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 April 30, 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.)







6865 SW 18th Street


Suite B-13


Boca Raton, Florida
33433


(Address of Principal Executive
Offices)




(866) 300-7410


(Registrant’s Telephone Number,
Including Area Code)




Indicate by check mark whether the
Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the past 12 months (or for such
shorter period that the Registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90
days.




YesþNoo




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)




YesoNoþ




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 oNo
o




As of June 12, 2009 the Registrant had
70,128,004 shares of Common Stock, 380,931 shares of Series 2 Class B Common
Stock and 21,500 shares of Series 3 Class B Common Stock issued and
outstanding.










JAG MEDIA HOLDINGS,
INC.




FORM
10-Q




For the Quarter Ended
April 30, 2009




INDEX




PagePart I.
      Financial Information
                                          
                                          
                                          1Item
      1: Financial Statements (Unaudited)
                                          
                                          
                                          1Condensed Consolidated Balance
      Sheets at April 30, 2009 (Unaudited) and July 31,
    2008
                                          
                                          
                                          2Condensed
      Consolidated Statements of Operations for
      the Nine and Three Months ended April30,
      2009 and 2008(Unaudited)
                                          
                                          
                                          3Condensed Consolidated Statement
      of Changes in Stockholders’ Equity [Deficiency] for the Nine Months ended
      April 30, 2009 (Unaudited)
                                          
                                          
                                          4Condensed
      Consolidated Statements of Cash Flows for the Nine and Three Months ended
      April 30, 2009 and April 30, 2008(Unaudited)
                                          
                                          
                                          5Notes
      to Condensed Consolidated Financial Statements(Unaudited)
                                          
                                          
                                          6Item
      2: Management’s Discussion and Analysis
                                          
                                          
                                          11Item
      3: Quantitative and Qualitative Disclosures About Market
      Risk
                                          
                                          
                                          17Item
      4T: Controls and Procedures
                                          
                                          
                                          17
  
  Part
      II. Other Information
                                  
                                  
                                  18Item
      1: Legal Proceedings
                                  
                                  
                                  18Item
      1A: Risk Factors
                                  
                                  
                                  18Item
      2: Unregistered Sales of Equity Securities and Use of
      Proceeds
                                  
                                  
                                  18Item
      3: Defaults Upon Senior Securities
                                  
                                  
                                  18Item
      4: Submission of Matters to Vote of Security
      Holders
                                  
                                  
                                  18Item
      5: Other Information
                                  
                                  
                                  18Item
      6: Exhibits
                                  
                                  
                                  18Signatures
                                  
                                  
                                  19EX-31.1:
      CERTIFICATIONEX-31.2:
      CERTIFICATIONEX-32.1:
      CERTIFICATIONS









PART
I.  FINANCIAL INFORMATION










PART
1


FINANCIAL
INFORMATION





Item 1.
Financial Statement




1




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 ARPIL 30,
2009 and JULY 31, 2008


April 30,
                                                                                                                      2009
                                                                                                                    
                                                                                                                    
                                                                                                                    July 31,
                                                                                                                      2008(unaudited)
                                                                                                                    
                                                                                                                    
                                                                                                                    (See note
1)AssetsCurrent
    assets:Cash
                                                                                                                    
                                                                                                                    $
                                                                                                                    106,252
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    275,168Accounts receivable, net of
      allowance for doubtful accounts of $60,000 and
    $47,500
                                                                                                                    
                                                                                                                    
                                                                                                                    44,959
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    33,369Other current
      assets
                                                                                                                    
                                                                                                                    
                                                                                                                    134,831
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    103,352Total current
      assets
                                                                                                                    
                                                                                                                    
                                                                                                                    286,042
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    411,889Equipment, net of accumulated
      depreciation of $154,408 and $142,746
                                                                                                                    
                                                                                                                    
                                                                                                                    24,139
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    31,207Totals
                                                                                                                    
                                                                                                                    $
                                                                                                                    310,181
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    443,096Liabilities and Stockholders'
      Equity (Deficiency)Current
      liabilities:Accounts payable and accrued
      expenses
                                                                                                                    
                                                                                                                    $
                                                                                                                    383,024
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    325,128Deferred
      revenues
                                                                                                                    
                                                                                                                    
                                                                                                                    14,404
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    15,824Total
      liabilities
                                                                                                                    
                                                                                                                    
                                                                                                                    397,428
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    340,952Mandatorily redeemable Class B
      common stock; par value $.00001 per share:400,000 shares designated as
      Series 2; 381,749 shares issued and
    outstanding
                                                                                                                    
                                                                                                                    
                                                                                                                    4
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    440,000 shares designated as Series
      3; 21,500 shares issued and outstanding
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -4
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    4Commitments and
      contingenciesStockholders' equity
      (deficiency):Preferred stock; par value $.00001
      per share; 50,000,000 shares authorized, none
issued
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -Common stock; par value $.00001
      per share; 500,000,000 shares authorized;67,517,816 and 61,767,816 shares
      issued and outstanding
                                                                                                                    
                                                                                                                    
                                                                                                                    675
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    617Additional paid-in
      capital
                                                                                                                    
                                                                                                                    
                                                                                                                    64,154,996
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    63,379,154Accumulated
      deficit
                                                                                                                    
                                                                                                                    
                                                                                                                    (64,242,922
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    (63,277,631
                                                                                                                    )Total stockholders' equity
      (deficiency)
                                                                                                                    
                                                                                                                    
                                                                                                                    (87,251
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    102,140Totals
                                                                                                                    
                                                                                                                    $
                                                                                                                    310,181
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    443,096






See Notes to Condensed Consolidated
Financial Statements.




2




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 NINE AND
THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (UNAUDITED)




Nine Months
                                                                                                              
                                                                                                              
                                                                                                              Three
MonthsEnded April
    30,
                                                                                                              
                                                                                                              
                                                                                                              Ended April
    30,2009
                                                                                                              
                                                                                                              
                                                                                                              2008
                                                                                                              
                                                                                                              
                                                                                                              2009
                                                                                                              
                                                                                                              
                                                                                                              2008Revenues
                                                                                                              
                                                                                                              $
                                                                                                              116,774
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              119,736
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              32,260
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              41,101Operating
      expenses:Cost of
      revenues
                                                                                                              
                                                                                                              
                                                                                                              29,698
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              18,569
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              2,306
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              10,544Selling
      expenses
                                                                                                              
                                                                                                              
                                                                                                              3,822
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              46,700
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              1,138
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              33,102General and administrative
      expenses
                                                                                                              
                                                                                                              
                                                                                                              862,645
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              1,567,071
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              147,954
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              566,327Totals
                                                                                                              
                                                                                                              
                                                                                                              896,165
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              1,632,340
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              151,398
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              609,973Loss from
      operations
                                                                                                              
                                                                                                              
                                                                                                              (779,391
                                                                                                              )
                                                                                                              
                                                                                                              
                                                                                                              (1,512,604
                                                                                                              )
                                                                                                              
                                                                                                              
                                                                                                              (119,138
                                                                                                              )
                                                                                                              
                                                                                                              
                                                                                                              (568,872
                                                                                                              )Other income
      (expense):Gain on change in value of
      derivative liability
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              602,338
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              -Interest
      expense
                                                                                                              
                                                                                                              
                                                                                                              (185,900
                                                                                                              )
                                                                                                              
                                                                                                              
                                                                                                              (1,690,638
                                                                                                              )
                                                                                                              
                                                                                                              
                                                                                                              (113,600
                                                                                                              )
                                                                                                              
                                                                                                              
                                                                                                              -Net loss
                                                                                                              
                                                                                                              $
                                                                                                              (965,291
                                                                                                              )
                                                                                                              
                                                                                                              $
                                                                                                              (2,600,904
                                                                                                              )
                                                                                                              
                                                                                                              $
                                                                                                              (232,738
                                                                                                              )
                                                                                                              
                                                                                                              $
                                                                                                              (568,872
                                                                                                              )Basic and diluted net loss per
      share
                                                                                                              
                                                                                                              $
                                                                                                              (0.02
                                                                                                              )
                                                                                                              
                                                                                                              $
                                                                                                              (0.05
                                                                                                              )
                                                                                                              
                                                                                                              $
                                                                                                              (0.00
                                                                                                              )
                                                                                                              
                                                                                                              $
                                                                                                              (0.01
                                                                                                              )Basic and diluted weighted average
      common shares outstanding
                                                                                                              
                                                                                                              
                                                                                                              63,506,827
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              52,951,588
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              64,663,883
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              55,236,625






See Notes to Condensed Consolidated
Financial Statements.




3




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(DEFICIENCY)
 NINE
MONTHS ENDED APRIL 30, 2009
 (UNAUDITED)


Common
StockNumber ofShares
                                                                                
                                                                                
                                                                                Amount
                                                                                
                                                                                
                                                                                Additional
                                                                                  Paid-in
    Capital
                                                                                
                                                                                
                                                                                Accumulated
      Deficit
                                                                                
                                                                                
                                                                                TotalBalance, August 1,
      2008
                                                                                
                                                                                
                                                                                61,767,816
                                                                                
                                                                                
                                                                                $
                                                                                617
                                                                                
                                                                                
                                                                                $
                                                                                63,379,154
                                                                                
                                                                                
                                                                                $
                                                                                (63,277,631
                                                                                )
                                                                                
                                                                                $
                                                                                102,140Effect of change in exercise price
      of warrants
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                185,900
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                185,900Shares issued on exercise of
      warrants
                                                                                
                                                                                
                                                                                5,750,000
                                                                                
                                                                                
                                                                                
                                                                                58
                                                                                
                                                                                
                                                                                
                                                                                589,942
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                590,000Net loss
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                (965,291
                                                                                )
                                                                                
                                                                                
                                                                                (965,291
                                                                                )Balance, April 30,
      2009
                                                                                
                                                                                
                                                                                67,517,816
                                                                                
                                                                                
                                                                                $
                                                                                675
                                                                                
                                                                                
                                                                                $
                                                                                64,154,996
                                                                                
                                                                                
                                                                                $
                                                                                (64,242,922
                                                                                )
                                                                                
                                                                                $
                                                                                (87,251
                                                                                )


See Notes to Condensed Consolidated
Financial Statements.




4




JAG MEDIA
HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 NINE
MONTHS ENDED APRIL 30, 2009 AND 2008
 (UNAUDITED)


2009
                                                          
                                                          
                                                          2008Operating
      activities:Net
      loss
                                                          
                                                          $
                                                          (965,291
                                                          )
                                                          
                                                          $
                                                          (2,600,904
                                                          )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                                                          
                                                          
                                                          11,662
                                                          
                                                          
                                                          
                                                          19,368Provision
      for doubtful accounts
                                                          
                                                          
                                                          12,500
                                                          
                                                          
                                                          
                                                          -Amortization
      of unearned, stock-based compensation
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          3,854Beneficial
      conversion charge included in interest expense
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          682,991Gain
      on change in value of derivative liability
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (602,338
                                                          )Amortization
      of debt discount
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          912,820Costs
      of the Company paid by potential merger partner
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          230,113Effect
      of issuance of common stock in exchange for
services
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          97,150Effect
      of change in exercise price of warrants
                                                          
                                                          
                                                          185,900
                                                          
                                                          
                                                          
                                                          -Amortization
      of deferred consulting costs
                                                          
                                                          
                                                          47,585
                                                          
                                                          
                                                          
                                                          366,964Loss
      on abandonment of fixed assets
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          6,029Changes
      in operating assets and liabilities:Accounts
      receivable
                                                          
                                                          
                                                          (24,090
                                                          )
                                                          
                                                          
                                                          (12,665
                                                          )Other
      current assets
                                                          
                                                          
                                                          (79,064
                                                          )
                                                          
                                                          
                                                          (48,775
                                                          )Accounts
      payable and accrued expenses
                                                          
                                                          
                                                          57,896
                                                          
                                                          
                                                          
                                                          (60,241
                                                          )Deferred
      revenues
                                                          
                                                          
                                                          (1,420
                                                          )
                                                          
                                                          
                                                          (11,961
                                                          )Net
      cash used in operating activities
                                                          
                                                          
                                                          (754,322
                                                          )
                                                          
                                                          
                                                          (1,017,595
                                                          )Investing
      activities:Equipment
      purchases
                                                          
                                                          
                                                          (4,594
                                                          )
                                                          
                                                          
                                                          (7,246
                                                          )Net
      cash used in investing activities
                                                          
                                                          
                                                          (4,594
                                                          )
                                                          
                                                          
                                                          (7,246
                                                          )Financing
      activities:Proceeds
      from exercise of warrants and stock options
                                                          
                                                          
                                                          590,000
                                                          
                                                          
                                                          
                                                          1,083,350Net
      cash provided by financing activities
                                                          
                                                          
                                                          590,000
                                                          
                                                          
                                                          
                                                          1,083,350Net increase (decrease) in
      cash
                                                          
                                                          
                                                          (168,916
                                                          )
                                                          
                                                          
                                                          58,509Cash, beginning of
      period
                                                          
                                                          
                                                          275,168
                                                          
                                                          
                                                          
                                                          507Cash, end of
      period
                                                          
                                                          $
                                                          106,252
                                                          
                                                          
                                                          $
                                                          59,016Supplemental disclosure of noncash
      financing activities:Noncash effect of convertible
      debentures converted to common stock
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          3,520,000Effect of issuance of common stock
      as payment for accued interest
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          535,679Receivable from investor for
      warrants exercised
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -Fair value of fully-vested common
      stock issued to consultant in exchange for services
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          94,150Fair value of options issued for
      payment of accounts payable
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          15,200Fair value of options issued for
      future services
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          460,851Reclassification of derivative
      liability upon exercise of options
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          433,652Reclassification of fair value of
      warrants from derivative liability to additional paid-in
      capital
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          10,400,900


See Notes to Condensed Consolidated
Financial Statements.




5


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


Note 1 – Business and Basis of
presentation:





In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments, consisting of normal recurring
adjustments, necessary to present fairly the financial position of JAG Media
Holdings, Inc. ("JAG Media") and its subsidiaries as of April 30, 2009, their
results of operations for the nine and three months ended April 30, 2009 and
2008, changes in stockholders' equity for the nine months ended April 30, 2009
and cash flows for the nine months ended April 30, 2009 and 2008. JAG Media and
its subsidiaries are referred to together herein as the "Company." Pursuant to
rules and regulations of the Securities and Exchange Commission (the "SEC"),
certain information and disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted from these consolidated
financial statements unless significant changes have taken place since the end
of the most recent fiscal year. Accordingly, these condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements, notes to consolidated financial statements and the other
information in the audited consolidated financial statements of the Company as
of July 31, 2008 and 2007 and for the years ended July 31, 2008 and 2007 (the
"Audited Financial Statements") included in the Company's Annual Report on Form
10-K (the "10-K") for the year ended July 31, 2008 that was previously filed
with the SEC and from which the July 31, 2008 consolidated balance sheet was
derived.





The
results of the Company's operations for the nine and three months ended April
30, 2009 are not necessarily indicative of the results of operations to be
expected for the full year ending July 31, 2009.





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





The
Company is actively pursuing potential mergers. As further discussed in Note 7
herein, on March 12, 2009, the Company entered into a Letter of Intent (the
“Letter of Intent”) with CardioGenics, Inc. (“CardioGenics”) and Yahia Gawad,
the principal stockholder of CardioGenics (the “Prinicpal Shareholder”)
regarding a proposed acquisition of CardiGenics by JAG Media.  As
further discussed in Note 7 herein, on May 22, 2009, the Company entered into a
Share Purchase Agreement (the “Acquisition Agreement”) with CardioGenics
Exchangeco, Inc., (“ExchangeCo”) an Ontario Canada corporation and subsidiary of
the Company, which the Company owns through CardioGenics Callco, Inc.,
(“CallCo”) a wholly-owned Ontario, Canada subsidiary of the Company,
CardioGenics, and the Principal Shareholder.





The
accompanying condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, as shown in
the accompanying condensed consolidated financial statements, the Company only
generated revenues of approximately $117,000, and it incurred a net loss of
approximately $965,000 and a cash flow deficiency from operating activities of
approximately $754,000 for the nine months ended April 30, 2009.  In
addition, as of April 30, 2009, the Company only had cash and cash equivalents
available of approximately $106,000 and working capital deficiency of
approximately $111,000.  Our wholly owned United Kingdom subsidiary,
Pixaya (UK) Limited is in default with respect to the payment of amounts due
under its overdraft facility with HSBC Bank plc.  As of April 30,
2009, the amount of the default is £22,596, equivalent to approximately
$37,000.  These matters raise substantial doubt about the Company's
ability to continue as a going concern.





Management
believes that, in the absence of a substantial increase in subscription
revenues, it is probable that the Company will continue to incur losses and
negative cash flows from operating activities through at least April 30, 2010
and that the Company will need to obtain additional equity or debt financing to
sustain its operations.





Management believes that the Company
will be able to obtain sufficient financing directly, or find an appropriate merger
candidate that has such financing, to enable it to  continue as a
going concern through at leastApril 30, 2010. However, if the Company cannot
obtain sufficient additional financing by that date, the Company may
be  forced thereafter to restructure its operations, file for
bankruptcy or entirely cease its
operations.





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





Note
2 - Net loss per share:





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




6


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


As of
April 30, 2009 and 2008, there were stock options outstanding for the purchase
of 750,000 shares of common stock, each, and warrants outstanding for the
purchase of 4,250,000 and 11,300,000 shares of common stock, respectively (see
Notes 4 and 5 herein). However, diluted per share amounts have not been
presented in the accompanying condensed consolidated statements of operations
because the Company had a net loss in the nine and three months ended April 30,
2009 and 2008 and the assumed effects of the exercise of the Company’s stock
options and warrants and the conversion of convertible debentures that were
outstanding during all or part of those periods would have been
anti-dilutive.




Note
3 - Income taxes:





As of
April 30, 2009, the Company had Federal net operating loss carry forwards of
approximately $39,379,000 available to reduce future Federal taxable income
which will expire from 2019 through 2028.





As of
April 30, 2009, the Company's deferred tax assets consisted of the effects of
temporary differences attributable to the following:




Deferred
      revenues, net
                    
                    $
                    5,000Unearned
      compensation
                    
                    
                    20,000Net
      operating loss carryforwards
                    
                    
                    14,674,00014,699,000Less
      valuation allowance
                    
                    
                    (14,699,000
                    )Total
                    
                    $
                    -




Due to
the uncertainties related to, among other things, the extent and timing of its
future taxable income, the Company offset its net deferred tax assets by an
equivalent valuation allowance as of April 30, 2009.





The
Company had also offset the potential benefits from its net deferred tax assets
by an equivalent valuation allowance during the year ended July 31, 2008. As a
result of increases in the valuation allowances of $265,000 and $41,000 during
the nine and three months ended April 30, 2009, respectively, and $1,057,000 and
$196,000 during the nine and three months ended April 30, 2008, respectively,
which were primarily attributable to the net loss incurred during each of those
periods, there are no credits for income taxes reflected in the accompanying
condensed consolidated statements of operations to offset pre-tax
losses.





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





On April
9, 2002, the Company entered into an equity line purchase agreement (the "
Equity Line Agreement") with YA Global pursuant to which the Company had, in
effect, put options whereby, subject to certain conditions, it could have
required YA Global to purchase shares of its common stock from time to time at
an aggregate purchase price of $10,000,000 through August 2006.  The purchase price was to be 95% of the
lowest closing bid price of the Company’s common stock over a specified number
of trading days commencing on specified dates. YA Global was entitled to a cash
fee equal to 5% of the gross proceeds received by the Company from YA Global in
connection with each put. As of May 25, 2006, the date the Equity Line
Agreement was effectively cancelled, $4,035,000 of the Company’s Equity Line
with YA Global had been utilized.





On
January 25, 2005, the Company entered into a Promissory Note Agreement with YA
Global for a loan of $2,000,000. The $2,000,000 loan from YA Global was funded
on February 2, 2005 net of a debt discount of $100,000 deducted at the time of
funding which is being amortized over the original term of the
loan.  The unamortized debt discount was approximately $32,000 as of
May 25, 2006 when a promissory note was converted into common stock and a
secured convertible debenture. The face amount of the promissory note and
interest on the amount from time to time outstanding at a rate of 12% per year
was originally payable either (i) out of the net proceeds to be received by the
Company upon delivery of put notices under the Equity Line Agreement or (ii) in
full by the Company within 663 calendar days, subsequently extended to 753
calendar days, of January 25, 2005 regardless of the availability of proceeds
under the Equity Line Agreement, unless an extension was mutually agreed to by
the parties in writing.





Pursuant
to the promissory note, the Company had agreed to deposit in escrow 35 put
notices under the Equity Line Agreement for puts in an amount of $60,000 each
and one request for a put under the Equity Line Agreement in an amount of
$181,017. Under the terms of the promissory note as amended on August 5, 2005,
the put notices were to have been held in escrow and released every 14 days
commencing November 4, 2005.





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





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


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


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




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




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




As of January 31, 2008, the warrants for
thepurchase of 12,000,000
shares werevalued at
approximately $10,400,900 based on the Black-Scholes option pricing model
assuming a risk free interest rate of 5.25% annually, no dividend payments,
annual volatility of 203.855%, exercise prices ranging from $0.40 to
$0.80 per share, and the stock price of $0.91 per share when valued.
This resulted in the recognition of unrealized gain on derivative liability of
approximately $658,000 during theninemonths endedApril 30,2008.





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





As ofApril 30, 2009, there were no outstanding
options granted to non-employees.





During thenineand three months endedApril30, 2008, respectively, YA Global
converted debentures in the principal amounts of
$3,520,000 and$0into 8,800,000 andnoshares of the Company’s common stock.
The Company recorded amortization of debt discount attributable to the
debentures of approximately $913,000 and$0during thenineand three months endedApril30, 2008, including $705,000which was accreted as a result of the
conversions.  As a result, the Company had no debentures outstanding as ofApril 30, 2008.





In connection with the conversion of all
of the remaining debentures on January 31, 2008, YA Global
agreed to the conversion of the accrued interest thereon, totaling approximately
$535,700, at $0.40 per share which resulted in the issuance by the Company of
1,339,199 shares of common stock.  In addition to interest expense of
approximately $95,000 and $0charged to operations in thenineand three months endedApril 30, 2008 based on the terms of the
debentures, the Company also recorded a
non-cash charge to interest expense of approximately
$683,000to reflect thebeneficial conversion feature arising from
the conversion of the accrued interest at $0.40 per share on January 31, 2008
when the fairmarket value of the Company’s common
stock was $0.91 per share.





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





OnMarch 12, 2009, the Company and YA Global agreed to
reduce the exercise price of warrants to purchase2,000,000 of the Company’s common stock from $0.60 per to $0.07per share and YA Global agreed to
exercise warrants to purchase2,000,000 of common stock at
$0.07for $140,000.  Since the change in
exercise price is a material restatement of terms, the Company valued the
warrants for the purchase of2,000,000 shares of common stock based on
the Black-Scholes option pricing model immediately before and immediately after
the change in the exercise price assuming a risk free interest rate of
1.03% annually, no dividend payments, annual
volatility of 197.118%, the stock price of $0.18 per share when valued and exercise
prices of $0.60 and $0.07, respectively.  This resulted
in an increase in the fairvalue of the warrants from
approximately $271,800 to $329,000.


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


OnApril 29, 2009, the Company and YA Global agreed to
reduce the exercise price of warrants to purchase2,000,000 of the Company’s common stock from $0.50 pershareto $0.05per share and YA Global agreed to
exercise warrants to purchase2,000,000 of common stock at
$0.05for $100,000.  Since the change in
exercise price is a material restatement of terms, the Company valued the
warrants for the purchase of2,000,000 shares of common stock based on
the Black-Scholes option pricing model immediately before and immediately after
the change in the exercise price assuming a risk free interest rate of
0.94% annually, no dividend payments, annual
volatility of 194.576%, the stock price of $0.15per share when valued and exercise
prices of $0.50 and $0.05, respectively.  This resulted
in an increase in the fairvalue of the warrants from
approximately $217,200 to $273,600.





The increase in the value of the
warrants of $185,900 and
$113,600was recorded as
interest expense during thenineand three months,
respectively,endedApril 30, 2009 and additional paid-in
capitalof
$185,900as ofApril 30, 2009.





Note 5 — Issuances of common
stock and stock options:





Shares issued  for
services:


The Company has issued, from time to
time, common stock to employees as compensation and to non-employees, including
investment analysts and commentators and other consultants that have entered
into agreements to provide the Company with financial information that is
released to subscribers, as consideration for consulting, professional and other
services.





During thenineandthreemonths endedApril 30, 2009, the Company did not issue any of
its common stock to any employees or consultants.





Options issued for
services:


TheCompany has issued, from time to time,
stock options for the purchase of common stock to employees as compensation and
to non-employees, including investment analysts and commentators and other
consultants that have entered into agreements to provide the Company with
financial information that is released to subscribers, as consideration for
consulting, professional and other services.




As ofApril 30, 2009, the Company has options
outstanding for the purchase of 750,000 shares of, effectively, common
stock all of which were granted pursuant to the Company’s 1999 Long-term
Incentive Plan (the “Incentive Plan”) which provides for individual awards to
officers, employees, directors, consultants and certain other
individuals that may take the form of stock options and certain other types of
awards for which the value is based in whole or in part upon the fairmarket value of, the Company’s common
stock. The number of shares of common stock that may be subject to all types of
awards under the Incentive Plan as amended may not exceed 6,000,000 shares.
The options typically vest upon grant but in no case later than two and one-half
years after grant and expire the earlier of the tenth anniversary
of the grant or the 90th day following termination of employment; provided
that during such 90 day period the option will be exercisable only to the
extent it was vested as of the date of such
termination.




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





During thenineand three months endedApril 30, 2009, the Company issued no options
for the purchase of common stock.





As ofApril 30, 2009, the Company has the ability to grant
options to purchase an additional 5,250,000 shares of common stock under
the Incentive Plan.




The table below summarizes the stock
option activity pursuant to our Incentive Plan for theninemonths endedApril 30, 2009:




WeightedWeighted
                      
                      
                      AverageAverage
                      
                      
                      Remaining
                      
                      
                      AggregateExercise
                      
                      
                      Contractual
                      
                      
                      IntrinsicShares
                      
                      
                      Price
                      
                      
                      Term
                      
                      
                      ValueOptions outstanding August 1,
      2008
                      
                      
                      750,000
                      
                      
                      $
                      0.02Granted
                      
                      
                      -
                      
                      
                      
                      -Exercised
                      
                      
                      -
                      
                      
                      
                      -Options outstanding January 31,
      2009
                      
                      
                      750,000
                      
                      
                      $
                      0.02
                      
                      
                      
                      2.34
                      
                      
                      $
                      97,500Options exercisable January 31,
      2009
                      
                      
                      750,000
                      
                      
                      $
                      0.02
                      
                      
                      
                      2.34
                      
                      
                      $
                      97,500


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


Warrants:





During thenineand three months endedApril 30, 2009, respectively, YA Global
exercised warrants for the purchase of5,750,000 and 4,000,000shares, respectively,of common stock atprices ranging from $0.50 per share to$0.20 per share resulting
in net proceeds to the Company of $590,000 and $240,000,
respectively.





On May
29, 2009 the Company and YA Global entered into a letter agreement amending
Warrant No. CCP-005 dated May 24, 2006 (the “Warrant Letter Agreement”), which
currently permits YA Global, as warrant holder, to exercise Warrant No. CCP-005
for up to 3,000,000 shares of JAG Media’s common stock at a price of $0.40 per
share on a cashless basis. Under the Warrant Letter Agreement, the exercise
price for 2,000,000 shares of JAG Media common stock under Warrant No. CCP-005
was changed from $0.40 per share to $0.10 per share. In addition, YA Global
agreed to exercise those 2,000,000 shares under Warrant No-CCP-005 at the
reduced exercise price of $0.10 per share, on a cash basis, resulting in an
aggregate exercise amount of $200,000 to be paid to JAG Media.YA Global did exercise those options for
the purchase of 2,000,000 shares on May 29, 2009 and remitted the proceeds of
$200,000 to JAG Media on May 29, 2009.Since the change in exercise price is a
material restatement of terms, the Company valued the warrants for the purchase
of2,000,000 shares of common stock based on
the Black-Scholes option pricing model immediately before and immediately after
the change in the exercise price assuming a risk free interest rate of
0.92% annually, no dividend payments, annual
volatility of 197.09%, the stock price of $0.44per share when valued and exercise
prices of $0.40 and $0.10, respectively.  This resulted
in an increase in the fairvalue of the warrants from
approximately $743,200 to $817,600.The increase of $74,400 will be recorded
as part of interest expense during the quarter ended July 31,
2009.





On May
29, 2009, YA Global exercised the remainder of Warrant No. CCP-004, dated May
24, 2006 and amended September 30, 2008, to purchase 1,250,000 shares of JAG
Media’s common stock at $0.20 per share on a cashless basis when the closing bid
price of the Company’s common stock was $0.40 per share.  The Company
issued 625,000 shares to YA Global in connection therewith.





Note
6 - Litigation:





The Company is a party to various claims
and lawsuits incidental to its business. In the opinion of management, it is
probable that the resolution of such contingencies will not materially affect
the consolidated financial position or results of operations of the Company in
subsequent years.





Note 7 -
Proposed Merger:





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





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





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




10


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


On March
12, 2009, JAG Media entered into a letter of intent with CardioGenics Inc., an
Ontario, Canada corporation (CardioGenics”) and Yahia Gawad, the principal
stockholder of CardioGenics pursuant to which, among other matters, CardioGenics
would be acquired by CardioGenics Exchangeco Inc. (“Exchangeco”), a newly
created Ontario, Canada corporation, which is wholly-owned by CardioGenics
Callco Inc. (“Callco”), another newly created Ontario, Canada corporation
wholly-owned by JAG Media. In furtherance of the letter of intent, on May 22,
2009, JAG Media, Callco, Exchangeco, CardioGenics and Yahia Gawad, entered into
a Share Purchase Agreement pursuant to which ExchangeCo will acquire all of the
outstanding shares of common stock of CardioGenics, excluding 161,269 common
shares owned by a minority shareholder of CardioGenics (“CardioGenics Common
Shares”) in accordance with the letter of intent entered into on March 12,
2009.





In
consideration for the surrender of their CardioGenics Common Shares to
ExchangeCo, ExchangeCo shall cause JAG Media to issue to the CardioGenics
shareholders 422,183,610 shares of JAG Media common stock, par value $0.00001
(the “Share Consideration”) in accordance with the terms of the Acquisition
Agreement. The CardioGenics shareholders shall have the option to receive their
pro-rata allocation of the Share Consideration in the form of (a) JAG Media
common stock, to be issued at the closing (the “JAG Consideration Shares”) or
(b) exchangeable shares of ExchangeCo, to be issued at the closing, which shares
shall be exchangeable at any time after the closing into a number of shares of
JAG Media common stock equal to such shareholders’ pro rata allocation of the
Share Consideration (the “Exchangeable Shares”). Upon issuance, the Share
Consideration shall provide 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 the closing, assuming (for purposes of such
calculation) that the Exchangeable Shares were fully exchanged for the permitted
number of shares of JAG Media common stock immediately following the
closing.





Shares
shall not be registered for resale and, therefore, shall remain subject to the
rights and restrictions of Rule 144. All Exchangeable Shares received by any
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 the closing
and, therefore, shall remain subject to the rights and restrictions of Rule 144
prior to any such registration. The existing public shareholders of JAG Media
will experience significant dilution from the issuance of these shares to the
shareholders of CardioGenics.





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





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





The
closing of the transaction is scheduled for June 30, 2009 and is subject to (a)
the relevant parties to the transaction entering into, prior to the
closing, a “Support Agreement” and “Exchange Rights Agreement” enabling
Exchangeco to fulfill its obligations with respect to the Exchangeable Shares;
(b) CardioGenics closing on private placements of not less than $1,500,000; (c)
CardioGenics delivering its audited financial statements to JAG Media in
accordance with the Acquisition Agreement; (d) the CardioGenics shareholders and
Debenture holders making certain deliveries, prior to the closing, as set forth
in the Acquisition Agreement; and (e) the satisfaction of various customary
conditions to closing.


11




Item 2.
Management’s Discussion and Analysis





Critical Accounting Policies and
Estimates





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





The
accounting policies and estimates used as of July 31, 2008, as outlined in
our previously filed Form 10-K, have been applied consistently for the nine
months ended April 30, 2009.




Related Party
Transactions





None.





Off-Balance Sheet
arrangements





We are
not party to any off balance sheet arrangements.





Results of
operations





Nine
months ended April 30, 2009 as compared to nine months ended April 30,
2008.




Nine
      MonthsEnded
      April 30,2009
                              
                              
                              2008
                              
                              
                              $
      ChangeRevenues
                              
                              $
                              116,774
                              
                              
                              $
                              119,736
                              
                              
                              $
                              (2,962)Operating
      expenses:Cost
      of revenues
                              
                              
                              29,698
                              
                              
                              
                              18,569
                              
                              
                              
                              11,129Selling
      expenses
                              
                              
                              3,822
                              
                              
                              
                              46,700
                              
                              
                              
                              (42,878
                              )General
      and administrative expenses
                              
                              
                              862,645
                              
                              
                              
                              1,567,071
                              
                              
                              
                              (704,426
                              )Totals
                              
                              
                              896,165
                              
                              
                              
                              1,632,340
                              
                              
                              
                              (736,175
                              )Loss
      from operations
                              
                              
                              (779,391
                              )
                              
                              
                              (1,512,604
                              )
                              
                              
                              733,213Other
      income (expense) :Gain
      on change in value of derivative liability
                              
                              
                              ---
                              
                              
                              
                              602,338
                              
                              
                              
                              (602,338
                              )Interest
      expense
                              
                              
                              (185,900
                              )
                              
                              
                              (1,690,638
                              )
                              
                              
                              1,504,738Net
      loss
                              
                              $
                              (965,291)
                              
                              
                              $
                              (2,600,904
                              )
                              
                              $
                              1,635,613





Revenues





Revenues
consist of subscription revenues from annual, semi-annual, quarterly and monthly
subscriptions relating to our product “JAGNotes.” JAGNotes is a daily
consolidated investment report that summarizes newly issued research, analyst
opinions, upgrades, downgrades and analyst coverage changes from various
investment banks and brokerage houses. Revenues decreased for the nine months
ended April 30, 2009 versus the nine months ended April 30, 2008 due to the lack
of advertising, the site’s reduced content and increased
competition.





Cost of revenues





Cost of
revenues includes the cost to transmit the product over the telephone and fax
lines, on-line service charges for our web site and costs in connection with the
development and maintenance of the web site.





During
the nine months ended April 30, 2009, there were $17,000 consulting fees as
compared to $7,600 for the nine months ended April 30, 2008. Such fees included
non-cash charges associated with the amortization of unearned compensation
arising from the issuance of shares in exchange for services of approximately
$17,000 for the nine months ended April 30, 2009. The increase in consulting
fees was a result of the renewal of consulting contracts at the end of the last
fiscal year associated with the maintenance of our jagnotes.com website which
expired in December 2008. Costs associated with the transmission of our product
over telephone and fax line and costs associated with the maintenance of our web
site remained constant.





Selling expenses





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




General
and administrative expenses





General
and administrative expenses consist primarily of compensation and benefits for
the officers, other compensation, which includes non-cash charges of
approximately $31,000 for a portion of the issuance of 250,000 options with an
aggregate fair value of approximately $138,000 to a non-employee for services,
occupancy costs, professional fees and other office expenses. The decrease in
general and administrative expenses is attributable to a $308,000 reduction in
payments to consultants helping to run Pixaya, a $210,000 reduction in printing
expenses incurred with potential mergers, a $200,000 reduction in professional
expenses incurred with potential mergers, offset primarily by an increase of
$12,500 charged to bad debt expense during the nine months ended April 30, 2009
versus the nine months ended April 30, 2008.




12




Gain (loss) on change in value of
derivative liability





As of
July 31, 2008 and April 30, 2009, we had no equity instruments that could result
in the issuance of an indeterminable number of our common shares; therefore,
there is no derivative liability as of April 30, 2009 or gain or loss resulting
from the change in the fair market value of our common stock.  The
gain on change in value of the derivative liability for the nine months ended
April 30, 2008 reflects the effect of the decrease in the fair market value of
our common stock. As of January 31, 2008, the fair market value of the
12,000,000 warrants was approximately $10,400,900 while as of July 31,
2007, the fair market value of those warrants was approximately $11,059,000,
resulting in a gain of approximately $658,000 for the nine months ended April
30, 2008. There were no options issued to non-employees at April 30, 2009 or
July 31, 2008.





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





Interest expense





The decrease in interest expense of
approximately $1,505,000 arises from the reduction in the
principal amount outstanding of YA Global convertible debentures partially offset by interest
incurred as a result of the change in terms reducing the exercise price of
warrants issued to YA Global.





During the nine months ended April 30,
2009, we and YA Global agreed to reduce the exercise price of warrants to
purchase 7,000,000 shares of our common stock.Since the change in exercise price is a
material restatement of terms, we valued the warrants based on the Black-Scholes
option pricing model immediately before and immediately after the change in the
exercise price assuming risk free interest ratesofbetween 0.94% and2.28% annually, no dividend payments,
annual volatilityranging
from 194.576 to198.949%andstock pricesofbetween $0.15 and$0.38 per share when valued and exercise
prices of,between $0.50 and$0.70; before,and $0.20and $0.05; after, respectively, resulting in an increase
in the fairvalue of the warrants from
$1,472,700to $1,658,600.  The increase of
$185,900was recorded as interest expense for
theninemonths endedApril 30, 2009.





During
the nine months ended April 30, 2008, interest totaling approximately $1,691,000
comprised of interest on our secured convertible debentures, interest from
amortization of debt discount and a  non-cash charge to interest
expense of approximately $683,000 to reflect the beneficial conversion feature arising from
the conversion of accrued interest at $0.40 per share on January 31, 2008 into
shares of our common stock when the fairvalue of our common stock was $0.91 per
share.Interest of approximately $95,000 was incurred as interest charged
at 10% per annum on our then outstanding convertible debentures.





Three
months ended April 30, 2009 as compared to three months ended
April 30, 2008.




Three
      MonthsEnded
      April 30,2009
                          
                          
                          2008
                          
                          
                          $
      ChangeRevenues
                          
                          $
                          32,260
                          
                          
                          $
                          41,101
                          
                          
                          $
                          (8,841
                          )Operating
      expenses:Cost
      of revenues
                          
                          
                          2,306
                          
                          
                          
                          10,544
                          
                          
                          
                          (8,238)Selling
      expenses
                          
                          
                          1,138
                          
                          
                          
                          33,102
                          
                          
                          
                          (31,964
                          )General
      and administrative expenses
                          
                          
                          147,954
                          
                          
                          
                          566,327
                          
                          
                          
                          (418,373
                          )Totals
                          
                          
                          151,398
                          
                          
                          
                          609,973
                          
                          
                          
                          (458,575)Loss
      from operations
                          
                          
                          (119,138
                          )
                          
                          
                          (568,872
                          )
                          
                          
                          449,734Other
      income (expense) :Interest
      expense
                          
                          
                          (113,600)
                          
                          
                          
                          ---
                          
                          
                          
                          (113,600
                          )Net
      loss
                          
                          $
                          (232,738)
                          
                          
                          $
                          (568,872
                          )
                          
                          $
                          336,134




13




Revenues





Revenues
decreased for the three months ended April 30, 2009 versus the three months
ended April 30, 2008 due to our lack of advertising and increased competition
among providers of financial information.





Cost of revenues





During
the three months ended April 30, 2009, there were no consulting fees as compared
to $7,600 during the three months ended April 30, 2008. Such fees included
non-cash charges associated with the amortization of unearned compensation
arising from the issuance of shares in exchange for services of approximately
$7,600 for the three months ended April 30, 2008. The decrease in consulting
fees is a result of the lapse of consulting contracts associated with
commentators for our jagnotes.com website. In addition, costs associated with
the transmission of our product over telephone and fax line and costs associated
with the maintenance of our web site decreased slightly.





Selling expenses





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





General and administrative
expenses





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





Interest expense





During the three months ended April 30,
2009, we and YA Global agreed to reduce the exercise price of warrants to
purchase 4,000,000 shares of our common stock.Since the change in exercise price is a
material restatement of terms, we valued the warrants based on the Black-Scholes
option pricing model immediately before and immediately after the change in the
exercise price assuming risk free interest ratesofbetween 0.94% and2.28% annually, no dividend payments,
annual volatilityranging
from 194.576 to197.118%andstock pricesofbetween $0.15 and$0.18 per share when valued and exercise
prices of,between $0.50 and$0.60; before,and $0.07 and $0.05; after, respectively, resulting in an increase
in the fairvalue of the warrants from
$489,000to $602,600.  The increase of
$113,600was recorded as interest expense for
thethreemonths endedApril 30, 2009.





Liquidity and Capital
Resources





We only
generated revenues of approximately $117,000 and we incurred a net loss of
approximately $965,000 and a cash flow deficiency from operating activities of
approximately $754,000 for the nine months ended April 30, 2009. In addition, at
April 30, 2009, we only had cash of approximately $106,000 and working
capital deficiency of approximately $111,000. Ourwholly owned United Kingdom
subsidiary, Pixaya (UK) Limited is in default with respect to the payment of
amounts due under its overdraft facility with HSBC Bank plc.  As of
the date of the filing of this report, the amount of the default is £22,596,
equivalent to approximately $37,000.These matters raise
substantial doubt about our ability to continue as a going concern.





We
believe that, in the absence of a substantial increase in subscription revenues
or sales of our streaming video products, it is probable that the we will
continue to incur losses and negative cash flows from operating activities
through at least April 30, 2010 and that we will need to obtain additional
equity or debt financing to sustain our operations until we can market our
services, expand our customer base and achieve profitability or effect a
merger.





We
believe that we will be able to obtain sufficient financing, directly, or find
an appropriate merger candidate that has such financing to enable us to continue
as a going concern through at least April 30, 2010. However, if we cannot obtain
sufficient additional financing by that date, we may be forced thereafter to
restructure our operations, file for bankruptcy or entirely cease our
operations.





Our cash
position of approximately $106,000 as of April 30, 2009 results primarily
from the transactions with YA Global described below.





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




14




On March 12, 2009, we and YA Global
agreed to reduce the exercise price of warrants to purchase 2,000,000shares of ourcommon stock from $0.60 per to $0.07
per share and YA Global agreed to exercise warrants to purchase 2,000,000 of
common stock at $0.07 for $140,000.On March 13, 2009, YA Global exercised
the warrants to purchase 2,000,000 shares of common stock and remitted $140,000
to us.





On April 29, 2009,weand YA Global agreed to reduce the
exercise price of warrants to purchase 2,000,000shares of ourcommon stock from $0.50 per to $0.05
per share and YA Global agreed to exercise warrants to purchase 2,000,000 of
common stock at $0.05 for $100,000.On April 30, 2009, YA Global exercised
the warrants to purchase 2,000,000 shares of common stock and remitted $100,000
to us.





Seasonality





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





Recent Accounting
Pronouncements





The FASB
and the Accounting Standards Committee of the American Institute of Certified
Public Accountants had issued certain accounting pronouncements as of April 30,
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 April 30, 2009 and 2008 or that they will have a
significant effect at the time they become effective.





RECENT
EVENTS





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





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





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





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




15




On May
29, 2009, we and YA Global entered into a letter agreement amending Warrant No.
CCP-005 dated May 24, 2006 (the “Warrant Letter Agreement”), which currently
permits YA Global, as warrant holder, to exercise Warrant No. CCP-005 for up to
3,000,000 shares of our common stock at a price of $0.40 per share on a cashless
basis. Under the Warrant Letter Agreement, the exercise price for 2,000,000
shares of our common stock under Warrant No. CCP-005 was changed from $0.40 per
share to $0.10 per share. In addition, YA Global agreed to exercise the
2,000,000 shares under Warrant No-CCP-005 at the reduced exercise price of $0.10
per share, on a cash basis, resulting in an aggregate exercise amount of
$200,000 to be paid to JAG Media.  YA Global did exercise those options for
the purchase of 2,000,000 shares on May29, 2009 and remitted the proceeds of
$200,000 to JAG Media onMay 29, 2009.  Since the change in
exercise price is a material restatement of terms, thewevalued the warrants for the purchase of
2,000,000 shares of common stock based on the Black-Scholes option pricing model
immediately before and immediately after the change in the exercise price
assuming a risk free interest rate of 0.92% annually, no dividend payments,
annual volatility of 197.09%, the stock price of $0.44 per share when valued and
exercise prices of $0.40 and $0.10, respectively.  This resulted in an
increase in the fairvalue of the warrants from
approximately $743,200 to $817,600.  The increase of $74,400 will be
recorded as part of interest expense during the quarter ended July
31,2009.





On May
29, 2009, YA Global exercised the remainder of Warrant No. CCP-004, dated May
24, 2006 and amended September 30, 2008, to purchase 1,250,000 shares of our
common stock at $0.20 per share on a cashless basis when the closing bid price
of our common stock was $0.40 per share.  We issued 625,000 shares of
our common stock to YA Global in connection therewith.





Warrant
No. CCP-005, and its underlying shares, shall not be registered for sale and
shall be subject to the rights and restrictions of Rule 144.





Proposed
Acquisition of CardioGenics Inc.





On March
12, 2009, JAG Media entered into a letter of intent with CardioGenics Inc.
(“CardioGenics”), an Ontario, Canada corporation and Yahia Gawad, the principal
stockholder of CardioGenics pursuant to which, among other matters, CardioGenics
would be acquired by CardioGenics Exchangeco Inc. (“ExchangeCo.”), a newly
created Ontario, Canada corporation, which is wholly-owned by CardioGenics
Callco Inc. (“CallCo”), another newly created Ontario, Canada corporation
wholly-owned by JAG Media. In furtherance of the letter of intent, on May 22,
2009 JAG Media, Callco, Exchangeco, CardioGenics and Yahia Gawad, entered into a
Share Purchase Agreement pursuant to which ExchangeCo will acquire all of the
outstanding shares of common stock of CardioGenics, excluding 161,269 common
shares owned by a minority shareholder of CardioGenics (“CardioGenics Common
Shares”) in accordance with the letter of intent entered into on March 12,
2009.





In
consideration for the surrender of their CardioGenics Common Shares to
ExchangeCo, ExchangeCo shall cause JAG Media to issue to the CardioGenics
shareholders 422,183,610 shares of JAG Media common stock, par value $0.00001
(the “Share Consideration”) in accordance with the terms of the Acquisition
Agreement. The CardioGenics shareholders shall have the option to receive their
pro-rata allocation of the Share Consideration in the form of (a) JAG Media
common stock, to be issued at the closing (the “JAG Consideration Shares”) or
(b) exchangeable shares of ExchangeCo, to be issued at the closing, which shares
shall be exchangeable at any time after the closing into a number of shares of
JAG Media common stock equal to such shareholders’ pro rata allocation of the
Share Consideration (the “Exchangeable Shares”). Upon issuance, the Share
Consideration shall provide 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 the closing, assuming (for purposes of such
calculation) that the Exchangeable Shares were fully exchanged for the permitted
number of shares of JAG Media common stock immediately following the
closing.





Shares
shall not be registered for resale and, therefore, shall remain subject to the
rights and restrictions of Rule 144. All Exchangeable Shares received by any
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 the closing
and, therefore, shall remain subject to the rights and restrictions of Rule 144
prior to any such registration. The existing public shareholders of JAG Media
will experience significant dilution from the issuance of these shares to the
shareholders of CardioGenics.





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





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




16




The
closing of the transaction is scheduled for June 30, 2009 and is subject to (a)
the relevant parties to the transaction entering into, prior to the closing, a
“Support Agreement” and “Exchange Rights Agreement” enabling Exchangeco to
fulfill its obligations with respect to the Exchangeable Shares; (b)
CardioGenics closing on private placements of not less than $1,500,000; (c)
CardioGenics delivering its audited financial statements to JAG Media in
accordance with the Acquisition Agreement; (d) the CardioGenics shareholders and
Debenture holders making certain deliveries, prior to the closing, as set forth
in the Acquisition Agreement; and (e) the satisfaction of various customary
conditions to closing.




Item 3. Quantative
and Qualitative Disclosure About Market Risk




N/A.




Item
4T. Controls and Procedures




(a) Evaluation of Disclosure Controls
and Procedures:





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





Our
management assessed the effectiveness of our internal controls over financial
reporting for the quarter ended April 30, 2009 based on the criteria established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on such assessment, our
management concluded that during the period covered by this report, our internal
controls over financial reporting were not effective. Management has identified
the following material weaknesses in our internal controls over financial
reporting:





•
            lack
      of documented policies and procedures;
and





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





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




(b) Changes in Internal Control over
Financial Reporting:




During the fiscal quarter ended April
30, 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.




17




PART II. OTHER
INFORMATION




Item
1. Legal Proceedings




None.




Item
1A. Risk Factors




N/A.




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




The following shares of our Common Stock
were issued to YA Global Investments, L.P., upon theirexercise of Warrant No. CCP-2, 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
      AmountApril 30,
    2009
                            
                            $0.05
                            
                            
                            2,000,000
                            
                            
                            $ 
    200,000




Item
3. Defaults Upon Senior Securities




Our wholly owned United Kingdom
subsidiary, Pixaya (UK) Limited, is in default with respect to the payment of
amounts due under its overdraft facility with HSBC Bank plc. As of the date of
the filing of this report, the amount of the default is £22,596.17, equivalent
to approximately $37,000.




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.




18




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: June 18,
      2009
                        By:
                        /s/ Thomas J.
      MazzarisiName:
                        Thomas J.
      MazzarisiTitle:
                        Chairman of the Board and
      Chief
                          Executive
      OfficerDate: June 18,
      2009
                        By:
                        /s/ Stephen J.
      SchoepferName:
                        Stephen J.
      SchoepferTitle:
                        President, Chief Financial
      Officer, Chief Operating Officer and Secretary




19




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




20