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
October 31, 2008.


o
            
            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
December 8, 2008 the Registrant had 63,517,816 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 October 31,
2008




INDEX




PagePart
      I. Financial Information
                  1Item
      1: Financial Statements
                  1Condensed
      Consolidated Balance Sheets at October 31, 2008 (Unaudited) and July 31,
      2008
                  2Condensed
      Consolidated Statements of Operations for the Three Months ended October
      31, 2008 and 2007 (Unaudited)
                  3Condensed
      Consolidated Statement of Changes in Stockholders’ Equity for the Three
      Months ended October 31, 2008 (Unaudited)
                  4Condensed
      Consolidated Statements of Cash Flows for the Three Months ended October
      31, 2008 and October 31, 2007 (Unaudited)
                  5Notes
      to Condensed Consolidated Financial Statements
                  6/11Item
      2: Management’s Discussion and Analysis and Results of
      Operations
                  12Item
      3: Quantitative and Qualitative Disclosures About Market
    Risk
                  15Item
      4T: Controls and Procedures
                  15Part
      II. Other Information
                  16Item
      1: Legal Proceedings
                  16Item
      1A: Risk Factors
                  16Item
      2: Unregistered Sales of Equity Securities and Use of
    Proceeds
                  16Item
      3: Defaults Upon Senior Securities
                  16Item
      4: Submission of Matters to Vote of Security Holders
                  16Item
      5: Other Information
                  16Item
      6: Exhibits
                  16Signatures
                  17





EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1:
  CERTIFICATIONS











PART
1


FINANCIAL
INFORMATION





Item
1. Financial Statements.





JAG Media
Holdings, Inc. and Subsidiaries





Index to
Financial Statements





PAGECondensed
      Consolidated Balance SheetsOctober
      31, 2008 (Unaudited) and July 31, 2008
                        2Condensed
      Consolidated Statements of OperationsThree
      Months Ended October 31, 2008 and 2007 (Unaudited)
                        3Condensed
      Consolidated Statement of Changes in Stockholders' EquityThree
      Months Ended October 31, 2008 (Unaudited)
                        4Condensed
      Consolidated Statements of Cash FlowsThree
      Months Ended October 31, 2008 and 2007 (Unaudited)
                        5Notes
      to Condensed Consolidated Financial Statements
                        6/11





*     *     *







JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 OCTOBER
31 2008, and JULY 31, 2008




October
      31,
                              2008
                            
                            
                            July
      31,
                              2008(unaudited)
                            
                            
                            (Note
      1)AssetsCurrent
      assets:Cash
      and cash equivalents
                            
                            $
                            391,785
                            
                            
                            $
                            275,168Accounts
      receivable, net of allowance for doubtful accounts of
    $47,500
                            
                            
                            36,579
                            
                            
                            
                            33,369Other
      current assets
                            
                            
                            109,537
                            
                            
                            
                            103,352Total
      current assets
                            
                            
                            537,901
                            
                            
                            
                            411,889Equipment,
      net of accumulated depreciation of $146,634 and $142,746
                            
                            
                            31,913
                            
                            
                            
                            31,207Totals
                            
                            $
                            569,814
                            
                            
                            $
                            443,096Liabilities
      and Stockholders' EquityCurrent
      liabilities:Accounts
      payable and accrued expenses
                            
                            $
                            339,834
                            
                            
                            $
                            325,128Deferred
      revenues
                            
                            
                            14,280
                            
                            
                            
                            15,824Total
      liabilities
                            
                            
                            354,114
                            
                            
                            
                            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:Preferred
      stock; par value $.00001 per share; 50,000,000 shares authorized, none
      issuedCommon
      stock; par value $.00001 per share; 500,000,000 shares
      authorized;63,517,816
      and 61,767,816 shares issued and outstanding
                            
                            
                            635
                            
                            
                            
                            617Additional
      paid-in capital
                            
                            
                            63,801,436
                            
                            
                            
                            63,379,154Accumulated
      deficit
                            
                            
                            (63,586,375
                            )
                            
                            
                            (63,277,631
                            )Total
      stockholders' equity
                            
                            
                            215,696
                            
                            
                            
                            102,140Totals
                            
                            $
                            569,814
                            
                            
                            $
                            443,096





See Notes
to Condensed Consolidated Financial Statements.





2





JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 THREE
MONTHS ENDED OCTOBER 31, 2008 AND 2007
 (UNAUDITED)





Three
      MonthsEnded
      October 31,2008
                
                
                2007Revenues
                
                $
                42,861
                
                
                $
                36,732Operating
      expenses:Cost
      of revenues
                
                
                16,798
                
                
                
                4,621Selling
      expenses
                
                
                -
                
                
                
                7,296General
      and administrative expenses
                
                
                262,507
                
                
                
                437,227Totals
                
                
                279,305
                
                
                
                449,144Loss
      from operations
                
                
                (236,444
                )
                
                
                (412,412
                )Other
      income (expense):Gain
      on change in value of derivative liability
                
                
                -
                
                
                
                1,933,938Interest
      expense
                
                
                (72,300
                )
                
                
                (189,847
                )Net
      income (loss)
                
                $
                (308,744
                )
                
                $
                1,331,679Basic
      net income (loss) per share
                
                $
                (0.00
                )
                
                $
                0.03Diluted
      net income (loss) per share
                
                $
                (0.00
                )
                
                $
                (0.01
                )Basic
      weighted average common shares outstanding
                
                
                62,376,512
                
                
                
                50,666,552Diluted
      weighted average common shares outstanding
                
                
                62,376,512
                
                
                
                58,080,023





See Notes
to Condensed Consolidated Financial Statements.





3





JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
 THREE
MONTHS ENDED OCTOBER 31, 2008
 (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
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (308,744
                  )
                  
                  
                  (308,744
                  )Balance,
      October 31, 2008
                  
                  
                  63,517,816
                  
                  
                  $
                  635
                  
                  
                  $
                  63,801,436
                  
                  
                  $
                  (63,586,375
                  )
                  
                  $
                  215,696





See Notes
to Condensed Consolidated Financial Statements.





4


JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 THREE
MONTHS ENDED OCTOBER 31, 2008 AND 2007
 (UNAUDITED)





2008
                
                
                2007Operating
      activities:Net
      income (loss)
                
                $
                (308,744
                )
                
                $
                1,331,679Adjustments
      to reconcile net income (loss) to net cash used in operating
      activities:Depreciation
                
                
                3,888
                
                
                
                7,321Amortization
      of unearned, stock-based compensation
                
                
                -
                
                
                
                3,300Gain
      on change in value of derivative liability
                
                
                -
                
                
                
                (1,933,938
                )Amortization
      of debt discount
                
                
                -
                
                
                
                125,240Costs
      of the Company paid by potential merger partner
                
                
                -
                
                
                
                230,113Effect
      of issuance of commons stock in exchange for services
                
                
                -
                
                
                
                25,600Effect
      of change in exercise price of warrants
                
                
                72,300
                
                
                
                -Amortization
      of deferred consulting costs
                
                
                19,034
                
                
                
                65,631Changes
      in operating assets and liabilities:Accounts
      receivable
                
                
                (3,210
                )
                
                
                (19,255
                )Other
      current assets
                
                
                (25,219
                )
                
                
                9,313Accounts
      payable and accrued expenses
                
                
                14,706
                
                
                
                (112,831
                )Deferred
      revenues
                
                
                (1,544
                )
                
                
                7,122Net
      cash used in operating activities
                
                
                (228,789
                )
                
                
                (260,705
                )Investing
      activities:Equipment
      purchases
                
                
                (4,594
                )
                
                
                -Net
      cash used in investing activities
                
                
                (4,594
                )
                
                
                -Financing
      activities:Issuance
      of common stock upon exercise of warrants and stock
options
                
                
                350,000
                
                
                
                398,200Net
      cash provided by financing activities
                
                
                350,000
                
                
                
                398,200Net
      increase in cash and cash equivalents
                
                
                116,617
                
                
                
                137,495Cash
      and cash equivalents, beginning of period
                
                
                275,168
                
                
                
                507Cash
      and cash equivalents, end of period
                
                $
                391,785
                
                
                $
                138,002Supplemental
      disclosure of noncash financing activities:Noncash
      effect of convertible debentures converted to common stock
                
                $
                -
                
                
                $
                1,600,000Receivable
      from consultant for options exercised
                
                $
                -
                
                
                $
                78,750Fair
      value of fully-vested shares issued to consultant for future
      services
                
                $
                -
                
                
                $
                70,400Reclassification
      of derivative liability
                
                $
                -
                
                
                $
                55,323Fair
      value of options issued for future services
                
                $
                -
                
                
                $
                240,179





See Notes
to Condensed Consolidated Financial Statements.





5
 JAG
MEDIA HOLDINGS INC. AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)





Note 1 - 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 October 31, 2008
(unaudited), their results of operations for the three months ended October 31,
2008 and 2007, cash flows for the three months ended October 31, 2008 and 2007
and changes in stockholders' equity for the three months ended October 31, 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. 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 balance sheet was
derived.





The
results of the Company's operations for the three months ended October 31, 2008
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 business acquired had not generated any significant
revenue as of the date of the acquisition or through October 31,
2008.




The
Company is actively pursuing potential mergers. On October 1, 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 Investments,
LP (“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 has 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.




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 $43,000, and it incurred a loss from
operations of approximately $236,000 and cash flow deficiencies from operating
activities of approximately $229,000 for the three months ended October 31,
2008.  In addition, as of October 31, 2008, the Company only had cash
and cash equivalents available of approximately $392,000 and it had working
capital of approximately $184,000.  These matters raise substantial
doubt about the Company's ability to continue as a going concern.





Management
believes that, in the absence of a substantial increase in subscription
revenues, it is probable that the Company will continue to incur losses and
negative cash flows from operating activities through at least October 31, 2009
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 October 31, 2009. 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.





6
 JAG
MEDIA HOLDINGS INC. AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)





Note
2 - Net earnings (loss) per share:


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





As of
October 31, 2008, 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 for the three months ended October 31, 2008 because the Company had a
net loss in the three months ended October 31, 2008 and the assumed effects of
the exercise of the Company's stock options and warrants that were outstanding
during all or part of those periods would have been anti-dilutive.





The table
below presents the computation of basic and diluted earnings per common share
for the three months ended October 31, 2007:







Basic
      earnings per share computation
              
              Three Months EndedOctober 31, 2007Numerator:Net
      Income
              
              $
              1,331,679Denominator:Basic
      weighted average shares outstanding
              
              
              50,666,552Basic
      net income per common share
              
              $
              0.03


Diluted
      earnings per share computation
                      
                      Three Months EndedOctober 31, 2007Numerator:Net
      income, as reported
                      
                      $
                      1,331,679Add:          
      Interest expense on convertible debentures
                      
                      
                      64,868Debt discount on convertible debentures
                      
                      
                      125,240Deduct:     
      Gain on change in value of derivative liability attributable to
      optionsand warrants issued to non-employees assumed to have been
      exercisedat the beginning of period
                      
                      
                      (1,933,938
                      )Net
      loss, as adjusted
                      
                      $
                      (412,151
                      )Denominator:Basic
      weighted average shares outstanding
                      
                      
                      50,666,552Incremental
      shares from assumed conversion:Conversion
      of stock options
                      
                      
                      731,264Conversion
      of common stock warrants
                      
                      
                      2,632,207Conversion
      of convertible debt
                      
                      
                      4,050,000Diluted
      weighted average shares
                      
                      
                      58,080,023Diluted
      net loss per common share
                      
                      $
                      (0.01
                      )





7
 JAG
MEDIA HOLDINGS INC. AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)




Note
3 - Income taxes:





As of
October 31, 2008, the Company had Federal net operating loss carry forwards of
approximately $38,891,000 available to reduce future Federal taxable income
which will expire from 2019 through 2028.





As of
October 31, 2008, the Company's deferred tax assets consisted of the effects of
temporary differences attributable to the following:





Deferred
      revenues, net
                      
                      $
                      5,000Unearned
      compensation
                      
                      
                      20,000Net
      operating loss carryforwards
                      
                      
                      14,514,00014,539,000Less
      valuation allowance
                      
                      
                      (14,539,000
                      )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 October 31, 2008.





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 $105,000 and $173,000, during
the three months ended October 31, 2008 and 2007, respectively, which were
primarily attributable to the net income or 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 datethe 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.


8
 JAG
MEDIA HOLDINGS INC. AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)





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





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 (formerly JAG Media LLC), security
agreements executed by the Company and its subsidiary granting YA Global a
security interest in all their respective assets. 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.





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 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
October 31, 2007, the fair value of the warrants was approximately
$9,069,000.  This resulted in the recognition of unrealized gain on
derivative liability of approximately $1,990,000 during the three months ended
October 31, 2007.





In
addition, 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. On
September 30, 2008, the Company and YA Global agreed to reduce the exercise
price of warrants to purchase 3,000,000 shares 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 shares 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 three months ended October 31, 2008 and
additional paid-in capital as of October 31, 2008.





As of
October 31, 2008, there were no outstanding options granted to
non-employees.




During
the three months ended October 31, 2007, YA Global converted debentures in the
principal amount of $1,600,000 into 4,000,000 shares of the Company’s common
stock. The Company recorded amortization of debt discount attributable to the
debentures of approximately $125,000 during the three months ended October 31,
2007, including $0 which was accreted as a result of the conversions. As of
October 31, 2007, the debentures had a net carrying value of approximately
$1,132,000, reflecting the remaining outstanding principal balance due of
$1,920,000 reduced by remaining unamortized debt discounts aggregating
approximately $788,000.


9
 JAG
MEDIA HOLDINGS INC. AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)





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.





During
the three months ended October 31, 2008, the Company did not issue
any shares 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
October 31, 2008, the Company has options outstanding for the purchase of
750,000 shares of 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 123 and
SFAS 123(R) are materially consistent, the adoption of SFAS 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 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 three months ended October 31, 2008, YA Global exercised warrants for the
purchase of 1,750,000 shares of common stock at $0.20 per share resulting in net
proceeds to the Company of $350,000.





During
the three months ended October 31, 2008, the Company issued no options for the
purchase of shares of common stock.





As of
October 31, 2008, the Company has the ability to issue options to purchase an
additional 5,250,000 shares of common stock under the Incentive
Plan.




10
 JAG
MEDIA HOLDINGS INC. AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)





Note 5 —
Issuances of common stock and stock options (concluded):





The table
below summarizes the stock option activity pursuant to the Company’s Incentive
Plan for the three months ended October 31, 2008:


WeightedWeighted
                                  
                                  
                                  AverageAverage
                                  
                                  
                                  Remaining
                                  
                                  
                                  AggregateExercise
                                  
                                  
                                  Contractual
                                  
                                  
                                  IntrinsicShares
                                  
                                  
                                  Price
                                  
                                  
                                  Term
                                  
                                  
                                  ValueOptions
      outstanding August 1, 2008
                                  
                                  
                                  750,000
                                  
                                  
                                  $
                                  0.02Granted
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Exercised
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Options
      outstanding October 31, 2008
                                  
                                  
                                  750,000
                                  
                                  
                                  $
                                  0.02
                                  
                                  
                                  
                                  2.83
                                  
                                  
                                  $
                                  285,000Options
      exercisable October 31, 2008
                                  
                                  
                                  750,000
                                  
                                  
                                  $
                                  0.02
                                  
                                  
                                  
                                  2.83
                                  
                                  
                                  $
                                  285,000




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.





Note 7 -
BlueCreek merger:





As
explained in Note 1 herein, on October 1, 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 has 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 enter into a merger agreement with BlueCreek and e2Business under
which BlueCreek would become JAG Media’s wholly owned subsidiary. In
consideration of the merger, the shareholders of BlueCreek would acquire 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 receive up to an
additional 200,000,000 shares of JAGMedia’s common stock if
BlueCreek achieves certain post-closing milestones.  The shares of JAG
Media’s common stock to be issued to the shareholders of BlueCreek would not be
registered for sale with the SEC and would, therefore, be subject to the resale
restrictions of Rule 144.  JAG Media’s existing public shareholders
will experience 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 resign as directors and executive
officers of JAG Media Holdings, Inc and its subsidiaries.  The Board
of Directors and management would be replaced with designees of
BlueCreek.




The
closing of the merger would be conditioned upon (i) each party completing a due
diligence review, the results of which are satisfactory in all respects to each
party, (ii) the Company and 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 is
non-binding.  There is no assurance that the definitive documentation
called for in the letter of intent will ever be executed, or if executed, that
the proposed merger between the Company and BlueCreek 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 the Company and BlueCreek, as contemplated by the terms
of the letter of intent.





11




Item
2.  Management’s Discussion and Analysis and Results of
Operations





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 annual report on Form 10-K filed on November 11, 2008, as
amended on Form 10-K/A filed on November 11, 2008, have been applied
consistently for the three months ended October 31, 2008.




Related
Party Transactions




None




Off-Balance
Sheet arrangements




We are
not party to any off balance sheet arrangements.





Results
of operations




Three
months ended October 31, 2008 as compared to three months ended October 31,
2007.




Three
      Months ended October 31,2008
                        
                        
                        2007
                        
                        
                        $
      ChangeRevenues
                        
                        $
                        42,861
                        
                        
                        $
                        36,732
                        
                        
                        $
                        6,129Operating
      expenses:Cost
      of revenues
                        
                        
                        16,798
                        
                        
                        
                        4,621
                        
                        
                        
                        12,177Selling
      expenses
                        
                        
                        -
                        
                        
                        
                        7,296
                        
                        
                        
                        (7,296
                        )General
      and administrative expenses
                        
                        
                        262,507
                        
                        
                        
                        437,227
                        
                        
                        
                        (174,720
                        )Totals
                        
                        
                        279,305
                        
                        
                        
                        449,144
                        
                        
                        
                        (169,839
                        )Loss
      from operations
                        
                        
                        (236,444
                        )
                        
                        
                        (412,412
                        )
                        
                        
                        175,968Other
      income (expense) :Gain
      on change in value of derivativeliability
                        
                        
                        -
                        
                        
                        
                        1,933,938
                        
                        
                        
                        (1,933,938
                        )Interest
      expense
                        
                        
                        (72,300
                        )
                        
                        
                        (189,847
                        )
                        
                        
                        117,547Net
      income (loss)
                        
                        $
                        (308,744
                        )
                        
                        $
                        1,331,679
                        
                        
                        $
                        (1,640,423
                        )




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 three months
ended October 31, 2008 versus the three months ended October 31, 2007 as
investors seek additional sources of information due to current financial market
conditions.  This demand for additional sources of financial information
resulted in an increase in the number of our subscribers.




12




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 three months ended October 31, 2008, there were approximately $10,000 of
consulting fees as compared to approximately none for the three months ended
October 31, 2007.  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 $10,000 for the three months ended
October 31, 2008.  The increase in consulting fees is a result of the
amortization of consulting contracts associated with maintaining the content
of our jagnotes.com website. 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




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 $18,000 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 reduction in an accrual
of approximately $22,000 for settlement of a payroll tax audit for the three
months ended October 31, 2008 as opposed to an accrual for payroll taxes of
approximately $45,000 for the three months ended October 31, 2007 and decreases
in salaries of approximately $51,000 and decreases in consulting fees of
approximately $57,000 during the three months ended October 31, 2008 versus the
October 31, 2007.





Gain
on change in value of derivative liability





As of
July 31, 2008 and October 31, 2008, 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 October 31, 2008 or gain or
loss resulting from the change in the fair market value of our common
stock.  The gain on derivative liability for the three months ended
October 31, 2007 reflects the effect of the decrease in the fair market value of
our common stock and the resulting increase as of October 31, 2007 in the excess
of the fair value of the value of the warrants issued in excess of debt proceeds
and options issued to non-employees as compensation. As of October 31, 2007, the
fair market value of the warrants was approximately $9,069,000 while as of
July 31, 2007, the fair market value of those warrants was approximately
$11,059,000, resulting in a gain of approximately $1,990,000 for the three
months ended October 31, 2007. There were no options issued to non-employees at
October 31, 2008 or July 31, 2008.




Interest
expense




The decrease in interest expense of
approximately $118,000 arises from the reduction in the principal amount
outstanding of YA Global Investments, L.P.’s (“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 three months ended October 31, 2008.





During
the three months ended October 31, 2007 interest totaling approximately $190,000
is comprised of interest on our secured convertible debentures and interest from
amortization of debt discount. Interest on debentures of approximately $65,000
was incurred as interest charged at 10% per annum on our convertible
debentures.




13




Liquidity
and Capital Resources





We only
generated revenues of approximately $43,000 and $37,000 and we incurred net
operating losses of approximately $236,000 and $412,000 and cash flow
deficiencies from operating activities of approximately $229,000 and $261,000
for the three months ended October 31, 2008 and 2007,
respectively.  In addition, at October 31, 2008, we had cash and cash
equivalents of approximately $392,000 and working capital of approximately
$184,000.  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 October 31, 2009 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 October 31, 2009. 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 $392,000 as of October 31, 2008 results primarily from the
transaction 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 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 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
had issued certain accounting pronouncements as of October 31, 2008 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 three months
ended October 31, 2008 and 2007 or that they will have a significant effect at
the time they become effective.





Recent
Events





On
October 1, 2008, we entered into a non-binding Letter of Intent with BlueCreek
Energy, Inc. (“BlueCreek”), a Colorado corporation engaged in the development,
extraction and processing of coalbed methane natural gas currently within the
Rocky Mountains region of the United States, e2Business Services, Inc.
(“e2Business”), a majority shareholder of BlueCreek and YA Global.  YA
Global, in addition to being the provider of much of our financing since 2002,
is a senior secured lender to BlueCreek and has 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, we would enter into a merger agreement with BlueCreek
and e2Business under which BlueCreek would become our wholly owned subsidiary.
In consideration of the merger, the shareholders of BlueCreek would acquire
339,402,576 shares of our common stock, representing upon issuance 82% of our
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 our
common stock to be received by the shareholders of BlueCreek at the closing of
the merger, the shareholders of BlueCreek may also receive up to an additional
200,000,000 shares of our common stock if BlueCreek achieves certain
post-closing milestones.  The shares of our common stock to be issued
to the shareholders of BlueCreek would not be registered for sale with the SEC
and would, therefore, be subject to the resale restrictions of Rule
144.  Our existing public shareholders will experience significant
dilution from the issuance of these shares to the shareholders of
BlueCreek.





Upon
closing of the merger, our current directors and executive officers would resign
as directors and executive officers of JAG Media Holdings, Inc and its
subsidiaries.  The Board of Directors and management would be replaced
with designees of BlueCreek.




14




In
connection with the proposed merger, the BlueCreek shareholders who immediately
prior to the closing own more than 15% of the outstanding BlueCreek stock (other
than YA Global, if applicable) will agree not to sell the shares of our common
stock issued in the merger for a period of twelve months from the closing;
provided, however, that prior to the expiration of such period and subject to
the resale restrictions of Rule 144, each of such shareholders may sell not more
than:




●
            50%
      of the shares that it would be permitted to sell pursuant to Rule 144,
      during any 3-month period following the expiration of the 6-month Rule 144
      holding period, if the post-merger company does not have its shares listed
      on the American Stock Exchange or the NASDAQ Capital Market at the time of
      such sales; or




●
            75%
      of the shares that it would be permitted to sell pursuant to Rule 144,
      during any 3-month period following the expiration of the 6-month Rule 144
      holding period, if the post-merger company does have its shares listed on
      the American Stock Exchange or the NASDAQ Capital Market at the time of
      such sales and has not received notice that it is not in compliance with
      any exchange listing requirements.




The
closing of the merger would be conditioned upon (i) each party completing a due
diligence review, the results of which are satisfactory in all respects to each
party, (ii) Us 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 us and
debt restructuring agreement with YA Global.  Except for certain
specified provisions, the letter of intent is non-binding.  There is
no assurance that the definitive documentation called for in the letter of
intent will ever be executed, or if executed, that the proposed merger between
us and BlueCreek 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 us and BlueCreek, 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 principles. 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 October 31, 2008 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 October 31, 2008, 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.




15




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




The
following shares of our Common Stock were issued to YA Global Investments, L.P.,
upon their exercise of Warrant No. CCP-4, in reliance on Section 3(a) (9) of the
Securities Act of 1933, as amended.





Date
      of Exercise
                
                Exercise
                  Price/Share
                
                
                Shares
                  Exercised
                
                
                Aggregate Exercise
                  AmountSeptember
      30, 2008
                
                $
                0.20
                
                
                
                1,750,000
                
                
                $
                350,000




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 £23,387, equivalent to approximately $36,000, based on the December 19, 2008
Exchange Rate of £1=US$1.54040).




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.




16




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:
      December 22, 2008
                By:
                /s/
      Thomas J. MazzarisiName:
                Thomas
      J. MazzarisiTitle:
                Chairman
      of the Board and Chief
                  Executive
      OfficerDate:
      December 22, 2008
                By:
                /s/
      Stephen J. SchoepferName:
                Stephen
      J. SchoepferTitle:
                President,
      Chief Financial Officer, Chief Operating Officer and
    Secretary





17





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




18