<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>d56450_10qsb.txt
<DESCRIPTION>QUARTERLY REPORT
<TEXT>

                                                                  SECURITIES AND
                                                                  EXCHANGE
                                                                  COMMISSION
                                                                  WASHINGTON,
                                                                  D.C. 20549
                                                                  FORM 10-QSB

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended June 30, 2003

                        Commission File Number 000-25991

                                 DAG MEDIA, INC.

        (Exact name of small business issuer as specified in its charter)

                New York                                        13-3474831
     (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                       Identification Number)

         125-10 Queens Boulevard
             Kew Gardens, NY                                      11415
(Address of principal executive offices)                        (Zip Code)

                            (718) 520-1000 (Issuer's
                     telephone number, including area code)

      Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 |_|

      As of August 6, 2003, there were outstanding 2,927,460 shares of the
issuer's common shares, $.001 par value.

<PAGE>

                                 DAG MEDIA, INC.
                  QUARTERLY CONSOLIDATED REPORT ON FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
                                TABLE OF CONTENTS

Part I - FINANCIAL INFORMATION
                                                                     Page Number
                                                                     -----------

Item 1.    Consolidated Financial Statements (unaudited)

           Consolidated Balance Sheet at June 30, 2003 ...............    2

           Consolidated Statements of Operations for the Three
           and Six Months Periods Ended June 30, 2003 and 2002 .......    3

           Consolidated Statements of Cash Flows for the Six
           Months Periods Ended June 30, 2003 and 2002 ...............    4

           Notes to Consolidated Financial Statements ................    5

Item 2.    Management's Discussion and Analysis of
           Consolidated Financial Condition and Results of
           Consolidated Operations ...................................    8

Item 3.    Controls and procedures ...................................   12

Part II - OTHER INFORMATION

Item 2.    Changes in Securities and Use of Proceeds .................   13

Item 6.    Exhibits ..................................................   14

SIGNATURES ...........................................................   15

CERTIFICATION ........................................................   16

EXHIBITS .............................................................   20

<PAGE>

                    Item 1. CONSOLIDATED FINANCIAL STATEMENTS
                                 DAG MEDIA, INC.
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 2003
                                   (unaudited)

<TABLE>
<S>                                                                                 <C>
Assets
Current assets:

   Cash and cash equivalents                                                        $    644,562
   Marketable securities                                                               6,694,683
                                                                                    ------------
            Total cash and cash equivalents and marketable securities                  7,339,245
                                                                                    ------------
   Trade accounts receivable, net of allowance for doubtful accounts of $ 898,000      2,804,210
   Directories in progress                                                             2,200,230
   Deferred tax asset                                                                    153,389
   Other current assets                                                                  200,955
                                                                                    ------------
         Total current assets                                                         12,698,029
                                                                                    ------------

Fixed assets, net of accumulated depreciation of $ 166,618                               287,749

Goodwill                                                                                 458,131

Trademarks and other intangibles, net                                                    441,037

Other assets                                                                              23,411
                                                                                    ------------
         Total assets                                                               $ 13,908,357
                                                                                    ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses                                               $    592,117

Accrued commissions and commissions payables                                             801,414

Advanced billing for unpublished directories                                           5,618,188
                                                                                    ------------
         Total current liabilities                                                     7,011,719
                                                                                    ------------

Shareholders' equity:
         Preferred shares - $ .01 par value; 5,000,000 shares authorized; no
         shares issued                                                                        --

         Common shares - $ .001 par value; 25,000,000 authorized; 2,996,190
         issued and 2,927,460 outstanding                                                  2,996

         Additional paid-in capital                                                    7,990,575
         Treasury stock, at cost- 68,730 shares                                         (231,113)
         Deferred compensation                                                           (99,086)
         Accumulated other comprehensive income                                           72,896
         Accumulated deficit                                                            (839,630)
                                                                                    ------------
                Total shareholders' equity                                             6,896,638
                                                                                    ------------
                Total liabilities and shareholders' equity                          $ 13,908,357
                                                                                    ============
</TABLE>

       The accompanying notes are an integral part of this balance sheet.


                                       2
<PAGE>

                                 DAG MEDIA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                     Three Months Ended June 30,         Six Months Ended June 30,
-----------------------------------------------------------------------------------------------------------------------------------
                                                                        2003              2002             2003             2002
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>                <C>             <C>
Advertising revenues                                                $ 1,525,746       $ 1,380,742       $3,687,622       $2,955,275
-----------------------------------------------------------------------------------------------------------------------------------
Publishing costs                                                        494,870           520,843          832,659          737,366
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
Gross Profit                                                          1,030,876           859,899        2,854,963        2,217,909
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
Operating costs and expenses:
-----------------------------------------------------------------------------------------------------------------------------------
Selling expenses                                                        524,327           548,935        1,549,546          998,998
-----------------------------------------------------------------------------------------------------------------------------------
Administrative and general costs                                        838,062           495,262        1,558,433        1,151,491
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
Total operating costs and expenses                                    1,362,389         1,044,197        3,107,979        2,150,489
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
(Loss) income from operations                                          (331,513)         (184,298)        (253,016)          67,420
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
Other income                                                             52,662            51,971          107,861          122,789
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
(Loss) income before (provision) benefit for income taxes              (278,851)         (132,327)        (145,155)         190,209
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
Benefit (provision) for income taxes                                     51,820            60,711          (15,838)         (94,151)
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
(Loss) income before cumulative effect of change in accounting         (227,031)          (71,616)        (160,993)          96,058
principle
-----------------------------------------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principle                          --                --               --         (895,000)
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
Net loss                                                            $  (227,031)      $   (71,616)       $(160,993)      $ (798,942)
                                                                    ===========       ===========       ==========       ==========
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
Net (loss) income per common share
-----------------------------------------------------------------------------------------------------------------------------------
 --Basic
-----------------------------------------------------------------------------------------------------------------------------------
(Loss) income before cumulative effect of change in accounting
principle                                                           $     (0.08)      $     (0.02)      $    (0.05)      $     0.03
-----------------------------------------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principal                          --                --               --            (0.30)
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
Net loss per common share                                           $     (0.08)      $     (0.02)      $    (0.05)      $    (0.27)
                                                                    ===========       ===========       ==========       ==========
-----------------------------------------------------------------------------------------------------------------------------------
 --Diluted
-----------------------------------------------------------------------------------------------------------------------------------
(Loss) income before cumulative effect of change in accounting
principle                                                           $     (0.08)      $     (0.02)      $    (0.05)      $     0.03
-----------------------------------------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principal                          --                --               --            (0.30)
                                                                    -----------       -----------       ----------       ----------
-----------------------------------------------------------------------------------------------------------------------------------
Net loss per common share                                           $     (0.08)      $     (0.02)      $    (0.05)      $    (0.27)
                                                                    ===========       ===========       ==========       ==========
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding

-----------------------------------------------------------------------------------------------------------------------------------
 --Basic                                                              2,927,460         2,925,486        2,927,460        2,918,495
                                                                    ===========       ===========       ==========       ==========
-----------------------------------------------------------------------------------------------------------------------------------
 --Diluted                                                            2,927,460         2,925,486        2,927,460        2,933,454
                                                                    ===========       ===========       ==========       ==========
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>

                                 DAG MEDIA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                       Six Months Ended   Six Months Ended
                                                                         June 30, 2003     June 30, 2002
                                                                       ----------------   ----------------
<S>                                                                       <C>               <C>
Cash flows from operating activities:
  Net loss                                                                $  (160,993)      $  (798,942)
  Adjustment to reconcile net loss to net cash provided by (used in)
  operating activities-
   Cumulative effect of change in accounting principle                             --           895,000
  Depreciation and amortization                                                80,684            39,312
  Amortization of deferred compensation                                         4,428             1,893
  Bad debt expense                                                            321,057           407,998
  Deferred taxes                                                              285,715            13,109
  Changes in operating assets and liabilities-
       Accounts receivable                                                   (459,170)         (711,663)
       Directories in progress                                                (89,402)         (344,657)
       Other current and noncurrent assets                                    (69,618)         (155,333)
       Accounts payable and accrued expenses                                 (160,088)           18,046
       Accrued commissions and commissions payable                             (6,637)          183,000
       Advance billing for unpublished directories                            836,637           418,702
       Income taxes payable                                                  (270,551)           (4,448)
                                                                          -----------       -----------

              Net cash provided by (used in) operating activities             312,062           (37,983)
                                                                          -----------       -----------

Cash flows from investing activities:
   Proceeds from sale of marketable securities, net                         2,848,778         3,274,944
   Purchase of fixed assets                                                   (99,832)          (39,687)
   Proceeds from sale of fixed assets                                          46,200                --
   Investment in marketable securities                                     (2,665,066)       (4,001,094)
                                                                          -----------       -----------
             Net cash provided by  (used in) investing activities             130,080          (765,837)
                                                                          -----------       -----------

Cash flows from financing activities:
    Proceeds from exercise of stock option                                         --            21,200
                                                                          -----------       -----------

              Net cash provided by financing activities                            --            21,200
                                                                          -----------       -----------

Net increase (decrease) in cash                                           $   442,142       $  (782,620)

Cash and cash equivalents, beginning of period                                202,420         3,229,179
                                                                          -----------       -----------

Cash and cash equivalents, end of period                                  $   644,562       $ 2,446,559
                                                                          ===========       ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>

                                 DAG MEDIA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2003

1.    THE COMPANY

      The accompanying unaudited consolidated financial statements of DAG Media,
Inc. ("DAG" or the "Company") included herein have been prepared by the Company
in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. However, in the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The
accompanying unaudited consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements for the
year ended December 31, 2002 and the notes thereto included in the Company's
10KSB. Results of consolidated operations for the interim period are not
necessarily indicative of the operating results to be attained in the entire
fiscal year.

      The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual amounts could differ from those estimates.

2.    CHANGE IN ACCOUNTING PRINCIPALS

      The Company has adopted SFAS No. 142 "Goodwill and other Intangible
Assets", as of January 1, 2002. In connection with a reorganization at the
consumption of the Company's initial public offering ("IPO") in 1999, the
Company acquired the 50% interest of an affiliate, which resulted in the
recognition of approximately $1 million in goodwill and $351,000 in trademarks
based on the IPO price. This goodwill was being amortized over 25 years. As a
result of the transition impairment test required by SFAS 142, due to the
decline in the market value of the Company's share and considering that this is
considered entity level goodwill, the Company determined that, as of January 1,
2002 the goodwill has been fully impaired. Accordingly the goodwill has been
written off as the cumulative effect of an accounting change in the accompanying
Consolidated Financial Statements. The Company is continuing to amortize its
trademarks over 25 year-estimated life as it believes that they do not have
unlimited future life.

3.    EARNINGS PER SHARE OF COMMON STOCK

      The Company has applied SFAS No. 128, "Earnings Per Share" in its
calculation and presentation of earnings per share - "basic" and "diluted".
Basic earnings per share are computed by dividing income available to common
shareholders (the numerator) by the weighted average number of common shares
(the denominator) for the period. The computation of diluted earnings per share
is similar to basic earnings per share, except that the denominator is increased
to include the number of additional common shares that would have been
outstanding if the potentially dilutive common shares had been issued.

      The numerator in calculating both basic and diluted earnings per common
share for each period is the reported net income. The denominator is based on
the following weighted average number of common shares:


                                       5
<PAGE>

<TABLE>
<CAPTION>
                                                                   Three Months Ended              Six Months Ended
                                                                         June 30,                       June 30,

                                                                   2003           2002            2003             2002
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>             <C>              <C>
Basic                                                           2,927,460      2,925,486       2,927,460        2,918,495

Incremental shares for assumed conversion of options                   --             --              --           14,959
-----------------------------------------------------------------------------------------------------------------------------
Diluted                                                         2,927,460      2,925,486       2,927,460        2,933,454
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

      The difference between basic and diluted weighted average common shares
resulted from the assumption that the dilutive stock options outstanding were
exercised. There were 89,440 and 152,440 stock options and warrants not included
in the diluted earnings per share calculation for the respective six and three
months period ended June 30, 2003 and 2002, as their effect would have been
anti-dilutive.

4.    STOCK - BASED COMPENSATION

      As permitted by the SFAS No. 123, "Accounting for Stock Based
Compensation", the Company accounts for stock-based compensation arrangements
with employees in accordance with provisions of Accounting Principles Board
("APB") Opinion No. 25 "Accounting for Stock Issued to Employees". Compensation
expense for stock options issued to employees is based on the difference on the
date of grant, between the fair value of the Company's stock and the exercise
price of the option. No stock based employee compensation cost is reflected in
net income, as all options granted under those plans had an exercise price equal
to the market value of the underlying common stock at the date of grant. The
Company accounts for equity instruments issued to non employees in accordance
with the provisions of SFAS No. 123 and Emerging Issues Task Force ("EITF")
Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring, or in Conjunction With Selling, or in Conjunction
With Selling Goods or Services". All transactions in which goods or services are
the consideration received for the issuance of equity instruments are accounted
for based on the fair value of the consideration received or the fair value of
the equity instrument issued, whichever is more reliably measurable.

      The following table illustrates the effect on net loss and loss per share
if the Company had applied the fair value recognition provisions of SFAS No. 123
to stock based compensation:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                    Three Months Ended       Three Months Ended       Six Months Ended       Six Months Ended June
                                       June 30, 2003            June 30, 2002           June 30, 2003               30, 2002

------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                       <C>                    <C>                      <C>
Net loss, as reported                   $ (227,031)               $ (71,616)             $ (160,993)              $ (798,942)
------------------------------------------------------------------------------------------------------------------------------------
Add:
------------------------------------------------------------------------------------------------------------------------------------
Total stock based employee                  (5,429)                  (5,429)                (10,858)                 (10,858)
compensation expenses determined
under fair value based method
for all awards
------------------------------------------------------------------------------------------------------------------------------------
Net loss, pro forma                     $ (232,460)               $ (77,045)             $ (171,851)              $ (809,800)
------------------------------------------------------------------------------------------------------------------------------------
Basic and diluted loss                  $    (0.08)               $   (0.02)             $    (0.05)              $    (0.27)
per share, as reported
------------------------------------------------------------------------------------------------------------------------------------
Basic and diluted loss                  $    (0.08)               $   (0.03)             $    (0.06)              $    (0.28)
per share, pro forma
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       6
<PAGE>

5.    SIGNIFICANT EVENTS

      On July 10, 2003 the company dismissed Grant Thornton LLP as its
independent accountants.

The company engaged Goldstein Golub Kessler LLP as its new independent
accountants. The decision to change accountants was recommended and approved by
the audit committee of the company's board of directors.

6.    ACQUISITION

      On August 5th, 2002 the Company purchased substantially all of the assets
of The Blackbook business from Brandera.com [U.S], Inc. (the "Blackbook
Acquisition"). The Blackbook is a leading publisher of photography and
illustration directories that have become very well branded and a reference
point for finding photographers and illustrators in North America. The Blackbook
acquisition was made through Blackbook Photography Inc., a newly formed wholly
owned subsidiary of DAG Media, Inc.

The consolidated financial statements herein include the accounts of the Company
and its wholly owned subsidiary since the acquisition date. All material
intercompany accounts and transactions have been eliminated.


                                       7
<PAGE>

                              Item 2. MANAGEMENT'S
         DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
                       CONSOLIDATED RESULTS OF OPERATIONS

      The following management's discussion and analysis of consolidated
financial condition and results of consolidated operations should be read in
conjunction with our unaudited financial statements and notes thereto contained
elsewhere in this report. This discussion contains forward-looking statements
based on current expectations that involve risks and uncertainties. Actual
results and the timing of certain events may differ significantly from those
projected in such forward-looking statements.

      We currently publish and distribute business directories in print and on
the worldwide web, both in the mainstream, as well as in targeted niche markets
in the nation. Our principal source of revenue derives from the sale of ads in
our print and on-line directories. As a sales incentive the Company also
provides added values such as referral services and consumer discount club.

      We operate Internet portals, a mainstream general portal NewYellow.com,
targeting the general population, JewishYellow.com targeting worldwide Jewish
communities and JewishMasterguide.com, targeting the ultra-orthodox and Hasidic
communities.

      New Yellow, the Company's first general interest, English only yellow page
directory competes directly with the Verizon Yellow Pages in New York City. New
Yellow, is the only general interest yellow page directory to provide full-color
advertisements. Also, as part of our services, we offer to all New Yellow
advertisers publication of two editions per year, referral services and consumer
discount club.

      Our principal source of revenue derives from the sale of ads for our
NewYellow and Jewish Israeli Yellow Pages directories. Our NewYellow rates are
significantly less than those of the Verizon Yellow Pages and must remain so in
order to maintain our competitive sales advantage with our advertisers.

      On August 5th , 2002 the Company purchased the business and assets of the
Blackbook from Brandera.com [U.S], Inc. The Blackbook is a leading publisher of
photography and illustration source books that have become the "Industry
Standard" reference source for finding photographers, illustrators and graphic
designers in North America. The Blackbook name is respected worldwide with an
estimated 25,000 art directors, creative directors, designers and corporations
worldwide using Blackbook to find the talent they need. The Blackbook source
books consist of three different books: Blackbook Photography, Blackbook
Illustration and Blackbook AR100 that encompass 3 distinct advertiser groups:
photographers, illustrators and a select group of more than 100 leading
corporate annual reports designers as well as the Blackbook's web site, the
blackbook.com.

      Advertising fees, whether collected in cash or evidenced by a receivable,
generated in advance of publication dates, are recorded as "Advanced billings
for unpublished directories" on our balance sheet. Many of our advertisers pay
the ad fee over a period of time. In that case, the entire amount of the
deferred payment is booked as a receivable. Revenues are recognized at the time
the directory in which the ad appears is published. Thus, costs directly related
to the publication of a directory in advance of publication are recorded as
"Directories in progress" on our balance sheet and are recognized when the
directory to which they relate is published. All other costs are expensed as
incurred.

      The principal operating costs incurred in connection with publishing the
directories are commissions payable to sales representatives and costs for paper
and printing. Generally, advertising commissions are paid as advertising revenue
is collected. We do not have any long term agreements with paper suppliers or
printers. Since ads are sold before we purchase paper and print a particular
directory, a substantial increase in the cost of paper or printing costs would
reduce our profitability. Administrative and general expenses include
expenditures for marketing, insurance, rent, sales and local franchise taxes,
licensing fees, office overhead and wages and fees paid to employees and
contract workers (other than sales representatives).


                                       8
<PAGE>

Three Months Ended June 30, 2003 Compared to Three Months Ended June 30, 2002

Advertising revenues

Advertising revenues for three months ended June 30, 2003 were $1,526,000
compared to $1,381,000 for the three months ended June 30, 2002, an increase of
$145,000. The increase was primarily attributable to the general growth in
business activity and reflects an increase in sales of both 2002 second edition
- and the first 2003 edition of the Jewish Israeli Yellow Pages directory. The
Blackbook's contribution for recognized revenue for the three months period
ended June 30, 2003 totaled to $114,000.

Publication costs

Publication costs for the three months ended June 30, 2003 were $495,000
compared to $521,000, for the corresponding period in 2002, a decrease of
$26,000. As a percentage of advertising revenues, publication costs were 32.44%
in the three months period ending June 30, 2003 compared to 37.73%, in the
corresponding 2002 period. The decrease in publication costs primarily reflects
the decrease in the paper and distribution costs of the April edition of the New
Yellow Manhattan directory compared to the equivalent edition last year
partially off-set by the Blackbook's contribution for publication costs for the
three months period ended June 30, 2003 which totaled $23,000.

Selling expenses

Selling expenses for the three months ended June 30, 2003 were $524,000 compared
to $549,000 for the corresponding period in 2002, a decrease of $25,000. This
decrease in selling expenses was primarily attributable to the general increase
in sales generated by sales representatives who work directly for the Company
rather then sales generated by agencies with higher commission rates.
Blackbook's selling expenses added in the Company's financial statements this
quarter totaled $67,000.

Administrative and general costs

General and administrative expenses for the three months period ended June 30,
2003 were $838,000 compared to $495,000 for the same period in 2002, an increase
of 69.29%. This increase is primarily attributable to the $175,000 of the
Blackbook's administrative costs added due to the inclusion of Blackbook in the
Company's consolidated financial statements as well as increase in salaries of
$53,000, an increase in the expense for uncollected receivables of $50,000 and
increase in professional fees totaling $29,000.

Other income

For the three months period ended June 30, 2003, the Company had other income of
$53,000 compared to other income of $52,000 for the three months period ended
June 30, 2002.

Provision for income taxes

Benefit for income taxes in the three months ended June 30, 2003 and 2002 was
$52,000 and $61,000, respectively. Starting year-end 2003, the Company will file
its tax returns according to the accrual basis of income recognition and
therefore adjust prior years taxes accruals. In addition, the Company created
deferred tax assets due to net operating loss accumulated for tax purposes,
which the company believes, will be used in the near future.


                                       9
<PAGE>

Six Months Ended June 30, 2003 Compared to Six Months Ended June 30, 2002

Advertising revenues

Advertising revenues for six months ended June 30, 2003 were $3,688,000 compared
to $2,955,000 for the six months ended June 30, 2002, an increase of $733,000.
The increase was primarily attributable to the general growth in business
activity and reflects an increase in sales of both 2002 second edition - and the
first 2003 edition of the Jewish Israeli Yellow Pages directory. The Blackbook's
contribution for recognized revenue for the six months period ended June 30,
2003 totaled to $151,000.

Publication costs

Publication costs for the six months ended June 30, 2003 were $833,000 compared
to $737,000, for the corresponding period in 2002, an increase of $96,000. As a
percentage of advertising revenues, publication costs were 22.58% in the period
ending June 30, 2003 compared to 24.95%, in the corresponding 2002 period. The
increase in publication costs primarily reflects the additional $130,000 of the
Blackbook publishing costs added due to the inclusion of Blackbook in the
Company's consolidated financials statements. In addition, the increase is
attributable to the increase in the printing costs of the Jewish Israeli Yellow
Pages directory due to a larger number of pages being printed off-set by the
decrease in the paper and distribution costs of the April edition of the New
Yellow Manhattan directory compared to the equivalent edition last year.

Selling expenses

Selling expenses for the six months ended June 30, 2003 were $1,550,000 compared
to $999,000 for the corresponding period in 2002, an increase of $551,000. This
increase in selling expenses was primarily attributable to the general increase
in sales commission and promotions paid due to the increase in sales as well as
an increase in secured income payments resulting from the Company's expansion of
its sales force. Blackbook's selling expenses added in the Company's financial
statements this quarter totaled $99,000.

Administrative and general costs

General and administrative expenses for the Six months ended June 30, 2003 were
$1,558,000 compared to $1,151,000 for the same period in 2002, an increase of
35.36%. This increase is primarily attributable to the $390,000 of the
Blackbook's administrative costs added due to the inclusion of Blackbook in the
Company's consolidated financial statements.

Other income

For the six months ended June 30, 2003, the Company had other income of $108,000
compared to other income of $123,000 for the six months ended June 30, 2002.
This decrease was attributable to the decrease in interest rates resulting in
decreased interest income in the six months period ended June 30, 2003.

Provision for income taxes

Provision for income taxes in the six months ended June 30, 2003 and 2002 was
$16,000 and $ 94,000, respectively. We used a 46% rate to calculate taxes on the
expected annual income. Starting year-end 2003,the Company will file its tax
returns according to the accrual basis of income recognition and therefore
adjusted prior years taxes accruals. In addition, the Company created deferred
tax assets due to net operating loss accumulated for tax purposes, which the
Company believes, will be used in the near future.


                                       10
<PAGE>

Liquidity and Capital Resources

At June 30, 2003 the Company had cash and cash equivalents and marketable
securities of $7,339,000 and working capital of $5,686,000 as compared to cash
and cash equivalents and marketable securities of $6,093,000 and working capital
of $6,699,000 at June 30, 2002. The increase in cash and cash equivalents and
marketable securities primarily reflects the cash provided by operating activity
by both the Company and Blackbook. The decrease in working capital primarily
reflects the general growth in business activity and therefore the increased
deferred revenues and commissions liability.

Net cash provided by operating activities was $312,000 for the six months ended
June 30, 2003. For the comparable 2002 period, net cash used in operating
activities was $38,000. The increase in net cash provided by operating
activities reflects the increase in corporate sales and collections.

Net cash provided by investing activities was $130,000 for the six months ended
June 30, 2003 compared to net cash used in investing activities of $766,000 for
the comparable 2002 period. Net cash provided by investing activities was
primarily the result of the Company's selling of marketable securities.

There was no net cash provided by financing activities for the six months ended
June 30, 2003 whereas at the comparable 2002 period there were $21,000. The net
cash provided by financing activities for the six months ended June 30, 2002 was
due to the exercise of stock options and the issuance of common shares,
respectfully.

We anticipate that our current cash balances together with our cash flows from
operations will be sufficient to fund the production of our directories and the
maintenance of our web site as well as increases in our marketing and
promotional activities for the next 12 months. However, we expect our working
capital requirements to increase over the next 12 months as we continue to
market our directories and expand our on-line services, in particular for
NewYellow.

Change In Accounting Principals

      The Company has adopted SFAS No. 142 "Goodwill and Other Intangible
Assets", as of January 1, 2002. In connection with a reorganization at the
consumption of our initial public offering ("IPO") in 1999, the Company acquired
the 50% interest of an affiliate, which resulted in the recognition of
approximately $1 million in goodwill based on the IPO price. This goodwill was
being amortized over 25 years. The Company adopted SFAS 142 effective January 1,
2002, which requires the determination of whether there has been impairment in
the carrying value of goodwill based on fair value. As a result of the decline
in the market value of the Company's shares, and considering that this is
considered entity level goodwill the Company determined that, as of January 1,
2002 the goodwill has been fully impaired. Accordingly the goodwill has been
written off as the cumulative effect of an accounting change in the accompanying
Financial Statements. The Company is continuing to amortize its trademarks over
25 year-estimated life as it believes that they do not have unlimited future
life.


                                       11
<PAGE>

                         Item 3. CONTROL AND PROCEDURES

            (a) Evaluation of Disclosure Controls and Procedures. We maintain
disclosure controls and procedures designed to provide reasonable assurance that
information required to be disclosed in the reports we file with the SEC is
recorded, processed, summarized and reported within the time periods specified
in the rules of the SEC. Within 90 days prior to the filing of this Quarterly
Report on Form 10-Q, we carried out an evaluation, under the supervision and
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the design and operation of these disclosures control and
procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relating to the Company (including our consolidated
subsidiary) required to be included in our periodic SEC filings.

            (b) Change in Internal Controls. There were no significant changes
in internal controls or other factors that could significantly affect our
internal controls subsequent to the date of our evaluation.

Forward Looking Statements

This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking
statements are typically identified by the words "believe", "expect", "intend",
"estimate" and similar expressions. Those statements appear in a number of
places in this report and include statements regarding our intent, belief or
current expectations or those of our directors or officers with respect to,
among other things, trends affecting our financial conditions and results of
operations and our business and growth strategies. These forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties. Actual results may differ materially from those projected,
expressed or implied in the forward-looking statements as a result of various
factors (such factors are referred to herein as "Cautionary Statements"),
including but not limited to the following: (i) our limited operating history,
(ii) potential fluctuations in our quarterly operating results, (iii) challenges
facing us relating to our rapid growth and (iv) our dependence on a limited
number of suppliers. The accompanying information contained in this report,
including the information set forth under "Management's Discussion and Analysis
of Financial Condition and Results of Operations", identifies important factors
that could cause such differences. These forward-looking statements speak only
as of the date of this report, and we caution potential investors not to place
undue reliance on such statements. We undertake no obligation to update or
revise any forward-looking statements. All subsequent written or oral
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the Cautionary Statements.


                                       12
<PAGE>

                                 DAG MEDIA, INC.

                            PART II-OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

In May 1999, we completed an initial public offering of 1,325,000 common shares
(the "IPO"), of which we sold 1,250,000 common shares and Assaf Ran, our
president, chief executive officer and principal shareholder, sold 75,000 common
shares. The common shares were sold for $6.50 each. Net proceeds, after expenses
of the IPO, were $6,423,763.

We will report the following information in our quarterly and annual filings
until the proceeds have been fully used.

(a)   Effective date of Registration Statement: May 13, 1999 (File No.
      333-74203).

(b)   The offering was declared effective May 13, 1999 and was consummated on
      May 18, 1999.

(c)   The managing underwriters were Paulson Investment Company, Inc. and
      Redwine & Company, Inc.

(d)   Securities Sold:

      (i)   Common shares - common shares par value $.001 per share

      (ii)  Representatives' warrants - warrants convertible into 132,500 common
            shares at a price of $7.80 per share. The representatives' warrants
            are exercisable over the four year period beginning on the first
            anniversary of the offering. These warrants were issued to the
            underwriters in connection with the offering.

(e)   Amount registered and sold:

      (i)   Common shares - 1,523,750 common shares were registered; 1,250,000
            common shares were sold for the account of the issuer and 75,000
            common shares were sold for the account of Assaf Ran, our president,
            chief executive officer and principal shareholder.

      (ii)  Representatives' warrants - 132,500 warrants registered and issued
            to the underwriters in connection with the IPO.

      (iii) Common shares issuable upon exercise of representatives' warrants -
            132,500 common shares registered.

(f)   Gross proceeds to issuer: $8,125,000.

(g)   Expenses incurred in connection with issuance of securities:

      Underwriting discounts and commissions                       $   731,250
      Expenses paid to the underwriters                            $   252,455
      Other expenses                                               $   717,532
                                                                   -----------
                                                                   $ 1,701,237

(h)   Net proceeds: $6,423,763.

(i)   Amount of net offering proceeds used for the purposes listed below:

--------------------------------------------------------------------------------
Marketable securities                                            $ 1,337,886
--------------------------------------------------------------------------------
New Yellow printing and distribution cost                        $ 4,665,957
--------------------------------------------------------------------------------
Investment in Blackbook Photography Inc.                         $   419,920
--------------------------------------------------------------------------------


                                       13
<PAGE>

                    Item 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits:

                  99.1 - Certification by Chief Executive Officer
                  99.2 - Certification by Chief Financial Officer

      (b)   Reports on Form 8-K

                  None

                                   SIGNATURES

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

                                      DAG Media, Inc. (Registrant)


Date: August 6, 2003          By: /s/ Assaf Ran
                                  -----------------------------
                                      Assaf Ran, President


Date: August 6, 2003          By: /s/ Yael Shimor-Golan
                                  ----------------------------------
                                      Yael Shimor-Golan, Chief Financial Officer


                                       14

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