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Item 8.01. Other Events.

The Company is filing this Amendment No. 1 to the initial Current Report on Form 8-K filed by the Company on September 6, 2012 to include historical audited and unaudited financial statements and pro forma financial information related to the acquisition of the Purchased Assets as required by Item 9.01 of Form 8-K.

Item 9.01 - Financial Statements and Exhibits

Financial Statements of Business Acquired

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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.

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Depreciation expense was $9,960,  $2,276 and $0 for the six months ended June 30, 2012 (unaudited), the year ended December 31, 2011 and the period from February 23, 2010 (Date of Inception) through December 31, 2010, respectively.

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4.  Patents

Ad-Vantage has filed for domestic and international patent protection on its technology. In the United States, one patent has been issued and four are pending. Internationally, no patents have been issued. Patents, at cost, consist of the following:

5.  Commitments and Contingencies

Operating Leases – In January 2012, Ad-Vantage entered into an operating lease agreement that commenced February 2012 for its office facility, which expires on February 19, 2014.

Future minimum lease commitments are as follows:

6.  Note Payable

In March 2011, Ad-Vantage entered into a promissory note that provides for advances of up to $500,000 with interest at 12% per annum payable monthly. The promissory note was provided by an investor in our preferred stock (Note 9).

7.   Stockholders’ Equity

On July 7, 2010, Ad-Vantage completed a reorganization in which Ad-Vantage Networks, LLC was converted into Ad-Vantage Networks, Inc., a Delaware corporation (the “Conversion”). As part of the Conversion, Ad-Vantage issued 10,000,000 shares of common stock.

Authorized, issued and outstanding

Common Stock

Ad-Vantage has authorized 30,000,000 common shares with a $0.001 par value. As of June 30, 2012 (unaudited), December 31, 2011 and 2010 there were 10,616,769 and 10,431,165 common shares issued and outstanding.

In 2010, Ad-Vantage issued 431,165 common shares at a fair value of $67,908 to a consultant for consulting services.

Preferred Stock

Ad-Vantage has authorized 7,000,000 preferred shares with a $0.001 par value. Issuances of Preferred Stock are as follows:

Series A Preferred Stock – In April 2012, 168,651 shares of preferred stock warrants were exercised. In July 2010 Ad-Vantage closed a private placement of 3,492,061 shares of Series A Preferred Stock at $0.1575 per share for total proceeds of $550,000. A total of 3,660,712 and 3,492,061 shares of Series A

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Preferred Stock were outstanding as of June 30, 2012 (unaudited),  December 31, 2011 and 2010, respectively.

The Series A Preferred Stock ranks senior in liquidation and dividend preferences to Ad-Vantage’s common stock. Holders of Series A Preferred Stock accrue dividends at the rate per annum of $0.0126. At June 30, 2012 (unaudited) and December 31, 2011, Series A Preferred Stock had dividends accumulated of approximately $88,382 and $66,000, respectively. No dividends have been declared, therefore there are no amounts accrued on the balance sheet.

The holders of the Series A Preferred Stock have conversion rights equivalent to such number of fully paid and non-assessable shares of common stock as is determined by dividing the Series A original issue price of $0.1575 by the then applicable conversion price. The conversion ratio is subject to customary anti-dilution adjustments, including in the event that Ad-Vantage issues equity securities at a price equivalent to less than the conversion price in effect immediately prior to such issue.

The holders of Series A Preferred Stock have a liquidation preference over the holders of Ad-Vantage’s common stock equivalent to the purchase price per share of the Series A Preferred Stock plus any accrued and unpaid dividends, whether or not declared, on the Series A Preferred Stock. A liquidation would be deemed to occur upon the happening of customary events, including transfer of all or substantially all of Ad-Vantage’s common stock or assets or a merger, or consolidation. Ad-Vantage believes that such liquidation events are within its control and therefore has classified the Series A Preferred Stock in stockholders’ equity.

The holders of Series A Preferred Stock vote together as a single class with the holders of Ad-Vantage’s common stock and the holders of Ad-Vantage’s Series B and Series C Preferred Stock on all action to be taken by Ad-Vantage’s stockholders. Each share of Series A Preferred Stock entitles the holder to the number of votes equal to the number of shares of common stock into which the shares of the Series A Preferred Stock are convertible into as of the record date for determining stockholders entitled to vote on such matter.

In connection with the issuance of Series A Preferred Stock, Ad-Vantage entered into an Investors’ Rights Agreement (the “Rights Agreement”). The Rights Agreement, as later amended and restated, provides that holders of at least 40% of then current Registrable Securities, including Ad-Vantage’s common stock into which the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock have been converted or are convertible, may demand and cause Ad-Vantage to register a Form S-1 or Form S-3, if eligible, on their behalf for the shares of common stock issued, issuable or that may be issuable upon conversion of the Series A Preferred Stock (the “Registrable Securities”). Whenever required under this agreement to effect the registration of any Registrable Securities, Ad-Vantage shall, as expeditiously as reasonably possible prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective.

Series B Preferred Stock - In November 2011 Ad-Vantage closed a private placement of 2,191,838 shares of Series B Preferred Stock at $0.4562 per share for total proceeds of $999,999. A total of 2,191,838 shares of Series B Preferred Stock were outstanding as of June 30, 2012 (unaudited) and December 31, 2011, respectively.

Upon any issuance, the Series B Preferred Stock would rank senior in liquidation and dividend preferences to Ad-Vantage’s common stock. Holders of Series B Preferred Stock accrue dividends at the rate per annum $0.0365 per share. At June 30, 2012 (unaudited) and December 31, 2011, Series B Preferred Stock had dividends accumulated of approximately $52,801 and $13,334, respectively. No dividends have been declared, therefore there are no amounts accrued on the balance sheet.

The holders of the Series B Preferred Stock would have conversion rights equivalent to such number of fully paid and non-assessable shares of common stock as is determined by dividing the Series B original issue price of $0.4562 by the then applicable conversion price. The conversion ratio is subject to

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customary anti-dilution adjustments, including in the event that Ad-Vantage issues equity securities at a price equivalent to less than the conversion price in effect immediately prior to such issue.

The holders of Series B Preferred Stock would have a liquidation preference over the holders of Ad-Vantage’s common stock equivalent to the purchase price per share of the Series B Preferred Stock plus any accrued and unpaid dividends, whether or not declared, on the Series B Preferred Stock. A liquidation would be deemed to occur upon the happening of customary events, including transfer of all or substantially all of Ad-Vantage’s common stock or assets or a merger, or consolidation. Ad-Vantage believes that such liquidation events are within its control and therefore Company has classified the Series B Preferred Stock in stockholders’ equity.

The holders of Series B Preferred Stock vote together as a single class with the holders of Ad-Vantage’s common stock, Series A Preferred Stock, and Series C Preferred Stock on all action to be taken by Ad-Vantage’s stockholders. Each share of Series B Preferred Stock entitles the holder to the number of votes equal to the number of shares of common stock into which the shares of the Series B Preferred Stock are convertible into as of the record date for determining stockholders entitled to vote on such matter.

In connection with the issuance of Series B Preferred Stock, Ad-Vantage entered into an Investors’ Rights Agreement (the “Rights Agreement”). The Rights Agreement, as later amended and restated, provides that holders of at least 40% of then current Registrable Securities, including Ad-Vantage’s common stock into which the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock have been converted or are convertible, may demand and cause Ad-Vantage to register a Form S-1 or Form S-3, if eligible, on their behalf for the shares of common stock issued, issuable or that may be issuable upon conversion of the Series A Preferred Stock (the “Registrable Securities”). Whenever required under this agreement to effect the registration of any Registrable Securities, Ad-Vantage shall, as expeditiously as reasonably possible prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective.

Series C Preferred Stock – In April 2012 Ad-Vantage closed a placement of 528,070 shares of Series C Preferred Stock at $1.14 per share for total proceeds of $602,000. A total of 528,070 and no shares of Series C Preferred Stock were outstanding as of June 30, 2012 (unaudited) and December 31, 2011, respectively.

Upon any issuance, the Series C Preferred Stock would rank senior in liquidation and dividend preferences to Ad-Vantage’s common stock. Holders of Series C Preferred Stock accrue dividends at the rate per annum $0.0912 per share. At June 30, 2012 (unaudited), Series C Preferred Stock had dividends accumulated of approximately $7,706.  No dividends have been declared, therefore there are no amounts accrued on the balance sheet.

The holders of the Series C Preferred Stock would have conversion rights equivalent to such number of fully paid and non-assessable shares of common stock as is determined by dividing the Series C original issue price of $1.14 by the then applicable conversion price. The conversion ratio is subject to customary anti-dilution adjustments, including in the event that Ad-Vantage issues equity securities at a price equivalent to less than the conversion price in effect immediately prior to such issue.

The holders of Series C Preferred Stock would have a liquidation preference over the holders of Ad-Vantage’s common stock equivalent to the purchase price per share of the Series C Preferred Stock plus any accrued and unpaid dividends, whether or not declared, on the Series C Preferred Stock. A liquidation would be deemed to occur upon the happening of customary events, including transfer of all or substantially all of Ad-Vantage’s common stock or assets or a merger, or consolidation. Ad-Vantage believes that such liquidation events are within its control and therefore Company has classified the Series C Preferred Stock in stockholders’ equity.

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The holders of Series C Preferred Stock vote together as a single class with the holders of Ad-Vantage’s Common Stock, Series A Stock and Series B stock on all action to be taken by Ad-Vantage’s stockholders. Each share of Series C Preferred Stock entitles the holder to the number of votes equal to the number of shares of common stock into which the shares of the Series C Preferred Stock are convertible into as of the record date for determining stockholders entitled to vote on such matter.

In connection with the issuance of Series C Preferred Stock, Ad-Vantage entered into an Investors’ Rights Agreement (the “Rights Agreement”). The Rights Agreement provides that holders of at least 40% of then current Registrable Securities, including Ad-Vantage’s common stock into which the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock have been converted or are convertible, may demand and cause Ad-Vantage to register a Form S-1 or Form S-3, if eligible, on their behalf for the shares of common stock issued, issuable or that may be issuable upon conversion of the Series A Preferred Stock (the “Registrable Securities”). Whenever required under this agreement to effect the registration of any Registrable Securities, Ad-Vantage shall, as expeditiously as reasonably possible prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective.

8.  Income Taxes

Ad-Vantage files income tax returns in the U.S. federal jurisdiction and the state of California. There are currently no income tax examinations underway for these jurisdictions since December 31, 2010 is the initial tax filing period.

Ad-Vantage provides deferred income taxes for differences between the tax reporting bases and the financial reporting bases of assets and liabilities. Ad-Vantage had no unrecognized income tax benefits. Should Ad-Vantage incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and operating expense, respectively. Unrecognized tax benefits are not expected to increase or decrease within the next twelve months.

Deferred Income Taxes – Ad-Vantage does not recognize the deferred income tax asset at this time because the realization of the asset is less likely than not. The components of Ad-Vantage’s deferred income tax asset are as follows:

As of December 31, 2011, Ad-Vantage has net operating losses for federal and state income tax purposes of approximately $720,489 and $719,935, respectively, which are available for application against future taxable income and which will start expiring in 2031 and 2021, respectively. The benefit associated with the net operating loss carry forward will more likely than not go unrealized unless a future operation is

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successful. Since the success of future operations is indeterminable, the potential benefits resulting from these net operating losses have not been recorded in the financial statements.

9.  Related Party Transactions

Ad-Vantage utilizes the programming services of a company managed by its Chief Technology Officer. Payments to this company were $85,559, $100,046 and $27,737 for the six months ended June 30, 2012 (unaudited), the year ending December 31, 2011 and the period from February 23, 2010 (Date of Inception) through December 31, 2010, respectively.

In March 2011, Ad-Vantage entered into a promissory note that provides for advances of up to $500,000 with interest at 12% per annum payable monthly. The promissory note was provided by an investor in our preferred stock. The promissory note matures in 36 months and any principal balance is due and payable 90 days after the note matures and Ad-Vantage has received written notice of demand for payment. A total of $80,000 was borrowed under this promissory note on September 1, 2011 and an additional $30,000 on October 3, 2011. The promissory note was paid in full on November 1, 2011.

10.  Stock-Based Compensation

Ad-Vantage's Board of directors adopted the 2010 Equity Incentive Plan (the “Plan”) in September 2010. The Plan provides long-term incentives to employees, members of the Board, and advisers and consultants of Ad-Vantage who are able to contribute towards the creation of or have created stockholder value by providing them stock options and other stock and cash incentives. Provisions such as vesting, repurchase and exercise conditions and limitations are determined by the Board of Directors on the grant date. The total number of shares that may be issued pursuant to the Plan shall not exceed 1,250,000 shares, subject to adjustment in the event of certain recapitalizations, reorganizations, and similar transactions. Generally, shares that are forfeited or canceled from awards under the Plan also will be available for future awards.

As of June 30, 2012 (unaudited) and December 31, 2011, 785,521 and 596,684 options were granted under the Plan, respectively, and 464,479 and 653,316 options were available to be granted under the Plan, respectively.

Stock options

During the six months ended June 30, 2012 (unaudited), the year ended December 31, 2011 and the period from February 23, 2010 (Date of Inception) through December 31, 2010, Ad-Vantage granted 188,837, 294,684 and 302,000 stock options, respectively, under the Plan to certain employees, directors, and advisers, respectively. A total of 377,500 options vest monthly over a 24 month period and 408,021 options vest one quarter (1/4) after one year and the balance over a 36 month period.

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A summary of stock option activity from February 23, 2010 (Date of Inception) through June 30, 2012 (unaudited) is as follows:

The exercise price and vesting period of each stock option is specified by the Board of Directors at the time of grant. The stock options expire seven years after the grant date.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The expected life assumption is based on the expected life assumptions of similar entities. Expected volatility is based on actual share price volatility of similar companies of the preceding twelve months. The risk-free interest rate is the yield currently available on U.S. Treasury zero-coupon issues with an expected term ranging from 2.5 to 5 years used as the input to the Black-Scholes model. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods as options vest, if actual forfeitures differ from those estimates. During the six months ended June 30, 2012 (unaudited), the year ended December 31, 2011, and for the period February 23, 2010 (Date of Inception) through December 31, 2010, Ad-Vantage experienced no forfeitures. The weighted average grant date fair value of options granted during 2011 and 2010 amounted to $0.101 and $0.158 per option, respectively, using the Black Scholes pricing model using the following assumptions:

As of June 30, 2012 (unaudited) and December 31, 2011 there was $333,037 and $88,454 of total unrecognized compensation costs, respectively, related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average

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period of approximately 5.92 years from June 30, 2012 (unaudited) and 2.7 years from December 31, 2011.

The following table summarizes information about stock options outstanding at June 30, 2012 (unaudited) and December 31, 2011:

Series A Preferred Stock Warrants

Series A Preferred Stock Warrants Issued for Consulting Services

Ad-Vantage had the following Series A Preferred Stock warrant activity during the period from February 23, 2010 (Date of Inception) through June 30, 2012 (unaudited):

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The following table summarizes certain aspects of Ad-Vantage’s outstanding warrants as of December 31, 2011:

The initial value of such warrants was calculated using the Black-Scholes valuation model using the following assumptions:

The total fair value of warrants issued during the year ended December 31, 2010 was $14,761. Ad-Vantage amortizes the fair value of the warrants ratably over the consulting agreement. Accordingly, $14,761 was charged to salary and other compensation expense and credited to additional paid-in capital during the year ended December 31, 2010.

11.  Subsequent Event

Assignment of License Agreement

In July 2012, Ad-Vantage licensed some specific noncore intellectual property and technology to an affiliated entity in exchange for all of the membership interest in the affiliated entity. The membership interests were then dividend out to the shareholders of record of Ad-Vantage as of July 2nd. The value of the intellectual property as determined by management was approximately $20,000.

Senior Secured Promissory Note

On July 12, 2012, Ad-Vantage received $1,400,000 pursuant to a senior secured promissory note. The note is secured by a lien on all assets of Ad-Vantage, bears interest at 10% per annum and is due and payable in full on or before the earliest of: (a) the Closing Date of the Merger, (b) January 9, 2014 and (c) the date of any default as specified by the note. Effective with the closing of the Merger on August 31, 2012, this note was owed by Ad-Vantage to its owner, JMG.

Grant of stock options

In May and August 2012, Ad-Vantage granted a total of 518,837 stock options under the 2010 Equity Incentive Plan. 368,837 options vest over a four year period and 150,000 options vest in equal amounts over 24 months; all are exercisable at $1.14 per share and expire seven years after the vesting commencement date.  Ad-Vantage also granted 2,800,000 non-qualified stock options outside the 2010 Equity Incentive Plan to be allocated among senior management. These options are exercisable at $1.14 per share, vested fully on August 31, 2012 upon the closing of Ad-Vantage’s merger with a subsidiary of JMG, and expire on August 31, 2018.

Merger with JMG Exploration, Inc.

On August 31, 2012, Ad-Vantage consummated a reverse triangular merger with a wholly owned subsidiary of JMG Exploration (“JMG”) pursuant to which Ad-Vantage became the surviving entity of the Merger and Ad-Vantage became a wholly owned subsidiary of JMG.  Pursuant to and in connection with the Amended and Restated Merger Agreement and the Merger:

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·

JMG issued 169,973.88 shares of Class M Preferred Stock (the “Class M Preferred”), a newly authorized class of JMG preferred stock, as consideration for the Merger.  Each issued and outstanding share of Ad-Vantage common stock and Ad-Vantage preferred stock (collectively, “Ad-Vantage Capital Stock”) was exchanged for 0.01 fully paid and nonassessable share of Class M Preferred (the “Exchange Ratio”).

·

JMG covenanted, as soon as reasonably practicable following the consummation of the Merger and subject to compliance with applicable law, to (i) cause its authorized number of shares of common stock to be increased from 25,000,000 to 100,000,000 (the “Authorized Share Increase”) and (ii) effect a one-for-two reverse stock split of its issued and outstanding shares of common stock (the “Reverse Stock Split”).

·

Upon the consummation of the Authorized Share Increase and the Reverse Stock Split, the shares of Class M Preferred issued in exchange for the shares of Ad-Vantage Capital Stock shall automatically convert (the “Automatic Conversion”) into shares of JMG’s common stock, at the ratio of 100 shares of common stock for each share of Class M Preferred (the “Conversion Ratio”).

·

After giving effect to the Reverse Stock Split and the Automatic Conversion, JMG will have approximately 19,726,603 shares of common stock outstanding, of which 16,997,388 shares will have been issued (giving effect to the Automatic Conversion) to complete the Merger.

·

All issued and outstanding options, warrants and other rights to acquire shares of Ad-Vantage common stock (collectively, “Ad-Vantage Options”) were converted into options, warrants or other rights to acquire shares of Class M Preferred (collectively, “Parent Class M Preferred Stock Options”) at the Exchange Ratio, with such Class M Preferred Stock Options having the same terms and being subject to the same conditions as the Ad-Vantage Options, provided, however, that upon the consummation of the Authorized Share Increase and the Reverse Stock Split all of the Class M Preferred Stock Options shall, without the requirement of any further action, convert into options for shares of JMG common stock, with such conversion occurring at the Conversion Ratio.  No Ad-Vantage Option shall have accelerated vesting in connection with the Merger.

·

JMG will extend the term of its three classes of warrants with exercise prices, respectively, of $8.50, $10.00 and $12.00 (such prices giving effect to the Reverse Stock Split) for a period of 18 months from the consummation of the Merger.

·

Each of those persons serving prior to the Merger as a director of JMG, with such resignations becoming effective as of September 16, 2012 (upon expiration of the applicable waiting period in compliance with the provisions of Rule 14f-1 (“Rule 14f-1”) of the Exchange Act of 1934, as amended (the “Exchange Act”)).

·

Each of David S. Grant and Sanjeev Kuwadekar became directors of Ad-Vantage, effective upon the consummation of the Merger, and each of Donald Wells, Ed Cerkovnik and Robert Burg became directors of Ad-Vantage as of September 16, 2102  upon expiration of the applicable waiting period in compliance with the provisions of Rule 14f-1.

·

Those persons serving as officers of JMG prior to the Merger resigned upon the consummation of the Merger and those persons serving as officers of Ad-Vantage became officers of JMG.

·

The Merger resulted in the current stockholders of JMG owning approximately 13.8% of Ad-Vantage and the Ad-Vantage Stockholders, as a group, owning the balance.

·

Certain members of the Ad-Vantage executive team agreed to lock-up, for a period of 12 months following the closing of the Merger, the shares of JMG’s common stock to be received by them in connection with the Merger.

The following unaudited pro forma financial information present the pro forma financial position and operating results assuming that the merger of Ad-Vantage Networks, Inc. ("Ad-Vantage"), a development

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stage company, and a subsidiary of JMG Exploration, Inc., a public company ("JMG") had taken place as of January 1, 2011.

The unaudited pro forma combined consolidated statements of operations do not reflect any potential cost savings that may be realized following the merger. The pro forma adjustments and assumptions are based on estimates, evaluations and other data currently available and, in JMG’s opinion, provide a reasonable basis for the fair presentation of the estimated effects directly attributable to the merger and related transactions. The unaudited pro forma combined statements of operations are provided for illustrative purposes only and are not necessarily indicative of what the consolidated results of operations of financial position would actually have been had the merger occurred on January 1, 2011, nor do they represent a forecast of the consolidated results of operations or financial position for any future period or date.

All information contained herein should be read in conjunction with JMG’s annual report on Form 10-K for the year ended December 31, 2011, the financial statements and notes thereto and of Ad-Vantage included in Item 9.01 of this Form 8-K/A and the notes to unaudited pro forma financial information included herein. The following pro forma financial information is included in this report:

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JMG Exploration, Inc.

Pro Forma Condensed Consolidated Balance Sheet (Note 1 and Note 2)

As of June 30, 2012

(unaudited)

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

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JMG Exploration, Inc.

Pro Forma Condensed Consolidated Statement of Operations (Note 1)

 (unaudited)

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

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JMG Exploration, Inc.

Pro Forma Condensed Consolidated Statement of Operations (See Note 1)

 (unaudited)

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Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

Note 1.

 Basis of Presentation

Pro Forma Condensed Consolidated Balance Sheet

The pro forma consolidated balance sheet combines the historical balance sheets of Ad-Vantage and JMG at June 30, 2012. The adjustments give effect to:

·

Classifying JMG’s oil and gas operations as discontinued operations; and

·

The elimination of the accumulated deficit of JMG; and

·

The Class M Preferred that was issued in the merger is assumed to be automatically converted to common stock. JMG will have approximately 19,726,603 shares of common stock outstanding, of which 16,997,388 shares will have been issued.

Pro Forma Condensed Consolidated Statement of Operations

The pro forma consolidated statement of operations for the year ended December 31, 2011 and the six month period ended June 30, 2012 combine the historical statements of operations of Ad-Vantage and JMG. The adjustments give effect to showing the historic oil and gas operations of JMG as a discontinued operation due to the pending spin off of the assets.

Note 2.

  Pro Forma Adjustments

1.

Reflecting JMG’s oil and gas operations as discontinued operations.

2.

Elimination of JMG accumulated deficit.

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Exhibit Index

*

Previously filed as an Exhibit to Registrant’s Current Report on Form 8-K filed with the Commission on September 6, 2012.

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