JAG Media Holdings Announces Merger Agreement with Cryptometrics

Merger will created biometric solutions company for facial and fingerprint recognition


BOCA RATON, Fla. - JAG Media Holdings, Inc. announced today that it has entered into a merger agreement and plan of merger pursuant to which the Company's wholly-owned and newly created subsidiary, Cryptometrics Acquisition, Inc., will, subject to the terms and conditions of the merger agreement, merge into Cryptometrics, Inc., a Delaware corporation that provides facial recognition and fingerprint biometric solutions to the government, aviation security, law enforcement, military, homeland security and commercial markets. Upon consummation of the merger, Cryptometrics will continue as the surviving corporation and become a wholly-owned subsidiary of JAG Media.

The consummation of the merger is subject to the fulfillment of various conditions set forth in the merger agreement, including, among others, (i) the delivery by JAG Media and Cryptometrics of disclosure schedules to one another which are satisfactory to both parties by January 18, 2006, (ii) the approval by JAG Media's stockholders of an amendment to JAG Media's articles of incorporation to increase its authorized shares of common stock from 250,000,000 to 500,000,000, (iii) the approval by JAG Media's stockholders of an amendment to JAG Media's articles of incorporation to change JAG Media's name to Cryptometrics and (iv) the listing of JAG Media's common stock on the NASDAQ Capital Market. In addition, until JAG Media and Cryptometrics agree otherwise, the merger agreement, notwithstanding approval by the Cryptometrics stockholders, may be cancelled with or without any reason at any time by either the Company or Cryptometrics with no liability.

In connection with the merger, the holders of common stock of Cryptometrics issued and outstanding immediately prior to the effective time of the merger will be entitled to receive shares of JAG Media common stock equal to 7.4656 times the number of shares of JAG Media common stock issued and outstanding at the effective time, (i) excluding all shares of JAG Media common stock held in treasury by JAG Media, and (ii) excluding all shares of Series 2 and Series 3 Class B common stock of JAG Media outstanding, but (iii) including as outstanding the relevant number of shares of JAG Media stock into which shares of JAG Media which are still outstanding and can be converted into common stock (but have not yet been converted) by virtue of recapitalizations carried out by JAG Media.

Upon consummation of the merger, the holders of JAG Media common stock immediately prior to the effective time of merger will own less than 12% of the issued and outstanding common stock of JAG Media and the holders of Cryptometrics common stock immediately prior to the effective time of merger will own over 88% of the issued and outstanding common stock of JAG Media.

The shares of JAG Media common stock to be received by the Cryptometrics stockholders will be subject to a 12-month lock-up and will not be tradable, except that thirty-five percent (35%) of such shares will be tradable so long as the shares of the Company are listed on the NASDAQ Capital Market.

Additional information regarding the proposed transaction, along with a copy of the merger agreement, can be found in the Company's filing on Form 8-K, which was filed with the SEC on December 30, 2005 and is available on EDGAR.

About JAG Media Holdings, Inc.

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