Edgar Filing: INNOVATION HOLDINGS

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______________ to ______________.

Commission File No.: 000-27777

Innovation Holdings, Inc. f/k/a Blagman Media International, Inc.
(Exact name of Registrant as specified in its Charter)

Nevada 91-192-3501
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

14622 Ventura Blvd., Suite 1015, Sherman Oaks, CA 91403
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: 310.788.5444

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(G) of the Act:
COMMON STOCK - $.001 PAR VALUE

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. YES [X] NO [ ]

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
2,380,712,006 shares of common stock as of May 31, 2003.

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION PAGE

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2003
(UNAUDITED) AND DECEMBER 31, 2002 3

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2003 AND 2002 (UNAUDITED) 4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
ENDED MARCH 31, 2003 AND 2002 (UNAUDITED) 5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31,
2003 (UNAUDITED) 6-9

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 10

ITEM 3. CONTROLS AND PROCEDURES 13

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS 13

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 13

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 13

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13

ITEM 5. OTHER INFORMATION 13

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 14

SIGNATURES 14

CERTIFICATIONS 14

INNOVATION HOLDINGS, INC. AND SUBSIDIARIES
(FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2003 AND DECEMBER 31, 2002

ASSETS

March 31 2003 December 31
(Unaudited) 2002

CURRENT ASSETS
Accounts receivable, net of allowance for doubtful
accounts of $18,667 and $0, respectively $ 56,480 $ 31,779
Prepaid expenses, media and other current assets 1,169,780 341,561
Assets related to discontinued operations 9,645 9,645
Total Current Assets 1,235,905 382,985

PROPERTY & EQUIPMENT - NET 97,185 104,902

OTHER ASSETS
Deposits 4,576 4,576
Total Other Assets 4,576 4,576

TOTAL ASSETS 1,337,666 492,463

LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES

Cash overdraft 735 11,782
Loans payable - current portion 95,100 50,000
Accounts payable and accrued expenses 1,645,486 1,542,976
Accrued compensation - officers 1,484,750 1,314,392
Deferred revenue 4,982 -
Due to officer 142,374 112,844
Capital lease obligation - current portion 20,519 19,978
Liabilities related to discontinued operations 10,400,999 10,400,999
Total Current Liabilities 13,794,945 13,452,971

LONG-TERM LIABILITIES
Loans payable 445,500 445,500
Capital lease obligation - long-term portion 13,021 18,358
Total Long-Term Liabilities 458,521 463,858

TOTAL LIABILITIES 14,253,466 13,916,829

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
Preferred stock, series A, $.001 par value, super
convertible redeemable preferred stock, 10,000,000
shares authorized, 0 shares issued and outstanding - -
Preferred stock, series B, $.001 par value, super
convertible redeemable preferred stock, 100 shares
authorized, 100 shares issued and outstanding 1 1
Common stock, $.001 par value, 20,000,000,000 shares
authorized, 17,535,135and 3,819,639 shares issued and
outstanding in 2003 and 2002, respectively 17,535 3,819
Additional paid in capital 37,846,029 35,587,400
Accumulated deficit (49,846,085) (49,015,586)

(11,982,520) (13,424,366)
Deferred stock based compensation (933,280) -

Total Stockholders' Deficiency (12,915,800) (13,424,366)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY 1,337,666 492,463

See accompanying notes to consolidated financial statements.

I NNOVATION HOLDINGS, INC. AND SUBSIDIARIES
(FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

For the Three For the Three
Months Ended Months Ended
March 31 2003 March 31 2002

REVENUES - NET $ 83,778 $ 48,459

OPERATING EXPENSES
Selling, general and administrative 889,971 3,622,957
Depreciation 7,717 4,155
Total Operating Expenses 897,688 3,627,112

LOSS FROM OPERATIONS (813,910) (3,578,653)

OTHER INCOME (EXPENSE)
Interest expense (16,589) (7,433)
Interest income - 321
Total Other (Expense) (16,589) (7,112)

LOSS FROM CONTINUING OPERATIONS (830,499) (3,585,765)

LOSS FROM DISCONTINUED OPERATIONS - (746,390)

NET LOSS (830,499) (4,332,155)

NET LOSS PER COMMON SHARE - BASIC AND DILUTED -
CONTINUING OPERATIONS (0.14) (7.70)

NET LOSS PER COMMON SHARE - BASIC AND DILUTED -
DISCONTINUED OPERATIONS - (1.61)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 6,041,906 465,506

See accompanying notes to consolidated financial statements.

INNOVATION HOLDINGS, INC. AND SUBSIDIARIES
(FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED

For the Three For the Three
Months Ended Months Ended
March 31 2003 March 31 2002

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations $ (830,499) $ (3,585,765)
Adjustments to reconcile net loss from continuing
operations to net cash provided by (used in)
operating activities:
Depreciation and amortization 7,717 4,155
Provision for bad debt 18,667 -
Stock issued for compensation and services 464,765 3,597,083
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (43,368) (18,104)
Prepaid expenses, media and other current assets 46,081 244,710
Deposits - (17,500)
Increase (decrease) in:
Accounts payable and accrued expenses 102,510 695,391
Media cost refunds payable - -
Accrued compensation - officers 170,358 115,779
Deferred revenue 4,982 (99,295)
Due to/from officer 29,530 -
Net Cash Provided By (Used In) Operating Activities (29,257) 936,454

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment - (3,785)
Payment for acquisition, net of cash acquired - (367,213)
Net Cash Used In Investing Activities - (370,998)

CASH FLOWS FROM FINANCING ACTIVITIES:
Loan proceeds 45,100 -
Cash overdraft (decrease) (11,047) -
Payments under capital lease obligation (4,796) -
Net Cash Provided By Financing Activities 29,257 -

NET INCREASE IN CASH - 565,456

CASH - BEGINNING OF PERIOD - 199,924

CASH - END OF PERIOD - 765,380

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid - 24,017

NON-CASH INVESTING AND FINANCIAL ACTIVITIES:

During the period ended March 31, 2003, the Company issued 6,245,000 shares of
common stock having a fair value of $874,300 to its SEC attorney for future legal
services recorded as a prepaid expense.

See accompanying notes to consolidated financial statements.

INNOVATION HOLDINGS, INC. AND SUBSIDIARIES
(FORMERLY BLAGMAN MEDIA INTERNATIONAL, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2003

NOTE 1 BASIS OF PRESENTATION

On February 10, 2003, the stockholders of the Blagman Media
International, Inc. approved an amendment to the articles of
incorporation to change its name to Innovation Holdings, Inc.

The accompanying unaudited condensed consolidated financial
statements include the accounts of the Innovation Holdings, Inc.
and its subsidiaries (the "Company"). All significant inter-
company transactions and balances have been eliminated in
consolidation.

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting
principles generally accepted in the United States of America and
the rules and regulations of the Securities and Exchange
Commission for interim financial information. Accordingly, they
do not include all the information necessary for a comprehensive
presentation of financial position and results of operations.

It is management's opinion, however that all material adjustments
(consisting of normal recurring adjustments) have been made which
are necessary for a fair financial statements presentation. The
results for the interim period are not necessarily indicative of
the results to be expected for the year.

The accompanying condensed consolidated financial statements and
the information included under the heading "Management's
Discussion and Analysis or Plan of Operation" should be read in
conjunction with the Company's Form 10-KSB for the year ended
December 31, 2002 filed on May 16, 2003.

In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and revenues
and expenses during the reported period. Actual results could
differ from those estimates.

Certain reclassifications have been made to the prior period
financial statements to conform to the current presentation.

NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No.
149, "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities". SFAS No. 149 amends and clarifies financial
accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging
activities under SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The changes in SFAS No. 149
improve financial reporting by requiring that contracts with
comparable characteristics be accounted for similarly. This
statement is effective for contracts entered into or modified
after June 30, 2003 and all of its provisions should be applied
prospectively.

The FASB has issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity." The Statement improves the accounting for certain
financial instruments that, under previous guidance, issuers could
account for as equity. The new Statement requires that those
instruments be classified as liabilities in statements of
financial position.
SFAS No. 150 affects the issuer's accounting for three types of
freestanding financial instruments. One type is mandatorily
redeemable shares, which the issuing company is obligated to buy
back in exchange for cash or other assets. A second type, which
includes put options and forward purchase contracts, involves
instruments that do or may require the issuer to buy back some of
its shares in exchange for cash or other assets. The third type
of instruments that are liabilities under this Statement is
obligations that can be settled with shares, the monetary value of
which is fixed, tied solely or predominantly to a variable such as
a market index, or varies inversely with the value of the issuers'
shares. SFAS No. 150 does not apply to features embedded in a
financial instrument that is not a derivative in its entirety.
In addition to its requirements for the classification and
measurement of financial instruments in its scope, SFAS No. 150
also requires disclosures about alternative ways of settling the
instruments and the capital structure of entities, all of whose
shares are mandatorily redeemable. Most of the guidance in SFAS
No. 150 is effective for all financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15,
2003. For private companies, mandatorily redeemable financial
instruments are subject to the provisions of this Statement for
the fiscal period beginning after December 15, 2003.

Management does not expect the impact from the pronouncements in
these statements to have a material impact on the Company's
consolidated financial position or results of operations.

NOTE 3 DISCONTINUED OPERATIONS

Pursuant to an Agreement and Plan of Reorganization dated March 4,
2002, effective March 22, 2002, the Company acquired 100% of the
outstanding stock of Century Media, Inc., a California corporation
("Century") by merging Blagman USA, Inc., into Century.
Pursuant to the transaction, the Company acquired all of the
capital stock of Century for cash and common stock of the Company,
assumed current debt obligations and unexercised option and stock
appreciation rights of Century and assumed accrued and ongoing
trade and other ordinary course obligations and relationships.
Prior to the closing, the parties negotiated with the holders of
portions of the outstanding Century debt to restructure the term
and payments of such debt and in certain cases, to allow for the
issuance of shares of common stock of the Company in lieu of cash
payments. Currently, the Company remains obligated on certain
contingent obligations including $1.25 million from the TMT Media
Corporation acquisition by Century in 2000 (See Note 6).

At closing, holders of Century shares received twenty cents per
Century share, of which two and one-half cents was payable in cash
and the balance of seventeen and one-half cents was payable by the
delivery of shares of common stock of the Company, for a total of
$903,292, and 14,377 options.

In relation to the acquisition, the Company recorded goodwill in
the amount of $3,048,484, of which $2,321,360 was on the balance
sheet of Century Media on the acquisition date, and recorded an
intangible asset of $5,855,286 related to the customer list
acquired. The Company evaluated the customer list and assigned it
a three-year life.

The Company's management performs on-going business reviews based
on quantitative and qualitative measures and assesses the need to
record impairment losses when impairment indicators are
identified. In the third quarter of 2002, the review made by
management of the Company determined that the goodwill related to
Century's business and the customer list acquired in the
acquisition were not recoverable. The Company then recorded
impairment charges of $3,048,484 and $5,599,007 (net of
amortization) related to the goodwill and customer list,
respectively.

In December 2002, management of the Company determined that it
would no longer invest its capital and human resources into
Century and entered into a plan to discontinue and abandon the
operations of Century. Effective with the fourth quarter of 2002,
this operating entity is reflected as a discontinued operation.

For the three months ended March 31, 2003, Century was not
operating and therefore did not have any revenues or operating
expenses. For the period from acquisition to December 31, 2002,
revenues and loss from discontinued operations were as follows:

Revenues $3,459,294
Net loss from discontinued operations 12,966,399

Assets and liabilities of the discontinued operations as of March
31, 2003 and December 31, 2002 were as follows:

Assets
Cash $ 313
Prepaid expenses 7,005
Deposits 2,327
Total Assets 9,645

Liabilities
Accounts payable 5,606,399
Accrued expenses 1,113,699
Deferred revenue 1,364,866
Notes payable 2,286,755
Capital lease obligation 29,280
Total Liabilities 10,400,999

Net liabilities of discontinued operations 10,391,354

The creditors of Century Media have filed various actions for
breach of contract. Said actions arise out of obligations
incurred by Century Media prior to the merger with the Company.
The Company disputes these claims and is actively seeking to
resolve these matters.

NOTE 4 NOTES AND LOANS PAYABLE

The following schedule reflects notes and loans payable as of
March 31, 2003 and December 31, 2002:

March 31 December 31
2003 2002
Note payable, interest at 6% due
March 31, 2001. The holder of the
note is currently not demanding
payment and the note continues to
accrue interest. $50,000 $50,000

Note payable - related party,
interest at 6%, due March 30, 2006 163,500 163,500

Note payable - stockholder,
interest at 6%, due April 2, 2006 85,000 85,000

Note payable - stockholder,
interest at 6%, due April 9, 2006 197,000 197,000

Note payable, interest at 3.8%, due
January 10, 2004 10,400 -

Note payable, interest at 4%, due
January 27, 2004 24,700 -

Note payable, interest at 2.8%,
principal and interest due February 11, 2004 10,000 -

540,600 495,500

Less current portion 95,100 50,000

Notes and loans payable 445,500 445,500

On January 10, 2003, the Company entered into a note payable
whereby the lender agrees to fund the Company on an as needed
basis up to $100,000 at an interest rate of 3.8% per annum.
Principal and interest are due no later than January 10, 2004.

On January 27, 2003, the Company entered into a note payable
whereby the lender agrees to fund the Company on an as needed
basis up to $75,000 at an interest rate of 4% per annum.
Principal and interest are due no later than January 27, 2004.

NOTE 5 STOCKHOLDERS' DEFICIENCY

In February 2003, the Board of Directors authorized a 5,000 for 1
reverse stock split. All share and per share amounts in the
accompanying consolidated financial statements and footnotes have
been restated to give effect to such reverse stock split.

In March 2003 and on May 5, 2003, 6,245,000 and 20,000,000 shares
of common stock were issued to the Company's SEC attorney,
respectively, for an agreement to provide future legal services.
(See Note 8)

During the three months ended March 31, 2003, the Company issued
approximately 6,570,000 common shares for consulting services.
The fair value of the issued shares was based upon the market
price of the Company's stock on the date of grant.

During the three months ended March 31, 2003, the Company issued
approximately 6,300,000 restricted common shares to the Chief
Executive Officer and subsequently cancelled and rescinded the
issuance. Accordingly, the Company has not included these shares
in its equity. The Company also issued 630,000 common shares to
three directors of the Company for services. The fair value of
the issued shares was based upon the market price of the Company's
stock on the date of grant.

NOTE 6 LITIGATION

The Company is a party to a number of lawsuits and claims, which
have been disclosed in the Company's Form 10-KSB for the year
ended December 31, 2002 filed on May 16, 2003. In the opinion of
management and external legal counsel, the status of the pending
lawsuits and claims have not materially changed from what was
disclosed in the Company's Form 10-KSB.

NOTE 7 GOING CONCERN

The Company's financial statements for the three months ended
March 31, 2003 have been prepared on a going concern basis, which
contemplated the realization of assets and the settlement of
liabilities and commitments in the normal course of business. The
Company incurred a net loss of $830,499 for the three months ended
March 31, 2003, and has a working capital deficiency of
$12,559,040 and a stockholders deficiency of $12,915,800 as of
March 31, 2003. The Company's working capital deficiency as of
March 31, 2003 may not enable it to meet such objectives as
presently structured. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

The ability of the Company to continue as a going concern is
dependent on the Company's ability to raise additional capital,
and implement its business plan. Management believes that actions
presently taken to obtain additional funding provide the
opportunity for the Company to continue as a going concern. The
Company is also actively seeking businesses to acquire.

NOTE 8 SUBSEQUENT EVENTS

During the period from April 1, 2003 through May 30, 2003, the
Company has issued approximately 1,337,000,000 common shares, in the
aggregate, to 24 different consultants for consulting services to be
provided over varying terms, which expires at various dates during
the fiscal year 2004.

On May 5, 2003, 20,000,000 shares of common stock were issued to
the Company's SEC attorney for an agreement to provide future
legal services.

The Company has issued 1 billion shares of restricted stock to be
placed in trust for the sole purpose of a shareholders fund. The
fund will be valued at approximately $1,000,000 (one million) and
additional stock may be required to reach this financial goal. A
fairness opinion doctrine will also be developed to support the
fund. This fund will be managed and maintained by an outside
independent financial firm. This trust will be maintained to
compensate shareholders who were unknowingly adversely effected by
the actions of outside parties (named in the SEC findings on March
31, 2003). The goal of the company is to return to shareholders
losses they realized from January 2002 - June 2002. The process
and procedure in claiming restitution by shareholders will be
forthcoming and detailed in an 8k filing within 30 days.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

General

Innovation Holdings, Inc. f/k/a Blagman Media International, Inc. is
a Nevada corporation (collectively with its subsidiaries, the
"Company"), which is the successor to a corporation founded in 1961.
We are a direct marketing, direct response and media enterprise based
in Century City, California which principally provides direct market
services and media buying for our clients and their products and
services through television, radio, Internet, print and outdoor
advertising media. In addition, we organize direct response media
campaigns on radio, television and in print and provide assistance in
backend marketing and creative production.

We began operations in 1994 as a sole proprietorship and formed a
corporation, Blagman Media International, Inc., in early 1999. On
August 2, 1999, we completed a reverse acquisition with Unisat, Inc.,
an inactive, public non-reporting company, founded in 1961 and
formerly known as Combined Companies, Inc. On the same date, Unisat,
Inc. changed its name to Blagman Media International, Inc. and we
therefore have two Nevada entities with the same name. The
transaction was structured as a share exchange, in which Robert
Blagman exchanged all of his shares in the privately held entity for
8,200,000 common shares of Unisat, Inc. In April 2000, we entered
into a share exchange agreement with MNS Eagle Equity Group I, an
inactive, reporting Nevada corporation, which resulted in our
becoming the parent reporting company.

The primary purpose of these transactions was to give us access to a
public market, to create a new corporate vehicle with which to build
a more expansive media-buying infrastructure, thereby allowing us to
leverage our direct marketing and direct response efforts. Currently,
we are actively pursuing acquisitions and various strategic and
working relationships which, if successful, will allow us to create a
"network" of alliance partners with the capacity to deliver a broader
range of services in a more cost-efficient manner.

In 2001, internally we focused on our core competencies by making
quantitative media buys and in assisting our clients in implementing
traditional radio, television and out of home media strategies. Given
the general uncertainties in Internet advertising and Internet
business models that developed in late 2000, and which continue, we
plan to monitor the use and styles of Internet advertising. In this
way, we can assess the opportunities available to us in Internet
advertising while not making any firm financial commitments to an
Internet strategy. In addition to considering merger and acquisition
opportunities for consolidation and industry growth, we are
continuing to pursue an expansion in the television production field
through strategic alliances.

In 2001, we also actively pursued acquisitions and completed our
first industry acquisition transaction in March 2002 when Century
Media, Inc. ("Century") became a wholly-owned subsidiary under the
name Blagman-Century Media, Inc. ("Blagman-Century"), subsequently
renamed Century Media, Inc. We had been negotiating since early 2001
to acquire Century Media, a Santa Monica based advertising agency in
business for over ten years with historical billings and placements
that ranged from $35 million to $110 million. In 2001, we entered
into agreements to acquire all of the outstanding stock of Century,
but certain requirements were not satisfied. In October 2001, we
concluded that the purchase price for Century, which was then set at
$5.7 million cash plus the assumption of significant debt, needed to
be substantially reduced as a result of our due diligence conclusions.

In March 2002, we completed the transaction through a merger of a
wholly-owned special purpose subsidiary into Century in exchange for
the payment of the equivalent of $0.20 per share to the shareholders
of Century ($0.025 in cash and the balance in shares of the common
stock of the parent company (hereafter "Common Shares"), repayment of
$749,778 in debentures through the issuance of Common Shares, and the
recognition of debts. As a result, at closing approximately $600,000
in cash and $2.2 million in restricted Common Shares were distributed
to holders of existing Century shares, debentures, and certain stock
rights. Under the merger agreement, the Common Shares were valued at
the closing bid price over the seven days prior to the date of the
agreement or $0.0008857, resulting in the issuance of 2,555,651,387
new Common Shares to the holders of Century shares, debentures and
certain stock rights. Century also had continuing debt obligations
due to affiliates and third parties of approximately $1.6 million,
exclusive of trade and contingency obligations. In connection with
our interest in the Century transaction, we provided management
services to Century from late 2001 to early 2002, essentially on a
reimbursement basis. As a result of the overwhelming debt and
departures by members of Century, we no longer consider this
acquisition viable. We are in the process of resolving all issues
related to the Century acquisition.

Following the acquisition of Century Media in March 2002, the Company
has determined that Century Media was not strategic to the Company's
ongoing objectives and has discontinued capital and human resource
investment in Century Media effective as of December 2002.

Results of Operations

Three Months Ended March 31, 2003 Compared to Three Months Ended
March 31, 2002

2003 2002

Total net revenues $ 83,778 $ 48,459

Operating Expenses:
General and Administrative 889,971 3,622,957

Net Loss from Operations (830,499) (3,585,765)

Net Loss Per Share (0.14) (7.70)

Net Revenues

Net Revenues (principally from advertising placements, commissions
and revenue sharing arrangements) for the three months ended March
31, 2003 as compared to the three months ended March 31, 2002
increased from $48,459 to $83,778. The increase in revenues is
attributed to the Company's ability to outsource many functions and
reduce staffing thereby allowing the Company to make more money.

Operating Expenses

Total operating expenses decreased $2,729,424 (76%) from $3,627,112
in 2002 to $897,688 in 2003. Included in operating expenses are
general and administrative expenses which decreased from $3,622,957
for the three month period ended March 31, 2002 to $889,971 (490%)
for the three month period ended March 31, 2003, due primarily to
more deferred stock based compensation being expensed during 2002
than in 2003 for a total decrease of $2,258,018 (63%) in expense
recognized for stock issued for services.

The total net loss of the Company in 2003 was $830,499 compared to
$4,332,155 for 2002, an 81% decrease.

Other Income (Expenses)

Other income expenses increased from $7,433 in 2002 to $16,589 (123%)
in 2003, primarily due to interest expense incurred from additional
costs the Company has incurred.

Liquidity and Capital Resources

The Company's current assets increased from $492,463 at December 31,
2002 to $1,337,999 at March 31, 2003 primarily due to prepaying legal
expenses in the amount of $874,300 via a stock issuance to the
Company's attorneys.

In connection with the various initiatives being pursued by
management to expand the Company's operations internally and through
strategic alliances or acquisitions with other industry partners,
additional capital funding will be required. The Company hopes to
raise these funds through an increase in general business profits due
to a shift in the main focus of its core business. the Company plans
to pass low profit making activity such as media buying to third
party contracted companies. The Company also plans to invest in
product ownership and development as well as actively pursue
opportunities to expand the marketing aspects of these products. As
the advertising industry goes through it's transitions, the Company
plans to react by adjusting its focus away form pure media buying to
product development. Product development continues to be a strong
avenue for the direct response advertising business. Affiliations and
associations with other advertising agencies will also expand the
Company's ability to increase cash flow and revenues without adding staff.

During 2002 and in the current quarter, the market price of our
common shares has continued to dropped precipitously. We believe that
there are two underlying causes. First, we apparently were one of the
companies targeted in an organized pattern of depressing prices
through "shorting" by a group pursuing a coordinated effort to effect
and profit from a falling share price and from attempts to extort
favorable stock issuances from the Company without fair
consideration. Management initiated referrals to appropriate
regulatory agencies for their action. While actions from these
referrals may reduce future manipulation, it cannot eliminate the
impact of the downward price spiral. The second factor apparently
affecting our price was the market reaction to the increase in
authorized and issued common shares which we undertook to compensate
consultants in our industry, to support Company growth and, more
recently, to effect the Century transaction. Following the
acquisition of Century Media in March 2002, the Company has
determined that Century Media was not strategic to the Company's
ongoing objectives and has discontinued capital and human resource
investment in Century Media effective as of December 2002.
Management is currently unwinding the Century transaction, evaluating
other opportunities and pursuing other initiatives to expand the
Company's operations internally and through strategic alliances or
acquisitions with other industry partners. These endeavors will be
funded in part from operations but will also require additional
capital funding which the Company hopes to raise through debt or
equity financing arrangements, if appropriate financing is available,
on reasonable and acceptable terms.

The Company intends to continue to seek additional working capital to
meet its operating requirements and to provide further capital for
expansion, acquisitions or strategic alliances with businesses that
are complementary to the Company's long term business objectives.
Additional capital will be needed to maintain the growth plans of the
Company.

The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

New Accounting Pronouncements

In April 2003, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 149,
"Amendment of Statement 133 on Derivative Instruments and Hedging
Activities". SFAS No. 149 amends and clarifies financial accounting
and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities".
The changes in SFAS No. 149 improve financial reporting by requiring
that contracts with comparable characteristics be accounted for
similarly. This statement is effective for contracts entered into or
modified after June 30, 2003 and all of its provisions should be
applied prospectively.

In addition to its requirements for the classification and
measurement of financial instruments in its scope, SFAS No. 150 also
requires disclosures about alternative ways of settling the
instruments and the capital structure of entities, all of whose
shares are mandatorily redeemable. Most of the guidance in SFAS No.
150 is effective for all financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003.
For private companies, mandatorily redeemable financial instruments
are subject to the provisions of this Statement for the fiscal period
beginning after December 15, 2003.

Management does not expect the impact from the pronouncements in
these statements to have a material impact on the Company's
consolidated financial position or results of operations.

Forward-Looking Statements

Safe Harbor statement under the Private Securities Litigation Reform
Act of 1995: Except for historical information contained herein, the
matters discussed in this filing are forward-looking statements that
involve risks and uncertainties, including but not limited to
economic, competitive, governmental and technological factors
affecting the Company's operations, markets, products and prices and
other factors discussed in the Company's various filings with the
Securities and Exchange Commission.

Critical Accounting Policies.

The Securities and Exchange Commission ("SEC") recently issued
Financial Reporting release No. 60, "Cautionary Advice Regarding
Disclosure About Critical Accounting Policies" (FRR 60"), suggesting
companies provide additional disclosure and commentary on their most
critical accounting policies. In FRR 60, the SEC defined the most
critical accounting policies as the ones that are most important to
the portrayal of a company's financial condition and operating
results, and require management to make its most difficult and
subjective judgments, often as a result of the need to make estimates
of matters that are inherently uncertain.

Based upon the foregoing definition, the registrant's most critical
accounting policies include:

Revenue Recognition

The Company recognizes revenue from the sale of media time to
advertising clients when the related advertisement is broadcasted.
Included in the monies received from advertising clients are amounts
which represent the reimbursement of media time purchased on behalf
of the customer for the related advertisements. These media purchase
reimbursements have been accounted for as an offset to the related
media purchases for the respective advertisement and not as gross
revenues as required under EITF 99-19 and SAB 101. Monies received
prior to the broadcast of the related advertisement are recorded as
deferred revenue. In addition, the Company earns commissions in
connection with the procurement of media time on behalf of
advertising clients. Such commissions are also considered earned when
the underling advertisement is broadcasted. Additionally, the Company
has entered into contractual agreements with other advertising firms
to share revenues based upon the terms of the specific agreements.
The income produced by these revenue-sharing contracts are recognized
as media or commission income depending upon the nature of the income
earned from the agreement.

Goodwill

In July 2001, the FASB issued SFAS No. 142, 'Goodwill and Other
Intangible Assets,' which was required to be adopted for fiscal 2002.
SFAS No. 142 established accounting and reporting standards for
goodwill and intangible assets resulting from business combinations.
SFAS No. 142 included provisions discontinuing the periodic
amortization of, and requiring the assessment of the potential
impairments of, goodwill (and intangible assets deemed to have
indefinite lives). As SFAS No. 142 replaced the measurement
guidelines for goodwill impairment, goodwill not considered impaired
under previous accounting literature may be considered impaired under
SFAS No. 142. SFAS No. 142 also required that the Company complete a
two-step goodwill impairment test. The first step compared the fair
value of each reporting unit to its carrying amount, including
goodwill. If the fair value of a reporting unit exceeded its carrying
amount, goodwill is not considered to be impaired and the second step
was not required. SFAS 142 required completion of this first step
within the first six months of initial adoption and annually
thereafter. If the carrying amount of a reporting unit exceeded its
fair value, the second step is performed to measure the amount of
impairment loss. The second step compared the implied fair value of
goodwill to the carrying value of a reporting unit's goodwill. The
implied fair value of goodwill is determined in a manner similar to
accounting for a business combination with the allocation of the
assessed fair value determined in the first step to the assets and
liabilities of the reporting unit. The excess of the fair value of
the reporting unit over the amounts assigned to the assets and
liabilities is the implied fair value of goodwill. This allocation
process was only performed for purposes of evaluating goodwill
impairment and did not result in an entry to adjust the value of any
assets or liabilities. An impairment loss is recognized for any
excess in the carrying value of goodwill over the implied fair value
of goodwill. Upon the initial adoption, any impairment loss
identified was presented as a change in accounting principle, net of
applicable income tax benefit, and recorded as of the beginning of
that year. Subsequent to the initial adoption, any impairment loss
recognized would be recorded as a charge to income from operations.

Asset Impairment

The Company reviews its long-lived assets and identifiable
intangibles for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not
be recoverable. In performing the review for recoverability, the
Company estimates the future cash flows expected to result from the
use of the asset and its eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest
charges) is less than the carrying amount of the asset, an impairment
loss is recognized.

Otherwise, an impairment loss is not recognized. Measurement of an
impairment loss for long-lived assets and identifiable intangibles
would be based on the fair value of the asset.

Item 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Within the 90 days prior to March 31, 2003, the Registrant carried
out an evaluation of the effectiveness of the design and operation of
its disclosure controls and procedures pursuant to Rule 13a-14 under
the Securities and Exchange Act of 1934 ("Exchange Act"). This
evaluation was done under the supervision and with the participation
of the Registrant's President. Based upon that evaluation, they
concluded that the Registrant's disclosure controls and procedures
are effective in gathering, analyzing and disclosing information
needed to satisfy the Registrant's disclosure obligations under the
Exchange Act.

(b) Changes in internal controls.

There were no significant changes in the Registrant's internal
controls or in its factors that could significantly affect those
controls since the most recent evaluation of such controls.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

There have been no material changes in any pending legal proceedings
to include on this report.

Item 2. Changes in Securities.

None.

Item 3. Defaults Upon Senior Securities.

None.

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

The following matters were submitted during the period covered by
this report to a vote of security holders, through the solicitation
of proxies or otherwise:

(a) The meeting was the Registrant's annual meeting and was held on
Monday, February 10, 2003.

(b) The meeting involved the election of the following directors:
Nominees: Robert Blagman, Andrew Givens, Walter Lubars and Jeffrey Wald.

Matters voted upon at the No. of votes No. of votes No. of votes No. of No. of
At the Meeting cast for cast against withheld abstentions broker
Non-votes

1. Election of directors
Robert Blagman 9,812,773,286 - 59,148,134 - -
Andrew Givens 9,797,209,771 - 74,430,649 - -
Walter Lubars 9,813,202,171 - 58,719,249 - -
Jeffrey Wald 9,788,199,322 - 83,722,098 - -

2. Amendment to
the Company's
Certificate of
Incorporation to
change the name
of the Company 9,746,074,964 94,701,678 30,995,780 - -

3. Approval of
grant of discretionary
authority to the
Company's Board
of Directors to
amend the Company's
Certificate of
Incorporation to
effect a reverse
stock split of
the Company's
common stock at
a ratio within
the range from
one-for-two
thousand to one-
for-five
thousand at any
time prior to
June 1, 2003 9,358,061,890 367,163,992 39,997,010 - -

4. Appointment
of Weinberg &
Company as the
Company's independent
auditors for the
new fiscal year
commencing on
January 1, 2003 9,777,740,079 24,101,138 50,944,300 - -

ITEM 5. Other Information

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits.

Exhibits included or incorporated by reference herein are set forth
in the attached Exhibit Index.

Reports on Form 8-K.

None.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of
1934, the Issuer has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

INNOVATION HOLDINGS, INC.
F/K/A BLAGMAN MEDIA INTERNATIONAL, INC.

Dated: June 11, 2003 /s/ ROBERT BLAGMAN
Robert Blagman, President

CERTIFICATION

I, Robert Blagman, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of
Innovation Holdings, Inc.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;

b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90
days prior to the filing date of this quarterly report (the
"Evaluation Date"); and

c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):

a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Dated: May June 11, 2003

By: /s/ Robert Blagman
Robert Blagman President

EXHIBIT LIST

2.11 Agreement and Plan of Reorganization (Incorporated by
reference; Form 8-K filed on March 11, 2002)

3.1 Articles of Incorporation (Incorporated by reference; Form 8-
K of MNS Eagle Equity Group I, Inc. filed on April 27, 2000)

3.2 Bylaws (Incorporated by reference; Form 8-K of MNS Eagle
Equity Group I, Inc. filed on April 27, 2000)

3.3 Certificate of Designation for Series B Convertible Preferred
Stock (Incorporated by reference; Form 8-K of MNS Eagle Equity Group
I, Inc. filed on April 27, 2000)

10.1 Employment Agreement with Robert Blagman (Incorporated by
reference; Form 10-KSB/A filed on April 30, 2001)

10.2 Employment Agreement with Leslie Blagman (Incorporated by
reference; Form 10-KSB/A filed on April 30, 2001)

10.3 Equity Line of Credit Agreement dated July 12, 2001 with
GazelleGroup LLP and DRH Investment Company LLP (Incorporated by
reference; Form SB-2/A filed on November 1, 2001)

10.4 Registration Rights Agreement dated July 12, 2001 with
GazelleGroup LLP and DRH Investment Company LLP (Incorporated by
reference; Form SB-2/A filed on November 1, 2001)

10.5 Securities Purchase Agreement dated July 12, 2001 with
certain named buyers (Incorporated by reference; Form SB-2/A filed on
November 1, 2001)

10.6 Placement Agent Agreement dated July 12, 2001 with May Davis
Group, Inc. (Incorporated by reference; Form SB-2/A filed on November
1, 2001)

10.7 Registration Rights Agreement dated July 12, 2001 with
certain named persons (Incorporated by reference; Form SB-2/A filed
on November 1, 2001)

10.8 2000 Employee Stock Compensation Plan (Incorporated by
reference; Form S-8 for MNS Eagle Equity Group I, Inc. filed on
September 11, 2000)

10.9 2001 Employee Stock Option Plan (Incorporated by reference;
Form S-8 filed on August 27, 2001)

21.1 List of Subsidiaries (Incorporated by reference, Form 10KSB,
as amended filed on April 15, 2002)

99.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 (filed
herewith)

Exhibit 99.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Innovation Holdings, Inc.
(the "Company") on Form 10-QSB for the year ended March 31, 2003 as
filed with the Securities and Exchange Commission on the date hereof
(the "Report"), the undersigned, in the capacity and on the date
indicated below, hereby certifies pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that to his knowledge:

(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.

A signed original of this written statement required by Section 906
has been provided to Innovation Holdings, Inc. and will be retained
by Innovation Holdings, Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.