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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-QSB
 þ
    
    Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
 For the quarterly period ended April 30, 2007.
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act
 For the transition period from  to  .
 Commission file number 000-28761
 JAG MEDIA HOLDINGS, INC.
  Nevada
(State or other jurisdiction of 
incorporation or organization)
    
    88-0380546
(I.R.S. Employer
Identification No.)
 
 
 
  þ o
  o þ
  o þ




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Index  
 PagePart I Financial InformationItem 1: Financial Statements (Unaudited)Condensed Consolidated Balance Sheet at April 30, 2007
    
    
    1Condensed Consolidated Statements of Operations for the
Nine and Three Months ended April 30, 2007 and 2006
    
    
    2Condensed Consolidated Statement of Changes in
Stockholders Deficiency for the Nine Months ended April
30, 2007
    
    
    3Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended April 30, 2007 and 2006
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2: Managements Discussion and Analysis
    
    
    15Item 3: Controls and Procedures
    
    
    23Part II Other InformationItem 1: Legal Proceedings
    
    
    25Item 2: Unregistered Sale of Equity Securities and Use of Proceeds
    
    
    25Item 3: Defaults Upon Senior Securities
    
    
    25Item 4: Submission of Matters to Vote of Security Holders
    
    
    25Item 5: Other Information
    
    
    25Item 6: Exhibits
    
    
    25SignaturesEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONS




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Item 1. Financial Statements (Unaudited)
  
    AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,598Accounts receivable, net of allowance for doubtful accounts of $7,500
    
    
    30,959Other current assets
    
    
    26,042Total current assets
    
    
    62,599Equipment, net of accumulated depreciation of $146,127
    
    
    63,919Total
    
    $
    126,518Liabilities and Stockholders DeficiencyCurrent liabilities:Accounts payable and accrued expenses
    
    $
    936,102Deferred revenues
    
    
    21,630Derivative liability
    
    
    5,114,349Total current liabilities
    
    
    6,072,081Convertible debentures payable, net of unamortized debt discount of $1,038,060
    
    
    2,481,940Total liabilities
    
    
    8,554,021Mandatorily redeemable Class B common stock; par value $.00001 per share:400,000 shares designated as Series 2; 381,741 shares issued and
outstanding
    
    
    440,000 shares designated as Series 3; 21,500 shares issued and
outstanding
    
    
    4Commitments and contingenciesStockholders deficiency:Preferred stock; par value $.00001 per share; 50,000,000 shares authorized, none issuedCommon stock; par value $.00001 per share; 500,000,000 shares authorized;
47,708,617 shares issued and outstanding
    
    
    477Additional paid-in capital
    
    
    44,934,199Accumulated deficit
    
    
    (53,362,183
    )Total stockholders deficiency
    
    
    (8,427,507
    )Total
    
    $
    126,518
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Nine Months
    
    Three MonthsEnded April 30,
    
    Ended April 30,2007
    
    2006
    
    2007
    
    2006Revenues
    
    $
    164,308
    
    
    $
    143,365
    
    
    $
    63,171
    
    
    $
    58,267Operating expenses:Cost of revenues
    
    
    60,654
    
    
    
    55,924
    
    
    
    18,522
    
    
    
    11,854Selling expenses
    
    
    71,241
    
    
    
    36,573
    
    
    
    11,425
    
    
    
    12,353General and administrative expenses
    
    
    1,032,575
    
    
    
    1,941,618
    
    
    
    475,067
    
    
    
    738,819Totals
    
    
    1,164,470
    
    
    
    2,034,115
    
    
    
    505,014
    
    
    
    763,026Loss from operations
    
    
    (1,000,162
    )
    
    
    (1,890,750
    )
    
    
    (441,843
    )
    
    
    (704,759
    )Other income (expense):Loss on change in value of
derivative liabitlity
    
    
    (2,404,601
    )
    
    
    
    
    
    
    (407,032
    )
    
    
    Interest income
    
    
    97
    
    
    
    2,678
    
    
    
    
    
    
    
    453Interest expense
    
    
    (1,287,001
    )
    
    
    (220,683
    )
    
    
    (211,070
    )
    
    
    (71,944
    )Net loss
    
    $
    (4,691,667
    )
    
    $
    (2,108,755
    )
    
    $
    (1,059,945
    )
    
    $
    (776,250
    )Basic net loss per share
    
    $
    (0.10
    )
    
    $
    (0.05
    )
    
    $
    (0.02
    )
    
    $
    (0.02
    )Basic weighted average common shares
outstanding
    
    
    46,001,871
    
    
    
    43,113,230
    
    
    
    47,663,673
    
    
    
    41,241,551
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UnearnedCommon Stock
    
    
    Additional Paid-
    
    
    Compensation
    
    
    AccumulatedNumber of Shares
    
    
    Amount
    
    
    in Capital
    
    
    (Unaudited)
    
    
    Deficit
    
    
    TotalBalance, August 1, 2006
    
    
    42,896,506
    
    
    $
    429
    
    
    $
    44,209,217
    
    
    $
    (34,870
    )
    
    $
    (48,670,516
    )
    
    $
    (4,495,740
    )Amortization of unearned, stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    22,700
    
    
    
    
    
    
    
    
    
    
    
    22,700Reclassification of deferred compensation upon
adoption of SFAS 123R
    
    
    
    
    
    
    
    
    
    
    (34,870
    )
    
    
    34,870
    
    
    
    
    
    
    
    Effect of
issuance of common stock for services
    
    
    180,000
    
    
    
    2
    
    
    
    62,198
    
    
    
    
    
    
    
    
    
    
    
    62,200Shares issued on conversion of convertible
debentures
    
    
    4,432,111
    
    
    
    44
    
    
    
    554,956
    
    
    
    
    
    
    
    
    
    
    
    555,000Shares issued on exercise of options
    
    
    200,000
    
    
    
    2
    
    
    
    3,998
    
    
    
    
    
    
    
    
    
    
    
    4,000Reclassification of derivative liability upon
exercise of options for 200,000 shares
    
    
    
    
    
    
    
    
    
    
    116,000
    
    
    
    
    
    
    
    
    
    
    
    116,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,691,667
    )
    
    
    (4,691,667
    )Balance, April 30, 2007
    
    
    47,708,617
    
    
    $
    477
    
    
    $
    44,934,199
    
    
    $
    
    
    
    $
    (53,362,183
    )
    
    $
    (8,427,507
    )
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2007
    
    
    2006Operating activities:Net loss
    
    $
    (4,691,667
    )
    
    $
    (2,108,755
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation
    
    
    27,007
    
    
    
    16,849Amortization of unearned, stock based compensation
    
    
    22,700
    
    
    
    47,342Loss on change in value of derivative liability
    
    
    2,404,598
    
    
    
    Amortization of debt discount
    
    
    1,009,851
    
    
    
    41,177Effect of issuance of common stock for services
    
    
    62,200
    
    
    
    Amortization of other assets
    
    
    
    
    
    
    20,587Changes in operating assets and liabilities:Accounts receivable
    
    
    (15,380
    )
    
    
    (14,419
    )Other current assets
    
    
    44,722
    
    
    
    41,421Accounts payable and accrued expenses
    
    
    703,312
    
    
    
    1,310,156Deferred revenues
    
    
    (818
    )
    
    
    (2,581
    )Net cash used in operating activities
    
    
    (433,475
    )
    
    
    (648,223
    )Investing activities:Equipment purchases
    
    
    (15,545
    )
    
    
    (12,642
    )Net cash used in investing activities
    
    
    (15,545
    )
    
    
    (12,642
    )Financing activities:Issuance of common stock upon exercise of stock options
    
    
    4,000
    
    
    
    Net cash provided by financing activities
    
    
    4,000
    
    
    
    Net decrease in cash and cash equivalents
    
    
    (445,020
    )
    
    
    (660,865
    )Cash and cash equivalents, beginning of period
    
    
    450,618
    
    
    
    660,865Cash and cash equivalents, end of period
    
    $
    5,598
    
    
    $
    Supplemental disclosure of noncash financing activities:Noncash effect of convertible debentures converted to common stock
    
    $
    555,000Fair value of fully-vested shares issued to non-employee
    
    $
    36,000
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Deferred revenues, net
    
    $
    7,000Unearned compensation
    
    
    45,000Net operating loss carryforwards
    
    
    12,899,00012,951,000Less valuation allowance
    
    
    (12,951,000
    )Total
    
    $
    
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WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    ValueOptions outstanding at beginning of period
    
    
    1,420,000
    
    
    $
    0.12Granted
    
    
    200,000
    
    
    
    0.05Exercised
    
    
    (200,000
    )
    
    
    0.02Canceled
    
    
    (20,000
    )
    
    
    1.00Options outstanding at end of period
    
    
    1,400,000
    
    
    $
    0.12
    
    
    
    5.53
    
    
    $
    474,000Options exercisable at end of period
    
    
    1,365,000
    
    
    $
    0.09
    
    
    
    5.48
    
    
    $
    474,000
  Nine Months EndedApril 30, 2007Risk-free interest rate
    
    
    6.00
    %Dividend yield
    
    
    0
    %Expected life
    
    5 yearsExpected volatility factor
    
    
    340.64
    %
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Item 2. Managements Discussion and Analysis.
 Critical Accounting Policies and Estimates
    Related Party Transactions:
  Off-Balance Sheet arrangements:
  Results of operations:
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Nine MonthsEnded April 30,2007
    
    
    2006
    
    
    $ ChangeRevenues
    
    $
    164,308
    
    
    $
    143,365
    
    
    $
    20,943Operating expenses:Cost of revenues
    
    
    60,654
    
    
    
    55,924
    
    
    
    4,730Selling expenses
    
    
    71,241
    
    
    
    36,573
    
    
    
    34,668General and administrative expenses
    
    
    1,032,575
    
    
    
    1,941,618
    
    
    
    (909,043
    )Totals
    
    
    1,164,470
    
    
    
    2,034,115
    
    
    
    (869,645
    )Loss from operations
    
    
    (1,000,162
    )
    
    
    (1,890,750
    )
    
    
    890,588Other income (expense) :Loss on change in value of derivative
liability
    
    
    (2,404,601
    )
    
    
    
    
    
    
    (2,404,601
    )Interest income
    
    
    97
    
    
    
    2,678
    
    
    
    (2,581
    )Interest expense
    
    
    (1,287,001
    )
    
    
    (220,683
    )
    
    
    (1,066,318
    )Net loss
    
    $
    (4,691,667
    )
    
    $
    (2,108,755
    )
    
    $
    (2,582,912
    )
 Revenues:
  Cost of revenues:
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Selling expenses:
  General and administrative expenses:
  Loss on change in value of derivative liability:
  Interest expense:
     17




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Three MonthsEnded April 30,2007
    
    
    2006
    
    
    $ ChangeRevenues
    
    $
    63,171
    
    
    $
    58,267
    
    
    $
    4,904Operating expenses:Cost of revenues
    
    
    18,522
    
    
    
    11,854
    
    
    
    6,668Selling expenses
    
    
    11,425
    
    
    
    12,353
    
    
    
    (928
    )General and administrative expenses
    
    
    475,067
    
    
    
    738,819
    
    
    
    (263,752
    )Totals
    
    
    505,014
    
    
    
    763,026
    
    
    
    (258,012
    )Loss from operations
    
    
    (441,843
    )
    
    
    (704,759
    )
    
    
    262,916Other income (expense) :Loss on change in value of derivative liability
    
    
    (407,032
    )
    
    
    
    
    
    
    (407,032
    )Interest income
    
    
    
    
    
    
    453
    
    
    
    (453
    )Interest expense
    
    
    (211,070
    )
    
    
    (71,944
    )
    
    
    (139,126
    )Net loss
    
    $
    (1,059,945
    )
    
    $
    (776,250
    )
    
    $
    (283,695
    )
 Revenues:
  Cost of revenues:
   Selling:
  18




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General and administrative expenses:
  Loss on change in value of derivative liability:
  Interest expense:
     Liquidity and Capital Resources:
   19




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Seasonality
and Inflation:
  Recent Accounting Pronouncements:
  22




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Recent Events:
    
    23




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PART II OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 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.
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SIGNATURES
  JAG MEDIA HOLDINGS, INC.Date: June 19, 2007
    By:
    /s/ Thomas J. MazzarisiName:
    Thomas J. MazzarisiTitle:
    Chairman of the Board and Chief Executive
OfficerDate: June 19, 2007
    By:
    /s/ Stephen J. SchoepferName:
    Stephen J. SchoepferTitle:
    President, Chief
Financial Officer,
Chief Operating
Officer and Secretary 26




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EXHIBIT INDEX
 31.1
    
    Section 302 Certification of Chief Executive Officer31.2
    
    Section 302 Certification of Chief Financial Officer32.1
    
    Section 906 Certification of Chief Executive Officer and Chief Financial Officer