs may increase. In addition, as
an Internet company it is unclear in which jurisdictions we are actually
conducting business. Our failure to qualify to do business in a jurisdiction
that requires us to do so could subject us to fines or penalties and could
result in our inability to enforce contracts in that jurisdiction. Even if we
were able to ascertain correctly in which jurisdictions we conduct business,
many of these jurisdictions have yet to determine the application of their
existing laws to Internet-related activities or develop laws that apply to such
activities.

                                       18
<PAGE>
WE COULD BE DEEMED TO BE AN INVESTMENT ADVISER SUBJECT TO FEDERAL OR STATE
REGULATORY OVERSIGHT.

Companies and individuals that provide financial advice to investors in the
United States are generally required to register as an investment adviser at
either the federal or state level, and are subject to extensive regulation. We
believe that our business consists of a publishing activity for which investment
adviser registration and regulation do not apply under applicable federal or
state law, and we do not believe that we are required to register as an
investment adviser with either the SEC or any of the various states. The
regulatory environment in which we operate is subject to change, however, and we
could be required to register as an investment adviser with an appropriate
regulatory agency at some point in the future. Such registration could adversely
affect our method of operation and revenues. For example, if we were ever deemed
to be in non-compliance with applicable investment adviser regulations, we could
be subject to various penalties, including administrative or judicial
proceedings that might result in censure, fine, civil penalties (including
treble damages in the case of insider trading violations), the issuance of
cease-and-desist orders or other adverse consequences.

                          RISKS RELATED TO OUR INDUSTRY

OUR BUSINESS IS CURRENTLY DEPENDENT ON THE CONTINUED PUBLIC INTEREST IN THE
STOCK MARKET.

The volatility of the stock market in the 1990s generated unprecedented public
interest in the stock market and trading. Our success depends upon the continued
maintenance or growth of this interest. The subsequent downturn in the stock
market may have been in part responsible for an overall decrease in subscription
revenues since the end of our second fiscal quarter of 2001. Even though the
market has recovered to some extent, our revenues have continued to decline. A
number of factors that are out of our control could lead to a stagnate or
depressed stock market which would likely decrease the public's interest in
stock trading and financial information. If this were to happen, it is likely
that we would lose a significant percentage of our then current and potential
subscriber base.

OUR STOCK - AND TECHNOLOGY AND INTERNET STOCKS GENERALLY - HAVE BEEN AND MAY
CONTINUE TO BE VOLATILE.

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

                                       19
<PAGE>
WE ARE IN AN INTENSELY COMPETITIVE BUSINESS WITH LOW BARRIERS TO ENTRY.

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

Our major competitors currently include:

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

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

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

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

o     Online brokerage firms such as Ameritrade, E*Trade Financial, Charles
      Schwab, Fidelity, Harrisdirect and TD Waterhouse.

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.

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

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OURSELVES AGAINST SECURITY RISKS.

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

                                       20
<PAGE>
                     RISKS RELATED TO OUR CAPITAL STRUCTURE

WE HAVE LIMITED CASH RESOURCES WHICH EXPOSES US TO CLAIMS.

As of July 31, 2005, we had $660,865 in cash and as of October 31, 2005, we had
approximately $315,000 in cash. Such low levels of cash restrict our ability to
operate and expose us to claims and lawsuits whatever the merits of such claims
may be. If a claim or lawsuit is pursued against us and we do not have adequate
cash at the time to defend against it, we may be forced to restructure, file for
bankruptcy or cease operations, any of which could cause you to lose all or part
of your investment in our Common Stock.

THE MARKET FOR OUR STOCK IS LIMITED.

Our Common Stock is traded on the Pink Sheets. Trading activity in our stock has
fluctuated and at times been limited. We cannot guarantee that a consistently
active trading market for our stock will continue, especially while we remain on
the Pink Sheets.

WE HAVE MATERIAL OUTSTANDING INDEBTEDNESS WHICH CAN ONLY BE REPAID BY ISSUING
EQUITY.

In February 2005, we borrowed $2,000,000 and we may be forced to borrow more.
Even if our borrowing is restructured, the only foreseeable repayment source at
this time is sales of our equity. If we are unable to raise money by selling our
Common Stock through our Equity Line Purchase Agreement or otherwise as required
to pay our indebtedness and interest thereon in a timely fashion, we will be in
default. In such event, we may be forced to restructure, file for bankruptcy or
cease operations, any of which could cause to you to lose all or part of your
investment in our Common Stock.

WE MAY NOT BE ABLE TO DRAW IN WHOLE OR IN PART ON THE EQUITY LINE PURCHASE
AGREEMENT WITH CORNELL CAPITAL, WHICH WOULD ADVERSELY AFFECT OUR LIQUIDITY.

We entered into a $10 million equity line financing arrangement with Cornell
Capital Partners, L.P. on April 9, 2002 and amended this arrangement on July 8,
2004 and July 21, 2004 to extend the term of the equity line. As of July 31,
2005, $4,035,000 of our existing equity line with Cornell Capital had been
utilized excluding our $2,000,000 Promissory Note. The Equity Line Purchase
Agreement, as amended, provides for the purchase by Cornell Capital of up to $10
million worth of shares of our Common Stock over a 48-month period ending on
August 28, 2006. There are limitations on the amount of our equity line draws
under the Equity Line Purchase Agreement with Cornell Capital. The maximum
dollar amount we can draw on the equity line at any one time is $500,000.
Cornell Capital's obligation to purchase our shares under the Equity Line
Purchase Agreement is also dependent upon various conditions being satisfied.
The most significant condition to closing is that the registration statement
covering the shares issuable to Cornell Capital pursuant to the equity line must
remain effective at all times and not be subject to any actual or threatened
stop order or subject to any actual or threatened suspension at any time prior
to any closing date. In addition, it is a condition to closing under the equity
line that the shares of Common Stock issuable to Cornell Capital at the closing
be authorized for trading on the Pink Sheets, Nasdaq OTC Bulletin Board or
another market or exchange and such trading shall not have been suspended at any
time by the SEC, Nasdaq or other regulatory authority from the date we deliver
our put notice to Cornell Capital through the closing date of the drawdown. It
is also a condition that on any given closing date, there shall be at least one
bid for the Common Stock on the Pink Sheets or the Nasdaq OTC Bulletin Board. We
are also required to have performed, satisfied and complied in full with all
covenants set forth in the transaction documents and our representations and
warranties set forth in those agreements must be true and correct at closing. If
these conditions are not satisfied, we cannot require Cornell Capital to
purchase our shares. In addition, we note that the obligation of Cornell Capital
to complete its purchases under the equity line is not secured or guaranteed. If
Cornell Capital does not have available funds at the time it is required to make
a purchase or if Cornell Capital otherwise refuses to honor its obligation to
us, we may not be able to force it to do so. If we are unable to draw in whole
or in part on the Equity Line Purchase Agreement for any of the above-referenced
reasons, our cash, cash equivalents, and securities will not be sufficient to
meet our anticipated cash needs unless we obtain alternative financing. There
can be no assurance that such financing will be available to us. If we are
unable to meet our cash needs, we may be forced to restructure, file for
bankruptcy or cease operations, any of which could cause you to lose all or part
of your investment in our Common Stock.

                                       21
<PAGE>
SHAREHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION FROM OUR SALE OF SHARES TO
CORNELL CAPITAL PARTNERS, L.P. PURSUANT TO THE EQUITY LINE PURCHASE AGREEMENT
AND THE PROMISSORY NOTE.

As the market price for our Common Stock decreases, the number of shares that
may be sold to Cornell Capital Partners, L.P. pursuant to our Equity Line
Purchase Agreement and the Promissory Note will increase. If we were to require
Cornell Capital to purchase our shares at a time when our stock price is
depressed, our existing shareholders' interest in our company will be
significantly reduced. We have registered 20,000,000 shares for sale to Cornell
Capital pursuant to the Equity Line Purchase Agreement and we have reserved up
to 3,500,000 shares of Common Stock for issuance to Cornell Capital for the
exercise of puts under the Promissory Note. If we determine to sell Cornell
Capital more than a total of 20,000,000 shares under the Equity Line Purchase
Agreement, we would need to file an additional registration statement.
Additionally, the Company has agreed to register the Common Stock sold to
Cornell Capital on a registration statement on Form SB-2. In the event the
proceeds from the sale of the Common Stock are insufficient to repay all amounts
due under the Promissory Note, the Company has agreed to reserve additional
shares of its Common Stock for issuance to Cornell Capital. Shareholders will
experience significant dilution if, as the result of a declining market price of
our Common Stock, we are forced to sell most or all of these shares to Cornell
Capital. In addition, if Cornell Capital is unable to resell the shares we issue
to it pursuant to the Equity Purchase Agreement, Cornell Capital could obtain a
controlling interest in JAG Media.

To illustrate this potential for dilution under the Equity Purchase Agreement,
the following table shows, based on the hypothetical variables shown in the
table, (i) the fee payable to Cornell Capital, (ii) the net proceeds to be
received by us, (iii) the number of shares we would issue to Cornell Capital,
(iv) the price Cornell Capital would pay for those shares, (v) the percentage of
our currently outstanding shares represented by the number of shares issued to
Cornell Capital and (vi) the amount of increase in the net tangible book value
per share that would occur as a result of such issuance. Our net tangible book
value as of July 31, 2005 was ($1,367,897), representing a net tangible book
value per share of our Common Stock, based on the number of such shares
outstanding as of October 26, 2005 of ($0.03).

<TABLE>
<CAPTION>
                                                                                                          Increase in
                                                                                        Percent of        Net Tangible
 Market      Advance      Investor        Net          Number of       Purchase         Outstanding       Book Value
 Price      Amount (1)       Fee       Proceeds      Shares Issued     Price (2)         Shares(7)        Per Share
 -----      ----------    --------     --------      -------------     ---------    ------------------    ------------
<S>        <C>           <C>         <C>             <C>              <C>                 <C>              <C>
$0.15 (3)    $500,000      $25,000     $475,000        3,496,503        $0.143              8%               $0.01
$0.11 (4)    $500,000      $25,000     $475,000        4,761,904        $0.105              11%              $0.01
$0.07 (5)    $500,000      $25,000     $475,000        7,462,686        $0.067              17%              $0.01
$0.04 (6)    $500,000      $25,000     $475,000       13,157,894        $0.038              29%              $0.01
</TABLE>

(1) Represents the maximum individual advance amount under the Equity Line
    Purchase Agreement.
(2) Represents 95% of Market Price (as defined in the Equity Line Purchase
    Agreement).
(3) Represents the Market Price of our
    Common Stock assuming our put right was exercised on October 21, 2005.
(4) Represents a 25% decline in the Market Price of our Common Stock.
(5) Represents a 50% decline in the Market Price of our Common Stock.
(6) Represents a 75% decline in the Market Price of our Common Stock.
(7) Based on 44,751,212  shares of Common Stock issued and outstanding as
    of October 26, 2005.

                                       22
<PAGE>
THE RESALE BY CORNELL CAPITAL PARTNERS, L.P. OF OUR SHARES MAY LOWER THE MARKET
PRICE OF OUR COMMON STOCK.

The resale by Cornell Capital Partners, L.P. of the Common Stock that it
purchases from us under the Equity Line Purchase Agreement and Promissory Note
will increase the number of our publicly traded shares, which could lower the
market price of our Common Stock. Moreover, the shares that we sell to Cornell
Capital will be available for immediate resale. There are no contractual
restrictions on the ability of Cornell Capital to offer shares issued to it
pursuant to the Equity Line Purchase Agreement and Promissory Note. Under the
Promissory Note, Cornell Capital holds puts which can be exercised every
fourteen days and we may continue to exercise our put right under the Equity
Line Purchase Agreement every five trading days. If Cornell Capital continues to
immediately resell such shares, our market price could decrease significantly
and you could experience significant dilution. In addition, the mere prospect of
such transactions could lower the market price for our Common Stock. The shares
of our Common Stock issuable to Cornell Capital under the equity line facility
will be sold at a 5% discount to the defined market price of our Common Stock at
the time of the sale. During July 2005, our Common Stock traded at an average of
approximately $0.10 per share. If we were to require Cornell Capital to purchase
our Common Stock when our stock price is low, our existing Common Stockholders
would experience substantial dilution.

Because Cornell Capital is purchasing our shares at a discount, it will have an
incentive to sell immediately so that it can realize a gain on the difference.
In the past we believe it has done so. If our Common Stock market price does
decline, this could further accelerate sales of our Common Stock as it would
require us to sell more shares under the equity line to raise the same amount of
money. In addition, the perceived risk of dilution and the resulting downward
pressure on our stock price could encourage third parties to engage in short
sales of our Common Stock. By increasing the number of shares offered for sale,
material amounts of short selling could further contribute to progressive price
declines in our Common Stock. These factors could also make it more difficult
for us to raise funds through future offerings of Common Stock.

A LARGE PERCENTAGE OF OUR STOCK COULD BE OWNED BY RELATIVELY FEW PEOPLE,
INCLUDING CORNELL CAPITAL AND OUR OFFICERS AND DIRECTORS.

As of October 26, 2005, our named executive officers and directors beneficially
owned or controlled a total of approximately 935,000 shares, or approximately 2%
of our issued and outstanding capital stock. Taking into account shares issuable
pursuant to our Promissory Note and Equity Line Purchase Agreement with Cornell
Capital, we estimate that Cornell Capital Partners, L.P. could beneficially own
up to 39,766,666 shares of our Common Stock, or approximately 47% of our issued
and outstanding capital stock. If all or most of these shares are issued to, and
held by, Cornell Capital, these persons, acting in concert, could be able to
control the disposition of any matter submitted to a vote of stockholders. This
concentration of ownership may also have the effect of delaying or preventing a
change of control of us. In addition, if these persons choose to sell all or a
substantial number of shares of our Common Stock in the public market at or
about the same time, such sales could cause the market price of our Common Stock
to decline. In addition, the sale of these shares could impair our ability to
raise capital through the sale of additional stock.

                                       23
<PAGE>
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 Common Stock does not currently qualify for listing on the Nasdaq Stock
Market, and we do not anticipate that we will qualify for such a listing in the
foreseeable future in the absence of a significant merger or acquisition. If our
Common Stock continues to be quoted on the Pink Sheets or Nasdaq OTC Bulletin
Board, and if the trading price of our Common Stock remains less than $5.00 per
share, our Common Stock is considered a "penny stock," and trading in our Common
Stock is subject to the requirements of Rule 15g-9 under the Securities Exchange
Act of 1934. Under this rule, brokers or dealers who recommend low-priced
securities to persons other than established customers and accredited investors
must satisfy special sales practice requirements. The broker or dealer must make
an individualized written suitability determination for the purchaser and
receive the purchaser's written consent prior to the transaction.

SEC regulations also require additional disclosure in connection with any trades
involving a penny stock, including the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and its
associated risks. These requirements could severely limit the liquidity of such
securities in the secondary market because few brokers or dealers are likely to
undertake these compliance activities. In addition to the applicability of the
penny stock rules, another risk associated with trading in penny stocks may be
large price fluctuations.

WE MAY NOT RECEIVE ALL OF THE PROCEEDS THAT WE ANTICIPATE FROM OUR AGREEMENT
WITH CORNELL CAPITAL PARTNERS, L.P.

Our Equity Line Purchase Agreement requires Cornell Capital Partners, L.P. to
purchase up to $10,000,000 of our shares, as we elect from time to time. As of
July 31, 2005, $4,035,000 of our existing equity line with Cornell Capital had
been utilized with a balance of $5,965,000 remaining available under the equity
line which must also cover our $2,000,000 Promissory Note. We have registered
20,000,000 shares to sell to Cornell Capital under such agreement of which
8,129,540 shares have been sold. Since the price at which we will sell our
shares to Cornell Capital is at a 5% discount to the average market price of our
Common Stock, if our closing stock price is less than $0.50 per share on the day
prior to the date of sale, we will receive gross proceeds of less than
$5,965,000, unless we determine to file an additional registration statement. In
addition, depending on the trading volume and market price of our shares, we may
not be able to raise funds through the sale of shares to Cornell Capital as fast
as we would like or as much as we would like.

INVESTORS WILL BE RELYING ON OUR MANAGEMENT'S JUDGMENT REGARDING THE USE OF
PROCEEDS FROM OUR SALE OF SHARES TO CORNELL CAPITAL.

Our management will have broad discretion with respect to the use of the net
proceeds from our sale of shares to Cornell Capital under the equity line, and
investors will be relying on the judgment of our management regarding the
application of those proceeds. We intend to use the funds we receive from
Cornell Capital to provide general working capital for JAG Media, including
working capital which might be required by our current or any new subsidiaries
we may establish.

OUR AMENDED CHARTER CONTAINS PROVISIONS WHICH MAY DISCOURAGE AN UNAFFILIATED
PARTY TO TAKE US OVER.

On June 4, 2004, we effected a recapitalization of our capital stock. This
recapitalization involved the authorization of 100,440,000 additional shares of
stock. Without further stockholder action, the Board of Directors of JAG Media
could authorize the issuance of all or any part of such additional shares,
including preferred stock with special voting rights by class or with more than
one vote per share, to a "white knight" in order to deter a potential buyer of
JAG Media. As a result, the recapitalization might have the effect of preventing
or discouraging an attempt by a party unable to obtain the approval of the Board
of Directors of JAG Media to take over or otherwise gain control of JAG Media.

                                       24
<PAGE>
YOUR OWNERSHIP OF SHARES IN JAG MEDIA COULD BE IN DOUBT DUE TO POSSIBLE NAKED
SHORTING OF OUR COMMON STOCK

Our Board of Directors believes, but cannot confirm, that speculators may have
engaged in a practice commonly known as a "naked short" sale of our stock, which
means that certain brokers may be permitting their short selling customers to
sell shares of our stock that their customers do not own and may have failed to
borrow and therefore deliver the shares sold to the purchaser of the shares.
Consequently, there may be a substantial number of purchasers who believe they
are stockholders of JAG Media but who in fact would not be stockholders since
their brokers may never have received any shares of JAG Media for their account.
In addition, investors who believe they are stockholders may not have received
our stock dividend to which they are entitled or may have been deprived of the
right to vote some or all of their shares. See Item 1. Description of Business -
Stock Dividend on page 12 of this Annual Report on Form 10-KSB.

Naked short selling can be illegal if done with the conscious intention of
leaving the short position as a paper entry indefinitely or if delivery of any
shares sold is not made in accordance with requirements of Regulation SHO. The
Securities and Exchange Commission has recognized that abuses exist with respect
to naked short sales of OTC Bulletin Board stocks and has recently adopted
Regulation SHO rules to address the practice. Because naked shorting may result
in an artificial depression of our stock price, you could lose all or part of
your investment in our Common Stock.

ITEM 2. DESCRIPTION OF PROPERTIES

Our executive and administrative headquarters is currently located at 6865 SW
18th Street, Suite B13, in Boca Raton, Florida. We rent this space at a cost of
$1,250 per month. The servers for our websites are housed at separate locations
as indicated above (see "Website Technical Information"). We believe that we
will be able to locate suitable new office space and obtain a suitable
replacement for our Florida office space, if our lease is not renewed, on
commercially reasonable terms.

ITEM 3. LEGAL PROCEEDINGS

On June 20, 2002, JAG Media Holdings, Inc. and its President and Chief Executive
Officer, Gary Valinoti, filed a complaint in the 165th District Court of Harris
County, Texas against over 150 brokerage firms, alleging, among other things, a
conspiracy among the defendants to short sell JAG Media stock. The original
lawsuit was subsequently amended on June 24, 2002 and was removed to the United
States District Court for the Southern District of Texas. The plaintiffs
subsequently filed a motion in the United States District Court for the Southern
District of Texas to have the action remanded back to the state court where it
was originally commenced. That motion was denied and the action proceeded in the
federal district court. On October 1, 2003, the Court denied various motions to
dismiss made on behalf of the defendants. However, in its ruling, the Court
indicated that all motions to dismiss could have been granted in light of the
defective pleadings made by plaintiffs and allowed plaintiffs 20 days to file an
amended complaint to comply with certain pleading requirements of the Court.
Plaintiffs filed an amended complaint within the required period. Discovery was
stayed while the motions to dismiss were pending.

After plaintiffs filed their third amended complaint, 78 out of the total of
approximately 150 defendants again filed a motion to dismiss the lawsuit. On
September 6, 2004, the Court entered an order granting the moving defendants'
motion to dismiss the lawsuit, again citing various deficiencies in the
pleadings. The Court did not grant the plaintiffs leave to replead.

                                       25
<PAGE>
The plaintiffs and the moving defendants have since stipulated to the entry of a
final judgment dismissing the third amended complaint against the moving
defendants with prejudice. As part of this stipulation, the parties have agreed
that upon entry of final judgment, the parties will (a) waive their right to
attorneys fees or seek sanctions and bear their own costs and (b) not appeal the
judgment.

On December 3, 2004, the Company announced that its original counsel had
assigned its legal retainer agreement in connection with the lawsuit to a legal
consortium consisting of various law firms and other consultants throughout the
country, which includes the Company's original counsel. The Company has met with
its new attorneys and is currently evaluating with them its options for
recommencing an action against certain defendants and possibly other parties in
light of the court's order.

Bay Point Investment Partners, LLC has threatened to commence litigation against
the Company, certain of its officers and directors and others. The Bay Point
claim relates to its purchase of shares of the Company's stock in private
placements on December 10, 2002 and June 19, 2003. Bay Point alleges, 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. Bay Point has made various requests but
has most recently sought a payment while continuing to hold all of its shares in
the Company. The Company believes it has meritorious defenses to Bay Point's
claims.

On March 4, 2005, the Company settled a dispute with a consultant in connection
with his performance of various investment banking services for the Company. The
claim was settled for $175,000, of which $100,000 was paid in cash and the
balance was paid by issuing 250,000 shares of common stock with an aggregate
fair value of $75,000. The cost of the settlement was accrued as of January 31,
2005 and has been included in operations for the year ended July 31, 2005.

                                       26
<PAGE>

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

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.


                                       27
<PAGE>
                                    PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
ISSUER PURCHASES OF SECURITIES

On April 8, 2002, we effected a recapitalization of our Common Stock pursuant to
which each one and one-tenth (1.1) shares of our outstanding common stock was
reclassified into one (1) share of Class A Common Stock and one-tenth (1/10th)
of a share of Series 1 Class B Common Stock. A public trading market for such
Series 1 Class B Common Stock never developed.

On June 4, 2004, we effected a second recapitalization pursuant to which each
share of our outstanding Class A Common Stock and Series 1 Class B Common Stock
was reclassified into one (1) share of new Common Stock.

Our Class A Common Stock traded through June 4, 2004 in the over-the-counter
market on the Nasdaq OTC Bulletin Board under the symbol JGMHA. Thereafter, our
Common Stock traded in the over-the-counter market on the Pink Sheets under the
symbol JAGH. The following table reflects quarterly high and low bid prices of
our Class A Common Stock and Common Stock from August 1, 2003 through July 31,
2005. Such prices are inter-dealer quotations without retail mark-ups,
mark-downs or commissions, and may not represent actual transactions.

                                                     High              Low
                                                     ----              ---
Fiscal Year 2004
----------------
First Quarter, ending October 31, 2003............   0.67              0.30
Second Quarter, ending January 31, 2004...........   1.00              0.25
Third Quarter, ending April 30, 2004..............   1.45              0.51
Fourth Quarter, ending July 31, 2004..............   1.10              0.30

Fiscal Year 2005
----------------
First Quarter, ending October 31, 2004............   1.10              0.15
Second Quarter, ending January 31, 2005...........   0.65              0.15
Third Quarter, ending April 30, 2005..............   0.52              0.11
Fourth Quarter, ending July 31, 2005..............   0.30             0.001

We issued shares of our Series 2 Class B Common Stock to holders of record as of
April 14, 2003 of our then Class A Common Stock. We issued shares of our Series
3 Class B Common Stock to an investor in June 2003 and to an investor in
September 2003. A public trading market for the Series 2 Class B Common Stock
and the Series 3 Class B Common Stock never developed.

As of October 26, 2005, there were 2,396 stockholders of record of our Common
Stock. On October 26, 2005, the closing bid price for our Common Stock was
$0.20.

RIGHTS OF  SECURITY HOLDERS

We have the authority to issue three hundred million four hundred forty thousand
(300,440,000) shares, of which: (i) two hundred fifty million (250,000,000)
shares shall be Common Stock, par value $0.00001; (ii) four hundred forty
thousand (440,000) shares shall be Class B Common Stock, par value $0.00001, of
which four hundred thousand (400,000) shares have been designated Series 2 Class
B Common Stock, and forty thousand (40,000) shares have been designated Series 3
Class B Common Stock; and (iii) fifty million (50,000,000) shares shall be
preferred stock.

                                       28
<PAGE>
As of July 31, 2005, we had (i) 44,747,799 shares of Common Stock issued and
outstanding, (ii) 380,829 shares of Series 2 Class B Common Stock, (iii) 21,500
shares of Series 3 Class B Common Stock issued and outstanding, and (iv) no
shares of preferred stock issued and outstanding.

General. The rights, preferences, privileges and restrictions of the Common
Stock, Series 2 Class B Common Stock and Series 3 Class B Common Stock are set
forth in full in the form of Amended and Restated Articles of Incorporation of
JAG Media which are on file with the Secretary of State of the State of Nevada
and filed as an exhibit to this Annual Report on Form 10-KSB, and the following
description should be read in conjunction with, and is qualified in its entirety
by reference to, the Amended and Restated Articles of Incorporation of JAG
Media.

Voting Rights. Except as required by law, at every meeting of stockholders of
JAG Media, every holder of Common Stock shall be entitled to one vote, in person
or by proxy, for each share of Common Stock outstanding in such holder's name on
the stock transfer records of the Registrant. The holders of shares of Series 2
Class B Common Stock and Series 3 Class B Common Stock are not entitled or
permitted to vote on any matter required or permitted to be voted upon by the
stockholders of JAG Media.

Distribution of Assets. Upon the dissolution, liquidation or winding up of JAG
Media, subject to the rights, if any, of the holders of any other of JAG Media's
securities, the holders of the Common Stock, Series 2 Class B Common Stock, and
Series 3 Class B Common Stock, will be entitled to receive all the assets of JAG
Media available for distribution to its stockholders ratably in proportion to
the number of shares held by them.

Dividends. Holders of Common Stock, Series 2 Class B Common Stock and Series 3
Class B Common Stock shall be entitled to receive, on an equal basis, such
dividends, payable in cash or otherwise, as may be declared thereon by the Board
of Directors from time to time out of the assets or funds of JAG Media legally
available therefor.

Mandatory Redemption. Each share of Series 2 Class B Common Stock and Series 3
Class B Common Stock must be redeemed by JAG Media, to the fullest extent
permitted by law, within six months (or as soon thereafter as permitted by law)
following final resolution of our lawsuit against certain brokerage firms (JAG
Media Holdings, Inc. v. A.G. Edwards & Sons et al.) in U.S. District Court for
the Southern District of Texas or any successor or other lawsuit relating to the
subject matter thereof in which JAG Media is named as a plaintiff, which date
shall be determined by the Board of Directors. The redemption price for each
share of the Series 2 Class B Common Stock shall be equal to the greater of (i)
par value or (ii) the amount obtained by dividing (a) ninety percent of the net
proceeds to us of the lawsuit after payment of fees and expenses incurred in
connection with such lawsuit and all taxes on net income accrued or paid with
respect to such amount, by (b) the total number of shares of Series 2 Class B
Common Stock issued and outstanding as of the redemption date, which amount
shall be rounded to the nearest whole cent. The redemption price for each share
of the Series 3 Class B Common Stock shall be equal to the greater of (i) par
value or (ii) .0025% of ten percent of the net proceeds to JAG Media of the
lawsuit after payment of fees and expenses incurred in connection with such
lawsuit and all taxes on net income accrued or paid with respect to such amount,
which amount shall be rounded to the nearest whole cent. Redemption of the
Series 2 Class B Common Stock and Series 3 Class B Common Stock would be subject
to the restrictions set forth in Section 78.288 of the Nevada Revised Statutes
which provides that a corporation may not make a distribution to its
stockholders if, after giving it effect, the corporation would not be able to
pay its debts as they become due in the usual course of business or the
corporation's total assets would be less than the sum of its total liabilities.

                                       29
<PAGE>
Preemptive Rights. None of the Common Stock, Series 2 Class B Common Stock or
Series 3 Class B Common Stock will carry any preemptive rights enabling a holder
to subscribe for or receive shares of JAG Media of any class or any other
securities convertible into any class of shares of JAG Media.

Preferred Stock. JAG Media's Board of Directors is authorized to issue the
preferred stock and the terms of the preferred stock, including dividend rates,
conversion prices, voting rights, redemption prices and similar matters, shall
be determined by JAG Media's Board of Directors.

Future Financings and Acquisitions. The Amended and Restated Articles of
Incorporation of JAG Media provide for 250,000,000 authorized shares of Common
Stock, 440,000 authorized shares of Class B common stock and 50,000,000
authorized shares of Preferred Stock. Therefore, our Board of Directors may
issue additional shares of Common Stock and shares of Preferred Stock, from time
to time in the future, for any proper corporate purpose, including public and
private equity offerings, convertible debt offerings, stock splits, stock
dividends, acquisitions, warrants, stock option plans, and funding of employee
benefit plans. No further action or authorization by our stockholders would be
necessary prior to the issuance of additional shares of Common Stock or the
issuance of the Preferred Stock. The future issuance by us of shares of Common
Stock or Preferred Stock may dilute the equity ownership position and the
rights, preferences and privileges of existing stockholders. Unissued shares of
Common Stock or Preferred Stock could be issued in circumstances that would
serve to preserve control of our existing management.

Anti-Takeover Effects. The Amended and Restated Articles of Incorporation of JAG
Media could have a potential anti-takeover effect with respect to JAG Media. Our
recapitalization implemented in 2004 involved the authorization of 100,440,000
additional shares of stock. Without further stockholder action, the Board of
Directors of JAG Media could authorize the issuance of all or any part of such
additional shares, including Preferred Stock with special voting rights by class
or with more than one vote per share, to a "white knight" in order to deter a
potential buyer of JAG Media. As a result, the recapitalization might have the
effect of preventing or discouraging an attempt by a party unable to obtain the
approval of the Board of Directors of JAG Media to take over or otherwise gain
control of JAG Media. As of the date of this Annual Report on Form 10-KSB,
except as disclosed elsewhere herein, management knows of no specific effort to
accumulate securities of JAG Media or to obtain control of JAG Media by means of
a merger, amalgamation, tender offer or solicitation in opposition to management
or otherwise, except Cryptometrics, Inc., as discussed above under Item 1.
Description of Business - Our Business Strategy on page 5 of this Report on Form
10-KSB.

OPTIONS

As of July 31, 2005, we had options outstanding to purchase an aggregate of
2,510,000 shares of our Common Stock at exercise prices ranging from $0.02 to
$3.50 per share, subject to certain vesting requirements, at any time prior to
various dates through March 2012, provided, however, that certain of these
options will expire prior to such dates upon the termination of certain
contracts with us.

WARRANTS

As of July 31, 2005, we had no warrants outstanding.

                                       30
<PAGE>
DIVIDEND POLICY

We have never paid any cash dividends on our Common Stock and anticipate that,
for the foreseeable future, no cash dividends will be paid on our Common Stock.
Payment of future cash dividends will be determined by our Board of Directors
based upon conditions then existing, including our financial condition, capital
requirements, cash flow, profitability, business outlook and other factors. In
addition, our future credit arrangements may restrict the payment of dividends.

On March 18, 2003, we announced our intention to declare a special stock
dividend. To effect such dividend, we filed a Certificate of Designation with
the Secretary of State of the State of Nevada on April 11, 2003 which designated
a new series of Class B Common Stock, par value $0.00001 per share, which was
distributed by dividend to the our stockholders of record as of the close of
business on April 14, 2003 in the ratio of one share of Series 2 Class B Common
Stock for every 100 shares of Common Stock. For a further discussion of the
foregoing stock dividend see the disclosure under the heading "Stock Dividend"
on page 12 of this Annual Report on Form 10-KSB.

RECENT SALE OF UNREGISTERED SECURITIES

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

As of April 9, 2002, we entered into a $10,000,000 Equity Line Purchase
Agreement with Cornell Capital Partners, L.P., a limited partnership managed by
Yorkville Advisors Management, LLC, a Delaware limited liability company,
pursuant to which we can put our shares of Common Stock, once registered with
the SEC, from time to time, at a purchase price equal to 95% of the lowest
closing bid price for such shares over the five trading days preceding the sale
of such shares. In connection with this Equity Line Purchase Agreement, we
issued Westrock Advisors, Inc. a placement agent fee of 10,000 shares of its
Common Stock. We also have agreed to pay a 5% cash fee to Cornell Capital
payable out of each drawdown under the equity line. The investments under this
Equity Line Purchase Agreement have been made in reliance upon Regulation D. No
puts were made under the Equity Line during the year ending July 31, 2002.

During the fiscal year ended July 31, 2003, Cornell Capital was required to pay
$1,885,000 and it received 5,623,266 shares of Common Stock as a result of the
exercise of put options under the equity line, and we received proceeds of
$1,783,250, net of $101,750 of placement fees. The per share prices and the
number of shares sold under the equity line during the period covered by this
report are as follows:

Price Per Share            Number of Shares Sold              Date Sold
---------------            ---------------------              ---------
$0.33                      757,576                            September 9, 2002
$0.27                      1,111,111                          September 19, 2002
$0.21                      2,380,952                          October 18, 2002
$0.456                     131,579                            November 18, 2002
$0.532                     939,850                            December 4, 2002
$0.91                      302,198                            December 30, 2002
$0.45(Average Price)       5,623,266 (Total Shares Sold)
====================       =============================

Pursuant to a Subscription Agreement, dated as of December 10, 2002, Bay Point
Investment Partners LLC purchased 1,136,364 shares of our Common Stock for a
total consideration of $500,000. The issuance of such securities was exempt from
registration under the Securities Act of 1933, as amended, pursuant to Section
4(2) thereof. Bay Point represented and warranted to us that it was acquiring
the shares of Common Stock solely for its own account for investment, and not as
a nominee for any other party, and not with a view to the distribution thereof
or with any present intention of selling any thereof. Bay Point also represented
to us that it was an "accredited investor" as defined in Rule 501 under the
Securities Act.

                                       31
<PAGE>
Pursuant to a Subscription Agreement, dated as of June 19, 2003, Bay Point
Investment Partners LLC purchased (a) 1,282,675 shares of our Common Stock and
(b) 20,000 shares of our Series 3 Class B Common Stock, par value $0.00001 per
share, for a total consideration of $422,000. In connection with the Bay Point
private placement, we entered into a placement agent agreement pursuant to which
we issued 128,267 shares of our Common Stock as a placement agent fee. The
issuance of such securities was exempt from registration under the Securities
Act of 1933, as amended, pursuant to Section 4(2) thereof.

Pursuant to a Subscription Agreement, dated as of September 25, 2003, Kuekenhof
Partners purchased (a) 35,000 shares of our Common Stock and (b) 1,500 shares of
our Series 3 Class B Common Stock, par value $0.00001 per share, for a total
consideration of $50,000. The issuance of such securities was exempt from
registration under the Securities Act of 1933, as amended, pursuant to Section
4(2) thereof.

During the fiscal year ended July 31, 2004, Cornell Capital was required to pay
$2,150,000 and it received 2,506,274 shares of Common Stock as a result of the
exercise of put options under the Equity Line Purchase Agreement, and we
received proceeds of $2,042,500 net of $107,500 of placement fees. The per share
prices and the number of shares sold under the equity line during the period
covered by this report are as follows:

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)
=====================      =============================

Pursuant to the Business Sale Agreement dated November 24, 2004 by and among the
Company, TComm Limited and Pixaya, we issued 250,000 shares of Common Stock to
TComm Limited on November 24, 2004 as partial consideration for our purchase of
the business and assets of TComm Limited. The issuance of such securities to
TComm was not subject to registration pursuant to Regulation S of the Securities
Act of 1933, as amended.

In consideration for his services in assisting the Company consummate the
acquisition of the business and assets of TComm Limited, on December 28, 2004,
we issued 12,500 shares of our Common Stock to Frank G. Abernathy. The issuance
of such securities was exempt from registration under the Securities Act of
1933, as amended, pursuant to Section 4(2) thereof.

During the fiscal year ended July 31, 2005, Cornell Capital did not purchase any
shares of Common Stock as a result of the exercise of put options under the
Equity Line Purchase Agreement.

PURCHASES OF EQUITY SECURITIES

There were no repurchases made for any class or series of securities in a month
within the fourth quarter of the fiscal year ended on July 31, 2005.

                                       32
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America for financial statements filed with the Securities and Exchange
Commission. The preparation of these consolidated financial statements requires
us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate our estimates, including
those related to accounts receivable, equipment, stock-based compensation,
income taxes and contingencies. We base our estimates on historical experience
and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

We have adopted the provisions of Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment of Long-Lived Assets" ("SFAS 144").
Under SFAS 144, impairment losses on long-lived assets, such as equipment and
capitalized website development costs, are recognized when events or changes in
circumstances indicate that the undiscounted cash flows estimated to be
generated by such assets are less than their carrying value and, accordingly,
all or a portion of such carrying value may not be recoverable. Impairment
losses are then measured by comparing the fair value of assets to their carrying
amounts.

We account for stock options, common stock and similar equity instruments issued
to employees as compensation using fair value based methods pursuant to
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). Accordingly, we estimate the fair value of options
using an option-pricing model (generally, the Black Scholes model) that meets
the criteria set forth in SFAS 123 and common stock using the market value of
our stock. We record such value through charges to compensation cost and
corresponding credits to equity. The charges to compensation cost are amortized
to expense over the vesting period.

                                       33
<PAGE>
In accordance with SFAS 123, all other issuances of common stock, stock options
or other equity instruments to employees and nonemployees as consideration for
goods or services received by us are accounted for based on the fair value of
the consideration received or the fair value of the equity instrument, whichever
is more readily measurable. Such fair value is measured at an appropriate date
pursuant to the guidance in the consensus reached for EITF Issue No. 96-18
(generally, the earlier of the date the other party becomes committed to provide
goods or services or the date the performance by the other party is complete)
and capitalized or expensed as if we had paid cash for the goods or services.
For purposes of determining the fair value of options and warrants using the
Black-Scholes option pricing model, we have estimated the life of options and/or
warrants to be five years. Given an active trading market for our common stock,
we estimate the volatility of our stock-based on week ending closing prices over
a historical period of not less than one year.

On December 16, 2004, the FASB published Statement of Financial Accounting
Standards No. 123 (Revised 2004), "Share-Based Payment". The provisions of SFAS
123R, as amended, will be effective for the Company in the first quarter of its
fiscal year ending July 31, 2006. Management is assessing the implications of
this revised standard, which may materially impact the Company's consolidated
results of operations in the first quarter of fiscal year 2006 and thereafter.

Due to uncertainties related to, among other things, the extent and timing of
future taxable income, we have recorded a full valuation allowance to reduce our
deferred tax assets. A positive adjustment to income will be required in future
years if we determine that we could realize these deferred tax assets.

RELATED PARTY TRANSACTIONS

On April 1, 2002, two of our executive officers loaned JAG Media a total of
$400,000 subject to the terms and conditions of unsecured promissory notes that,
as amended, were payable on April 30, 2004 and bore interest at an annual rate
of 9%. The loans were repaid in full, including interest, in March 2004.

OFF-BALANCE SHEET ARRANGEMENTS

The Company is not party to any off-balance sheet arrangements.

YEAR ENDED JULY 31, 2005 AS COMPARED TO YEAR ENDED JULY 31, 2004
<TABLE>
<CAPTION>
                                                         Year Ended July 31,
                                                 ----------------------------------
                                                     2005                  2004                 Change
                                                     ----                  ----                 ------
<S>                                              <C>                   <C>                   <C>
Revenues                                         $    239,651          $    253,256          $   (13,605)
                                                 ------------          ------------          -----------

Operating expenses:
     Cost of revenues                                 152,371               272,161             (119,790)
     Selling expenses                                  43,441                13,698               29,743
     General and administrative expenses            1,745,455             1,951,876             (206,421)
                                                 ------------          ------------          -----------
            Totals                                  1,941,267             2,237,735             (296,468)
                                                 ------------          ------------          -----------

Loss from operations                               (1,701,616)           (1,984,479)             282,863

Other income (expense):
     Write-off of goodwill                            (50,586)                                   (50,586)
     Interest income                                    8,543                 3,485                5,058
     Interest expense                                (145,506)              (23,930)            (121,576)
     Loss from retirement of assets                                            (713)                 713
                                                 ------------          ------------          -----------
Net loss                                         $ (1,889,165)         $ (2,005,637)         $   116,472
                                                 ============          ============          ===========
</TABLE>

                                       34
<PAGE>
REVENUES

Revenues primarily consist of subscription revenues from annual, semi-annual,
quarterly and monthly subscriptions relating to our product "JAGNotes." JAGNotes
is a daily consolidated investment report that summarizes newly issued research,
analyst opinions, upgrades, downgrades, and analyst coverage changes from
various investment banks and brokerage houses. The decrease in subscription
revenues during the year ended July 31, 2005 was due primarily to a lack of
advertising and increased competition. While our revenues do include revenues
from other sources, these other revenues are not material to our operations as a
whole.

COST OF REVENUES:

Cost of revenues includes the cost to transmit the product over the telephone
and fax lines, on-line service charges for our website, costs in connection with
the development and maintenance of the website, and payments to commentators and
employees for their reports that are posted on our website.

During the year ended July 31, 2005, consulting fees were approximately $113,300
as compared to approximately $219,000 for the year ended July 31, 2004. Such
fees included non-cash charges associated with the amortization of unearned
compensation arising from the issuance of shares in exchange for services of
approximately $35,000 and $144,000 for the years ended July 31, 2005 and 2004,
respectively. The decrease in consulting fees is a result of the expiration of
consulting contracts associated with commentators for our jagnotes.com website.
In addition, costs associated with the transmission of our product over
telephone and fax lines and costs associated with the maintenance of our website
decreased commensurate with our decrease in revenues.

SELLING EXPENSES:

Selling expenses consist primarily of advertising and other promotional
expenses. This increase results primarily from new sales and marketing expenses
of Pixaya, our United Kingdom subsidiary.

GENERAL AND ADMINISTRATIVE EXPENSES:

General and administrative expenses consist primarily of compensation and
benefits for the officers, other compensation, occupancy costs, professional
fees and other office expenses. The decrease in general and administrative
expenses is attributable to our efforts to better contain costs. In addition, in
the year ended July 31, 2004, we incurrred legal and data processing expenses
related to proposed acquisitions and $150,000 of severance payments in
connection with the resignation of our CEO.

INTEREST EXPENSE:

The increase results from borrowings under our Promissory Note payable to
Cornell Capital.

LIQUIDITY AND CAPITAL RESOURCES:

We only generated revenues of approximately $240,000 and $253,000 and we
incurred net losses of approximately $1,889,000 and $2,006,000 and cash flow
deficiencies from operating activities of approximately $1,524,000 and
$1,700,000 for the years ended July 31, 2005 and 2004, respectively. These
matters raise substantial doubt about our ability to continue as a going
concern.

                                       35
<PAGE>
We believe that, in the absence of a substantial increase in subscription
revenues, it is probable that we will continue to incur losses and negative cash
flows from operating activities through at least July 31, 2006 and that we will
need to obtain additional equity or debt financing to sustain our operations
until we can market our services, expand our customer base and achieve
profitability.

As further explained below, we entered into an agreement with an investment
partnership pursuant to which it has, in effect, "put" options whereby, subject
to certain conditions, we are able to require the investment partnership to
purchase shares of our common stock from time to time at prices based on the
market value of its shares. The maximum aggregate purchase price under this
equity line is $10,000,000. The Equity Line became available on August 28, 2002
and was extended in July 2004 for an additional 24 months through August 2006
unless it is terminated earlier at the discretion of the Company. As of July 31,
2005 and October 12, 2005, we had received gross proceeds of $4,035,000, from
the exercise of "put" options. Although the timing and amount of the required
purchases under the agreement are at our discretion, the purchases are subject
to certain conditions and the ability of the investment partnership to fund the
purchases.

We believe that we will be able to generate sufficient revenues from our
remaining facsimile transmission and website operations and obtain sufficient
financing from our 2002 Equity Line Agreement described below before it expires
in August 2006 or through other financing agreements to enable us to continue as
a going concern through at least July 31, 2006. However, if we cannot generate
sufficient revenues and/or obtain sufficient additional financing, if necessary,
by that date, we may be forced thereafter to restructure our operations, file
for bankruptcy or entirely cease our operations.

On November 24, 2004, we entered into a Business Sale Agreement with TComm
Limited, a company organized in the United Kingdom, and Pixaya (UK) Limited
(formerly known as TComm (UK) Limited), a company newly organized in the United
Kingdom and a wholly-owned subsidiary of the Company. The Company entered into
the transaction to access the seller's development stage software, which the
Company believed offered a new platform for delivery of the Company's services
as well as being valuable in its own right. Effective October 3, 2005, TComm
(UK) Limited formally changed its name to Pixaya (UK) Limited.

The transactions contemplated by the Business Sale Agreement were consummated on
November 24, 2004. Under the Business Sale Agreement, Pixaya purchased TComm
Limited's software development business, which is focused on streaming video
solutions, and all of its assets related to that business. The business acquired
had not generated any significant revenue as of the date of the acquisition or
through July 31, 2005.

At the time of acquisition Pixaya was in various stages of development of 4
products: (1) TComm TV, which delivers on-demand video/audio clips to various
java-based and Symbian-based mobile phones; (2) CCMTV, which consists of
software programs and related hardware intended to permit field personnel to
send real-time video streams from the field to a central location where they can
be viewed by one or more persons; (3) Eye Contact, which is a network-based
internal communications system for business that enables employees to
communicate securely face-to-face from their own desks; and (4) TComm Messenger,
which is a network based instant video messaging platform that allows employees
of an organization to communicate securely in real-time within their offices and
from remote locations.

                                       36
<PAGE>
After reviewing the above product line, we determined that several adjustments
in the product line were desirable. In this regard Pixaya has discontinued
development of the Eye Contact and TComm Messenger products. Pixaya has
re-branded CCMTV as "SurvayaCam" and TComm TV as "Pixaya Mobile" and is further
developing Pixaya Mobile with a view to supporting the delivery of our
fast-breaking financial information products. In addition, Pixaya is developing
a new product named "SOS Guides," which are mobile travel guides that will be
made available to users on their mobile phones. Pixaya intends to market the SOS
Guides to travel agents, metropolitan tourist bureaus and other travel related
companies.

The purchase price paid to TComm Limited consisted of (i) 250,000 shares of our
common stock, having a value based on the closing price of our common stock as
of the close of business on the day prior to the acquisition, equal to
approximately $42,500 and (ii) the payment of approximately $19,000 in cash. The
purchase price was allocated to the fair value of assets and goodwill as
follows:

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

As of January 31, 2005 the management tested the goodwill for impairment and
concluded that it had been impaired. Therefore, we have recognized a charge of
$50,400 for the write-off of goodwill in the year ended July 31, 2005.

In addition, TComm Limited has agreed not to compete with the business conducted
by Pixaya for a period of two years from the closing date of the transaction.
The Business Sale Agreement also contains customary representations and
warranties. TComm Limited has agreed to indemnify Pixaya for any damages which
may result from a breach of its warranties but only if the damages exceed
approximately $20,000. TComm Limited has entered into a lockup agreement with us
pursuant to which it has agreed not to sell or otherwise transfer the Common
Stock for a period of one year.

In connection with entering into the Sale Agreement, Pixaya entered into
employment agreements on November 24, 2004 with 4 individuals, all of whom were
previously employed by TComm Limited. The employment agreements have a term of 3
years and automatically renew unless terminated by either party. As a result,
our obligations for cash payments under the employment agreements subsequent to
July 31, 2005 will total $345,000 as follows:

                     Year ending                         Amount
                     -----------                         ------
                    July 31, 2006                       $144,000
                    July 31, 2007                       $151,000
                    July 31, 2008                       $ 50,000
                                                        --------
                         Total                          $345,000
                                                        ========

Pursuant to the employment agreements, we granted options to purchase 260,000
shares of common stock with exercise prices ranging from $.50 - $1.00 as
additional compensation for services to be rendered under such contracts. The
aggregate estimated fair value of the options at the date of issuance of $51,200
will be recognized over the term of the employment agreements.

The employees have each agreed not to compete with the business conducted by
Pixaya for a specified period ranging from six months to 12 months once their
employment with Pixaya has terminated.

                                       37
<PAGE>
TComm Limited had no revenues for the years ended July 31, 2005.

Our cash and cash equivalent position of approximately $661,000 as of July 31,
2005 results primarily from our borrowing from Cornell Capital Partners L.P.
under our $2,000,000 Promissory Note made during the year ended July 31, 2005
described below.

On April 9, 2002, we entered into an Equity Line Purchase Agreement with Cornell
Capital Partners L.P. pursuant to which we have, in effect, put options whereby,
subject to certain conditions, we can require Cornell Capital to purchase shares
of our common stock from time to time at an aggregate purchase price of
$10,000,000. The Equity Line Agreement became available to us on August 28,
2002, and will remain available through August 28, 2006 unless it is terminated
earlier by us in our sole discretion. The purchase price will be 95% of the
lowest closing bid price of our common stock over a specified number of trading
days commencing on specified dates. Cornell Capital shall be entitled to a cash
fee equal to 5% of the gross proceeds received by us from Cornell Capital in
connection with each put. The timing and amount of the required purchases shall
be at our discretion subject to certain conditions including (i) a maximum
purchase price to be paid by Cornell Capital for each put of $500,000; (ii) at
least five trading days must elapse before we can deliver a new put notice to
Cornell Capital; (iii) the registration statement covering the shares issuable
to Cornell Capital pursuant to the equity line must remain effective at all
times and (iv) on any given closing date, there shall be at least one bid for
the common stock on the Nasdaq OTC Bulletin Board. In addition, the obligation
of Cornell Capital to complete its purchases under the Equity Line Purchase
Agreement is not secured or guaranteed and, accordingly, if Cornell Capital does
not have available funds at the time it is required to make a purchase, we may
not be able to force it to do so. We have issued 10,000 shares of our common
stock to a placement agent as of the effective date as consideration for their
services in connection with the Equity Line Purchase Agreement.

During the year ended July 31, 2005, no shares of common stock were issued
pursuant to the Equity Line Purchase Agreement. During the year ended July 31,
2004, 2,506,274 shares of Common Stock were sold under the Equity Line Purchase
Agreement yielding aggregate net proceeds of $2,042,500 to the Company. As of
July 31, 2005, we had the ability to require Cornell Capital to purchase shares
of our common stock pursuant to the 2002 Equity Line Agreement at an aggregate
purchase price of $5,965,000 through August 28, 2006.

On January 25, 2005, we entered into a Promissory Note Agreement with Cornell
Capital for a loan of $2,000,000. The $2,000,000 loan from Cornell Capital was
funded on February 2, 2005. On August 5, 2005, we and Cornell Capital agreed, as
permitted under the Promissory Note to extend for three months the date by which
we must pay all amounts due under the Promissory Note. The face amount of the
Promissory Note (as amended) and interest on the amount from time to time
outstanding at a rate of 12% per year will be payable either (i) out of the net
proceeds to be received by us upon delivery of put notices under the Equity Line
Agreement or (ii) in full by us within 753 calendar days of January 25, 2005
regardless of the availability of proceeds under the Equity Line Agreement,
unless an extension is mutually agreed to by the parties in writing.

Pursuant to the Promissory Note, we have agreed to deposit in escrow 35 put
notices under the Equity Line Agreement in an amount of $60,000 each and one
request for a put under the Equity Line Agreement in an amount of $181,017.
Under the terms of the Promissory Note (as extended), the put notices held in
escrow will be released every fourteen (14) days commencing November 4, 2005.
Cornell Capital has, however, recently informed the Company that it is returning
the puts for the Company's shares that it currently holds while it discusses
with the Company the restructuring of the Promissory Note. We have also agreed
to reserve out of our authorized but unissued shares of common stock 3,500,000
shares of our common stock (the "Reserved Shares") to be delivered to Cornell
Capital under the Equity Line upon use of such put notices. We have paid to
Cornell Capital a fee of $100,000 in connection with this transaction which has
been recorded as a debt discount and is being amortized over the life of the
loan.

                                       38
<PAGE>
We have the option to repay the amounts due under the Promissory Note and to
withdraw any put notices yet to be effected provided that each repayment is in
an amount not less than $25,000. In addition, we have the right to accelerate
the delivery of one or more put notices and to select the specific put notice to
be so accelerated. If the Promissory Note is not paid in full when due, the
outstanding principal owed thereunder will be due and payable in full together
with interest at a rate of 14% per year or the highest permitted by applicable
law, if lower.

Upon an event of default (as defined in the Promissory Note), the entire
principal balance and accrued interest of the Promissory Note, and all other
obligations of our Company under the Promissory Note, would become immediately
due and payable without any action on the part of Cornell Capital.

During the year ended July 31, 2005, we used cash of approximately $1,524,000 in
our operations to fund our net loss.

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

The FASB and the Accounting Standards Committee of the American Institute of
Certified Public Accountants had issued certain accounting pronouncements as of
July 31, 2005 that will become effective in subsequent periods; however, we do
not believe that any of those pronouncements would have significantly affected
our financial accounting measurements or disclosures had they been in effect
during the year ended July 31, 2005 and 2004 or that they will have a
significant effect at the time they become effective.

On December 16, 2004, the FASB published Statement of Financial Accounting
Standards No. 123 (Revised 2004), "Share-Based Payment". The provisions of SFAS
123R, as amended, will be effective for the Company in the first quarter of its
fiscal year ending July 31, 2006. Management is assessing the implications of
this revised standard, which may materially impact the Company's consolidated
results of operations in the first quarter of fiscal year 2006 and thereafter.

On December 16, 2004, FASB issued SFAS No. 153, "Exchange of Non-monetary
Assets, and amendment of APB Opinion 29, Accounting for Non-monetary
Transaction" ("SFAS 153). This statement amends APB Opinion 29 to eliminate the
exception for non-monetary exchanges of similar productive assets and replaces
it with a general exception for exchanges of non-monetary assets that do not
have commercial substance. Under SFAS 153, if a non-monetary exchange of similar
productive assets meets a commercial-substance criterion and fair value is
determinable, the transaction must be accounted for at fair value resulting in
recognition of any gain or loss. SFAS 153 effective for non-monetary
transactions in fiscal periods that begin after June 15, 2005. The Company does
not anticipate that the implementation of this standard will have a material
impact on its consolidated financial position, results of operations or cash
flows.

In May 2005, the FASB issued FASB Statement No. 154, "Accounting Changes and
Error Corrections ("SFAS 154"). SFAS 154 replaces Accounting Principles Board
Opinion No. 20, "Accounting Changes" and FASB Statement No. 3, "Reporting
Accounting Changes in Interim Financial Statements," and requires the direct
effects of accounting principle changes to be retrospectively applied. The
existing guidance with respect to accounting estimate changes and corrections of
errors is carried forward in SFAS 154. SFAS 154 is effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The Company does not expect the adoption of SFAS 154 to have a
material effect on the financial statements.

                                       39
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

The financial statements of JAG Media provided pursuant to Item 7 of this Annual
Report on Form 10-KSB are attached separately at the rear of this Annual Report
on Form 10-KSB. Please see the index below.

                          Index to Financial Statements

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                             <C>
Report of Independent Registered Public Accounting Firm.........................F-2

Consolidated Balance Sheet July 31, 2005........................................F-3

Consolidated Statements of Operations Years Ended July 31, 2005 and 2004........F-4

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
Years Ended July 31, 2005 and 2004..............................................F-5

Consolidated Statements of Cash Flows Years Ended July 31, 2005 and 2004........F-6

Notes to Consolidated Financial Statements......................................F-7 - F-22

</TABLE>
                                      * * *

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

None.

ITEM 8A.   DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the fiscal year ended July 31, 2005, our Chief Executive
Officer and Chief Financial Officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures that we have in place with respect to the accumulation and
communication of information to management and the recording, processing
summarizing and recording thereof. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective in alerting them in a timely manner to
material information relating to the company (including its consolidated
subsidiaries) required to be included in our periodic SEC filings.

In designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

                                       40
<PAGE>

During the fiscal quarter ended July 31, 2005, there has not occurred any
change in JAG Media's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, JAG Media's
internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

None.

                                       41
<PAGE>
                                    PART III

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

Following is certain information about our executive officers and directors.

Thomas J. Mazzarisi, age 48, is our Chairman of the Board, Chief Executive
Officer and General Counsel. Previously, Mr. Mazzarisi served as our Executive
Vice President and General Counsel from March 1999 to April 2, 2004 and as our
Chief Financial Officer from November 9, 2001 to April 2, 2004. Mr. Mazzarisi
has been a member of our Board of Directors since July 1999. From 1997 until
joining JAG Media Holdings, Inc., Mr. Mazzarisi practiced law from his own firm
in New York, specializing in international commercial transactions. From 1988
until 1997, Mr. Mazzarisi was a Senior Associate at the former law firm of
Coudert Brothers where he also specialized in international commercial
transactions. Prior to joining Coudert Brothers, Mr. Mazzarisi was Deputy
General Counsel of the New York Convention Center Development Corporation. Mr.
Mazzarisi is a graduate of Fordham University where he received a B.A. in
Political Economy and was elected to Phi Beta Kappa. Mr. Mazzarisi received his
J.D. from Hofstra University School of Law.

Stephen J. Schoepfer, age 46 is our President, Chief Operating Officer, Chief
Financial Officer and Secretary. Previously, Mr. Schoepfer served as our
Executive Vice President, Chief Operating Officer and Secretary from July 1999
to April 2, 2004. Mr. Schoepfer has been a member of our Board of Directors
since July 1999. Prior to joining the Company in July 1999, he was a Financial
Advisor with the investment firm of Legg Mason Wood Walker. Prior to joining
Legg Mason, Mr. Schoepfer served as a Financial Advisor and Training Coordinator
at Prudential Securities. Mr. Schoepfer attended Wagner College.

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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

Based solely on our review of the copies of such forms received by it with
respect to fiscal 2005, or written representations from certain reporting
persons, to the best of our knowledge, all reports were filed on a timely basis.

                                 CODE OF ETHICS

We have adopted a Code of Ethics (our "Code of Ethics") that applies to our
chief executive officer and chief financial officer. The Company will provide to
any person without charge, upon request, a copy of its Code of Ethics by sending
such request to the attention: Thomas J. Mazzarisi, Chairman, Chief Executive
Officer and General Counsel, JAG Media Holdings, Inc., 6865 S.W. 18th Street,
Suite B13, Boca Raton, Florida 33433. The Company will promptly disclose any
amendments or waivers to its Code of Ethics on Form 8-K.

                                       42
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth certain summary information regarding
compensation paid to our Chief Executive Officer and our President for services
rendered during the fiscal years ended July 31, 2003, 2004 and 2005. Except as
listed in the table below, no executive officer holding office in fiscal year
2005 received total annual salary and bonus exceeding $100,000. No such officers
have been awarded any stock options, stock appreciation rights or other long
term or incentive compensation not reflected below.

                               ANNUAL COMPENSATION
<TABLE>
<CAPTION>
                                                                                                Long-Term
                                                                                               Compensation
                                                                                               Common Shares
                                                                              Other              Subject to
                                    Fiscal                                    Annual              Options        All Other
Name and Principal Position          Year         Salary      Bonus        Compensation           Granted       Compensation
---------------------------         ------        ------      -----        ------------          -----------    ------------
<S>                                  <C>         <C>           <C>         <C>                   <C>            <C>
Thomas J. Mazzarisi,                 2005        $150,000       --              --                   --              --
Chairman of the Board,
Chief Executive Officer and          2004        $150,000       --              --                   --              --
General Counsel
                                     2003        $150,000       --              --                   --              --

Stephen J. Schoepfer,                2005        $150,000       --              --                   --              --
President, Chief Operating
Officer, Chief Financial             2004        $150,000       --              --                   --              --
Officer and Secretary
                                     2003        $150,000       --              --                   --              --
</TABLE>


                                       43
<PAGE>
OPTION GRANTS IN FISCAL YEAR 2005

No freestanding SARs or restricted stock awards were granted to, or exercised
by, any of our named executive officers during the fiscal year ended July 31,
2005.

The following table sets forth information regarding options to acquire shares
of our Common Stock granted under our Long-Term Incentive Plan to Thomas J.
Mazzarisi (our Chairman, Chief Executive Officer and General Counsel) and
Stephen J. Schoepfer (our President, Chief Operating Officer, Chief Financial
Officer and Secretary) during the fiscal year ended July 31, 2005.

                OPTION GRANTS IN PERIOD BEGINNING AUGUST 1, 2004
                            AND ENDING JULY 31, 2005
<TABLE>
<CAPTION>
                                                  Percentage of
                                                  Total Options
                                                   Granted to
                                                Employees in the
                                Number of       period beginning
                               Securities        August 1, 2004      Exercise or
                           Underlying Options       and ended      Base Price Per    Market Price on     Expiration
Name                             Granted          July 31, 2005       ($/Share)     the Date of Grant       Date
----                       ------------------    ----------------  --------------   -----------------    ----------
<S>                        <C>                   <C>               <C>              <C>                  <C>
Thomas J. Mazzarisi                 0                   *                 *                 *                 *
Stephen J. Schoepfer                0                   *                 *                 *                 *
</TABLE>
* Not applicable.

REPORT ON REPRICING OF OPTIONS

Our Board believes that the retention of executives who possess an in depth
knowledge of our operations, contacts within the professional financial
community for certain information that we provide to our subscribers and the
skills and expertise required to lead our organization is vital to our
competitive strength. It is the policy of our Board to award stock options to
our executive officers in order to align their interests with those of our
long-term investors and to help attract and retain these persons. It is our
Board's goal to preserve this incentive as an effective tool in compensating,
motivating and retaining our executives. We have granted these options at
exercise prices below the market price of our stock as a form of immediate
compensation to our executives.

We did not reprice any stock options during our fiscal year ended July 31, 2005.

                                       44
<PAGE>
EQUITY COMPENSATION PLAN INFORMATION AS OF JULY 31, 2005
<TABLE>
<CAPTION>
                                                                                                             Number of
                                                                                                            securities
                                                                                                             remaining
                                                                                                           available for
                                                                                                          future issuance
                                                                                                           under equity
                                                            Number of securities     Weighted average   compensation plans
                                                              to be issued upon     exercise price of       (excluding
                                                                 exercise of           outstanding          securities
                                                            outstanding options,    options, warrants      reflected in
                                                             warrants and rights        and rights          column (a))
                                                                     (a)                   (b)                  (c)
                                                           -----------------------  ------------------  -------------------
<S>                                                        <C>                        <C>               <C>
Equity compensation plans approved by security
holders..................................................     Not applicable         Not applicable      Not applicable

1999 Long-Term Incentive Plan (not approved by
security holders)........................................        2,010,000               $ .02            3,990,000(1)

Individual Compensation Arrangements (not approved
by security holders).....................................          500,000               $3.50           Not applicable
                                                                 ---------               -----            ---------
          Total..........................................        2,510,000(2)            $ .79            3,990,000(1)
                                                                 =========               =====            =========
</TABLE>



(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.


                                       45
<PAGE>
OPTION EXERCISES IN FISCAL YEAR 2005

The following table sets forth certain information regarding the stock options
exercised during the fiscal year ended July 31, 2005 and the stock options held
as of July 31, 2005 by Thomas J. Mazzarisi (our Chairman, Chief Executive
Officer and General Counsel) and Stephen J. Schoepfer (our President, Chief
Operating Officer, Chief Financial Officer and Secretary).

               AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
                         FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                            Number of Shares Underlying
                              Shares                        Unexercised Options at July     Value of Unexercised In-the-Money
                             Acquired                                 31, 2005                   Options at July 31, 2005
                               on                           ----------------------------   ----------------------------------
Name                         Exercise     Value Realized    Exercisable    Unexercisable   Exercisable          Unexercisable
----                         --------     --------------    -----------    -------------   -----------          -------------
<S>                          <C>          <C>              <C>             <C>            <C>                   <C>
Thomas J. Mazzarisi             0               0             500,000            0          $ 40,000                 0
Stephen J. Schoepfer            0               0             250,000            0          $ 20,000                 0
</TABLE>
DIRECTOR COMPENSATION

We currently do not compensate our directors for their services in such
capacity.

1999 LONG-TERM INCENTIVE PLAN

In October, 1999 the Board of Directors approved the 1999 Long-Term Incentive
Plan. This plan was most recently amended in April 2002. The purpose of the plan
is to allow us to attract and retain officers, employees, directors, consultants
and certain other individuals and to compensate them in a way that provides
additional incentives and enables such individuals to increase their ownership
interests in JAG Media. Individual awards under the plan may take the form of:

o        either incentive stock options or non-qualified stock options;

o        stock appreciation rights;

o        restricted or deferred stock;

o        dividend equivalents;

o        bonus shares and awards in lieu of our obligations to pay cash
         compensation; and

o        other awards, the value of which is based in whole or in part upon the
         value of the Common Stock.

The plan will generally be administered by a committee appointed by the board of
directors, except that the board will itself perform the committee's functions
under the plan for purposes of grants of awards to directors who serve on the
committee. The board may also perform any other function of the committee and is
currently serving as the committee. The committee generally is empowered to
select the individuals who will receive awards and the terms and conditions of
those awards, including exercise prices for options and other exercisable
awards, vesting and forfeiture conditions, performance conditions, the extent to
which awards may be transferable and periods during which awards will remain
outstanding. Awards may be settled in cash, shares, other awards or other
property, as the committee may determine.

                                       46
<PAGE>
The maximum number of shares that may be subject to outstanding awards under the
plan will not exceed 6,000,000 shares of Common Stock. As of July 31, 2005,
there were a total of 2,010,000 shares of Common Stock subject to outstanding
options granted under the plan. These options are exercisable at prices ranging
from $0.02 to $1.00 per share.

The plan will remain in effect until terminated by the board of directors. The
plan may be amended by the board of directors without the consent of our
stockholders, except that any amendment, although effective when made, will be
subject to stockholder approval if required by any Federal or state law or
regulation or by the rules of any stock exchange or automated quotation system
on which our Common Stock may then be listed or quoted. The number of shares
reserved or deliverable under the plan, the annual per-participant limits, the
number of shares subject to options automatically granted to non-employee
directors, and the number of shares subject to outstanding awards are subject to
adjustment in the event of stock splits, stock dividends and other extraordinary
corporate events.

We generally will be entitled to a tax deduction equal to the amount of
compensation realized by a participant through awards under the plan, except no
deduction is permitted in connection with incentive stock options if the
participant holds the shares acquired upon exercise for the required holding
periods; and deductions for some awards could be limited under the $1.0 million
deductibility cap of Section 162(m) of the Internal Revenue Code. This
limitation, however, should not apply to certain options, stock appreciation
rights and performance-based awards granted thereafter if JAG Media complies
with certain requirements under Section 162(m).

EMPLOYMENT CONTRACTS

MAZZARISI AND SCHOEPFER EMPLOYMENT AGREEMENTS

On August 31, 2001, we entered into amended and restated three-year employment
agreements with each of Stephen J. Schoepfer (our President, Chief Operating
Officer, Chief Financial Officer and Secretary) and Thomas J. Mazzarisi (our
Chairman of the Board, Chief Executive Officer and General Counsel). On November
3, 2005, certain of the provisions of the amended and restated employment
agreements were amended. Each of these employment agreements now expires on
August 31, 2007 and provides for an annual base salary of $150,000. In addition,
each executive is entitled to receive annual incentive stock option bonuses as
follows:

o    Option for 500,000 shares of Common Stock if the average closing bid price
     of our Common Stock for the year ended August 31, 2006 under the contract
     is $1.00 or greater;

o    Option for 500,000 shares of Common Stock if the average closing bid price
     of our Common Stock for the year ended August 31, 2007 under the contract
     is $2.00 or greater; and

Such options are exercisable at fair market value as defined in the employment
agreements as recently amended, determined with respect to the indicated year
end.

No annual incentive stock option bonuses have been earned to date under the
employment agreements.

The executives shall also be granted an option to purchase a 5% ownership
interest in any subsidiary that JAG Media successfully creates and spins off
during the term of their employment contracts.

                                       47
<PAGE>
Pursuant to these employment agreements, each of the above named executives is
entitled to the same medical and other benefits, including health and life
insurance coverage, as are provided to other employees of JAG Media. In the
event JAG Media terminates the employment of any of such executives without
cause or such executive resigns for good reason as defined in the employment
agreements, such executive shall be entitled to receive (i) continued medical
and life insurance coverage for a period equal to the greater of one year or the
number of years and fractions thereof between the date of such termination and
the end of the term (the Severance Period), (ii) a lump sum cash payment equal
to the executive's highest rate of annual salary in effect during the term
multiplied by the Severance Period, (iii) a lump sum cash payment equal to the
number of accrued and unused vacation days calculated at the executive's then
current salary rate and (iv) accelerated vesting of all of the executive's
outstanding stock options. Such cash payments will be made within 10 days of
termination of employment, and shall not be subject to offset for amounts earned
by the executive in respect of any subsequent employment, nor is the executive
required to seek any such subsequent employment.

Further, immediately prior to a "change in control" (as defined in our Long-Term
Incentive Plan) of JAG Media, the above-named executives shall also be granted
an option to acquire 1,000,000 shares of our Common Stock (subject to equitable
adjustments for stock splits, etc.) at an exercise price equal to the fair
market value of the average closing bid price of the Company's stock for the 30
days prior to such change in control, which option shall be fully vested and
immediately exercisable in full and expire on a date which is the earlier of ten
years from such change in control and three years after termination of
employment. Generally, under our Long-Term Incentive Plan a "change in control"
shall be deemed to have occurred (i) if there is an acquisition of 30% or more
of our then outstanding shares of Common Stock, (ii) Messrs. Mazzarisi and
Schoepfer cease for any reason to constitute at least a majority of the members
of our Board, or (iii) a merger, consolidation, recapitalization,
reorganization, sale or disposition of all or a substantial portion of our
assets, or similar transaction shall have occurred. However, a change in control
shall not be deemed to have occurred if consummation of such a transaction would
result in at least 70% of the total voting power represented by the voting
securities of JAG Media outstanding immediately after such transaction being
beneficially owned by at least 75% of the holders of outstanding voting
securities of JAG Media immediately prior to the transaction, with the voting
power of each such continuing holder relative to other such continuing holders
not substantially altered in the transaction.

In the unlikely event that we issue to Cornell Capital under the equity line
more than approximately 19,180,000 shares of our Common Stock and Cornell
Capital does not sell any such shares and we issue no other shares, such
issuance to Cornell Capital would result in the acquisition by Cornell Capital
of more than 30% of our then outstanding shares of Common Stock and would
trigger the change in control provisions in the employment agreements of our
executive officers. As a result, each of Messrs. Mazzarisi and Schoepfer would
be granted an option to acquire 1,000,000 shares of our Common Stock at an
exercise price equal to the fair market value of the stock prior to such change
in control, which option would be fully vested and immediately exercisable in
full and expire on a date which would be the earlier of ten years from such
change in control and three years after termination of such person's employment.
The occurrence of the change of control would also permit each executive to
resign from JAG Media if they so chose and be entitled to all of the severance
benefits described above, including medical and life insurance coverage,
accelerated vesting of outstanding stock options and certain lump sum cash
payments.

In lieu of options previously granted which were cancelled, we granted on August
31, 2001 to each of Messrs. Mazzarisi and Schoepfer options to purchase an
aggregate of 1,000,000 shares of our Common Stock exercisable at a price per
share of $0.02, all of which vested immediately upon the execution of the
amended and restated agreements. These options are subject to the terms of our
1999 Long-Term Incentive Plan, as amended, and may be exercised, in whole or in
part, by the executives on a cashless basis.

                                       48
<PAGE>
INDEMNIFICATION OF OFFICERS AND DIRECTORS

Our Articles of Incorporation provide that we shall indemnify our officers,
directors, employees and agents to the full extent permitted by Nevada law. Our
Bylaws include provisions to indemnify our officers and directors and other
persons against expenses (including judgments, fines and amounts paid for
settlement) incurred in connection with actions or proceedings brought against
them by reason of their serving or having served as officers, directors or in
other capacities. We do not, however, indemnify them in actions in which it is
determined that they have not acted in good faith or have acted unlawfully or
not in JAG Media's best interest. In the case of an action brought by or in the
right of JAG Media, we shall indemnify them only to the extent of expenses
actually and reasonably incurred by them in connection with the defense or
settlement of these actions and we shall not indemnify them in connection with
any matter as to which they have been found to be liable to JAG Media, unless
the deciding court determines that, notwithstanding such liability, that person
is fairly entitled to indemnity in light of all the relevant circumstances.

We do not currently maintain director's and officer's liability insurance but we
may do so in the future.

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors and officers pursuant to the foregoing provisions,
or otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND RELATED STOCKHOLDER
MATTERS

The following table sets forth information regarding the beneficial ownership of
our Common Stock as of October 26, 2005 (except as otherwise indicated) by (i)
each person known by JAG Media to be the beneficial owner of more than 5% of our
Common Stock, (ii) each director and nominee to be a director, (iii) each named
executive officer and (iv) all directors and executive officers as a group.
Except as otherwise indicated below, each of the persons named in the table has
sole voting and investment power with respect to the shares set forth opposite
such person's name.

<TABLE>
<CAPTION>
Name & Address of Beneficial Owner                 Number of Shares Beneficially Owned           Percentage of Class
-----------------------------------------------    ------------------------------------------    ---------------------
<S>                                                <C>                                          <C>
Gary Valinoti                                      5,102,000(1)(2)(3)(4)                         11.2%
4 Page Drive
Red Bank, NJ 07701

Thomas Mazzarisi (Chairman of the Board,           610,000(1)(5)                                 1.3%
Chief Executive Officer and General Counsel)
6865 SW 18th Street, Suite B13,
Boca Raton, Florida 33433

Stephen Schoepfer (President,                      325,000(1)(6)                                 *
Chief Operating Officer,
Chief Financial Officer and Director)
6865 SW 18th Street, Suite B13,
Boca Raton, Florida 33433

All executive officers and directors as a          935,000(1)(5)(6)                              2.2%
group (2 persons)
</TABLE>

-------------
* Less than one percent

                                       49
<PAGE>

(1) Based on 44,751,212 shares of Common Stock issued and outstanding as of
    October 26, 2005, plus the number of shares of Common Stock which the
    beneficial owner has the right to acquire within 60 days, if any.

(2) Includes 524,498 shares of Common Stock owned by Mr. Valinoti's wife,
    Cathleen Valinoti.

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

(4) Based on Form 5 filed on September 14, 2004.

(5) Includes 500,000 shares of Common Stock issuable upon the exercise of stock
    options.

(6) Includes 250,000 shares of Common Stock issuable upon the exercise of stock
    options.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

LOANS FROM OFFICERS OF THE COMPANY

On April 1, 2002, Thomas J. Mazzarisi, our Chairman, Chief Executive Officer and
General Counsel, loaned us $200,000. The loan was subject to the terms and
conditions of an unsecured promissory note issued by us to Mr. Mazzarisi on such
date. The loan, which bore interest at 9.0% per annum, was repaid in full,
including interest, by JAG Media on March 29, 2004.

On April 1, 2002, Stephen J. Schoepfer, our President, Chief Operating Officer,
Chief Financial Officer and Secretary, loaned us $200,000. The loan was subject
to the terms and conditions of an unsecured promissory note issued by us to Mr.
Schoepfer on such date. The loan, which bore interest at 9.0% per annum, was
repaid in full, including interest, by JAG Media on March 29, 2004.

We used the original proceeds of these loans to fund existing payables and for
general corporate purposes.

                                       50
<PAGE>
ITEM 13. EXHIBITS

(a)(1) Financial Statements. See index to Financial Statements on page 40.

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

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

EXHIBIT NO.       DESCRIPTION
-----------       -----------

2.1               Agreement and Plan of Reorganization dated March 16, 1999
                  between Professional Perceptions, Inc. (now known as
                  JagNotes.com Inc.); Harold Kaufman, Jr., an officer, director
                  and principal stockholder thereof; NewJag, Inc.; and the
                  stockholders of NewJag, Inc. (1)

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

3.1               Articles of Incorporation of Registrant. (2)

3.2               Certificate of Amendment to Articles of Incorporation of
                  Registrant as filed with the Secretary of State of the State
                  of Nevada on April 8, 2002. (9)

3.3               Certificate of Amendment to Articles of Incorporation as filed
                  with the Secretary of State of the State of Nevada on March 1,
                  2005. (27)

3.4               Certificate of Designation of the Series 2 Class B Common
                  Stock. (16)

3.5               Certificate of Designation of the Series 3 Class B Common
                  Stock. (19)

3.6               Certificate of Amendment to Articles of Incorporation of
                  Registrant as filed with the Secretary of State of the State
                  of Nevada on June 4, 2004. (24)

3.7               Bylaws of Registrant.  (2)

3.8               Amendment to Bylaws of Registrant. (13)

3.9               Amendment to Bylaws of Registrant.  (27)

4.1               Stock Option to acquire 500,000 shares of Common Stock granted
                  to Strategic Growth International, Inc. on March 14, 2000. (3)

4.2               Promissory Note, dated April 1, 2002 in the amount of $200,000
                  issued to Thomas J. Mazzarisi. (9)

4.3               Promissory Note, dated April 1, 2002 in the amount of $200,000
                  issued to Stephen J. Schoepfer. (9)

                                       51
<PAGE>
4.4               Amendment, dated June 26, 2002, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Thomas J.
                  Mazzarisi. (10)

4.5               Amendment, dated June 26, 2002, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Stephen J.
                  Schoepfer. (10)

4.6               Amendment, dated August 15, 2002, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Thomas J.
                  Mazzarisi. (11)

4.7               Amendment, dated August 15, 2002, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Stephen J.
                  Schoepfer. (11)

4.8               Amendment, dated January 31, 2003 to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Thomas J.
                  Mazzarisi. (15)

4.9               Amendment, dated January 31, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Stephen J.
                  Schoepfer. (15)

4.10              Amendment, dated March 31, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Thomas J.
                  Mazzarisi. (17)

4.11              Amendment, dated March 31, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Stephen J.
                  Schoepfer. (17)

4.12              Amendment, dated October 14, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Thomas J.
                  Mazzarisi. (18)

4.13              Amendment, dated October 14, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Stephen J.
                  Schoepfer. (18)

4.14              Amendment, dated December 12, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Thomas J.
                  Mazzarisi. (20)

4.15              Amendment, dated December 12, 2003, to Promissory Note, dated
                  April 1, 2002 in the amount of $200,000 issued to Stephen J.
                  Schoepfer. (20)

4.16              Amendment, dated as of January 31, 2004, to Promissory Note,
                  dated April 1, 2002 in the amount of $200,000 issued to Thomas
                  J. Mazzarisi. (22)

4.17              Amendment, dated as of January 31, 2004, to Promissory Note,
                  dated April 1, 2002 in the amount of $200,000 issued to
                  Stephen J. Schoepfer. (22)

4.18              Form of Common Stock Certificate

4.19              Form of Series 2 Class B Stock Certificate

10.1              JAG Media Holdings, Inc. 1999 Long Term Incentive Plan, as
                  amended. (7)

10.2              Amended and Restated Employment Agreement, dated August 31,
                  2001, by and between Thomas J. Mazzarisi and Registrant. (6)

                                       52
<PAGE>
10.3              Amended and Restated Employment Agreement, dated August 31,
                  2001, by and between Stephen J. Schoepfer and Registrant. (6)

10.4              Amendment to Amended and Restated Employment Agreement, dated
                  as of November 3, 2005, by and between Registrant and Thomas
                  J. Mazzarisi.

10.5              Amendment to Amended and Restated Employment Agreement, dated
                  as of November 3, 2005, by and between Registrant and Stephen
                  J. Schoepfer.

10.6              Equity Line Purchase Agreement dated as of April 9, 2002, by
                  and between the Registrant and Cornell Capital Partners, L.P.
                  (8)

10.7              Registration Rights Agreement, dated as of April 9, 2002, by
                  and among the Registrant, Cornell Capital Partners, L.P., and
                  Westrock Advisors, Inc. (8)

10.8              Placement Agent Agreement, dated as of April 9, 2002, by and
                  among the Registrant, Cornell Capital Partners, L.P., and
                  Westrock Advisors, Inc. (8)

10.9              Waiver of Section 5.5 of Equity Line Purchase Agreement, dated
                  June 18, 2002, executed by Cornell Capital Partners, L.P. (10)

10.10             Consulting Agreement, dated June 12, 2002, between the
                  Registrant and Walsh Organization, Inc. (18)

10.11             Power of Attorney and Contingent Fee Contract, dated June 14,
                  2002, among the Registrant, Gary Valinoti and the Law Firm of
                  O'Quinn, Laminack & Pirtle. (18)

10.12             Subscription Agreement, dated December 10, 2002, between the
                  Registrant and Bay Point Investment Partners LLC. (12)

10.13             Placement Agent Agreement, dated December 10, 2002, between
                  the Registrant and RMC 1 Capital Markets, Inc. (12)

10.14             Placement Agent Agreement, dated as of June 19, 2003, between
                  the Registrant and RMC 1 Capital Markets, Inc., as amended on
                  August 12, 2003. (19)

10.15             Subscription Agreement, dated as of June 19, 2003, between the
                  Registrant and Bay Point Investment Partners LLC, as amended
                  on August 12, 2003. (19)

10.16             Asset Purchase Agreement dated August 12, 2003 by and among
                  the Registrant, Vertex Interactive, Inc., XeQute Solutions PLC
                  and XeQute Solutions, Inc. (19)

10.17             Subscription Agreement, dated as of September 25, 2003,
                  between the Registrant and Kuekenhof Equity Fund L.P. (18)

10.18             Finder's Fee Agreement, dated as of January 5, 2004, between
                  the Registrant and Flow Capital Advisors, Inc. (21)

10.19             Separation Agreement, dated April 2, 2004, between the
                  Registrant and Gary Valinoti. (23)

                                       53
<PAGE>
10.20             Letter Agreement, dated July 8, 2004, amending the Equity Line
                  Purchase Agreement, dated as of April 9, 2002, by and between
                  the Registrant and Cornell Capital Partners, L.P. (25)

10.21             Letter Agreement, dated July 21, 2004, amending the Equity
                  Line Purchase Agreement, dated as of April 9, 2002, by and
                  between the Registrant and Cornell Capital Partners, L.P. (25)

10.22             Business Sale Agreement dated November 24, 2004, by and among
                  TComm Limited, TComm (UK) Limited and the Registrant. (26)

10.23             Promissory Note, dated January 25, 2005 by and between Cornell
                  Capital Partners, L.P. and the Registrant. (28)

10.24             Letter Agreement, dated August 5, 2005, extending maturity
                  date of Promissory Note dated January 25, 2005, by and between
                  the Registrant and Cornell Capital Partners. (29)

14.1              Code of Ethics. (18)

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 January 16, 2004, by and among the
                  Registrant, Great Eastern Securities, Inc. and the
                  stockholders of Great Eastern Securities, Inc. (21)

99.3              Letter of Intent, dated September 9, 2005, by and among the
                  Cryptometrics, Inc. and the Registrant. (30)

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

(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 our Quarterly Report on Form 10-QSB filed
    on June 16, 2000.
(4) Previously filed as an exhibit to Post-Effective Amendment No. 2 to our
    Registration Statement on Form SB-2 filed on June 22, 2000.
(5) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
    on December 20, 2000.
(6) Previously filed as an exhibit to Amendment No. 1 to our Registration
    Statement on Form SB-2 filed on September 26, 2001.

                                       54
<PAGE>
 (7) Previously filed as an exhibit to our Registration Statement on Form S-8
     filed on May 1, 2002.
 (8) Previously filed as an exhibit to our Registration Statement on Form SB-2
     filed on May 7, 2002.
 (9) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     April 17, 2002.
(10) Previously filed as an exhibit to Amendment No. 2 to our Registration
     Statement on Form SB-2 filed on August 2, 2002.
(11) Previously filed as an exhibit to our Annual Report on Form 10-KSB filed on
     November 13, 2002.
(12) Previously filed as an exhibit to our Registration Statement on Form SB-2
     filed on January 9, 2003.
(13) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     January 27, 2003
(14) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     February 18, 2003.
(15) Previously filed as an exhibit to Amendment No. 1 to our Registration
     Statement on Form SB-2 filed on February 24, 2003.
(16) Previously filed as an exhibit to our Registration Statement on Form 8-A
     filed on April 10, 2003.
(17) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     June 16, 2003.
(18) Previously filed as an exhibit to our Annual Report on Form 10-KSB filed on
     November 13, 2003.
(19) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     August 13, 2003.
(20) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on December 19, 2003
(21) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     January 20, 2004.
(22) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on March 22, 2004.
(23) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     April 5, 2004.
(24) Previously filed as an exhibit to our Registration Statement on Form 8-A
     filed May 26, 2004.
(25) Previously filed as an exhibit to our Registration Statement on Form SB-2
     filed on August 5, 2004.
(26) Previously filed as an exhibit to our Quarterly Report on Form 10-QSB filed
     on December 20, 2004.
(27) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     March 7, 2005.
(28) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     February 3, 2005.
(29) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     August 9, 2005.
(30) Previously filed as an exhibit to our Current Report on Form 8-K filed on
     September 14, 2005.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

The aggregate fees billed for the fiscal years ended July 31, 2005 and 2004 for
professional services rendered by J.H. Cohn LLP for the audit of the our annual
financial statements and the review of the financial statements included in our
quarterly reports on Form 10-QSB were $103,262 and $66,793, respectively.

                                       55
<PAGE>
AUDIT-RELATED FEES

The aggregate fees billed for the fiscal years ended July 31, 2005 and 2004 for
assurance and related services rendered by J.H. Cohn LLP related to the
performance of the audit or review of our financial statements were $15,110 and
$25,678, respectively.

TAX FEES

The aggregate fees billed for the fiscal years ended July 31, 2005 and 2004 for
services rendered by J.H. Cohn LLP in connection with the preparation of our
federal and state tax returns were $5,250 and $4,000, respectively.


ALL OTHER FEES

There were no other fees billed by J.H. Cohn in the years ended June 30, 2005 or
June 30, 2004.

PRE-APPROVAL POLICIES AND PROCEDURES

The Board of Directors is required to pre-approve the rendering by our
independent auditor of audit or permitted non-audit services.

The services provided for 2005 were 84% audit services, 12% audit related fees
and 4% tax services. The services provided above for 2004 were 69% audit
services, 27% audit related services and 4% tax services.


                                       56
<PAGE>

                    JAG Media Holdings, Inc. and Subsidiaries




                                                                          PAGE
                                                                          ----
Report of Independent Registered Public Accounting Firm                    F-2

Consolidated Balance Sheet
    July 31, 2005                                                          F-3

Consolidated Statements of Operations
    Years Ended July 31, 2005 and 2004                                     F-4

Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
    Years Ended July 31, 2005 and 2004                                     F-5

Consolidated Statements of Cash Flows
    Years Ended July 31, 2005 and 2004                                     F-6

Notes to Consolidated Financial Statements                                F-7/22



                                     * * *

                                      F-1
<PAGE>
            Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders
JAG Media Holdings, Inc.


We have audited the accompanying consolidated balance sheet of JAG Media
Holdings, Inc. and Subsidiaries as of July 31, 2005, and the related
consolidated statements of operations, changes in stockholders' equity
(deficiency) and cash flows for the years ended July 31, 2005 and 2004. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of JAG Media Holdings,
Inc. and Subsidiaries as of July 31, 2005, and their results of operations and
cash flows for the years ended July 31, 2005 and 2004, in conformity with
accounting principles generally accepted in the United States of America.

The consolidated financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As further discussed
in Note 2 to the consolidated financial statements, the Company's operations
have generated recurring losses and cash flow deficiencies from operating
activities. Such matters raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans concerning these matters are
also described in Note 2. The accompanying consolidated financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.



                                                         /s/ J.H. Cohn LLP

Roseland, New Jersey
November 7, 2005


                                      F-2
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                           Consolidated Balance Sheet
                                  July 31, 2005

<TABLE>
<CAPTION>
                                               Assets

<S>                                                                                                              <C>
Current assets:
    Cash and cash equivalents                                                                                    $  660,865
    Accounts receivable, net of allowance for doubtful accounts
        of $7,500                                                                                                    14,510
    Other current assets                                                                                             67,249
                                                                                                                 ----------
           Total current assets                                                                                     742,624

Equipment, net of accumulated depreciation of $95,438                                                                59,052
Other assets                                                                                                         36,426
                                                                                                                 ----------
           Total                                                                                                 $  838,102
                                                                                                                 ==========
                              Liabilities and Stockholders' Deficiency

Current liabilities:
    Accounts payable and accrued expenses                                                                        $  213,190
    Deferred revenues                                                                                                29,231
                                                                                                                 ----------
           Total current liabilities                                                                                242,421

Loan payable, net of unamortized debt discount of $72,851                                                         1,927,149
                                                                                                                 ----------
           Total liabilities                                                                                      2,169,570
                                                                                                                 ----------

Mandatorily redeemable Class B common stock; par value $.00001 per share:
        400,000 shares designated as Series 2; 380,829 shares issued and
        outstanding                                                                                                       4

        40,000 shares designated as Series 3; 21,500 shares issued and
        outstanding                                                                                                       -
                                                                                                                 ----------
                                                                                                                          4
                                                                                                                 ----------
Commitments and contingencies

Stockholders' deficiency:
    Preferred stock; par value $.00001 per share;
        50,000,000 shares authorized, none issued
    Common stock; par value $.00001 per share;
        250,000,000 shares authorized; 44,747,799 shares
        issued and outstanding                                                                                          448
    Additional paid-in capital                                                                                   43,742,187
    Unearned compensation                                                                                           (40,447)
    Accumulated deficit                                                                                         (45,033,660)
                                                                                                                 ----------
           Total stockholders' deficiency                                                                        (1,331,472)
                                                                                                                 ----------
           Total                                                                                                   $838,102
                                                                                                                 ==========
</TABLE>

See Notes to Consolidated Financial Statements.

                                      F-3
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                      Consolidated Statements of Operations
                       Years Ended July 31, 2005 and 2004
<TABLE>
<CAPTION>
                                                          2005                2004
                                                       -----------         -----------
<S>                                                    <C>                    <C>
Revenues                                               $   239,651            $253,256
                                                       -----------         -----------
Operating expenses:
    Cost of revenues                                       152,371             272,161
    Selling expenses                                        43,441              13,698
    General and administrative
        expenses                                         1,745,455           1,951,876
                                                       -----------         -----------
           Totals                                        1,941,267           2,237,735
                                                       -----------         -----------

Loss from operations                                    (1,701,616)         (1,984,479)

Other income (expense):
    Writeoff of goodwill                                   (50,400)
    Interest income                                          8,357               3,485
    Interest expense                                      (145,506)            (23,930)
    Loss from retirement of assets                                                (713)
                                                       -----------         -----------

Net loss                                               $(1,889,165)        $(2,005,637)
                                                       ===========         ===========

Basic net loss per share                                     $(.04)              $(.05)
                                                             =====               =====

Basic weighted average common
    shares outstanding                                  44,510,641          42,696,349
                                                       ===========         ===========
</TABLE>

See Notes to Consolidated Financial Statements.

                                      F-4
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

     Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
                       Years Ended July 31, 2005 and 2004
<TABLE>
<CAPTION>
                                          Common Stock
                                          ------------               Additional          Unearned       Accumulated
                               Number of Shares        Amount      Paid-in Capital     Compensation       Deficit         Total
                               ----------------        ------      ---------------     ------------     -----------       -----
<S>                            <C>                    <C>          <C>                <C>            <C>             <C>
Balance, August 1, 2003           41,244,025            $412         $41,217,522        $(140,884)     $(41,138,858)   $   (61,808)

Sale of common stock and
1,500 shares of redeemable
Series 3 Class B common
stock through private
placement                             35,000                              50,000                                            50,000

Effects of issuance of
common stock in exchange
for services                         450,000               5             260,995          (78,000)                         183,000

Amortization of unearned
compensation                                                                              194,619                          194,619

Sales of common stock
pursuant to equity
financing agreement, net
of expenses of $107,500            2,506,274              25           2,042,475                                         2,042,500

Net loss                                                                                                 (2,005,637)    (2,005,637)
                                  ----------            ----         -----------        ---------      ------------    -----------
Balance, July 31, 2004            44,235,299             442          43,570,992          (24,265)      (43,144,495)       402,674

Effect of issuance of
options in exchange for
services                                                                  51,200          (51,200)

Amortization of unearned
compensation                                                                               35,018                           35,018

Effect of issuance of
common stock for purchase
of business                          250,000               3              42,497                                            42,500

Effects of issuance of
common stock in exchange
for services and claim
settlement                           262,500               3              77,498                                            77,501

Net loss                                                                                                 (1,889,165)    (1,889,165)
                                  ----------            ----         -----------        ---------      ------------    -----------
Balance, July 31, 2005            44,747,799            $448         $43,742,187        $ (40,447)     $(45,033,660)   $(1,331,472)
                                  ==========            ====         ===========        =========      ============    ===========
</TABLE>

See Notes to Consolidated Financial Statements.

                                      F-5
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows
                       Years Ended July 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                                             2005                 2004
                                                                         -----------           -----------
<S>                                                                     <C>                   <C>
Operating activities:
    Net loss                                                             $(1,889,165)          $(2,005,637)
    Adjustments to reconcile net loss to net cash used in
        operating activities:
        Depreciation and amortization                                         19,684                18,769
        Amortization of unearned compensation                                 35,018               194,619
        Amortization of debt discount                                         27,149
        Amortization of other assets                                          13,574
        Writeoff of goodwill                                                  50,400
        Loss from retirement of assets                                                                 713
        Effects of issuance of common stock
           in exchange for services and claim settlement                      77,501               183,000
        Changes in operating assets and liabilities:
           Accounts receivable                                                (2,270)               (7,080)
           Other current assets                                                6,586                10,221
           Accounts payable and accrued expenses                             147,657               (89,527)
           Deferred revenues                                                 (10,262)               (5,236)
                                                                         -----------           -----------
                  Net cash used in operating activities                   (1,524,128)           (1,700,158)
                                                                         -----------           -----------

Investing activities - purchase of equipment
        Equipment purchases                                                  (32,078)              (29,276)
        Cash paid for business acquisition                                   (19,212)
                                                                         -----------           -----------
                   Net cash used in investing activities                     (51,290)              (29,276)
                                                                         -----------           -----------

Financing activities:
        Proceeds from loan payable                                         2,000,000
        Costs paid in connection with loan payable                          (150,000)
        Net proceeds from private placements of common stock                                     2,092,500
        Repayment of notes payable to officers                                                    (400,000)
                                                                         -----------           -----------
                  Net cash provided by financing activities                1,850,000             1,692,500
                                                                         -----------           -----------

Net increase (decrease) in cash and cash equivalents                         274,582               (36,934)
Cash and cash equivalents, beginning of year                                 386,283               423,217
                                                                         -----------           -----------

Cash and cash equivalents, end of year                                   $   660,865           $   386,283
                                                                         ===========           ===========

Supplementary Cash Flow Information:
        Interest paid                                                    $    27,150           $    71,810
                                                                         ===========           ===========
</TABLE>

See Notes to Consolidated Financial Statements.

                                      F-6
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

Note 1 - Organization:
         JAG Media Holdings, Inc., a Nevada corporation, and its subsidiaries
         (the "Company") gather and compile financial and investment information
         from contacts at financial institutions, experienced journalists, money
         managers, analysts and other Wall Street professionals and generate
         revenues by releasing such information to subscribers on a timely basis
         through facsimile transmissions and a web site, www.jagnotes.com.
         Subscribers receive, among other things, a daily early-morning
         investment report that summarizes newly issued research, analyst
         opinions, upgrades, downgrades and analyst coverage changes from
         various investment banks and brokerage houses and alerts, during the
         trading day, of rumors circulating on Wall Street. The Company is also
         developing a related product line which will enable the Company to
         provide subscribers with select upgrades/downgrades and rumors in
         streaming video and/or text message format delivered to their mobile
         phones. 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 January 4, 2002, a subsidiary, JAG Company Voice LLC, was
         formed to provide small to medium sized companies with production and
         distribution services for delivering press releases and other company
         information over the Internet in streaming video format; however, it
         never conducted any significant operations, and on April 1, 2004 all of
         its operations ceased and it was merged with another subsidiary of the
         Company, Jag Media LLC.

         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 some of these products
         and has added a new service to this product line, as further described
         in Note 5. However, the business acquired had not generated any
         significant revenue as of the date of the acquisition or through July
         31, 2005. Effective October 3, 2005, TComm (UK) Limited formally
         changed its name to Pixaya (UK) Limited.

         On February 11, 2004, the stockholders of the Company approved an
         amendment to the articles of incorporation that authorized the
         implementation of changes related to a recapitalization plan for the
         Company that was consummated on June 4, 2004 (the "Recapitalization").
         As a result of the Recapitalization, the Company became authorized to
         issue up to 250,000,000 shares of common stock with a par value of
         $.00001 per share, and it issued 1 share of common stock in exchange
         for every 1 share of Class A common stock and Series 1 Class B common
         stock outstanding prior to the recapitalization.

         Prior to the Recapitalization, each share of Series 1 Class B common
         stock was immediately convertible into one share of Class A common
         stock and each share of Class A common stock and Series 1 Class B
         common stock was equal in respect to dividends and voting rights.
         Therefore, each share of Series 1 Class B common stock was, in
         substance, equivalent to one share of Class A common stock for
         financial reporting purposes prior to the Recapitalization, and each
         share of Class A common stock and each share of Series 1 Class B common
         stock is, in substance, equivalent to 1 share of common stock after the
         Recapitalization for financial

                                      F-7
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

Note 1 - Organization (Continued):
         reporting purposes. Accordingly, the Recapitalization, which has been
         retroactively reflected in the accompanying consolidated financial
         statements and these notes, did not have any effect on numbers of
         shares of common stock, the weighted average number of common shares
         outstanding or any amounts per common share.

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 $240,000 and $253,000
         and it incurred net losses of approximately $1,889,000 and $2,006,000
         and cash flow deficiencies from operating activities of approximately
         $1,524,000 and $1,700,000 for the years ended July 31, 2005 and 2004,
         respectively. In addition, as of July 31, 2005 the Company only had
         cash and cash equivalents available of $661,000 and working capital of
         $500,000. 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, 2006 and that the Company will need to obtain
         additional equity or debt financing to sustain its operations until it
         can successfully market its services, expand its customer base and
         achieve profitability.

         As further explained in Note 4, the Company entered into an agreement
         with an investment partnership pursuant to which it has, in effect,
         "put" options whereby, subject to certain conditions, it is able to
         require the investment partnership to purchase shares of its common
         stock from time to time at prices based on the market value of its
         shares. The maximum aggregate purchase obligation under this equity
         line is $10,000,000. This equity line was renewed in July 2004 and
         expires in August 2006. As of July 31, 2005, the Company had received
         gross proceeds of $4,035,000 from the exercise of "put" options.
         Although the timing and amount of the required purchases under the
         agreement are at the Company's discretion, the purchases are subject to
         certain conditions as also explained in Note 4 and the ability of the
         investment partnership to fund the purchases. Also as explained in
         Note 4, on January 25, 2005, the Company entered into a Promissory Note
         agreement with the investment partnership pursuant to which the Company
         agreed to borrow $2,000,000 from the investment partnership. The
         $2,000,000 loan was funded on February 2, 2005. Pursuant to the
         Promissory Note as amended, the Company has deposited 35 put notices
         under the above agreement in the amount of $60,000 each and one in the
         amount of $181,017 into escrow which will be released every 14 days
         beginning November 4, 2005.

         Management believes that the Company will be able to generate
         sufficient revenues from its remaining facsimile transmission and web
         site operations and obtain sufficient financing from its agreement with
         the investment partnership prior to its expiration in August 2006 or
         through other financing agreements to enable it to continue as a going
         concern through at least July 31, 2006. However, if the Company cannot
         generate sufficient revenues and/or obtain sufficient additional
         financing, if necessary, by that date, the Company may be forced
         thereafter to restructure its operations, file for bankruptcy or
         entirely cease its operations.

                                      F-8
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         The accompanying consolidated financial statements do not include any
         adjustments related to the recoverability and classification of assets
         or the amount and classification of liabilities that might be necessary
         should the Company be unable to continue as a going concern.

         Use of estimates:
         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect certain
         reported amounts and disclosures. Accordingly, actual results could
         differ from those estimates.

         Principles of consolidation:
         The accompanying consolidated financial statements include the accounts
         of JAG Media Holdings, Inc. and its subsidiaries. All significant
         intercompany accounts and transactions have been eliminated in
         consolidation.

         Revenue recognition:
         Fees for subscriptions are generally billed in advance on a monthly,
         quarterly, semi-annual or annual basis. Revenues from subscriptions are
         recognized ratably over the subscription period. Subscription fees
         collected that relate to periods subsequent to the date of the
         consolidated balance sheet are included in deferred revenues.

         Cash equivalents:
         Cash equivalents consist of highly liquid investments with a maturity
         of three months or less when acquired.

         Equipment:
         Equipment is stated at cost, net of accumulated depreciation.
         Depreciation is provided using accelerated methods over the estimated
         useful lives of the assets, which range from three to seven years.

         Impairment of long-lived assets subject to amortization:
         The Company has adopted the provisions of Statement of Financial
         Accounting Standards No. 144, "Accounting for the Impairment of
         Long-Lived Assets" ("SFAS 144"). Under SFAS 144, impairment losses on
         long-lived assets, such as equipment are recognized when events or
         changes in circumstances indicate that the undiscounted cash flows
         estimated to be generated by such assets are less than their carrying
         value and, accordingly, all or a portion of such carrying value may not
         be recoverable. Impairment losses are then measured by comparing the
         fair value of assets to their carrying amounts.


                                       F-9
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         Goodwill and other intangible assets not subject to amortization:
         The Company periodically reviews the carrying value of intangible
         assets not subject to amortization, including goodwill, to determine
         whether impairment may exist. Statement of Financial Accounting
         Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142")
         requires that goodwill and certain intangible assets be assessed
         annually for impairment using fair value measurement techniques.
         Specifically, goodwill impairment is determined using a two-step
         process. The first step of the goodwill impairment test is used to
         identify potential impairment by comparing the fair value of a
         reporting unit with its carrying amount, including goodwill. The
         estimates of fair value of a reporting unit are determined using
         various valuation techniques with the primary technique being a
         discounted cash flow analysis. A discounted cash flow analysis requires
         the Company to make various judgmental assumptions including
         assumptions about future cash flows, growth rates, and discount rates.
         The assumptions about future cash flows and growth rates are based on
         the Company's budget and long-term plans. Discount rate assumptions are
         based on an assessment of the risk inherent in the respective reporting
         units. If the fair value of a reporting unit exceeds its carrying
         amount, goodwill of the reporting unit is considered not impaired and
         the second step of the impairment test is unnecessary. If the carrying
         of a reporting unit exceeds its fair value, the second step of the
         goodwill impairment test is performed to measure the amount of
         impairment loss, if any. The second step of the goodwill impairment
         test compares the implied fair value of the reporting unit's goodwill
         with the carrying amount of that goodwill. If the carrying amount of
         the reporting unit's goodwill exceeds the implied fair value of that
         goodwill, an impairment loss is recognized in an amount equal to that
         excess. The implied fair value of goodwill is determined in the same
         manner as the amount of goodwill recognized in a business combination.
         That is, the fair value of the reporting unit is allocated to all of
         the assets and liabilities of that unit (including any unrecognized
         intangible assets) as if the reporting unit had been acquired in a
         business combination and the fair value of the reporting unit was the
         purchase price paid to acquire the reporting unit.

         The impairment test for other intangible assets not subject to
         amortization consists of a comparison of the fair value of the
         intangible asset with its carrying value. If the carrying value of the
         intangible asset exceeds its fair value, an impairment loss is
         recognized in an amount equal to that excess. The estimates of fair
         value of intangible assets not subject to amortization are determined
         using various discounted cash flow valuation methodologies. Significant
         assumptions are inherent in this process, including estimates of
         discount rates. Discount rate assumptions are based on an assessment of
         the risk inherent in the respective intangible assets.

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

                                      F-10
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         Stock-based compensation:
         The Company has accounted for stock options, common stock and other
         similar equity instruments issued to employees as compensation using
         fair value based methods pursuant to Statement of Financial Accounting
         Standards No. 123, "Accounting for Stock-Based Compensation", ("SFAS
         123"). Accordingly, the Company estimates the fair value of stock
         options using an option-pricing model (generally, the Black-Scholes
         model) that meets criteria set forth in SFAS 123 and common stock using
         its market value. It records such value through charges to compensation
         cost and corresponding credits to equity. The charges to compensation
         cost are amortized to expense over the vesting period.

         In accordance with SFAS 123, all other issuances of common stock, stock
         options or other equity instruments to employees and nonemployees as
         the consideration for goods or services received by the Company are
         accounted for based on the fair value of the consideration received or
         the fair value of the equity instruments issued, whichever is more
         reliably measurable. Such fair value is measured as of an appropriate
         date pursuant to the guidance in the consensus for the Financial
         Accounting Standards Board, the Emerging Issues Task Force (the "EITF")
         Issue No. 96-18 (generally, the earlier of the date the other party
         becomes committed to provide goods or services or the date performance
         by the other party is complete) and capitalized or expensed as if the
         Company had paid cash for the goods or services.

         On December 16, 2004, the FASB published Statement of Financial
         Accounting Standards No. 123 (Revised 2004), "Share-Based Payment"
         ("SFAS 123R"). The provisions of SFAS 123R, as amended, will be
         effective for the Company in the first quarter of its fiscal year
         ending July 31, 2006. Management is assessing the implications of this
         revised standard, which may materially impact the Company's
         consolidated results of operations in the first quarter of fiscal year
         2006 and thereafter.

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

                                      F-11
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         As of July 31, 2005, there were options outstanding for the purchase of
         a total of 2,510,000 shares of common stock (see Note 4). However,
         diluted per share amounts have not been presented in the accompanying
         consolidated statements of operations because the Company had a net
         loss in the years ended July 31, 2005 and 2004 and the assumed effects
         of the exercise of the Company's stock options that were outstanding
         during all or part of those periods would have been anti-dilutive.

         Other Recently Issued Accounting Standards:

         The EITF and the Accounting Standards Executive Committee of the
         American Institute of Certified Public Accountants have issued certain
         accounting pronouncements as of July 31, 2005 in addition to SFAS 123R
         that will become effective in subsequent periods; however, management
         of the Company does not believe that any of those pronouncements would
         have significantly affected the Company's financial accounting
         measurements or disclosures had they been in effect during 2005 and
         2004, and it does not believe that any of those pronouncements will
         have a significant impact on the Company's consolidated financial
         statements at the time they become effective.

Note 3 - Income taxes:
         As of July 31, 2005, the Company had net operating loss carryforwards
         of approximately $29,116,000 available to reduce future Federal taxable
         income which will expire from 2019 through 2025. As of July 31, 2005
         the Company's deferred tax assets consisted of the effects of temporary
         differences attributable to the following:

              Deferred revenues, net                               $     10,000
              Unearned compensation                                     648,000
              Net operating loss carryforwards                       11,185,000
                                                                   ------------
                                                                     11,843,000
              Less valuation allowance                              (11,843,000)
                                                                   ------------
                  Total                                            $          -
                                                                   ============

         Due to the uncertainties related to, among other things, the extent and
         timing of its future taxable income, the Company offset its net
         deferred tax assets by an equivalent valuation allowance as of July 31,
         2005.

         The Company had also offset the potential benefits from its net
         deferred tax assets by an equivalent valuation allowance as of July 31,
         2004 and 2003 of approximately $12,372,000 and $12,300,000. As a result
         of the changes in the valuation allowance of $(517,000) and $72,000
         during the years ended July 31, 2005 and 2004, respectively, there are
         no credits for income taxes reflected in the accompanying consolidated
         statements of operations to offset pre-tax losses.

     Note 4 - Equity and debt financing agreements with Cornell Capital
              Partners, L.P.:
         On April 9, 2002, the Company entered into an equity line purchase
         agreement (the "Equity Line") with Cornell Capital Partners L.P.
         ("Cornell Capital") pursuant to which the Company has, in effect, put
         options whereby, subject to certain conditions, it can require Cornell
         Capital to purchase shares of its common stock from time to time at an
         aggregate purchase price of $10,000,000. The Equity Line became
         available on August 28, 2002 and was extended in July 2004 for an
         additional 24 months through August 2006 unless it is terminated
         earlier at the discretion of The Company. The purchase price will be
         95% of the lowest closing bid price of the Company's common stock over
         a specified number of trading days commencing on specified dates.
         Cornell Capital shall be entitled to a cash fee equal to 5% of the
         gross proceeds received by the Company from Cornell Capital in
         connection with each put. As of July 31, 2005, $4,035,000 of the
         Company's Equity Line with Cornell Capital had been utilized.

                                      F-12
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         The timing and amount of the required purchases shall be at the
         Company's discretion subject to certain conditions including (i) a
         maximum purchase obligation to be paid by Cornell Capital for each put
         of $500,000; (ii) at least five trading days must elapse before the
         Company can deliver a new put notice to Cornell Capital; (iii) the
         registration statement covering the shares issuable to Cornell Capital
         pursuant to the equity line must remain effective at all times and (iv)
         on any given closing date, there shall be at least one bid for the
         common stock on the Nasdaq OTC Bulletin Board. In addition, the
         obligation of Cornell Capital to complete its purchases under the
         Equity Line Agreement is not secured or guaranteed and, accordingly, if
         Cornell Capital does not have available funds at the time it is
         required to make a purchase, the Company may not be able to force it to
         do so.

         During the year ended July 31, 2005, no put options were exercised.
         During the year ended July 31, 2004, Cornell Capital was required to
         pay $2,150,000 and it received 2,506,274 shares of common stock and the
         Company received proceeds of $2,042,500, net of $107,500 of placement
         fees, as a result of the exercise by the Company of put options
         pursuant to the Equity Line. As of July 31, 2005, the Company had the
         ability to require Cornell Capital to purchase shares of its common
         stock pursuant to the Equity Line at an aggregate purchase price of
         $5,965,000 through August 28, 2006 before taking into account any puts
         related to the Promissory Note described below. The $5,965,000 of
         availability will be reduced to the extent the Promissory Note and
         interest thereunder is repaid out of the net proceeds received by the
         Company upon delivery of put notices under the Equity Line Agreement.

         On January 25, 2005, the Company entered into a Promissory Note
         Agreement with Cornell Capital for a loan of $2,000,000. The $2,000,000
         loan from Cornell Capital was funded on February 2, 2005 net of a debt
         discount of $100,000 attributable to a fee paid to Cornell Capital
         deducted at the time of funding which is being amortized over the life
         of the loan. The unamortized debt discount as of July 31, 2005 is
         $72,851. The face amount of the Promissory Note and interest on the
         amount from time to time outstanding at a rate of 12% per year will be
         payable either (i) out of the net proceeds to be received by the
         Company upon delivery of put notices under the Equity Line Agreement or
         (ii) in full by the Company within 663, subsequently extended to 753,
         calendar days of January 25, 2005 regardless of the availability of
         proceeds under the Equity Line Agreement, unless an extension is
         mutually agreed to by the parties in writing.

         Pursuant to the Promissory Note, the Company has agreed to deposit in
         escrow 35 put notices under the Equity Line Agreement in an amount of
         $60,000 each and one request for a put under the Equity Line Agreement
         in an amount of $181,017. Under the terms of the Promissory Note, as
         amended on August 5, 2005, the put notices held in escrow will be
         released every 14 days commencing November 4, 2005 (See Note 11). The
         Company has also agreed to reserve out of its authorized but unissued
         shares of common stock 3,500,000 shares of the Company's common stock
         (the "Reserved Shares") to be delivered to Cornell Capital under the
         Equity Line upon use of such put notices.

                                      F-13
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         The Company has the option to repay the amounts due under the
         Promissory Note and to withdraw any put notices yet to be effected
         provided that each repayment is in an amount not less than $25,000. In
         addition, the Company has the right to accelerate the delivery of one
         or more put notices and to select the specific put notice to be so
         accelerated. If the Promissory Note is not paid in full when due, the
         outstanding principal owed thereunder will be due and payable in full
         together with interest at 14% per year or the highest permitted by
         applicable law, if lower.

         Upon an event of default (as defined in the Promissory Note), the
         entire principal balance and accrued interest of the Promissory Note,
         and all other obligations of the Company under the Promissory Note,
         would become immediately due and payable without any action on the part
         of Cornell Capital.

Note 5 - Acquistion:

         On November 24, 2004, the Company entered into a Business Sale
         Agreement (the "Sale Agreement") with TComm Limited, a company
         organized in the United Kingdom ("Seller"), and Pixaya, a company newly
         organized in the United Kingdom and a wholly-owned subsidiary of the
         Company. The Company entered into the transaction to access the
         seller's development stage software, which the Company believed offered
         a new platform for delivery of the Company's services as well as being
         valuable in its own right.

         The transactions contemplated by the Sale Agreement were consummated on
         November 24, 2004. Under the Sale Agreement, Pixaya purchased the
         Seller's software development business, which is focused on streaming
         video solutions and all of its assets related to that business. The
         business has not generated any significant revenue as of the date of
         the acquisition or through July 31, 2005.

         The acquired product lines the Company intends to continue to develop
         include: (1) Pixaya Mobile (previously known as TComm TV), which
         delivers on-demand video/audio clips to various java-based and
         Symbian-based mobile phones and (2) SurvayaCam (previously known as
         CCMTV), which is currently under development and will consist of
         software programs (and related hardware) intended to enable field
         personnel to send real-time video streams from the field to a central
         point where they can be viewed by one or more persons. Because the
         acquired product lines are still under development, it is difficult for
         the Company to estimate the amount of resources that will be required
         to complete the development of these product lines.

         The purchase price paid to TComm Limited consisted of (i) 250,000
         shares of the Company's common stock, having a value based on the
         closing price of the Company's common stock as of the close of business
         on the day prior to the acquisition, equal to approximately $42,500 and
         (ii) the payment of approximately $19,000 in cash. The purchase price
         was allocated to the fair value of assets and goodwill as follows:

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

                                      F-14
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         As of January 31, 2005, management tested the goodwill for impairment
         and concluded that it had been impaired. Therefore, the Company has
         recognized a charge of $50,400 for the write-off of goodwill in the
         year ended July 31, 2005.

         In addition, the Seller has agreed not to compete with the business
         conducted by Pixaya for a period of two years from the closing date of
         the transaction. The Sale Agreement also contains customary
         representations and warranties. The Seller has agreed to indemnify
         Pixaya for any damages which may result from a breach of its warranties
         but only if the damages exceed approximately $20,000. The Seller has
         entered into a lockup agreement with the Company pursuant to which it
         has agreed not to sell or otherwise transfer the shares received as
         part payment of the purchase price for a period of one year.

         Pixaya had no revenues from its inception in November 2004 through July
         31, 2005.

         Unaudited pro forma results of operations for years ended July 31, 2005
         and 2004 assuming the Company had acquired the business and the related
         assets from the Seller as of the beginning of each of these years have
         not been presented because such information would not differ materially
         from the historical results of operations for such periods.

Note 6 - Other issuances of common stock and stock options:

         Amendments of articles of incorporation:

         As explained in Note 1, on February 11, 2004, the stockholders of the
         Company approved an amendment to the articles of incorporation that
         authorized the implementation of changes related to a recapitalization
         plan for the Company that was consummated on June 4, 2004 (the
         "Recapitalization").

         Pursuant to the Recapitalization, (i) the total number of shares of all
         classes of capital stock authorized for issuance by the Company
         increased from 200,000,000 shares to 300,440,000 shares with a par
         value of $.00001 per share, of which 50,000,000 shares are authorized
         for issuance as preferred stock, 250,000,000 shares are authorized for
         issuance as common stock, 400,000 shares are authorized for issuance as
         Series 2 Class B common stock and 40,000 shares are authorized for
         issuance as Series 3 Class B Common stock; and (ii) the Company issued
         1 share of common stock in exchange for every 1 share of Class A common
         stock and Series 1 Class B common stock outstanding prior to the
         recapitalization.

         Mandatorily redeemable Class B common stock:
         On March 18, 2003 and June 30, 2003, the Company's Board of Directors
         approved the designation of 400,000 shares and 40,000 shares of Class B
         common stock, par value $.00001 per share, as "Series 2 Class B common
         stock" and "Series 3 Class B common stock," respectively. The Company's
         Board of Directors also declared a special stock dividend on March 18,
         2003 for the distribution of shares of Series 2 Class B common stock to
         owners of the Company's common stock as of the record date, April 14,
         2003, in a ratio of one share of Series 2 Class B common stock for
         every 100 shares of common stock owned. As of July 31, 2005, a total of
         380,829 shares of Series 2 Class B common stock were outstanding as a
         result of the stock dividend. On June 30, 2003, the Company issued
         20,000 shares of Series 3 Class B common stock in connection with the
         private placement of common stock, as further explained below.

                                      F-15
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         Note 6 - Other Issuances of common stock and stock options (continued):

         The shares of Series 2 and Series 3 Class B common stock will be
         nonvoting, have dividend and liquidation rights equal to the Class A
         common stock and be redeemable. Redemption by the Company shall be
         mandatory within six months following final resolution of the Company's
         lawsuit against various brokerage firms currently pending in U.S.
         District Court for the Southern District of Texas or any successor or
         related suit (or as soon thereafter as legally permissible). The
         redemption price per share of the Series 2 Class B common stock will be
         the greater of (i) the par value of each share or (ii) the amount
         obtained by dividing (a) 90% of the net proceeds to the Company of such
         lawsuit after payment of fees and expenses incurred in connection with
         such lawsuit and all taxes on net income accrued or paid with respect
         to such net amount divided by (b) the total number of shares of Series
         2 Class B common stock outstanding. The redemption price per share of
         the Series 3 Class B common stock will be the greater of (i) the par
         value of each share or (ii) .0025% of 10% of the net proceeds to the
         Company of such lawsuit after payment of fees and expenses incurred in
         connection with such lawsuit and all taxes on net income accrued or
         paid with respect to such net amount.

         Since the value of the Series 2 and Series 3 Class B common stock is
         contingent upon the outcome of the pending litigation, the Company
         recorded the shares of Series 2 and Series 3 Class B common stock that
         were issuable as of July 31, 2003 at their total par value of $4.20.
         Since the Company will be required to distribute substantially all of
         the proceeds of the pending litigation to the holders of Series 2 and
         Series 3 Class B common stock, the Company has classified the shares as
         the equivalent of mandatorily redeemable preferred stock and excluded
         their carrying value from stockholders' equity and total liabilities in
         the accompanying July 31, 2004 consolidated balance sheet pursuant to
         the rules and regulations of the Securities and Exchange Commission.

         In accordance with Statement of Financial Accounting Standards No. 150,
         "Accounting for Certain Financial Instruments with Characteristics of
         Both Liabilities and Equity, " the par value of the mandatorily
         redeemable stock is recorded as a liability.

         Equity financing agreement:
         As further explained in Note 4, during the year ended July 31, 2004,
         Cornell Capital was required to pay $2,150,000 and it received
         2,506,274 shares of common stock and the Company received proceeds of
         $2,042,500 net of $107,500 of placement fees as a result of the
         exercise by the Company of put options pursuant to the Equity Line
         Agreement.

         Shares sold through private placement:
         During the year ended July 31, 2004, the Company sold 35,000 shares of
         its common stock and 1,500 shares of its Series 3 Class B common stock
         through a private placement, and it received proceeds of $50,000.

         The private placements were intended to be exempt from registration
         under the Act.

         Stock dividend:
         During the year ended July 31, 2004, the Company issued an additional
         6,709 shares of its mandatorily redeemable Series 2 Class B common
         stock based on required adjustments to the number of shares originally
         issued in connection with a stock dividend affected during the year
         ended July 31, 2003.

                                      F-16
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         Shares issued to pay salaries:
         During the year ended July 31, 2004, the Company agreed to issue a
         total of 300,000 shares of its common stock with an aggregate fair
         value of $183,000 to pay salaries, all of which was charged directly to
         expense.

         Shares issued to consultants:
         During the year ended July 31, 2005, the Company issued a total of
         12,500 shares of its commons stock with an aggregate fair value of
         $2,500 to pay for consulting services.

         On March 4, 2004, the Company settled a dispute with a consultant in
         connection with his performance of various investment banking services
         for the Company. The claim was settled for $175,000, of which $100,000
         was paid in cash and the balance was paid by issuing 250,000 shares of
         common stock with an aggregate fair value of $75,000. The settlement
         has been included in operations for the year ended July 31, 2005.

         During the year ended July 31, 2004, the Company issued a total of
         150,000 shares of its common stock with an aggregate fair value of
         $78,000 to pay for consulting services. The fair value of the shares
         was originally charged to unearned compensation and is being amortized
         to expense over the terms of the consulting agreements.

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

         The cost of the options and warrants, determined based on their
         aggregate estimated fair values at the respective dates of issuance,
         was initially charged directly to expense or to unearned compensation
         and subsequently amortized to expense.

         The following table reconciles the number of shares of common stock
         subject to options and warrants that were outstanding at August 1, 2003
         as a result of issuances of those options and warrants to employees and
         nonemployees as compensation for services to the number outstanding at
         July 31, 2005 and sets forth other related information:
<TABLE>
<CAPTION>
                                                                   Number of Shares
                                                                    ----------------
                                                                                     Range of Exercise
                                                       Common Stock                        Prices
                                                       ------------                  -----------------
<S>                                                   <C>                           <C>
Options and warrants issued for services outstanding,
August 1, 2003 and July 31, 2004                         3,585,000                      $.02-$6.00
Options issued (A)                                         260,000                      $.50-$1.00
Options and warrants cancelled                          (1,335,000)                     $.15-$6.00
                                                        ----------
Options issued for services outstanding, July 31, 2005
(B) (C)                                                  2,510,000                     $.02-$3.50
                                                        ==========
</TABLE>

                                      F-17
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         (A)      During 2005, the Company granted options to purchase 260,000
                  shares of common stock to employees of Pixaya (see Note 5).
                  These options and warrants had exercise prices ranging from
                  $.50 to $1.00, and will expire in March 2015 and had a fair
                  value of $51,200.

         (B)      These options also include options for the purchase of
                  1,750,000 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.

         (C)      These options will expire at various dates from August 2005
                  through March 2015.

         The following table summarizes information about the number of shares
         of common stock subject to options and warrants that were outstanding
         at July 31, 2005 as a result of issuances of those options and warrants
         to employees and nonemployees as compensation for services:

<TABLE>
<CAPTION>
                        Options and Warrants Outstanding                          Options and Warrants Exercisable
                       ----------------------------------                         --------------------------------
                                         Weighted Average
                                             Years of         Weighted
          Exercise         Number            Remaining         Average              Number         Weighted Average
           Prices       Outstanding      Contractual Life   Exercise Price        Exercisable       Exercise Price
         <S>             <C>             <C>               <C>                   <C>                  <C>
         $   .02         1,750,000            6.09            $    .02             1,750,000           $    .02
             .50           130,000            9.37                 .50                65,000                .50
             .75            65,000            9.37                 .75                     0                  0
            1.00            65,000            9.37                1.00                     0                  0
            3.50           500,000             .06                3.50               500,000               3.50
                         ---------                                                 ---------
         $.02-$3.50      2,510,000            5.23            $.02-$3.50           2,315,000                .79
         ==========      =========                            ==========           =========           ========
</TABLE>

         Unearned compensation is being amortized to expense on a straight-line
         basis over the period in which the related services are rendered (such
         period is limited to the initial term of any related employment or
         consulting agreement). A total of $35,018 and $194,619 was amortized
         during 2005 and 2004, respectively. The unamortized balance of $40,447
         and $24,265 has been reflected as a reduction of stockholders' equity
         as of July 31, 2005 and 2004, respectively.

                                      F-18
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

Note 7 - Notes payable to officers:
         On April 1, 2002, two executive officers loaned the Company a total of
         $400,000 subject to the terms and conditions of unsecured promissory
         notes that, as amended, were payable on June 30, 2004 and bore interest
         at an annual rate of 9%. The loans were repaid in full, including
         interest, in March 2004.

Note 8 - Employee benefit plans:
         The Company maintains a profit-sharing plan and a money purchase plan
         for the benefit of all eligible employees. The Company's contributions
         to these defined contribution plans are made on a discretionary basis.
         The Company made no contributions to the plans in 2005 and 2004.

Note 9 - Commitments and contingencies:
         Concentrations of credit risk:
         Financial instruments that potentially subject the Company to
         concentrations of credit risk consist primarily of cash and cash
         equivalents. 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, 2005.

         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 Sale Agreement, Pixaya entered into employment
         agreements on November 24, 2004 with four individuals, all of whom were
         previously employed by the Seller. 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, 2005 will total
         approximately $345,000,as follows:

                         Year ending                         Amount
                         -----------                         ------
                        July 31, 2006                       $144,000
                        July 31, 2007                        151,000
                        July 31, 2008                         50,000
                                                            --------
                        Total                               $345,000
                                                            ========

         Leases:
         The Company has 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 $15,000 and
         $21,000 for 2005 and 2004, respectively. As of July 31, 2005, the
         Company was not subject to any significant noncancelable office leases.

                                      F-19
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         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 has threatened to commence
         litigation against the Company, certain of its officers and directors
         and others. The Bay Point claim relates to its purchase of shares of
         the Company's stock in private placements on December 10, 2002 and June
         19, 2003. Bay Point alleges, 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. The Company believes it has meritorious
         defenses to Bay Point's claims.

Note 10 - Fair value of financial instruments:
         The Company's material financial instruments at July 31, 2005 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 Cornell Capital. 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, 2005 because of their liquidity and/or their short-term
         maturities.

Note 11 - Subsequent events:
         On August 5, 2005, the Company and Cornell Capital agreed, as permitted
         under the Promissory Note, dated as of January 25, 2005, between the
         Company and Cornell Capital, to extend for three months the date by
         which the Company must pay all amounts due under the Promissory Note.
         Accordingly, the schedule for puts under the Company's Equity Line
         Purchase Agreement, dated as of April 9, 2002, as amended July 8, 2004
         and July 21, 2004, between the Company and Cornell Capital, was
         extended for three months such that the put date for the first put
         notice was November 4, 2005, instead of August 5, 2005, and all
         bi-weekly put notices thereafter were adjusted accordingly. Cornell
         Capital has, however, recently informed the Company that it is
         returning the puts for the Company's shares that it currently holds
         while it discusses with the Company the restructuring of the Promissory
         Note.

         On August 5, 2005, as permitted by the Promissory Note, the Company
         opted to make three interest payments to Cornell Capital, each in the
         amount of $20,000, which payments were made in a single lump sum of
         $60,000. The payments were included in accrued liabilities as of July
         31, 2005.

         On September 9, 2005, the Company entered into a non-binding letter of
         intent (the "Letter of Intent") with Cryptometrics, Inc., a Delaware
         corporation ("Cryptometrics"), pursuant to which the Company and
         Cryptometrics would enter into a merger agreement under 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 shares would, upon issuance, represent 88% of the outstanding
         Company common stock, in exchange for all of the issued and outstanding
         capital stock of Cryptometrics (the "Proposed Transaction"). The shares
         of common stock to be received by the stockholders of Cryptometrics
         would be registered under the U.S. Securities Act of 1933, as amended
         (the "Securities Act"). If consummated, the Proposed Transactions would
         be accounted for as a reverse acquisition in which Cryptometrics would
         be the acquirer.

                                      F-20
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

         At the closing of the Proposed Transaction (the "Closing"), 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, at least a majority of whom would be independent and
         who, in whole or in part, would also constitute the audit committee of
         the Company's board of directors.

         Cryptometrics was incorporated in May 2000 under the name Postal Hut,
         Inc. and in November 2001 changed its name to Cryptometrics, Inc.
         Cryptometrics's business focuses on the biometric security industry.
         Cryptometrics produces hardware and software products that take
         advantage of the internationally approved standards for biometric
         identification and verification.

         In connection with the Proposed Transaction, the Cryptometrics
         stockholders will agree not to sell or otherwise dispose of the shares
         of Common Stock that are received in connection with the Proposed
         Transaction for a period of 12 months from the Closing; provided, that
         subject to compliance with all relevant securities laws, 35% of the
         shares will not be subject to the lock-up provision, if and so long as,
         the shares of the post-merger Company are trading on the NASDAQ Small
         Cap Market.

         The Proposed Transaction is subject to various conditions being
         satisfied prior to Closing, including, among others:

     o completion of all steps necessary to increase the number of authorized
     shares of common stock of the Company from 250,000,000 to 450,000,000 and
     approval of a name change to a name including "Cryptometrics";

     o the Registration Statement relating to the registration of the shares of
     common stock being issued to the stockholders of Cryptometrics being
     declared effective by the Securities and Exchange Commission;

     o the listing of the Company's common stock on the NASDAQ Small Cap Market;
     and

     o the Company not having outstanding indebtedness for borrowed money in
     excess of the principal amount of $2,000,000.

     In addition, the Closing is conditioned upon (i) each party completing a
     due diligence review, the results of which are satisfactory in all respects
     to each party, (ii) the Company and Cryptometrics obtaining all appropriate
     and necessary corporate and stockholder approvals for the transaction, and
     (iii) the parties entering into definitive agreements, including, without
     limitation, a mutually acceptable definitive acquisition agreement between
     Cryptometrics and the Company.

     Except for certain specified provisions, the Letter of Intent is
     non-binding. There is no assurance that the definitive documentation called
     for in the Letter of Intent will ever by executed, or if executed, that the
     proposed transaction between the Company and Cryptometrics will be
     consummated.

                                      F-21
<PAGE>
                    JAG Media Holdings, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

     On November 3, 2005, the Company renewed and extended the amended and
     restated employment agreements between the Company and its two senior
     executives, each dated August 31, 2001, retroactively effective to August
     31, 2004. Under the revision, the Company became obligated to make cash
     payments of $150,000 to each of the two senior executives annually during
     the three year period ending August 31, 2007. As a result, the Company's
     obligations for cash payments under each of the two employment agreements
     during periods subsequent to July 31, 2005 totaled approximately $150,000
     payable in each of the years ending July 31, 2006 and 2007 and $12,500
     payable in the year in the year ended July 31, 2008. The exercise price of
     various options which may be granted under the terms of the original
     amended and restated employment agreements was increased from 25% of a
     defined market value to 100% of a defined fair market value.



                                      * * *



                                      F-22

<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                          JAG MEDIA HOLDINGS, INC.

                          By:  /s/ Thomas J. Mazzarisi
                               -------------------------------------------------
                               Thomas J. Mazzarisi
                               Chairman of the Board and Chief Executive Officer



Dated: November 7, 2005

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

         SIGNATURE                           TITLE                   DATE
         ---------                           -----                   ----
 /s/ Thomas J. Mazzarisi     Chairman of the Board, Chief       November 7, 2005
--------------------------   Executive Officer and General
   Thomas J. Mazzarisi       Counsel (Principal Executive
                             Officer)

/s/ Stephen J. Schoepfer     President, Chief Operating         November 7,2005
--------------------------   Officer, Chief Financial
  Stephen J. Schoepfer       Officer, Secretary and Director
                             (Principal Financial and
                             Accounting Officer)