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 July
31, 2009.




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





For the transition period from
________to
_______.




Commission
file number 000-28761




JAG
MEDIA HOLDINGS, INC.


(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.)




6295
Northam Drive


Unit
8


Mississauga,
Ontario L4V 1WB


(Address
of Principal Executive Offices)




(905)
673-8501


(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
o




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  o
            Accelerated
      Filer  oNon-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 o      No
þ




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).




Yes o                        No o




As of
September 17, 2009 the Registrant had the following number of shares of its
capital stock outstanding: 217,656,202 shares of Common Stock, 1 share of Series
1 Preferred Voting Stock, par value $0.0001, representing 16 exchangeable shares
of the Registrant’s subsidiary, CardioGenics ExchangeCo Inc., which are
exchangeable into 276,655,415 shares of the Registrant’s Common Stock, 380,931
shares of Series 2 Class B Common Stock and 21,500 shares of Series 3 Class B
Common Stock.







JAG MEDIA HOLDINGS,
INC.




FORM 10-Q




For the Quarter Ended July 31,
2009




INDEX


PagePart I. Financial
    Information
            1Item 1: Financial Statements
      (Unaudited)
            1Condensed Consolidated Balance Sheets at July 31,
      2009 (Unaudited) and October 31, 2008
            1Condensed Consolidated Statements of Operationsand Accumulated Deficit(Unaudited)for the Three
      and Nine Months ended July31, 2009 and 2008and Cumulative from November 20, 1997 (date of
      inception) to July 31, 2009
            2Condensed Consolidated Statement of Changes in
      Stockholders’ Equity [Deficiency] (Unaudited) for the Nine Months ended
      July 31, 2009
            3Condensed Consolidated Statements of Cash Flows(Unaudited)for the Nine Months ended July 31, 2009 and 2008
      and Cumulative from November 20, 1997 (date of inception) to July 31,
      2009
            4Notes to Condensed Consolidated Financial
      Statements(Unaudited)
            5Item 2: Management’s Discussion and
      Analysis
            20Item 3: Quantitative and Qualitative Disclosures
      About Market Risk
            25Item 4T: Controls and
      Procedures
            25Part II. Other Information
            26Item 1: Legal Proceedings
            26Item 1A: Risk Factors
            26Item 2: Unregistered Sales of Equity Securities
      and Use of Proceeds
            26Item 3: Defaults Upon Senior
      Securities
            26Item 4: Submission of Matters to Vote of Security
      Holders
            26Item 5: Other Information
            26Item 6: Exhibits
            26Signatures
            27EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1:
  CERTIFICATIONS










PART I.  FINANCIAL INFORMATION







Item
1.  Financial Statements




JAG
Media Holdings, Inc.


(A
Development Stage Company)


Condensed
Consolidated Balance Sheets


July
      31
            
            
            October
      312009
            
            
            2008(unaudited)
            
            
            (Note
      2)AssetsCurrentCash
      and Cash Equivalents
            
            $
            3,007,564
            
            
            $
            253,872Deposits
      and Prepaid Expenses
            
            
            9,123
            
            
            
            8,309Refundable
      Taxes Receivable
            
            
            8,784
            
            
            
            9,091Government
      Grants and Investment Tax Credits Receivable
            
            
            176,025
            
            
            
            211,0243,201,496
            
            
            
            482,296Long
      TermGoodwill
            
            
            12,712,334
            
            
            
            —Property
      and Equipment
            
            
            53,122
            
            
            
            67,218Patents
            
            
            268,737
            
            
            
            234,71613,034,193
            
            
            
            301,934$
            16,235,689
            
            
            $
            784,230Liabilities
      and Stockholders' Equity (Deficiency)LiabilitiesCurrentAccounts
      Payable and Accrued Expenses
            
            $
            940,192
            
            
            $
            408,870Due
      to Director
            
            
            72,143
            
            
            
            872,435Derivative
      Liability
            
            
            12,155,739
            
            
            
            —Accrued
      Interest Payable
            
            
            —
            
            
            
            565,931Debentures
      Payable
            
            
            25,000
            
            
            
            1,006,97213,193,074
            
            
            
            2,854,208Mandatorily
      redeemable Class B common stock; par value $.00001 per share:
              400,000
      shares designated as series 2; 381,749 shares issued and
      outstanding
            
            
            4
            
            
            
            —40,000
      shares designated as series 3; 21,500 shares issued and
      outstanding
            
            
            —
            
            
            
            —4
            
            
            
            —Commitments
      and contingenciesStockholders'
      equity (deficiency):Preferred
      stock; par value $.0001 per share,
              50,000,000
      shares authorized, none issuedCommon
      stock; par value $.00001 per share;
              500,000,000
      shares authorized,
              217,421,011
      and 222,410,228 common shares and
              276,655,415
      and 0 exchangeable shares issued and
              outstanding
      as at July 31, 2009 and October 31, 2008 respectively
            
            
            4,941
            
            
            
            2,224Additional
      paid-in capital
            
            
            21,992,911
            
            
            
            2,051,017Accumulated
      deficit
            
            
            (18,905,391
            )
            
            
            (4,332,700
            )Accumulated
      other comprehensive income (loss)
            
            
            (49,850
            )
            
            
            209,481Total
      stockholders' equity (deficiency)
            
            
            3,042,611
            
            
            
            (2,069,978
            )Total
      liabilities and stockholders' equity (deficiency)
            
            $
            16,235,689
            
            
            $
            784,230




See notes
to condensed consolidated financial statements.




- 1
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Operations and Deficit (Unaudited)
 
 Three
Months and Nine Months Ended July 31, 2009 and 2008 and
 Cumulative from
November 20, 1997 (date of Inception) to July 31, 2009


For
      the Three Months Ended
                  
                  
                  For
      the Nine Months Ended
                  
                  
                  Cumulative
      From
                    November
      20, 1997
                    (Date
      of Inception) toJuly
      31,
                  
                  
                  July
      31,
                  
                  
                  July
      31,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008
                  
                  
                  2009Operating
      expensesAmortization
      of Property and Equipment
                  
                  $
                  6,736
                  
                  
                  $
                  8,196
                  
                  
                  $
                  18,958
                  
                  
                  $
                  24,761
                  
                  
                  $
                  152,909Amortization
      of Patent Application Costs
                  
                  
                  2,513
                  
                  
                  
                  —
                  
                  
                  
                  2,513
                  
                  
                  
                  —
                  
                  
                  
                  2,513Write-off
      of Patent Application Costs
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  29,928General
      and Administrative
                  
                  
                  1,345,418
                  
                  
                  
                  40,574
                  
                  
                  
                  1,401,453
                  
                  
                  
                  111,526
                  
                  
                  
                  2,833,665Research
      and Product Development, Netof
      Investment Tax Credits
                  
                  
                  1,318,826
                  
                  
                  
                  (120,998
                  )
                  
                  
                  1,389,868
                  
                  
                  
                  (91,240
                  )
                  
                  
                  2,413,247Total
      operating expenses and operating loss (income)
                  
                  
                  2,673,493
                  
                  
                  
                  (72,228
                  )
                  
                  
                  2,812,792
                  
                  
                  
                  45,047
                  
                  
                  
                  5,432,262Other
      expenses (income)Interest
      Expense and Bank Charges (Net)
                  
                  
                  481,285
                  
                  
                  
                  36,260
                  
                  
                  
                  598,543
                  
                  
                  
                  98,792
                  
                  
                  
                  2,113,038Loss
      on Change in Value of Derivative Liability
                  
                  
                  11,340,329
                  
                  
                  
                  —
                  
                  
                  
                  11,340,329
                  
                  
                  
                  —
                  
                  
                  
                  11,340,329Loss
      (Gain) on Foreign Exchange
                  
                  
                  (193,387
                  )
                  
                  
                  (40,894
                  )
                  
                  
                  (178,973
                  )
                  
                  
                  110,831
                  
                  
                  
                  19,762Total
      other expenses (income)
                  
                  
                  11,628,227
                  
                  
                  
                  (4,634
                  )
                  
                  
                  11,759,899
                  
                  
                  
                  209,623
                  
                  
                  
                  13,473,129Net
      Income (loss)
                  
                  $
                  (14,301,720
                  )
                  
                  $
                  76,862
                  
                  
                  $
                  (14,572,691
                  )
                  
                  $
                  (254,670
                  )
                  
                  $
                  (18,905,391
                  )Basic
      and Fully Diluted NetIncome
      (Loss) per Common Share
                  
                  $
                  (0.05
                  )
                  
                  $
                  0.00
                  
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.00
                  )Weighted-average
      shares of Common Stock outstanding
                  
                  
                  271,440,449
                  
                  
                  
                  222,410,228
                  
                  
                  
                  240,545,701
                  
                  
                  
                  222,410,228




See notes
to condensed consolidated financial statements.




- 2
-




JAG
Media Holdings, Inc.


(A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficiency)
(Unaudited)
 For
the Nine Months Ended July 31, 2009
 Common Stock
                    
                    
                    Additional
                      Paid-in
                    
                    
                    Deficit
                      Accumulated
      During
                      the
      Development
                    
                    
                    Accumulated
                      Other
                      Comprehensive
                    
                    
                    Total
                      Stockholders'
                      EquityShares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Stage
                    
                    
                    Income (Loss)
                    
                    
                    (Deficiency)Balance
      November 1, 2008
                    
                    
                    222,410,228
                    
                    
                    $
                    2,224
                    
                    
                    $
                    2,051,017
                    
                    
                    $
                    (4,332,700
                    )
                    
                    $
                    209,481
                    
                    
                    $
                    (2,069,978
                    )Issuance
      of common shares as payment ofdebenture
      interest, January 2009, $0.05 per share
                    
                    
                    4,950,945
                    
                    
                    
                    49
                    
                    
                    
                    236,194
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    236,243Issuance
      of common shares on exerciseof
      options, April 2009
                    
                    
                    5,709,798
                    
                    
                    
                    57
                    
                    
                    
                    (29
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    28Issuance
      of common sharesas
      employee compensation,May
      2009, $0.04 per share
                    
                    
                    26,963,129
                    
                    
                    
                    270
                    
                    
                    
                    1,110,703
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,110,973Issuance
      of common sharesto
      directors, May 2009, $0.04 per share
                    
                    
                    9,283,952
                    
                    
                    
                    93
                    
                    
                    
                    382,437
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    382,530Issuance
      of common sharesas
      employee compensationJune
      2009, $0.04 per share
                    
                    
                    4,575,647
                    
                    
                    
                    46
                    
                    
                    
                    187,766
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    187,812Issuance
      of common sharesin
      exchange for servicesrendered,
      June 2009, $0.04 per share
                    
                    
                    50,234
                    
                    
                    
                    -
                    
                    
                    
                    2,062
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    2,062Issuance
      of common sharesfor
      cash, June 2009 , $0.04 per share
                    
                    
                    240,902
                    
                    
                    
                    2
                    
                    
                    
                    8,600
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    8,602Issuance
      of common sharesin
      exchange for servicesrendered,
      July 2009, $0.04 per share
                    
                    
                    471,533
                    
                    
                    
                    5
                    
                    
                    
                    20,245
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    20,250Issuance
      of common shares aspayment
      of director compensation,July
      2009, $0.04 per share
                    
                    
                    2,410,055
                    
                    
                    
                    24
                    
                    
                    
                    103,476
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    103,500Issuance
      of common shares asemployee
      compensation,July
      2009, $0.04 per share
                    
                    
                    11,735,920
                    
                    
                    
                    117
                    
                    
                    
                    503,883
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    504,000Issuance
      of common sharesto
      retire debentures, July 2009, $0.03 per share
                    
                    
                    33,460,282
                    
                    
                    
                    335
                    
                    
                    
                    997,237
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    997,572Issuance
      of common sharesas
      payment of debentureInterest,
      July 2009, $0.05 per share
                    
                    
                    8,557,120
                    
                    
                    
                    86
                    
                    
                    
                    418,582
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    418,668Issuance
      of common sharesto
      retire director's loan,July
      2009, $0.04 per share
                    
                    
                    23,778,126
                    
                    
                    
                    238
                    
                    
                    
                    884,762
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    885,000Issuance
      of common sharesas
      payment of intereston
      director's loan,July
      2009, $0.04 per share
                    
                    
                    2,185,564
                    
                    
                    
                    22
                    
                    
                    
                    108,613
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    108,635Issuance
      of common sharesfor
      cash, July 2009
                    
                    
                    65,400,175
                    
                    
                    
                    654
                    
                    
                    
                    2,714,346
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    2,715,000Issuance
      of common shares as compensation
                      for
      consulting contract July 2009, $0.38 per share
                    
                    
                    1,000,000
                    
                    
                    
                    10
                    
                    
                    
                    379,990
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    380,000Beneficial
      conversion charge on
                      3rd
      debenture
                    
                    
                    —
                    
                    
                    
                    
                    
                    
                    
                    335,000
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    335,000Beneficial
      conversion charge on
                      director's
      loan
                    
                    
                    —
                    
                    
                    
                    
                    
                    
                    
                    117,109
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    117,109Reclassification
      of warrants to derivative
                      liability
                    
                    
                    
                    
                    
                    
                    
                    (786,710
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (786,710
                    )Assumption
      of options in reverse merger
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    644,806
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    644,806Comprehensive
      Income (Loss)Net
      Loss
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (14,572,691
                    )
                    
                    
                    
                    
                    
                    
                    (14,572,691
                    )Other
      Comprehensive Income (Loss)Currency
      Translation Adjustment
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (259,331
                    )
                    
                    
                    (259,331
                    )Effect
      of Reverse Merger
                    
                    
                    70,892,816
                    
                    
                    
                    709
                    
                    
                    
                    11,572,822
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    11,573,531Balance
      July 31, 2009
                    
                    
                    494,076,426
                    
                    
                    $
                    4,941
                    
                    
                    $
                    21,992,911
                    
                    
                    $
                    (18,905,391
                    )
                    
                    $
                    (49,850
                    )
                    
                    $
                    3,042,611
  See notes
to condensed consolidated financial statements.




- 3
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Statement
of Cash Flows (Unaudited)
 Nine
Months Ended July 31, 2009 and 2008 and
 Cumulative from
November 20, 1997 (date of Inception) to July 31, 2009
 Cumulative
      FromNovember
      20, 1997Nine
      Months Ended
                                                                  July
      31,
                                                                
                                                                
                                                                (Date
      of Inception)
                                                                  to
      July 31,2009
                                                                
                                                                
                                                                2008
                                                                
                                                                
                                                                2009Cash
      flows from operating activitiesNet
      Loss for the Period
                                                                
                                                                $
                                                                (14,572,691
                                                                )
                                                                
                                                                $
                                                                (254,670
                                                                )
                                                                
                                                                $
                                                                (18,905,391
                                                                )Adjustments
      to reconcile net loss for the period tonet
      cash provided used by operating activitiesAmortization
      of Property and Equipment
                                                                
                                                                
                                                                18,958
                                                                
                                                                
                                                                
                                                                24,761
                                                                
                                                                
                                                                
                                                                152,909Amortization
      of Patent Application Costs
                                                                
                                                                
                                                                2,513
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                2,513Write-off
      of Patent Application Costs
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                29,928Amortization
      of Deferred Debt Issuance Costs
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                511,035Loss
      on Extinguishment of Debt
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                275,676Loss
      on Change in Value of Derivative Liability
                                                                
                                                                
                                                                11,340,329
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                11,340,329Interest
      Accrued and Foreign Exchange Loss(Gain)
      on Debt
                                                                
                                                                
                                                                33,098
                                                                
                                                                
                                                                
                                                                75,516
                                                                
                                                                
                                                                
                                                                599,029Unrealized
      Foreign Exchange
                                                                
                                                                
                                                                (259,331
                                                                )
                                                                
                                                                
                                                                53,510
                                                                
                                                                
                                                                
                                                                29,770Beneficial
      Conversion Charge
                                                                  included
      in Interest Expenses
                                                                
                                                                
                                                                452,109
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                452,109Common
      Stock Issued as Employee or
                                                                  Officer/
      Director Compensation
                                                                
                                                                
                                                                2,288,815
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                2,508,282Common
      Stock Issued for Services
                                                                  Rendered
                                                                
                                                                
                                                                402,312
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                402,312Stock
      Options Issued for Services Rendered
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                192,238Stock
      Options Issued to Directors
                                                                  and
      Committee Chairmen
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                54,582Changes
      in Operating Assets and Liabilities,
                                                                  Net
      of AcquisitionDeposits
      and Prepaid Expenses
                                                                
                                                                
                                                                (80,769
                                                                )
                                                                
                                                                
                                                                3,658
                                                                
                                                                
                                                                
                                                                (88,962
                                                                )Refundable
      Taxes Receivable
                                                                
                                                                
                                                                1,197
                                                                
                                                                
                                                                
                                                                6,115
                                                                
                                                                
                                                                
                                                                (2,242
                                                                )Investment
      Tax Credits Receivable
                                                                
                                                                
                                                                55,671
                                                                
                                                                
                                                                
                                                                383,735
                                                                
                                                                
                                                                
                                                                (155,353
                                                                )Accounts
      Payable and Accrued Expenses
                                                                
                                                                
                                                                (89,139
                                                                )
                                                                
                                                                
                                                                79,177
                                                                
                                                                
                                                                
                                                                319,731Advances
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                131Net
      cash provided (used) by operatingactivities
                                                                
                                                                
                                                                (406,928
                                                                )
                                                                
                                                                
                                                                371,802
                                                                
                                                                
                                                                
                                                                (2,281,374
                                                                )Cash
      flows from investing activitiesCash
      Acquired from Acquisition
                                                                
                                                                
                                                                195,885
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                195,885Purchase
      of Property and Equipment
                                                                
                                                                
                                                                (297
                                                                )
                                                                
                                                                
                                                                (323
                                                                )
                                                                
                                                                
                                                                (184,657
                                                                )Patent
      Application Costs
                                                                
                                                                
                                                                (13,808
                                                                )
                                                                
                                                                
                                                                (18,217
                                                                )
                                                                
                                                                
                                                                (258,359
                                                                )Net
      cash provided (used) by investing activities
                                                                
                                                                
                                                                181,780
                                                                
                                                                
                                                                
                                                                (18,540
                                                                )
                                                                
                                                                
                                                                (247,131
                                                                )Cash
      flows from financing activitiesDue
      to Director
                                                                
                                                                
                                                                74,142
                                                                
                                                                
                                                                
                                                                38,104
                                                                
                                                                
                                                                
                                                                946,574Issue
      of Debentures
                                                                
                                                                
                                                                371,333
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                1,378,305Issue
      of Common Shares on Exercise of Stock Options
                                                                
                                                                
                                                                28
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                28Issue
      of Common Shares for Cash
                                                                
                                                                
                                                                2,723,602
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                3,523,847Redemption
      of 10% Senior Convertible Debentures
                                                                
                                                                
                                                                (369,972
                                                                )
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                (369,972
                                                                )Net
      cash provided by financing activities
                                                                
                                                                
                                                                2,799,133
                                                                
                                                                
                                                                
                                                                38,104
                                                                
                                                                
                                                                
                                                                5,478,782Effect
      of foreign exchange on cash and cash equivalents
                                                                
                                                                
                                                                179,707
                                                                
                                                                
                                                                
                                                                14,616
                                                                
                                                                
                                                                
                                                                57,287Cash
      and cash EquivalentsIncrease
      (decrease) in cash and cash equivalentsduring
      the period
                                                                
                                                                
                                                                2,573,985
                                                                
                                                                
                                                                
                                                                391,366
                                                                
                                                                
                                                                
                                                                2,950,277Beginning
      of period
                                                                
                                                                
                                                                253,872
                                                                
                                                                
                                                                
                                                                25,741
                                                                
                                                                
                                                                
                                                                —End
      of period
                                                                
                                                                $
                                                                3,007,564
                                                                
                                                                
                                                                $
                                                                431,723
                                                                
                                                                
                                                                $
                                                                3,007,564
  See notes
to condensed consolidated financial statements.




- 4
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008


1.
            Nature
      of Business





JAG Media
Holdings, Inc. (“JAG Media”) was incorporated December 16, 1997 in Nevada.
They are in the business of gathering and compiling financial and investment
information from various financial institutions and other Wall Street
professionals. Revenues of JAG Media are generated by releasing such financial
information to subscribers in a consolidated format on a timely basis through
facsimile transmissions and a web site. Jag Media has also developed software
focused on streaming video solutions. Historically, further development of this
software has been limited as a result of JAG Media’s lack of financial
resources.




CardioGenics
Inc. (“CardioGenics”) was incorporated November 20, 1997 in the Province of
Ontario, Canada, and carries on the business of development and
commercialization of diagnostic test products for the In Vitro diagnostics
market. CardioGenics has several test products that are in various stages of
development.




CardioGenics’
business is that of a development stage company, with a limited history of
operations and whose revenues, to date, have been primarily comprised of grant
revenue and Scientific Research Tax Credits from government agencies. There can
be no assurance that the Company will be successful in obtaining regulatory
approval for the marketing of any of the existing or future products that the
Company will succeed in developing.




On July
31st, 2009,
JAG Media and CardioGenics entered into a reverse acquisition transaction
(discussed further in Note 4), which results in JAG Media being the “legal
acquirer” and CardioGenics the “accounting acquirer” in accordance
with Statement of Financial Accounting Standards No. 141 "Business
Combinations" ("SFAS 141"). The prospective filings with the Securities and
Exchange Commission ("the SEC") included the historical financial results of
CardioGenics as of and for the periods ending July 31, 2009 and 2008 and JAG
Media, and its subsidiaries only as of and for the period commencing July 31,
2009, the date of the reverse acquisition, and will
hereafter  collectively be referred to as the Company.




References
herein to CardioGenics common shares has been retrospectively adjusted to
reflect the exchange ratio 20.957 JAG Media common shares for each share of
Cardiogenics common stock established in the share purchase
agreement.








2.
            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 condensed consolidated financial
position of JAG Media Holdings, Inc.  and its subsidiaries as of July
31, 2009, their results of operations for the nine and three months ended July
31, 2009 and 2008, changes in stockholders’ equity for the nine months ended
July 31, 2009 and cash flows for the nine months ended July 31, 2009 and 2008.
JAG Media and its subsidiaries are referred to together herein as the “Company”.
Pursuant to rules and regulations of 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 October 31, 2008 and 2007
and for the years ended October 31, 2008 and 2007 (the “Audited Financial
Statements”) included in the Company’s Form 8K/A that was previously filed with
the SEC on August 10, 2009 and from which the October 31, 2008 consolidated
balance sheet was derived.






- 5
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008


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




The
accompanying consolidated financial statements have been prepared using the
accounting principles generally accepted in the United States of America
applicable to a going concern, which contemplates the realization of assets and
the satisfaction of liabilities and commitments in the normal course of
business.




The
Company has incurred operating losses since inception and has experienced
negative cash flows from operations since inception.  The Company has
an accumulated deficit at July 31, 2009 of approximately $18.9 million. The
Company has not yet established an ongoing source of revenues sufficient to
cover its operating costs and to allow it to continue as a going
concern.  The Company has funded its activities to date almost
exclusively from debt and equity financings.  These conditions raise
substantial doubt about the Company’s ability to continue as a going
concern.




The
Company will continue to require substantial funds to continue research and
development, including preclinical studies and clinical trials of its product
candidates, and to commence sales and marketing efforts, if the FDA and other
regulatory approvals are obtained. In order to meet its operating cash flow
requirements Management’s plans include financing activities such as private
placements of its common stock and issuances of convertible debt
instruments.  Management is also actively pursuing industry
collaboration activities including product licensing and specific project
financing.




While the
Company believes it will be successful in obtaining the necessary financing to
fund its operations, meet revenue projections and manage costs, there are no
assurances that such additional funding will be achieved and that it will
succeed in its future operations.  The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts of liabilities that might be necessary should
the Company be unable to continue in existence.








3.
            Summary
      of Significant Accounting Policies





(a)
            Principles
      of Consolidation




The
consolidated financial statements include the accounts of the Company and its
100% owned subsidiaries.  All significant intercompany transactions
and balances have been eliminated.





(b)
            Development
      Stage Company


The
accompanying financial statements have been prepared in accordance with the
provisions of Statement of Financial Accounting Standards (“SFAS”) No.7,
“Accounting and Reporting by Development Stage Enterprises.”




(c)
            Cash
      and Cash Equivalents


The
Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.




(d)
            Research
      and Development Costs


Expenditures
for research and development are expensed as incurred and include, among other
costs, those related to the production of prototype products, including payroll
costs. Amounts expected to be received from governments under Scientific
Research Tax Credit arrangements are offset
against current expenses.  The Company recognizes revenue from
restricted grants in the period in which the Company has incurred the
expenditures in compliance with the specific restrictions.




- 6
-


JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 3.
              Summary
      of Significant Accounting Policies
(continued)
  (d)
              Net
      Loss Per Common Share
 Basic
earnings
per share (“EPS”) is computed by dividing income (loss) available to
common stockholders by the weighted average number of common shares outstanding
during the period. Diluted EPS gives affect to all dilutive potential common
shares outstanding during the period. The computation of diluted EPS does not
assume conversion, exercise or contingent exercise of securities that would have
an anti-dilutive effect on earnings.
 
 (e)
              Use
      of Estimates
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.
 
 (f)
              Foreign
      Currency Translation
 The
Company maintains its accounting records for its Canadian operations in Canadian
dollars. Transactions in United States dollars (“USD”) are translated into
Canadian dollars at rates in effect at the date of the transaction and gains or
losses on such transactions are recorded at the time of settlement in the
statement of operations.
  The
Company’s reporting currency is the United States dollar.  Foreign
denominated assets and liabilities of the Company are translated into USD at the
prevailing exchange rates in effect at the end of the reporting period, the
historical rate for shareholders’ equity and a weighted average of exchange rate
in effect during the period for expenses, gains and
losses.  Adjustments that arise from translation into the reporting
currency are recorded in the accumulated other comprehensive income (loss)
component of stockholders’ deficiency.
  The
Company carries out a portion of transactions in foreign
currencies.  The balances of the Company’s convertible debentures are
denominated in USD.  The Company monitors its risk and it is
management’s opinion that the Company is not exposed to significant foreign
currency risks related to the debentures.
 
 (g)
              Financial
      Instruments
 The
carrying values of cash and cash equivalents, other current assets, accounts
payable and accrued expenses approximate their fair values due to their
short-term nature.
  Debentures
approximate their fair value based upon the borrowings available for the nature
of the underlying debt.
   - 7
-
  JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 3.
              Summary
      of Significant Accounting Policies
(continued)
  (h)
              Effects
      of Recent Accounting Pronouncements
  In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value,
establishes a framework for measuring fair value in accordance with accounting
principles generally accepted in the United States, and expands disclosures
about fair value measurements. SFAS No.157 is effective for financial statements
issued for the Company’s fiscal year beginning November 1, 2008, with earlier
application encouraged. Any amounts recognized upon adoption as cumulative
effect adjustment will be recorded to the opening balance of retained earnings
in the year of adoption. On February 12, 2008, the FASB delayed the effective
date for non-financial assets and liabilities to fiscal years beginning on
November 15, 2008; however, the effective date for financial assets remains
intact. The Company is currently evaluating the impact of this statement for the
Non-financial assets and liabilities on its condensed consolidated results of
operations or condensed consolidated financial position.
  In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS
No. 141(R)”), which establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in an
acquiree, including the recognition and measurement of goodwill acquired in a
business combination.  SFAS No. 141(R) is effective as of the
beginning of the first fiscal year beginning on or after December 15,
2008.  Earlier adoption is prohibited and the Company is currently
evaluating the effect, if any that the adoption will have on its consolidated
financial position, results of operations or cash flows.
  In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interest in
Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS No. 160”),
which will change the accounting and reporting for minority interests, which
will be recharacterized as noncontrolling interests and classified as a
component of equity within the consolidated balance sheets.  SFAS No.
160 is effective as of the beginning of the first fiscal year beginning on or
after December 15, 2008.  Earlier adoption is prohibited and the
Company is currently evaluating the effect, if any that the adoption will have
on its consolidated financial position, results of operations or cash
flows.
  In May
2008, the FASB issued FASB
Staff Position (“FSP”) Accounting Principles Board (“APB”) Opinion 14-1,
“Accounting for Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlements).” This FSP requires a portion of
this type of convertible debt to be recorded as equity and to record interest
expense on the debt portion at a rate that would have been charged on
nonconvertible debt with the same terms. This FSP takes effect in the first
quarter of fiscal years beginning after December 15, 2008 and will be applied
retrospectively for all periods presented. It will be effective for the Company
on November 1, 2009.  The Company is currently evaluating how it may
affect the consolidated financial statements.
   - 8
-
  JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 3.
              Summary
      of Significant Accounting Policies
(continued)
 
 (h)
              Effects
      of Recent Accounting Pronouncements
(continued)
  In April
2008, the FASB issued Emerging Issue Task Force (“EITF”) 07-05, “Determining
whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own
Stock.”  EITF 07-5 applies to any freestanding financial instruments
or embedded features that have the characteristics of a derivative, as defined
by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”
and to any freestanding financial instruments that are potentially settled in an
entity’s own common stock.  EITF 07-5 is effective for financial
statements issued for fiscal years beginning after December 15,
2008.  The Company is currently evaluating the impact of EITF 07-5
will have on its financial position, results of operations or cash
flows.
  In June
2008, the FASB issued FSP 03-6-1, “Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities.” Securities
participating in
dividends with common stock according to a formula are participating securities.
This FSP determined unvested shares of restricted stock and stock units with no
forfeitable rights to dividends are participating securities. Participating
securities require the “two-class” method to be used to calculate basic earnings
per share. This method lowers basic earnings per common share. This FSP takes
effect in the first quarter of fiscal years beginning after December 15, 2008
and will be applied retrospectively for all periods presented. It will be
effective for the Company on November 1, 2009. The Company does not expect FSP
EITF 03-6-1 to have a material effect on its consolidated financial
statements.
  In May
2009, FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”), which
established general accounting standards and disclosure for subsequent events.
The Company adopted SFAS 165 during the quarter ended July 31, 2009. In
accordance with SFAS No. 165, the Company has evaluated subsequent events
through the date and time the condensed consolidated financial statements were
issued on September 21, 2009. No material subsequent events have occurred since
July 31, 2009 that would require recognition or disclosure in these condensed
consolidated financial statements.
   4.
              Acquisition
  On July
31, 2009, JAG Media completed a reverse acquisition of privately held
CardioGenics, an Ontario, Canada Corporation. The acquisition was effected
pursuant to a Share Purchase Agreement dated May 22, 2009 by and among the
Company, CardioGenics Inc. and CardioGenics ExchangeCo Inc., the Company’s
wholly owned subsidiary (“ExchangeCo”). In accordance with the terms of the
Share Purchase Agreement, 99% of the holders of common shares of CardioGenics
Inc. (two (2) minority shareholders of CardioGenics Inc. holding in aggregate
173,869 common shares of CardioGenics Inc. did not participate) surrendered
their CardioGenics Common Shares to ExchangeCo. ExchangeCo caused the Company to
issue to the CardioGenics shareholders 422,183,610 shares of the Company’s
common stock, par value $0.00001 (the “Share Consideration”). The
CardioGenics shareholders had the option to receive their pro-rata
allocation of the Share Consideration in the form of (a) JAG
Media’s  common stock
(the “JAG Consideration Shares”) or (b) exchangeable shares of ExchangeCo.,
which shares are exchangeable at any time after July 31, 2009 into a number
of shares of the JAG Media’s common stock equal to such shareholders’ pro rata
allocation of the Share Consideration (the “Exchangeable Shares”). The
Exchangeable Shares have the same voting rights, dividend entitlements and other
attributes as JAG Media common stock. Exchangeable Shares will automatically be
exchanged for JAG Media common stock five years from July 31, 2009,
and upon the occurance of certain other events. The Share
Consideration provides the former CardioGenics shareholders with direct and/or
indirect ownership of approximately 85% of JAG Media’s outstanding common stock
(on a fully diluted basis) as of July 31, 2009.
  - 9
-
  JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 On July
31, 2009, 145,528,195 common shares of JAG Media were issued to certain former
shareholders of CardioGenics and 16 Exchangeable Shares, which are exchangeable
into 276,655,415 common shares of JAG Media, were issued to former
CardioGenics shareholders who elected to take such Exchangeable Shares. JAG
Media common shares received by the CardioGenics shareholders in exchange for
their CardioGenics Cammon Shares are not registered for resale and, therefore,
shall remain subject to the rights and restrictions of Rule 144. All
Exchangeable Shares received by the CardioGenics shareholders in exchange for
their CardioGenics Common Shares (and any JAG Media common stock into which such
Exchangeable Shares may be exchanged) shall not be registered for resale prior
to six (6) months following July 31, 2009 and, therefore, shall remain subject
to the rights and restrictions of Rule 144 prior to any such
registration.
  The Share
Consideration provides the CardioGenics shareholders with direct and/or
indirect ownership of approximately 85% of JAG Media’s outstanding common stock
(on a fully diluted basis) as of July 31, 2009. Based on the five-day average
price of the Company’s common stock of $0.16 per share, the purchase price
approximated was $11,573,536, plus approximately $275,000 of acquisition cost
plus fair value of options and warrants assumed of $644,806.
  A summary
of the purchase price allocation is as follows:
 Common
      stock issued
              
              $
              11,573,536Acquisition
      costs incurred
              
              
              275,000Fair
      value of options and warrants assumed
              
              
              644,806Total
      purchase price
              
              $
              12,493,342
 The
purchase price has been allocated as follow based on the fair values of the
assets and liabilities acquired:
  Cash
                
                $
                195,885Accounts
      payable
                
                
                (386,177
                )Derivative
      liability for warrants assumed
                
                
                (28,700
                )Goodwill
                
                
                12,712,334Total
                
                $
                12,493,342
 The
following pro forma condensed consolidated financial information presents the
combined results of operations of JAG Media Holdings, Inc. and CardioGenics,
Inc. as if the acquisition had occurred as of November 1, 2008 and 2007, after
giving effect to certain adjustments, including the issuance of JAG Media
Holdings, Inc. common stock as part of the purchase price. For the purpose of
this pro forma presentation, both JAG Media Holdings, Inc.’s and CardioGenics,
Inc.’s financial information is presented for the three and nine months ended
July 31, 2009 and 2008, respectively. The pro forma condensed consolidated
financial information does not necessarily reflect the results of operations
that would have occurred had JAG Media Holdings, Inc. and CardioGenics, Inc.
been a single entity during such periods.
 
 Three
      Months ended
                July
      31,
              
              
              Nine
      Months ended
                July
      31,2009
              
              
              2008
              
              
              2009
              
              
              2008Revenues
              
              $
              44,742
              
              
              $
              57,329
              
              
              $
              118,655
              
              
              $
              140,333Net
      loss
              
              $
              (14,795,692
              )
              
              $
              (154,197
              )
              
              $
              (15,723,210
              )
              
              $
              (4,418,312
              )Weighted-average
      shares ofCommon
      stock outstanding:Basic
              
              
              342,458,190
              
              
              
              283,966,113
              
              
              
              307,072,264
              
              
              
              281,537,003Basic
      and diluted net loss per common share
              
              $
              (0.04
              )
              
              $
              (0.00
              )
              
              $
              (0.05
              )
              
              $
              (0.02
              )
   - 10
-
  JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 5.
              Due
      to Director
 
 The
amount due to a director is due on demand and carries interest at 10% per
annum.  Amounts payable and accrued expenses include accrued interest
payable on the amount due to the director of $149,498 and $177,807 as of July
31, 2009 and 2008, respectively. On July 31, 2009, $885,000 due to a director
was converted to 23,778,126 common shares of the Company. A beneficial
conversion charge of $117,109 was credited against additional paid-in capital.
Accrued interest on the director’s loan of $108,635 was converted to 2,185,522
common shares of the Company at the same time.
  On
January 28, 2009, the Company issued to a director and an officer of the Company
a new series of debentures in the amount of $371,333.  The debentures
were for a term of two years and carry interest at 10% per annum.  At
July 31, 2009, the holders of the debentures exchanged the debentures, plus
accrued interest, for 17,017,084 common shares of the Company’s common stock. A
beneficial conversion charge of $335,000 was credited against additional paid-in
capital.
 
 6.
              Income
    Taxes
 
 The
Company adopted the provisions of FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes – and interpretation of FASB Statement No. 109”
(“FIN 48”), on August 1, 2007. FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statement in accordance
with FASB Statement 109 “Accounting for Income Taxes”, and prescribes a
recognition threshold and measurement process for financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. FIN 48 also provides guidance on derecognition classification,
interest and penalties accounting in interim periods disclosure and
transition.
  Based on
the Company’s evaluation, management has concluded that there are no significant
tax positions requiring recognition in the condensed consolidated financial
statements.
  The
Company has incurred losses since inception, which have generated net operating
loss carryforwards for income tax purposes.  The net operating loss
carryforwards arise from Canadian sources of approximately
$4,901,719.
  All
fiscal years have been examined; however, claims relating to research and
development credits are open for review for the fiscal years ended October 2008
and 2007 and the nine months ended July 31, 2009.
  For the
nine months ended July 31, 2009 and 2008, the Company’s effective tax rate
differs from the statutory rate principally due to the net operating losses for
which no benefit was recorded.
 
 
 7.
              Debentures
      Payable
 
 10%
Senior Convertible Debentures
  10%
Senior Convertible Debentures due September 30, 2006 and extended to September
30, 2009. The debentures are senior in right of payment to all other
indebtedness of the Company. Interest is payable at maturity, conversion or
redemption of the debentures. Interest on interest is calculated at 10%
annually, compounded monthly, payable on redemption or conversion of the
debentures. Interest may, at the option of the Company, be paid in cash or
common shares, the latter at the rate of 20.957 common shares per $1 of
interest.  The debentures may be converted in multiples of $25,000 by
the holder at any time in exchange for the lesser of (i) 20.957 shares for each
$1 face value of debentures being converted or (ii) at a price equal to 90% of
the most recent issue price of common shares to an arm's length investor. The
Company may redeem the debentures at any time after the giving to the holders of
seven (7) days notice, during which time the holders must notify the Company
whether the redemption is to occur in cash or common shares, the latter in
exchange for the lesser of (i) 20.957 common shares for each $1 face value of
debentures being converted, or (ii) at a price equal to 90% of the most recent
issue price of common shares. Interest may be converted at the option of the
Company into 20.957 common shares for each $1 payable.  Debentures
totalling $234,972 were payable to former officers of the
Company.
   - 11
-
  JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 On
November 12, 2008, a group of holders of Senior Convertible Debentures, holding
in total $369,972 principal amount of senior convertible debentures plus accrued
interest of $235,243, issued a notice of default under the debentures,
demanding, within sixty (60) days of the notice, payment of principal, or
conversion to common shares of the Company at the rate of 83.828 common shares
for each $1 face value of Debentures outstanding, plus interest on conversion to
common shares at the rate of 20.957 common shares for each $1 of interest
payable. The debenture was settled as follows: the principal amount of $369,972
was repaid in cash on January 27, 2009 and the interest payable on that
date in the amount of $236,243 was satisfied by the issuance of 4,950,945 common
shares of the Company
  At July
31, 2009, $280,000 senior convertible debentures were converted to common shares
of the Company at the rate of 20.957 common shares of the Company for each $.78
face value of the debentures. Interest was converted at the rate of 20.957
common shares of the Company for each $1 payable.
  10%
Subordinated Convertible Debentures
  10%
Subordinated Convertible Debentures due September 30, 2006 and extended to
September 30, 2009. The debentures are senior in right of payment to all other
indebtedness of the Company except for the senior convertible debentures
described above. Interest is payable at maturity, conversion or redemption of
the debentures. Interest on interest is calculate at 10% annually, compounded
monthly, payable on redemption or conversion of the debentures. Interest may, at
the option of the Company, be paid in cash or common shares of the Company, the
latter at the rate of 20.957 common shares of the Company per $1 of interest.
The debentures may be converted in multiples of $25,000, or the entire
outstanding principal sum if less than $25,000, by the holder at any time in
exchange for the lesser of (i) 20.957 shares for each $1 face value of
debentures being converted, or (ii) at a price equal to 90% of the most recent
issue price of common shares to an arm's length investor. The Company may redeem
the debentures at any time after the giving to the holders of seven (7) days
notice, during which time the holders must notify the Company whether the
redemption is to occur in cash or common shares, the latter in exchange for the
lesser of (i) 20.957 common shares of the Company for each $1 face value of
debentures being converted, or (ii) at a price equal to 90% of the most recent
issue price of common shares of the Company. Interest may be converted at the
option of the Company into 20.957 common shares of the Company for each $1
payable.
  At July
31, 2009, the subordinated convertible debentures were converted to common
shares of the Company at the rate of 20.957 common shares of The Company for
each $.78 face value of the debentures. Interest was converted at rate of 20.957
common shares of the Company. for each $1 payable.
   - 12
-
  JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 7.
              Debentures
      Payable (continued)
 
 Current
convertible debentures consist of:
  July
      31,
                
                
                October
      31,2009
                
                
                200810%
      Senior Convertible Debentures
                
                $
                25,000
                
                
                $
                674,97210%
      Subordinated Convertible Debentures
                
                
                —
                
                
                
                332,000$
                25,000
                
                
                $
                1,006,972
 
 The
convertible debentures are accounted for in accordance with EITF 98-5 and 00-27.
The following summarizes the significant terms and accounting for each
convertible debenture entered into by the Company.
 
 $
              674,972
              
              
              $
              332,000Debenture
              
              
              DebentureDate
      issued
              
              9/30/2003
              
              
              9/21/2004Debenture
      Amount
              
              $
              674,972
              
              
              $
              332,000#
      of Debentures
              
              
              16
              
              
              
              9Gross
      Proceeds
              
              $
              674,972
              
              
              $
              332,000Net
      Proceeds
              
              $
              674,972
              
              
              $
              332,000Warrants
      Issued to Investors
              
              
              14,145,388
              
              
              
              6,957724Warrant
      Exercise Price
              
              $
              0.047
              
              
              $
              0.047Warrant
      Fair Value (WFV)
              
              $
              0.02514
              
              
              $
              0.0225Warrant
      Relative Fair Value (WRFV)
              
              $
              232,926
              
              
              $
              106,557Beneficial
      Conversion Feature (BCF)
              
              $
              84,432
              
              
              $
              33,517Black-Scholes
      Model AssumptionsFair
      value of common stock
              
              $
              0.037
              
              
              $
              0.037Risk
      Free Interest Rate (%)
              
              
              4.73
              
              
              
              4.73Expected
      Volatility
              
              
              .7248
              
              
              
              .6866Life
      of Warrants (years)
              
              
              7
              
              
              
              6Costs
      associated with issuance classified as deferred debt issuance
      costs
              
              $
              41,048
              
              
              $
              12,554Amortization
      of WFV and BCF as Non-cash Interest Expense
              
              $
              317,358
              
              
              $
              140,074Principal
      and Interest Converted
              
              
              —
              
              
              
              —Shares
      Issued Upon Conversion
              
              
              —
              
              
              
              —Principal
      and Interest Repayments in Shares Of Common Stock
              
              
              —
              
              
              
              —Shares
      Issued for Principal and Interest Repayments
              
              
              —
              
              
              
              —Principal
      and Interest Repayments in Cash
              
              
              —
              
              
              
              —
 
 As of
July 31, 2009, and October 31, 2008, the outstanding balance of debentures
payable, was $25,000, and $1,006,972, net of unamortized debt discount of $-0-
in each year, respectively.  The accrued interest payable on the
debentures was $0 and $454,265 as of July 31, 2009 and 2008,
respectively.
   - 13
-
  JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008
 7.
              Debentures
      Payable (continued)
 
 On May 6,
2007, the maturity date of the debentures payable was extended to September 30,
2007. The term of the existing warrants associated with the original debentures
was extended from September 30, 2010 to September 30, 2011.  The
conversion price was amended to the lesser of 1) a discount of 10% of whatever
forms an arm’s length financing, existing or in the future, comes in at or 2)
$0.047.  At the date of the extension, the Company recorded in its
statement of operations a loss on extinguishment of debt of
$44,096.  The debentures were fully accreted to face value at the time
of the extension.
  On
October 2, 2008 the maturity date of the debentures payable was extended to
September 30, 2009. The existing warrants associated with the original
debentures were cancelled and replaced by warrants entitling the holder to
purchase 31.44 common shares in the Company for each $1 principal amount of the
debenture at a price of $0.047 per share up to and including January 30,
2014.   Certain holders of the 10% senior convertible debentures
did not agree to the extension of the due date to September 30, 2009 and hence
are entitled to demand either the payment of principal, or conversion to common
shares of the Company at the rate of 83.838 common shares of the Company for
each $1 face value of debentures outstanding plus interest on conversion to
common shares at the rate of 20.957 common shares of the Company for each $1 of
interest payable.  At the date of the extension, the Company recorded
in its statement of operations a Loss on Extinguishment of Debt of
$231,580.  The debentures were fully accreted to face value at the
time of the extension.
  On
November 12, 2008, a group of holders of senior convertible debentures, holding
in total $369,972 principal amount of Senior Convertible Debentures plus accrued
interest of $236,243, issued a notice of default under the debentures,
demanding, within sixty (60) days of the notice, payment of principal, or
conversion to common shares at the rate of 83.828 common shares of CardioGenics
Inc. for each $1 face value of debentures outstanding, plus interest on
conversion to common shares of CardioGenics Inc. at the rate of 20.957 common
shares of the Company for each $1 of interest payable. The debenture was settled
as follows: the principal amount of $369,972 was repaid in cash January 27, 2009
and the interest payable on that date in the amount of $236,243 was satisfied by
the issuance of 4,950,945 common shares.
  10%
Convertible Debentures
 On
January 28, 2009, the Company issued to a director and an officer of the Company
a new series of Debentures in the amount of $371,333.The Debentures were for a
term of two years and carried interest at 10% per annum, interest payable at
maturity.
  At July
31, 2009 the debenture holders exchanged the debentures, plus accrued interest,
for 812,000 common shares of the Company’s common stock. A beneficial conversion
charge of $335,000 was credited against Additional Paid-In Capital.
  8.
              Stock
      Based Compensation
 
 Effective
November 1, 2005, the Company implemented the fair value recognition provisions
of SFAS 123(R) and SAB 107 for all share-based
compensation.  Stock-based employee compensation related to stock
options for each of the nine months ended July 31, 2009 and 2008
amounted to $-0-.
  The fair
value of each option granted is estimated on grant date using the Black-Scholes
option pricing model which takes into account as of the grant date the exercise
price and expected life of the option, the current price of the underlying stock
and its expected volatility, expected dividends on the stock and the risk-free
interest rate for the term of the option.  The Company did not grant
any stock options during the nine months ended July 31, 2009 and
2008.
  - 14
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008


The
following is a summary of the common stock options granted, forfeited or expired
and exercised under the Plan:




WeightedAverageExerciseOptions
                    
                    
                    PriceOutstanding
      – November 1, 2006
                    
                    
                    9,901,198
                    
                    
                    $
                    0.02Granted
                    
                    
                    —
                    
                    
                    
                    —Forfeited/expired
                    
                    
                    —
                    
                    
                    
                    —Exercised
                    
                    
                    —
                    
                    
                    
                    —Outstanding
      – October 31, 2007
                    
                    
                    9,901,198
                    
                    
                    $
                    0.02Granted
                    
                    
                    —
                    
                    
                    
                    —Forfeited/expired
                    
                    
                    —
                    
                    
                    
                    —Exercised
                    
                    
                    —
                    
                    
                    
                    —Outstanding
      – October 31, 2008
                    
                    
                    9,901,198
                    
                    
                    
                    —Granted
                    
                    
                    —
                    
                    
                    
                    —Forfeited/expired
                    
                    
                    (4,191,400
                    )
                    
                    $
                    0.06Exercised
                    
                    
                    (5,709,798
                    )
                    
                    
                    0.05Assumed
      upon JAG Media acquisition
                    
                    
                    2,750,000
                    
                    
                    $
                    0.25Outstanding
      – July 31, 2009
                    
                    
                    2,750,000
                    
                    
                    $
                    0.25Exercisable
                    
                    
                    2,750,000
                    
                    
                    $
                    0.25





The
Company does not have any unvested options or unrecognized compensation expense
at July 31, 2009 and 2008.








9.
            Stockholders’ Equity
      (Deficiency)





Comprehensive
Income (Loss)


Comprehensive
loss, which includes net loss from the change in the foreign currency
translation account, for the three and nine months ended July 31, 2009 and 2008
respectively was as follows:





For
      the Three Months Ended
              July
      31,
            
            
            For
      the Nine Months Ended
              July
      31,2009
            
            
            2008
            
            
            2009
            
            
            2008Net
      income (loss)
            
            
            (14,301,720
            )
            
            
            76,862
            
            
            
            (14,572,691
            )
            
            
            (254,670
            )Currency
      translation adjustment
            
            
            (269,371
            )
            
            
            3,080
            
            
            
            (259,331
            )
            
            
            53,510Comprehensive
      income (loss)
            
            $
            (14,571,091
            )
            
            $
            79,942
            
            
            $
            (14,832,022
            )
            
            $
            (201,160
            )




Equity
Instruments Issued for Services Rendered


During
the years ended October 31, 2000 through 2006 the Company issued stock options
with a nominal exercise price in exchange for services rendered to the Company.
The fair value of each stock option was measured at the fair value of the
underlying services on the date of grant.  The fair value of each
grant was charged to the related expense in the statement of
operations.




- 15
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008


At each
period end, CardioGenics Inc. had outstanding the following options and
warrants:





July
      31
              
              
              October2009
              
              
              2008Share
      Purchase OptionsIssued
      to Members of the Board of Directors and Committee Chairmen entitling the
      holder to purchase 20.957 common sharesofthe at a price of
      $.06 per share to October 31, 2009
              
              
              —
              
              
              
              4,191,400Issued
      to Consultants entitling the holders to purchase common shares ofthe Company at a
      price of $28.00 for the total quantity under the grant
              
              
              —
              
              
              
              5,709,798Assumed
      upon acquisition of JAG Media
              
              
              2,750,000Total
      Share Purchase Options Outstanding
              
              
              2,750,000
              
              
              
              9,901,198





At July
31, 2009, the CardioGenics assumed options outstanding at JAG Media entitling
the employees to purchase 750,000 common shares of the Company’s stock at a
price of $0.02 per share to August 31, 2011.




At July
31, 2009, the Company issued options to employees entitling the employees to
purchase 2,000,000 common shares of the Company’s stock at a price of $0.34 per
share to July 31, 2019, based upon change of control provisions in their
employment agreements.  All these options were immediately
vested.  The fair value of 2,750,000 options assumed from JAG Media is
included in the purchase price.






- 16
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008


July
      31,
            
            
            October
      31,2009
            
            
            2008WarrantsIssued
      to subscribers to the debenture financing of 2003 and its related
      extension entitling the holder to purchase 1 common share of the Company
      at an exercise price of $0.047 per common share up to and including July
      31, 2012
            
            
            21,218,082
            
            
            
            21,218,082Issued
      to agents for the debenture financing of 2003 entitling the holder to
      purchase 1 common share of the Company at an exercise price of $0.047 per
      common share up to and July 31, 2012
            
            
            1,527,765
            
            
            
            1,527,765Issued
      to subscribers to the debenture financing of 2003 and its related
      extension entitling the holder to purchase 1 common share in the Company
      at an exercise price of $0.047 per common share up to and including July
      31, 2012
            
            
            10,436,586
            
            
            
            10,436,586Issued
      to agents for the debenture financing of 2003 entitling the holder
      to  purchase 1 common share in the Company at an exercise price
      of $0.047 per common share up to and including July 31,
    2012
            
            
            556,618
            
            
            
            556,618Total
      Warrants outstanding
            
            
            33,739,051
            
            
            
            33,739,051





At July
31, 2009, on completion of the acquisition detailed at Note 4, the expiration
date of these warrants was fixed at July 31, 2012 in accordance with the terms
of the warrants.





Since the conversion of the warrants
could result in the issuance of common shares in excess of the number of common
shares authorized, 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 will be prohibited from concluding that it will 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. Therefore, as of the date of the reverse acquisition, the Company
recorded the related fair value of all warrants issued with prior debentures
previously issued to non-employees as a liability. Subsequent changes in the
fair value of such options and warrants at the end of each reporting period will
be recorded as charges or credits to the Company’s results of operations.





At July
31, 2009, the Company assumed the remainder of warrants dated May 24, 2006
entitling YA Global to purchase 250,000 shares of the Company’s common stock for
$0.40 per share.






- 17
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008


10.
            Standby
      Equity Distribution Agreement





On March
12, 2009, the Company 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 the Company’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”). The Company 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, the Company 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 Volumes 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 the Company.
Further, the Company’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 or the OTC
Bulletin Board of 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”), the Company shall issue
to YA Ltd, as a commitment fee, shares of the Company’s 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 the Company 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, the Company and YA Ltd also
entered into a Registration Rights Agreement (the “Registration Rights
Agreement”) pursuant to which the Company agreed to register the shares of the
Company’s common stock to be issued in connection with the SEDA (the
“Registrable Securities”). The Company 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 the Company shall not have the
ability to make any Advances under the SEDA until the Registration Statement is
declared effective. The Company 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 the
Company such Registrable Securities may permanently be sold without registration
and without any time, volume or manner limitations pursuant to Rule
144.






- 18
-




JAG
Media Holdings, Inc.
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements (Unaudited)
 July 31, 2009 and 2008


11.
            Issuances
      of Common Stock





During
the nine months ended July 31, 2009, the Company issued the following common
shares:




Nine
      Months ended
              July
      31, 2009#
      of shares
            
            
            AmountIssued
      to employees and officers for services rendered since
      inception
            
            
            43,274,654
            
            
            $
            1,802,785Issued
      to directors for services rendered since inception
            
            
            11,694,006
            
            
            $
            486,030Issued
      to debenture holders on conversion of debentures
            
            
            33,460,282
            
            
            $
            997,572Issued
      to debenture holders on settlement of interest
            
            
            13,508,064
            
            
            $
            654,911Issued
      to director on conversion of director’s loan
            
            
            23,778,126
            
            
            $
            885,000Issued
      to director on settlement of interest on director’s loan
            
            
            2,185,564
            
            
            $
            108,635Issuance
      to third parties for services rendered
            
            
            1,521,767
            
            
            $
            402,312






12.
            Net
      Loss per Share





The
following table sets forth the computation of weighted-average shares
outstanding for calculating basic and diluted earnings per share
(EPS):




3
      months Ended
              July 31,
            
            
            9
      months Ended
              July 31,2009
            
            
            2008
            
            
            2009
            
            
            2008Weighted-average
      shares - basic
            
            
            271,444,449
            
            
            
            222,410,228
            
            
            
            240,545,701
            
            
            
            222,410,228Effect
      of dilutive securities
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Weighted-average
      shares - diluted
            
            
            271,440,449
            
            
            
            222,410,228
            
            
            
            240,545,701
            
            
            
            222,410,228





Basic
earnings per share (“EPS”) and diluted EPS for the nine months ended July 31,
2009 and 2008 have been computed by dividing the net loss available to common
stockholders for each respective period by the weighted average shares
outstanding during that period. All outstanding options, warrants and shares to
be issued upon the exercise of the outstanding options and warrants representing
approximately 36,739,051 and 43,640,249 incremental shares respectively have
been excluded from the three months and nine months ended July 31, 2009 and 2008
computation of diluted EPS as they are antidilutive given the net losses
generated.




13.
            Commitments
      and Contingent Liabilities




Lawsuits




a)
            On
      April 22, 2009, the Company’s Canadian subsidiary, CardioGenics
      Inc., was served with a statement of claim from a former employee
      claiming compensation for wrongful dismissal and ancillary causes of
      action including payment of monies in realization of his investment in
      CardioGenics, with an aggregate claim of $514,000.  The Company
      considers all the claims to be without any merit, has already delivered a
      statement of defense and intends to vigorously defend the
      action.  If the matter eventually proceeds to trial, the Company
      does not expect to be found liable on any ground or for any cause of
      action.





b)
            On
      June 22, 2009, the Company’s Canadian subsidiary, CardioGenics
      Inc., received a letter from a former advisor with regards to a
      Non-Circumvention Agreement dated July 16, 2004 and a Finder’s Fee
      Agreement dated December 13, 2004 with said former advisor. The letter
      states that the Company has breached said agreements insofar as the
      transaction between CardioGenics Inc. and the Company is concerned and
      advising that said former advisor is entitled to payment of 8% of the
      transaction value in accordance with the terms of the Finder’s Fee
      Agreement. The Company’s lawyers have written to said former advisor
      denying any contractual breach and explaining why said former advisor’s
      claims are without merit.




14.
            Supplemental
      Disclosure of Cash Flow Information





For
      the ninemonths
      endedJuly
      312009
            
            
            2008Cash
      paid during the period for:Interest
            
            $
            1,348
            
            
            $
            59Income
      taxes
            
            $
            —
            
            
            $
            —






- 19
-




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 October 31, 2008, as outlined
in our previously filed Form 8K/A, have been applied consistently for the nine
months ended July 31, 2009.
 
 Related Party
Transactions
 
 During
the nine months ended July 31, 2009, we utilized advances from a director
totaling approximately $885,000 bearing interest at 10% per annum. On July 31,
2009, the advances from director plus interest of $108,613 were converted to
common shares at a price of $.037 per share for the advances and $.05 for the
interest
 
 Off-Balance Sheet
arrangements
 
 We are
not party to any off balance sheet arrangements.
 
 Results of
operations
 
 Nine
months ended July 31, 2009 as compared to nine months ended July 31,
2008.
 Nine
      MonthsEnded
      July 31,2009
                
                2008
                
                $
      ChangeOperating
      expenses:Amortization
      of property and equipment
                
                $
                18,958
                
                
                $
                24,761
                
                
                $
                (5,803
                )Amortization
      of patent application costs
                
                
                2,513
                
                
                
                —
                
                
                
                2,513General
      and administrative expenses
                
                
                1,401,453
                
                
                
                111,526
                
                
                
                1,289,927Research
      and production, net of investment tax credits
                
                
                1,389,868
                
                
                
                (91,240
                )
                
                
                1,481,108Total
      operating expenses and operating loss
                
                
                2,812,792
                
                
                
                45,047
                
                
                
                2,767,745Other
      expenses (income)Interest
      expense and bank charges, net
                
                
                598,543
                
                
                
                98,792
                
                
                
                499,751Loss
      on change in value of derivative liability
                
                
                11,340,329
                
                
                
                —
                
                
                
                11,340,329Loss
      (gain) on foreign exchange
                
                
                (178,973
                )
                
                
                110,831
                
                
                
                (289,804
                )Net
      (loss) income
                
                $
                (14,572,691
                )
                
                $
                (254,670
                )
                
                $
                (14,318,021
                )
 Revenues
 
 During
the nine months ended July 31, 2009 and 2008 we did not generate any
revenues.  As a result of a reverse acquisition effected on July 31,
2009 discussed below, we anticipate generating insignificant revenues
from operations in the next two quarters.
  - 20
-
  Operating
expenses
  Operating
expenses include the costs to a) develop and patent a method for controlling the
delivery of compounds to a chemical reaction; b) developing the QL Care
Analyzer, a small, automated, robust and proprietary point of care testing
device; and, c) customizing paramagnetic beads through our proprietary method
which improves their light collection. In addition, the Company is in the
process of adapting test products for the POC disposable, single-use
cartridge-format. Detailed manufacturing specifications and costing have been
created and custom manufacturers have been sourced.
  General and administrative
expenses
  General
and administrative expenses consist primarily of compensation to officers and
directors, occupancy costs, professional fees and other office expenses. The
increase in general and administrative expenses is attributable primarily to
common share based compensation to officers and directors of approximately
$947,000 and a  common share based consulting fee paid to former
officers of the acquired company of $380,000.
  Research
and production, net of investment tax credits
  Research
and development expenses consist primarily of salaries and wages paid to
officers and employees engaged in those activities and supplies consumed
therefor. The increase in research and development expenses is attributable
primarily to common share based compensation to those officers and employees of
approximately $1,342,000.
  Other
expenses (income)
 Interest
expense and bank charges, net
 
 The
increase in interest expense of approximately $500,000 arises from beneficial
conversion feature charges on conversion of debentures and director’s loan at
July 31, 2009 and a higher level of debt through the period.
 
 During
the nine months ended July 31, 2009, interest totaling approximately $599,000
was comprised of $87,000 on our secured convertible debentures, $59,000 on a
director’s loan and non-cash charges to interest expense of approximately
$335,000 to reflect the beneficial conversion feature arising from the
conversion of a secured debenture at $0.02 per share on July 31, 2009 into
shares of our common stock and approximately $117,000 to reflect the beneficial
conversion feature arising from the conversion of a director’s loan at $0.037
per share on July 31, 2009 into shares of our common stock when the fair value
of our common stock was $0.042 per share.
 
 During
the nine months ended July 31, 2008, interest totaling approximately $98,000 was
comprised of $74,000 on our secured convertible debentures and $64,000 on a
director’s loan, less approximately $40,000 in interest income.
 
 Loss on change in value of
derivative liability
 
 The loss
on derivative liability reflects the effect of the increase on the fair market
value of our common stock and the resulting increase in the excess of the fair
value of the value of the warrants issued to non-employees in connection with
debt.  As of July 31, 2009, the fair market value of those warrants
was approximately $12,155,000.
  Three
months ended July 31, 2009 as compared to three months ended July 31,
2008.
  Three
      MonthsEnded
      July 31,2009
                
                
                2008
                
                
                $
      ChangeOperating
      expenses:Amortization
      of property and equipment
                
                
                6,736
                
                
                $
                8,196
                
                
                $
                (1,460)Amortization
      of patent application costs
                
                
                2,513
                
                
                
                —
                
                
                
                2,513General
      and administrative expenses
                
                
                1,345,418
                
                
                
                40,574
                
                
                
                1,304,844Research
      and production, net of investment tax credits
                
                
                1,318,826
                
                
                
                (120,998
                )
                
                
                1,439,824Total
      operating expenses and operating loss
                
                
                2,673,493
                
                
                
                (72,228
                )
                
                
                2,745,721Other
      expenses (income)Interest
      expense and bank charges, net
                
                
                481,285
                
                
                
                36,260
                
                
                
                445,025Loss
      on change in value of derivative liability
                
                
                11,340,329
                
                
                
                —
                
                
                
                11,340,329(Gain)
      on foreign exchange
                
                
                (193,387
                )
                
                
                (40,894
                )
                
                
                (152,493
                )Net
      (loss) income
                
                $
                (14,301,720)
                
                
                $
                76,862
                
                
                $
                (14,378,582)
  - 21
-
  General
and administrative expenses
 
 General
and administrative expenses consist primarily of compensation to officers and
directors, occupancy costs, professional fees and other office expenses. The
increase in general and administrative expenses is attributable primarily to
common share based compensation to officers and directors of approximately
$947,000 and a  common share based consulting fee paid to former
officers of the acquired company of $380,000.
  Research
and production, net of investment tax credits
 
 Research
and development expenses consist primarily of salaries and wages paid to
officers and employees engaged in those activities and supplies consumed
therefor. The increase in research and development expenses is attributable
primarily to common share based compensation to those officers and employees of
approximately $1,342,000.
  Other
expenses (income)
 Interest expense and bank charges,
net
 
 The
increase in interest expense of approximately $450,000 arises from beneficial
conversion feature charges on conversion of debentures and director’s loan at
July 31, 2009.
 
 During
the three months ended July 31, 2009, interest totaling approximately $481,000
was comprised of $15,000 on our secured convertible debentures, $14,000 on a
director’s loan and non-cash charges to interest expense of approximately
$335,000 to reflect the beneficial conversion feature arising from the
conversion of a secured debenture at $0.02 per share on July 31, 2009 into
shares of our common stock and approximately $117,000 to reflect the beneficial
conversion feature arising from the conversion of a director’s loan at $0.037
per share on July 31, 2009 into shares of our common stock when the fair value
of our common stock was $0.042 per share.
 
 During
the three months ended July 31, 2008, interest totaling approximately $36,000
was comprised of $25,000 on our secured convertible debentures and $21,000 on a
director’s loan, less approximately $11,000 in interest income.
  Liquidity and Capital
Resources
 
 We have
not generated any revenues since inception and we incurred a net loss of
approximately $14,573,000 and a cash flow deficiency from operating activities
of approximately $407,000 for the nine months ended July 31, 2009. We have not
yet established an ongoing source of revenues sufficient to cover our operating
costs and allow us to continue as a going concern.  We have funded our
activities to date almost exclusively from debt and equity
financings.  These matters raise substantial doubt about our ability
to continue as a going concern.
 
 We will
continue to require substantial funds to continue research and development,
including preclinical studies and clinical trials of
our products, and to commence sales and marketing efforts.  Our plans
include financing activities such as private placements of our common stock and
issuances of convertible debt instruments.  We are also actively
pursuing industry collaboration activities including product licensing and
specific project financing.
  - 22
-




We
believe we will be successful in obtaining the necessary financing to fund our
operations, meet revenue projections and manage costs, however there are no
assurances that such additional funding will be achieved and that we will
succeed in our future operations.
 
 On July
31, 2009, we completed a reverse acquisition of privately held CardioGenics Inc.
(“CardioGenics”), an Ontario, Canada Corporation. The acquisition was effected
pursuant to a Share Purchase Agreement dated May 22, 2009 by and among the
Company, CardioGenics Inc. and CardioGenics ExchangeCo Inc., the Company’s
wholly owned subsidiary (“ExchangeCo”). In accordance with the terms of the
Share Purchase Agreement, 99% of the holders of common shares of CardioGenics
Inc. (two (2) minority shareholders of CardioGenics holding in aggregate
173,869 common shares of CardioGenics Inc. did not participate) surrendered
their CardioGenics Common Shares to ExchangeCo. ExchangeCo caused the Company to
issue to the CardioGenics shareholders 422,183,610 shares of the Company’s
common stock, par value $0.00001 per share (the “Share Consideration”). The
CardioGenics shareholders had the option to receive their pro-rata
allocation of the Share Consideration in the form of (a) JAG Media’s common
stock (the “JAG Consideration Shares”) or (b) exchangeable shares of ExchangeCo.
Inc., which shares shall be exchangeable at any time after July 31, 2009 into a
number of shares of JAG Media’s common stock equal to such shareholders’
pro rata allocation of the Share Consideration (the “Exchangeable Shares”). The
Exchangeable Shares have the same voting rights, dividend entitlements and other
attributes as JAG Media common stock. Exchangeable Shares will automatically be
exchanged for JAG Media common stock five years from July 31, 2009, and in
certain other events. The Share Consideration provides the former CardioGenics
shareholders with direct and/or indirect ownership of approximately 85% of JAG
Media’s outstanding common stock (on a fully diluted basis) as of July 31,
2009.
 
 On July
31, 2009, 145,528,195 common shares of JAG Media were issued to certain former
shareholders of CardioGenics and 16 Exchangeable Shares, which are exchangeable
into 276,655,415 common shares of JAG Media, were issued to former CardioGenics
shareholders who elected to take such Exchangeable Shares. JAG Media common
shares received by the CardioGenics shareholders in exchange for their
CardioGenics Common Shares are not registered for resale and, therefore, shall
remain subject to the rights and restrictions of Rule 144. All Exchangeable
Shares received by the CardioGenics shareholders in exchange for their
CardioGenics Common Shares (and any JAG Media common stock into which such
Exchangeable Shares may be exchanged) shall not be registered for resale prior
to six (6) months following July 31, 2009 and, therefore, shall remain subject
to the rights and restrictions of Rule 144 prior to any such
registration.
 
 The Share
Consideration provide the CardioGenics Inc.’s shareholders with direct and/or
indirect ownership of approximately 85% of JAG Media’s outstanding common stock
(on a fully diluted basis) as of July 31, 2009. Based on the five-day average
price of the Company’s common stock of $0.16 per share, the purchase price
approximated was $11,573,536, plus approximately $275,000 of acquisition cost
plus fair value of options and warrants assumed of $644,806.
  A summary
of the purchase price allocation is as follows:
  Common
      stock issued
              
              $
              11,573,536Acquisition
      costs incurred
              
              
              275,000Fair
      value of options and warrants assumed
              
              
              644,806Total
      purchase price
              
              $
              12,493,342
   - 23
-
  The
purchase price has been allocated as follow based on the fair values of the
assets and liabilities acquired:
  Cash
                
                $
                195,885Accounts
      payable
                
                
                (386,177
                )Derivative
      liability for warrants assumed
                
                
                (28,700
                )Goodwill
                
                
                12,712,334Total
                
                $
                12,493,342
 The
following pro forma condensed consolidated financial information presents the
combined results of operations of JAG Media Holdings, Inc. and CardioGenics,
Inc. as if the acquisition had occurred as of November 1, 2008 and 2007, after
giving effect to certain adjustments, including the issuance of JAG Media
Holdings, Inc. common stock as part of the purchase price. For the purpose of
this pro forma presentation, both JAG Media Holdings, Inc.’s and CardioGenics,
Inc.’s condensed consolidated financial information is presented for the three
and nine months ended July 31, 2009 and 2008, respectively. The pro forma
condensed consolidated financial information does not necessarily reflect the
results of operations that would have occurred had JAG Media Holdings, Inc. and
CardioGenics, Inc. been a single entity during such periods.
  Three
      Months ended
                July
      31,
              
              
              Nine
      Months ended
                July
      31,2009
              
              
              2008
              
              
              2009
              
              
              2008Revenues
              
              $
              44,742
              
              
              $
              57,329
              
              
              $
              118,655
              
              
              $
              140,333Net
      Loss
              
              $
              (14,795,692
              )
              
              $
              (154,197
              )
              
              $
              (15,723,210
              )
              
              $
              (4,418,312
              )Weighted-average
      shares of Common stock outstanding:Basic
              
              
              342,458,190
              
              
              
              283,966,113
              
              
              
              307,072,264
              
              
              
              281,537,003Basic
      net loss per common share
              
              $
              (0.04
              )
              
              $
              (0.00
              )
              
              $
              (0.05
              )
              
              $
              (0.02
              )
  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 July 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 nine months ended July 31, 2009 and 2008 or that they will have a
significant effect at the time they become effective.




- 24
-




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 statements 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 July 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;





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





•
            lack
      of resources to account for complex and unusual
    transactions.





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 July 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.


- 25
-




PART II. OTHER INFORMATION




Item
1.    Legal Proceedings




On April 22, 2009, our Canadian subsidiary, CardioGenics
Inc., was served with a statement of claim from a former contractor
claiming compensation for wrongful dismissal and ancillary causes of action
including payment of monies in realization of his investment in CardioGenics
Inc. with an aggregate claim of $514,000.  The matter is currently pending
in the Ontario Superior Court of Justice, in the Province of Ontario, Canada. We
consider all the claims to be without any merit, have already delivered a
statement of defence and intend to vigorously defend the
action.




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 and Warrant No. CCP-5, 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
              AmountMay
      29, 2009 (Warrant No. CCP-4)
            
            
            *
            
            
            
            1,250,000
            *
            
            $
            
            *May
      29, 2009 (Warrant No. CCP-5)
            
            $
            0.10
            
            
            
            2,000,000
            
            
            $
            200,000July
      28, 2009 (Warrant No. CCP-5)
            
            $
            0.18
            
            
            
            750,000
            
            
            $
            135,000


*
              YA
      Global exercised 1,250,000 shares on a “cashless” basis, in accordance
      with the terms of the warrant, which resulted in 625,000 shares being
      issued to YA Global in lieu of the 1,250,000 shares that were
      exercised.




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 US$38,000.




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.





- 26
-




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:
      September 21, 2009
            By:
            /s/
      Yahia GawadName:
            Yahia
      GawadTitle:
            Chief
      Executive OfficerDate:
      September 21, 2009
            By:
            /s/
      James EssexName:
            James
      EssexTitle:
            Chief
      Financial Officer







- 27
-




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