UNITED STATES SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549




FORM 10-Q


þ
            
            Quarterly
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the quarterly period ended
January 31, 2009.


 ̈
            
            Transition
      report under Section 13 or 15(d) of the Exchange
  Act





For the transition period fromto.




Commission
file number 000-28761




JAG MEDIA HOLDINGS,
INC.


(Exact
name of registrant as specified in its Charter)


Nevada
              (State
      or other jurisdiction of
              incorporation
      or organization)
            
            88-0380546
              (I.R.S.
      Employer
              Identification
      No.)




6865 SW
18th Street


Suite
B-13


Boca
Raton, Florida 33433


(Address
of Principal Executive Offices)




(866)
300-7410


(Registrant’s
Telephone Number, Including Area Code)




Indicate
by check mark whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 þ      No
 ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer and “smaller
reporting company” in Rule 12b-2 or the Exchange Act. (Check one):




Large
      Accelerated filer    ̈
            Accelerated
      Filer                         ̈Non-Accelerated
      Filer     ̈
            Smaller
      Reporting Company     þ(Do
      not check if a smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)




Yes  ̈      No
þ




As of
March 16, 2009 the Registrant had 65,517,816 shares of Common Stock, 381,749
shares of Series 2 Class B Common Stock and 21,500 shares of Series 3 Class B
Common Stock issued and outstanding.











JAG MEDIA HOLDINGS,
INC.




FORM 10-Q




For the Quarter Ended January 31,
2009




INDEX




PagePart
      I. Financial Information
                                        
                                        4Item 1: Financial Statements
      (Unaudited)
                                        
                                        4Condensed Consolidated Balance Sheets at January
      31, 2009 (Unaudited) and July 31, 2008
                                        
                                        5Condensed Consolidated Statements of Operations
      for the Six and Three Months ended January 31, 2009 and 2008
      (Unaudited)
                                        
                                        6Condensed Consolidated Statement of Changes in
      Stockholders’ Equity (Deficiency) for the Six Months ended January
      31, 2009 (Unaudited)
                                        
                                        7Condensed Consolidated Statements of Cash Flows
      for the Six Months ended January 31, 2009 and January 31, 2008
      (Unaudited)
                                        
                                        8Notes to Condensed Consolidated Financial
      Statements
                                        
                                        9Item 2: Management’s Discussion and
      Analysis
                                        
                                        15Item 3: Quantitative and Qualitative Disclosures
      About Market Risk
                                        
                                        20Item 4T: Controls and
      Procedures
                                        
                                        20Part II. Other Information
                                        
                                        21Item 1: Legal Proceedings
                                        
                                        21Item 1A: Risk Factors
                                        
                                        21
 
 2
 
 Item 2: Unregistered Sales of Equity Securities
      and Use of Proceeds
                                    
                                    21Item 3: Defaults Upon Senior
      Securities
                                    
                                    21Item 4: Submission of Matters to Vote of Security
      Holders
                                    
                                    21Item 5: Other Information
                                    
                                    21Item 6: Exhibits
                                    
                                    21Signatures
                                    
                                    22EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONS




3




PART
1


FINANCIAL
INFORMATION





Item 1.
Financial Statements.





JAG Media
Holdings, Inc. and Subsidiaries





Index to
Financial Statements




PAGECondensed
      Consolidated Balance SheetsJanuary
      31, 2009 (Unaudited) and July 31, 2008
                          
                          
                          5Condensed
      Consolidated Statements of OperationsSix
      and Three Months Ended January 31, 2009 and 2008
    (Unaudited)
                          
                          
                          6Condensed
      Consolidated Statement of Changes in Stockholders' Equity(Deficiency)
      Six Months Ended January 31, 2009 (Unaudited)
                          
                          
                          7Condensed
      Consolidated Statements of Cash FlowsSix
      Months Ended January 31, 2009 and 2008 (Unaudited)
                          
                          
                          8Notes
      to Condensed Consolidated Financial Statements
                          
                          
                          9/14





*     *     *




4




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED BALANCE SHEETS


JANUARY
31, 2009 and JULY 31, 2008





January 31,
                          2009
                        
                        
                        July 31,
                          2008(unaudited)
                        
                        
                        (See note 1)AssetsCurrent
      assets:Cash
      and cash equivalents
                        
                        $
                        39,129
                        
                        
                        $
                        275,168Accounts
      receivable, net of allowance for doubtful accounts of $60,000 and
      $47,500
                        
                        
                        33,319
                        
                        
                        
                        33,369Other
      current assets
                        
                        
                        129,414
                        
                        
                        
                        103,352Total
      current assets
                        
                        
                        201,862
                        
                        
                        
                        411,889Equipment,
      net of accumulated depreciation of $150,521 and $142,746
                        
                        
                        28,025
                        
                        
                        
                        31,207Totals
                        
                        $
                        229,887
                        
                        
                        $
                        443,096Liabilities
      and Stockholders' Equity (Deficiency)Current
      liabilities:Accounts
      payable and accrued expenses
                        
                        $
                        427,438
                        
                        
                        $
                        325,128Deferred
      revenues
                        
                        
                        10,558
                        
                        
                        
                        15,824Total
      liabilities
                        
                        
                        437,996
                        
                        
                        
                        340,952Mandatorily
      redeemable Class B common stock; par value $.00001 per
    share:400,000
      shares designated as Series 2; 381,749 shares issued andoutstanding
                        
                        
                        4
                        
                        
                        
                        440,000
      shares designated as Series 3; 21,500 shares issued andoutstanding
                        
                        
                        -
                        
                        
                        
                        -4
                        
                        
                        
                        4Commitments
      and contingenciesStockholders'
      equity (deficiency):Preferred
      stock; par value $.00001 per share; 50,000,000 shares authorized, none
      issued
                        
                        
                        -
                        
                        
                        
                        -Common
      stock; par value $.00001 per share; 500,000,000 shares
      authorized;63,517,816
      and 61,767,816 shares issued and outstanding
                        
                        
                        635
                        
                        
                        
                        617Additional
      paid-in capital
                        
                        
                        63,801,436
                        
                        
                        
                        63,379,154Accumulated
      deficit
                        
                        
                        (64,010,184
                        )
                        
                        
                        (63,277,631
                        )Total
      stockholders' equity (deficiency)
                        
                        
                        (208,113
                        )
                        
                        
                        102,140Totals
                        
                        $
                        229,887
                        
                        
                        $
                        443,096





See Notes
to Condensed Consolidated Financial Statements.




5




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


SIX AND
THREE MONTHS ENDED JANUARY 31, 2009 AND 2008


(UNAUDITED)





Six Months
                  
                  
                  Three MonthsEnded January 31,
                  
                  
                  Ended January 31,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Revenues
                  
                  $
                  84,514
                  
                  
                  $
                  78,635
                  
                  
                  $
                  41,653
                  
                  
                  $
                  41,903Operating
      expenses:Cost
      of revenues
                  
                  
                  27,392
                  
                  
                  
                  8,025
                  
                  
                  
                  10,594
                  
                  
                  
                  3,404Selling
      expenses
                  
                  
                  2,684
                  
                  
                  
                  13,598
                  
                  
                  
                  2,684
                  
                  
                  
                  6,302General
      and administrative expenses
                  
                  
                  714,691
                  
                  
                  
                  1,000,744
                  
                  
                  
                  452,184
                  
                  
                  
                  563,517Totals
                  
                  
                  744,767
                  
                  
                  
                  1,022,367
                  
                  
                  
                  465,462
                  
                  
                  
                  573,223Loss
      from operations
                  
                  
                  (660,253
                  )
                  
                  
                  (943,732
                  )
                  
                  
                  (423,809
                  )
                  
                  
                  (531,320
                  )Other
      income (expense):Gain
      (loss) on change in value of derivative liability
                  
                  
                  -
                  
                  
                  
                  602,338
                  
                  
                  
                  -
                  
                  
                  
                  (1,331,600
                  )Interest
      expense
                  
                  
                  (72,300
                  )
                  
                  
                  (1,690,638
                  )
                  
                  
                  -
                  
                  
                  
                  (1,500,791
                  )Net
      loss
                  
                  $
                  (732,553
                  )
                  
                  $
                  (2,032,032
                  )
                  
                  $
                  (423,809
                  )
                  
                  $
                  (3,363,711
                  )Basic
      and diluted net loss per share
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.06
                  )Basic
      and diluted weighted average common sharesoutstanding
                  
                  
                  62,947,164
                  
                  
                  
                  52,951,588
                  
                  
                  
                  63,517,816
                  
                  
                  
                  55,236,625





See Notes
to Condensed Consolidated Financial Statements.




6




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(DEFICIENCY)


SIX
MONTHS ENDED JANUARY 31, 2009


(UNAUDITED)





Common StockNumber of Shares
                
                
                Amount
                
                
                Additional Paid-in
                  Capital
                
                
                Accumulated
                  Deficit
                
                
                TotalBalance,
      August 1, 2008
                
                
                61,767,816
                
                
                $
                617
                
                
                $
                63,379,154
                
                
                $
                (63,277,631
                )
                
                $
                102,140Effect
      of change in exercise price of warrants
                
                
                
                
                
                
                
                
                
                
                72,300
                
                
                
                
                
                
                
                72,300Shares
      issued on exercise of warrants
                
                
                1,750,000
                
                
                
                18
                
                
                
                349,982
                
                
                
                
                
                
                
                350,000Net
      loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (732,553
                )
                
                
                (732,553
                )Balance,
      January 31, 2009
                
                
                63,517,816
                
                
                $
                635
                
                
                $
                63,801,436
                
                
                $
                (64,010,184
                )
                
                $
                (208,113
                )





See Notes
to Condensed Consolidated Financial Statements.





7




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


SIX
MONTHS ENDED JANUARY 31, 2009 AND 2008


(UNAUDITED)





2009
                      
                      
                      2008Operating
      activities:Net
      loss
                      
                      $
                      (732,553
                      )
                      
                      $
                      (2,032,032
                      )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                      
                      
                      7,775
                      
                      
                      
                      15,204Provision
      for doubtful accounts
                      
                      
                      12,500
                      
                      
                      
                      -Amortization
      of unearned, stock-based compensation
                      
                      
                      -
                      
                      
                      
                      3,854Beneficial
      conversion charge included in interest expense
                      
                      
                      -
                      
                      
                      
                      682,991Gain
      on change in value of derivative liability
                      
                      
                      -
                      
                      
                      
                      (602,338
                      )Amortization
      of debt discount
                      
                      
                      -
                      
                      
                      
                      912,820Costs
      of the Company paid by potential merger partner
                      
                      
                      -
                      
                      
                      
                      230,113Effect
      of issuance of common stock in exchange for services
                      
                      
                      -
                      
                      
                      
                      72,448Effect
      of change in exercise price of warrants
                      
                      
                      72,300
                      
                      
                      
                      -Amortization
      of deferred consulting costs
                      
                      
                      47,585
                      
                      
                      
                      280,395Changes
      in operating assets and liabilities:Accounts
      receivable
                      
                      
                      (12,450
                      )
                      
                      
                      (24,374
                      )Other
      current assets
                      
                      
                      (73,647
                      )
                      
                      
                      14,055Accounts
      payable and accrued expenses
                      
                      
                      102,310
                      
                      
                      
                      (125,206
                      )Deferred
      revenues
                      
                      
                      (5,266
                      )
                      
                      
                      (5,892
                      )Net
      cash used in operating activities
                      
                      
                      (581,446
                      )
                      
                      
                      (577,962
                      )Investing
      activities:Equipment
      purchases
                      
                      
                      (4,593
                      )
                      
                      
                      -Net
      cash used in investing activities
                      
                      
                      (4,593
                      )
                      
                      
                      -Financing
      activities:Proceeds
      from exercise of warrants and stock options
                      
                      
                      350,000
                      
                      
                      
                      626,950Net
      cash provided by financing activities
                      
                      
                      350,000
                      
                      
                      
                      626,950Net
      increase (decrease) in cash and cash equivalents
                      
                      
                      (236,039
                      )
                      
                      
                      48,988Cash
      and cash equivalents, beginning of period
                      
                      
                      275,168
                      
                      
                      
                      507Cash
      and cash equivalents, end of period
                      
                      $
                      39,129
                      
                      
                      $
                      49,495Supplemental
      disclosure of noncash financing activities:Noncash
      effect of convertible debentures converted to common stock
                      
                      $
                      -
                      
                      
                      $
                      3,520,000Effect
      of issuance of common stock as payment for accued interest
                      
                      $
                      -
                      
                      
                      $
                      535,679Receivable
      from investor for warrants exercised
                      
                      $
                      -
                      
                      
                      $
                      280,000Fair
      value of fully-vested common stock issued to consultant inexchange
      for services
                      
                      $
                      -
                      
                      
                      $
                      94,150Fair
      value of options issued for payment of accounts payable
                      
                      $
                      -
                      
                      
                      $
                      15,200Fair
      value of options issued for future services
                      
                      $
                      -
                      
                      
                      $
                      378,327Reclassification
      of derivative liability upon exercise of options
                      
                      $
                      -
                      
                      
                      $
                      433,652Reclassification
      of fair value of warrants from derivative liabilityto
      additional paid-in capital
                      
                      $
                      -
                      
                      
                      $
                      10,400,900





See Notes
to Condensed Consolidated Financial Statements.





8


JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
   (UNAUDITED)


Note 1 – Business and Basis of
presentation:


In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments, consisting of normal recurring
adjustments, necessary to present fairly the financial position of JAG Media
Holdings, Inc. ("JAG Media") and its subsidiaries as of January 31, 2009, their
results of operations for the six and three months ended January 31, 2009 and
2008, changes in stockholders' equity for the six months ended January 31, 2009
and cash flows for the six months ended January 31, 2009 and 2008. JAG Media and
its subsidiaries are referred to together herein as the "Company." Pursuant to
rules and regulations of the Securities and Exchange Commission (the "SEC"),
certain information and disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted from these consolidated
financial statements unless significant changes have taken place since the end
of the most recent fiscal year. Accordingly, these condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements, notes to consolidated financial statements and the other
information in the audited consolidated financial statements of the Company as
of July 31, 2008 and 2007 and for the years ended July 31, 2008 and 2007 (the
"Audited Financial Statements") included in the Company's Annual Report on Form
10-K (the "10-K") for the year ended July 31, 2008 that was previously filed
with the SEC and from which the July 31, 2008 consolidated balance sheet was
derived.





The
results of the Company's operations for the six and three months ended January
31, 2009 are not necessarily indicative of the results of operations to be
expected for the full year ending July 31, 2009.





As
further explained in Note 1 to the Audited Consolidated Financial Statements,
the Company gathers and compiles financial and investment information from
contacts at financial institutions and other Wall Street professionals and
generates revenues by releasing such information to subscribers in a
consolidated format on a timely basis through facsimile transmissions and a web
site.  The Company is also in the business of developing related
software focused on streaming video solutions.  Development of these
products has been limited as a result of the Company’s lack of financial
resources.




The
Company is actively pursuing potential mergers. As further discussed in Note 7
herein, on October 2, 2008 the Company entered into a non-binding Letter of
Intent with respect to a merger opportunity with BlueCreek Energy, Inc.
(“BlueCreek”), e2Business Services, Inc. (“e2Business”), a majority shareholder
of BlueCreek and YA Global. On December 29, 2008, the Company received a letter
from BlueCreek, dated December 29, 2008, stating that BlueCreek had elected to
terminate further merger discussions with the Company, consistent with the terms
of the letter of intent.





As
further discussed in Note 8 herein, on March 12, 2009, the Company entered into
a Letter of Intent (the “Letter of Intent”) with CardioGenics, Inc.
(“CardioGenics”) and Yahia Gawad, a principal stockholder of CardioGenics
regarding a proposed acquisition of CardiGenics by JAG Media.





The
accompanying condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, as shown in
the accompanying condensed consolidated financial statements, the Company only
generated revenues of approximately $84,500, and it incurred a net loss of
approximately $733,000 and a cash flow deficiency from operating activities of
approximately $581,000 for the six months ended January 31, 2009.  In
addition, as of January 31, 2009, the Company only had cash and cash equivalents
available of approximately $39,000 and working capital deficiency of
approximately $236,000.  Our wholly owned United Kingdom subsidiary,
Pixaya (UK) Limited is in default with respect to the payment of amounts due
under its overdraft facility with HSBC Bank plc.  As of January 31,
2009, the amount of the default is £22,596, equivalent to approximately
$32,328.  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 January 31, 2010
and that the Company will need to obtain additional equity or debt financing to
sustain its operations.





Management
believes that the Company will be able to obtain sufficient financing directly,
or find an appropriate merger candidate that has such financing, to enable it to
continue as a going concern through at least January 31, 2010. However, if the
Company cannot obtain sufficient additional financing by that date, the Company
may be forced thereafter to restructure its operations, file for bankruptcy or
entirely cease its operations.





The
accompanying condensed 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.





Note
2 - Net loss per share:


The Company presents "basic" 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 loss per share is calculated by dividing net 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 outstanding stock
options and warrants and the conversion of outstanding convertible
debentures were issued during the period and the treasury stock method had been
applied to the proceeds from the exercise of the options and warrants and net
income or loss was adjusted for interest on the convertible
debentures.




9


JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
   (UNAUDITED)


As of
January 31, 2009, there were stock options and warrants outstanding for the
purchase of a total of 750,000 and 8,250,000 shares of common stock,
respectively (see Notes 4 and 5 herein). However, diluted per share amounts have
not been presented in the accompanying condensed consolidated statements of
operations because the Company had a net loss in the six and three months ended
January 31, 2009 and 2008 and the assumed effects of the exercise of the
Company’s stock options and warrants and the conversion of convertible
debentures that were outstanding during all or part of those periods would have
been anti-dilutive.





Note
3 - Income taxes:


As of
January 31, 2009, the Company had Federal net operating loss carry forwards of
approximately $39,260,000 available to reduce future Federal taxable income
which will expire from 2019 through 2028.





As of
January 31, 2009, the Company's deferred tax assets consisted of the effects of
temporary differences attributable to the following:





Deferred
      revenues, net
                      
                      $
                      4,000Unearned
      compensation
                      
                      
                      20,000Net
      operating loss carryforwards
                      
                      
                      14,634,00014,658,000Less
      valuation allowance
                      
                      
                      (14,658,000
                      )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 January 31, 2009.





The
Company had also offset the potential benefits from its net deferred tax assets
by an equivalent valuation allowance during the year ended July 31, 2008. As a
result of increases in the valuation allowances of $224,000 and $119,000 during
the six and three months ended January 31, 2009, respectively, and $863,000 and
$861,000 during the six and three months ended January 31, 2008, respectively,
which were primarily attributable to the net loss incurred during each of those
periods, there are no credits for income taxes reflected in the accompanying
condensed consolidated statements of operations to offset pre-tax
losses.





Note
4 - Equity and debt financing agreements with YA Global:


On April
9, 2002, the Company entered into an equity line purchase agreement (the "
Equity Line Agreement") with YA Global pursuant to which the Company had, in
effect, put options whereby, subject to certain conditions, it could have
required YA Global to purchase shares of its common stock from time to time at
an aggregate purchase price of $10,000,000 through August 2006.  The
purchase price was to 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. YA Global was entitled to a cash fee equal to 5% of the gross proceeds
received by the Company from YA Global in connection with each put. As of
May 25, 2006, the date the Equity Line Agreement was effectively cancelled,
$4,035,000 of the Company’s Equity Line with YA Global had been
utilized.





On
January 25, 2005, the Company entered into a Promissory Note Agreement with YA
Global for a loan of $2,000,000. The $2,000,000 loan from YA Global was funded
on February 2, 2005 net of a debt discount of $100,000 deducted at the time of
funding which is being amortized over the original term of the
loan.  The unamortized debt discount was approximately $32,000 as of
May 25, 2006 when a promissory note was converted into common stock and a
secured convertible debenture. The face amount of the promissory note and
interest on the amount from time to time outstanding at a rate of 12% per year
was originally 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 calendar days, subsequently extended to 753
calendar days, of January 25, 2005 regardless of the availability of proceeds
under the Equity Line Agreement, unless an extension was mutually agreed to by
the parties in writing.





Pursuant
to the promissory note, the Company had agreed to deposit in escrow 35 put
notices under the Equity Line Agreement for puts 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 were to have been held in escrow and released every 14 days
commencing November 4, 2005.





All put
notices were returned to the Company on May 25, 2006, when the Company
terminated its Equity Line with YA Global, converted $250,000 of the principal
of its $2,000,000 promissory note payable to YA Global into
1,250,000 shares of the Company’s common stock which were issued on such
date for which the fair value was $400,000, and converted the remaining
principal amount of $1,750,000 and accrued interest of $150,000 on the
promissory note into a secured convertible debenture in the principal amount of
$1,900,000.  In addition, the Company issued similar secured
convertible debentures to YA Global in the principal amounts of $1,250,000 on
May 25, 2006 and $1,000,000 on May 31, 2006, which provided the
Company with net proceeds of approximately $2,025,000 after fees and costs of
$225,000 paid to YA Global which were recorded as part of the debt discount on
the debentures. All the secured convertible debentures bore interest at the rate
of 10% per year and were initially due to mature three years after
issuance. They were convertible through maturity into shares of the Company’s
common stock as described below.





The
Company was required to issue irrevocable transfer agent instructions relating
to the issuance of stock certificates on conversion of the debentures or
exercise of the warrants. The Company was also required to deliver on behalf of
itself and its subsidiary, Pixaya LLC, security agreements executed by the
Company and its subsidiary granting YA Global a security interest in all their
respective assets. Pursuant to such security agreements, the Company and its
subsidiary could not incur any further liens, declare a dividend, issue any
guarantees or incur any new indebtedness in excess of $25,000 other than trade
accounts payable. In accordance with the terms of the January 31, 2008 agreement
between the Company and YA Global, the security agreements were terminated,
effective upon conversion by YA Global of the remaining principal and accrued
interest on the convertible debentures into common stock of the
Company.


10
 JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
   (UNAUDITED)


YA Global
had the right to convert the debentures, at its sole option, into shares of the
Company’s common stock at a conversion price which was the lower of
(i) $0.40 per share or (ii) a 10% discount to the lowest volume
weighted average price, as reported by Bloomberg L.P, of the Company’s common
stock during the 30 trading days prior to the conversion date (see Note 7
herein).




In
connection with the foregoing May 25, 2006 transaction, the Company issued
warrants to YA Global to purchase 12,000,000 shares of common stock. The
warrants are exercisable through May 2011 at prices ranging from $0.40 to
$0.80 per share (see Note 6 to the Audited Financial Statements, and
Note 7 herein). The exercise price and number of shares issuable pursuant
to each of the warrants are subject to antidilution
provisions.




Since the
conversion of the secured convertible debentures could have resulted in the
issuance of an indeterminable number of common shares because they were
convertible at a discount from the market price, the Company determined that
based on the guidance in the consensus for EITF Issue No. 00-19 (“EITF
00-19”) “Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in a Company’s Own Stock”, the Company was prohibited from
concluding that it would have a sufficient number of authorized and unissued
shares to net-share settle any of those warrants or any other warrants or
options previously issued or granted to non-employees while the debentures were
outstanding. Therefore, as of the date the secured convertible debentures and
the related warrants were initially issued, the Company recorded the related
fair value of all warrants issued with the debentures and options previously
issued to non-employees as a derivative liability as explained below. Subsequent
changes in the fair value of such options and warrants at the end of each
reporting period were recorded as increases or decreases to the liability and
charges or credits to the Company’s results of operations until they were
exercised and until all of the debentures were converted.




As of
January 31, 2008, the warrants for the purchase of 12,000,000 shares was valued
at approximately $10,400,900 based on the Black-Scholes option pricing model
assuming a risk free interest rate of 5.25% annually, no dividend payments,
annual volatility of 203.855%, exercise prices ranging from $0.40 to
$0.80 per share, and the stock price of $0.91 per share when valued.
This resulted in the recognition of unrealized gain on derivative liability of
approximately $658,000 during the six months ended January 31, 2008 and
unrealized loss on derivative liability of approximately $1,331,600 during the
three months ended January 31, 2008.





On
January 31, 2008, warrants for the purchase of 700,000 shares were exercised at
the price of $0.40 per share, resulting in increase in additional paid-in
capital of approximately $280,000.  The aggregate exercise price of
$280,000 was not paid by YA Global until after January 31, 2008.  In
addition, as explained below, all of the remaining debentures were converted on
January 31, 2008.  As a result, the Company no longer had any equity
instruments that could result in the issuance of an indeterminable number of
common shares.  Accordingly, the fair value of the warrants of
$10,400,900 at the time of the exercise of the 700,000 warrants and the
conversion of the debentures was reclassified from derivative liability to
additional paid-in capital.





As of
January 31, 2009, there were no outstanding options granted to
non-employees





During
the six and three months ended January 31, 2008, respectively, YA Global
converted debentures in the principal amounts of $3,520,000 and $1,920,000 into
8,800,000 and 4,800,000 shares of the Company’s common stock. The Company
recorded amortization of debt discount attributable to the debentures of
approximately $913,000 and $788,000 during the six and three months ended
January 31, 2008, including $705,000 which was accreted as a result of the
conversions.  As a result, the Company had no debentures outstanding
as of January 31, 2008.





In
connection with the conversion of all of the remaining debentures on January 31,
2008, YA Global agreed to the conversion of the accrued interest thereon,
totaling approximately $535,700, at $0.40 per share which resulted in the
issuance by the Company of 1,339,199 shares of common stock.  In
addition to interest expense of approximately $95,000 and $28,600 charged to
operations in the six and three months ended January 31, 2008 based on the terms
of the debentures, the Company also recorded a non-cash charge to interest
expense of approximately $683,000  to reflect the beneficial
conversion feature arising from the conversion of the accrued interest at $0.40
per share on January 31, 2008 when the fair market value of the Company’s common
stock was $0.91 per share.





On
September 30, 2008, the Company and YA Global agreed to reduce the exercise
price of warrants to purchase 3,000,000 of the Company’s common stock from $0.70
per to $0.20 per share and YA Global agreed to exercise warrants to purchase
1,750,000 of common stock at $0.20 for $350,000.  Since the change in
exercise price is a material restatement of terms, the Company valued the
warrants for the purchase of 3,000,000 shares of common stock based on the
Black-Scholes option pricing model immediately before and immediately after the
change in the exercise price assuming a risk free interest rate of 2.28%
annually, no dividend payments, annual volatility of 198.949%, the stock price
of $0.38 per share when valued and exercise prices of $0.70 and $0.20,
respectively.  This resulted in an increase in the fair value of the
warrants from approximately $983,700 to $1,056,000.  The increase in
the value of the warrants of $72,300 was recorded as interest expense during the
six months ended January 31, 2009 and additional paid-in capital as of January
31, 2009.





Note 5 —
Issuances of common stock and stock options:


Shares
issued  for services:


The
Company has issued, from time to time, common stock to employees as compensation
and to non-employees, including investment analysts and commentators and other
consultants 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.




11


JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
   (UNAUDITED)


During
the three and six months ended January 31, 2009, the Company did not issue any
of its common stock to any employees or consultants.





Options
issued for services:


The
Company has issued, from time to time, stock options for the purchase of common
stock to employees as compensation and to non-employees, including investment
analysts and commentators and other consultants 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 of
January 31, 2009, the Company has options outstanding for the purchase of
750,000 shares of, effectively, common stock all of which were 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, the Company’s common stock. The number
of shares of common stock that may be subject to all types of awards under the
Incentive Plan as amended may not exceed 6,000,000 shares. The options
typically vest upon grant but in no case later than two and one-half years after
grant and expire the earlier of the tenth anniversary of the grant or the
90th day following termination of employment; provided that during such
90 day period the option will be exercisable only to the extent it was
vested as of the date of such termination.




Through
July 31, 2006, the Company recognized the cost of grants of options to
employees and non-employees based on the fair value of the equity instruments at
the date issued amortized over the periods in which the related services were
rendered in accordance with the provisions of Statement of Financial Accounting
Standards No. 123, “Accounting for Stock-Based Compensation”
(“SFAS 123”). Accordingly, the Company had been estimating the fair value
of stock options using an option-pricing model (generally, the Black-Scholes
model) that meets the criteria set forth in SFAS 123 and common stock using
its market value. It has been recording such value through charges to
compensation cost and corresponding credits to equity. The charges to
compensation cost are being amortized to expense over the vesting period. As
required, effective August 1, 2006, the Company adopted Statement of
Financial Accounting Standards No. 123 (Revised 2004), “Share-Based
Payment” (“SFAS 123(R)”) using the modified prospective application
transition method. Because the fair value recognition provisions of
SFAS No. 123 and SFAS No. 123(R) are materially consistent,
the adoption of SFAS No. 123(R) did not have a significant impact on
the methods used by the Company to value and account for its options or its
financial position and results of operations. In accordance with
SFAS No. 123(R), the Company reclassified previously unamortized
unearned compensation of $34,870 from unearned compensation to additional
paid-in capital as of the date of adoption. There was no charge to
operations.





During
the six and three months ended January 31, 2009, the Company issued no options
for the purchase of common stock.





As of
January 31, 2009, the Company has the ability to grant options to purchase an
additional 5,250,000 shares of common stock under the Incentive
Plan.




The table
below summarizes the stock option activity pursuant to our Incentive Plan for
the six months ended January 31, 2009:




WeightedWeighted
                                  
                                  
                                  AverageAverage
                                  
                                  
                                  Remaining
                                  
                                  
                                  AggregateExercise
                                  
                                  
                                  Contractual
                                  
                                  
                                  IntrinsicShares
                                  
                                  
                                  Price
                                  
                                  
                                  Term
                                  
                                  
                                  ValueOptions
      outstanding August 1, 2008
                                  
                                  
                                  750,000
                                  
                                  
                                  $
                                  0.02Granted
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Exercised
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Options
      outstanding January 31, 2009
                                  
                                  
                                  750,000
                                  
                                  
                                  $
                                  0.02
                                  
                                  
                                  
                                  2.58
                                  
                                  
                                  $
                                  150,000Options
      exercisable January 31, 2009
                                  
                                  
                                  750,000
                                  
                                  
                                  $
                                  0.02
                                  
                                  
                                  
                                  2.58
                                  
                                  
                                  $
                                  150,000





Warrants:





During
the six and three months ended January 31, 2009, respectively, YA Global
exercised warrants for the purchase of  1,750,000 shares of common
stock and no shares of common stock at $0.20 per share resulting in net proceeds
to the Company of $350,000 and none, respectively.





Note
6 - 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.




12


JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
   (UNAUDITED)


Note 7 -
Proposed merger:


On
October 2, 2008, the Company entered into a non-binding Letter of Intent with
respect to a merger opportunity with BlueCreek, e2Business Services, a majority
shareholder of BlueCreek and YA Global.  BlueCreek is a Colorado
corporation engaged in the development, extraction and processing of coalbed
methane natural gas currently operating within the Rocky Mountains region of the
United States YA Global, in addition to being the provider of much of the
Company’s financing since 2002, is a senior secured lender to BlueCreek and had
agreed to restructure its two convertible debentures and warrant with BlueCreek
at the closing of the merger by reducing the interest rates, amending the
conversion terms of the debentures, deferring certain principal payments,
converting $2,000,000 of principal into equity of BlueCreek in the form of a
warrant, and agreeing to remove certain registration rights it had with respect
to the shares underlying the convertible debentures and the
warrants.  Pursuant to the letter of intent, the Company would have
entered into a merger agreement with BlueCreek and e2Business under which
BlueCreek would have become JAG Media’s wholly owned subsidiary. In
consideration of the merger, the shareholders of BlueCreek would have acquired
shares of JAG Media’s common stock, representing upon issuance 82% of JAG
Media’s outstanding common stock on a fully diluted basis, in exchange for all
of the issued and outstanding capital stock of BlueCreek. In addition to shares
of JAG Media’s common stock to be received by the shareholders of BlueCreek at
the closing of the merger, the shareholders of BlueCreek may also have received
up to an additional 200,000,000 shares of JAGMedia’s common stock if
BlueCreek achieved certain post-closing milestones.  The shares of JAG
Media’s common stock to be issued to the shareholders of BlueCreek would not
have been registered for sale with the SEC and would, therefore, have been
subject to the resale restrictions of Rule 144.  JAG Media’s existing
public shareholders would have experienced significant dilution from the
issuance of these shares to the shareholders of BlueCreek. Upon closing of the
merger, the Company’s current directors and executive officers would have
resigned as directors and executive officers of JAG Media Holdings, Inc and its
subsidiaries.  The Board of Directors and management would have been
replaced with designees of BlueCreek.




The
closing of the merger would have been conditioned upon (i) each party completing
a due diligence review, the results of which were satisfactory in all respects
to each party, (ii) the Company and BlueCreek obtaining all appropriate and
necessary corporate and shareholder approvals for the transaction, and (iii) the
entering into of definitive agreements among the parties, including, without
limitation, a mutually acceptable definitive merger agreement between BlueCreek
and the Company and debt restructuring agreement with YA
Global.  Except for certain specified provisions, the letter of intent
was non-binding.





On
December 29, 2008, the Company received a letter from BlueCreek, dated December
29, 2008, stating that BlueCreek had elected to terminate further merger
discussions with the Company, consistent with the terms of the letter of
intent.





Note
8 – Subsequent events:


On March
12, 2009, JAG Media and YA Global Master SPV Ltd. (“YA Ltd”) entered into a
Standby Equity Distribution Agreement (the “SEDA”) pursuant to which YA Ltd
agreed to purchase up to $5,000,000 of JAG Media’s common stock (the “Commitment
Amount”) over the course of the thirty-six (36) months following the date the
registration statement for the shares to be issued pursuant to the SEDA is first
declared effective (the “Commitment Period”). JAG Media shall have the right,
but not the obligation, to sell common stock to YA Ltd during the Commitment
Period. Each right to sell common stock to YA Ltd is an “Advance” under the
SEDA.





In order
to request an Advance under the SEDA, JAG Media must submit a written notice to
YA Ltd specifying the amount of the Advance (an “Advance Notice”). An Advance
Notice may be delivered to YA Ltd every five (5) trading days. The common stock
issued to YA Ltd in connection with each Advance Notice shall be issued at a
purchase price equal to 95% of the lowest Volume Weighted Average Price (“VWAP”)
during the five trading days immediately following the date of the Advance
Notice, as reported by Bloomberg, L.P. In addition (i) each Advance may not
exceed $250,000; (ii) the aggregate amount of the Advances pursuant to the SEDA
shall not exceed the Commitment Amount; (iii) in no event shall the number of
shares of common stock issuable to YA Ltd pursuant to an Advance cause the
aggregate number of shares of common stock beneficially owned by YA Ltd and its
affiliates to exceed 9.99% of the then
outstanding common stock of JAG Media. Further, JAG Media’s common stock being
authorized for quotation on a “Principal Market,” which is defined as the NASDAQ
Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the
NYSE Euronext, the OTC Bulletin Board or the New York Stock Exchange, shall be a
condition to any Advance. Each Advance shall also be subject to such additional
terms and conditions as are set forth in the SEDA. On the 11th trading day
following the completion of the “Commencement Date,” as defined in the
Registration Rights Agreement (the “Commencement Date”), JAG Media shall issue
to YA Ltd, as a commitment fee, shares of JAG Media common stock in an amount
equal to $250,000 divided by the average of the VWAP for each of the ten (10)
trading days following the effective date of the Acquisition (the “Commitment
Fee Shares”). The Commitment Fee Shares shall be included on any registration
statement filed by JAG Media after the date of the SEDA, unless such shares may
be resold without any limitation pursuant to Rule 144.





On March
12, 2009, concurrent with the execution of the SEDA, JAG Media and YA Ltd also
entered into a Registration Rights Agreement (the “Registration Rights
Agreement”) pursuant to which JAG Media agreed to register the shares of JAG
Media common stock to be issued in connection with the SEDA (the “Registrable
Securities”). JAG Media may not file the registration statement for the
Registrable Securities (the “Registration Statement”) prior to the tenth (10th)
trading day following the Commencement Date and JAG Media shall not have the
ability to make any Advances under the SEDA until the Registration Statement is
declared effective. JAG Media shall cause the Registration Statement that has
been declared effective to remain effective at all times until all Registrable
Securities under the Registration Statement cease to be Registrable Securities.
Once issued, Registrable Securities cease to be Registrable Securities when (i)
such Registrable Securities have been disposed of pursuant to the Registration
Statement; (ii) such Registrable Securities have been sold under circumstances
under which all of the applicable conditions of Rule 144 (or any similar
provision then in force) are met; or (iii) in the opinion of counsel to JAG
Media such Registrable Securities may permanently be sold without registration
and without any time, volume or manner limitations pursuant to Rule
144.





On March
12, 2009 JAG Media and YA Global entered into a letter agreement amending
Warrant No. CCP-003 dated May 24, 2006 (the “Warrant Letter Agreement”), which
currently permits YA Global, as warrant holder, to exercise Warrant No. CCP-003
for up to 2,000,000 shares of JAG Media’s common stock at a price of $0.60 per
share on a cashless basis. Under the Warrant Letter Agreement, the exercise
price for the 2,000,000 shares of JAG Media common stock under Warrant No.
CCP-003 was changed from $0.60 per share to $0.07 per share. In addition, YA
Global agreed to exercise, and did exercise on March 13, 2009, the 2,000,000
shares under Warrant No-CCP-003 at the reduced exercise price of $0.07 per
share, on a cash basis, resulting in an aggregate exercise amount of$140,000 to be paid to JAG
Media.




13


JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES






(UNAUDITED)







Warrant
No. CCP-003, and its underlying shares, shall not be registered for sale and
shall be subject to the rights and restrictions of Rule 144.





On March
12, 2009, JAG Media entered into a letter of intent with CardioGenics Inc., an
Ontario, Canada corporation and Yahia Gawad, a principal stockholder of
CardioGenics pursuant to which, among other matters, CardioGenics would be
acquired by a newly created Ontario, Canada corporation (“ExchangeCo”), which
would be wholly-owned by another newly created Ontario, Canada corporation
wholly-owned by JAG Media (“CallCo”). In consideration of the acquisition of
CardioGenics by ExchangeCo, the shareholders of CardioGenics would be issued at
the Closing, in exchange for all of the CardioGenics shares, a number of
convertible preferred ExchangeCo shares (the “ExchangeCo Shares”), which, upon
conversion, would result in the issuance to the ExchangeCo stockholders of a
number of shares of JAG Media common stock (the “JAG Media Common Stock”), which
upon such issuance would equal eighty-five percent (85%) of the outstanding JAG
Media Common Stock (on a fully diluted basis) as of the Closing Date, assuming
(for purposes of this calculation) that the shares of JAG Media Common Stock
resulting from the conversion of the ExchangeCo Shares were issued at the
Closing (the “Proposed Transaction”). The CardioGenics stockholders would have
the option to receive their pro-rata number of ExchangeCo Shares or, in lieu
thereof, may elect to receive directly their pro-rata number of JAG Media Common
Stock shares. CallCo and ExchangeCo would be established as Ontario, Canada
subsidiaries of JAG Media prior to the Closing.





The
shares of JAG Media Common Stock to be received by the shareholders of
CardioGenics would not be registered for sale with the U.S. Securities and
Exchange Commission prior to the expiration of the Rule 144 holding period and
would, therefore, be subject to the rights and restrictions of Rule 144. The
existing public shareholders of JAG Media will experience significant dilution
from the issuance of these shares to the shareholders of
CardioGenics.





At the
Closing, JAG Media’s current directors would resign as directors of JAG Media
and its subsidiaries and would also resign as officers and executives of JAG
Media and its subsidiaries. JAG Media's board of directors would be replaced
with designees of CardioGenics. The current directors of JAG Media would also
enter into consulting agreements with the post-closing company at the Closing,
pursuant to which they will provide certain consulting services to assist the
post-closing company in connection with certain transition matters.





CardioGenics
was incorporated in Ontario, Canada in November 1997. CardioGenics develops
technology and products targeting the immunoassay segment of the InVitro
Diagnostic testing market. CardioGenics has developed the QL Care Analyzer, a
proprietary point of care immuno-analyzer, which will run a number of diagnostic
tests to be developed by CardioGenics, the first of which will be a series of
cardiovascular diagnostic tests. As part of its core proprietary technology,
CardioGenics has also developed a proprietary method for silver coating
paramagnetic microspheres (a fundamental platform component of immunoassay
equipment), which improve instrument sensitivity to light. CardioGenics’principal
offices are located in Mississauga, Ontario, Canada.





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) JAG
Media and CardioGenics obtaining all appropriate and necessary corporate and
shareholder approvals for the transaction, (iii) the entering into of definitive
agreements among the parties, including, without limitation, a mutually
acceptable definitive acquisition agreement between CardioGenics and ExchangeCo
and other related agreements and (iv) JAG Media Common Stock continuing to be
quoted on the OTC Bulletin Board as of the Closing Date.





The
execution of the definitive acquisition agreement and other related closing
documents shall be subject to (a) JAG Media and YA Global entering into the SEDA
and (b) CardioGenics receiving commitments for not less than $1,500,000 in
financing.





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 will
be consummated. Further, to the extent that definitive agreements are reached,
no assurances can be given that any such agreements will be entered into
consistent with the current expectations of JAG Media and CardioGenics, as
contemplated by the terms of the Letter of Intent.


14




Item
2.  Management’s Discussion and Analysis





Critical Accounting Policies and
Estimates





Our
discussion and analysis of our financial condition and results of operations are
based upon our condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial statements filed with the
Securities and Exchange Commission. The preparation of these condensed
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.





The
accounting policies and estimates used as of July 31, 2008, as outlined in
our previously filed Form 10-K, have been applied consistently for the six
months ended January 31, 2009.





Related Party
Transactions





None.





Off-Balance Sheet
arrangements





We are
not party to any off balance sheet arrangements.





Results of
operations





Six
months ended January 31, 2009 as compared to six months ended
January 31, 2008.




Six MonthsEnded January 31,2009
                                    
                                    
                                    2008
                                    
                                    
                                    $ ChangeRevenues
                                    
                                    $
                                    84,514
                                    
                                    
                                    $
                                    78,635
                                    
                                    
                                    $
                                    5,879Operating
      expenses:Cost
      of revenues
                                    
                                    
                                    27,392
                                    
                                    
                                    
                                    8,025
                                    
                                    
                                    
                                    19,367Selling
      expenses
                                    
                                    
                                    2,684
                                    
                                    
                                    
                                    13,598
                                    
                                    
                                    
                                    (10,914
                                    )General
      and administrative expenses
                                    
                                    
                                    714,691
                                    
                                    
                                    
                                    1,000,744
                                    
                                    
                                    
                                    (286,053
                                    )Totals
                                    
                                    
                                    744,767
                                    
                                    
                                    
                                    1,022,367
                                    
                                    
                                    
                                    (277,600
                                    )Loss
      from operations
                                    
                                    
                                    (660,253
                                    )
                                    
                                    
                                    (943,732
                                    )
                                    
                                    
                                    283,479Other
      income (expense) :Gain
      on change in value of derivative liability
                                    
                                    
                                    —
                                    
                                    
                                    
                                    602,338
                                    
                                    
                                    
                                    (602,338
                                    )Interest
      expense
                                    
                                    
                                    (72,300
                                    )
                                    
                                    
                                    (1,690,638
                                    )
                                    
                                    
                                    (1,618,338
                                    )Net
      loss
                                    
                                    $
                                    (732,553)
                                    
                                    
                                    $
                                    (2,032,032
                                    )
                                    
                                    $
                                    1,299,479





Revenues





Revenues
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. Revenues increased for the six months
ended January 31, 2009 versus the six months ended January 31, 2008 as investors
seek additional sources of information due to current financial market
conditions.


15


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 web site, and costs in connection with
the development and maintenance of the web site.





During
the six months ended January 31, 2009, there were $17,000 in consulting fees as
compared to none for the six months ended January 31, 2008. 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
$17,000 for the six months ended January 31, 2009. The increase in consulting
fees is a result of consulting contracts associated with our jagnotes.com
website. In addition, costs associated with the transmission of our product over
telephone and fax line and costs associated with the maintenance of our web site
increased slightly.





Selling expenses





Selling
expenses consist primarily of advertising and other promotional expenses. We
have temporarily discontinued our advertising and other promotional
expenses.





General
and administrative expenses





General
and administrative expenses consist primarily of compensation and benefits for
the officers, other compensation, which includes non-cash charges of
approximately $31,000 to for a portion of the issuance of 250,000 options with
an aggregate fair value of approximately $138,000 to a non-employee for
services, occupancy costs, professional fees and other office expenses. The
decrease in general and administrative expenses is attributable to a $259,000
reduction in payments to consultants helping to run Pixaya, and a $57,000
reduction in expenses incurred with potential mergers during the six months
ended January 31, 2009 versus the six months ended January 31,
2008.





Gain (loss) on change in value of
derivative liability





As of
July 31, 2008 and January 31, 2009, we had no equity instruments that could
result in the issuance of an indeterminable number of our common shares,
therefore there is no derivative liability as of January 31, 2009 or gain or
loss resulting from the change in the fair market value of our common
stock.  The gain on change in value of the derivative liability for
the six months ended January 31, 2008 reflects the effect of the decrease in the
fair market value of our common stock. As of January 31, 2008, the fair market
value of the 12,000,000 warrants was approximately $10,400,900 while as of
July 31, 2007, the fair market value of those warrants was approximately
$11,059,000, resulting in a gain of approximately $658,000 for the six months
ended January 31, 2008. There were no options issued to non-employees at January
31, 2009 or July 31, 2008.




During
the six months ended January 31, 2008, YA Global Investments, L.P. (“YA Global”)
converted debentures in the principal amounts of $3,520,000 into 8,800,000
shares of our common stock. Therefore, all of the remaining debentures were
converted on January 31, 2008.  As a result, we no longer had any
equity instruments that could result in the issuance of an indeterminable number
of common shares.  Accordingly, the fair value of the warrants of
$10,400,900 was reclassified from derivative liability to additional paid-in
capital.




Interest expense





The
decrease in interest expense of approximately $1,618,000 arises from the
reduction in the principal amount outstanding of YA Global convertible
debentures partially offset by interest incurred as a result of the change in
terms reducing the exercise price of warrants issued to YA Global.


Since the
change in exercise price is a material restatement of terms, we valued the
warrants for the purchase of 3,000,000 shares of common stock based on the
Black-Scholes option pricing model immediately before and immediately after the
change in the exercise price assuming a risk free interest rate of 2.28%
annually, no dividend payments, annual volatility of 198.949%, the stock price
of $0.38 per share when valued and exercise prices of $0.70 and $0.20,
respectively, resulting in an increase in the fair value of the warrants from
$983,700 to $1,056,000.  The increase of $72,300 was recorded as
interest expense for the six months ended January 31, 2009.


During
the six months ended January 31, 2008, interest totaling approximately
$1,691,000 is comprised of interest on our secured convertible debentures,
interest from amortization of debt discount, and a  non-cash charge to
interest expense of approximately $683,000 to reflect the beneficial conversion
feature arising from the conversion of accrued interest at $0.40 per share on
January 31, 2008 into shares of our common stock when the fair value of our
common stock was $0.91 per share.  Interest of approximately $95,000
was incurred as interest charged at 10% per annum on our then outstanding
convertible debentures.


16


Three
months ended January 31, 2009 as compared to three months ended
January 31, 2008.





Three MonthsEnded January 31,2009
                                    
                                    
                                    2008
                                    
                                    
                                    $ ChangeRevenues
                                    
                                    $
                                    41,653
                                    
                                    
                                    $
                                    41.903
                                    
                                    
                                    $
                                    (250
                                    )Operating
      expenses:Cost
      of revenues
                                    
                                    
                                    10,594
                                    
                                    
                                    
                                    3,404
                                    
                                    
                                    
                                    7,190Selling
      expenses
                                    
                                    
                                    2,684
                                    
                                    
                                    
                                    6,302
                                    
                                    
                                    
                                    (3,618
                                    )General
      and administrative expenses
                                    
                                    
                                    452,184
                                    
                                    
                                    
                                    563,517
                                    
                                    
                                    
                                    (111,333
                                    )Totals
                                    
                                    
                                    465,462
                                    
                                    
                                    
                                    573,223
                                    
                                    
                                    
                                    (107,761
                                    )Loss
      from operations
                                    
                                    
                                    (423,809
                                    )
                                    
                                    
                                    (531,320
                                    )
                                    
                                    
                                    107,511Other
      income (expense) :Loss
      on change in value of derivative liability
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (1,331,600
                                    )
                                    
                                    
                                    (1,331,600
                                    )Interest
      expense
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (1,500,791
                                    )
                                    
                                    
                                    (1,500,791
                                    )Net
      loss
                                    
                                    $
                                    (423,809
                                    )
                                    
                                    $
                                    (3,363,711
                                    )
                                    
                                    $
                                    2,939,902





Revenues





Increases
in revenue for the three months ended January 31, 2009 versus the three months
ended January 31, 2008 as investors seek additional sources of information due
to current financial market conditions were offset by decreases due to our lack
of advertising and increased competition among providers of financial
information.





Cost of revenues





During
the three months ended January 31, 2009, there were approximately $7,000 in
consulting fees as compared to none during the three months ended January 31,
2008. 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 $7,000 for the three months ended January 31, 2008.
The increase in consulting fees is a result of consulting contracts associated
with our jagnotes.com website. In addition, costs associated with the
transmission of our product over telephone and fax line and costs associated
with the maintenance of our web site increased slightly.





Selling expenses





Selling
expenses consist primarily of advertising and other promotional expenses. The
decrease results from reduction of sales and marketing expenses.





General and administrative
expenses





The
decrease in general and administrative expenses is attributable to a decrease in
legal and accounting costs associated with a proposed acquisition.





Loss on change in value of
derivative liability





The loss
on change in value of derivative liability for the three months ended January
31, 2008 reflects the effect of the increase in the fair market value of our
common stock. As of January 31, 2008, the fair market value of the 12,000,000
warrants was approximately $10,400,900 while as of October 31, 2007, the fair
market value of those warrants was approximately $9,069,300, resulting in a loss
of approximately $1,331,600 for the three months ended January 31,
2008.





During
the three months ended January 31, 2008, YA Global converted debentures in the
principal amount of $1,920,000 into 4,800,000 shares of our common
stock.  Therefore, all of the remaining debentures were converted
on January 31, 2008.  As a result, we no longer had any equity
instruments that could result in the issuance of an indeterminable number of
common shares.  Accordingly, the fair value of the warrants of
$10,400,900 was reclassified from derivative liability to additional paid-in
capital. There were no options issued to non-employees at January 31,
2009.


17


Interest expense





The
decrease in interest expense of approximately $1,501,000 arises from the
reduction in the principal amount outstanding of YA Global convertible
debentures.




During
the three months ended January 31, 2008 interest totaling $1,501,000 is
comprised of interest on our secured convertible debentures, interest from
amortization of debt discount, and this non-cash charge to interest expense of
approximately $683,000 to reflect the beneficial conversion
feature.  Interest on debentures of approximately $30,000 was incurred
as interest charged at 10% per annum on our convertible debentures.





Liquidity and Capital
Resources





We only
generated revenues of approximately $85,000 and we incurred a net loss of
approximately $733,000 and a cash flow deficiency from operating activities of
approximately $581,000 for the six months ended January 31, 2009. In addition,
at January 31, 2009, we only had cash and cash equivalents of approximately
$39,000 and working capital deficiency of approximately $236,000. Ourwholly owned United Kingdom
subsidiary, Pixaya (UK) Limited is in default with respect to the payment of
amounts due under its overdraft facility with HSBC Bank plc.  As of
the date of the filing of this report, the amount of the default is £22,596,
equivalent to approximately $32,328.These matters raise
substantial doubt about our ability to continue as a going concern.





We
believe that, in the absence of a substantial increase in subscription revenues
or sales of our streaming video products, it is probable that the we will
continue to incur losses and negative cash flows from operating activities
through at least January 31, 2010 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 or effect a
merger.





We
believe that we will be able to obtain sufficient financing, directly, or find
an appropriate merger candidate that has such financing to enable us to continue
as a going concern through at least January 31, 2010. However, if we cannot
obtain sufficient additional financing by that date, we may be forced thereafter
to restructure our operations, file for bankruptcy or entirely cease our
operations.





Our cash
and cash equivalent position of approximately $39,000 as of January 31,
2009 results primarily from the transactions with YA Global described
below.





On
September 30, 2008, we and YA Global agreed to reduce the exercise price of
warrants to purchase 3,000,000 shares of our common stock from $0.70 per to
$0.20 per share and YA Global agreed to exercise warrants to purchase 1,750,000
shares of common stock at $0.20 for $350,000.  On September 30, 2008,
YA Global exercised the warrants to purchase 1,750,000 shares of common stock
and remitted $350,000 to us.




Seasonality





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.





Recent Accounting
Pronouncements





The FASB
and the Accounting Standards Committee of the American Institute of Certified
Public Accountants had issued certain accounting pronouncements as of January
31, 2009 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 six months ended January 31, 2009 and 2008 or that they will have a
significant effect at the time they become effective.





RECENT
EVENTS





On March
12, 2009, we and YA Global Master SPV Ltd. (“YA Ltd”) entered into a Standby
Equity Distribution Agreement (the “SEDA”) pursuant to which YA Ltd agreed to
purchase up to $5,000,000 of our common stock (the “Commitment Amount”) over the
course of the thirty-six (36) months following the date the registration
statement for the shares to be issued pursuant to the SEDA is first declared
effective (the “Commitment Period”). JAG Media shall have the right, but not the
obligation, to sell common stock to YA Ltd during the Commitment Period. Each
right to sell common stock to YA Ltd is an “Advance” under the
SEDA.


18


In order
to request an Advance under the SEDA, we must submit a written notice to YA Ltd
specifying the amount of the Advance (an “Advance Notice”). An Advance Notice
may be delivered to YA Ltd every five (5) trading days. The common stock issued
to YA Ltd in connection with each Advance Notice shall be issued at a purchase
price equal to 95% of the lowest Volume Weighted Average Price (“VWAP”) during
the five trading days immediately following the date of the Advance Notice, as
reported by Bloomberg, L.P. In addition (i) each Advance may not exceed
$250,000; (ii) the aggregate amount of the Advances pursuant to the SEDA shall
not exceed the Commitment Amount; (iii) in no event shall the number of shares
of common stock issuable to YA Ltd pursuant to an Advance cause the aggregate
number of shares of common stock beneficially owned by YA Ltd and its affiliates
to exceed 9.99% of the then outstanding common stock of JAG Media. Further, JAG
Media’s common stock being authorized for quotation on a “Principal Market,”
which is defined as the NASDAQ Global Select Market, the NASDAQ Global Market,
the NASDAQ Capital Market, the NYSE Euronext, the OTC Bulletin Board or the New York
Stock Exchange, shall be a condition to any Advance. Each Advance shall also be
subject to such additional terms and conditions as are set forth in the
SEDA.





On the
11th trading day following the completion of the “Commencement Date,” as defined
in the Registration Rights Agreement (the “Commencement Date”), JAG Media shall
issue to YA Ltd, as a commitment fee, shares of JAG Media common stock in an
amount equal to $250,000 divided by the average of the VWAP for each of the ten
(10) trading days following the effective date of the Acquisition (the
“Commitment Fee Shares”). The Commitment Fee Shares shall be included on any
registration statement filed by JAG Media after the date of the SEDA, unless
such shares may be resold without any limitation pursuant to Rule
144.





On March
12, 2009, concurrent with the execution of the SEDA, we and YA Ltd also entered
into a Registration Rights Agreement (the “Registration Rights Agreement”)
pursuant to which we agreed to register our shares of common stock to be issued
in connection with the SEDA (the “Registrable Securities”). We may not file the
registration statement for the Registrable Securities (the “Registration
Statement”) prior to the tenth (10th) trading day following the Commencement
Date and we shall not have the ability to make any Advances under the SEDA until
the Registration Statement is declared effective. JAG Media shall cause the
Registration Statement that has been declared effective to remain effective at
all times until all Registrable Securities under the Registration Statement
cease to be Registrable Securities. Once issued, Registrable Securities cease to
be Registrable Securities when (i) such Registrable Securities have been
disposed of pursuant to the Registration Statement; (ii) such Registrable
Securities have been sold under circumstances under which all of the applicable
conditions of Rule 144 (or any similar provision then in force) are met; or
(iii) in the opinion of counsel to JAG Media such Registrable Securities may
permanently be sold without registration and without any time, volume or manner
limitations pursuant to Rule 144.





On March
12, 2009, we and YA Global entered into a letter agreement amending Warrant No.
CCP-003 dated May 24, 2006 (the “Warrant Letter Agreement”), which currently
permits YA Global, as warrant holder, to exercise Warrant No. CCP-003 for up to
2,000,000 shares of our common stock at a price of $0.60 per share on a cashless
basis. Under the Warrant Letter Agreement, the exercise price for the 2,000,000
shares of our common stock under Warrant No. CCP-003 was changed from $0.60 per
share to $0.07 per share. In addition, YA Global agreed to exercise, and did
exercise on March 13, 2009, the 2,000,000 shares under Warrant No-CCP-003 at the
reduced exercise price of $0.07 per share, on a cash basis, resulting in an
aggregate exercise amount of $140,000 to be paid to JAG Media.





Warrant
No. CCP-003, and its underlying shares, shall not be registered for sale and
shall be subject to the rights and restrictions of Rule 144.





Proposed
Acquisition of CardioGenics Inc.





On March
12, 2009, we entered into a letter of intent (the "Letter of Intent") with
CardioGenics Inc., an Ontario, Canada corporation ("CardioGenics"), and Yahia
Gawad, a principal stockholder of CardioGenics pursuant to which, among other
matters, CardioGenics would be acquired by a newly created Ontario, Canada
corporation (“ExchangeCo), which would be wholly-owned by another newly created
Ontario, Canada corporation wholly-owned by JAG Media (“CallCo”). In
consideration of the acquisition of CardioGenics by ExchangeCo, the shareholders
of CardioGenics would be issued at the Closing, in exchange for all of the
CardioGenics shares, a number of convertible preferred ExchangeCo shares (the
“ExchangeCo Shares”), which, upon conversion, would result in the issuance to
the ExchangeCo stockholders of a number of shares of JAG Media common stock (the
“JAG Media Common Stock”), which upon such issuance would equal eighty-five
percent (85%) of the outstanding JAG Media Common Stock (on a fully diluted
basis) as of the Closing Date, assuming (for purposes of this calculation) that
the shares of JAG Media Common Stock resulting from the conversion of the
ExchangeCo Shares were issued at the Closing (the “Proposed Transaction”). The
CardioGenics stockholders would have the option to receive their pro-rata number
of ExchangeCo Shares or, in lieu thereof, may elect to receive directly their
pro-rata number of JAG Media Common Stock shares. CallCo and ExchangeCo would be
established as Ontario, Canada subsidiaries of JAG Media prior to the
Closing.





The
shares of JAG Media Common Stock to be received by the shareholders of
CardioGenics would not be registered for sale with the U.S. Securities and
Exchange Commission prior to the expiration of the Rule 144 holding period and
would, therefore, be subject to the rights and restrictions of Rule 144. The
existing public shareholders of JAG Media will experience significant dilution
from the issuance of these shares to the shareholders of
CardioGenics.


19





At the
Closing, our current directors would resign as directors of JAG Media and its
subsidiaries and would also resign as officers and executives of JAG Media and
its subsidiaries. The board of directors would be replaced with designees of
CardioGenics. The current directors of JAG Media would also enter into
consulting agreements with the post-closing company at the Closing, pursuant to
which they will provide certain consulting services to assist the post-closing
company in connection with certain transition matters.





CardioGenics
was incorporated in Ontario, Canada in November 1997. CardioGenics develops
technology and products targeting the immunoassay segment of the InVitro
Diagnostic testing market. CardioGenics has developed the QL Care Analyzer, a
proprietary point of care immuno-analyzer, which will run a number of diagnostic
tests to be developed by CardioGenics, the first of which will be a series of
cardiovascular diagnostic tests. As part of it core proprietary technology,
CardioGenics has also developed a proprietary method for silver coating
paramagnetic microspheres (a fundamental platform component of immunoassay
equipment), which improve instrument sensitivity to light. CardioGenics’
principal offices are located in Mississauga, Ontario, Canada.





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) JAG
Media and CardioGenics obtaining all appropriate and necessary
corporate and shareholder approvals for the transaction, (iii) the entering into
of definitive agreements among the parties, including, without limitation, a
mutually acceptable definitive acquisition agreement between CardioGenics and
ExchangeCo and other related agreements and (iv) JAG Media Common Stock
continuing to be quoted on the OTC Bulletin Board as of the Closing
Date.





The
execution of the definitive acquisition agreement and other related closing
documents shall be subject to (a) JAG Media and YA Global entering into the SEDA
and (b) CardioGenics receiving commitments for not less than $1,500,000 in
financing.





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 will
be consummated. Further, to the extent that definitive agreements are reached,
no assurances can be given that any such agreements will be entered into
consistent with the current expectations of JAG Media and CardioGenics, as
contemplated by the terms of the Letter of Intent.




Item 3. Quantative and Qualitative
Disclosure About Market Risk




N/A.




Item 4T. Controls and
Procedures




(a)
Evaluation of Disclosure Controls and Procedures:





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) to provide reasonable assurance regarding the reliability of our
financial reporting and preparation of financial statement for external purposes
in accordance with U.S. generally accepted accounting principals. A control
system, no matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives. Because of the inherent
limitations in all control systems, internal controls over financial reporting
may not prevent or detect misstatements. The design and operation of a control
system must also reflect that there are resource constraints and management is
necessarily required to apply its judgment in evaluating the cost-benefit
relationship of possible controls.





Our
management assessed the effectiveness of our internal controls over financial
reporting for the quarter ended January 31, 2009 based on the criteria
established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on such assessment,
our management concluded that during the period covered by this report, our
internal controls over financial reporting were not effective. Management has
identified the following material weaknesses in our internal controls over
financial reporting:





•
            lack
      of documented policies and procedures;
and





•
            there
      is no effective separation of duties, which includes monitoring controls,
      between the members of management.





Management
is currently evaluating what steps can be taken in order to address these
material weaknesses.




(b)
Changes in Internal Control over Financial Reporting:




During
the fiscal quarter ended January 31, 2009, there were no changes in our internal
control over financial reporting that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.


20


PART
II. OTHER INFORMATION




Item 1. Legal
Proceedings




None.




Item 1A. Risk
Factors




N/A.




Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds





None.




Item 3. Defaults Upon Senior
Securities




Our
wholly owned United Kingdom subsidiary, Pixaya (UK) Limited, is in default with
respect to the payment of amounts due under its overdraft facility with HSBC
Bank plc. As of the date of the filing of this report, the amount of the default
is £22,596.17, equivalent to approximately $32,328.




Item 4. Submission of Matters to a
Vote of Security Holders




None.




Item 5. Other
Information




None.




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.


21


SIGNATURES




In
accordance with the requirements of the Exchange Act, the Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.


JAG
      MEDIA HOLDINGS, INC.Date:
      March 20, 2009
                  By:
                  /s/
      Thomas J. MazzarisiName:
                  Thomas
      J. MazzarisiTitle:
                  Chairman
      of the Board and Chief
                    Executive
      OfficerDate:
      March 20, 2009
                  By:
                  /s/
      Stephen J. SchoepferName:
                  Stephen
      J. SchoepferTitle:
                  President,
      Chief Financial Officer,Chief Operating Officer and
      Secretary


22





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


23